A friend just shared a deck on DTC CPG brand. Spending 60% of their round on marketing.
My response unedited:
"So much $ on marketing & branding. That’s what we keep seeing over and over again. Tech VCs funding marketing/branding of products that haven’t hit...
My response unedited:
"So much $ on marketing & branding. That’s what we keep seeing over and over again. Tech VCs funding marketing/branding of products that haven’t hit...
...Skinny Pop raised $500k to get to $80m in revenue. Halo Top raised $1.5m to get to $400m in revenue. RXBar raised $10k before $100m in revenue and $600m sale. Anastasia raised <$5m before $Xb sale to TPG. etc etc etc....
..CGP companies are absolute machines when they see product market fit. The right team focuses on that- not on planning PR for a product that doesn’t exist."
[end of msg]
Re-posting here because I'm going to just start linking to this when I get similar decks.
[end of msg]
Re-posting here because I'm going to just start linking to this when I get similar decks.
To be clear - what fuels me is helping entrepreneurs to thrive. I get extremely frustrated when I see an entrepreneur get swept up into the (typically) tech ecosystem of raising a lot of $ when some companies will actually be more successful without the $.
In the case of consumer, early marketing dollars mask a lack of product market fit. The product market fit is what matters in consumer- with it these companies are absolutely amazing investments. But $Xm in marketing spend from a happy VC just makes finding that fit harder.
