April 28, 2022

Michael Duda (Bullish) - How to invest in brands that can appeal to the early majority, the two ways to win as a brand, and why all consumers are liars

Michael Duda (Bullish) - How to invest in brands that can appeal to the early majority, the two ways to win as a brand, and why all consumers are liars

Our guest today is our second second time guest, Mike Duda. Mike is the General Partner at Bullish. Bullish is a consumer only venture capital fund and creative agency. Some of their investments include Sunday, Spark Grills, Hu, Care/of. I mention these brands specifically because all the founders of those companies have been on the podcast but they’ve also invested in Peloton, Harry’s Warby Parker. If you want to learn the founding story of how Mike founded Bullish, highly recommend his first episode in 2020. In this episode we focus on his process to identifying a consumer insight, what needs to happen in order for an insight to become an investment opportunity and his analysis on consumer behavior. I was delighted Mike was willing to come back on the show for a chat, without further ado, here he is.

Questions I ask Mike:

  1. What’s your process to identifying a nascent consumer insight?
  2. I’ve had investors come on the show talk about their jobs are to identify the difference between a consumer trend and a fad. How do you make that distinction?
  3. What has to happen in order for a trend to become big?
  4. One of the massive trends in 2010s was home fitness, and you were big winners with your investment in Peloton. I’d love it if you could walk through how you made that investment?
  5. What's the next big thing in consumer that you think is under-appreciated or contrarian?
  6. What’s often misunderstood investing in consumer oriented companies?
  7. If the bet is right when it comes to a trend, how important is having a competitive advantage in your product?
  8. When you think about the major themes and changes in consumer behavior, what comes to mind?
  9. Is investing in consumer products saturated since it's easier than ever to launch a company?
  10. What do you think is misunderstood by tech when it comes to CPG?
  11. What’s misunderstood when it comes to brand?
  12. What’s under-appreciated when it comes to building a brand?
  13. What’s one piece of advice you have for founders?
Transcript
WEBVTT 1 00:00:12.400 --> 00:00:17.039 Hello and welcome to the consumer VC. I am your host, Michael but 2 00:00:17.120 --> 00:00:20.719 and. On this show we talked about the world of venture capital and innovation 3 00:00:20.839 --> 00:00:25.280 in both consumer technology and consumer products. If you're enjoying this content, you 4 00:00:25.280 --> 00:00:30.480 could subscribe to my newsletter, the consumer VC DOT substackcom, to get each 5 00:00:30.519 --> 00:00:35.159 new episode and more consumer news delivered straight to your inbox. Our guest today 6 00:00:35.240 --> 00:00:40.119 is our second second time guest, Mike Doda. Mike is a general partner 7 00:00:40.159 --> 00:00:44.439 at bullish. Bullish is a consumer only venture capital fund and Creative Agency. 8 00:00:44.759 --> 00:00:49.320 Some of their investments include Sunday, spark, grills, Hue and care of. 9 00:00:49.399 --> 00:00:53.399 I mentioned these companies because all the founders have been on the show, 10 00:00:53.399 --> 00:00:57.159 but they've also been an investor in Peloton, Harry's and will be Parker, 11 00:00:57.240 --> 00:01:00.880 among other amazing companies. If you want to learn about the founding story, 12 00:01:00.960 --> 00:01:04.159 about how Mike founded bullish, I highly recommend his first episode that we recorded 13 00:01:04.159 --> 00:01:08.000 in two thousand and twenty. In this episode we focus on his process to 14 00:01:08.079 --> 00:01:12.840 identifying consumer insight, what needs to happen in order for an insight to become 15 00:01:12.879 --> 00:01:19.000 an investment opportunity and his analysis on consumer behavior. I was delighted Mike Was 16 00:01:19.040 --> 00:01:22.439 Willing to come back on the show for a chat, and so, without 17 00:01:22.519 --> 00:01:27.439 further ado, here he is. Mike. Thank you so much for joining 18 00:01:27.480 --> 00:01:32.640 me for a second time. You're the second second time guests that I've had 19 00:01:32.680 --> 00:01:34.200 on the show. How are you? I'm doing well, Mike. Listen, 20 00:01:34.239 --> 00:01:38.799 I have a consumer VC Tattoo. I think the franchise your building is 21 00:01:38.840 --> 00:01:42.680 awesome, and look where you are now. You're over two hundred episodes and 22 00:01:42.719 --> 00:01:45.879 doing live events. You're like a rock star man. So thank you for 23 00:01:45.879 --> 00:01:49.640 remembering my name and my email address. Hardly, hardly heartily. Thanks and 24 00:01:49.760 --> 00:01:51.719 for being here. Is is the Ze me. Fine. Why is Stur 25 00:01:51.920 --> 00:01:57.359 since obviously you are Mr Consumer, whats your process for identifying a nascent consumer 26 00:01:57.480 --> 00:02:00.640 insight that maybe could turn into a trend? One of the things we do 27 00:02:00.680 --> 00:02:04.079 every year, and it's for my partner Brent far ten, one of our 28 00:02:04.120 --> 00:02:07.840 GPS, is we do this ongoing study the power of why, and in 29 00:02:07.959 --> 00:02:10.919 our thesis is and our believe is all consumers are liars. There's a great 30 00:02:10.919 --> 00:02:15.680 photo out there what women say about their husband's on facebook versus what they say 31 00:02:15.680 --> 00:02:17.919 in Google. And let's just say Google is like a digital truth serum, 32 00:02:17.919 --> 00:02:22.800 whereas like on Facebook, my husband is great, my husband's amazing. On 33 00:02:22.919 --> 00:02:25.360 Google, why is my husband and Asshole is my husband? This is it 34 00:02:25.439 --> 00:02:28.919 that, and it just so interesting. And so one of the things like 35 00:02:28.960 --> 00:02:31.479 just doing like survey monkey stuff is cute, but we do it in depth. 36 00:02:31.520 --> 00:02:35.719 We have it four years running about what consumers are really doing and it's 37 00:02:35.800 --> 00:02:39.240 so compelling. What we've found out, because what we've landed on, is 38 00:02:39.280 --> 00:02:43.159 that we looked invest in brands and aren't just going to get the early stage 39 00:02:43.159 --> 00:02:46.719 adopters. We look for brands that have the potential to get the early stage 40 00:02:46.800 --> 00:02:52.479 majority and that's it. Like usually rung to or run three of stuff in 41 00:02:52.879 --> 00:02:55.919 many ways like a post series, a round, and it's interesting what they 42 00:02:55.919 --> 00:02:59.879 look like, as much as this podcast might resonate with a lot of people. 43 00:03:00.039 --> 00:03:01.759 And then New York and Samacisco in La, and you've heard me talked 44 00:03:01.759 --> 00:03:06.479 about that, the real influencers. I'm not talking about social media, instagram 45 00:03:06.560 --> 00:03:08.560 or tick dock. The real influencers are they're probably thirty five to forty four 46 00:03:08.599 --> 00:03:14.840 years young. They over index in areas like Virginia, Arizona and Texas. 47 00:03:14.879 --> 00:03:19.560 They spend more on home services and entertainment and vacations. They like enjoying about 48 00:03:19.560 --> 00:03:22.400 reading about new technology, change and world versus bragging about they got one of 49 00:03:22.400 --> 00:03:24.800 the first one hundred. You know, out there. They're very curious. 50 00:03:24.840 --> 00:03:29.000 There's certain values that they have in terms like family and honor are big to 51 00:03:29.039 --> 00:03:31.960 them. And then it comes from like the fusion of innovation and the different 52 00:03:32.000 --> 00:03:36.800 behaviors of people. But you know, it's really interesting of the stuff we 53 00:03:36.879 --> 00:03:42.520 study consumer behavior and where are informedness. Like if you go back to when 54 00:03:42.520 --> 00:03:45.960 we first start investing in the two thousand and ten, two thousand and fourteen, 55 00:03:46.120 --> 00:03:49.800 it was the internet is hero, cut out the middleman, Internet boom, 56 00:03:49.840 --> 00:03:52.560 and you have warby Parker, you Harry's, your Casper on that. 57 00:03:52.960 --> 00:03:58.759 Now there's an air of customization and post pandemic. IPHONES are now fourteen years 58 00:03:58.800 --> 00:04:00.879 young, like the consumer demands are have gone up there. It's just like 59 00:04:01.240 --> 00:04:05.240 more and more people are less brand loyal and they're looking for new things. 60 00:04:05.319 --> 00:04:08.680 And you know, part of what we'd go into is, as we look 61 00:04:08.680 --> 00:04:11.960 at consumer behavior and study with people are doing year and we have sixteen hundred 62 00:04:12.000 --> 00:04:15.759 people that represent American this thing like it's identifying stuff. So we get a 63 00:04:15.800 --> 00:04:19.399 good sense of what's a trend versus what's a fat how about that? For 64 00:04:19.439 --> 00:04:24.519 a long would an answer boom. I really appreciate that make so that is 65 00:04:24.560 --> 00:04:27.839 also pretty justy. I like how you said that you're really interested in terms 66 00:04:27.920 --> 00:04:30.600 of the what the early majority is actually you doing and also not thinking about 67 00:04:30.600 --> 00:04:34.120 the early majority with the New York's and Las and Francisco is a kind of 68 00:04:34.120 --> 00:04:38.319 the coast of the world, but you actually think about it in more of 69 00:04:38.319 --> 00:04:42.480 like the middle of the country, and so like like the Virginia and Texas 70 00:04:42.560 --> 00:04:46.199 being like the main two regions, and that's what came out. That's when 71 00:04:46.240 --> 00:04:48.480 we looked at who these people are the earliest majority. It's like we didn't 72 00:04:48.480 --> 00:04:51.839 say, let's Pick Virginia or Arizona. It's like that's where they wand up 73 00:04:51.879 --> 00:04:57.000 being people that look like this. It's surprised US versus overlooking. And so 74 00:04:57.120 --> 00:04:59.959 Texas. Does that make sense? Yeah, because everyone seems to have moved 75 00:04:59.959 --> 00:05:02.399 to Texas, but Virginia, we didn't see that. And by the way, 76 00:05:02.439 --> 00:05:06.839 this target is everywhere, that this general photography is everywhere. But where 77 00:05:06.839 --> 00:05:12.000 they overindex surprised us and it's just it's a reminder there's three and thirty eight 78 00:05:12.000 --> 00:05:15.959 million Americans out there, and the ones that read tech crunch aren't, as 79 00:05:15.959 --> 00:05:18.879 say, the ones that we want to get first and foremost or are the 80 00:05:18.920 --> 00:05:24.600 key to long term success of the businesses we invest in. When you're doing 81 00:05:24.639 --> 00:05:28.399 these data analytics and and figuring out where they early majority is, I mean 82 00:05:28.439 --> 00:05:30.279 like what, what kind of goes into that, and figuring out why is 83 00:05:30.319 --> 00:05:35.439 it Texas in Virginia that you're overindexing on when it comes to early majority, 84 00:05:35.560 --> 00:05:40.720 or where you think that the next where you're examining maybe considered behavior and maybe 85 00:05:40.759 --> 00:05:44.600 those two regions, I'm sure also other regions as well. But where does 86 00:05:44.600 --> 00:05:47.480 that kind of come from? It really comes from my partner, Brent Credit. 87 00:05:47.480 --> 00:05:51.240 Again, it's like we we have a strategy team that's adjacent works alongside 88 00:05:51.279 --> 00:05:56.079 the investment team at bullish, and so what we do is we actually craft 89 00:05:56.079 --> 00:06:00.480 and customize these researching isitives, use an outside party, pay people to participate. 90 00:06:00.519 --> 00:06:03.600 We also like have a couple criteria. So what knocks people out, 91 00:06:03.639 --> 00:06:06.600 like if they're in the marking industry, tends knock them out, and so 92 00:06:06.800 --> 00:06:10.360 we do things not just for like the quick answers and say, Oh, 93 00:06:10.399 --> 00:06:13.560 look, we did this poll in two seconds. We actually spend a lot 94 00:06:13.560 --> 00:06:15.120 of time on it and we also do it for the number of the brand 95 00:06:15.199 --> 00:06:19.720 that we invest in, like we're doing a substantial initiave right now for culture, 96 00:06:19.800 --> 00:06:23.839 Lewis and Sunday lawn that I can't speak to because it might be announced 97 00:06:23.839 --> 00:06:27.040 by the time as podcast hares and sometime in q one. But it's like 98 00:06:27.240 --> 00:06:30.439 going a deep dive in terms of looking at a market place and look at 99 00:06:30.519 --> 00:06:32.920 our current consumer base and look at the target consumers and like okay, what 100 00:06:32.959 --> 00:06:35.720 can we learn? What we model and go up from? And so if 101 00:06:35.720 --> 00:06:40.319 we could do that on a daily basis, on a day to day basis 102 00:06:40.319 --> 00:06:43.519 is of VC fund bring that kind of rigor, it's just exceptional. What 103 00:06:43.600 --> 00:06:46.959 sets US apart. So it's less about the how exactly do it, but 104 00:06:46.160 --> 00:06:51.639 we have people that came from the Worlds of daily harvest or deloit or people 105 00:06:51.639 --> 00:06:56.839 that did quant and qualitative like research for for the passion before they came to 106 00:06:56.879 --> 00:07:00.279 bullish. What do you focus on, like the next big thing consumer? 107 00:07:00.360 --> 00:07:04.240 What would you still think maybe is under appreciated or contrarian? It is still 108 00:07:04.240 --> 00:07:09.240 maintain is like as much as we all obsess over tech and whether it's the 109 00:07:09.319 --> 00:07:13.399 stock market, when you look at the multiples to early stage VC. Look 110 00:07:13.439 --> 00:07:16.639 for innovation is like we still think it's UND appreciates. One the consumer asset 111 00:07:16.720 --> 00:07:21.439 class and to boring stuff, and I still contend is if that we're consider 112 00:07:21.439 --> 00:07:27.519 a good investor and it's because we'vest in a bike, a razor, a 113 00:07:27.639 --> 00:07:30.800 pair of glasses, a chocolate and shampoo. I'm talking about Peloton and Harry's 114 00:07:30.800 --> 00:07:35.759 and Warby Parker and hugh chocolate and and function of beauty on that stuff. 115 00:07:35.800 --> 00:07:40.120 And so what we try to is we just study the consumer categories like we 116 00:07:40.120 --> 00:07:45.319 always have. We see behaviors and we look for like really intriguing entrepreneurs or 117 00:07:45.360 --> 00:07:48.279 looking to burn the boats and and like pursue a passion and right or wrong 118 00:07:48.319 --> 00:07:51.519 for consumers. But still paranoid is to like, Oh, here's how we 119 00:07:51.519 --> 00:07:55.480 could lose her dollar if we don't keep it up. And what's interesting is 120 00:07:55.480 --> 00:07:58.040 that is the nature of what that entrepreneur has been looking like. When we 121 00:07:58.040 --> 00:07:59.959 look at the data, like go back to ten years ago, I think 122 00:07:59.959 --> 00:08:03.639 the average age of our founders was like twenty six in at like a half 123 00:08:03.720 --> 00:08:07.319 or like twenty seven years young. The first few bets out of our Brand 124 00:08:07.360 --> 00:08:09.360 Fund, to which is we started investing out of in two thousand and twenty 125 00:08:09.360 --> 00:08:13.560 one is we had a thirty five year old Mama to that was raising capital 126 00:08:13.600 --> 00:08:16.800 wherever she's giving birth to her second child, will not actually getting birth, 127 00:08:16.839 --> 00:08:20.639 but pregnant a couple early fifty one, fifty two year old guys who were 128 00:08:20.720 --> 00:08:24.560 leaving a big corporate environment because they thought they could do something better. And 129 00:08:24.560 --> 00:08:28.360 when we look at her ten or less ten deals. Eight we're done in 130 00:08:28.560 --> 00:08:33.879 Beaverton, Oregon, Neuchanan, Connecticut, Philadelphia, Pittsburgh, Austin, Bolder 131 00:08:33.000 --> 00:08:37.720 Minneapolis, among others. So it's just really interesting in terms of so it's 132 00:08:37.960 --> 00:08:41.200 I'm getting the punch line of the choke and less. It's like less what 133 00:08:41.240 --> 00:08:45.240 we look for, but like really see what's happening and and where it's happening 134 00:08:45.279 --> 00:08:48.080 and whether it's because of shark tank or this show, which, by the 135 00:08:48.120 --> 00:08:50.840 way, you've unlocked a lot of people not in the in the in the 136 00:08:50.840 --> 00:08:54.000 coast have been into it or want to join venture. It's just people are 137 00:08:54.039 --> 00:09:00.080 realizing like entrepreneurship, were investing, is more accessible, whether you're overlooked and 138 00:09:00.080 --> 00:09:03.399 overlooked is certainly the African American population, which is just doesn't get BC funding. 139 00:09:03.399 --> 00:09:07.799 Women that, despite being most of the population, doesn't get VC funding. 140 00:09:07.799 --> 00:09:09.279 But if you're from Tulsa, Oklahoma and your White Mail, you're overlooked, 141 00:09:09.399 --> 00:09:11.759 if you're not an engineer, you're overlooked. And so it's like what 142 00:09:11.799 --> 00:09:15.440 I think it's. A lot of sunlight is being shed in those areas, 143 00:09:15.480 --> 00:09:18.639 which is wonderful, and our job is to find but it's still stick into 144 00:09:18.639 --> 00:09:20.000 our core. Is this? Is this a great consumer disruption? Is this 145 00:09:20.080 --> 00:09:24.399 in need, and then finding that the founding teams have an unlock? But 146 00:09:24.480 --> 00:09:30.159 more and more we're seeing like crazier things being attacked, and I say crazier 147 00:09:30.279 --> 00:09:33.480 not in any disparaging way, please, but it's like investing in matress in 148 00:09:33.519 --> 00:09:37.639 two thousand and thirteen was crazy. Whether it's areas and digital detoxification, whether 149 00:09:37.679 --> 00:09:41.120 it's areas like psychedelics, which I am hugely fascinated by, especially studying what's 150 00:09:41.159 --> 00:09:46.279 going on in areas like Brazil, in Asia. Pack like there's just a 151 00:09:46.279 --> 00:09:48.639 lot of stuff going on right now. This is such a wonderful time. 152 00:09:48.759 --> 00:09:52.759 This will literally be a golden era of consumer and maintain it's maybe it's because 153 00:09:52.759 --> 00:09:56.679 a freaking bat bit of snake in China we have the pandemic. But covid 154 00:09:56.720 --> 00:09:58.799 I think, is going to unlock a lot of people to say, like, 155 00:10:00.000 --> 00:10:01.679 if I'm spending my time this way, it's just not satisfy, I'm 156 00:10:01.679 --> 00:10:05.200 going to go start my own thing or do something else. And we've seen 157 00:10:05.240 --> 00:10:09.919 so many different like between the great resignation to the golden sacks analyst to like 158 00:10:11.200 --> 00:10:13.720 the kind of entrepreneurs going on right now. It is it's an all bets 159 00:10:13.720 --> 00:10:16.919 are off thing, and so so when you say what we look for, 160 00:10:16.960 --> 00:10:20.320 it's like, in many ways we try not have blinders on, but we 161 00:10:20.440 --> 00:10:22.960 trying to listen and use our eyes see what we're seeing out there, and 162 00:10:22.000 --> 00:10:26.080 it's a lot different than it was four years ago and which is really cool. 163 00:10:26.120 --> 00:10:31.399 Now that is do you also think that sin it's in the pandemic? 164 00:10:31.440 --> 00:10:33.919 You're probably doing a lot more virtual meetings. You mean entrepreneurs remotely. Do 165 00:10:33.919 --> 00:10:37.799 you think that has been also an unlock, not only on the entrepreneurial side, 166 00:10:37.840 --> 00:10:43.120 people maybe leaving their jobs actually start something and really re examining what they 167 00:10:43.159 --> 00:10:46.080 actually want to do, but also on the investor's side as well, looking 168 00:10:46.159 --> 00:10:50.799 more at opportunities that aren't you know, just on the coast, humans hate 169 00:10:50.919 --> 00:10:54.720 change, but boy can we adapt, can't we? Wow, can we 170 00:10:54.759 --> 00:10:58.440 adapt, like all, what was us while we can't get on plans to 171 00:10:58.440 --> 00:11:01.519 go see this. It's like we were raising a fun during the pandemic. 172 00:11:01.559 --> 00:11:03.600 Not Ideal, but it just like it kind of changed the playing field, 173 00:11:03.639 --> 00:11:07.840 like okay, let's do it this way. We funded businesses that when I 174 00:11:07.960 --> 00:11:09.919 like to see the whites of someone's eyes, I love seeing the nonverbal in 175 00:11:09.960 --> 00:11:13.279 person. Well, you know, zooms got a strong HD camera attached to 176 00:11:13.320 --> 00:11:16.480 it, right, but it's like we had to do that. So we 177 00:11:16.519 --> 00:11:18.559 figure stuff out along the ways, and that's what is a human race. 178 00:11:18.600 --> 00:11:22.759 We do a pretty good job of on that side. And also unlocks new 179 00:11:22.759 --> 00:11:26.480 technological needs. Like why did restaurants operate this way, or is why had 180 00:11:26.639 --> 00:11:28.879 education this way? or Why is healthcare this way? I mean the healthcare 181 00:11:28.960 --> 00:11:33.200 system, which is one of the most archaic and Bureaucrat across the Board, 182 00:11:33.200 --> 00:11:35.960 pretty much adopted tell a health pretty quick right. It was amazing and some 183 00:11:37.000 --> 00:11:39.600 things aren't going back on that side of it, except the Etnas and the 184 00:11:39.600 --> 00:11:43.639 insurance companies world want you going back because, oh, you're not doing those 185 00:11:43.679 --> 00:11:46.639 regular office of visits and that's how we make money. So it's really interesting 186 00:11:46.639 --> 00:11:52.279 that we can shift over periods of time. And yet ECOMMERCE penetration fascinating. 187 00:11:52.360 --> 00:11:56.519 ECOMMERCE, predatory ECOMMERCE is an overall part of retails. What thirteen percent prepandemic 188 00:11:56.559 --> 00:12:00.840 and then it went up to twenty seven percent. Do in the pandemic the 189 00:12:00.840 --> 00:12:03.679 waters going back in the ocean. That's not going up to thirty or thirty 190 00:12:03.679 --> 00:12:05.720 five percent. Like physical retail, still matters. Why we like to see 191 00:12:05.720 --> 00:12:09.440 feel touch. Also, if I just got to get a cute tip and 192 00:12:09.480 --> 00:12:13.159 I don't have q tips, I might go to my CBS on that side 193 00:12:13.200 --> 00:12:15.759 of it, or maybe I'll go to go puff if you know they're making 194 00:12:15.759 --> 00:12:18.039 money and stay in businesses on that side. So it's interesting from a VC 195 00:12:18.200 --> 00:12:22.480 perspective. On the fat trend, thing is fifteen minute grocery became cool again, 196 00:12:22.639 --> 00:12:26.080 like and I'd flashbacks to the two thousand and twenty version. You've had 197 00:12:26.080 --> 00:12:28.519 a couple of people on your show that have been great on it, and 198 00:12:28.600 --> 00:12:31.759 yet we saw some that raise over ten million that disappeared in seven months. 199 00:12:31.799 --> 00:12:35.799 And so what's going to have staying power in terms of like a true need 200 00:12:35.840 --> 00:12:39.759 that's also has some physical prudency and viability, and what's like, well, 201 00:12:39.799 --> 00:12:43.960 that was nice, but you know, you basically snorted the cocaine of capital 202 00:12:43.000 --> 00:12:46.120 from VC's, but it didn't work out. That's what's just all so awesome 203 00:12:46.200 --> 00:12:50.120 right now. It's so I've think I've stolen this line. My Crystal Ball 204 00:12:50.200 --> 00:12:54.000 is permanently like broken. We don't know, but man, things are like 205 00:12:54.159 --> 00:13:01.039 happening and building and succeeding and faltering at a record pace and I can't say 206 00:13:01.039 --> 00:13:05.679 it's that good or bad. It's like it's what it is. It's super 207 00:13:05.720 --> 00:13:07.200 fascinating and you give me thinking, Mike. That's why I love this show. 208 00:13:07.240 --> 00:13:09.080 You get me thinking. I love this I don't know if I have 209 00:13:09.120 --> 00:13:11.759 these kind of lucid thoughts when I'm just sitting around. So God, man, 210 00:13:11.799 --> 00:13:15.960 your your show's even better. That for my psyche than I realized. 211 00:13:16.399 --> 00:13:18.600 Too kind, too kind. But how do you also think when you think 212 00:13:18.600 --> 00:13:22.159 about, and you have your whole research team, you think about some of 213 00:13:22.159 --> 00:13:26.759 the massive trends that you talked about, the Stallsia detachment were to the major 214 00:13:26.799 --> 00:13:30.919 ones. You point out. Do you think of your yourself in terms of 215 00:13:30.919 --> 00:13:33.679 how you invest, where you have these themes that you think you're going to 216 00:13:33.720 --> 00:13:37.600 be huge themes coming into the next five hundred and ten years, and then 217 00:13:37.639 --> 00:13:41.519 you go out and you chase after entrepreneurs who are building in those in those 218 00:13:41.559 --> 00:13:43.360 themes, or do you think a bit more like bottoms up and you have 219 00:13:43.399 --> 00:13:48.840 like an entrepreneur surprise you and to let you in into maybe a secret that 220 00:13:48.039 --> 00:13:50.759 you might then go back and be like, okay, actually this, this 221 00:13:50.799 --> 00:13:54.879 could be something big? It is more of the ladder. We see a 222 00:13:54.919 --> 00:13:58.320 lot of Fomo. Like we say, like we've identified all these trends and 223 00:13:58.360 --> 00:14:01.840 based on these trends, like pillows are going to be big, we just 224 00:14:01.840 --> 00:14:03.399 pillows. People going to sleep more and it got demand where the pillows made 225 00:14:03.480 --> 00:14:07.120 of like whatever. Then you just can't help us. But you want to 226 00:14:07.120 --> 00:14:09.639 do a pillow deal and then you can accept so much. We're humans, 227 00:14:09.679 --> 00:14:11.679 were rational. Then you look for reasons to do that pillow deal versus not. 228 00:14:11.799 --> 00:14:15.320 Which is that? So we try not to do that. And again 229 00:14:15.360 --> 00:14:18.080 there's two hundred and forty or two hundred and fifty different categories out there. 230 00:14:18.200 --> 00:14:20.879 What it does is help us more informed that when we see stuff and again, 231 00:14:20.919 --> 00:14:24.720 it helps us be our antidote to Tam or our compliment to Tam. 232 00:14:24.759 --> 00:14:28.200 You and I've talked before, like I just Tam is so overrated. It's 233 00:14:28.279 --> 00:14:33.480 not even funny, like CAC as bad in many ways, but it just 234 00:14:33.559 --> 00:14:37.080 like you throw the balls where the someone's going, not not that you look 235 00:14:37.080 --> 00:14:41.000 through the windshield, not the Ruby Mirror, to plow ahead. And so 236 00:14:41.320 --> 00:14:45.279 way we use these cultural themes, and you know what we think? Are 237 00:14:45.360 --> 00:14:48.840 Like trends that have some sting power for a few years, not just like 238 00:14:48.879 --> 00:14:50.799 what's going to be the address or anything. It's just like that helps us 239 00:14:50.919 --> 00:14:56.000 lens to see, like who's this? Will that early stage majority be like 240 00:14:56.320 --> 00:14:58.960 receptive, this, will be looking for and then as our business five build 241 00:15:00.200 --> 00:15:03.480 towards it to so those are like indications and evidence we can point to that 242 00:15:03.519 --> 00:15:07.159 when you see like a great entrepreneur, you're not just full in love, 243 00:15:07.279 --> 00:15:09.279 how this person, she is great, she's amazing, but also, Oh, 244 00:15:09.360 --> 00:15:13.039 this, this is business viability, because of weird things are going. 245 00:15:13.399 --> 00:15:18.279 Peloton, the TAM on Peloton in that categories two point one billion Peloton. 246 00:15:18.320 --> 00:15:20.559 While they haven't had the best, best couple months reach forty. Forty billion 247 00:15:20.600 --> 00:15:24.399 dollars at one point not too long ago, and it's because when they saw 248 00:15:24.480 --> 00:15:30.039 like less people going to church more two thirds of American households have dual like 249 00:15:30.799 --> 00:15:33.240 two people at work. It's like spending time at home is just more of 250 00:15:33.240 --> 00:15:37.080 a forced nature. So how can you make it better? And they built 251 00:15:37.120 --> 00:15:41.360 community of that. So and from a tech basis that couldn't have exist without 252 00:15:41.360 --> 00:15:43.200 for G and WI FI. But we didn't invest because of for Gene Wi 253 00:15:43.240 --> 00:15:46.320 fi. That was an enablement. So all those different factors kind of go 254 00:15:46.399 --> 00:15:50.720 in onto it and in it either. I'm trying to make it some what, 255 00:15:50.799 --> 00:15:52.519 some more complicated. Is it's not, but it's all part of just 256 00:15:52.559 --> 00:15:56.279 our BLIEP like. You look at the demand side, you look what's going 257 00:15:56.399 --> 00:15:58.159 on in the world, you look at the like will people need this? 258 00:15:58.639 --> 00:16:02.720 Is this a problem that really needs to be solved? And this is something 259 00:16:02.759 --> 00:16:06.440 that is it has business viability, usually some strong gross march and to go 260 00:16:06.559 --> 00:16:10.200 from to be profitable at some point in time. And so that's how we 261 00:16:10.200 --> 00:16:12.799 look at it. It is like a it is like a salad bar with 262 00:16:12.840 --> 00:16:18.480 no bowls. Things bleed into one another like the Croutons into the Bacon bits, 263 00:16:18.519 --> 00:16:21.919 the carrots in them, with a cucumbers, the Romane with the Arugula. 264 00:16:22.000 --> 00:16:26.080 It's all together. When you're talking about companies, you're maybe saying how 265 00:16:26.120 --> 00:16:27.919 it's easy to kind of get into the weeds and be like okay, what's 266 00:16:27.960 --> 00:16:32.679 a cat going to be in kind of get into all these analytics, when 267 00:16:32.799 --> 00:16:37.360 really it's partly about measuring the human behavior and it people would actually obviously by 268 00:16:37.399 --> 00:16:42.240 the product or really maybe create a new habit potentially with this product. How 269 00:16:42.279 --> 00:16:47.759 do you measure human behavior per se? And if a company they pitch to 270 00:16:47.799 --> 00:16:49.960 you the bullish how do you measure to see if this is something that that 271 00:16:51.000 --> 00:16:52.919 could actually catch? The biggest way we do it is in a short gird 272 00:16:52.919 --> 00:16:56.240 a little bit. Is like by probing and ask the entrepreneur like what are 273 00:16:56.240 --> 00:17:00.240 we learning? And you want to go back to Birch box, which was 274 00:17:00.240 --> 00:17:02.799 our first investment today, one of the one of the things we loved about 275 00:17:02.840 --> 00:17:07.319 Alien Coati is that they did a test and with like two hundred people and 276 00:17:07.359 --> 00:17:08.880 they knew maybe twenty of them, so is only ten percent, and they 277 00:17:08.880 --> 00:17:11.799 came back with all the Datas and then they said here the four things we 278 00:17:11.880 --> 00:17:17.119 learned and it's like she doesn't like this, she liked this, she this, 279 00:17:17.119 --> 00:17:19.480 this or this, and then they iterated the product and proposition around the 280 00:17:19.480 --> 00:17:22.200 people. That's the kind of stuff we love. That kind of marries that 281 00:17:22.240 --> 00:17:26.240 all up, because here's the thing. We're not smarter than the entrepreneurs we 282 00:17:26.359 --> 00:17:27.759 back. I mean we brag about the ones that hit it big and we 283 00:17:27.839 --> 00:17:32.839 change your twitter profiles right like Pany, but it's like our entrepreneurs do all 284 00:17:32.880 --> 00:17:34.880 the hard work on that side of it and they're the ones in the pilot's 285 00:17:36.440 --> 00:17:38.480 seat, capting the you know, the their plane, spending more time on 286 00:17:38.519 --> 00:17:42.759 it. We just love that like obsessive desire to like be about like they 287 00:17:42.759 --> 00:17:47.319 are. We doing the right thing because I think was a Steve Bomber Microsoft 288 00:17:47.400 --> 00:17:49.440 quote. It's hard to change before you have to. Maybe was Bill Gates. 289 00:17:49.480 --> 00:17:52.839 And sometimes when you're doing so well, you're in you're on the cover 290 00:17:53.000 --> 00:17:57.039 of all these magazines and like you're like the top spot of the consumer DC 291 00:17:57.279 --> 00:18:00.319 podcast. It's like we're doing great, don't change everything because it's working. 292 00:18:00.519 --> 00:18:04.000 And yet that could be the worst thing ever, because there's someone ready to 293 00:18:04.000 --> 00:18:07.839 come up to eat your lunch and other competitors, and you're not iterating enough 294 00:18:07.880 --> 00:18:11.279 on that. And so we really really in terms of that stuff. Is 295 00:18:11.319 --> 00:18:15.119 the how does this entrepreneur before check, like, how are they looking at 296 00:18:15.160 --> 00:18:18.559 it? And or they worshiping what they're doing and they love what they're doing. 297 00:18:18.640 --> 00:18:22.279 I mean that's yes, without a doubt. But like, if you're 298 00:18:22.319 --> 00:18:25.480 too precious about wanting to change run it, or you don't really factor in 299 00:18:25.519 --> 00:18:29.240 the people giving you money. So I love about DTC. It's a business 300 00:18:29.240 --> 00:18:32.519 model. Sure, I mean there's not a ton of scale DTC and we 301 00:18:32.559 --> 00:18:36.119 can give that element, but DCC is a feedback mechanisms. You can actually 302 00:18:36.240 --> 00:18:37.960 learn from the people given you money and then you can put stuff out there 303 00:18:37.960 --> 00:18:41.960 and they can help with innovation, all these things. He uses a dialog, 304 00:18:41.039 --> 00:18:45.440 not just as a we're saving margins so we don't sell a retail it's 305 00:18:45.440 --> 00:18:48.519 like that's a part of it, but we let really comes down to is 306 00:18:48.880 --> 00:18:51.839 simply, as said, it's like how the founder and the founding team is 307 00:18:51.839 --> 00:18:53.640 going about making sure that they're going to like, not only win over the 308 00:18:53.640 --> 00:18:56.240 consumer and that they can get into cache and LTV, but how are you 309 00:18:56.279 --> 00:18:59.960 going to treat and how do you make sure they're going to stay relevant to 310 00:19:00.000 --> 00:19:04.079 them over time, especially in an era where you're having increasingly an abundance of 311 00:19:04.200 --> 00:19:07.720 it seems like unlimited options? Yeah, I mean that's a really, really 312 00:19:07.759 --> 00:19:12.640 good point. What you think about? If there's a company that's on trend 313 00:19:12.640 --> 00:19:15.480 maybe, or you know it's a nascent trend that you think could be big 314 00:19:15.680 --> 00:19:21.160 and you really like the founder in you might the company, how important is 315 00:19:21.200 --> 00:19:26.400 it to have a competitive advantage when it comes to the actual product itself? 316 00:19:26.799 --> 00:19:29.880 It's important. It's gotta be Importan because there's got to be hook in it 317 00:19:30.079 --> 00:19:32.920 for somewhere. This is like how's this better for me? Whatever? It 318 00:19:33.000 --> 00:19:36.440 just can't be too much attribute driven. Oh look, it's cheaper, oh 319 00:19:36.519 --> 00:19:38.920 it's faster. It's like those are things that could be with the rep piece 320 00:19:38.960 --> 00:19:42.960 of technology like taken away, like when Harry's launch, Harry is was not 321 00:19:44.039 --> 00:19:48.079 a better shave than Gillette. Gillette spends a good sillions of money on product 322 00:19:48.079 --> 00:19:51.519 innovation. It's a really great shape. It's just like it's an insane proposition 323 00:19:51.559 --> 00:19:53.720 that rips you off. But like, Harry's is a damn good shave and 324 00:19:53.720 --> 00:19:56.000 it's a it's a better value in that stuff. And then, if you 325 00:19:56.000 --> 00:20:00.880 look at it, it's a shaving company named Harry's. How hilarious is that? 326 00:20:00.200 --> 00:20:03.400 It took itself a little bit less seriously, like you didn't have to 327 00:20:03.400 --> 00:20:07.599 shave every day, right, versus Chilette, Jilette, a best a man 328 00:20:07.680 --> 00:20:11.559 can get. Yeah, okay, all right, easy s aggro guy. 329 00:20:11.599 --> 00:20:14.480 So part of it is a brand. Is got to be the values behind 330 00:20:14.480 --> 00:20:18.559 it, what it stands for. Like it's not just the younger generations now. 331 00:20:18.559 --> 00:20:21.880 It's just like, if I love I'll make up three I'm yellow stickies. 332 00:20:21.880 --> 00:20:22.839 Oh my God, these are the best things another. But then I 333 00:20:22.839 --> 00:20:26.599 find out they're burning down the Brazilian rainforest to make them. I'm probably going 334 00:20:26.640 --> 00:20:29.480 to like, I'm not going to do that anymore. And, by the 335 00:20:29.480 --> 00:20:30.680 way, three I'm don't sue me, I know you don't do that. 336 00:20:30.839 --> 00:20:36.200 So it's like the values of brands and companies matter a lot and it's always 337 00:20:36.240 --> 00:20:38.839 interesting. And cancel culture. What would people say? They're going to cancel 338 00:20:38.920 --> 00:20:41.720 verse what they do. But you have to stand for something bigger than the 339 00:20:41.720 --> 00:20:45.759 product itself. But the products got to do something or you go all in 340 00:20:45.839 --> 00:20:49.079 the other way. Wrong theory, and I'm going to say this with a 341 00:20:49.160 --> 00:20:56.400 huge respect liquid death. How awesome is liquid death? Liquid death like is 342 00:20:56.519 --> 00:21:02.039 just so awesome because it's all brand. They're basically like repositioning water to make 343 00:21:02.039 --> 00:21:04.160 it look like alcohol or tobacco or would be Badass. I've tasted the water. 344 00:21:04.359 --> 00:21:07.160 The water to me isn't as good. It doesn't matter. It's just 345 00:21:07.240 --> 00:21:11.440 it's a badge and they just raise seventy five million dollars and good to Peter 346 00:21:11.559 --> 00:21:14.599 Fam which not not every one loves that guy, but like he stood by 347 00:21:14.680 --> 00:21:17.839 that brand before his cool. And if you look at the things they do, 348 00:21:17.960 --> 00:21:21.400 from like making it bat on the Super Bowl the underdog to getting a 349 00:21:21.480 --> 00:21:25.799 voodoo person to cast is felt like they live into it and yet they don't 350 00:21:25.920 --> 00:21:30.000 go into like liquid death now with extra like h two, O two or 351 00:21:30.319 --> 00:21:36.440 three hundred right. It's just they're all into that and so it's like God 352 00:21:36.440 --> 00:21:40.200 bless them and it's certainly done well for them. So the product has to 353 00:21:40.240 --> 00:21:42.680 do something in there. But also, if you know you're consumer, some 354 00:21:42.799 --> 00:21:47.559 consumers like you know when you saw the explosion to hymns. I can't think 355 00:21:47.640 --> 00:21:52.640 hymns was better than Viagra, but it made it certainly more like less old 356 00:21:52.759 --> 00:21:56.559 and stodgy and more recreational and more on. That's a they built a brand 357 00:21:56.640 --> 00:21:59.480 and a proposition around it and they kind of got it and they're like let's 358 00:21:59.519 --> 00:22:03.240 lead the conversation. The open versus all right out is function. No one 359 00:22:03.279 --> 00:22:06.319 talks about it. Everyone talks about it as right. It's the percentage to 360 00:22:06.319 --> 00:22:08.319 have it. So it's the companies and brands have to do stuff. But 361 00:22:08.480 --> 00:22:14.039 we've seen, like that's a case off patent drug goes. That was all 362 00:22:14.079 --> 00:22:17.680 brand and and I'm sure some great service stuff, and Andrews, whom just 363 00:22:17.960 --> 00:22:21.119 flat out crushed it, in amazing. But it's like the product has to 364 00:22:21.160 --> 00:22:25.960 matter or if there's if everything's a parody, be more empathetic, be more 365 00:22:26.000 --> 00:22:30.160 but break free of category norms or bring something near to the table and keep 366 00:22:30.200 --> 00:22:33.279 bringing something new to the table. That's the game you're going to play. 367 00:22:33.279 --> 00:22:37.079 No totally and make clized as in terms of you either have maybe like a 368 00:22:37.319 --> 00:22:41.119 some type of product invasion on one side or you kind of just go in 369 00:22:41.279 --> 00:22:45.039 on all brand like you do with like with death, which I mean I 370 00:22:45.400 --> 00:22:49.039 absolutely love their youtube videos and obviously the brands amazing and I keep thinking when 371 00:22:49.039 --> 00:22:52.160 I drink it. It's going to be something more, but it's great. 372 00:22:52.240 --> 00:22:55.640 It's great. With all this being said, what do you think is still 373 00:22:55.720 --> 00:22:59.640 under presidence? Obviously you came from a brand billing background. You still build 374 00:22:59.640 --> 00:23:03.480 brands. What do you think from when you think about like traditional VC? 375 00:23:03.720 --> 00:23:06.799 What do you think it's still under appreciated in venture capital when it comes to 376 00:23:06.799 --> 00:23:11.440 actually building a brander or brand biliding in consumer I think we as VC's have 377 00:23:11.519 --> 00:23:15.960 to get more comfortable that there's different ways of doing it, and I especially 378 00:23:15.000 --> 00:23:18.440 believe that, like, for instance, one of the things I've become to 379 00:23:18.480 --> 00:23:22.240 unlearned. It's like pattern matching isn't good pattern matching. I putting that Tam 380 00:23:22.359 --> 00:23:25.279 Category A little bit. It's like, Oh, if we invest in people 381 00:23:25.319 --> 00:23:27.839 that look like this, increase our likelihood. Like if you graduate from pain, 382 00:23:27.880 --> 00:23:32.319 Oh you're probably have a good business and let's Whar we Parker Harry's care 383 00:23:32.359 --> 00:23:36.039 of h all pain. But that's how you that's how it's one of the 384 00:23:36.039 --> 00:23:38.440 reasons why, like Afriter American women are raising capital or women are race. 385 00:23:38.559 --> 00:23:41.079 So it's like part of it is like there's a lot of people, and 386 00:23:41.200 --> 00:23:45.880 it especially and consumer, regardless of what skin race you are that like I 387 00:23:45.920 --> 00:23:49.200 have an idea, I have a problem going to solve. I don't know 388 00:23:49.240 --> 00:23:52.200 what the venture game is. I don't know like I'm supposed to do it. 389 00:23:52.279 --> 00:23:56.039 Pretend page powerpoint deck. This way I'm going to go about it. 390 00:23:56.079 --> 00:23:57.519 I think we as VC's have to get more comfortable. And, by the 391 00:23:57.519 --> 00:24:00.279 way, I'm not speaking at the VC real like shame on you people, 392 00:24:00.359 --> 00:24:03.799 I'm talking to myself as well, and it's like that's why I find myself. 393 00:24:03.839 --> 00:24:07.599 It's just like, you know, I've told the Pelton story, like 394 00:24:07.640 --> 00:24:11.559 Peloton literally did not raise capital right way because it just John did it and 395 00:24:11.599 --> 00:24:14.839 like, guess what, good proposition. We have others like that as well 396 00:24:14.880 --> 00:24:18.079 too, and it's just we're trying to get more empathetic, like really understand, 397 00:24:18.079 --> 00:24:22.960 like how's this Entreprenur going after this? And and it's because like not 398 00:24:22.000 --> 00:24:26.559 everyone is just Google's and reads the sequoia deck or, like you know, 399 00:24:26.880 --> 00:24:30.680 spends time obsessing over like time to build quotes or you know, winter is 400 00:24:30.680 --> 00:24:33.799 coming, like that's us as we say that. A lot of no watchers 401 00:24:33.880 --> 00:24:37.359 don't do that, and good for them. So we have to get more 402 00:24:37.400 --> 00:24:41.680 comfortable just around like assessing based on like. Okay, I like the way 403 00:24:41.680 --> 00:24:45.240 you're going about it, because there is not a straight line to success, 404 00:24:45.400 --> 00:24:48.640 or even failure for that matter, in building a company, you know, 405 00:24:48.720 --> 00:24:53.039 and for all the like, Sir blankly of like spanks and all that stuff 406 00:24:53.079 --> 00:24:56.519 filled night of Nike, like they took unusual routes or did things where to 407 00:24:56.599 --> 00:25:00.839 face stuff, and so we got to celebrate differences more, and not just 408 00:25:00.880 --> 00:25:04.599 again that who is doing it, but like the way it's being done, 409 00:25:04.640 --> 00:25:08.240 and that's hard to do when you have to do like make a decision on 410 00:25:08.319 --> 00:25:11.920 term sheets and nine days, not ninety days, is Josh Coopleman once said 411 00:25:12.000 --> 00:25:15.160 was going on like a decade to go to now. So with the speed, 412 00:25:15.359 --> 00:25:19.440 with more entrepreneurs coming from war areas, you have coworking spaces and like 413 00:25:19.599 --> 00:25:23.720 Helena Montana, and not just like wherever we work is it's like we have 414 00:25:23.839 --> 00:25:30.559 to adapt that not all entrepreneurs are going to follow the process in the playbook 415 00:25:30.640 --> 00:25:33.039 that we'd like them to. I totally agree with you about pattern matching. 416 00:25:33.160 --> 00:25:37.799 It's come up on this show. Some investors love to say that they've gotten 417 00:25:37.839 --> 00:25:41.519 better at investing because of pattern matching, but at the same time then you 418 00:25:41.559 --> 00:25:45.480 might only invest in people that actually look like you or maybe think like you 419 00:25:45.519 --> 00:25:48.759 do, especially for building a company. There's no really straightlined to success, 420 00:25:48.759 --> 00:25:52.000 as you say. So it could be very, very different. I wish 421 00:25:52.000 --> 00:25:53.400 it was what I wish I was smarter. Our team is so good. 422 00:25:53.440 --> 00:25:57.759 I'm at least loud and bombastic, I guess. But with this pattern matching, 423 00:25:57.759 --> 00:26:02.599 if they could take like Amanda Duckworths Book on Grit is just phenomenal and 424 00:26:02.640 --> 00:26:04.319 it's like, how do you do pattern matching on grit? How do you 425 00:26:04.359 --> 00:26:07.880 see that stuff? So I think there's like elements and attributes and protain people, 426 00:26:07.920 --> 00:26:11.759 but like it's tough to kind of pattern match that way. It's like 427 00:26:11.960 --> 00:26:15.440 you can patter match on data and like more senses and rational stuff, but 428 00:26:15.440 --> 00:26:19.920 we just is a fan of eq beating Iq over the long term or building 429 00:26:19.920 --> 00:26:23.000 bigger things like that's the way you try to look at it. So I'm 430 00:26:23.000 --> 00:26:26.240 not again as anti powder matchic. I just think it's fools gold and it's 431 00:26:26.240 --> 00:26:30.799 going to just lead us to WHO's getting money and who's not getting money. 432 00:26:30.960 --> 00:26:33.480 Should think yours a little bit, but I love to know with investors and 433 00:26:33.559 --> 00:26:37.640 invest in CBG, which I know your you love invest in CPG and and 434 00:26:38.079 --> 00:26:41.359 VI's in your brands and, as you say, even though he commerce has 435 00:26:41.440 --> 00:26:44.599 got up to I think, twenty seven percent, is that right? It's 436 00:26:44.640 --> 00:26:47.480 not going to go out. Probably maybe much farther. When it comes to 437 00:26:47.519 --> 00:26:51.359 go into Omi Channel, I've had kind of two different thoughts around this. 438 00:26:51.519 --> 00:26:55.799 I once had Ernesto Schmidt from the craffery, who thinks that brands are actually 439 00:26:55.799 --> 00:26:59.920 going into retail. Dis You your brands going to retail way too early. 440 00:27:00.480 --> 00:27:03.440 Target and Walmart of being very aggressive and brand should actually hold out and and 441 00:27:03.839 --> 00:27:07.319 kind of focus on e commerce more. Then I had andy done on, 442 00:27:07.400 --> 00:27:14.480 who was obviously the one who coined dmvb, and he actually thought that brands 443 00:27:14.599 --> 00:27:19.000 should maybe started retail. Wanted to know, as an advisor, how you 444 00:27:19.039 --> 00:27:23.359 think about when a brand should kind of go into retail. That started off 445 00:27:23.359 --> 00:27:26.960 digitnative, whatever business her brand, you you are. It's like, who's 446 00:27:27.000 --> 00:27:30.519 your target audience? What are you doing? Where does it make sense to 447 00:27:30.559 --> 00:27:33.720 be and digital? I agree with it the first part of the craft. 448 00:27:33.839 --> 00:27:37.000 He said like there's a lot of DTC going to retail earlier and he brings 449 00:27:37.000 --> 00:27:40.039 a unique perspective and because he's been on the BINOBO's end. He's been on 450 00:27:40.079 --> 00:27:45.000 the Walmart suit and of things too. I will say this. Retailers, 451 00:27:45.000 --> 00:27:48.039 they used to, you know, give brands the heisman and be backbreakers, 452 00:27:48.079 --> 00:27:52.079 are actively recruiting young brands faster than ever. I am amazed that. We 453 00:27:52.119 --> 00:27:56.839 just wrote or LP letter last week and it just the amount of outreach we 454 00:27:56.880 --> 00:28:02.640 had from like big retailers with new initiative and more is incredible. And well, 455 00:28:02.640 --> 00:28:06.759 then he paired off with DTC and dealing with IOS Fourteen, which is 456 00:28:06.880 --> 00:28:10.160 beat the living dog shit out of a lot of companies. Two Thousand and 457 00:28:10.160 --> 00:28:11.880 twenty pandemic, Oh my God, is great. facebook. INSER rates go 458 00:28:11.960 --> 00:28:15.880 down because all the big spenders go out. This is great. Two Thousand 459 00:28:15.880 --> 00:28:18.599 and twenty one, I was fourteen, comes up. Oh, you know, 460 00:28:18.680 --> 00:28:21.200 I have tough year over your comps because all prices one up. But 461 00:28:21.240 --> 00:28:23.000 then you had, I was fourteen, apples, wargons, facebook, and 462 00:28:23.079 --> 00:28:27.279 so that that kicked the gut of a lot of companies. And so looking 463 00:28:27.319 --> 00:28:30.519 at that way, going to retail is a way of like, well, 464 00:28:30.640 --> 00:28:34.240 given the arbitrage going on there, if I go to retail, it's like 465 00:28:34.319 --> 00:28:37.640 it could be a good way of doing it. It's kind of like marketing. 466 00:28:37.680 --> 00:28:40.920 It's also really good when you realize no sane human being on earth spends 467 00:28:40.920 --> 00:28:44.079 all their time on facebook and Google is don't. So if you know, 468 00:28:44.200 --> 00:28:47.599 the more you know who your customer is. And so if you're like so 469 00:28:47.640 --> 00:28:52.119 CBS, if your target audience, and there's psychographics I would get into it's 470 00:28:52.119 --> 00:28:56.240 your target once is like exkews female in our late S, higher household income, 471 00:28:57.200 --> 00:29:00.920 is more into health and beauty. CBS is an absolutely phenomenal place to 472 00:29:00.920 --> 00:29:04.480 consider because of who their set is and they have nine thousand locations. On 473 00:29:04.480 --> 00:29:10.160 that side of it. Walmart has gotten, is done unbelievable in terms of 474 00:29:10.160 --> 00:29:14.079 like recruiting early stage brands, and we've had a couple of ours and they're 475 00:29:14.119 --> 00:29:18.599 about to launch a new initiative in a certain sector. That is really impressive. 476 00:29:18.599 --> 00:29:21.759 And they're all taken from the target playbook. That almost started with the 477 00:29:21.960 --> 00:29:26.039 twenty fourteen adoption of Harry's, which set the world on fire one of our 478 00:29:26.079 --> 00:29:30.640 companies. So it's hard to saying either or the one thing, there's got 479 00:29:30.640 --> 00:29:33.440 to be a better fucking word than I'm in the channel. It just like 480 00:29:33.640 --> 00:29:34.920 there's got to be something, but I don't have it. I'm not critiquing 481 00:29:34.920 --> 00:29:38.559 you, but it just like being where your customer needs you. And so, 482 00:29:40.160 --> 00:29:44.119 like I will go to my local CBS for stuff. I've Amazon and 483 00:29:44.119 --> 00:29:45.839 that stuff. But you know, other things, look, let's do DTC 484 00:29:47.039 --> 00:29:49.200 and maybe there's certain things I can't get elsewhere. But the more you know 485 00:29:49.240 --> 00:29:53.640 about who your consumer really is and when and why they need you and all 486 00:29:53.680 --> 00:29:56.559 that stuff, the more you can figure out, like, what a retail 487 00:29:56.640 --> 00:30:00.920 strategy should or shouldn't be. We love going like a morphoe is one of 488 00:30:00.920 --> 00:30:04.039 our newest brands. are going to be announcing some stuff related to a certain 489 00:30:04.119 --> 00:30:11.279 US market soon and it's like Peloton, almost a fantastical product actually your if 490 00:30:11.319 --> 00:30:14.119 this were live, you'd see I'm wearing it now because I'd shoulder surgery and 491 00:30:14.119 --> 00:30:17.480 I don't. It's weird to fit into stuff, but it's almost like it's 492 00:30:17.480 --> 00:30:19.400 intriguing, but you need to see it and feel in touch it so it 493 00:30:19.400 --> 00:30:22.920 becomes more real. Pelaton was the same way. That's we talked about this 494 00:30:22.960 --> 00:30:26.559 before. Like an unlock for Peloton is when they open up stores and malls 495 00:30:26.559 --> 00:30:32.200 that were near Tesla's and then they did national TV advertising during football. So 496 00:30:32.400 --> 00:30:33.559 that could be a part of the strategy, but it's like there's no one 497 00:30:33.599 --> 00:30:37.839 size fits all. And again I wish I were smart enough or loose enough 498 00:30:37.039 --> 00:30:41.200 or insightful enough to say, like here's how to do it, but offline, 499 00:30:41.240 --> 00:30:45.480 I mean offline and can cannon should be effective. Lot of lost strategies, 500 00:30:45.480 --> 00:30:48.640 but doesn't have to be. And that point in. Or should you 501 00:30:48.680 --> 00:30:51.640 like, Oh, you should just start offline to I will say this. 502 00:30:51.799 --> 00:30:55.440 Another element that factors in his partnerships is like how do you make news and 503 00:30:55.440 --> 00:30:57.400 how do you do things? And there's like some like a you know, 504 00:30:59.799 --> 00:31:02.720 a reach in brand. So it's just like there's borrowed equity that if I 505 00:31:02.759 --> 00:31:04.160 do a partnership with like you, it's like, oh, wow, might 506 00:31:04.200 --> 00:31:07.680 do to might be decent, because he hangs with my Guel and Consumer v 507 00:31:07.799 --> 00:31:11.079 seat. That's great. So it that's the factors in, but it's just 508 00:31:11.440 --> 00:31:15.519 we look at it just doing CAC, just doing digital acquisition. Clearly that's 509 00:31:15.599 --> 00:31:18.400 under the gun. The answer isn't like well, let's just go do TV. 510 00:31:18.920 --> 00:31:21.759 It can be an answer, but like if you hit know the consider 511 00:31:21.839 --> 00:31:26.160 the consumer decision journey, match up to what she or he needs and how 512 00:31:26.160 --> 00:31:30.960 they're making decisions on purchases, whether it's a frequent purchase or to consider purchase, 513 00:31:30.400 --> 00:31:33.720 and then go to where she needs to and not just a base of 514 00:31:33.759 --> 00:31:37.640 like going to seven thousand doors right away, and that's the person from a 515 00:31:37.640 --> 00:31:41.680 billy crafty. That's for a good if early stage brands go into over expand 516 00:31:41.720 --> 00:31:45.119 into retail really quick, it better work, because then it's hard raise money 517 00:31:45.119 --> 00:31:49.559 based on potential if you're already there and you're not getting the turns or that 518 00:31:49.559 --> 00:31:53.599 are adequate in either. But we can all come up with case studies is 519 00:31:53.640 --> 00:31:57.960 to why each strategy could work or fail. Accordingly, it just the more 520 00:31:59.079 --> 00:32:02.440 can you make it about where the person needs to your consumer, and we 521 00:32:02.599 --> 00:32:07.920 have to offer Capella landscape that that tends to be the guide. We're just 522 00:32:07.960 --> 00:32:13.039 more open ended on the stuff that's we're just more open ended because they the 523 00:32:13.039 --> 00:32:15.400 advice we would give, like a halley hair, which is one of ours, 524 00:32:15.480 --> 00:32:19.400 versus the morphoe versus some of the other ones that are like Sunday lawn 525 00:32:19.480 --> 00:32:22.559 what they're doing now. Stay tuned, like it's just it isn't one size 526 00:32:22.559 --> 00:32:25.960 fits all, but that's the kind of like methodology of the rubric we use 527 00:32:27.039 --> 00:32:30.759 to kind of like help our entrepreneurs figure that out. That's helpful. Go 528 00:32:30.799 --> 00:32:35.240 with your customer needs you and also, I would say to that commit when, 529 00:32:35.359 --> 00:32:37.440 if you're, I should, going into whichever challenge you're going into. 530 00:32:37.680 --> 00:32:42.599 What I chatted with Clayton Christophery, was side about how one of his entrepreneurs, 531 00:32:42.880 --> 00:32:46.240 it was target, went into target and did not commit and target and 532 00:32:46.240 --> 00:32:50.839 really that that wholesale channels completely fell apart. So so which everyone you go 533 00:32:50.880 --> 00:32:53.079 into is? It's big. What is? One Book? Then inspiet you 534 00:32:53.240 --> 00:32:58.960 personally. One book then is parody professionally, shoot dog professionally. And again 535 00:32:58.960 --> 00:33:01.680 it's not necessarily the most original math because shoot dog and we have our interns 536 00:33:01.680 --> 00:33:05.240 read it. It's a great story to how one of the most epic, 537 00:33:05.400 --> 00:33:08.279 iconic brands have been built. But the founder went through fifteen or sixteen years 538 00:33:08.319 --> 00:33:12.640 of like hell, getting financing. You're not getting financing. You see a 539 00:33:12.640 --> 00:33:15.759 real story about how he didn't see treat some is early employees that well, 540 00:33:15.799 --> 00:33:20.519 but they persevered because they were they believe in the brand, the proposition it 541 00:33:20.599 --> 00:33:24.240 is. It is a side of of like empathy that I can begin to 542 00:33:24.240 --> 00:33:28.960 tell you is like so good and it's why most VC books are boring. 543 00:33:29.000 --> 00:33:31.200 Like I try to read VC books but it's like all how to and stuff 544 00:33:31.240 --> 00:33:35.640 like that. That was like real. I'm Ben Horowitz has written a couple 545 00:33:35.640 --> 00:33:37.440 of books to on it. I don't know if of a book that hit 546 00:33:37.519 --> 00:33:40.920 personally. Maybe I'll say the Bible. My Lord Jesus Christ, I am 547 00:33:40.960 --> 00:33:44.680 an Irish Calvic, but not. I don't know if I have anything like 548 00:33:44.759 --> 00:33:49.200 that because I just is someone who's Eq or against as many books that should. 549 00:33:49.279 --> 00:33:52.920 It's just when I think of people or experiences or real life actions, 550 00:33:52.920 --> 00:33:57.279 those have just some printed more of a memorable impact on that side of it. 551 00:33:57.400 --> 00:34:00.920 So No, Mike, do to book club contributions. I've failed you 552 00:34:01.519 --> 00:34:07.079 twice now. Twice. Well, you've joined the club. Shoot dog is 553 00:34:07.119 --> 00:34:12.719 the number one book that people recommend on this show. So you're know, 554 00:34:13.079 --> 00:34:15.599 and I hate, I hate to be not contrary, not contragging. How 555 00:34:15.679 --> 00:34:20.480 non contrarying of me? Yeah, exactly, like I'm a sheep. I'm 556 00:34:20.519 --> 00:34:22.960 a freakin sheep. My final question to you, since you're a madman, 557 00:34:23.079 --> 00:34:27.960 what were your three favorite super bowl commercials? I did like. What Coin 558 00:34:28.000 --> 00:34:31.679 Base did? I love the braver it that the coin base CEO and fortunately 559 00:34:31.719 --> 00:34:37.400 tweeted about how the super commercial was made and was so disrespectful to the marketing 560 00:34:37.440 --> 00:34:40.360 industry and Advertising Agency. Like Jesus. But a spot was good and I 561 00:34:40.440 --> 00:34:43.960 want to say bad things as result, but I'm not going to participating. 562 00:34:44.000 --> 00:34:49.280 Canceled culture. Really great thing to do, but that guy, I actually 563 00:34:49.320 --> 00:34:52.599 let the key, had dog robot one like showing the electric cars and with 564 00:34:52.639 --> 00:34:54.599 the electric dog and that side of it was taking. It was brilliant that 565 00:34:54.599 --> 00:34:59.079 you're showing still it does a future for technology the people wear because it test 566 00:34:59.119 --> 00:35:02.800 electric cars. But doing the old super bowl trick of like people love dogs 567 00:35:02.840 --> 00:35:07.119 and pets and humor and kids, like let's get the dog in there right. 568 00:35:07.159 --> 00:35:09.000 I thought that was exceptionally well played. Those are the two that are 569 00:35:09.039 --> 00:35:13.599 still memorable with me now and there were certainly some others. It was interesting. 570 00:35:13.639 --> 00:35:15.480 I did a pull on twitter just to see, like, because there 571 00:35:15.639 --> 00:35:20.079 are studies that show like the if you advertise in the Super Bowl, like 572 00:35:20.159 --> 00:35:22.360 if you have x effectiveness and so many levels the pull, like, did 573 00:35:22.400 --> 00:35:25.199 anyone buy anything? Did you visit a website? I think I'd like three 574 00:35:25.280 --> 00:35:30.440 hundred responses and like two percent of people. Maybe was one percent bought something, 575 00:35:30.480 --> 00:35:34.199 twenty six percent had consideration that they might consider a product based on the 576 00:35:34.239 --> 00:35:37.880 Super Bowl, nineteen percent visit a site or social media, which was probably 577 00:35:37.880 --> 00:35:42.119 the coin base one, and then the remainder were like, yeah, I 578 00:35:42.159 --> 00:35:44.800 didn't do anything. And you know, it's also reminder that a lot of 579 00:35:44.800 --> 00:35:46.599 people are drinking anahizer Bush and other products during the Super Bowl too, and 580 00:35:46.599 --> 00:35:50.599 they're just taking it as entertainment. I think the Super Bowl is could be 581 00:35:50.599 --> 00:35:52.559 one of the most is one of the most effective marketing things done well. 582 00:35:52.559 --> 00:35:57.119 I also think the Emmy's. People sleep on the EMMYS, but talk about 583 00:35:57.119 --> 00:36:00.920 a way of reaching like women who are gathered and gathering groups, and talk 584 00:36:00.920 --> 00:36:04.119 about like the Emmy's is written. But you know, in a world and 585 00:36:04.519 --> 00:36:07.280 this we're in venture capital right, it's like we talked about cack and all 586 00:36:07.280 --> 00:36:10.239 that stuff. Mainstream brand building can work if done the right way. So 587 00:36:10.320 --> 00:36:15.280 that's that's why the Super Bowl can be effective, and thank you for playing 588 00:36:15.320 --> 00:36:19.800 into my my love of Brandon Marketing and creativity on that side. No, 589 00:36:19.920 --> 00:36:22.639 hardly, and I appreciate it. But also the about Kia was that I 590 00:36:22.639 --> 00:36:29.400 felt like almost every car commercial except for Toyota went advertising electric cars and I 591 00:36:29.440 --> 00:36:31.639 just thought Keia did did it the best out of out of any of them. 592 00:36:31.639 --> 00:36:36.599 So I thought that was really cool and Quinbus is awesome. Was Really, 593 00:36:36.840 --> 00:36:39.840 really kind of interesting and they did it. So Mike, Thanks again 594 00:36:39.920 --> 00:36:44.159 so much for coming on the show. Really appreciate you taking his time here 595 00:36:44.199 --> 00:36:46.559 for a second time. I will do it any other time. It's a 596 00:36:46.960 --> 00:36:51.280 what you are doing for the community, what you stand for. Like Mc 597 00:36:51.320 --> 00:36:53.679 Guilp like you know, that's the only venture job I've ever had was starting 598 00:36:53.719 --> 00:36:58.760 a company that does it. Like what you're doing is just making something that 599 00:36:58.800 --> 00:37:02.039 seems so unttainable or so far fetious so up there and your humanizing. So 600 00:37:02.079 --> 00:37:06.639 if you ever need like a kidney, you need a spleen, you need 601 00:37:06.679 --> 00:37:10.639 blood donated, I'm here for you because what you do is awesome. And 602 00:37:10.679 --> 00:37:14.159 there you have it. I hope you enjoyed that as much as I did. 603 00:37:14.199 --> 00:37:16.880 I highly recommend following Mike on Twitter at Mike Duda. If you enjoyed 604 00:37:16.920 --> 00:37:20.880 this episode, I love it if you'd write a review on the apple podcast. 605 00:37:21.119 --> 00:37:22.760 You're also well going to follow me, your host, Mike, on 606 00:37:22.760 --> 00:37:27.960 twitter at Mike Gelb, and also follow for episode announcements at Consumer VC. 607 00:37:28.320 --> 00:37:29.719 Thanks for listening. Everyone