" What VCs Care About Right Now" Part 1 [COMMERCISM 2014]

TL;DR

E-commerce deals were once highly valued, but now face challenges in securing funding due to lack of exits and capital-intensive nature.

Transcript

two to three years ago e-commerce deals were hot as and now they're cold as snot or something like that why why or is that not the case e-commerce was like super hot every everybody was paying any amount of valuation what it's the case it's true very true it's very true and now cold is like why yeah um WR it's the polar vortex right now of e-commer... Read More

Key Insights

• 😀 E-commerce deals have become less attractive to investors due to a lack of exits and challenges faced by capital-intensive companies.
• 💪 Marketplaces and online retail brands that offer unique experiences and have strong economics are still able to secure funding and succeed.
• ✋ Subscription commerce can be profitable if the product fulfills a predictable and necessary need, and the brand maintains a high level of customer satisfaction.

Questions & Answers

Q: Why has the interest in e-commerce deals decreased in recent years?

The lack of exits and failure of some capital-intensive e-commerce companies have made investors more cautious about investing in the sector. Additionally, valuations for other sectors, such as enterprise and audience-based businesses, have been more appealing to investors.

Q: What makes a strong e-commerce brand in today's market?

Strong branding exercises and continuous efforts to understand and meet customer needs are essential for building a successful e-commerce brand. It is important to offer a unique experience and have metrics such as high margins and low churn.

Q: Is subscription commerce (in a box) a good business model?

Subscription commerce can be a good business model if the product or service fulfills a necessary and predictable need for customers. However, it is crucial to create a strong brand and consistently deliver value to retain customers and ensure profitability.

Q: How relevant is video for e-commerce?

Video is highly relevant for e-commerce, as it can be used as a medium for advertising and showcasing products. YouTube, in particular, has been an unsung hero for e-commerce, but there is still room for growth and innovation in monetizing the platform.

Summary & Key Takeaways

• E-commerce companies that raised a lot of capital and stumbled have upset the balance in the industry, leading to a lack of exits and funding at later stages.

• The perception of e-commerce has shifted, with some claiming that the industry is declining and no longer profitable.

• Marketplaces and online retail brands that offer unique experiences and have strong economics are still able to secure funding and thrive in the e-commerce space.