Consumer Startups

“You probably don't have a whole lot of consumer companies coming through right now.”

“Like you would find it just as easy to get money for consumer as you would for tech in India.”

“The difference between now and 15 years ago is there's a handful of companies with such large distribution that they're the natural homes to do new things. Because even if they're five years late, they can just cross sell it, right?”

“The explosion in consumer in, you know, sort of the 2008 to 2012, 2014 period, that was an opening up of platforms. And then as the consolidation happened, you know, distribution closed down, which sort of spurred, you know, this move over to B to B.”

“In fact, our stated sort of approach is weird and working. That's how we've tried to invest in consumer.”

“Consumer has the, this property that like very, very, very few things are going to work, but if it works really big, but if it doesn't work, it's often like really talented entrepreneurial founders that can then either like Take what they've built to a larger…”

“I think all good consumer pitches, for me, come down to an insight on human psychology.”

“And so if you're going to do a consumer startup, it can't be based on advertising. It's just too expensive. Advertising cannot clear the inference cost even with it with inference costs declining.”

“The typical path to first 1000 users for consumer startups is one of three things. First, reach out to friends and colleagues. Example, email them, post on social media, or call them. Second, go where your target audience hangs out, online or offline. So for e…”

“The second most common way to acquire your first 1000 users, and it's important for early growth of 30% of consumer startups, is to go recruit them directly.”

“Though often advised against, getting press right out of the gate is a very legitimate early growth strategy, responsible for the early growth of over 20% of the most successful consumer startups.”

“A good growth rate is 15% month over month. At that rate, you'll five X your user base every year. 10% monthly growth for consumer company is okay. It means you'll approximately triple your user base every year. Five percent a month or lower is unlikely to rea…”

“If your net promoter score, your MPS, is not extremely high as a new consumer company, you're toast. You pretty much have to re-engineer the product to make it something that people love. The reason is it correlates extremely well with word of mouth referral. …”

“So I've done a bunch of research on consumer startups, B to B startups, and the numbers I see, and I'm curious if you see similar numbers, is around a fifth of consumer startups ended up pivoting to a completely different product, and almost half, like, 40% of…”

“I think it's a pain cave for a founder to go out without some angle or strategy and how they're going to get distribution, you know, like what advantage are you going to have? Because say you make something great, it's going to get copied or snatched up by som…”

“Well, that's in a B to B company. You know, if you're in, if you're more consumer, you're going to have more marketing or product marketing plus technical. Okay, because what you're talking about is SA, I think you referring to SaaS business, where you really …”

“There's so much more variability, and I think it can never be plugged into a spreadsheet with like a thumbs up or thumbs out. That just will be definitionally impossible in consumer”

“And one of the draws towards doing software and industrial hardware is that we generally think that the capital efficiency is one and a half to two times more than the consumer startups.”

“So I think that you know, that vagueness in backing consumer startups, unlike a B to B startup where, you know, you absolutely get a fair idea, you know, from an enterprise customer of the, you know, the need and value for that product. I think it's very hard …”

“People think that YC funds consumer companies, and this is what our bread and butter is. And like, Yeah, like, I think it's like five percent consumer.”

“Ultimately, the challenge is always, especially with consumer kind of focused startup is as soon as you start making money, then VCs will start judging you based on that revenue today. And so strategically, there's some challenges there, which is an unfortunat…”

“If you're social companies, you could grow off the backs of Facebook distribution and Twitter distribution, but all of those channels are now clogged down. They're now incredibly optimized and they're largely pay to play. So it's very difficult for a startup t…”

“The story of going from early adopter to mass is storytelling. It's the ability to build that connection with the market so that they understand what you're doing, and they want to give it a try, and you're going to be able to develop their trust, and some of …”

“And that was the whole push that we're now seeing, is that the New York market Is really working, you know, the older industry is really working with the new industry of consumer and e-commerce and content companies that are coming out of the startup world.”

“I think one of the advice I give to my other founder friends on whether they're doing connected devices or software, as long as they're doing something consumer facing, I highly, highly recommend them. Don't be in a stealth mode. Don't be in a stealth mode. No…”