The big winners in e-commerce focus on the experience, says Forerunner’s Kirsten Green


Consider the customer.

Kirsten Green, who runs the early stage venture capital firm Forerunner Ventures, has established herself as one of the best pickers of the next generation of successful e-commerce and consumer brands. Green has invested in companies like Warby Parker, Dollar Shave Club, Outdoor Voices and Glossier.

How’d she pick them — and how has she avoided some of the notable recent flameouts? The key, she said at the Code Commerce Series event in Las Vegas: A strong focus on the customer experience.

“You increasingly cannot compete just on product,” Green said. “To have a product that the consumer is willing to exchange money for is table stakes.” Competing on price alone, meanwhile, is a “crappy” business, she said. “So the thing to compete on is delivering a great experience.”

What have some of the winning entrepreneurs had in common?

“All of those founders pitched me a customer experience. All of them led with: ‘Here’s the guy. Here’s the girl. Here’s what’s wrong with the shopping experience.’”

In many cases today, that means building a direct-to-consumer e-commerce business. But it could also include relatively traditional components like physical retail stores. Many of Green’s investments, such as Warby Parker, Outdoor Voices and Bonobos, have some variety of brick-and-mortar presence.

“The customer wants what the customer wants — when they want it, where they want it, and how they want it,” she said. “And if you want to build a big business, and you want to be meaningful to a big, broad group of customers, you need to think about how you’re going to meet them in the various places where they might expect to see you.”

Green is a former equity research analyst who launched Forerunner Ventures with a $40 million fund in 2012. But up until a few months ago, there was a question of whether her investment thesis would pan out as many investors fled e-commerce in the face of Amazon’s growing dominance and some high-profile startup duds.

Green’s thinking, however, was that as more commerce moves online, traditional retailers and CPG companies would have trouble adapting. And as a result, they would be forced to spend big money to acquire digital-native brands that are resonating with the next generation of consumers online.

Then Unilever bought one of Forerunner’s portfolio companies, Dollar Shave Club, for $1 billion. Next, Walmart agreed to spend $3.3 billion to acquire Jet, another Green investment. Forerunner was the only VC firm to back both companies. And suddenly, Green’s thesis was looking really good.

via http://ift.tt/2dH1Wgt

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s