Thread by @ryan_caldbeck

1/ I think @faire_wholesale is (still) hugely undervalued at $12b. They’ve identified an incredibly valuable wedge to absolutely massive markets and are just getting started.

[I’m not an investor, I just admire how they are solving big problems]

2/ Market(s): It’s easy to have looked at Faire a few yrs ago and focused on narrative that all offline retail is dying or that they are selling trinkets to mom and pop stores. Those are the same people that dismiss PFP NFTs by saying they can cut and paste them. Shallow thinking

3/ Consider this: In NA and Europe alone, there are 2m independent retailers collectively doing about $2.5T (yes, that’s a T) in revenue. Btw that’s just *one* side of the *current* Faire marketplace….

4/ Online retail is important. It will continue to grow. But the millions of entrepreneurs who run these independent mostly businesses will continue to innovate- both online and offline.

5/ Faire will benefit from both their online and offline growth. These retailers feel tremendous pain today and are incredibly motivated to succeed.

6/ Today, and for the last several decades, the wholesale buying process (how these retailers discover and “buy” brands/products) is broken. The friction is hard to believe if you haven’t seen it in person.

7/ Trade Shows like @expowest are a living hell for most retailers and brands. Think about what your company does to find customers/suppliers and compare it to the video here:

https://twitter.com/ryan_caldbeck/status/1056314582057213953

8/ Buyers at even large retailers have little non-commoditized data. At small retailers? Forget it- they are relying on gut. That creates inefficiency for them and the brands they buy from.

9/ Failed product launches (>50% at many retailers) mean lost sales, disappointed customers for the retailer. It also means the brands wont get repeat business. Bad experience for all.

10/ Brands and retailers take meaningful financial risk in working together. The brand has to make the product before getting paid by the retailer. The retailer has to buy the product before getting paid by the end consumer. Everyone is doing it on mostly gut.

11/ The problem is real, the market is huge. There is meaningful friction in starting this marketplace- aggregated both sides of a highly fragmented and disperse market. Consider this framework from @bgurley.... @faire_wholesale crushes it.

abovethecrowd.com/2012/11/13/all…

12/ I love how @sarahtavel sums up what helps marketplaces win: “The marketplace that wins is the marketplace that figures out how to make their buyers and sellers meaningfully happier than any substitute.”

Talk to some Faire customers- they love it.

sarahtavel.medium.com/the-hierarchy-…

13/ Why? Let's focus first on the value they provide to the community. Brands can expand and grow their businesses via access to a global community of ind retailers.

14/ If you’ve started a brand you know that traditionally launching literally meant going to your local farmers market or trying to convince local stores to put you in. It was slow, painful and…..well it sucked.

15/ For retailers Faire provides access to differentiated inventory. Assortment. These retailers will struggle to survive on convenience (commoditized) or price (scale benefits of WMT, AMZN).

Assortment is the answer.

https://twitter.com/ryan_caldbeck/status/1052985815775600640

16/ Ahh but all brands will become fintech companies.

And that’s where Faire gets even more exciting. Today they offer net 60 day payment turns AND free returns on opening orders. Retailers LOVE this.....

h/t @astrange

future.a16z.com/every-company-…

17/ They also guarantee on-time payments to the brands. Go talk to someone that sells into @Walgreens who routinely screws their brands - you’ll get a sense of how important this is.

Wow there are a lot of layers to this cake.

a16z.com/2012/01/18/a-r…

18/ The path to using predictive analytics to help with financial tools should be obvious by now. I have no inside information but lending and equity investing could (should!) be on the roadmap as an offering for both brands and retailers.

19/ This is a company that should have broader data, and IMO better data per customer, than Square. Bold statement.

20/ There may be network effects for both sides here. The value provided to each side of the market increases as this marketplace gets larger. As they expand internationally suddenly brands and retailers have whole new worlds opened to them.

21/ There should be an opportunity to leverage prescriptive analytics as well. Imagine the data Faire sits on for both brands and retailers. How can they leverage that data to help each side build their businesses more effectively? To create new businesses?

22/ This is the right team to build this. Founders’ background at Square helped them see the need and execute it. @MaxRhodesOK @kolovson Daniele @mescortes

news.faire.com/leadership/

23/ Huge congrats on their most recent fundraise. I think they are just getting started.

@faire_wholesale will be the operating system for these retailers to operate.

WAGMI

pitchbook.com/news/articles/…