Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

The Difficulty of Consumer Investing: Reimagining the Endpoint

2,965 views

Published on

A talking points deck walking through current challenges in investing in consumer facing technology companies

Published in: Technology
  • Be the first to comment

The Difficulty of Consumer Investing: Reimagining the Endpoint

  1. 1. The Difficulty of Consumer Investing Reimagining the Endpoint @EzraMoGee
  2. 2. All Attention Has Turned to Mobile @EzraMoGee
  3. 3. Yet Mobile is a Dead End for VCs @EzraMoGee
  4. 4. No One Downloads Apps Average Monthly App Installs Across iOS/Android Spectrum: • 65.5% = 0/mo • 8.4% = 1/mo • 8.9% = 2/mo @EzraMoGee
  5. 5. So Where Do You Focus? • Hybrid Web/Mobile Transactional Platforms • Whether the hook is a tool, community, or content, there must be a transactional core @EzraMoGee
  6. 6. Web 1.0 vs Web 2.0 • The early generation of consumer victories – from eBay, Opentable & Zillow to as recent as Grubhub – was about digitizing offline processes. • The next wave is about re-imagination of consumer behavior: Airbnb, Uber. – What would the world look like IF – What macro trends do we see appearing in the world? @EzraMoGee
  7. 7. Dwindling Opportunities (But still exist) • Digitizing offline processes (few pockets still exist). • Vertical commerce ($400M upper band for exits) • D2C branded products – Honest Co, Casper, Harry’s – winners in many of the big categories though food (the largest prize) still exists. • Geo-located/Mobile On-demand: Few markets support better, faster, AND cheaper. @EzraMoGee
  8. 8. Larger Pockets of Opportunity • Concierge/Conversational Platforms – Trunk Club may have pioneered but The Middleman Has Struck Back. [Stichfix, Laurel & Wolf, Havenly]. • Low Cost of Capital Arb Models – Avant, Beepi (managed marketplace that purchases cars upfront & holds inventory), Opendoor (managed marketplace that purchases homes upfront & holds inventory) [Window may be closing]. – Unclear if investors still have appetite for this category of investment (high capital requirements) as market adjusts… @EzraMoGee
  9. 9. Emerging Opportunities We are entering the “reimagination” phase of Venture: • Millenial Reimagination – Common, Room Service, • Gen Z Reimagination - Younow • Adult Home Living Reimagination – Blue Apron, Casper • Professional/Office Reimagination – Breather, WeWork • Healthcare Reimagination - Oscar ** Must be going after LARGE markets: Living, Transportation, Food, Jobs, Fashion, Health @EzraMoGee
  10. 10. Emerging Opportunities • Dependent on existing macro factors. Millenials have: – Less time – Overwhelmed by life & optionality, resentful – Cash constrained – Looking to avoid friction, encumberment – Distrust of corporations, government, authority – Focused on community, relationships – Re-emergence of the family – Independence, control over work life. @EzraMoGee
  11. 11. Example 1: Spothero • Description: Mobile app for on-demand or scheduled booking of parking spaces. • Why Fundamentally Broken: Pricing information entirely opaque, horrific customer service, no quality control. • Macro Trends: Distrust, Time Constrained • Verdict: Cheaper, Good margins AND better • Category: Mobile On-Demand @EzraMoGee
  12. 12. Example 2: Sprig • Description: Vertically integrated mobile app for on-demand food delivery in <15 mins with constrained choice. • Why Fundamentally Broken: Grubhub digitized food ordering but choice remains a burden. Blue Apron still requires meal choices a week in advance. Choice remains a burden. • Macro Trends: Overwhelmed by choice, less time, looking to avoid friciton. • Category: On-demand, Millenial Reimagination @EzraMoGee
  13. 13. Summary • The focus MUST be on reimagination – nuanced difference from “disruption”! They will be the biggest opportunities. • Very unclear if low cost of capital arb models won’t be HUGE implosions, but we learn that challenging transactional status quo has value. – Are consumers en masse willing to sacrifice economics for convenience? • MUST own the BRAND. Huge loss of value if you don’t OWN the end consumer. • Brand Building is Expensive!! Unlike SaaS which is now all about cash efficiency, I am not convinced that B2C startups must be perfectly cash efficient. – Healthy unit economics + Growth are Primary. – Cash efficiency is important but ultimately secondary because appetite still exists for GO BIG plays. @EzraMoGee

×