Henrik Johansson

The VC/DNVB honeymoon is over. 🥀 Here's why: both sides have realized that DTC brands aren’t really tech companies. Recently, the "DTC darlings" have taken a hit: Bonobos was resold for $75M after Walmart bought it for $300M 📉 Unilever parted ways with Dollar Shave Club seven years after buying it for $1 billion 💸 And that's just the start—other brands like Casper, Outdoor Voices, and Smile Direct Club have faced similar fates. These brands thrived during the early 2010s VC boom. 🚀 Since 2006, venture capital investments skyrocketed from $30 billion to over $340 billion in 2021. With limited SaaS options to invest in, VCs turned to startups with similar growth potential. DTC brands fit the bill perfectly, wooing investors with three key points: 1️⃣ Tech-savvy teams: In the early 2010s, selling online required a strong dev team, and competition for talent was fierce. 2️⃣ Cutting out the middlemen: Facebook and Google allowed these brands to reach customers directly at a low cost, bypassing traditional distribution channels. 3️⃣ Attractive business models: Gross margins were high, similar to software, and recurring revenue from subscriptions offered an impressive LTV/CAC ratio thanks to low distribution costs via Facebook. But several changes exposed flaws in this model: 1️⃣ E-commerce tech became accessible to everyone through platforms like Shopify and Klaviyo, removing the unique advantage of in-house tech. 2️⃣ Facebook and Google increased ad costs, replacing one middleman with another. Then, iOS 14 made targeted advertising even harder. 3️⃣ Post-COVID, e-commerce growth slowed, and to sustain their growth, vertical SaaS platforms raised their prices. 4️⃣ Rising raw material costs squeezed margins further. 📈 5️⃣ VCs realized that big companies like Unilever and P&G (potential buyers) didn’t care about LTV/CAC ratios since multiple sales channels (including retail) complicated these metrics. This undermined the growth acceleration strategy VCs had envisioned. In the end, e-commerce is more about logistics, product, and marketing than pure tech. 📦🛍️📢 All this makes it a less appealing investment for venture capitalists.

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This is a must listen to for anyone B2B founder. How to figure out Product Market Fit. One of best frameworks I've seen in a while. https://lnkd.in/ghSmhVNB

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According to government estimates, the U.S. Manufacturing sector loses well over $100B annually because so many companies remain over-dependent on outdated manual processes. For such companies, creating a more “eCommerce-like” buying experience for their suppliers is imperative.    That’s why today Cleo launched CIC ORCA (Order to Cash Automation), a new capability in our Cleo Integration Cloud platform that dramatically improves #B2B buying experiences by delivering seamless “eCommerce to EDI” workflows for businesses that don’t happen to have EDI capabilities.    CIC ORCA is intended for #manufacturers, #wholesalers, and #distributors who must cater to the modern B2B buyer’s preferences for ease-of-use, self-service, and efficiency when procuring goods, getting delivery updates, and receiving invoices from their suppliers.     In an era shaped by the “Amazon Effect,” suppliers are increasingly expected to emulate the B2C buying experience. Cleo's CIC ORCA gets everyone singing from the same song sheet. For the full story see today's Cleo Press Release or visit the CIC ORCA web page -- https://lnkd.in/gqFn4hCj

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Today, I was reminded of two remarkably prescient 1997 ACM, Association for Computing Machinery presentations: the first by Nathan Myhrvold and the second by Bran Ferran. If you are not a member of the ACM - I highly recommend joining. Nathan Myhrvold The future of software, the software industry, and Windows '47 https://lnkd.in/egMwYty Bran Ferran How IT will transform the experience of telling and listening to stories https://lnkd.in/gqF7C7TK

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Are you developing a medical device or digital health? Come learn about regulatory and legal impacts and how design for manufacturing is critical to your startup's success.

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Great article Hannah Sieber & Artyc team! Very exciting to see the breadth of applications here, your progress, and the huge potential for impact! #climatetech #hardtech #supplychainsustainability

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DeepCast shipped a number of really cool new features recently in advance of a broad outreach push to podcast listeners. One new feature is our new Daily DeepDigest tool that sends you a concise daily email including any new episodes from the trailing 24 hours from any podcasts you Subscribe to (on DeepCast). Think daily podcast cliff notes or podcast news ticker tape, with a hint of Morning Brew various brews or PitchBook News—it's increasing information throughput when you're pressed for time. And this feature is rapidly evolving to distill other key extractions from shows you're already interested in, but also exposing you to other shows you might be unfamiliar with that also have nuggets to share—and thus increasing your aperture yet still conscious of your time. Want to go deeper on any given episode? Click the episode detail and you're off to an episode on DeepCast, where you can subsequently read a longer form distillation of that episode or go straight to the source and listen to the episode. (And podcaster friends, these pages are definitely increasing indexing and thus Google entry points to your shows!) I'm loving this feature as a user, personally. Can't wait to see what others think! #BuildingInPublic #Podcasts #AllTheWorldsInformation #HowYouWantIt

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I've sat on both sides of the M&A table dozens of times. Having a differentiated product with a defensible moat in a healthy market is critically important. Full stop. However, don't under-estimate the importance of demonstrating to the buyer that you have a deep, genuine understanding of your business. For example... Be able to clearly articulate why strategic decisions were made in the past. (What was your rationale? What adjustments did you make and why? What did you learn?) Be able to logically and reasonably describe how and why gross margins, growth rates, profitability, retention rates, etc. will improve over time. Know the language of your buyer...e.g. if you're a SaaS business seeking an investment from Private Equity, you must know what they mean by bookings, net revenue retention, gross margins, CAC, payback, cash EBITDA, etc. Further, when asked about these things, your ability to answer immediately with confidence and specificity ("$24.2M" is a MUCH better answer than "I think it's about $24 or $25M...but I can confirm with our investment banker"). This instills a level of comfort with the buyer, which generates real value in how excited they will get about the investment / acquisition and maybe even the price they're willing to pay. It may feel superficial, but someone that is going to write a check for tens or hundreds of millions of dollars wants to feel confident that you and your team are locked in on the economic engine of your business and can speak to it in black-and-white metrics. Obviously, I can't scientifically put a number or percentage to what this is worth, but I can tell you that I've been in the room with the people writing the big checks and have been engaged in the deal team debates on whether or not to buy and at what price. A seller that knows the "secret sauce" of their business, the levers that can be pulled, and the data that tells the objective story greatly increases the likelihood of a fast and high-value outcome. ************ P.S. Even if you don't plan to sell or take on a majority investment, run your business like you are. Your leadership team's ability to speak a common, data-driven language will allow you to make better decisions faster.

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We've invested in some really compelling teams with awesome products. As they transition from startup to scale-up, you reach a strategic inflection point where the company begins considering its options. The Power Law is a mathematical nicety (copium), but the cold reality is that not all exits are ideal. For a winning startup, an acquisition or an IPO can accelerate growth, provide access to greater resources, and create opportunities for expanded market reach and innovation. But, for a struggling company, an acquisition is a responsible consideration to safeguard employees’ jobs, preserve the company’s mission, and provide stability by integrating with a financially stronger organization. A lot has been written about how startups are acquired, but not much about *why* startups are acquired. I penned some thoughts on how to be more 'acquirable' and build with the end in mind. https://lnkd.in/dHdbXpPt

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To all #founders and #entrepreneurs out there, our intro meetings are conversational and easy going. Feel free to message me to setup a call. Learn what Pioneera Ventures can do for you!

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I have invested in some consumer electronics hardware startups for over a decade, and have seen some fail and some succeed. Consumer hardware is HARD. Consumers expect close to perfect products that at least promise to do many things for them, product price can typically only go down from launch day onwards, and there are so many balls to juggle simultaneously in taking product through launch + shipping. Biggest mistake is often this: perfect is the enemy of good. Steve Jobs may have said consumers don't know what they want, but you are no Steve Jobs - so get real consumer feedback as early as possible vs building in stealth forever. Lastly, plan ahead for next 2-3 rounds of financing. Money will be hardest to get when you need it most, and quality of investors drops sharply because there are few exit paths half-way through. This is something most executives who come from large consumer electronics companies and may have great experience in product design, engineering, supply chain management, manufacturing, logistics, pricing, distribution channels, marketing etc, don't know enough about.

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A few spots left for this awesome workshop with Justin Gray of In Revenue Capital. Every successful founder I know learns to develop and maintain high performing relationships. This is a skill like anything else and can be developed. Founders, if you want to build a high-growth company, learn to build high-performing relationships. This workshop will help you do that. Hope you can join us.

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Got a fundraising sea story for you . . . I've known Andrew Bialecki and Ed Hallen, Klaviyo co-founders, for >10 years. They personally helped me back when Klaviyo had ~10 employees. I was running marketing at a turnaround in Boston (Karmaloop--it had gone bankrupt). Klaviyo was a few doors down on Boylston street. Or Newbury. I can't quite remember. Our turnaround marketing team was FRUSTRATED. Karmaloop's email program was on some legacy platform (I won't mention it. . . we shouldn't speak ill of the dead). We couldn't do any of the lifecycle marketing we wanted to do . . . . . . and lifecycle marketing was critical to our turnaround thesis. It was the only way we were going to make it work. So after a particularly frustrating time trying to get a triggered email send to work, I threw up my hands, announced "I'm going next door," walked over to Klaviyo, and knocked on the door. Ed answered. Andrew waved--he was coding. "Hey, can your team help me migrate this beast onto your platform and make it sing? Like, this week?" Andrew and Ed bent over backwards for me and helped me get Karmaloop's 5M emails migrated and humming. It's not a stretch to say the turnaround (and the next ones) could only happen because of Klaviyo. I've stayed in touch with them ever since. They've given Michael Epstein and me advice over the years, been in our corner, and been a part of PostPilot journey. (PostPilot's original thesis was simple: "Klaviyo for direct mail." Now, it feels like the story's come full circle, because Andrew and Ed just invested in PostPilot's Series A. Like so many other things in my career, it all started with a turnaround. 

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It was a real honor to interview Brad Burnham co-founder of Union Square Ventures and partner Placeholder on the history of hype cycles in technology and the value they bring to capital and market formation. Brad has had tremendous success across decades investing at the frontier - when it was the frontier/ before it was obvious. Crypto is still the underdog and his views on the opportunity and its nuances are prescient. Specifically it is both a technical and financial innovation which can lead to excess volatility and a unique muscle as it relates to being a venture manager. But the returns are real. And the innovation is real despite some of the the common narratives. No one debates the breakthrough applications in AI at M13 we have been very active. It is also very clear that incumbents have massive data and distribution advantages which can make it challenging to find the right pockets to invest. AI is on its own hype cycle and as always the best teams (typically with contrarian takes) win. Very exciting times to be a venture investor.

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I sat down with Rebecca Lynn, Co-Founder of Canvas Ventures, an early-stage VC fund with almost $900 Million AUM. She's a 25-year fintech veteran and 5x Forbes Midas list honoree. In this Fintech Leaders episode, we discuss: - Data-driven marketing and go-to-market strategies - How startups should think about preparing for M&A opportunities   - What great entrepreneurs have in common - The areas of fintech where AI is making an actual difference   - Challenges of building a VC fund from scratch … and a lot more!

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I believe two of the big winners over the next 10 years in the SMB category will be PE who are rolling up the businesses and GenAI powered software that makes running these businesses significantly more turnkey and/or profitable. Thanks for having me on Jay Kapoor. If you want spicy takes fast forward to 25 min mark. If you want to get deep in market analysis buckle in for the whole thing. https://lnkd.in/d8M7Jyrx

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In this exciting episode of the Duran Inci Podcast—where innovation meets deep insight—I am thrilled to host Alex Berg, a pioneering entrepreneur who is revolutionizing industries with his innovative approach at Cratos Equipment, often dubbed "The Tesla of Construction." Visionary Insights: Dive into the motivations that drive top entrepreneurs beyond mere profit. Learn about Alex's passion for transforming the status quo and how it leads to groundbreaking results. The Power of 'WHY': Discover how aligning business operations with core values can shape the future of an industry and forge unstoppable teams. Challenging the Norms: Unpack why tackling complex challenges is essential for creating a fulfilling and impactful future. This episode is a must-listen for aspiring entrepreneurs and anyone eager to explore the limits of what's possible in business innovation. Tune in and be inspired to think differently and act boldly. #EntrepreneurialSpirit #InnovativeLeadership #VisionaryThinking #BusinessTransformation #CratosEquipment #DisruptTheStatusQuo #FutureOfBusiness #PodcastForChange #DuranInciPodcast #ChallengeConvention

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SFTW Startup Spotlight returns after a bit of a break. This month I highlight #artificialintelligence and #robotics company FarmWise Access to farm labor is a big challenge here in California (and in many other parts of the world). Labor can be up to 50% of your production costs in specialty crops Farmwise is tackling this challenge head on, with their AI powered mechanical weeding robotic implements (Vulcan!) and taking advantage of convergence of a few different technologies with a bold mission and vision "Enable growers and ag equipment OEMs to reimagine every farming task with machinery that can perceive, understand, and act at the plant level in real time" The startup spotlight from SFTW does a deep dive into -Farmwise's philosophy and a vision for a different way to farm -Deep dive into their technology (my favorite part!) -Their flexible and modular architecture -Use of foundation models (another topic I like to think about) -Business model, and most importanlty, -The team behind Farmwise led by industry veterans Tjarko Leifer and Greg Chiocco, and a diverse motivated team Link in the first comment #agriculture #california #agtech

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