The Exchanges

Q the equation of kind of copying the product, in many ways, an easier solution is the acquisition route. We've seen it with the likes of Dollar Shave and Bonobos with regards to selling to large incumbents of today. Do you believe then that we're potentially in a consolidatory environment, or do you think there will be this next-gen crop of e-commerce companies like the Glossiers and Zolas of the world?

A I think we are certainly in a consolidatory environment. I believe M&A has not for a very long time been this exciting, and if you look at the beauty brands, Estee Lauder and L'Oreal are acquiring these companies on seven times forward year revenue multiples. Huge valuations being paid for many of these companies, whether it be in cosmetics, Whether it be Jet or Dollar Shave Club. But I always believe, you know, we can do as much analysis as we possibly want with regards to justifying the valuation multiples. But at the end of the day, something is only worth what someone's willing to pay for it. So if you're Unilever thinking, I can get great insight through having Dollar Shave Club as part of Unilever, and this can be our entrance into the bathroom, you're willing to pay a much higher multiple for that. Quite often, Estee Lauder will publicly say, we think that 95% of our growth for the next 10 years is going to come through acquisitions. We're just not innovating, and we need to acquire to get that innovation. With the big companies thinking that they just can't get that same level of innovation, they're going to have to continue to make the acquisitions that we've been seeing. So, I definitely don't see any signs of that stopping anytime soon.

AI assessment note: “I think we are certainly in a consolidatory environment.”

Q Ok, so, 60 seconds per one. Favorite book and why? What should I be reading? One Brit to another.

A Oh, well, I just read Phil Knight's Shoe Dog. That was wonderful. I definitely learned a lot of lessons there on, well, I mean, the highs and the lows of being a founder, just never stopping, you know, even post IPO, you really have to love that journey and mission, and there were a lot of great lessons there on brand. If I'm really honest with you, my favorite book, and the only book that I have read seven times, is Enid Blyton's Folk of the Faraway Tree. Um, every single... Oh, I know. What does it say about me? But every single day, there is a different land at the top of the tree. Great to read to your kids, or maybe just read to yourself, because if you've got a curious mind and a good imagination, it is such a fun little book.

AI assessment note: “my favorite book, and the only book that I have read seven times, is Enid Blyton's”

Q mentioned Amazon there. I have both Kirsten Green and Henry McNamara Green Oaks on the show, and they agreed with you with regards to the optimism, and they said that Amazon does more to make the market opportunity than to crush it. I'm intrigued. How do you perceive the role of Amazon for consumer today and the potential enabling power that it does present, as suggested by Kirsten and Henry?

A I actually listened to that podcast, Harry, where, uh, Carson Green said that, and I thought it was a very interesting comment. So while I do think there is certainly some truth in that, my view is always that Amazon is not your friend. They are maybe increasing the size of the overall pie. They are making companies' lives very, very difficult, and anything that's working, they see, and they decide to go after. So I already mentioned Zola, and so of course, Amazon have got their wedding registry business, and so we have to constantly be on our toes and thinking about how we can have a moat around the business so that Amazon can't just instantly copy exactly what you're doing, and so going back to our earlier point, brand is definitely a moat, and content is another really interesting moat that I like to think about, so Glossier have done a really great job with that in, first of all, creating the content Then tapping into exactly who their customer is, and what their customer wants, and then producing the products that their customer And so, I think models like that have strong boats around them. Those are the ones that it's going to be very difficult for Amazon to copy. So, for them, it's great. Amazon will increase the size of the pie, but they can't take their market share quite as easily.

AI assessment note: “my view is always that Amazon is not your friend.”

Q I'm sorry, I do have to dig in on one aspect. You mentioned TAM being important. As a venture nerd, it's one that I always debate on. How important really is TAM for you, especially with ever-increasing amount of new markets being created and the difficulty with assessing those? How do you think about TAM, its importance, and then kind of market creation?

A So this is contrarian, but I actually don't think that TAM is very important. The greatest consumer companies of our time have been created in very small markets. Um, so, At the time, the taxi market clearly was not as large as the market that Uber's currently going after, and you could say the exact same thing for Airbnb and sleeping in other people's apartments. So, for me, it's about can the existence of this company increase the TAM? Can it bring lots of small markets together? Can it increase the overall size of the market? And so, we don't necessarily need to think about the current size of the market, but more the size of this market Could be.

AI assessment note: “I actually don't think that TAM is very important.”

Q How does margin play into that perspective in terms of the importance of margin for consumer brands and the requirement to have them early? Is there a time when actually margin does become kind of pinnacly important?

A So, when Lightspeed started nearly 20 years ago, we were an enterprise and infrastructure focused VC. And so, as a result, we still think of margins as sort of, uh, you know, the 90% plus SAS type margins. So, we're So if we're bringing a 30% gross margin e-commerce company to the table, then that to us is not going to quite hit the bill or cut the mustard. And so I think it's interesting when you find an e-commerce company that has 90% plus margins. And I am regularly meeting these digitally native vertical brands which have SaaS type margins. You look at cosmetics, for example, and a lot of these cosmetics brands have 95% margins, and so they are just as attractive, if not more attractive, than the margins we see on the enterprise side.

AI assessment note: “if we're bringing a 30% gross margin e-commerce company... not going to quite hit the bill”

Q the equation of kind of copying the product, in many ways, an easier solution is the acquisition route. We've seen it with the likes of Dollar Shave and Bonobos with regards to selling to large incumbents of today. Do you believe then that we're potentially in a consolidatory environment, or do you think there will be this next-gen crop of e-commerce companies like the Glossiers and Zolas of the world?

A I think we are certainly in a consolidatory environment. I believe M&A has not for a very long time been this exciting, and if you look at the beauty brands, Estee Lauder and L'Oreal are acquiring these companies on seven times forward year revenue multiples. Huge valuations being paid for many of these companies, whether it be in cosmetics, Whether it be Jet or Dollar Shave Club. But I always believe, you know, we can do as much analysis as we possibly want with regards to justifying the valuation multiples. But at the end of the day, something is only worth what someone's willing to pay for it. So if you're Unilever thinking, I can get great insight through having Dollar Shave Club as part of Unilever, and this can be our entrance into the bathroom, you're willing to pay a much higher multiple for that. Quite often, Estee Lauder will publicly say, we think that 95% of our growth for the next 10 years is going to come through acquisitions. We're just not innovating, and we need to acquire to get that innovation. With the big companies thinking that they just can't get that same level of innovation, they're going to have to continue to make the acquisitions that we've been seeing. So, I definitely don't see any signs of that stopping anytime soon.

AI assessment note: “I think we are certainly in a consolidatory environment.”

Q Ok, so, 60 seconds per one. Favorite book and why? What should I be reading? One Brit to another.

A Oh, well, I just read Phil Knight's Shoe Dog. That was wonderful. I definitely learned a lot of lessons there on, well, I mean, the highs and the lows of being a founder, just never stopping, you know, even post IPO, you really have to love that journey and mission, and there were a lot of great lessons there on brand. If I'm really honest with you, my favorite book, and the only book that I have read seven times, is Enid Blyton's Folk of the Faraway Tree. Um, every single... Oh, I know. What does it say about me? But every single day, there is a different land at the top of the tree. Great to read to your kids, or maybe just read to yourself, because if you've got a curious mind and a good imagination, it is such a fun little book.

AI assessment note: “my favorite book, and the only book that I have read seven times, is”

Q mentioned Amazon there. I have both Kirsten Green and Henry McNamara Green Oaks on the show, and they agreed with you with regards to the optimism, and they said that Amazon does more to make the market opportunity than to crush it. I'm intrigued. How do you perceive the role of Amazon for consumer today and the potential enabling power that it does present, as suggested by Kirsten and Henry?

A I actually listened to that podcast, Harry, where, uh, Carson Green said that, and I thought it was a very interesting comment. So while I do think there is certainly some truth in that, my view is always that Amazon is not your friend. They are maybe increasing the size of the overall pie. They are making companies' lives very, very difficult, and anything that's working, they see, and they decide to go after. So I already mentioned Zola, and so of course, Amazon have got their wedding registry business, and so we have to constantly be on our toes and thinking about how we can have a moat around the business so that Amazon can't just instantly copy exactly what you're doing, and so going back to our earlier point, brand is definitely a moat, and content is another really interesting moat that I like to think about, so Glossier have done a really great job with that in, first of all, creating the content Then tapping into exactly who their customer is, and what their customer wants, and then producing the products that their customer And so, I think models like that have strong boats around them. Those are the ones that it's going to be very difficult for Amazon to copy. So, for them, it's great. Amazon will increase the size of the pie, but they can't take their market share quite as easily.

AI assessment note: “my view is always that Amazon is not your friend.”

Q Can I dive in on that data before we move on and just ask what gets you cited within that data? Is it kind of Recurring customers. Is it an amount willing to spend? Is it NPS of the product? What is it for you that really gets you attracted?

A For me personally, it's any data that shows me that the customer truly loves this brand. Yes, it's NPS. Yes, it's repeat behavior that the customer is coming back time and time again. It's also data surrounding the referral program to show that people are not just coming back themselves, but they're also telling their friends about this. Maybe there is a referral bonus. Maybe they're referring their friends not for money. There's quite often other motivations. Quite often it's, you know, the ego of saying, oh, I found this amazing new product. You have to try it too. But whatever the motivation is, it's interesting. You can see it in the data that people are coming back time and time again and telling others to do so.

AI assessment note: “Yes, it's NPS. Yes, it's repeat behavior that the customer is coming back”

Q I'm sorry, I do have to dig in on one aspect. You mentioned TAM being important. As a venture nerd, it's one that I always debate on. How important really is TAM for you, especially with ever-increasing amount of new markets being created and the difficulty with assessing those? How do you think about TAM, its importance, and then kind of market creation?

A So this is contrarian, but I actually don't think that TAM is very important. The greatest consumer companies of our time have been created in very small markets. Um, so, At the time, the taxi market clearly was not as large as the market that Uber's currently going after, and you could say the exact same thing for Airbnb and sleeping in other people's apartments. So, for me, it's about can the existence of this company increase the TAM? Can it bring lots of small markets together? Can it increase the overall size of the market? And so, we don't necessarily need to think about the current size of the market, but more the size of this market Could be.

AI assessment note: “I actually don't think that TAM is very important.”

Q Can I dive in on that data before we move on and just ask what gets you cited within that data? Is it kind of Recurring customers. Is it an amount willing to spend? Is it NPS of the product? What is it for you that really gets you attracted?

A For me personally, it's any data that shows me that the customer truly loves this brand. Yes, it's NPS. Yes, it's repeat behavior that the customer is coming back time and time again. It's also data surrounding the referral program to show that people are not just coming back themselves, but they're also telling their friends about this. Maybe there is a referral bonus. Maybe they're referring their friends not for money. There's quite often other motivations. Quite often it's, you know, the ego of saying, oh, I found this amazing new product. You have to try it too. But whatever the motivation is, it's interesting. You can see it in the data that people are coming back time and time again and telling others to do so.

AI assessment note: “For me personally, it's any data that shows me that the customer truly loves”

Q How does margin play into that perspective in terms of the importance of margin for consumer brands and the requirement to have them early? Is there a time when actually margin does become kind of pinnacly important?

A So, when Lightspeed started nearly 20 years ago, we were an enterprise and infrastructure focused VC. And so, as a result, we still think of margins as sort of, uh, you know, the 90% plus SAS type margins. So, we're So if we're bringing a 30% gross margin e-commerce company to the table, then that to us is not going to quite hit the bill or cut the mustard. And so I think it's interesting when you find an e-commerce company that has 90% plus margins. And I am regularly meeting these digitally native vertical brands which have SaaS type margins. You look at cosmetics, for example, and a lot of these cosmetics brands have 95% margins, and so they are just as attractive, if not more attractive, than the margins we see on the enterprise side.

AI assessment note: “30% gross margin e-commerce company to the table, then that to us is not going to”

Q Talk to me. The average consumer downloads less than one app per month. The app store is hence dead. Agree?

A Disagree, but I do think that it is increasingly hard to be a home screen app. Um, so this is definitely why we think about what is the next platform, but within mobile first, you've got to think about it is just so hard to be a home screen app right now, and so the way that we think about this is we just constantly look at daily active users. We just think that is the number one metric to look at to show whether somebody is using this on a daily basis, whether they are using this so often that It is on their home screen, because, you know, out of sight, out of mind, if it is not on your home screen, then you are not using this on a daily basis. That's certainly the number one metric that we'll speak to founders about, and it is difficult. You know, it's why we're looking at e-commerce. It's why we're looking at other platforms. So it's not dead, but it's just harder.

AI assessment note: “Disagree, but I do think that it is increasingly hard to be a home screen app.”

Q So you wouldn't agree, then, with the thesis that in the early days of consumer, you have to lose money on initial customers to really scale?

A So that is true for some areas within consumer. That is not necessarily true for areas within e-commerce and brands. It's interesting when we believe be everywhere that your customer is, and so we do believe in the Bonobos Guide Shop, Type model, and clearly all birds have just raised around to focus on retail expansion, and you can see that these retail stores are profitable in a matter of months. Often they're cost-neutral marketing channels. We quite often think that within e-commerce, no, you're not necessarily losing money on every transaction, and certainly they will get better with scale, and those are the type of companies that we invest in where they can't afford to keep the stock in. The demand is much higher than that. And so they need money for that. They need money because it's scale. This is going to be a very profitable business. But yeah, that's, that statement's not necessarily true in e-commerce land.

AI assessment note: “That is not necessarily true for areas within e-commerce and brands.”

Q Can I be a contrarian and say, do you think that's good then for VCs, especially take on the perspective of Lightspeed, billion-dollar fund, Bonobos, a dollar shaven jet, brilliant, but anomalies to the equation. Bonobos, say, a three hundred million more, more normal acquisition, maybe, with a 10 to 15% ownership, doesn't really move the needle. Do you think that does mean it's still exciting, though?

A So, it depends on a couple of things. Depends, we're early stage investors, so we'll often invest at the seed or series A or series B stage, and so it certainly depends the valuation you're getting in at, and then, yeah, I mean, you're absolutely right. We definitely need billion dollar plus acquisition, um, to move the needle for our funders at 1.2 billion dollars. And so, we need to be thinking about whether this is a company that will be acquired for more than a billion dollars, or ideally, whether this is a company Um, only raise their seed in series A before getting to the point that they're currently at. So if you're that capital efficient and can go all the way to IPO or acquisition on such little capital, then that makes it very interesting.

AI assessment note: “We definitely need billion dollar plus acquisition, um, to move the needle”

Q And so, and so, how did that then translate from the family development to venture?

A So, I was always a math student. So, I naturally went into finance, and then I nearly spent a decade at Morgan Stanley. I was in the equity research and sales side, and was the analyst covering retail and e-commerce names. I mean, it was a fun time to be covering them. So, it was ASOS, Net-A-Porter, Ux, really at a time where e-commerce was just taking so much market share. And people were just sort of learning about these names back then. So I would, you know, meet these companies a year or two before they IPO'd and really think about how to best position them for IPO, further scale the business and the brand for, you know, continued scalable growth. So that was a good nine or so years there. And then I went to a consumer fintech startup. You actually know it, Nutmeg.

AI assessment note: “I naturally went into finance, and then I nearly spent a decade at Morgan Stanley.”

Q No, I completely agree on the capital efficient element. I do want to slightly switch tangents. So before we move into the quickfire, being a fanboy of Planet of the Apps, I do have to ask, how did that come about? Talk to me. What was the story?

A Yeah, absolutely. It was a really fun experience. It was originally Will.i.am's idea, uh, so he pitched it to the Propagate guys. I have to say, it was one of the most enjoyable, uh, weeks that I have had, and certainly didn't expect that I would be on a show with Will.i.am, Gwyneth Bountro, Gary Vaynerchuk, and Jess Alva, um, when I started this a couple of years ago. So, the thing that I find most interesting is that the show really democratized entrepreneurship, Because we looked across the entire country for founders, and this is not just people in Silicon Valley building products for people in Silicon Valley. This is really products for the 99%. This is what gets me really excited. The fact that one of the first companies I ever worked on was Holla. We did the seed in Holla, which is an online dollar store, and so products like that for the 99%, or Stitch Fix, those are the companies that I find really exciting, and I'm spending a lot of time on right now, and so for me, Planet of the Apps Did exactly that. And, uh, Harry, you'll have to check out the second episode because it was the largest amount that was ever invested on television. I invested in a female entrepreneur called Lauren Farley from Dote, which is a virtual app. Yes.

AI assessment note: “It was originally Will.i.am's idea, uh, so he pitched it to the Propagate guys.”

Q And so, and so, how did that then translate from the family development to venture?

A So, I was always a math student. So, I naturally went into finance, and then I nearly spent a decade at Morgan Stanley. I was in the equity research and sales side, and was the analyst covering retail and e-commerce names. I mean, it was a fun time to be covering them. So, it was ASOS, Net-A-Porter, Ux, really at a time where e-commerce was just taking so much market share. And people were just sort of learning about these names back then. So I would, you know, meet these companies a year or two before they IPO'd and really think about how to best position them for IPO, further scale the business and the brand for, you know, continued scalable growth. So that was a good nine or so years there. And then I went to a consumer fintech startup. You actually know it, Nutmeg.

AI assessment note: “So, I was always a math student. So, I naturally went into finance”

Q Talk to me. The average consumer downloads less than one app per month. The app store is hence dead. Agree?

A Disagree, but I do think that it is increasingly hard to be a home screen app. Um, so this is definitely why we think about what is the next platform, but within mobile first, you've got to think about it is just so hard to be a home screen app right now, and so the way that we think about this is we just constantly look at daily active users. We just think that is the number one metric to look at to show whether somebody is using this on a daily basis, whether they are using this so often that It is on their home screen, because, you know, out of sight, out of mind, if it is not on your home screen, then you are not using this on a daily basis. That's certainly the number one metric that we'll speak to founders about, and it is difficult. You know, it's why we're looking at e-commerce. It's why we're looking at other platforms. So it's not dead, but it's just harder.

AI assessment note: “Disagree, but I do think that it is increasingly hard to be a home screen app.”

Q So you wouldn't agree, then, with the thesis that in the early days of consumer, you have to lose money on initial customers to really scale?

A So that is true for some areas within consumer. That is not necessarily true for areas within e-commerce and brands. It's interesting when we believe be everywhere that your customer is, and so we do believe in the Bonobos Guide Shop, Type model, and clearly all birds have just raised around to focus on retail expansion, and you can see that these retail stores are profitable in a matter of months. Often they're cost-neutral marketing channels. We quite often think that within e-commerce, no, you're not necessarily losing money on every transaction, and certainly they will get better with scale, and those are the type of companies that we invest in where they can't afford to keep the stock in. The demand is much higher than that. And so they need money for that. They need money because it's scale. This is going to be a very profitable business. But yeah, that's, that statement's not necessarily true in e-commerce land.

AI assessment note: “That is not necessarily true for areas within e-commerce and brands.”

Q Speaking of a real business at some point in time, are we nervous of doing A's cognizant of the fact that I don't know about you, but there really is a crunch at B. B and C, it's like, well, the rubber hits the road, and the crunch is real. Are we nervous about doing A's given the very different and changed expectations at B?

A I'm on the board of a company where we did the A, and Rebecca actually just did the B, um, and so it's A, wonderful being on board with Rebecca, um, and B, like, those founders are so thoughtful and so smart, it's daybreak, um, and what they're doing is mental health For adolescents. Um, and so I would say, listen, like there is a crunch in terms of valuation. Definitely that is coming down, but I do still believe the best teams and the ones that are growing, you know, two, three, four, five X year on year, they will continue to get funded. And so really we're just moving to like a flight to quality and that's okay.

AI assessment note: “the best teams and the ones that are growing... will continue to get funded”

Q Can I be a contrarian and say, do you think that's good then for VCs, especially take on the perspective of Lightspeed, billion-dollar fund, Bonobos, a dollar shaven jet, brilliant, but anomalies to the equation. Bonobos, say, a three hundred million more, more normal acquisition, maybe, with a 10 to 15% ownership, doesn't really move the needle. Do you think that does mean it's still exciting, though?

A So, it depends on a couple of things. Depends, we're early stage investors, so we'll often invest at the seed or series A or series B stage, and so it certainly depends the valuation you're getting in at, and then, yeah, I mean, you're absolutely right. We definitely need billion dollar plus acquisition, um, to move the needle for our funders at 1.2 billion dollars. And so, we need to be thinking about whether this is a company that will be acquired for more than a billion dollars, or ideally, whether this is a company Um, only raise their seed in series A before getting to the point that they're currently at. So if you're that capital efficient and can go all the way to IPO or acquisition on such little capital, then that makes it very interesting.

AI assessment note: “if you're that capital efficient and can go all the way to IPO or acquisition”

Q No, I completely agree on the capital efficient element. I do want to slightly switch tangents. So before we move into the quickfire, being a fanboy of Planet of the Apps, I do have to ask, how did that come about? Talk to me. What was the story?

A Yeah, absolutely. It was a really fun experience. It was originally Will.i.am's idea, uh, so he pitched it to the Propagate guys. I have to say, it was one of the most enjoyable, uh, weeks that I have had, and certainly didn't expect that I would be on a show with Will.i.am, Gwyneth Bountro, Gary Vaynerchuk, and Jess Alva, um, when I started this a couple of years ago. So, the thing that I find most interesting is that the show really democratized entrepreneurship, Because we looked across the entire country for founders, and this is not just people in Silicon Valley building products for people in Silicon Valley. This is really products for the 99%. This is what gets me really excited. The fact that one of the first companies I ever worked on was Holla. We did the seed in Holla, which is an online dollar store, and so products like that for the 99%, or Stitch Fix, those are the companies that I find really exciting, and I'm spending a lot of time on right now, and so for me, Planet of the Apps Did exactly that. And, uh, Harry, you'll have to check out the second episode because it was the largest amount that was ever invested on television. I invested in a female entrepreneur called Lauren Farley from Dote, which is a virtual app. Yes.

AI assessment note: “It was originally Will.i.am's idea, uh, so he pitched it to the Propagate guys.”

Q know. What can I say? Um, I am interested, though, because with, with that, and with the kind of, uh, that hat on, I'm always intrigued as to the potential and the benefits with regards to VCs being public. What are your thoughts on VC brands and visibility with VCs today in such crowded and kind of proliferated marketplaces? What are your thoughts on that and the need for that?

A So I think it's important, like, if we say brand is a network effect, if we say content is a key moat, Then I think you have to take those and apply them to your own business, and so for us, our investment thesis is that content is a key mode in creating an e-commerce business, and so it was quite fun to create that content ourselves, and to really think about having a brand in such a noisy environment, and so I think it's important that people know what you stand for, what your values are, and what Sectors you're spending your time on, because at the end of the day, this is such a specialized business, and so you do want to spend as much time as you possibly can getting your brand out there so that people know what you stand for.

AI assessment note: “I think it's important that people know what you stand for, what your values are”

Q know. What can I say? Um, I am interested, though, because with, with that, and with the kind of, uh, that hat on, I'm always intrigued as to the potential and the benefits with regards to VCs being public. What are your thoughts on VC brands and visibility with VCs today in such crowded and kind of proliferated marketplaces? What are your thoughts on that and the need for that?

A So I think it's important, like, if we say brand is a network effect, if we say content is a key moat, Then I think you have to take those and apply them to your own business, and so for us, our investment thesis is that content is a key mode in creating an e-commerce business, and so it was quite fun to create that content ourselves, and to really think about having a brand in such a noisy environment, and so I think it's important that people know what you stand for, what your values are, and what Sectors you're spending your time on, because at the end of the day, this is such a specialized business, and so you do want to spend as much time as you possibly can getting your brand out there so that people know what you stand for.

AI assessment note: “So I think it's important, like, if we say brand is a network effect”

Q You said before a potentially contrarian thing to me being brand as a key network effect. I'm intrigued. What does that really mean?

A Yeah, so we spend a lot of time thinking about network effects, and I certainly believe that brand is a key network effect. And yes, user economics, TAM are important, but at the end of the day, your margins and the size of the market, not quite as important if no one's buying your product. And so for me, it's the magic behind the brand. And to that point, Emily from Glossier says it best when she says a brand, it's a little bit of science and a little bit of magic all rolled into one. I very much agree with that. I think that it is A brand that gets people to come back time and time again, purchase, tell the friends about it. Um, we've invested in Rothy's and Zola, and if you speak to Zola for every customer that has their wedding on Zola, they refer to point to other couples to also have their registry on Zola, the online wedding registry business. And so, you know, that brand can really create a real moat around your business. And it's not just e-commerce, but it's the whole of consumer that's So important for.

AI assessment note: “A brand that gets people to come back time and time again, purchase, tell the friends”

Q Speaking of a real business at some point in time, are we nervous of doing A's cognizant of the fact that I don't know about you, but there really is a crunch at B. B and C, it's like, well, the rubber hits the road, and the crunch is real. Are we nervous about doing A's given the very different and changed expectations at B?

A I'm on the board of a company where we did the A, and Rebecca actually just did the B, um, and so it's A, wonderful being on board with Rebecca, um, and B, like, those founders are so thoughtful and so smart, it's daybreak, um, and what they're doing is mental health For adolescents. Um, and so I would say, listen, like there is a crunch in terms of valuation. Definitely that is coming down, but I do still believe the best teams and the ones that are growing, you know, two, three, four, five X year on year, they will continue to get funded. And so really we're just moving to like a flight to quality and that's okay.

AI assessment note: “really we're just moving to like a flight to quality and that's okay.”

Q You said before a potentially contrarian thing to me being brand as a key network effect. I'm intrigued. What does that really mean?

A Yeah, so we spend a lot of time thinking about network effects, and I certainly believe that brand is a key network effect. And yes, user economics, TAM are important, but at the end of the day, your margins and the size of the market, not quite as important if no one's buying your product. And so for me, it's the magic behind the brand. And to that point, Emily from Glossier says it best when she says a brand, it's a little bit of science and a little bit of magic all rolled into one. I very much agree with that. I think that it is A brand that gets people to come back time and time again, purchase, tell the friends about it. Um, we've invested in Rothy's and Zola, and if you speak to Zola for every customer that has their wedding on Zola, they refer to point to other couples to also have their registry on Zola, the online wedding registry business. And so, you know, that brand can really create a real moat around your business. And it's not just e-commerce, but it's the whole of consumer that's So important for.

AI assessment note: “for every customer that has their wedding on Zola, they refer to point to other couples”