It took a year, but Gwyneth Paltrow figured out how to exploit the pandemic

It took a year, but Gwyneth Paltrow figured out how to exploit the pandemic

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Gwyneth Paltrow is at it again. Here’s the scene for the perfect grift for our times:

Tens of millions of people around the country have fallen ill with COVID-19. Nearly half a million have died. Given chronic testing shortages, millions more have likely been infected and never diagnosed. Some of those infected will develop long-term effects, suffering lingering symptoms for weeks to months—or maybe longer.

Sometimes the symptoms appear to be direct extensions of the illness, such as lingering shortness of breath, cough, and/or chest pain. Other times, the symptoms may be more nondescript, such as fatigue and trouble concentrating, aka “brain fog.”

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#covid-19, #goop, #gwyneth, #long-covid, #science

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Tony Florence, the low-flying head of NEA’s tech practice, on the art of building household brands

Tony Florence isn’t as well known to the public as other top investors like Bill Gurley or Marc Andreessen, but he’s someone who founders with SaaS and especially marketplace e-commerce companies know — or should. He’s responsible for the global tech investing activities for NEA, one of the world’s biggest venture firms in terms of assets under management (it closed its newest fund with $3.6 billion last year).

Florence has also been involved with a long list of e-commerce brands to break through, including Jet, Gilt, Goop, Casper, Letgo, and Moda Operandi.

It’s because we talked earlier this week with one of his newer e-commerce bets, Maisonette, that we wanted to ask him about brand building more than a year into a pandemic that has changed the world in both fleeting and permanent ways. We wound up talking about how customer acquisition has changed; what he thinks of the growing number of companies trying to roll up third-party sellers on Amazon; and how upstarts can maintain momentum when even younger companies become a shiny new fascination for customers.

Note: one topic that he couldn’t and wouldn’t comment on is the future of one famed founder who Florence has backed twice, Marc Lore, who stepped down from Walmart last month to begin building what he recently told Vox is a multi-decade project to build “a city of the future” supported by “a reformed version of capitalism.”

Part of our chat with Florence, lightly edited for length and clarity, follows:

TC: You’ve funded a number of very different businesses that have managed to grow even as Amazon has eaten up more of the retail market. Is there any sector or vertical you wouldn’t back because of the company?

TF: You have to be thoughtful about Amazon. I wouldn’t say there’s one particular area that you either can ignore or feel like you’re completely comfortable and open to, given the scale of their platform. At the same time, there are founding principles and fundamentals that we think about as they relate to companies being able to compete and operate successfully.

TC: And these are what? You’ve backed Marc Lore, Philip Krim (of Casper), Sylvana and Luisana of Maisonette. Do they have something in common?

TF:  Sometimes [founders] come at the problem organically; they’re living it [and want to solve it]. Other times, somebody like Marc sees a business opportunity and just attacks it. But there are commonalities. These are folks who are very customer centric, who are focused on good, fundamental unit economics, and who are obsessive about their people, their teams. It takes a village to build a young successful company, and all of those founders you mentioned are great at recruiting world-class people. There’s a sense of vision and mission and culture.

When you wake up and decide to do something, the majority of people you talk to just want to tell you the reasons why it can’t work, so it also takes a certain [wherewithal] to have such conviction around what you’re doing that you’re kind of all in on it, and you’re going to break through no matter what.

TC: Maisonette was going to open a brick-and-mortar store but put a pin in that plan because of COVID. Will we go back to seeing direct-to-consumer brands opening real-world locations when this is over? Has the pandemic permanently changed that calculation?

TF: Leading up to the pandemic, a lot of the young DTC companies that were direct-to-consumer brands, and even the traditional e-commerce marketplaces, were experimenting with offline. Some of it was out of necessity, frankly. Sometimes [customer acquisition costs] became so expensive that it was actually cheaper for them to go offline. In other cases, it was done because the customer wanted that closed loop experience, as with [mattress maker] Casper.

A lot of companies [opened these stores] in a contained way it worked really well. It’s very accretive financially to the overall business contribution, margin wise. It was accretive for the overall customer experience. And in many cases, it didn’t cannibalize anything. It just expanded the [total addressable market].

We’re spending a lot of time right now continuing to think through what are the permanent changes that are going to come out of the pandemic, but I would say the omnichannel model has really has started to take shape and succeed if you look at big retailers like Walmart and Target, so I think there will be an omnichannel dynamic to many of these companies that we’re talking about. Also, over the last 12 months, the cost of acquisition and the efficacy of marketing has swung back in the favor of these young companies. It’s improved to a point where we don’t really even need to think about offline.

TC: I know it had become expensive to acquire customers digitally because it was so crowded out there. Did it become less crowded?

TF: There were very few platforms that these companies could use pre pandemic that weren’t oversaturated . . . it was just very competitive, and that would bid up the cost of acquisition. In the last 12 months, you’ve seen big parts of that market go away. With airlines and financial services and a lot of the spend going way down, it’s become a lot cheaper for companies to market digitally.

TC: Still, it feels at times that it’s hard to maintain a brand’s momentum over time; there’s always some new outfit nipping at its heels. How does a brand itself fresh and relevant in 2021?

TF: There’s a hits dynamic — a fad dynamic — in the consumer space, so that’s always a challenge. You [compete by] continually reinventing and adding [to your offerings]. You see that in social categories, you see that in marketplaces [where they add] managed services and other components [like] payments, and you clearly see it in the way some of the direct-to-consumer companies continue to add new products to the mix.

You focus on the core aspects of your brand and its mission and vision and make sure that the customers really feel that. There’s a community dynamic that has really occurred the last four or five years around e-commerce companies. Glossier is a great example of a company that built a great community around a core set of product offerings, and that has really propelled that company beyond its core customer customer base.

There’s also a contextual commerce opportunity. Goop is a great example this; Gwyneth [Paltrow] brilliantly came up with [an effective way] to merge content and commerce, and that’s something a lot of companies in the commerce space have started to invest in.

TC: Content, community and not necessarily speed, so focusing on what Amazon does not. Can I ask: do you think Amazon needs to be reigned in?

TF: If you’re competing with them [in the] cloud market or a commerce market, they’re a very formidable competitor, and you got to take them very, very seriously. They’re at a scale that’s just incredibly impressive. But I do think you’re seeing a lot of innovation around the edges and companies finding areas that Amazon maybe can’t focus on or isn’t focusing on.

TC: What do you think of these Amazon Marketplace roll-ups that we’re seeing? There’s been at least a half of dozen of them that already, including Thrasio, which announced $750 million this week. All are raising money hand over first.

TF: We haven’t made an investment in the area, though we’re watching very closely. It can be a very capital intensive strategy to execute on because you’re buying brands and then bringing them onto the platform to consolidate and grow, but there’s just an enormous long tail to the e-commerce space and this is an opportunity to consolidate that.

TC: Like, an infinite opportunity? How many roll-ups can the market support?

TFL I do think that we’ll see a handful of these companies get to decent scale. The question will be whether you’ve got more of an arbitrage going on [by] buying companies and generating synergies or there’s some fundamental bigger breakthrough. If you could use AI [and] machine learning to understand how to better serve customers and think about customer acquisition a little bit better, that would be really interesting. If there are real economies of scale to the supply chains [or] baseline infrastructure, that would certainly be interesting.

It’s early on. It remains to be seen how this is gonna play out.

Pictured above, left to right: NEA’s global managing director, Scott Sandell, and Florence, who is the head of global tech investing activities at NEA and who works alongside Mohamad Makhzoumi, who oversees the firm’s healthcare practice.

#casper, #ecommerce, #glossier, #goop, #jet, #maisonette, #marc-lore, #marketplaces, #nea, #tc, #tony-florence, #venture-capital

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Gwyneth Paltrow, Rebel Wilson, Darren Criss, and Baron Davis are backing an LA-based weed soda company

Celebrity investors including Gwyneth Paltrow, Rebel Wilson, Ruby Rose, Darren Criss, Baron Davis, Tove Lo, and Casey Neistat have come together to back the Los Angeles-based thc-infused drink company, Cann, the company said.

It’s the latest in a string of deals that show the strength of the market for alternative intoxicants — at least in California.

News of the funding follows yesterday’s announcement that the Los Angeles-based, national liquor delivery service Saucey would be merging with a marijuana dispensary and delivery service, Emjay under the mantle of Pacific Coast Holdings.

For its part, Cann has become the fastest growing THC beverage on the market with over 2 million cans of the stuff sold (I’ve had it. It’s good.).

For the company’s backers — and its founders — the pitch that Cann is a better alternative to alcohol simply resonates.

“Cann sits at the intersection of two powerful trends we’ve been monitoring at goop for some time: the
‘sober curious’ and ‘cannabis curious’ movements,” said Gwyneth Paltrow, the multi-hyphenate actress-entrepreneur-musician (she sings!) who founded the lifestyle and wellness brand, goop. “There’s no reason why alcohol should be so much easier to purchase than Cann, and I’m confident the founders will lead the charge in finding ways to integrate it into the same purchasing channels and drinking environments.”

Cann’s not the only company looking to carve out a slice of the liquor market with an alternative intoxicant. There’s also Kin Euphorics, which also pitches itself as an alcohol alternative. Then there’s a slew of CBD and THC infused drinks that have managed to attract venture backing. They include K-Zen Beverages, which has raised $5 million from the investment firm DCM to roll out its line of intoxicants and California Dreamin’ is a Y Combinator-backed intoxicant containing a whopping 10 milligrams of THC. Sweet Reason raised money from Lerer Hippeau for its CBD-sparkling drink and Recess, Daytrip, Infuzed, and Dram all have offerings as well.

Cann’s cans come with 2 milligrams of THC and 4 milligrams of CBD, which, after a few cans of Cann is enough for a light buzz.

Actress Ruby Rose cited the company’s commitment to diversity, with a staff that’s comprised equally of men and women and where people of color make up 33% of the total headcount.

For its next act, Cann is looking to grow its geographic footprint. The company expanded into Nevada in the past year and is eyeing four more states within the next six months, according to a statement.

 

#actors, #actress, #california, #can, #cann, #casey-neistat, #goop, #gwyneth-paltrow, #los-angeles, #nevada, #tc

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Gwyneth Paltrow’s pseudoscience Goop series renewed on Netflix

Promotional image of Oscar-winner Gwyneth Paltrow emerging from a stylized depiction of the female genital anatomy.

Enlarge / Promotional image of Oscar-winner Gwyneth Paltrow emerging from a stylized depiction of the female genital anatomy. (credit: Netflix)

Gwyneth Paltrow—actor, pseudoscience-peddler, empowerer of women, and person who recently learned what a vagina is—will return to Netflix with a second season of The Goop Lab.

The six-episode docuseries of Paltrow’s wellness and “contextual commerce” empire, Goop, has been renewed, according to an exclusive report by Variety.

The first season, which oozed onto the streaming platform in late January of this year, followed Paltrow and her exploited Goopers as they aimlessly took to the high seas of junk science and marinated in snake oil spas. Individual episodes explored important topics such as the bright side of hypothermia, the powers of a magician who can massage your aura with moves he learned watching The Karate Kid, Goopers tripping on mushrooms for pretty much no reason at all, the benefits of a $50 salmon fillet, and how to be a fortune-teller in case you need a back-up career in the circus.

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#gaming-culture, #goop, #gwyneth-paltrow, #netflix, #pseudoscience, #science, #the-goop-lab

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