Consumer VC

By Mike GelbBusiness Investing

Consumer VC episodes

July 08, 2022Joe Spector (Dutch) - How he’s changing the pet industry and how his approach to fundraising has evolved
Our guest today is Joe Spector, Founder & CEO of Dutch. Dutch is the online vet care when you need it. Previously Joe was one of the founders of hims & hers. We discuss the opportunity he saw within pet insurance and care, how his approach to fundraising is different than hims & hers, why he wants to change the incentive structure within the vet industry.
Why did you decide to leave hims & hers?
What was the aha moment that led to Dutch?
What was the opportunity that you saw?
Why did you decide to focus on telehealth for pets?
What is the major pain point for pet owners?
Can you lay out for us the value chain for healthcare for pets? How are the regulatory requirements different from healthcare for humans?
How did you approach raising capital?
In the early days, they have to be good at multiple things
What was the first problem you wanted to solve?
How did you approach distribution and sales?
Paying vets $80 an hour
Hims & Hers raised money every 90 days and raised lots of money. How do you approach fundraising and the capital structure of Dutch?
What was it like fundraising during COVID?
Don’t use a recruiter
There was a substantial increase in pet ownership during COVID and telemedicine was more widely adopted as a whole during this period. How was Dutch affected? Did you grow faster than you expect?
Since only 2% of pet owners have insurance, how do you approach consumer education?
How do you think about the incentives for vets - they make money off selling the drugs, so they would want to recommend more drugs for your pet - and what is Dutch doing to create better alignment with the vet and the pet owner/pet?
29 min
July 05, 2022Brian O’Malley (Forerunner Ventures) - How he’s investing in the empowerment economy, the evolution of consumer venture capital and raising $1 billion fund
Our guest today is Brian O’Malley, Partner at Forerunner. Forerunner is one of the top consumer venture capital firms that tirelessly champions founders who deliver the innovation they demand. Some of Brian’s investments include Sunday, Canal and Dumpling. Recently they raised $1 billion for Fund 6. We discuss how Forerunner’s thesis has evolved over the past few years, what is the empowerment economy, and current valuation and venture climate today.
We discuss:
How do you define investing in consumer today?
It seems as though Forerunner’s thesis has evolved from only investing in pure consumer companies to ecommerce enablement/B2B, along with other funds that primarily focus on consumer. Can you talk about why the transition?
Is part of the reason why because it’s harder than before to pick brands that could generate great returns?
What is the empowerment economy?
In your article “Empowering Main Street”, you mention how OpenTable and Yelp achieved massive local market share, but they weren’t embraced. What do you mean by that and how do identify if a company you’re looking at is being embraced? Partnering up with their customers
Did COVID at all change your thesis when it came the your empowering economy thesis?
When you’re looking at empowering SMBs or bringing them online, when does a white label option make sense vs. a standalone application?
I certainly understand the push for consumers wanting to shop local, but isn’t partly what killed local stores that they couldn’t compete on price with the Walmarts / Targets? How do you think about consumer price sensitivity?
When you and your conduct your consumer insights research, how do you make sure there’s alignment with what people say and how they act?
Where customer
What are some of the differences between investing and evaluating a business where an SMB is the customer rather than the customer?
How do you also think about the current venture landscape when it comes to valuations?
There’s been a lot of chatter about some of the more high-profile companies folding and there’s been a debate about who is responsible - could the board have guided the CEO to cut burn for example. After you invest, what do you think about a board’s role and board construction?
What’s one thing you would change about VC?
What’s one book that has inspired you personally and one book that has inspired you professionally?
The Wright Brothers book
Shoedog by Phil Knight
What’s the best piece of advice that you’ve received?
40 min
June 29, 2022John Timar (Kill Cliff) - Why they doubled down on their core audience in times of doubt, How the Navy SEALs inspired the creation of the brand, and His approach to partnerships for growth
Our guest today is John Timar, CEO of Kill Cliff. Kill Cliff is America’s best-selling clean energy drink and the official drink of the Atlanta Braves. We discuss how the Navy Seals impacted John and led the founding of Kill Cliff, some of the creative marketing initiatives Kill Cliff has done the past few years including a partnership with Joe Rogan, why at one point they considered a rebrand, and how they doubled down on their core audience and release new SKUs. Without further ado, here’s John.
Why did you want to be a Navy SEAL?
What was the hardest part of becoming a SEAL?
What did you most learn from that experience?
How was the transition to civilian life?
How was the transition from SEALs into business?
What did you first do after the SEALs?
Don’t have the community
Why did Todd Ehrlich found Kill Cliff? What was the insight? How did you know Todd?
When you say lost its way, give an example of something that the company did that was inauthentic to the brand?
What were some of the challenges going from enterprise to consumer?
How is it a better alternative to what’s out there?
Kill
What’s been the low points and tough moments within Kill Cliff?
When did you get involved? Why did you get involved? What was your first role?
How do you approach distribution since I’d imagine the Red Bull probably try to block you?
You were able to recruit John Brenkus as your CMO. How did you convince him to join and what has been the impact?
How do you approach partnerships?
What is Kill Cliff fight club?
When did you decide to get into CBD and why?
What’s the perception of energy drinks?
How did you raise capital?
Why were you promoted to CEO?
With your partnership with Rogan, has the controversy around him had any affect with Kill Cliff?
How do you approach new flavors and products?
One piece of advice?
58 min
June 23, 2022Patrick Chun (Juxtapose) - What is an inception stage investment firm, why it’s less risky than modern venture capital, how he recruits CEOs to lead each business he incubates
Our guest today is Patrick Chun, Founding Partner of Juxtapose. Juxtapose is an inception stage investment firm. Some of the companies that they founded include Tend, Care/of, and Dayforward. Their process for how they build companies is pretty unique for this show. We discuss their model, why their model is less risky than traditional venture capital, and his process for finding the right CEO to lead each business. Without further ado, here’s Patrick.
What is Juxtapose? What was the initial insight or prior experience that influenced your decision to found it? Why did you choose to found it?
Why do you believe your model is less risky than traditional venture capital?
You are incubating
When you say do the work, what do you mean?
What’s your process identifying an observation
True verifiable fact in the world
When your
Lots of observation
How many observations do you have a week
Insights you can pull off of an observation
On-demand dispatch
Track 500-1000 observations
Talk about 50-100
What’s your process for building businesses step by step – from the ideation stage to creating beta products / product is in market?
Recycled and reentered the funnel
4-6 months
How do you think about timing as well?
Obsolete assumption
You can never have an investor home
When do you bring on an experienced CEO and team? How do you think about that process?
What are qualities you’d like to see from the CEO?
From 0 to 10 at what stage is the company in when you bring on a CEO?
How do you source “Michael Jordan” CEOs? If they are the Michael Jordan’s, what typically get them excited to join the company - since I’m sure they get alot of offers to lead different teams?
Can it be difficult to attract since these companies are still small?
How do you hire the team?
Once a company has a CEO, how do you think about the role of Juxtapose moving forward with the business?
The best supporter of the company from 0-200 people
Is the shift from operator to more of board member/observer type role?
Do you ever get the itch to become a CEO of one of your companies?
How do you approach hiring for your studio? Are you looking for people who have operational experience or more investor experience since it seems the studio model is at the intersection of both?
What are the challenges with the studio model? What can get overlooked?
What are the shortcomings of the venture studio model or what do studios tend to struggle with?
Was there a prior experience that led you to want to build a different type of firm than traditional VC?
What’s one thing you would change about venture capital?
What’s one book that inspired you personally and one book that inspired you professionally?
4,000 weeks Oliver Burkman
What’s the best piece of advice for founders?
What is it that people will see in the market and if you’re right
30 min
June 21, 2022Patrick Schwarzenegger (MOSH) - Why he's creating the tools for a "mindstyle" lifestyle, why he co-founded a brain bar brand and how he got into angel investing in health and wellness brands
My guest today is Patrick Schwarzenegger, CEO and cofounder of Mosh. Mosh is a brain wellness brand co-founded by both Patrick and his mom, Maria Shriver. They’re on a mission to change the conversation about brain health through food, education, research and providing the tools for a "mindstyle" lifestyle. Patrick is also an actor, angel investor in a number of health and wellness brands. We discuss what attracted him to innovation within health and wellness, how he became interested in investing, what he looks for in companies and the founding story of how he and his mom founded Mosh. Without further ado, here’s Patrick.
What was your initial attraction or introduction to investing in consumer brands and consumer technology?
How would you describe your due diligence process as an investor?
What’s your process for discovering new brands and having a pulse on the latest trends? Do you consider to be more top-down or bottom-up?
What are trends within CPG that you’re particularly excited about and a trend that you think is maybe past its prime or no longer special?
Is there any common threads that you’ve seen when it comes to what makes a successful founder or company? KPIs that stand out?
How early do you typically write a check in a company?
For your investments that didn’t work out. What tended to be the reasons why the companies failed?
What were your takeaways from Expo West?
How do you spend your time? You’re a CEO, actor, active angel investor, how do you juggle it?
How do you also think and analyze brands that are co-founded by celebrities and people of influence?
How did you found Mosh with your mom, Maria?
What was the pain point you both wanted to solve?
How did you approach building the product?What’s the goal of the brand?
Currently, you’re only selling online. Are we going to see Mosh in retail channels? How do you think about what the right channels should be for Mosh?
How do you juggle being CEO and also an actor?
What’s one thing you would change about the fundraising process or venture capital?
What’s one book that has inspired you personally and one book that has inspired you professionally?
Number one book - Atomic Habits
What’s the best piece of advice that you’ve received?
What’s one piece of advice that you have for founders?
34 min
June 16, 2022Ariana Thacker (Conscience VC) - What it means to invest in deep tech x consumer, How she raised her first VC fund, and Her definition of a moat
Our guest today is Ariana Thacker, founder of Conscience VC. Conscience invests into early-stage & science-led consumer startups. We’re going to discuss why science-led consumer startups is contrarian in itself, what are real tangible defensible moats, and her approach to fundraising her first fund.
Why did you want to break into VC?
Why did you decide to start your own fund?
What was the fundraising process like?
How do you partner with founders?
What’s your approach to portfolio construction and fund construction? I.e. are you more concentrated or less concentrated, what are your Gen-Z apprentices role within the fund / scout program
What do you mean by the intersection of deep tech and consumer?
How do you think about defensible competitive advantages?
Walk us through why you invested in Nimbus or gained conviction?
How far along does a founder need to be in order for you to be at your stage?
Are there specific categories that you mostly focus on?
3 buckets
What are some of the challenges investing in deeptech? Why do alot of fund managers stay away?
What’s your approach to sourcing opportunities?
Go through multi pronged approach
What’s one thing you would change about venture capital?
What’s one book that has inspired you personally and one book that has inspired you professionally?
4 agreements - dont personally, dont make assumptions, always do your best, be impeccable with your word
Disciplined entrepreneurship ->
What’s the best piece of advice that you’ve received?
25 min
June 14, 2022Paul Voge (Aura Bora) - Why he decided to found a sparkling water company with weird flavors, How he entered retail during COVID, and What perception he would change when founding a CPG business
Our guest today is Paul Voge, one of the founders and CEO of Aura Bora. Aura Bora is sparkling water made from real herbs, fruits, and flowers for earthly tastes and heavenly feelings. The flavors are definitely one of kind and different like Lavender Cucumber, Cactus Rose, Peppermint Watermelon. I was skeptical at first but when I tried it, I must say I LOVED it. My personal favorite is lemongrass coconut. Paul has a pretty fascinating story about how he started and his approach to building a sparkling water company with out-there wacky flavors that are delicious.
How would you define your relationship with Sparkling water before you started a sparkling water company?
Did you always want to be an entrepreneur?
What was the “aha” moment?
What was the first flavor you LOVED that you felt you perfected?
How did you think about different flavor profiles/expanding SKUs
I had Seth on last week
How did you think about experimenting with flavors? Was this something you did yourself, did you hire/partner with a food/drink scientist?
You didn’t have any experience within CPG. How did you go about building your network?
Why invest in beverage brands?
What was the hardest part fundraising?
How do you think about ads?
When did you feel like you were on to something?
At what point did you quit your job?
What was your distribution strategy? Was it to start DTC and then go into retail or go into retail from the getgo?
How did you get into Whole Foods?
Why did you move from Boulder to San Francisco?
What were some of the things you had to pick up on quickly since you didn’t come from CPG prior to starting Aura Bora?
How much should you spend in tradespend?
You were in SKUs accelerator, what was so valuable about that experience?
It’s March 2020. COVID happens and your cranking, trying to get into stores. Walk us through what’s happening during that time?
How did you approach developing relationships with stores during that period?
How did COVID change your distribution approach?
We talk to a number of CPG retail investors on this show that emphasize it’s all about velocity rather than the total number of stores you’re in. What’s good velocity to you? How do you measure success?
Why did you decide to go on Shark Tank? What was that experience like?
Was the intent always to take a deal no matter what?
What was your approach to raising a fundraising round?
How do you think about SKUs and flavor approach today? What’s the strategy?
What’s one thing that you’ve been surprised in the consumer response - could be positive or negative. Negative could be more interesting.
What’s one book that has inspired you personally and one book that inspired you professionally?
Seth Goldman - Mission in a Bottle
Mark Rompolla - Build Something Great
The Last Lecture
What’s the best piece of advice that you’ve received?
Amateurs talk strategy, experts talk logistics
What’s one thing you would change about the CPG industry?
36 min
June 08, 2022Joe Marchese (Human Ventures) - What marketing channels brands overlook, how to partner with founders and build investment firms
Our guest today is Joe Marchese, who is a serial entrepreneur and has started a few VC funds including Human Ventures, Casa Komos, Groundswell, True X, Reserve and Attention Capital. His resume is pretty wild. Joe has alot of experience within marketing and advertising so on today’s episode we’re going to focus on how to approach marketing channels, what channels are still undervalued and maybe you can get more bang for your buck, and his approach to building brands and partnering with exceptional entrepreneurs.
How did you get your start in media and advertising?
What was your attraction to entrepreneurship as well as working with founders?
What advertising channel is still underappreciated by brands?
What’s still misunderstood about media today? (follow on: talk about the Attention Economy.)
How do you monetize attention?
What’s your approach to starting businesses?
How did Human Ventures come together?
When you are incubating companies at Human, what do first-time entrepreneurs misunderstand the most when it comes to growing their businesses?
What’s your diligence process when you’re analyzing companies?
Are there specific categories that you’re currently deep in or intrigued by?
What’s one thing you would change about venture capital?
What’s one book that has inspired you personally and one book that has inspired you professionally?
Probable impossibilities
Life’s Edge by Carl Zimmer
What’s the best piece of advice you’ve received?
28 min
June 01, 2022Matt Nichols (Commerce Ventures) - How Brands Can Leverage Web.3 to Build Community, The Future of Retail From a Crypto Lens, and Use Cases Where Web.3 Might Not Be Impactful
My guest today is Matt Nichols, founder of Commerce Ventures. They back entrepreneurs from every background building the infrastructure for tomorrow's industries. We focus our time deconstructing web.3 and how it could be impactful to brands and change retail.
Here are some of the questions I ask Matt:
How did you get started in venture capital?
When did you found Commerce VC?
Why the focus on retail?
How can blockchain technology help retail?
What’s wrong with current loyalty programs?
Paint us a picture of the change in buying behavior for a consumer from the moment they step into a store.
Do brands need to embrace Web3 in order to win in the next generation?
How should brands approach the creation of digital goods and partnerships with platforms?
What’s your due diligence process
Supply chain traceability
What’s your view about digital goods?
What could you not do that blockchain solves for?
What’s the relationship between NFT and luxury?
What has to work in order for the whole supply chain to transact through smart contracts?
How do you also think about customer identification when it comes to wallet ownership? How is this a better point of contact with a person than email?
Activity is fully traceable
What do you think is one thing that’s overlooked when it comes to the intersection of blockchain and retail?
Too many use cases
What’s one book that inspired you professionally or personally?
The Hard Things About Hard Things
Endurance - Shackleton’s Journey to the Southpole
Spend time with the customers, try to understand their problems?
33 min
May 26, 2022Seth Goldman & Chef Spike Mendelsohn (Eat The Change & PLNT Burger) - Why they decided to found two companies together, and their approach to making the world a better place
Our guests today are Seth Goldman and Spike Mendelsohn, co-founders of Eat The Change and PLNT Burger. Eat the Change is a snack company that’s on a mission to create chef-crafted and nutrient-dense snacks that are kind to the planet. PLNT Burger are plant-based burger restaurants. Currently they have 11 of them. Prior to going into business together, Seth is well known for being the founder of Honest Tea and Chef Spike Mendelsohn was one of the Top Chefs on the show Top Chef and started quite a few restaurant establishments including VIm & Victor, We, The Pizza, Santa Rosa Taqueria, my personal favorite Good Stuff Eatery. I’m on the record that Good Stuff makes the best burger I’ve ever tried. I’m really excited to have both Seth and Chef Spike on the podcast, not only because they are legends, but they started each of their businesses where I grew up. Seth started Honest Tea in Bethesda, which is where I was raised, and many of Spike’s restaurants are in DC and the surrounding areas. This was a thrill to have them on. Without further ado, here is Seth Goldman and Chef Spike.
Some of the questions I ask them –
What were each of your attractions to entrepreneurship and food?
Activist
When you think about all the businesses each of you have started, what’s been the common thread?
How did you guys meet each other?
When was the moment that you realized you wanted to work with one another? What makes your partnership special?
What was the inspiration behind PLNT Burger?
How do you think about products that are better for you vs. better for the planet?
Has “plant based” become a catch-all term for better for you, even though there is now a debate if plant-based alternatives are better for you than the original meat product?
When you think about releasing new products, how do you make sure they are better for you and not just the planet?
Incredible planet challenge
Why did you decide to start Eat the Change and what is it?
How did you measure impact?
What’s been the reaction so far?
Have to have something that’s different
Did you raise outside capital
Why did you found it in Bethesda?
What’s your approach to creating new better-for-you products?
How do you measure impact?
What’s your retail approach?
How do you think about launching new restaurants and CPG brands? Is there an overall strategy that ties the two together?
How do you approach consumer education when it comes to what people should eat?
What’s one book that inspired each of you personally and one professionally?
Mission in a bottle
My Life in Full - Seth
The Call of the Wild - Seth
Danny Meyer - Setting the Table - Spike
Zappos book - Tony
What’s one piece of advice each of you have for founders?
What’s your favorite piece of advice that you received?
38 min

About Consumer VC

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Consumer VC takes a look into early-stage consumer investing and venture capital. If you are interested in learning about consumer trends, have a b2c business and interested in learning about the…