Jul 1, 2016 · 28m · 20vc
20VC: Why Great VCs Know The Opportunity In Hardware, Physical Stores Will Not Disappear and The Importance of Consumer Brand with Josh Udashkin @ Raden
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Josh Udashkin, founder of Raden, exploring how the smart luggage company combined custom hardware engineering, omnichannel retail strategy, and venture backing to disrupt the traditional travel market.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 30.9% of the talking time here. How this is scored →
Harry as informed peer 3.0 Guest teaching 3.0 Guest disagreement 1.6 Harry pushing back 1.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 10:15 Rejecting the DTC narrative
Josh directly challenges the popular tech industry narrative, stating he is not a believer in the direct-to-consumer label and insisting omnichannel retail is necessary.
Hardest push from Harry ▶ 9:38 Citing annual report admissionsHarry challenges the conventional view of legacy luggage brands by citing their own official annual reports where they admit incompetence at online sales.
Biggest teaching moment ▶ 12:51 Hardware as multiple companiesJosh educates the host on the true complexity of hardware, explaining how a single hardware product is actually an electronics firm, luggage firm, mobile app, and distributor combined.
Harry holds his own ▶ 9:38 Demonstrating incumbent researchHarry demonstrates strong background preparation by referencing specific disclosures in official annual reports of legacy luggage companies.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Program Announcement: VC Unlocked | 1 | 1 | 1 | 0 | The segment consists of promotional announcements followed by a brief intro where the host asks about the guest's transition from law to luggage. The guest humorously self-deprecates his legal career without friction. | |
| E-Commerce Evolution & Consumer Shopping Behaviors | 2 | 3 | 1 | 1 | The host asks about shifting consumer behaviors and quotes a third-party source regarding Raden's physical store. The guest shares retail insights from his time at Aldo and explains the rationale behind combining physical retail with online presence. | |
| Building a Consumer Brand & Product Design | 3 | 3 | 2 | 1 | The host quotes investor Ben Lerer on brand building to prompt the guest. The guest colorfully criticizes incumbent luggage companies as 'Mr. Potato Head' businesses using generic catalog parts. | |
| Online Optimization & Omnichannel vs. Direct-to-Consumer | 5 | 4 | 3 | 2 | The host shows research depth by citing official annual reports from legacy luggage incumbents admitting their online sales weakness. The guest responds by explicitly pushing back on the popular direct-to-consumer narrative in favor of omnichannel retail. | |
| Hardware Investment Realities & Manufacturing Challenges | 3 | 4 | 1 | 1 | The host brings up the common VC hesitation around hardware investments. The guest agrees with the premise and educates the audience on why hardware startups are actually multiple distinct businesses combined into one. | |
| IoT, App Engagement, and Software Monetization | 4 | 3 | 1 | 2 | The host probes on monetization models, specifically asking if Raden employs a software-as-a-service recurring revenue model like Fitbit. The guest explains why listening to current users takes priority before implementing SaaS pricing. | |
| Fundraising Dynamics, Passion, and Cold Outreach | 3 | 2 | 2 | 2 | The host asks about fundraising mistakes and cold emailing VCs. The guest mildly challenges standard Silicon Valley dogma by strongly advocating for cold outreach alongside warm intros. | |
| Avoiding Crowdfunding & Managing Customer Expectations | 3 | 4 | 2 | 1 | The host asks why Raden avoided crowdfunding platforms like Kickstarter. The guest explains how crowdfunding ruins customer expectations and hinders long-term brand building, before proceeding through a standard quick-fire round. |
Statements from this episode (16)
Josh Udashkin: The luggage category lacked strong brands and consistent pricing
“There were very few great brands. There are a couple of luxury products. You know, the merchandising seemed all over the place. The pricing seemed all over the place.”
Udashkin: Aldo's power SKUs generated 70% of total product sales
“We had these power SKUs that really were selling 70% of the assortment, so we would make a couple of products, they would turn into bestsellers, and the bestsellers were really carrying the entire business”
Udashkin: Aldo.com outperformed physical store sales tenfold
“You know, we said at Aldo that aldo.com was our number one store by tenfold and very, very efficient store at that.”
Josh Udashkin: Building a consumer brand requires a physical retail footprint
“I think it's very hard to build brand, which is, you know, first and foremost, what we're up to here without some type of You know, physical footprint or place for consumers to interact with you being, you know, even your retail associate and how they're train…”
Raden hired former Beats by Dre designer Kenny Sweet for luggage design
“I met Kenny Sweet who had worked on the Beats project for a number of years, and we really vibed, and I had this merchandising concept around a single almost unlined product, you know, that was very stark and looked like many of the products that we've been bu…”
Udashkin: Traditional luggage brands assemble generic parts into 'cyborg shells'
“The luggage business is kind of a Mr. Potato Head business, I call it, The traditional brands, the companies take catalog parts from a number of different factories, and then they put them together on some randomly designed cyborg shell. And then they spit it …”
Udashkin: Hardware founders fail by prioritizing product development over brand values
“Whenever I talk to people starting these things who are so focused only on the product And getting it out the door, and you know, whatever it's going to be named, that they forget that in order to build something, you need to communicate your values, and it ne…”
Udashkin: Pure direct-to-consumer strategy does not work for every category
“I'm not really a big believer in the whole direct-to-consumer narrative in every single category. I think omni-channel retail for me is the way to go, and for others”
Udashkin: A hardware startup is effectively multiple companies in one
“It's multiple companies in one. So you have a luggage firm, you have an electronics firm, you have mobile development, firmware development, then you have all the things around building a brand. Then you're a retailer, you're a distributor, you're a marketer, …”
Udashkin refuses meetings with VCs inexperienced in hardware investing
“I tend to generally stay away even when I get a request for a meeting. Don't really want to be their first foray into investing in a hardware company.”
Udashkin: Hardware founders should secure manufacturing partners before pitching VCs
“My advice to entrepreneurs is, you know, do the sourcing work, and a lot of the things around VC will come easier, because they're really the people that are going to invest in building your prototypes.”
Udashkin: In-app support is the future of customer experience
“When you can communicate with your customer at the touch of a button on an application, that's the customer experience of the future. Instead of having to dial one eight eight eight and get somebody on the line and coordinate some type of return for us, it's, …”
Udashkin: Global luggage market is a $40 billion annual business
“The industry in our case is a forty billion dollar a year business globally.”
Udashkin: Crowdfunding platforms generate sales but fail to build lasting brands
“It's starting to become, first of all, very, very difficult to build a brand off of those platforms. I think they're good at generating a certain level of sales, but then you never actually build, you know, a brand or any type of marketing funnel or really fig…”
Raden sold out initial inventory, driving shipping delay to 15 days
“We sold out of all the product that we had made, even with venture funding and working capital funding and everything else, and so now we're You know, 15 day shipping times when really we're meant to be a same day or second day business.”
Udashkin: Raden's five-year roadmap centers on mobile travel software
“Most of our roadmap is really around the mobile experience and really connecting with a travel experience that engages users of our product and provides them with all sorts of other information about where they're going and the airports that they're traveling …”