The real Quest is for... REAL MONEY!

Victor

If Commerce is indeed a “Quest”… what’s the ultimate treasure to find? I’d say ACTUAL MONEY, isn’t it obvious? Well, it may have not been that clear until last year… Many DTC statups were burning cash in the pursuit of growth: using cheap financing to acquire new customers, hoping to get profitable (a.k.a. ACTUAL MONEY) someday in the future. Last year’s inflationary spiral and rising ad costs shattered many startups’ dreams. Check the DTC Unicorn ICU/obituaries:

Allbirds $4B → $0.7B
Casper $1.1B → $0.3B (has gone private)
Hims $1.6B → $1.2B
Birchbox $0.5B → $0.05B (private)
Stitch Fix $10B → $0.7B
Blue Apron $2.2B → $0.2B
Brandless $0.5B → $0 (now restarted)
Peloton $47B → $4.0B
Outdoor Voices $110M → $40M
Warby Parker $6.8B → $1.6B

These are many of the US ones which got good media coverage (current valuations might differ though…).

Any other (local) example you can think of? Or maybe an interesting "comeback" story to inspire the Quest for actual profitability?

Lauren Kulwicki

I recognize a lot of these companies coming from the US. Many of them I assumed were quite successful with their aggressive marketing strategies (some of them I feel like I hear as ads every time I listen to my podcasts). Super interesting read @Victor, curious to hear about some local examples or a comeback story….

Guido X Jansen

Yeah, those numbers don't look great….

Dutch Biking company VanMoof had a valuation of $512—768m in 2021. Today they are bankrupt…

Of course there is a difference between valuation and whether or not the company is making/losing (actual) money.

Samuel Pais

Interesting thoughts, what should they have done during their execution to prevent this? Were they just too pushy in marketing and customer acquisition at all costs without a proper understanding of longevity?

samuel.stuart

https://commercequest.space/discussion/comment/28205#Comment_28205

https://www.nytimes.com/2023/08/31/business/vanmoof-sale-lavoie-mclaren.html - Potential come back?

Victor

A local example in Spain I can think of is Jeff.com - started as a new way of doing laundry which expanded into other services as well as into many more markets (many unsuccessfully as washing clothes is something very different in some latam countries). Last February they achieved a VC round of 83 million EUR but around April it was discovered they haven't been paying their employees for a couple months. Despite the huge socialmedia buzz seems to still be afloat.

Great example the one of VanMoof, and a potential comeback yes.

2 nice "comeback stories" -though not from startups - I like are:

• Toys R Us. From a bankruptcy in 2017 in its home market (USA - the brand kept operating in other countries) due to aggressive online competition (the initial fight they had with Amazon is big chapter in eCommerce history), this great brand has recently been resurrected selling online again and with stores within Macy's.
• Nike, particularly how they decided to go completely DTC but a few months ago they decided to go back to selling via wholesale… Yes, DTC would have meant higher margins, but you have to diversify your channels and don't shoot yourself on the foot by cutting off a huge channel reaching many more customers! The Quest for Money is tough!

Guido X Jansen

I really like the Lego comback story, does that count? :D

https://www.youtube.com/watch?v=IjcSKukg9IE