Investors lose money

and are mad about it

I spent the past two weeks traveling.

Was in LA for work and Geekex, crushed the stage with Jason, Nik, and Isaac.
Then went to NYC for meetings and Commerce Summit.

And this shouldnt come as a surprise, but the energy was a lot different than 2020, when I went to my first Geekex event.

This time around it was a lot more polished.
Better speakers, more talent, more trust, a better venue.

But there was less “feverishness”.

Commerce summit was the same way.

It was an AMAZING event.

Opening party at Shopifys office.
Harley spoke.
50-100 9 figure brands all in a room together.

But the energy was different than 2020.

It wasnt about fresh new brands or fast growth.

I looked around the room and just saw a bunch of brands who “made it”.

“The titanic sunk and this room is who made it on a lifeboat”

Thats the quote that was running in my head for the 3 day event.
There weren’t any NEW brands.
There wasn’t any one investing in YOUNG brands.

It was brands with EBITDA and investors looking to buy EBITDA.

The beauty of consumer is it attracts people with passion.

Successful consumer founders come from every background.

Its because they make things they are passionate about, and sometimes they get lucky and find other people who are passionate about the same stuff.

Its not tech- No one is passionate about cloud infrastructure.

Tech founders set out to make money.
More power to them.

But every time I have ever seen a consumer brand set out to make money, they have failed miserably.

The best, largest, most profitable consumer brands make stuff THEY WANT because of some INSANE desire to create.

And this is where the disconnect from the investor class comes from.

Investors like to make money.
They usually fail at this, but they arent actually passionate about anything.

They might have a thesis or pretend to care about something, but money allocators might as well be ATMs, they have as much personality anyway

And when they approach consumer, they try to pattern match with the goal- making money. But the best consumer founders are such fucking misfits that they CAN NOT convince someone to invest in them.

There wont be funding for consumer for the next 4 years.

Sure you will hear about some rounds.
But those rounds are going to be allocated to “winners”

Magic Spoon might raise again, but thats because they dont need too. They made it.

Trying to invest in Consumer doesnt work.
You cant pick the winners, because there is no pattern.
They dont come from the same schools, they dont talk the same, and they dont follow the same path.

Some will ONLY use facebook, some will be 90% amazon, some will crush organic.

Consumer is as diverse as the customer base, with a million ways to succeed, but picking the winner is actually impossible.

And this is fine.
Investors SHOULD lose money sometimes.

We all hear “9/10 brands that raise money fail”

But then we act shocked when brands fail.
The response should be “duh”

Yeah going out of business sucks, but thats literally the game we decided to play.
It’s like getting out in Baseball, happens way more than homeruns.

But I still hear “Angels” bellyaching about losing money.

No shit you lost money.
Dont be an investor then.

And the same goes for brands, DONT FEEL ANY REMORSE FOR LOSING MONEY.
The people who invested in you love taking credit for success, they love the clout, they love taking meetings. This is the game they chose to play.

Anyway-
My actionable tip of the week is just make something you love.
Do it without any exit in mind.
Just be happy if you can cover your credit card bill every month.

Some of us will win the lottery. Many of us will go bust.
Thats just the game. The game is random.

So might as well go out doing something you actually like, instead of dropshipping dollhouses on amazon.

And listen to my podcast.