The Internet has disintermediated everything about consumer goods; from access to raw materials to direct communication with consumers. This new paradigm, combined with a lack of need for early adopters, provides companies with opportunities to quickly grow revenues. There will be many great companies created, but many won’t be 10x venture opportunities. The massive winners will be across all categories and be global, omnichannel brands, even though they will begin with pure online commerce.
Both of our fund families focus on consumer products. From the Social Starts side, we’ll be looking primarily for affordable luxury (aspirational) products. From the Joyance side, we’ll focus more on consumer goods derived from deep science with high emotional content.
Companies we will look to invest in 2020 H1 will:
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Be sold online primarily; with omnichannel as an inflection point
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Be micro-manufactured and ship well; preferably, but not always, using new tech materials
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Allow for a type of product design or economics not feasible in the traditional channel
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Have high customer lifetime value
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Deliver high gross margins
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Display a strong propensity to be shared via social media or garner earned media
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Show product timelessness; not subject to fast or seasonal product shifts
The best consumer products companies will hit these specific sweet spots:
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Cost over $40 (don’t compete with Wal-Mart) but less than $1000 (repeat customers = swoon)
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Create custom products mass-produced
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Have a technological advantage
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Focus on very few items at most early on
The categories we believe have the greatest health and happiness potential right now are:
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Cosmetics/Anti-Aging
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Supplements/Vitamins
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Pet Care
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Baby Care
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Sexual Wellness
This is a golden era for digital commerce. The massive winners could come from any category. At inception, they will be marked by tight end-to-end control of the sourcing, manufacture, distribution and sales process. But, over time, the big winners will always become global, omnichannel brands, that deliver a generational opportunity for us to invest in a massive shift in worldwide consumption habits.
