Travel Tips and Tricks

Traveling is one of my favorite things. It’s amazing to experience a new culture, hear a new language, and try local customs. More than that, I feel the more I experience in the world, the easier it becomes for me to relate to and empathize with people. It becomes easier to find common ground and use that as a basis for a new relationship or improving an existing one. I arguably went a little overboard during my business school time and traveled to 20+ countries in two years (currently at 32 total). I typically organize trips for my friends and they join knowing they will see some of the best sites in a pretty tight timeframe.

Here, I’ve assembled a set of insights that I have discovered over the years to help traveling more manageable and fun.

  • Money:
    • I highly advise a credit card with no foreign transaction fees. Always pay in local currency – the card will give you a much better conversion rate than other options. Not all money exchanges are created equal – some offer fair rates with no commission (ask if there is a commission); others have hidden fees they won’t tell you about and just imply that you don’t understand the conversion – they prey on tourists and you need to be wary of this.
    • I try not to carry more than $100-worth of cash on me. The further away from a big city you go, the more you would need to bring: many merchants in rural areas in Europe don’t accept credit cards.
    • Everything is negotiable. I can’t stress this enough. I have gotten discounts in coffee shops in Iceland and Thailand just by asking nicely for them. You could use levers such as calling the person by name, mentioning you are a student, or just being nice and friendly (just don’t expect the discount necessarily). My friends have tried this and have been able to get discounts in full-fledged stores like Macy’s at the register. You miss out on 100% of things you don’t ask for – just because there is a stated price or a stated rule, don’t take it as given.
    • To generate money while you travel,  you can consider renting out your place on Airbnb. There are companies out there that manage the listings and cleaning for you for a cut of the profit. Totally worth it in my opinion.
  • Airfare:
    • I use a mix of Momondo, Skyscanner, and Skiplagged. The first one has great deals for students, often 3-4x cheaper than the same fare on the carrier’s website
  • Accommodation:
    • I typically stay at an Airbnb or a hostel to save money and try to experience local culture more than a hotel would offer. Hostelworld is a great resource for the latter. For Airbnb, I first find out the places I’d want to visit in a city or in a region (e.g., beach, particular park, etc.) and then look for Airbnbs either within 15 minutes walking or close to a subway stop 3-5 stops away. This makes it easier to hit all the places I want without spending much time driving around and finding parking.
    • Trick to save money on Airbnb in foreign countries: there is a 3% fee Airbnb charges for foreign currency transactions. To avoid this, scroll down to the bottom of the page on the main Airbnb page and change the currency to the one for the country you’re traveling to. Then the prices will be displayed in local currency and there will be no fee.
  • Cars:
    • It’s much harder to find automatic cars in Europe than in the U.S. Definitely had to bring friends who knew how to drive stick sometimes – not something I have learned for now.
  • Luggage:
    • I try to travel only with a carry on and a backpack as that saves time at the airport and minimizes the odds of your bag getting lost. If possible, advise your group of this and try to get everyone on the same page. I’m at a point where I can travel for 3-4 weeks without a checked bag.



Impact VC

Placeholder ImageWhile talking to VC firms, I have always found it difficult to pinpoint and eloquently describe exactly the area I was interested in – is it B2C? B2B? FinTech? E-commerce? On one hand businesses like marketing analytics aren’t super interesting to me (though I am sure there are wonderful companies working on this problem), so that would rule out B2B…but at the same time I love companies like Slack and WeWork. Similarly I was able to get excited for some consumer products but not others (even if both have raised money and/or gone public). The challenge was compounded when I realized some firms invest only in a particular function such as commerce enablement or business analytics. Communicating interests across consumer and enterprise, different industries, and numerous horizontal functions was a struggle.

Recently, I went through the exercise of identifying areas I am passionate about I discovered an important insight: it’s much easier for me to think about investing in terms of the impact the companies would make on the world. One example is improving wellbeing, be it psychological, physical, or otherwise. Another is improving asset utilization, also known as saving consumers and/or businesses time/money. Once I thought of things in terms of impact and social benefit, things clicked.

Below are some thoughts on the two spaces I mentioned and some companies I like in each. What other impact areas or companies excite you?


Investment area 1: Improving wellbeing

With the advent and spread of companies like Blue Apron and ClassPass, it has become in vogue and increasingly easier to stay active and eat healthy. Consumers are more than ever aware of the benefits of taking care of themselves. Let’s split wellbeing into three categories and discuss investment areas in each: staying active (fitness), eating well (nutrition), and being emotionally balanced (mental health). Their combination represents well over a $1T market and has numerous investment opportunities.

Fitness: there is a gap in analyzing and tracking performance to ensure maximum efficiency during training. A Fitbit can tell me how many steps I walked but it doesn’t help me with my form or account for the fact that my step may be twice as long as another person’s. Companies like Rithmio and Shapescale are aiming to fix this. Rithmio developed software that wearable manufacturers can integrate into their products and that can independently learn gestures to give customized advice to the consumer. Imagine your fitness tracker suddenly able to give you specific insights about your jogging form to improve stamina and energy. With investment from Intel, Rithmio has insider access to their partnerships with Oakley, ESPN, and New Balance. By licensing this software to wearable manufacturers and developing a B2C app in parallel, the company stands to become a solid business. They have limited competition and a technology scalable to numerous industries. Shapescale tackles the “dumb tracker” aspect of the weight scale. Instead of giving a single number, the device uses a 3-D scanner to create a digital model of the body and can help track day-to-day progress, including changes in muscle size and fat composition. As a YC company, Shapescale has access to a great network that will maximize their marketing and distribution. This technology can be incredibly helpful and informative to the consumer and change the way they think about weight loss.

Nutrition: this space is getting crowded, with numerous delivery and food options to choose from; at the same time, consumers increasingly demand more organic, farm-to-table, responsibly sourced food with no added preservatives or refined sugar. I have recently taken up a paleo diet and find it fairly frustrating having to read every food label at a grocery store while not being able to afford to shop at a purely organic and healthy store. It would stand to reason that growing the supply of such ingredients would be instrumental to lowering the price and thus accessibility of healthy food. One way to do that is through precision agriculture, where rather than spraying an entire field with pesticide, a drone can determine and treat a specific source of plant malaise. A farmer may know what to look for but doesn’t have the technical know-how of how to accomplish this. A company like DroneBase, that is a marketplace for drone operators, could help bridge this gap.

Mental Health: there is a trend amongst the millennial demographic to value self-fulfillment in all aspects of their lives. Certainly I have seen the trend across MBA programs where fewer people are content taking corporate jobs and skew towards entrepreneurship. In parallel, things like meditation and self-improvement are becoming more mainstream. These trends demonstrate consumers’ willingness and interest to learn more about themselves and to seek happiness in their lives. One company that is enabling this is Talkspace: by lowering the perceived barrier to therapist services, it enables the average person to seek mental and emotional help. Access to therapy can be key to enabling the workforce finding fulfillment in their chosen field. In a similar vein, Akili is a great example of a company taking steps to treating cognitive disorders using modern technology. Rather than resorting to synthetic and often habit-forming medications, the company uses video games to help patients at home, with doctors tracking remotely.

Investment Area 2: Improving asset utilization, i.e. saving consumers and businesses money

Robotics and AI can go a long way to improving asset utilization. The automotive industry is a good example. If we assume that self-driving technology will permeate to the average consumer, then we can imagine a world where a person “allows” their car to drive around on its own and collect fares while the owner is at work, effectively diminishing the lifetime cost of the vehicle. This is compelling since 90% of the time a car goes unused and is one of the main reasons I don’t own one now. Another avenue of improving asset utility is marketplaces. An example is Flexe, which enables businesses to leverage existing warehouse space that is being unused by another business. This enables a business to allocate less money to storage costs and spend it on employees and developing great products. A third category is tools that enable more efficient transactions, such as the hire of an employee. The startup Interviewed creates automated tests that employers can use to evaluate how a potential hire would perform on the job rather than just going off their resume and interviewing skills. This minimizes the time that an organization would expend on recruiting and improves the happiness of employees since they have a better understanding of what is required of them in their new job.

Drones are overhyped


I wrote this in May 2016 so some of the information may be a little out of date.


Executive Summary

Drone startups have garnered increasing investor attention over the past five years, with an all-time high investment of $450M across 74 deals in 2015. 67% of those deals were at the Seed/Series A stage, implying the industry is still nascent and could grow significantly as the market matures.



This is relatively small compared to the $2.65B[1] in funding a new category, such as Insurance Tech, has secured during the same period or the $30B Internet Software companies have raised. While drone investing lags more established players today, the release of FAA regulations could cause the sector to grow faster.

However, the market overall is fairly small at ~$3B with defense drones accounting for close to 100%. In addition, it’s hard to argue that drones are a 10x improvement over an existing service/product rather than a nice-to-have. The other frontier spaces such as space and virtual reality hold more promises for investors and investing in drones would certainly incur an opportunity cost.

If investors choose to invest, they should focus on energy density, security, and avionics sectors. There is a limited competitive set given the current absence of regulations and a previous focus on hardware, and it makes sense to invest before the space is crowded.

Brief Drone History

Nikola Tesla first introduced unmanned vehicles in 1898 at an exhibition in Madison Square Garden. Throughout the 1900s, and especially during World War I and II, drones have gained popularity amongst military minds. Whether it was using drones for training anti-aircraft gunners or forcing enemy forces to reveal their locations without sacrificing human pilots, applications tended to center around combat situations. The drone that most are familiar with, the Predator, entered service in 1995 and was used heavily in the post-9/11 era to fight terrorism. Its use became the subject of media and public scrutiny, eliciting fears of disassociation from mass human casualties.[2]

Improvements in the size and cost of battery technology, motors, transistors, and GPS over the past 20 years have enabled the hobbyist and consumer drone markets to emerge. It wasn’t until 2010 when Parrot unveiled its AR drone at the Consumer Electronics Show that consumers had access to unmanned areal vehicles (UAVs). Since then, companies like DJI, Parrot, and 3DR have capitalized on the confluence of technology improvement and consumer interest by developing a number of drone models priced in the sub-$2,000 range. Tech companies have also unveiled drone plans – in 2013 Amazon CEO Jeff Bezos indicated a future service called Prime Air, where drones would deliver customer purchases within 30 minutes.

Drone Market



The market for defense-focused drones, such as the Predator, remains active and significant. In 2015, it was $3.2B out of the $3.3B drone market in the U.S., with Northrop Grumman, General Atomics (Predator manufacturer), and Textron owning 83.5% of the market[3]. The defense market currently accounts for 96% of drone revenue.

Defense disruption was demonstrated by Elon Musk with SpaceX in the aerospace field: he showed that a startup can compete with established industry players and leverage drive, ambition, absence of a bureaucracy, and technology to hold its own. This is possible, and likely, in other defense fields such as drones, but the disruption is still 10+ years away (largely due to the challenges described below), which is more than the life of a typical venture fund.


The consumer market includes hobbyists and general consumers buying drones for personal use – whether it’s taking photos (e.g., Lily Robotics’ throwable drone camera), racing (e.g., The Drone Racing League; though this straddles consumer and enterprise with advertising), or purely for fun. The Consumer Electronics Association (CEA) projects this segment to reach $300M globally by 2018[4]. This is likely too small a market for venture funds to invest in due to the returns required to return their limited partners’ (LP’s) money. It is worth noting that products like Lily could take off similar to GoPro and be a worthwhile investment.

According to Gartner, the personal drone market is early in the hype cycle and consumers are only beginning to adopt the technology. This implies that as consumers gain an appreciation and educate themselves on drones, there are likely to be new drone manufacturers who take advantage of increased demand, as well as a further segmentation of the consumer market as manufacturers tailor their offerings to appeal to different demographics. 



The commercial segment is where investors should focus their attention if they choose to invest in this sector. The market size is expected to be $2.07B globally by 2022[5], growing faster than both the consumer and defense markets.

Similar to personal drones, Gartner predicts in its 2015 Smart Machines analysis, that commercial UAVs are approaching the top of the hype cycle but have more than 10 years before they plateau. It isn’t clear that venture investors could put in money and exit prior to the market correction associated with disillusionment.

Commercial drones currently target industries where drones can replace humans. There are several that have economic incentives to adopt drones in order to reduce headcount and improve efficiency, but drones are not necessarily the game-changer that will disrupt them.

  • Agriculture: drones could survey as well as treat acres of land in a matter of minutes rather than hours or days it would take a human. Another take on this is minimizing replanting costs, where companies such as Droneseed are installing pneumatic seed injectors on drones that enable nearly instantaneous planting of trees
  • Oil: examining miles of pipelines, providing supplies to oil rigs or tankers, surveying potential drill sites
  • Search and Rescue: whether it’s flying into a burning building or locating an earthquake survivor under a collapsed structure, drones could improve the speed of help
  • Real Estate: surveying potential and existing sites
  • Law enforcement: help police avoid risking their lives in hostage situations or locate wanted persons of interest; can equip drone with infrared/night vision for night operations. Another take on this is using drones to catch poachers
  • News: send in drones instead of helicopters and/or personnel to get coverage of a story
  • Medical: delivering vaccines or medication in situations where seconds are the difference between life and death
  • Delivery: imagine receiving your Loubotins or groceries from a drone outside your door or window


Challenges and Opportunities

The industry faces a number of challenges and therein lie potential investment areas. Astute investors in this market should look for scalable companies that can address one or more of these problems. Odds are, the hardware will become increasingly commoditized, so investing in software and services that enable future drone operations will be the key to generating returns.


There are currently no governing rules for operating drones commercially, which has potentially impeded an explosion of drone technology. The FAA has missed their 2015 deadline for releasing commercial drone guidelines, and the new expected date is June 2016. Recently, they received a recommendation from an internal committee to classify drones based on their proximity and length of flight over crowds. It remains to be seen whether they implement the recommendation in their official report.

The FAA has allowed certain drone companies to operate under a Section 333 exemption, which it currently grants on a case-by-case basis. By the end of 2015, the FAA has granted over 1,000 exemptions, with the majority going to real estate, photos/filming, and utilities/energy[6].

Recently, the three largest drone manufacturers, Parrot, 3DR, and DJI, along with GoPro have formed the Drone Manufacturer Coalition, leaving the likes of Google, Intel, and others in the Small UAVs group. If the first group focuses on consumer drone lobbying while the latter on commercial use, it could be what the market needs to hasten the FAA to release regulations.


The current top-of-the-line (rotor-based) drones have a flight time of less than 30 minutes. As consumers become increasingly untethered (mobile phones, wearables, drones), the technology will need to keep up. Facebook’s Aquila drone, which has fixed wings covered in solar panels, is one take on addressing this challenge. The drone intends to cruise at high altitude and user lasers to enable wireless connectivity in remote areas of the planet.

Companies to watch:

  • Pellion Technologies: magnesium ion battery technology development; funded by ARPA and Khosla Ventures
  • Enevate: has raised $60M+ to develop new high-density energy source


There has been somewhat negative portrayal by the media in the drone arena. Starting with scrutiny of the Predator drones wreaking havoc on foreign soil to arrests of drone operators due to flying one too close to the Empire State building. This can have the unintended side effect of turning public sentiment against drone technology, which in turn can slow the FAA ruling. In addition, drone companies have to spend a significant amount of time educating the industries they are approaching, such as oil, about drones and how they could be beneficial. While the millennial consumer will grasp the concept quickly, established large corporations may be slower to adopt.

Companies to watch:

  • Drone Racing League: the entertainment angle relating to drones could balance the negative media portrayal and prevent public sentiment from turning too negative; $8M raised
  • TravelByDrone: capture the world through drone photography; This can help consumers discover new places and drive tourism


As regulations get developed, it will be critical for drones to be aware of no-fly and restricted zones lest they impact consumer psychology as noted above. Technology should also enable authorities to take over or disable drones that “misbehave”.

Startups to watch:

  • SkySafe: disables or takes over drones remotely; $3M raised
  • AirMap: manages no-fly zones for drones; $17M raised


Once a drone is airborne, it must be able to adjust to unforeseen conditions, from weather to humans to planes. AI, not all too dissimilar from that used in self-driving cars, could be adapted to drones to enable intelligent self-navigation.

Startups to watch:

  • Skydio: develops drones that will fly autonomously; has a team of experts in computer vision, consumer electronics, and robotics. Raised $28M
  • Airware: operating system for commercial drones; has raised $70M+ from venture companies

Competitive Landscape

There are currently only 58 companies that have raised over $1M in funding, potentially due to investors awaiting official commercial regulations prior to committing serious capital to the technology[7].


Most of the focus in startups has been on Hardware, but for venture businesses, software-focused businesses will be more attractive. They require less capital and are more easily scalable.

In addition to these startups, companies like Tesla, Facebook, and Google play the role of potential purchasers as well as direct competitors.


Though drones have been around for decades, only recently have technology advancements in consumer electronics enabled consumer exposure. With drones ranging from $50-$2,000+, the consumer has plenty of options to choose from. To date, investor attention has focused on drone manufacturers, but as the FAA decision nears and hardware becomes commoditized, software and services enabling security/avionics along with developments in energy density technology should command the venture dollar. However, because investors have to choose the best companies, not simply good ones, their attention should focus on other sectors such as space and virtual reality where the business disruption factor is at least 10x. At this stage, the drone market is too small, business case not sufficiently robust or scalable to be a venture business, and the technology is feels more like an augmentation of existing businesses than a 10x improvement.

[1] CB Insights


[3] IBISWorld




[7] CB Insights

Category Killers: Direct to Consumer E-Commerce

NOVEMBER 3, 2015

Category Killers: E-Commerce Startups Disrupting Brick-And-Mortar Brands


Cosmetics, baby gear, caskets, and socks are among the physical goods categories ripe for e-commerce led disruption.

Over the past five years, companies like Warby Parker, Casper, and Harry’s have grown from unknown startups to leading brands in their respective categories. It’s hard to take a subway ride in New York without seeing Casper’s “One Perfect Mattress” campaign or walk a few blocks without spotting a pair of Warby Parker frames.

During my MBA internship with Gotham Ventures this past summer, I studied these “category killers” to identify common traits, potential early indicators of success, and categories poised for future disruption. I am happy to share the thinking that emerged from my research. Below, I have outlined common trends for market conditions, team composition, product development, and branding taken from interviews with employees at many of these companies, their investors, and outside research.

Category Killer (n): A startup that disrupts an established consumer physical goods segment through direct-to-consumer e-commerce distribution of branded products. 

Ex. Warby Parker, Harry’s, Dollar Shave Club.

Despite Amazon’s position as the dominant online distributor of third-party brands, opportunity remains for e-commerce companies that pursue proprietary merchandising and branding strategies (as detailed by Andy Dunn, founder and CEO of Bonobos). Fueled by the proliferation of e-commerce and advances in marketing and logistics infrastructure, dozens of would-be category killers have sprung up over the past five years to take advantage of this opportunity and several have emerged as meaningful businesses.

This research focused on seven leading category killers — Bonobos, Casper, Dollar Shave Club, Frank & Oak, Harry’s, Mack Weldon, and Warby Parker — most of which rank amongst CB Insights’ list of most promising e-commerce startups [1]. There are surely lessons learned from earlier e-commerce startups, but these are beyond the scope of my research.

Favorable Market Conditions

 The typical profile of the industries in which these category killers have emerged includes:

  • Total Addressable Market > $2B in US: offers opportunity for new entrant to gain share and build brand prior to incumbent retaliation;
  • High Concentration: > 50% of the market is controlled by ≤4 incumbents;
  • Limited Brand Allegiance: existing companies focus on selling product rather than lifestyle;
  • 3rd-Party B&M channels: incumbents typically distribute their offerings primarily via brick-and-mortar locations of other brands; little focus on e-commerce distribution;
  • High Headcount: > 60,000 employees each for the incumbents; and
  • High Price Point: the incumbents generally enjoy high margins and distribution involves several middlemen — a structural mitigator to lower prices.

Founding Teams

 Amongst the founding teams of the top seven category killers, the most common professional backgrounds included:

  • Strategy consulting or business development: 5;
  • Previous founder: 4;
  • Relevant category experience: 4; and
  • Private equity: 3.

The high number of founding teams that include former consultants is arguably due to the nature of the consulting skillset, which lends itself well to the analysis and improvement of long-standing industries, such as retail, that are data-rich and have major logistics and supply-chain considerations. Notably, the first hire at Casper, which did not have former consultants on its founding team, had previously spent years leading strategy and marketing efforts for major corporations.

Best Practices: Company Culture

Many companies described an iterative culture as a key enabler of successful tactics and strategies. Warby Parker’s foray into brick-and-mortar (B&M) sales began as an experiment, offering glasses to consumers in person at its corporate headquarters.  As demand grew they eventually opened a standalone B&M. They now operate 20 stores nation-wide. This was not the result of a corporate strategy that laid out B&M opening goals and timelines for the year. Similarly, Casper’s New York showroom helped the company iteratively understand what customers value in an in-store experience to position itself as a sleep company. Now, upon scaling markets, one of the first tasks is to establish a local showroom.

Best Practices: Product

Product best practices can be broken into three chronological phases: laying the foundation (generally pre-Seed), building customer experience (Seed and Series A), and establishing retail presence (Series B and C).

Phase I: Lay the foundation 

  • Initial product selection: Companies offered a product that is a necessity. Think about Warby’s glasses or Harry’s razors — both are products that consumers don’t need to be sold on. This allows the company to focus on selling an experience rather than generate demand for the product;
  • Price point: Prices for challenger products were typically 30-40% lower than incumbents’;
  • Brand Potential: Companies established brands broad enough to accommodate future product expansion, enabling the startups to create additional product lines as they matured. Casper is branding itself as a sleep company, allotting itself room to expand beyond mattresses; and
  • Minimize middlemen: Companies established multi-source supplier contracts or own the supply chain like Harry’s (which owns its German factory) to minimize middlemen margin.

Phase II: Build customer experience

  • Brand consistency: Brand values tend to be consistent at every customer touch point, including but not limited to, messaging on the website, the product aesthetic, and packaging;
  • Magical unboxing: The unboxing experience is a critical component of the customer experience that can create a “magic” moment. It is not an accident that YouTube is filled with thousands of Casper unboxing videos;
  • Brand experience: Focusing on experience to a much greater degree than incumbents enables customers to recommend the company as a whole. One telling Casper reviewer on YouTube who did not like the mattress still recommended the company to others because their customer experience was so positive;
  • Exclusivity: Making the purchasing experience “cool” helps customers feel like they are getting exclusive exposure to a scarce product. Referral programs that foster word-of-mouth are one way of achieving this. Harry’s invited customers to sign up for a site that did not identify what products would be sold, and its messaging was about revolutionizing shaving. The company invited these early adopters to earn referral discounts, resulting in 100K new emails in one week; and
  • Trial period: For products with a > $100 price point, free trials help alleviate consumers’ trepidation about purchasing a relatively unknown product.

Phase III: Establish a retail presence

  • If?: Based on interviews with investors, there is some consensus that expansion into brick-and-mortar these days is a question of “when” not “if” – all e-commerce startups eventually have to establish physical locations if they desire to achieve scale.
  • When?: The first location tends to follow a Series B/C raise due to capital requirements of physical locations.
  • How?: One common growth hack is to use existing working space as initial retail presence – Casper’s first showroom was in the back room of their corporate HQ in Manhattan. This can help companies test variations on customer experience before committing to a full showroom or store.
  • Really?: Companies in lower-price point categories could elect to distribute through brand-aligned third-party channels in addition to establishing their own retail locations. For instance, Harry’s has an interesting approach in distributing their products through Birchbox and Nordstrom since those distribution channels tend to appeal to Harry’s target demographic.

Best Practices: Brand

  • Millennial mindset: Being digital natives, Millennials typically make a good initial target demographic. Their mental barriers to buying online are low and they are receptive to brands that appeal to experience, engagement, and social benefit.
  • Excel on NPS: Net Promoter Score (NPS)—the percentage of customers who would recommend your product minus the percentage who wouldn’t—is an important metric used to evaluate brand health. Established online retail companies like Amazon and Zappos have NPS of ~60. For a would-be category killer, an NPS of around or above that range appears to be helpful for attracting investor attention (Warby Parker had a score above 90 prior to its Series B).
  • Content marketing: Can be a great way to “soft-sell” the product and raise awareness of a certain space. Casper hired five independent journalists to write articles about sleep; Harry’s has a “Five O’clock” magazine.
  • Altruistic message: Embedding a social good component in the value proposition (e.g. Warby Parker’s “Buy a Pair, Give a Pair”) can bolster brand affinity.

Potential New Markets

During the course of this research, I identified several markets that share many of the favorable conditions described earlier, and which consequently may be prime for disruption. In no particular order, these markets include:

  • Baby/children products (e.g. baby strollers, car seats): $2B US market with product price points of $500-$5,000;
  • End-of-life market (e.g. caskets/coffins): 75% of $750M market owned by four players. Larger funeral market is $15B;
  • Cosmetics: close to 50% of the $12B U.S. market owned by two players; and
  • Others: diamond rings, socks, flowers, pet products, and bras/lingerie.

Closing Thoughts

Across today’s e-commerce landscape, startups are leveraging internet economics to build high-potential companies to disrupt staid retail categories. These category killers share several traits in market structure, team composition, product, and brand that may help future entrepreneurs with early-stage growth. At the same time, investors may be able to extrapolate certain criteria to assist with capital allocation. There are likely further insights and conclusions beyond those outlined above, but hopefully this can be a start. Your opinions and thoughts are welcome and would be greatly appreciated.

Click here for the full Category Killers presentation. 


[1] Determined by CB Insights’ proprietary Mosaic score (combination of momentum, fundraising, and industry health).


Category Killers: Aftermath

yayoi_gagosian1I published the Category Killers post last year after spending a few months digging into companies like Warby Parker, Casper, and others to understand whether there could be best practices gleaned from their early-stage growth.

Here is what happened after I published it:

  • I met with and hopefully was able to help several startups in this space; this tells me new companies are being launched in the direct to consumer space, which I’m all for
    • Toothbrushes, pet food, furniture (x2), diamonds, candles, and more
  • Casper launched their line of pillows and other products, expanding from just mattresses. This validates my thinking that these category killer companies keep a broad vision (e.g., sleep company rather than mattress company) to enable content marketing and product expansion
  • Dollar Shave Club sold to Unilever for $1B. Some VC’s I have spoken to are hesitant to invest in direct to consumer e-commerce due to historically low (2-3x) multiples. However, the DSC represents a 4-5x revenue multiple. What gives? The trick may lie in valuing these types of startups as lifestyle brands (e.g., LVMH) rather than e-commerce
  • VC’s consistently asked whether e-commerce was my main area of interest given my post. The answer is “No”. I am passionate about companies that improve consumers’ lives, and direct to consumer e-commerce is just one of those avenues. I wrote the post to help entrepreneurs starting similar companies (check), and to show investors I can develop thought leadership about an industry. As an aspiring venture investor, I wanted to demonstrate passion for the industry and show my writing and analytical abilities.
    • Areas that I like include marketplaces (e.g., Handy, Beepi), Virtual Reality (e.g., Alchemy Learning), Drones (e.g., Drone Racing League), Space (e.g., SpaceX, Planetary Resources). However, I find it difficult to stay on top of all of the industries given the number of news sources available to us these days. If you have tips on how you can set up industry-specific news channels, I would love to hear about it.