20VC: Why Brands Can Have The Same Revenue Multiples As Enterprise Companies & The Right Way To Think About Amazon In Today's World of Commerce with Eurie Kim, General Partner @ Forerunner Ventures

Eurie Kim is a General Partner @ Forerunner Ventures, the early stage firm dedicated to investing in entrepreneurs defining the next generation of commerce. Fun fact, they are the only firm to have investments in both Jet.com and Dollar Shave Club, two of the biggest and highest-profile e-commerce exits in recent years. Forerunner also counts Birchbox, Bonobos, Glossier, Hotel Tonight, Warby Parker and Zola among its portfolio companies. Prior to Forerunner, Eurie was a consultant at Bain and before that an investor at Castanea Partners. Eurie currently sits on the boards of companies such as Away, MoveWith and The Farmers Dog, just to name a few. In Today’s Episode You Will Learn: 1.) How Eurie made her into the world of VC and investing in the next generation of commerce with Forerunner? 2.) How does Eurie look to argue that commerce deals do attain the same revenue multiple on exit as enterprise deals? Do Forerunner think about exit potential when investing in companies? How does this Eurie's thesis on both ownership and price sensitivity? What are the required fund-returning ownership levels today? 3.) With the time it takes for brands to flourish, how does Forerunner think about reserve allocation? How does Forerunner determine which companies to double down on and which to constrain capital? Why does Eurie believe that it takes less time than ever for brands to flourish today? What is a good example of this? 4.) How does Eurie define the term "digitally native vertically integrated brand"? What are the core components that make those all star brands of today shine in the early days? What are the commonalities in those successful founders that build these mega brands? 5.) Given the rise of some prominent new brands eating incumbent market share, does Eurie believe this is a market of consolidation or new incumbents will be made? How does Eurie view the role of Amazon? To what extent does Eurie observe and analyse Amazon's activity? Items Mentioned In Today’s Show: Eurie’s Fave Book: Blue Ocean Strategy Eurie's Fave Blog: Business of Fashion Eurie’s Most Recent Investment: Shop Shops As always you can follow Harry, The Twenty Minute VC and Eurie on Twitter here! Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC. NatureBox Unlimited snack plans offer all you can eat snacks for one fixed price per employee. Naturebox use simple ingredients you can trust to create bold flavors you can’t find anywhere else. All NatureBox snacks are free from artificial junk and variety is endless with options from sweet or savory to vegan or gluten-free. Simply choose the plan that fits your team’s unique snacking habits and select any of NatureBox’s time-saving add-on’s. And beyond Unlimited snacks, you’ll receive perks such as free kitchen setup, no contracts, a dedicated account manager and more. Simply click here to and use the offer code VC20 to get 20% of your first Naturebox month. Leesa is the Warby Parker or TOMS shoes of the mattress industry. Leesa have done away with the terrible mattress showroom buying experience by creating a luxury premium foam mattress that is ordered completely online and ships for free to your doorstep. The 10-inch mattress comes in all sizes and is engineered with 3 unique foam layers for a universal, adaptive feel, including 2 inches of memory foam and 2 inches of a really cool latex foam called Avena, design to keep you cool. All Leesa mattresses are 100% US or UK made and for every 10 mattresses they sell, they donate one to a shelter. Go to Leesa.com to start the New Year with better nights sleep!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  Another week in the world of the 20 minute VC with me, Harry Stebbings. As you all know by now, you can find me on Snapchat at H Stebbings with two Bs and all ads get a personal message from me. Now to the show today, and I really am excited to release this one. Last year, Kirsten Green was announced as one of the most downloaded episodes of the year, and today I'm thrilled to release our episode with her partner, Yuri Kim, general partner at Forerunner Ventures, the early-stage firm dedicated to investing in entrepreneurs defining the next generation of commerce. Fun fact, they're the only firm to have investments in both Jet.com and Dollar Shave Club, two of the biggest and highest-profile e-commerce exits in recent years. Forerunner also counts Birchbox, Barnaboss, Glossier, whose president Henry Davis was on the show recently, Hotel Tonight, Warby Parker and Zola among its incredible portfolio.

• 0:45Harry Stebbings?

  Prior to Forerunner, Yuri was a consultant at Bain, and before that was an investor at Castanea Partners. Yuri also sits on the boards of companies such as Away, Move With and The Farmer's Dog, just to name a few. And I'd also want to say a special thank you to Michael Kim at Sandana and Kirsten Green for the intro to Yuri's today. I really do so appreciate that. However, before we meet today's guest, it's the new year and everyone is thinking of health and diet, and so this month's partnerships will be aligned to that. And did you know that office snacks are the third most requested perk by employees? With 83% suggesting it to be a huge perk? Well, that's where NatureBox comes in. NatureBox is the first ever unlimited snacking programme for offices of all sizes. Starting with just $12 per month, per employee, you can choose the plan that fits your team

• 1:29Harry Stebbings?

  and ensure you never run out of snacks again. And if your body is a temple like mine clearly is not with all those mojitos, then have no fear with NatureBox. Real, simple ingredients, no artificial colours or sweeteners, and free setup, shipping and a dedicated account manager. What's stopping you getting set up today with 20% off your first month using the offer code VC20 at www.naturebox.com/vc20? That really is a must. And good health is not just about healthy snacking with NatureBox, but good sleep with Lisa, the Warby Parker or Tom's shoes of the mattress industry. Lisa have done away with a terrible mattress showroom buying experience by creating this luxury premium foam mattress that's ordered completely on And shipped for free to your doorstep.

• 2:12Harry Stebbings?

  And the 10 inch mattress comes in all sizes and is engineered with three unique foam layers for a universal adaptive feel, including two inches of memory foam and two inches of a really cool latex foam called Avina, which is designed to keep you cool. And all Lisa mattresses are 100% US or UK made. And for every 10 mattresses they sell, they donate one to a shelter. Head over to leesa.com to start the new year with a better night's sleep. But you've heard enough from me, so I'm now thrilled to welcome Yuri Kim, general partner at Forerunner Ventures.

• 2:47Speaker 01

  You have now arrived at your destination.

• 2:50Harry Stebbings?

  Yuri, it's such a pleasure to have you on the show today. Huge thanks to Charles at Precursor and your wonderful partner Kirsten for the intro. But thank you so much for joining me today, Yuri.

• 2:58Speaker 02

  Oh, thank you so much, Harry.

• 3:00Harry Stebbings?

  Not at all. I've been dying to do this episode for a long time and I want to kickstart today with a little on you and hear why your path into venture was more serendipitous than maybe planned. Let's start with that.

• 3:11Speaker 02

  Sure, that's a fun place to start. So I don't know, I mean, I'm sure you've asked many people in venture about how they got into venture. And I don't know how many would say they planned to be in it, but for me, I definitely didn't plan it.

• 3:22Harry Stebbings?

  So I think it's just about me, actually. Yeah, I think I'm the only one that's not.

• 3:25Speaker 02

  You're the only one that plans. So back in 2011, a close friend of mine from business school, Mitchell Green, who actually founded his own venture firm called Lead Edge Capital, told me that he knew a great angel investor named Kirsten Green, who was on a board with him of a company called Serena and Lily, which is in Kirsten's angel portfolio. And he thought we would get along and we both had similar backgrounds in investing and love for consumer brands. So he made the introduction and Kirsten and I met over coffee down at the Ferry Building in San Francisco and started chatting and about three minutes into the conversation, we both realized that we had a ton in common and knew a lot of people that were overlapping in the entrepreneurial space and had a lot of similar passions. And so at the time I was working at Bain Consulting here in San Francisco

• 4:08Speaker 02

  and, you know, working with clients like eBay and Nordstrom on their e-commerce strategies. But I'd always wanted to get back to my entrepreneurial roots and I'd always contemplated venture capital, but honestly. At the time, there wasn't a firm that was specializing in consumer investing per se. There were certainly a lot of firms that were doing one-off commerce deals, but there wasn't a dedicated firm as there had been during my earlier years of private equity investing. So when Kirsten shared her vision for institutionalizing her investing activities in the early-stage commerce space and her vision for the future in that sector, I was super hooked. And, you know, let her know that I wanted to stay in touch if she ended up raising the fund, which she ultimately did. About a month and a half later, I get a phone call saying that she'd gotten her first term sheet for Foreigner Partners One.

• 4:51Speaker 02

  And, you know, she asked what I thought about joining her team. So basically fell out of my chair and I said, of course. And, you know, I was invigorated by the idea of helping her bring Foreigner to life.

• 4:59Harry Stebbings?

  And what a trail she's blazed with Foreigner. But before we dive into the exciting trends that you're pursuing in consumer, every fund has to have a thesis in a construction model. And Michael Kim at Sendana asks, given consumer and e-commerce brands maybe don't attain the same valuation multiple as enterprise models, how does that impact your mindset on entry point and price when investing today with Foreigner?

• 5:22Speaker 02

  Okay, so it's a good question. I would, I would just want to first push back a little bit on the first part of the statement. I think a lot of people will often sort of flippantly say enterprise businesses get a lot of credit for seeing higher valuation multiples than consumer businesses. I think in some cases, you know, there are examples of that being true, but we actually recently came across some analysis that showed that all the enterprise SaaS M&A deals done since 2015, the average revenue multiple of those deals was three and a half to four X. So.

• 5:48Harry Stebbings?

  Wow. So not the hail of seven X.

• 5:50Speaker 02

  It's not, it's not seven or eight or 10 or, you know, even to be honest, I was surprised as well because you do hear about those outliers. But obviously compared to some of the, the deals that we've seen this year with Dollar Shave Club being acquired by Unilever for five X revenue and Shuue's acquisition of, by PetSmart, which were four X and even more traditional commerce deals that you see, which are as high as six or seven X for some beauty deals that L'Oréal and Unilever have done. So anyways, I just wanted to level the playing field because we get this sort of thinking a lot when investors compare enterprise and commerce sectors. But I think commerce deals can absolutely drive the same valuations and have super exciting venture returns. So that's that.

• 6:26Harry Stebbings?

  That's changed my mindset from the start.

• 6:29Speaker 02

  So to the second part of the question around thinking about mindset on entry point and price, any investor needs to do this because you know, even if your sector has higher valuation multiples, you certainly can't then be willy nilly about how you're going to enter the opportunity. So to answer your point specifically, we do keep sort of market valuation trends in mind. We think about like a real reasonable base case price point. If we think about what would a listed get acquired, what could that number be based on comps or comparable deals in the market? And then, you know, as a result, just making sure that when we do invest early, that it's not at crazy valuations, that things are rooted in some sort of general benchmarking that makes sense. And you know, we're often coaching founders not to optimize for valuation in the early days anyways, but it's about

• 7:12Speaker 02

  building a strong business. And if you have a great business that has great unit economics and traction and all of that, then you are going to be the one that can potentially drive outsized returns. So you know, we always want to be balanced in our thinking on all points.

• 7:25Harry Stebbings?

  Speaking of kind of outsized returns, it's also largely driven by ownership and something that I'm seeing a huge amount more swaying towards today is kind of the dominance of ownership in investors' thinking. I'd love to hear your thoughts on the required ownership to move the needle for a firm like Forerunner and how you think about that internally?

• 7:40Speaker 02

  Yeah, that's a great point. So ownership really matters. I think especially when you're in the earliest stages, you want to, you know, you're investing in a lot of companies that are very high risk because they're so early. They're sometimes not even product in market yet, or you know, the founding team is super small. And so, you know, when you think, oh, billion dollar valuations and an IPO or an acquisition, that's great. But if you own half a percent, honestly, the math just doesn't work out. If you have a hundred million dollar fund, you still need to make three, four, five X on that to be a top tier firm. And so while we're not dogmatic about ownership, we do have some benchmarks where we consider, hey, we're only doing 20 deals in each portfolio. Each of these deals needs to make a difference if there's an outcome. And so we want to

• 8:24Speaker 02

  balance the work that we're going to put into a deal with the amount of ownership and potential outcome that there could be. And I mean, I think recently what's been interesting is I would say two years ago, three years ago, we were much more focused on sort of the percent ownership. And now we've evolved a bit of that thinking to think It isn't just ownership as a percent, but actually dollars to work. So if you have a smaller ownership percentage of the business, but you've been able to put two, three, four million dollars and you think that there's a potential to get 10 or 20 X on those dollars, that's still a great deal. So I think it's balancing both sides and just, you know, depending on what strategy your firm has, ours is a bit more quality over quantity in terms of number of deals and ownership is truly important.

• 9:01Harry Stebbings?

  Before we move on though, I do want to address the final tenant to successful portfolio management being reserve allocation. So with that in mind and combining that with the significant time it takes to build brands today, how does Forerunner think about both reserve allocation and the investment decision making behind those reserves?

• 9:19Speaker 02

  Yeah, so as a guideline, you know, we were similar to many of the other firms out there where we're earmarking reserves at about a two to one rate. So our initial investment is sort of 30% of our total dollars and then 60% saved for reserves or 35, 65. Now that's just a guideline and in venture, it's all about outsized growth in a relatively short period of time. So once we see a business is gaining traction, we make a decision on whether or not it warrants more than its fair share of reserves. And similarly, if a company is underperforming, then, you know, we're more transparent with the founders early on about our potentially appetite or lack thereof of putting in more money. So that company's allocation of reserves might be freed up for other portfolio companies. So it's, you know, it's an art, not a science.

• 9:59Harry Stebbings?

  Can I ask, do you, do you always follow on to preserve the company in terms of signaling? Or is there a case of kind of being very open and saying, we are not going to follow, period?

• 10:08Speaker 02

  No, we, it is not a foregone conclusion. Every investment, including follow-on investments, are considered new decisions and we revisit the thesis on the investment and make sure that our rationale for investing in the beginning is still intact, or if the company has pivoted in some way, that that all makes sense and we still want to continue investing. I mean, that's obviously difficult if there's a team that feels like if Forerunner doesn't continue investing, that is going to signal something in the market. But we have that conversation super early where the team is able to either understand that and work accordingly to come up with a different plan. Or we're obviously really happy to have conversations with other investors if it is a sort of a Forerunner reason why we're not investing, but not anything to do with. The company. So for example, there's one company that we invested in last year who pivoted into

• 10:53Speaker 02

  a strategy that, to be honest, is not in our core sweet spot. And so it's the best thing for the company, but we're not the best investors to continue investing in it because it just doesn't match our focus area. And so the founder is super appreciative of our time and our support. And we've been really active in helping her get more funding elsewhere.

• 11:09Harry Stebbings?

  No, that absolutely makes sense. But we touched on the full on funding element there. And it being potentially more difficult in the space being brand orientated, maybe not so tangible as kind of a core MRR metric, so to speak. So I want to touch on your process that makes you lean into one brand over another. I asked many mutual friends about this and kind of how you distinguish, and they all had the same questions. So I'm thrilled to start with this. But before we dive in, there's buzzwords commonly thrown around in our industry. So let's start with nomenclature. And how do you define digitally native vertically integrated brand? Let's start with that.

• 11:42Speaker 02

  So the digital native portion of the term we see as just the brand is born online. It typically focuses on the millennial consumer or the consumer who's otherwise digitally native themselves. So this is the consumer set that honestly doesn't know what life was like before the internet and before the phone. The vertically integrated part of the term refers to the fact that the brand both makes and sells their product. And they have complete control over the product development process as well as the customer experience, which is actually the most important part, you know, and for most, if not all digitally native brands, the customer is their obsession. They know who their customer is, what she buys, what she wants, how they can serve her better. There's a real sort of one on one relationship, which otherwise in generations past didn't exist, you know. And so before brands might come to life, they might use a wholesale partner like a department store.

• 12:27Speaker 02

  The department store sells to the customer like me and the brand knows nothing about me. And so the advantage that digitally native vertical brands have is that they own this customer relationship. They own their data and that means that they can react faster with product experience, with the overall offering and certainly with service to make sure that they're meeting and exceeding their customers' expectations. So it's a real advantage to be direct to consumer in that way.

• 12:49Harry Stebbings?

  So now we have the nomenclature locked down, so to speak. I'd love to hear, what do you fundamentally look for in those brands? You've backed some of the kind of enduring all stars. So what do you? In those brands and what are the core considerations?

• 13:02Speaker 02

  So not all digital native vertical brands are well suited for the venture route. And granted, that's a statement to all companies, not all companies are well suited for the venture route. In fact, most aren't. You know, you can be a very successful company or digital brand and not take a dime of venture capital. But you know, if you do want to go the venture route, I would say the most important consideration we're looking for as venture investors is whether a specific brand has a potential to be much, much larger than the products they're selling today. And we think about whether the brand has a potential to become a real lifestyle brand, whether they can connect with consumers on a broader set of needs than just individual products and really sort of speak to an ethos that the consumer is going to live and breathe. And so in this way, it really matters whether a company is building a real brand or whether they're just selling products. And I think to some people it's intangible and we get that.

• 13:46Speaker 02

  A brand is not just a logo and a color scheme, but it really is an entire mindset of your company and how you want to do business with your consumers.

• 13:54Harry Stebbings?

  How do you dig a layer deeper when you when you get kind of presented with an opportunity? And it all looks very brand orientated and good. How do you dig one layer deeper? Is it through kind of going to the company itself and seeing the ethos a three layers down? Or is it through assessing supply chains? What is it for you that suggests kind of true brand, not selling product?

• 14:12Speaker 02

  Most of the time it has to do with the founders. And it's the authentic passion and mission that these founders are bringing to the brand, which ultimately translates to an experience that I think customers start to have that emotional connection to. I think there are examples where a brand has come later on in a company's life and it's still worked out. But the ones that we're more inclined to support in these earliest stages are ones where, you know, like an Emily Weiss, who's the founder of Glossier, a beauty brand that's one of our earlier investments. You know, she lives and breathes beauty. She is the arbiter of beauty. She is somebody that people look up to and aspire to, you know, sort of know what she's doing and thinking and using in the beauty world.

• 14:53Speaker 02

  And so that type of control over that messaging really moves the needle for brands in the earliest ages.

• 15:00Harry Stebbings?

  Now, President Henry is also a very beautiful man. I had him on the show recently.

• 15:04Speaker 02

  He's awesome. And he said, what?

• 15:06Harry Stebbings?

  I know, no wonder we got on so well. So now that we've got, sorry.

• 15:10Speaker 02

  Actually, just before we get off of the point on Henry, there's one other thing we do think about when we look at which brands we're going to invest in, and that's actually unit economics. So Henry has a finance background. He's extremely savvy when it comes to just thinking about the business of a brand. And, you know, certain categories have structurally higher margins than others. Beauty is obviously one of them. And by vertically integrating their earlier stage teams have the ability to start investing in their businesses and marketing and customer service because they have that margin to play with. It is hard to build a brand early days if there aren't enough margin dollars. So we look at what is the inherent unit economic structure of the category as well.

• 15:46Harry Stebbings?

  Speaking of kind of unit economics, I'm really intrigued by kind of customer acquisition today, and I find it generally more over in the consumer space. Just with the incumbency advantages, meaning that the distribution channels are more expensive and more crowded. How do you think about kind of customer acquisition for brands and consumer investments that you make and potentially getting more and more difficult?

• 16:05Speaker 02

  Yeah, it really is. And I think that all companies would love to believe that there's some silver bullet. And, you know, when we talk, talk to a lot of founders that come in and they're thinking, oh, we want to hit some critical mass inflection point like, you know, Casper or Way or Warren Parker. You know, they name these different companies, but if you look at those companies, it's not one thing that they're doing. They're doing everything well. They're doing paid acquisition. They're doing social media marketing. They're doing branding. They're doing all kinds of different types of activations to connect with their consumers. And so it is a situation where you as a team needs to be very flexible and forward thinking about what new acquisition channels there are. Because the existing channels, you just have to do, and you have to do efficiently, but that's never going to get you a breakout success.

• 16:50Speaker 02

  You need to do more than that to be able to start pulling ahead.

• 16:52Harry Stebbings?

  That is the dream with the breakout success term there because I want to discuss the inflection points within brands. And when a brand goes from kind of small and struggling to that inflection point and curving up to the right of a breakout brand. How do you distinguish between the two and really kind of look to analyze that inflection point?

• 17:10Speaker 02

  So we've all seen in the market that there are some brands that just somehow become what feels like an overnight. Success. I would say from an investment standpoint, we sort of are lucky enough to see many of these brands before they even launch. And so everyone has to start from somewhere, which is zero. But I would say when you think about some of the brands that come to mind, that everyone sort of has top of mind as the best direct consumer brands. They actually reach clear product market fit, certainly with their consumers in terms of consumer love, within their first year or two of business. You know, and it's typically really hard for a brand to start breaking out several years after being in business. I've seen it happen before, but it requires a founder to be extremely disciplined on limited resources, limited capital, to be able to get a brand to maybe profitability.

• 17:52Speaker 02

  So that they can continue growing steadily and then maybe at a certain point, they start to see some more momentum. But the ones that you're thinking about in the market that we all know of, whether it's Warby or Casper or Glossier. Or, you know, a recent investment of ours, Away, that's been really breaking out lately. Those are happening very early days and it is very obvious when it happens. It is a clear difference from the existing sort of pack.

• 18:15Harry Stebbings?

  So would you actually disagree with the fact that it takes longer for a brand to be established? That kind of common assessment that I said earlier, actually.

• 18:21Speaker 02

  Yeah, it depends on what you define as established. I think if you think established is getting to $50 million of revenue, I would say Away is going to do it in 22 months. So that's pretty fast, I think.

• 18:32Harry Stebbings?

  That's that's fast, okay.

• 18:34Speaker 02

  You know, but there are other, you know, Allbirds, which is not in our portfolio, but another really fast growing brand. I think they did a million dollars in their first month of business. So, you know, and certainly are well ahead of that now because they've been in business also about two years. So it takes a long time to build a brand. It's not sort of you can throw something out there and then get an overnight success. But when you have something that really is resonating with the consumer, you start to see that early traction and it's pretty fun. It's pretty fun to watch.

• 19:01Harry Stebbings?

  Well, I mean, you're you're converting all my previously held beliefs. So, I mean, this is a fantastic interview for me, but I'd love to, before moving into a quick fire, speak maybe more about the macro today. And my first big question is, you mentioned some of the incredible companies from Dollar Shave Club to Bonobos. So I'd love to hear if you think this is maybe a consolidatory environment? Or do you really think there will be this crop of next gen e-commerce companies that don't sell out?

• 19:26Speaker 02

  Yeah, so we're definitely in an exciting time in the market where big incumbents are not only just realizing that they're losing customer market share and mind share, but they're actually starting to finally take action against that fear and concern. And that's leading to marquee acquisitions like the one, you know, the ones we mentioned before, where traditional companies are looking to infuse new blood into their businesses. Not only gaining access to a new sort of this digitally native consumer that they don't know and they don't speak the same language of, but also to bring in new talent that has that digital native thinking that they need to reinvent the rest of their business. So that said, I definitely think there will be other companies that decide to go the distance, like what we just saw with the Stitch Fix IPO with Katrina Lake, who's a founder and CEO. And, you know, there are several companies hitting real scale.

• 20:09Speaker 02

  I'm guessing some will be taken off the table by big incumbents who need to bring that lifeline to stay relevant in their own companies. But some will IPO and maybe even become acquirers of their own. So I think in the next few years, we will start to see some of the larger private companies hit their exit events. And I don't think that all of them are just going to, I wouldn't even say selling out, because that seems like somewhat of a negative connotation. But being acquired and being sort of innovative force into a big business can be a real opportunity as well. That's certainly what Walmart did when they were acquiring Jet. And Mark Lorre is now leading that business and doing amazing things in the market very, very quickly. So I think that's a great opportunity as well for a lot of these companies. So they're both on the table. I think that if you're a great business and you're reaching scale, you know, you can have your pick.

• 20:52Harry Stebbings?

  I mean, tied to this kind of strain of conversation, I have a question from Nikki at Shasta. Does Forerunner actively think about whether a potential investment would be something an incumbent CPG or retailer would buy? Or is that not a kind of mindset that's on the table?

• 21:06Speaker 02

  We do have the thought exercise around what does the competitive landscape look like as we're thinking about an early-stage company and what is that company disrupting? We keep in mind the incumbent's strengths and weaknesses and whether there might be an ability to have sort of potential acquisition options down the line. But we really are looking to back founders who are striving to build huge lasting businesses. So plotting a quick M and A plan is not really on our minds. But, you know, I'd be lying if I said we don't think about it. So just in terms of a base case. What is a plausible way to see this business monetize in the future? Sure, we keep that in mind.

• 21:42Harry Stebbings?

  And kind of finishing on incumbents and before we dive into the quickfire, what incumbent could we not talk about but Amazon? Your partner Kirsten, they do more to make the market than to harm it. So I'd love to hear your thoughts on the effect of Amazon. What do you think about it and how it affects your your strategy and thinking?

• 21:58Speaker 02

  So, I mean, Kirsten, obviously, it's a contrarian viewpoint because everyone else is afraid of Amazon and, you know, hair on fire because Amazon's around. They're formidable. There is no questioning that. And we do have an eye on what they're doing. We think about, you know, the fact that they're launching new fashion brands and that they're probably surpassing Macy's now for number of dollars sold for apparel in the US. But you have to keep in mind that Amazon is here and they have advantages in terms of the billions of eyeballs that they've got on their website. And so you can either just try to run and hide from them or you can try to have the thought exercise of how could we leverage Amazon? How could we get access to that incredible user base and maybe convert them into our own experience? And it's not easy and no one's figured it out,

• 22:42Speaker 02

  but we're challenging our own internal team, as well as our founders and the portfolio, to just think differently and and sort of turn that question on its head a bit to see like, how would you use Amazon to your advantage versus feeling really threatened by it? You know, and even more so with new distribution channels that they're creating, like for voice. You just can't stick your head in the ground like an ostrich. You have to start pushing thinking and and being sort of flexible to the new ways of doing business.

• 23:08Harry Stebbings?

  No, I absolutely love that positivity. But on that positive note, I do want to dive into a quickfire round. So it's 60 seconds per statement. How does that sound?

• 23:17Speaker 02

  I will try.

• 23:19Harry Stebbings?

  Okay, so let's start with your favorite book and why. What should I read next time around?

• 23:23Speaker 02

  Oh, it's an oldie but a goodie. It's called Blue Ocean Strategy. I love it because my father gave it to me and it's the only book he ever gave me. Korean man who barely spoke English at the time. And it's a really simple concept. It's one that we live every day where you're looking for new ideas to innovate instead of trying to compete in the muddied waters of existing products and services. So it's it's an old one.

• 23:42Harry Stebbings?

  Now, this is a terrible question, but I'm going to ask it anyway. What consumer trend do you? Most excited about today and why. I mean, God, it's awful. I'm sorry.

• 23:50Speaker 02

  No, it's okay. I I don't have a super unique answer, but I I personally think that live streaming video is really interesting right now. It's been around for a long time, but it's really bridging, at least in the consumer space, it's really bridging online and offline experiences. And I'm really excited to see how customers start to really adopt that way of interacting with companies and brands.

• 24:10Harry Stebbings?

  We mentioned away multiple times in the interview, a question from Jen Rubio, founder. She asked, what's been your biggest learning about what it takes to be a great board member?

• 24:18Speaker 02

  Well, that's a good question. I think the most important thing I try to keep in mind of being her board member is that it's my job to help the founders think strategically about next steps for the business, because it really is hard to do that when you're in day to day operations. You're sort of eyeball deep in challenges that are happening every minute of the day. And so, you know, with all of the companies we're involved in, there's often patterns we can see or stages of growth we can foreshadow that I believe it is really helpful to share with founders so that they can just stay ahead and avoid common pitfalls. And the other lesson is obviously that every great relationship period, but certainly a board member founder relationship is always rooted in trust and great communication. So ultimately, you want to be able to share the good, the bad, the ugly with your board member. You want to be able to get help before things get bad and you want to share your victories.

• 25:03Speaker 02

  And I think that building a business is super hard and so founders need support. And it's easy to feel like you're all alone and you have no one to support you. So as a board member, I really try to be my founder's greatest advocate and confidant so that they can talk about anything with me, whether it's good or bad.

• 25:18Harry Stebbings?

  Why does voice present a big challenge for companies in the future?

• 25:21Speaker 02

  Well, as I mentioned just before, a couple of questions before, voice is a new platform and many products are going to run the risk of getting commoditized. So when you say, Alexa, I want toilet paper, does it care what brand of toilet paper you get? You know, probably not. It's probably a circumstance where you're just going to have the last brand that you ordered and or maybe it's the cheapest one that's out there. But in that type of environment, we think it's even more critical to have a brand and to have that direct consumer relationship so that you're one of the products and services people ask for by name. So Google Home or Alexa, I need some Warby Parkers or Alexa, call me a lift. It's something that's going to be called out by name versus by product.

• 25:59Harry Stebbings?

  What's your favorite blog or newsletter? Rainy day in San Francisco, what do you sit down on the sofa to?

• 26:04Speaker 02

  I really love the business of fashion. It was started by one of my old colleagues, Imran Ahmed, and he does an amazing job chronicling what's happening in the fashion world, in the consumer world from a business perspective, and has really been the forefront of that conversation. And I also love the skin, totally a guilty pleasure.

• 26:21Harry Stebbings?

  No, I'm a big business of fashion fan too. And last question, what would you most like to change in the world of startups and Silicon Valley?

• 26:27Speaker 02

  You know, I think I've actually seen some of the change that I'd wanted to see over the last couple of years, which is switching the mindset from growth at all costs to building sound businesses that are still growing really fast, but the growth isn't self-destructive. And I think that that pressure often comes from the venture community, and founders are now becoming much smarter and more disciplined about it, and realizing I don't want to just raise more funding for the sake of funding and spend more cash because I want to raise more funding. You know, I think that that conversation is getting to a much healthier place, so it's resulting in more stable businesses, which is great for our business.

• 27:00Harry Stebbings?

  And then final question, what's your most recent investment? And why did you say yes?

• 27:04Speaker 02

  Oh, it's a great question. Actually, we just wired an investment yesterday, which is called Shop Shops. And this team is leveraging that live streaming video technology that I mentioned before, and they're bridging online customers to offline shopping experiences. Right now, the company is focused on bringing store, live-stream hosted shopping events in the US to customers in China who purchase online through these shows. So think of it as like a QVC plus a far-fetched, but cross-border. And the reason we said yes is the founder, Leah Wu, is a force of nature. She's got an amazing background to do exactly this company. And you know, with how fast the world is shrinking, her approach with Shop Shops is really on the forefront of multiple trends.

• 27:46Harry Stebbings?

  Well, Yuri, as I said at the start, I've been recommended at this show by 12 guests. I'm so thrilled that we made it to this day, and thank you so much for joining me.

• 27:54Speaker 02

  Oh, thank you so much, Harry. That was super fun.

• 27:57Harry Stebbings?

  As you heard there, 12 prior guests referred Yuri for the show and after that interview, you can see why, a much-loved and respected individual in the venture ecosystem. And if you'd like to see more from Yuri, you can on Twitter @Yuri_ Kim. And I do want to thank the whole For Honor team for being so fantastic with me and the show. It's always such a pleasure to work with them. And we'd love to welcome you back behind the scenes of the 20 Minute VC on Snapchat. You can do that by adding @HStubbings with two Bs. It'd be fantastic to see you there. But before we leave you today, it's the new year and everyone is thinking of health and diet, and so this month's partnerships will be aligned to that. And did you know that office snacks are the third most requested perk by employees? With 83% suggesting it to be a huge perk? Well, that's where NatureBox comes in.

• 28:40Harry Stebbings?

  NatureBox is the first ever unlimited snacking programme for offices of all sizes, starting with just $12 per month per employee. You can choose the plan that fits your team and ensure you never run out of snacks again. And if your body is a temple like mine clearly is not with all those mojitos, then have no fear with NatureBox. Real, simple ingredients, no artificial colours or sweeteners, and free setup, shipping, and a dedicated account manager. What's stopping you getting set up today with 20% off your first month using the offer code VC20 at www.naturebox.com/VC20? That really is a must. And good health is not just about healthy snacking with NatureBox, but good sleep with Lisa, the Warby Parker or Tom Shoes of the mattress industry.

• 29:23Harry Stebbings?

  Lisa have done away with a terrible mattress showroom buying experience by creating this luxury premium foam mattress that's ordered completely online and shipped for free to your doorstep. And the 10-inch mattress comes in all sizes and is engineered with three unique foam layers for a universal adaptive feel, including 2 inches of memory foam and 2 inches of a really cool latex foam called Avina, which is designed to keep you cool. And all Lisa mattresses are 100% US or UK made, and for every 10 mattresses they sell, they donate one to a shelter. Head over to leesa.com to start the new year with a better night's sleep. I want to say a huge thank you for all your support, and I cannot wait to bring you Founder's Friday with Neil Young.