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Aug. 18, 2022

Clément Pointillart (Verlinvest) - How do you examine brand equity, Why rummaging through the trash made him interested in consumer and Does product innovation matter in CPG

Clément Pointillart (Verlinvest) - How do you examine brand equity, Why rummaging through the trash made him interested in consumer and Does product innovation matter in CPG

Our guest today is Clément Pointillart, Executive Director at Verlinvest. Verlinvest is Verlinvest is an international, evergreen investment company with over €2bn assets under management backed by families who have together built some of the world’s largest consumer brands.Their portfolio includes Oatly, Who Gives a Crap, Vita Coco and Hint. Clement leads the Verlinvest US office and am part of the Consumer Products and Retail practice. We discuss how he examines brand equity, if product differentiation really matters, and how he thinks about grocery distribution strategy. Without further ado, here’s Clement.

  1. What attracted you to consumer investing?
  2. How did you end up joining Verlinvest?
  3. How do you evaluate if a company has brand equity? And how do you spot and predict a consumer trend early?
  4. Product differentiation
  5. Only long-lasting
  6. How do you analyze product differentiation? Does it matter?
  7. How do you think about distribution? Even though conventional grocery is introducing organic/better for you options, does it make sense for all better for you products to go into conventional grocery?
  8. What are categories that you’re particularly excited about?
  9. What are signs that a premium product could achieve mass adoption?
  10. How do you analyze price for better-for-you products and if they are priced properly?
  11. How should a brand focus on international expansion?
  12. Mission that is clear, authentic, and bring in status quo
  13. When does it make sense to
  14. What does a successful outcome look like to you?
  15. Does a brand have to have a mission in order for you to be interested?
  16. People spending more time at home, purchasing an e-bike
  17. What are the differences between VC and growth equity investing?
  18. What’s one thing you would change about growth investing?
Transcript
WEBVTT 1 00:00:00.040 --> 00:00:16.559 Oh, hello and welcome to the consumer VC. I am your host, 2 00:00:16.600 --> 00:00:20.079 Michael, and on this show we talked about the world of venture capital and 3 00:00:20.239 --> 00:00:25.160 innovation in both consumer technology and consumer products. If you're enjoying this content, 4 00:00:25.239 --> 00:00:29.920 you could subscribe to my newsletter, the consumer VC DOT sub stack dot com, 5 00:00:29.960 --> 00:00:33.640 to get each new episode and more consumer news delivered straight to your inbox. 6 00:00:34.039 --> 00:00:38.280 Our guest today is clament point to art, executive director at Verlinvest. 7 00:00:38.320 --> 00:00:44.119 Vertlin fest is an International Evergreen Investment Company with over two billion in assets under 8 00:00:44.119 --> 00:00:48.359 management, backed by families who have built together some of the world's largest consumer 9 00:00:48.399 --> 00:00:52.439 brands. Their portfolio includes Oatley, who gives a crap, fight a cocoa 10 00:00:52.560 --> 00:00:57.280 and hint. CLMENT leads the VERLA vest US office and is part of the 11 00:00:57.280 --> 00:01:02.079 consumer products and retail practice. On this episode we discussed consumer products. On 12 00:01:02.119 --> 00:01:07.000 this episode we discuss consumer brands and consumer products, how Clement thinks about brand 13 00:01:07.000 --> 00:01:14.000 equity, if product differentiation really does matter, and how it evaluates grocery distribution 14 00:01:14.079 --> 00:01:23.319 strategy. Without further ADO, here's clament, clement, thank you so much 15 00:01:23.560 --> 00:01:26.439 for joining me today. How are you? I'm great. Thank you for 16 00:01:26.480 --> 00:01:30.000 having me. Very excited. Oh really, excited, really excited, to 17 00:01:30.000 --> 00:01:32.680 have you on the show. Thanks again for for taking the time. So 18 00:01:33.400 --> 00:01:38.560 what was your initial attraction and why did you get involved in consumer investing? 19 00:01:38.480 --> 00:01:42.560 Well, first I think I've always been fascinated by the center, you know, 20 00:01:42.599 --> 00:01:45.959 as a as a kid or growing up, when people would invite me 21 00:01:46.040 --> 00:01:48.840 to dinner, you know, the first thing I would do was go to 22 00:01:48.879 --> 00:01:51.760 the kitchen, open the fridge, look at the closets, you know, 23 00:01:52.040 --> 00:01:56.040 understand why they picked a brand over another one, et Cetera, and, 24 00:01:56.079 --> 00:02:00.000 you know, ask as questions. It drives my kids crazy. But today 25 00:02:00.200 --> 00:02:02.400 in New York City, when I walk in the streets, I look at 26 00:02:02.400 --> 00:02:06.200 the garbage bags and I'm like, Whoa, well, that's interesting. What 27 00:02:06.319 --> 00:02:08.879 kind of beverage like people like she buy? Etcetera, etcetera, and I'm 28 00:02:08.919 --> 00:02:15.560 so proud when I see one of our brands packaging in the traffic can. 29 00:02:16.319 --> 00:02:20.520 And again my kids think I'm crazy. Maybe that's first of all, I 30 00:02:20.560 --> 00:02:22.879 think it's the passion. On top of that, you know, I feel 31 00:02:22.919 --> 00:02:29.840 that more and more there is a massive link between consumption and the identity that 32 00:02:29.879 --> 00:02:32.680 I find refescinating. In some ways, I would say that consuming is the 33 00:02:32.719 --> 00:02:37.560 new religion you know, whether you're Vigan, Quito, non GMO, etcetera 34 00:02:37.639 --> 00:02:40.759 like, people define themselves with the kind of diets or habits to follow, 35 00:02:40.800 --> 00:02:44.759 and so, as a result, I think that being a consumer investor allows 36 00:02:44.759 --> 00:02:47.319 you to be at the center of, you know, many of society's challenges 37 00:02:47.400 --> 00:02:52.599 and questions. And then the last point is that, you know, for 38 00:02:52.719 --> 00:02:55.840 me, consumer investing allows me to have fund on a day basis at very 39 00:02:55.919 --> 00:03:02.280 fast world about driving consumer revolutions, engine the status school and and try to 40 00:03:02.319 --> 00:03:07.479 help consumers have access to better options for themselves or for the planet. And 41 00:03:07.520 --> 00:03:12.599 you know, honestly, I'm inspired on a day basis by meeting with super 42 00:03:12.680 --> 00:03:19.080 driven entrepreneurs that pursue crazy dreams and demonstrate on a daty basis the power of 43 00:03:19.080 --> 00:03:23.319 of innovation. So, you know, for me that led me really naturally 44 00:03:23.360 --> 00:03:29.280 to investing in consumer not the biggest challenge is for me to stay fit with 45 00:03:29.319 --> 00:03:31.240 all the products that we try on a daily basis and all the food and 46 00:03:31.280 --> 00:03:36.879 beverage that we eat. But that's a that's a separate topplication of all the 47 00:03:36.960 --> 00:03:40.319 snack companies that are coming out and everything. Yeah, it's it's I sure 48 00:03:40.360 --> 00:03:44.719 to imagine, and they show up all the different flavors and you want to 49 00:03:44.759 --> 00:03:46.520 try all of them. TERREB. It's funny because I had investors come on 50 00:03:46.560 --> 00:03:51.280 the show that actually talk about Um, you know, the grocery store and 51 00:03:51.360 --> 00:03:53.000 houses. This like magical place, and it is a magical place right. 52 00:03:53.039 --> 00:03:57.719 You see all the brands that are on shelf and kind of kind of understand 53 00:03:57.800 --> 00:04:00.639 in terms of maybe some of the trends that are that are happening, just 54 00:04:00.800 --> 00:04:03.319 looking a little closer store. Give us a little bit of background on Vera 55 00:04:03.439 --> 00:04:09.400 Best, if you don't mind. After College I started my investment career at 56 00:04:09.759 --> 00:04:13.719 actually my career in investment banking, at a place called Azad, first in 57 00:04:13.759 --> 00:04:16.279 Paris and then in New York, and there I got to work for a 58 00:04:16.279 --> 00:04:19.120 firm called and as a Bush in Dev being there, and you know, 59 00:04:19.160 --> 00:04:24.240 the I'llest Beer Company in the world, and they happened to be backed by 60 00:04:24.399 --> 00:04:29.120 the Belgian family that is at the origin of very invest and through that experience, 61 00:04:29.240 --> 00:04:30.759 you know, I got to understand the family heritage of the group, 62 00:04:31.160 --> 00:04:36.240 the focus that Abi had on branding and marketing and and I got approached by 63 00:04:36.439 --> 00:04:41.959 someone at very invest ten years ago and being French, the US I'm sure 64 00:04:41.959 --> 00:04:44.800 you didn't, you didn't recognize I was French, but let me let me 65 00:04:45.279 --> 00:04:46.800 put that on the table. But you know, being friend to the US 66 00:04:46.879 --> 00:04:53.279 European connection was for me really unique. I love the entrepreneurial opportunity also to 67 00:04:53.319 --> 00:04:56.879 build an office UH and the presence of very invest in the US. In 68 00:04:56.920 --> 00:05:00.519 two twelve we were two in an office without any window, a C or 69 00:05:00.639 --> 00:05:05.120 heat. So it was a very interesting experience and in total at very investor 70 00:05:05.120 --> 00:05:10.959 were seven investors. So I think it was a trilly unconventional move, if 71 00:05:11.000 --> 00:05:15.279 you asked my my family, to live in a super established bank where I 72 00:05:15.360 --> 00:05:17.920 was really having a great time. But en after ten years, I I 73 00:05:17.920 --> 00:05:23.639 feel pretty proud of what we've built in Uh we have ten people now in 74 00:05:23.680 --> 00:05:28.519 the US in New York and Los Angeles. We're over twenty five investors globally. 75 00:05:28.759 --> 00:05:30.319 We've had a few, you know, cool successes and our belt, 76 00:05:30.399 --> 00:05:35.079 like our investments in in Chewy, dot com, in a totally in Pedigo 77 00:05:35.240 --> 00:05:39.639 Vida, Coco, Genexa, hint water, etcetera. And you know, 78 00:05:39.680 --> 00:05:42.759 I think that we've been able to win in what is, in the US, 79 00:05:42.920 --> 00:05:47.480 the most competitive market in in consumer investment. Thanks to a few things. 80 00:05:47.800 --> 00:05:51.120 One is we've been around for twenty seven years, so we've we've acquired, 81 00:05:51.360 --> 00:05:57.600 I assume, some some experience in consumer we have a super flexible capital 82 00:05:57.639 --> 00:06:00.600 base with with our family and ever Greens turn. We don't need to return 83 00:06:00.720 --> 00:06:04.800 cash to our shoulders, so we can really align with the entrepreneurs for, 84 00:06:05.079 --> 00:06:08.959 you know, one year of fifteen years, it doesn't matter to us, 85 00:06:09.000 --> 00:06:12.480 as long as we take the time to build the right outcome for for all 86 00:06:12.519 --> 00:06:16.199 the stakeholders. And we we have a strong international presence with boots on the 87 00:06:16.240 --> 00:06:20.839 ground that allows us to be relevant a in capturing trends globally, but also 88 00:06:20.920 --> 00:06:28.120 help our entrepreneurs develop international businesses. That's that's really interesting. Congratulations on all 89 00:06:28.120 --> 00:06:30.399 your successes, as are, you know, obviously incredible companies. But I 90 00:06:30.399 --> 00:06:34.199 think that's also really interesting your point about how you're able to be very, 91 00:06:34.279 --> 00:06:40.079 very super flexible when it comes to what maybe your returns are when you actually 92 00:06:40.120 --> 00:06:43.519 have to, you know, engage in those types of returns and everything when 93 00:06:43.519 --> 00:06:45.480 you look at a company, because I know you you invested in, you 94 00:06:45.480 --> 00:06:46.920 know, technology companies like Chewi, dot com and then all the way to, 95 00:06:47.000 --> 00:06:49.199 of course, you know, CPG, brands like you know, totally 96 00:06:49.319 --> 00:06:53.600 and hint. How do you think about, you know, return profiles? 97 00:06:53.680 --> 00:06:56.120 We talked about a lot on the show. But like for a technology company 98 00:06:56.199 --> 00:06:59.120 like CHEWI'S DOT COM, for example, it's very, typically, very different 99 00:06:59.120 --> 00:07:01.680 return profile than like an eatly or a hint or you know of like CPG 100 00:07:01.800 --> 00:07:05.000 products, like how or or is it not? I mean, how would 101 00:07:05.040 --> 00:07:09.040 you? How do you kind of think about it? When one thing about 102 00:07:09.199 --> 00:07:13.560 portfolio contraction for you know, maybe software intensive companies versus you know, non 103 00:07:13.600 --> 00:07:16.759 software int as of companies. So on that point, Mike, I'm happy 104 00:07:16.800 --> 00:07:21.120 to elaborate further. Kennedy, we're first and foremost consumer investors, and so 105 00:07:21.160 --> 00:07:25.839 we said that the tech component of Sassets are would be less of my would 106 00:07:25.839 --> 00:07:30.360 be less expertise. What I would say, however, is that when approaching 107 00:07:30.360 --> 00:07:35.399 a consumer investment, one needs to understand that you will never have the same 108 00:07:35.680 --> 00:07:40.680 you know hyper ball or, you know, a crazy growth potential in a 109 00:07:40.680 --> 00:07:43.399 super short amount of time, because it takes time to build a brand, 110 00:07:43.439 --> 00:07:46.639 it takes time to build a presence on the shelf, it takes time to 111 00:07:46.680 --> 00:07:51.079 build trust with the consumers, etcetera, etcetera, and the big mistake to 112 00:07:51.199 --> 00:07:57.399 me that had been happening over the last five, five six years has been 113 00:07:57.439 --> 00:08:01.800 to apply a venture capital and tality from the second value to consumer investment. 114 00:08:03.000 --> 00:08:07.439 I think that has led to tremendous inflation in the in the valuation environment and, 115 00:08:07.480 --> 00:08:11.199 as a result, putting increasing pressure on entrepreneurs to deliver a growth that, 116 00:08:11.319 --> 00:08:16.199 Kenny Lee, is very hard to achieve in consumer goods in a very 117 00:08:16.199 --> 00:08:18.240 short time. pering. Yeah, I mean I definitely agree. I feel 118 00:08:18.279 --> 00:08:22.879 like the term, you know, DTC brand, for example, it maybe 119 00:08:22.920 --> 00:08:24.680 implies that this is a whole new business model, a whole new type of 120 00:08:24.680 --> 00:08:28.279 business that maybe there is, you know, a software component to there which 121 00:08:28.279 --> 00:08:33.200 really you're using your software for distribution is not actually a software product, and 122 00:08:33.240 --> 00:08:37.360 so maybe cylindon valley, you know, investors got really interested and attracted because, 123 00:08:37.440 --> 00:08:41.159 oh Bev they're kind of you know software se kind of companies maybe should 124 00:08:41.200 --> 00:08:45.240 be valued like software type businesses, when really they're not. It's just a 125 00:08:45.240 --> 00:08:48.519 new, you know, distribution channel for Um for consumer brands. Yeah, 126 00:08:48.519 --> 00:08:52.919 it's just another channel. That can be an amazing way for to get early 127 00:08:52.919 --> 00:08:58.399 adoption, to to help consumer discover the product in an easy way when you're 128 00:08:58.440 --> 00:09:01.240 there far from a store that we've carry the product, etcetera. Ultimately, 129 00:09:01.639 --> 00:09:07.360 at the invest we believe in an Omni channel strategy. Brands that have been 130 00:09:07.480 --> 00:09:11.759 started online will ultimately have to go offline. Brands that have started offline should 131 00:09:11.759 --> 00:09:16.000 think about increasing their reach by going online, either through their own website or 132 00:09:16.000 --> 00:09:22.559 Amazon, etcetera. But we don't believe that a pure DTC brand will be 133 00:09:22.679 --> 00:09:26.559 able to scale at the right level without my flne presence as well. How 134 00:09:26.600 --> 00:09:31.639 do you think when you're evaluating brands? You know, I mean obviously you're 135 00:09:31.759 --> 00:09:33.720 very, very flexible, as you said, when it comes to you know, 136 00:09:35.000 --> 00:09:37.080 the duration of that here. You know you're in a company and at 137 00:09:37.080 --> 00:09:41.600 the amount of time that it maybe takes the generator return. What is maybe 138 00:09:41.600 --> 00:09:43.320 the entry point that you invest in when it comes to a brand, and 139 00:09:43.480 --> 00:09:46.600 how do you value your brands overall, like how do you think about brand 140 00:09:46.639 --> 00:09:48.399 equity that a brand is building up, because it takes obviously a long time 141 00:09:48.440 --> 00:09:52.679 to build up that brain equity component. Yeah, the second part, honestly, 142 00:09:52.679 --> 00:09:56.320 you're pointing probably at one of the trickiest part of our job, which 143 00:09:56.399 --> 00:09:58.759 is to try and be able to sort what's a trend and what's the fat? 144 00:10:00.039 --> 00:10:01.879 And as a firm, they said, you know, we won't drive 145 00:10:01.879 --> 00:10:05.960 consumer revolutions over the long term rather than back a temporary fad and, you 146 00:10:05.960 --> 00:10:09.279 know, make some money through a quick turn around, you know, make 147 00:10:09.320 --> 00:10:13.080 a two quick, quick two eggs on a company by selling it at the 148 00:10:13.159 --> 00:10:16.279 right time. We do not like companies that are built to sell. So, 149 00:10:16.799 --> 00:10:20.320 as a result, we spend a tremendous amount of time looking for categories 150 00:10:20.320 --> 00:10:26.399 and businesses that are at inflection point and spend probably way too many nights writing 151 00:10:26.440 --> 00:10:31.840 deep dives to understand sectors, subsectors, the winning brands within the subsectors, 152 00:10:31.840 --> 00:10:35.960 etcetera, doing extremely deep in the approach. Ultimately, the core of our 153 00:10:35.000 --> 00:10:41.879 work is too we are extremely focused on analyzing retail data, understanding consumer engagement 154 00:10:41.159 --> 00:10:46.840 with the brand, understanding the social media following the quality and the pattern of 155 00:10:46.840 --> 00:10:50.320 online sales, etcetera. We also have a network of advisors and experts in 156 00:10:50.600 --> 00:10:56.200 different categories that are able to talk to distributors and retailers to understand how brands 157 00:10:56.279 --> 00:11:01.440 performing. And you know, I said that there's not one killer analysis that 158 00:11:01.480 --> 00:11:05.960 allows us to get it right, but it's more, you know, completion 159 00:11:05.120 --> 00:11:09.799 of combination of analysis that ultimately gives us the confidence in the quality of the 160 00:11:09.840 --> 00:11:16.639 growth trajectory of the brand. How do you also think about pride differentiation when 161 00:11:16.639 --> 00:11:20.480 you're analyzing CPG companies? How do you define it? Doesn't need to be 162 00:11:20.720 --> 00:11:26.320 pride differentiation in many cases. It certainly said that differentiation matters at the beginning 163 00:11:26.360 --> 00:11:28.399 Atleast, right and you need to stand for something. You need to offer 164 00:11:28.399 --> 00:11:31.519 a better alternative to what's currently on the shelf. Otherwise, why would a 165 00:11:31.559 --> 00:11:35.720 retailer even talk to you if it's just like a meat product without anything so 166 00:11:37.080 --> 00:11:43.240 absolutely differentiated packaging, innovative in Green List, a unique taste profile. Those 167 00:11:43.279 --> 00:11:46.399 are things that are important. However, we need to remind ourselves that we 168 00:11:46.480 --> 00:11:50.320 are in consumer we're not in the rocket ship industry, right, and so 169 00:11:52.039 --> 00:11:56.679 various centry are pretty low ultimately, and so you need to build much more 170 00:11:56.960 --> 00:12:01.399 than you know, than just a differentiation, and that's why, for us, 171 00:12:01.840 --> 00:12:07.399 ultimately the only long lasting barrier to entry is brand, brand building. 172 00:12:07.440 --> 00:12:09.639 You know, if I take the example of of Pedigo, which is an 173 00:12:09.679 --> 00:12:15.399 investment we made recently, they have amazing electric bikes, but ultimately, what 174 00:12:15.639 --> 00:12:20.840 is making Pedigo so successful and so different its ability to gather a community organized 175 00:12:20.919 --> 00:12:26.320 rights on weekends, use the store as a meaning point for people to grab 176 00:12:26.320 --> 00:12:30.159 a coffee and share the passion serve, you know, an outer an option 177 00:12:30.240 --> 00:12:33.399 for underserved communities and underserved population, and that, to me is something that 178 00:12:33.919 --> 00:12:39.000 is much more important than the color or the shape of the bike. That's 179 00:12:39.000 --> 00:12:43.000 one element. I think also, more and more we see a requirement from 180 00:12:43.039 --> 00:12:50.879 consumers for brands to embrace a mission and have a positive impact either on people 181 00:12:50.960 --> 00:12:54.840 or the planet. And what's obvious is that the brand mission has to be 182 00:12:54.000 --> 00:12:58.039 clear from the start of the journey in order for those elements to be authentic. 183 00:12:58.200 --> 00:13:03.159 And so if I take example of two inist colony, which is another 184 00:13:03.240 --> 00:13:07.440 investment we made out of Europe, which is a chocolate company, they're trying 185 00:13:07.480 --> 00:13:11.000 to fight against slavery in the supply chain. I don't know if you do, 186 00:13:11.159 --> 00:13:13.120 but you know one point six million kids work in the Cook Industry in 187 00:13:13.159 --> 00:13:18.120 Africa, and so that company defines itself as an impact company that happens to 188 00:13:18.159 --> 00:13:22.360 do chocolate, and so that can be another reverse and that can be, 189 00:13:22.639 --> 00:13:26.559 for me, a long lasting differentiation factor. No, and I really appreciate 190 00:13:26.600 --> 00:13:31.320 you sharing these examples in terms of what that a company their early stages needs 191 00:13:31.320 --> 00:13:35.120 to stamp for something order for to Pique your interest like that must be the 192 00:13:35.200 --> 00:13:39.919 brand messaging has to be very, very clear. I appreciate that example that 193 00:13:39.960 --> 00:13:43.159 you gave about community. I know that community the term. It's kind of 194 00:13:43.159 --> 00:13:45.679 a term that's really thrown out a lot there. But the cops of brands 195 00:13:45.720 --> 00:13:48.960 and it makes sense to just from like a financial aspect. If you're able 196 00:13:48.960 --> 00:13:52.240 to develop a community then, especially given since you know, facebook ads are 197 00:13:52.320 --> 00:13:58.879 very expensive, you're able to generate um revenue, must more cost effectively and 198 00:13:58.960 --> 00:14:01.360 not have to maybe rely as much on on cost requisition costs, since it's 199 00:14:01.600 --> 00:14:07.320 organic. What are some maybe community type metrics that you might look at that 200 00:14:07.360 --> 00:14:11.279 are interesting to you as you are evaluating, you know, a a brand 201 00:14:11.399 --> 00:14:16.320 or or company? Yeah, it can go from pretty sophisticated slash numerical two 202 00:14:16.399 --> 00:14:22.039 more subtle elements. If I look at the numerical metrics with, for example, 203 00:14:22.159 --> 00:14:26.039 instead of looking at the total number of followers on Instagram, I would 204 00:14:26.039 --> 00:14:31.120 look at the engagement rate. I would look, for example, at the 205 00:14:31.200 --> 00:14:35.039 number of mentions on on Tiktok and the kind of organic videos that you can 206 00:14:35.080 --> 00:14:39.600 generate it so on. That's really on the numerical side. Then maybe we're 207 00:14:39.600 --> 00:14:41.840 a bit old schooled, but what we like to track is, you know, 208 00:14:41.879 --> 00:14:46.440 our signs of cult following. We find that way and so the if 209 00:14:46.480 --> 00:14:50.679 I take the example of oft when we did the investment back in and we 210 00:14:50.679 --> 00:14:56.480 started the diligence action, we were amazed just to see how, you know, 211 00:14:56.519 --> 00:15:01.279 the cult following that the brand was having in music festival. You know, 212 00:15:01.279 --> 00:15:05.600 there was a music festivals that Hootie was organizing around the post meal generation 213 00:15:05.919 --> 00:15:11.000 and then managed to put together thousands of kids. You know that we're here 214 00:15:11.039 --> 00:15:13.480 with the many festivals. We want to you know, we want to build 215 00:15:13.519 --> 00:15:16.559 a brand against the their industry. We want to build the post meal generation. 216 00:15:16.919 --> 00:15:20.039 That to me, first of all, it was a bit odd. 217 00:15:20.159 --> 00:15:22.639 I mean, I don't know that you can mobilize you know, I don't 218 00:15:22.639 --> 00:15:24.960 know that I want to spend two weeks in one week of my summer, 219 00:15:24.120 --> 00:15:26.879 you know, necessarily as a sixteen year old or seventhe year old. That 220 00:15:26.960 --> 00:15:31.080 was a made but you know, that spoke to me about the strength of 221 00:15:31.080 --> 00:15:35.399 the brand, about the ability like this to mobilize your consumers, not necessarily, 222 00:15:35.399 --> 00:15:37.240 by the way, your consumers just a part of the population. You 223 00:15:37.279 --> 00:15:41.320 always want to look at. Yes, numerical components like the following, like 224 00:15:41.360 --> 00:15:46.159 the number of reviews, the quake of the review that Sarah, but also 225 00:15:46.320 --> 00:15:52.759 the more intangible components like the festival I was mentioned for I love the favor 226 00:15:52.840 --> 00:15:56.080 Brun up early be remember an article about how how they approached the United States. 227 00:15:56.159 --> 00:16:00.559 It wasn't just havey of US trying to get into grocery and retail. 228 00:16:00.639 --> 00:16:02.919 It was hey, let's actually try to go, you know, on Prem 229 00:16:02.919 --> 00:16:04.519 which you think about our prime you thinking of alcohol, but in this case 230 00:16:04.559 --> 00:16:07.080 it was it was coffee shops, right, and so they were actually going 231 00:16:07.120 --> 00:16:11.639 into coffee shops and generating that demand. I remember when my buddies telling me 232 00:16:11.679 --> 00:16:15.159 like he like, he like would go to his coffee shop just because they 233 00:16:15.200 --> 00:16:17.480 have totally there and you couldn't find it in soords. It was just like 234 00:16:17.559 --> 00:16:19.480 really cool, you know, brand that you couldn't find in soords, because 235 00:16:19.480 --> 00:16:22.440 that was like their strategy from the very beginning. How do you also think 236 00:16:22.480 --> 00:16:26.879 about like kind of sin? I always just think about totally when it comes 237 00:16:26.879 --> 00:16:30.159 to a pretty unique distribution. How they approach distribution. But, like, 238 00:16:30.320 --> 00:16:33.720 are there other examples that you have or what do you look for companies, 239 00:16:33.759 --> 00:16:36.440 because I know we've talked a little bit about pridly differentiation. How do you 240 00:16:36.679 --> 00:16:41.799 think about like distribution differentiation, especially if a brand is coming from maybe being 241 00:16:41.840 --> 00:16:45.720 an online success and their approach to, you know, on the channel in 242 00:16:45.759 --> 00:16:48.759 retail? Going back to what we discussed earlier, I think it's important for 243 00:16:48.879 --> 00:16:53.200 brand to understand what, you know, why a retailer is going to take 244 00:16:53.240 --> 00:16:57.279 shelf away from an existing brand and existing product and put your brand instead, 245 00:16:57.559 --> 00:17:03.279 and so it's important for me for those online brands to go back to what 246 00:17:03.440 --> 00:17:07.440 made them successful, highlight those two retailers and then find one or two retail 247 00:17:07.519 --> 00:17:11.480 partners at the beginning. You know, we always say go deep, not 248 00:17:11.279 --> 00:17:15.640 not, not, not wide, and so pick one or two retailers with 249 00:17:15.000 --> 00:17:18.200 who you're gonna be able with which you're going to be able to build a 250 00:17:18.200 --> 00:17:23.240 case study of success. For example, pick a regional chain, maybe the 251 00:17:23.319 --> 00:17:29.599 natural channel at the beginning, you know, fifty hundred stores and focus a 252 00:17:29.640 --> 00:17:33.759 lot of spending a lot of time making that launch a success. Once you 253 00:17:33.799 --> 00:17:37.359 have that, you can go to other retailers and tell them look, you 254 00:17:37.359 --> 00:17:41.400 know, give us a chance, look at once you produce on the shelf 255 00:17:41.640 --> 00:17:45.039 with that assortment, at that price point, etcetera, etcetera. Thinks that 256 00:17:45.079 --> 00:17:48.119 you have been able to test with your initial partner, you'll have creating this 257 00:17:48.200 --> 00:17:52.119 case study of success that then you can try to replicate with other retailers. 258 00:17:52.319 --> 00:17:56.279 That, to me, is absolutely critical, and so for those online players, 259 00:17:56.559 --> 00:18:00.160 I always advise them to spend a lot of time finding the idea your 260 00:18:00.400 --> 00:18:04.039 first partner that will be an amazing supporter and that will be patient enough to 261 00:18:04.160 --> 00:18:07.039 create this case study of success that you will then bring to the world. 262 00:18:07.319 --> 00:18:11.079 Online brands, at the end of the day, get quite a bit of 263 00:18:11.119 --> 00:18:14.799 visibility sometimes, and so they're gonna get approaches from a bunch of retailers that 264 00:18:14.960 --> 00:18:18.519 are also under pressure to bring those online brands on in their stores. And 265 00:18:18.559 --> 00:18:22.200 so a bunch of brands, even if they're pretty small, are going to 266 00:18:22.279 --> 00:18:26.640 receive a bunch of approaches from different retailers, and we always remind the brands 267 00:18:27.200 --> 00:18:30.519 of the power of saying no. You'd much rayther focus on one of the 268 00:18:30.640 --> 00:18:34.880 partners again, pether, it can be a regional partner, it can be, 269 00:18:34.920 --> 00:18:38.359 you know, a national partner, but there is pretty specific in its 270 00:18:38.359 --> 00:18:42.160 in its value proposition, etcetera, and and saying no to others, because 271 00:18:42.279 --> 00:18:47.319 if you you know, it can be very tempting to be launching in ten 272 00:18:47.720 --> 00:18:52.039 dollars the first year, but then if you're collecting dusts, it's very complicated 273 00:18:52.079 --> 00:18:56.079 to go back to those retailers and as for a second chance. So we 274 00:18:56.160 --> 00:18:59.000 always advise brands who try and go, you know, take it slow and 275 00:18:59.119 --> 00:19:03.920 UH and they know, and then expand as time stands by. With all 276 00:19:03.920 --> 00:19:07.960 this being said, what does it make sense for a brand to think about 277 00:19:08.000 --> 00:19:12.720 going into retail and taking that next step and developing on the Channel Strategy? 278 00:19:12.720 --> 00:19:15.519 I'm sure this is something that you think about a lot because you're investing in 279 00:19:15.519 --> 00:19:18.279 a lot of digital brands. But the bet is not just hey, let's 280 00:19:18.279 --> 00:19:22.720 scale your online e commerce business. We want to take you in retail and 281 00:19:22.519 --> 00:19:27.160 actually have you be in source. Absolutely I think here it's always important to 282 00:19:27.319 --> 00:19:32.559 take a practical approach. The worst thing that you can do is to, 283 00:19:33.480 --> 00:19:36.839 you know, sell online, start to see you slow down in revenue, 284 00:19:37.200 --> 00:19:41.640 start to see an increasing cap, reduction in the in the conversion rate, 285 00:19:41.680 --> 00:19:45.519 etcetera, etcetera, and go you know, kind of as a desperate measure, 286 00:19:45.799 --> 00:19:48.960 turn into the offline channel and say, okay, can we make your 287 00:19:48.000 --> 00:19:51.839 work? Because at that moment you don't have the time, you don't have 288 00:19:51.880 --> 00:19:55.759 the leverage, you don't have the pressing power that you need to to grow 289 00:19:55.799 --> 00:20:00.680 sustainably offline. So think early about your move from online to offline. Make 290 00:20:00.759 --> 00:20:06.839 It complimentary and hopefully, you know, both online and offline will feed off 291 00:20:06.880 --> 00:20:08.440 each other. If I take the example of a hint water, so they 292 00:20:08.480 --> 00:20:12.240 actually started offline. Then they built an amazing presence online. But what we 293 00:20:12.359 --> 00:20:18.599 love to see is that the consumer online was then turning back to the offline 294 00:20:18.680 --> 00:20:22.799 channel for the daily purchased, the discovery of new of new flavors and the 295 00:20:22.880 --> 00:20:26.119 daily, you know, the Pantry load that they wanted to do. And 296 00:20:26.200 --> 00:20:30.200 so the we could acquire a customer online, but then they would move offline. 297 00:20:30.200 --> 00:20:33.880 And sometimes offline consumers were interested in buying online. But you want to 298 00:20:33.880 --> 00:20:37.039 see that virtual circle. The worst thing is my online say saying to fade 299 00:20:37.039 --> 00:20:41.279 away, let me go offline to try and find my salvation there and and 300 00:20:41.319 --> 00:20:44.400 then you know it's probably too late. You also want to think very carefully 301 00:20:44.440 --> 00:20:48.359 about the way you build your unique economics to make it work in an offline 302 00:20:48.400 --> 00:20:52.200 environment, because it's completely different, obviously, from an online environment. Yeah, 303 00:20:52.279 --> 00:20:56.680 I remember chatting with John Sebastiani from sinema brands. She was saying that 304 00:20:56.880 --> 00:21:00.920 the hard parts of analyzing indigenous brands is, of course you have to have 305 00:21:00.960 --> 00:21:03.079 a question of will as work in retail. If that is, you know, 306 00:21:03.200 --> 00:21:06.640 check mark, obviously that it Piques your interest to invest, but also, 307 00:21:06.799 --> 00:21:08.480 like, does the actual unit economics work too? And a lot of 308 00:21:08.519 --> 00:21:14.400 times when you're starting out online, you might not think about the retail side 309 00:21:14.400 --> 00:21:18.039 because also many cases some of the entrepreneurships don't have that experience of actually growing 310 00:21:18.079 --> 00:21:19.759 to brand retail, so they don't actually know, you know, what those 311 00:21:19.799 --> 00:21:23.039 like UN economics actually are to make, you know, a really great, 312 00:21:23.119 --> 00:21:26.920 solid wholesale business. Yes, and there are a lot of buckets of cost 313 00:21:27.039 --> 00:21:32.400 that you ignore online that, unfortunately, you know, a distributor is going 314 00:21:32.440 --> 00:21:34.920 to cost you something, merchandizing is going to cost you something. That those 315 00:21:34.920 --> 00:21:38.720 are all elements that you absolutely need to take into account when thinking about your 316 00:21:40.000 --> 00:21:44.160 price point and your ultimate Morgen profile and profit pool in your diligence process and 317 00:21:44.160 --> 00:21:48.079 when you're evaluating brands. What are signs that a premium product? I mean, 318 00:21:48.079 --> 00:21:51.599 I know that a lot of your investments are in premium better for your 319 00:21:51.599 --> 00:21:56.160 products. What are signs that those could actually achieve mass adoption? That's the 320 00:21:56.160 --> 00:22:00.960 opportunity, right. How do you think about this? Yeah, you're you're 321 00:22:00.039 --> 00:22:03.279 right. For a premium product. The tricky part is to be able to 322 00:22:03.319 --> 00:22:07.839 strike a balance between appealing to earlier doctors, you know, creating that case 323 00:22:07.839 --> 00:22:11.960 study of success with the cult following base, etcetera, without being seen as 324 00:22:12.680 --> 00:22:15.839 out of touch with the general population. In other words, it's you know, 325 00:22:15.880 --> 00:22:19.119 it's amazing to be able to sell tons of products that are local farmers 326 00:22:19.160 --> 00:22:22.240 market and Brooklyn, but you know you want to see an interest from slightly 327 00:22:22.240 --> 00:22:26.880 more diverse population in order to think about a mass adoption. So I think 328 00:22:26.880 --> 00:22:29.880 there are, you know, a lot of tools that allow you to test 329 00:22:29.920 --> 00:22:33.200 that mass doction potential. I think you start with the attributes of the product, 330 00:22:33.359 --> 00:22:38.200 price points, convenience, etcetera. There were also monitoring things like social 331 00:22:38.240 --> 00:22:42.319 media, following outside of its core geography and to see if, you know, 332 00:22:42.400 --> 00:22:45.640 you start to see early signs of people asking for the product. Where 333 00:22:45.640 --> 00:22:48.720 can I get it can't wait for it to arrive in my town, et 334 00:22:48.759 --> 00:22:53.200 Stera, etcetera, and that allows you to get some signs of adoption. 335 00:22:53.279 --> 00:22:56.960 Of course, then you have more sophisticated tools with you, brand studies, 336 00:22:57.000 --> 00:23:02.319 etcetera, and and testing, you know, appetite from potential consumers. But 337 00:23:02.440 --> 00:23:06.240 yes, you you want to make sure that that you see early signs of 338 00:23:06.559 --> 00:23:11.279 interest from broad population. What does a successful outcome look like for you? 339 00:23:11.359 --> 00:23:14.680 I mean, we taught us a lot, and I think that's kind of 340 00:23:14.680 --> 00:23:17.799 going back to your earlier point about maybe when software is the looking value, 341 00:23:17.839 --> 00:23:21.519 investors were invest in CPG hoping maybe for, you know, billion type of 342 00:23:21.839 --> 00:23:25.480 exits, when really those are kind of few and far between. When it 343 00:23:25.480 --> 00:23:30.880 comes to CBG, what do you like? Is Success from a financial fund 344 00:23:30.079 --> 00:23:34.359 perspective? Yeah, it's interesting because I was going to say that we are 345 00:23:34.400 --> 00:23:38.680 a bit of a strange animal in the world of investment. You know, 346 00:23:38.720 --> 00:23:42.920 we are a Femini backed holding company, and so success to us is not 347 00:23:42.960 --> 00:23:48.440 only measured by financial results. It is absolutely but you know, when we 348 00:23:48.119 --> 00:23:53.440 our philosophy is ready to try and look at a big category that has a 349 00:23:53.480 --> 00:23:56.839 fundamental problem, you know, the product of the service that that we're back 350 00:23:57.319 --> 00:24:03.720 should then create a switching moment where consumers move to a more sustainable alternative. 351 00:24:03.920 --> 00:24:10.200 And so first success is when we identify one of these companies and take it 352 00:24:10.200 --> 00:24:15.480 to a large international, mainstream audience. That's really what's successive. Typically, 353 00:24:15.559 --> 00:24:21.640 that will translate in a large company that has managed to develop its revenue base 354 00:24:22.000 --> 00:24:25.960 in its home country but also on a global scale, that has managed to 355 00:24:26.000 --> 00:24:30.119 expand its manufacturing footprint and expand the profit pool and and, as a result, 356 00:24:30.160 --> 00:24:37.000 be a a company that will be that will have an appeal either a 357 00:24:37.000 --> 00:24:40.799 two way strategic player or to the to the public markets. As we've seen 358 00:24:40.839 --> 00:24:44.880 over the last two years, it's been a pretty common route for many CPG 359 00:24:45.000 --> 00:24:48.240 companies. What do you think about large markets and you think about, you 360 00:24:48.279 --> 00:24:52.480 know, some of the trends that's been happening eximmer. I mean what trends 361 00:24:52.519 --> 00:24:56.119 specifically are you kind of most excited about? You know today that maybe are 362 00:24:56.200 --> 00:25:00.200 still nascent, that you think could become large or they're already large, but 363 00:25:00.240 --> 00:25:04.119 you still see that there's opportunities for four more brands to be I think there's 364 00:25:04.160 --> 00:25:08.599 an overarching theme for us. We and that goes across categories. I mean 365 00:25:08.599 --> 00:25:14.000 I could spend hours going through each. Again, I mentioned the deep times 366 00:25:14.039 --> 00:25:15.440 that we do. So could you know, if you have four hours, 367 00:25:15.599 --> 00:25:21.160 I'll walk you through the categories, subcategories, sub subcategories that we're particularly interested 368 00:25:21.160 --> 00:25:22.880 in. But if I want to take a step back, I think a 369 00:25:23.000 --> 00:25:27.599 theme that we that we've been particularly interested in over the last few years is 370 00:25:27.640 --> 00:25:33.920 really the David Golife. We like to again always going back to driving consumer 371 00:25:33.960 --> 00:25:38.599 revolutions. We believe that consumers are going to ask more and more of brands 372 00:25:40.240 --> 00:25:45.880 to have a mission that is clear, that is authentic and that is trying 373 00:25:45.880 --> 00:25:49.880 to improve the state of school by saying that, whether you are in the 374 00:25:49.920 --> 00:25:55.160 food and beverage, in the pet food, in the bulliant personal care, 375 00:25:55.440 --> 00:26:00.480 in the gurbial goods, supporting goods, mattress industry, you'll always find entrepreneurs 376 00:26:00.480 --> 00:26:04.799 that are trying to innovate in order to provide a better alternative, and that 377 00:26:04.960 --> 00:26:10.400 is something that to us, is is key and there is the main focus 378 00:26:10.400 --> 00:26:12.759 on of the fund and that translates, as I said, in many different 379 00:26:12.839 --> 00:26:17.319 categories and you can find that in a lot of different subsegments. But that's 380 00:26:17.359 --> 00:26:19.880 the trend that we're interested in backing. That makes sense because I mean also 381 00:26:19.920 --> 00:26:23.880 maybe the entrepreneur's job right to prove to you in some way that this is 382 00:26:25.160 --> 00:26:27.359 actually a trend, right, that this is actually there too, right. 383 00:26:27.920 --> 00:26:33.079 Yeah, absolutely, I mean the the we we typically when we talk to 384 00:26:33.200 --> 00:26:38.400 entrepreneur and when we entertain discussions with an entrepreneurs because we're convinced already about trend 385 00:26:38.480 --> 00:26:41.920 dynamics. So we've done a bit of homework, of course. Then through 386 00:26:41.960 --> 00:26:48.279 the dialogue we seek reinforcement of that conviction and through that dialogue will also understand 387 00:26:48.279 --> 00:26:53.680 if the entrepreneur is here too quickly take advantage of that trend or is fundamentally 388 00:26:53.720 --> 00:26:59.680 motivated to drive that that evolution over the long term and will be interested in 389 00:26:59.680 --> 00:27:03.039 the lab are not not the former one, people that you try to create, 390 00:27:03.079 --> 00:27:07.240 that create or serve the way that they've created, basically, that those 391 00:27:07.240 --> 00:27:11.559 also want, that are more exciting. What were some of your learnings during 392 00:27:11.640 --> 00:27:17.279 this Um you know, past two years during covid has this at all Um 393 00:27:17.720 --> 00:27:21.720 for maybe some of your thesis or some of the transitor focus on? has 394 00:27:21.880 --> 00:27:26.640 this kind of made you more accepting to them, or or maybe you now 395 00:27:26.759 --> 00:27:30.119 maybe have shifted towards Um something different or like just would love to kind of 396 00:27:30.119 --> 00:27:33.000 hear, like you're learnings over the past two years as as we kind of 397 00:27:33.039 --> 00:27:37.519 come out of this period. The first thing I'd say is it's made our 398 00:27:37.200 --> 00:27:44.200 job extremely tricky because a lot of a lot of sales trends have been accelerated 399 00:27:44.200 --> 00:27:48.240 by COVID and as an investor, we've had to be extremely careful to understand 400 00:27:48.519 --> 00:27:53.279 the companies that were experiencing a covid bump. This is the one that we're 401 00:27:53.880 --> 00:27:59.319 experiencing a covid acceleration. You know, you see a few categories that basically 402 00:27:59.759 --> 00:28:06.559 to advantage of this unique set of circumstances to have a positive impact on their 403 00:28:06.599 --> 00:28:10.519 business, but not necessarily long lasting one. And over the last you know, 404 00:28:10.519 --> 00:28:14.559 when we looked at businesses until early two you still have a lot of 405 00:28:14.599 --> 00:28:18.119 business models where it was very unclear whether or not the self trajectory that that 406 00:28:18.319 --> 00:28:23.200 experience was going to be sustainable or not. So a lot of our time 407 00:28:23.240 --> 00:28:27.119 has been spent trying to understand and you let me take maybe the example of 408 00:28:27.119 --> 00:28:34.000 Peligo once more. Peligo as a company has experienced a pretty amazing growth over 409 00:28:34.000 --> 00:28:40.440 the last three years, driven by people spending more time at home, people 410 00:28:40.759 --> 00:28:44.880 having more time to send to be outside with a family, etcetera, and 411 00:28:44.920 --> 00:28:48.400 so that drove an interest in, you know, purchasing an Ebike. You 412 00:28:48.400 --> 00:28:52.000 could say, okay, maybe that was a covid bump, but for us, 413 00:28:52.279 --> 00:28:56.400 we looked at the adoption rate of e bikes in Europe. That represents 414 00:28:56.440 --> 00:29:00.839 no over fully for in the country like Netherlands, very example, and we 415 00:29:00.920 --> 00:29:03.519 compared that to the penetrition in the US, when it was two percent. 416 00:29:03.960 --> 00:29:07.920 and honestly, after you understand those two numbers for me, you rest your 417 00:29:07.920 --> 00:29:14.720 case. Right, even if the US will never reach of the penetrition that 418 00:29:14.799 --> 00:29:18.960 you experience in the Netherlands, you still have a market that can increase ten 419 00:29:18.119 --> 00:29:22.119 x from where it is to them. And so for us, yes, 420 00:29:22.200 --> 00:29:26.039 there was a massive acceleration through Covid, but that has allowed Consummus to be 421 00:29:26.119 --> 00:29:30.920 aware of the product. The awareness was extremely before Covid, and so now 422 00:29:32.000 --> 00:29:34.759 we think that there is actually a very positive tail wind that is going to 423 00:29:34.880 --> 00:29:38.680 last for the next ten years. And you see that also through government support, 424 00:29:40.279 --> 00:29:44.319 etcetera, bike lanes that are being built all over the country, etcetera, 425 00:29:44.319 --> 00:29:47.680 etcetera. I appreciate that, e bike, example, because, you 426 00:29:47.720 --> 00:29:49.839 know, you really do. For some categories, as you said, it 427 00:29:49.920 --> 00:29:53.759 really mass accelerated them and you have to think as we kind of come out 428 00:29:53.799 --> 00:29:56.880 of this period, well, that still be the case? Was this, 429 00:29:57.039 --> 00:30:02.359 you know, as part of of this past two year period? And can 430 00:30:02.400 --> 00:30:04.559 they continue to grow at that rate? Or even they can't grow that rate, 431 00:30:04.559 --> 00:30:07.240 can they grow to what it needs to take in order to be, 432 00:30:07.279 --> 00:30:11.519 you know, a pretty big business to to Pique your interest? How do 433 00:30:11.599 --> 00:30:15.640 you also think of about like the exit environment during, you know, these 434 00:30:15.680 --> 00:30:18.480 times, as well as the past two years? You know, I think 435 00:30:18.519 --> 00:30:22.000 that the past few years, you know, spacs have, for example, 436 00:30:22.400 --> 00:30:26.880 been very, very popular and many of them haven't really quite panned out the 437 00:30:26.920 --> 00:30:30.720 way that we'd hope in the in the public markets. Do you think that, 438 00:30:30.759 --> 00:30:34.480 like, strategics are in better positioned than they maybe were previously? I 439 00:30:34.480 --> 00:30:38.279 mean that right now that public markets are not too well at all, but 440 00:30:38.319 --> 00:30:41.359 do you think that that this is like a great, you know, position 441 00:30:41.359 --> 00:30:45.279 to be in if you were a potential strategic for example, in the last 442 00:30:45.279 --> 00:30:48.799 two years have been tough for strategics because they were faced, you know, 443 00:30:48.880 --> 00:30:53.000 SPAC or traditional impos they were faced with a public market that was willing to 444 00:30:53.200 --> 00:30:57.559 underwrite, you know, two to three years of growth and so many companies. 445 00:30:59.799 --> 00:31:02.960 One did not IPP on the twenty one or twent two revenue, but 446 00:31:02.960 --> 00:31:07.240 tween twente twenty four. A strategic will have a harder time underwriting this, 447 00:31:07.400 --> 00:31:11.440 or has has had a harder time underwriting this now that the public markets are 448 00:31:11.440 --> 00:31:15.400 effectively shut. You're right to mention that. You know, some spects are 449 00:31:17.400 --> 00:31:22.079 experiencing difficult times. The strategics are shopping their pencils, as they should. 450 00:31:22.279 --> 00:31:26.359 They're going to have amazing opportunities, both on the private and on the public 451 00:31:26.400 --> 00:31:30.720 side. Many companies went public that were not necessarily meant to go public or 452 00:31:30.799 --> 00:31:36.759 that should not have necessarily went public. They're now faced with a market based 453 00:31:36.759 --> 00:31:40.759 stuff, with an investor base that is expecting a lot from them. Whether 454 00:31:40.880 --> 00:31:44.440 you you beat or you miss, it feels that, you know, the 455 00:31:44.440 --> 00:31:47.519 pulse is not there on the share price at the moment, and so strategics 456 00:31:47.519 --> 00:31:52.279 are obviously gonna be able to benefit from this, especially in the consumer world, 457 00:31:52.359 --> 00:31:56.160 where many strategics are based on take most of the revenue from staple consumers, 458 00:31:56.200 --> 00:32:00.279 staple goods and so as a result, we will not suffer as much 459 00:32:00.319 --> 00:32:02.440 from a revenue standpoint, from a top line standpoint, and they will be 460 00:32:02.480 --> 00:32:06.839 able to pass through most of the inflation to consumers, so the margins will 461 00:32:06.880 --> 00:32:12.519 not suffer as much. That will lead to higher or similar generation as before 462 00:32:12.839 --> 00:32:15.960 and, as a result, an opportunity to to acquire a few businesses. 463 00:32:16.000 --> 00:32:21.319 Absolutely, I really appreciate you sharing your perspective on that. I certainly agree 464 00:32:21.359 --> 00:32:23.640 that this is maybe a position right now where strategic are at a position of 465 00:32:23.640 --> 00:32:29.440 strength currently. What's one thing you would change about? Maybe the perception of 466 00:32:29.799 --> 00:32:34.240 investing in consumer brands? I want to go back to what I you know, 467 00:32:34.279 --> 00:32:36.640 what we talked about earlier. I think over the last three or four 468 00:32:36.720 --> 00:32:42.000 years there's been just an influx of capital from the tech industry that has can 469 00:32:42.079 --> 00:32:46.720 live, been unhealthy in many ways for investors, because that is led to 470 00:32:47.119 --> 00:32:54.039 pretty impressive valuation increases, but also for entrepreneurs because that has created, according 471 00:32:54.119 --> 00:32:59.920 to me, a necessary pressure on them to give them an impression that grow 472 00:33:00.000 --> 00:33:05.160 of that all costs was absolutely necessary. It didn't necessarily give them the time 473 00:33:05.240 --> 00:33:09.039 to build the Right Foundation, the right unit economics and, as a result, 474 00:33:09.279 --> 00:33:15.680 treated you board dynamics and situation for companies that were very uncomfortable. So 475 00:33:15.839 --> 00:33:20.440 my hope is that, I mean maybe the silver lining of this, of 476 00:33:20.519 --> 00:33:23.799 the situation that we currently end is that things will, you come back a 477 00:33:23.839 --> 00:33:29.200 little bit more to a more current, quote, normal environment, which will 478 00:33:29.519 --> 00:33:34.440 you allow each side to be to be happy, and will also provide the 479 00:33:34.599 --> 00:33:39.440 required amount of time for entrepreneurs to always think strategically and not cut corners to 480 00:33:39.440 --> 00:33:44.440 to to get the growth that was expected of them in the future, in 481 00:33:44.480 --> 00:33:49.240 the in the past. What's one book that's inspired you personally in one book 482 00:33:49.240 --> 00:33:54.920 that disparity professionally? You know, my life is filled with nonfiction and h 483 00:33:55.039 --> 00:33:59.079 base case studies, Etcetera. So when I, you know, when I 484 00:33:59.160 --> 00:34:04.279 finally get to sit down at night and read, you know I'm only excited 485 00:34:04.319 --> 00:34:08.039 about fiction actually, and you know I like to dream of of of of 486 00:34:08.119 --> 00:34:13.960 big destinies and so and particularly, you know, I love the writers of 487 00:34:14.000 --> 00:34:16.559 the nineteenth century and early part of the twentieth century. You know, when 488 00:34:16.599 --> 00:34:24.400 I think of a Joseph Kiss selling a Victor Hugo, which you know, 489 00:34:24.480 --> 00:34:30.239 those are, you know, writers that have been able to to create universe 490 00:34:30.320 --> 00:34:35.679 and universe that really moved me and characters that are typically larger than life, 491 00:34:35.760 --> 00:34:38.360 you know, and they inspire me to do big thing with my life, 492 00:34:38.599 --> 00:34:42.599 kind of, you know, the same way that entrepreneurs inspiring me on a 493 00:34:42.679 --> 00:34:45.760 daily basis to, you know, to get out of my of my of 494 00:34:45.800 --> 00:34:51.199 my comfort zone and try to pursue the dreams. I appreciate that. I 495 00:34:51.239 --> 00:34:54.440 appreciate that because Barry Concarry and a lot of people that come out usually say 496 00:34:54.559 --> 00:35:00.280 business books are nonfiction books and so, Um, I really appreciate you mentioned 497 00:35:00.320 --> 00:35:04.280 the authors. Let's dream a bit. Exactly, exactly, Hey, it's 498 00:35:04.320 --> 00:35:07.400 consumer we got. We got a dream right. So my final question to 499 00:35:07.440 --> 00:35:09.480 you is, what's that? You one piece of advice that you have for 500 00:35:09.760 --> 00:35:13.679 founders? Well, you know, if you think. First of all, 501 00:35:14.199 --> 00:35:19.360 I must say that I do this job because I fundamentally admire entrepreneurs and I 502 00:35:19.400 --> 00:35:22.079 wish I was an entreprene on myself, but since I'm not, the next 503 00:35:22.320 --> 00:35:27.280 best thing for me was investing in entrepreneurs. So first of all, I 504 00:35:27.280 --> 00:35:30.000 I just want to say that any one days today pursuing the dream of, 505 00:35:30.360 --> 00:35:35.159 you know, getting out there, Um, you know, creating a product, 506 00:35:35.400 --> 00:35:38.920 experiencing the fury of of this, you know of this of this environment 507 00:35:39.440 --> 00:35:44.519 deserves a lot of respect. To me. The one piece of advice that 508 00:35:44.519 --> 00:35:47.320 I'd like to give is, very early on, try to understand what different 509 00:35:47.360 --> 00:35:51.079 siates you, not necessarily as a product, but as a dread. What 510 00:35:51.079 --> 00:35:54.360 do you want to stand for? What will be the red line that will 511 00:35:54.360 --> 00:36:00.840 never cross and what you believe will have a positive act on the future, 512 00:36:00.840 --> 00:36:05.480 on your kids? By doing so and by putting that you should put it 513 00:36:05.559 --> 00:36:08.400 on the wall in your in your office and staying true to it, you 514 00:36:08.519 --> 00:36:15.199 will build the authentic link. That is the most important thing for me in 515 00:36:15.280 --> 00:36:19.920 order to create a strong bond with a consumer and that will, as a 516 00:36:19.920 --> 00:36:23.039 result, allow you to survive many bad times. That will allow you to 517 00:36:23.199 --> 00:36:27.760 survive knockoff competition. That will allow you to survive, you know, a 518 00:36:28.400 --> 00:36:30.159 bad they're a bad meeting with the retailer, because ultimately, you know what 519 00:36:30.199 --> 00:36:35.679 you stand for and you know that consumers love you for that element. So, 520 00:36:36.079 --> 00:36:37.760 yeah, maybe it's a bit Cliche, but to me it's very important 521 00:36:37.800 --> 00:36:43.800 to try and define an authentic mission that you will stay true to during the 522 00:36:43.880 --> 00:36:46.280 left and life of your entrepreneur journey. And I finally say one thing, 523 00:36:46.360 --> 00:36:51.400 Mike is a good brand, a good entrepreneur, even in tough times, 524 00:36:51.760 --> 00:36:54.760 will have access to capital and, as a result, as an entrepreneur, 525 00:36:54.880 --> 00:37:00.920 I would spend a tremendous amount of time diligencing the capital partner that you're talking 526 00:37:00.960 --> 00:37:05.559 to. I want to make sure that you're actually going to get something out 527 00:37:05.559 --> 00:37:07.360 of them, real value, not just what they put on a website, 528 00:37:07.360 --> 00:37:10.239 but you can they provide you with case studies? Can they introduce you to, 529 00:37:12.000 --> 00:37:15.039 you know, the other CEOS that they've worked with, etcetera? Because 530 00:37:15.079 --> 00:37:19.840 you you owe it to yourself and also to your employees and to the to 531 00:37:20.079 --> 00:37:22.920 to your brand, to partner with the with the bet. So all the 532 00:37:22.960 --> 00:37:27.480 most complimentary investor and people and honestly, the worst thing that you could do 533 00:37:27.639 --> 00:37:30.400 is rush through a process like going to Las Vegas, getting married and the 534 00:37:30.480 --> 00:37:35.159 next day be like wow, what they do, because the investor is someone 535 00:37:35.199 --> 00:37:37.639 you're gonna spend, you know, quite a bit of time over the next 536 00:37:37.679 --> 00:37:39.880 five, six years, and you know, if you want to be with 537 00:37:39.920 --> 00:37:45.320 someone, you'll be, you'll be happy with totally, totally. I completely 538 00:37:45.360 --> 00:37:47.400 agree, Clement. This is so much fun. Thank you so much for 539 00:37:47.440 --> 00:37:51.360 your time again, this is this is really great. I had a great 540 00:37:51.360 --> 00:37:52.760 time. Thank you, Mike. Thank you. There you have it. 541 00:37:52.760 --> 00:37:57.280 It was terrific with Clement. I hope you all enjoyed. If you enjoyed 542 00:37:57.280 --> 00:37:59.880 this episode, I love it if you write a review on the Apple Pard 543 00:38:00.039 --> 00:38:02.480 Hass. You're also welcome to follow me your host, Mike, on twitter 544 00:38:02.599 --> 00:38:07.000 at Mike Gelb, and also follow for episode announcements at Consumer VC. Thanks 545 00:38:07.000 --> 00:38:25.559 for listening, everyone. Oh, Oh, oh,