Brent Bellm

Who will be the next supply chain consolidator? From 2011 to 2021, XPO scaled up from $70M to $20B, fueled by a combination of organic growth and 18 acquisitions. The model was extremely successful. But the supply chain ecosystem remains extremely fragmented. There is plenty of room for new consolidators to emerge as winners. In the food supply chain software arena, one emerging acquiror is GrubMarket Inc. They have built a network model to help food suppliers automate their relationships with their customers. GrubMarket has acquired over 100 companies to date. They are expecting to exceed $2B in annualized revenue. And they just announced their latest purchase: Butter 🧈, a SaaS platform to automate food distribution. Kudos to Mike Xu, Winston C., and all involved! #logistics #supplychain #consolidation https://lnkd.in/emY4wpsy

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A recent chat with a portco founder reminded me that #B2Bsales 101 says you can’t sell your product to anyone - the customer has to buy it. Which means, the product you think you are selling is not necessarily what they are buying. A classic example would be a kitchen knife. Who buys a kitchen knife just to put it in a drawer? No one. People buy a way to chop vegetables. If it’s a knife, a sword or a lightsaber - doesn’t matter. They want their vegetables chopped. What are you really selling? A way to chop vegetables. That means your first task in a B2B sale is to find out: what does the customer think they are buying? What do they actually need? If it’s chopped vegetables, show them how neatly you can cut them; don’t spend time showing how amazingly long the knife is or how well the sun reflects off the blade. Or in the B2B context: hey Mr. Customer, what is the problem you’re trying to solve? Great, let me show you how my product solves it for you. Extra points: give your customer credit that they’ve tried other products. It’s perfectly valid to ask: “what have you tried so far? What is it you did not like about the other solutions? (=this is the unmet need. Focus on that and you increase the changes to close the deal)

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Let’s play the blame game. Whenever an NBA team – or a company – fails to reach expectations, people are quick to point fingers. "The Atlanta Hawks didn’t make the Playoffs because of Trae Young," some say. "Company Y missed their earnings because the VP of DTC didn’t get enough unique visitors to the website," they say. Rarely, though, is the finger pointed at the right place. That’s because – and the example of Trae really had me thinking about this – when a company falls short, it’s almost always an institutional failure and not a single individual. What does that mean? Let’s keep using Company Y and that VP of DTC as our example. In a nutshell, the VP was in charge of DTC revenue and missed the projected number. Still, to drive that revenue the VP’s dependent on the product team producing and delivering the right product at the right time. That VP’s dependent on the marketing team cooking up the right assets, branding, and copy. That VP’s dependent on the C suite allocating the proper budget to drive the expected dollars. That VP’s depending on a lot of variables – and on the overall institution – that are out of their control. Likewise, Trae averaged 26 ppg, 10 apg, and made the NBA All-Star team this year. Yeah, he wasn’t perfect on defense and he turned the ball over a fair amount. Still, he’s dependent on institutional variables, too, such as the front office picking up the proper complimentary pieces before (and during) the season. He’s dependent on the ownership group hiring the right basketball, medical, nutrition, and training staff. And, he’s dependent on all of his teammates. With all of that in mind, no matter who is at the top of a company or team, it takes certain factors to be successful. You have to have clear goals and incentives need to be aligned. You have to have outstanding communication. You have to trust one another. You have to, lastly for now, respect one another. If one of those key elements is missing, leadership is going to be on the hook. Which is why we say: Heavy is the head, in this case Trae and our VP of DTC, that wears the crown. #leadership #business

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KNOW YOUR REAL BUSINESS ECONOMICS • GAAP Revenue • Cash Flow • Cash • Contribution Margin • CAC • CAC Payback FUNDRAISING: PRESENT & SUBSTANTIATE FINANCIALS • Investor needs to know what your forecasts are • They need to believe them David Weiden, Khosla Ventures

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Trigger warning. UK founders to VCs: "you (generally) suck". I was taken aback by the intensity of comments made during an exit fireside chat organised by our friends at ARGO, Jeff and Aneesh. Room full of founders, we're talking about the importance of starting exit planning very early (say 3 years+ prior to exit) and the message is: "I would never feel comfortable bringing this topic up to my board, I just would not trust them to handle any of it well". Ensued a discussion about Tier II board vs. Tier III boards, how much VC boards suck, how VC's just do not know how to interact with founders and how a number of key topics are best actively avoided. Nods across the room. The Tier I Board, the kind of place where you could actually bring up strategic topics like, you know, "who might actually want to buy us some day and how do we start building the right kind of relationships today" seemed to be a sort of faraway land, as if sitting with the Knights of the Round Table or the Jedi High Council would actually be easier to achieve. Damn. So we can say all we want about founder-friendly blah blah but if this is still the prevalent reality for UK and European founders, what the heck are we doing and when do we start the topic of "being a great board member" seriously? We need to collectively get out shit together and start training investors to be better board members.

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During my remaining non-compete period (today was the first time I really had little FoMo), I've realized that Better Collective will likely follow the same pattern as other corporations and lay off employees based on cold, hard spreadsheet calculations. This will be particularly prevalent in European markets for two key reasons: 1) Perceived lower revenue value: They believe the public market undervalues European revenue streams. 2) Dominant market position: They feel secure in their European market share and less concerned about potential competition. Furthermore, with Google's recent updates and restrictions on cookie dropping from major player(s), the industry is overlooking the lessons learned from Catena Media's decline when they neglected their reliable income sources. As an affiliate, I would capitalize on this emerging weakness in Europe rather than focusing on the US market. This will be a self-inflicted weakness.

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I’ve had some thought provoking discussions with #founders, investors and fellow advisors recently on #marketing efficiency, channel mix, measurement and incrementality. As someone who’s recently transitioned from leading in enterprise environments (Google) to advising scrappier setups, I know it’s not easy. Be that as it may, here are a few observations & rules of thumb worth considering: 1️⃣𝗔𝗽𝗽𝗿𝗼𝗮𝗰𝗵 & 𝗠𝗶𝗻𝗱𝘀𝗲𝘁: ✔️Spend more time on decisions where implications cascade down vs. silo-ed ones that have less surface area impact. ✔️Therefore, when it comes to high-level channel strategy (or that eternal brand vs performance question), it's better to be directionally on track vs. obsessing with precision at a narrower level. ✔️There is no silver bullet that will solve everything overnight. Yes, some channels could give you clear signs of success early on, others give you a proxy or lagging indicator. That has no bearing on effectiveness. 2️⃣𝗖𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗖𝗼𝘀𝘁 (𝗖𝗔𝗖): ✔️I’m not sure how many founders or investors truly understand 'demand creation’ vs. 'demand capture’ or how to evaluate certain channels over a longer time frame. ✔️The oft quoted #CAC metric is, more often than not, a garbage in - garbage out situation. It’s the easiest metric to game in the short term. 3️⃣𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝗺𝗲𝗻𝘁 (+ 𝗜𝗻𝗰𝗿𝗲𝗺𝗲𝗻𝘁𝗮𝗹𝗶𝘁𝘆) 𝗳𝗼𝗿 #𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀: ✔️You could argue that at an early stage, any marketing is likely to be more 'incremental’ than not. I agree that the benefit of better measurement (better channel allocation & forecasting) should be > the cost to implement it (analytics resources, dashboards). ✔️However, when you expand to 3+ channels, it is worth knowing what channel is in the driving seat [causing your car to move] vs. tagging along [pun intended] for the ride. ✔️It’s interesting that MMMs, the stalwarts of econometric measurement, are witnessing a comeback as marketers look for a future-proof solution in light of cookie deprecation and cross-channel tracking issues. There’s likely to be more innovation here courtesy LLMs, particularly solutions that are open source, lightweight or more actionable. ✔️ While modelling & experiments are the collective holy grail, there are tactics that can improve the chances of your marketing being more incremental as you scale. a) If you’re running acquisition campaigns, exclude your existing customers from being targeted with paid ads. Sounds basic, but this often gets overlooked. b) Avoid over-indexing on brand SEM or retargeting campaigns. The last click ROI may look great, but you’re just using paid ads for use cases that your owned touch points should address efficiently.

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The Wonder acquisition of Grubhub illustrates how smart supply chain-based companies can pivot. Wonder started out as a "cloud kitchen," operating a chain of virtual restaurants paired with a truck fleet for food delivery. They pivoted into physical restaurants, and are on track to reach 100 locations by the end of 2025. Now, with Grubhub, they gain a pool of drivers, transportation, and software for network management. Will it work? https://lnkd.in/e9u6cH7V

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There are lots of podcasts for the sexy stuff. You know what I’m talking about - 🥤fun beverage brands 🖥️ VC-backed tech startups 🛌 DTC mattress companies each of which that incinerates cash. But what the unsexy things? The stuff that: 💰 Generates cash 👷 Employs most of America ⚡️ Powers the systems of every day life Dear friend and respected industrialist Seth Deutsch has finally created one. Diners and Deals is like “How I Built This” but for America’s deal makers. 🔸 The executives who lead services roll ups 🔶 The 20 year overnight success CEO 🔶 Growth focused M&A pros Have a listen and see for yourself. 👇

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I believe two of the big winners over the next 10 years in the SMB category will be PE who are rolling up the businesses and GenAI powered software that makes running these businesses significantly more turnkey and/or profitable. Thanks for having me on Jay Kapoor. If you want spicy takes fast forward to 25 min mark. If you want to get deep in market analysis buckle in for the whole thing. https://lnkd.in/d8M7Jyrx

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Surprising to see two mega mergers getting past antitrust: - The $53B Chevron-Hess merger - The DirecTV-Dish merger where AT&T is selling its stake in DirecTV for $7.6B to TPG and DirecTV buying Dish for $1 and taking on its $10B in debt What does it mean for consumers? And what does it mean for the M&A market? These approvals may signal a shift in antitrust policy. Looks like they're prioritizing global competitiveness over strict market share considerations. This might invite additional scrutiny on how these mergers impact innovation in bigtech. These mega mergers usually tend to have a strong impact on consumer choice and pricing. The industry dynamics will be closely watched by regulators and investors.

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I'm a big fan of "value retail". Time and again, a new platform with value based positioning has been able to carve out space in a competitive market with very large incumbents. Their offering has been simple - significantly (30-40% at least) lower prices than incumbents. They have squirmed their way to a large outcome. This has happened across categories, without a doubt.    Meesho came eight years after Flipkart/ Amazon with their average order value being <INR 350 vs INR 1k+ for market. They're at $5B GMV RR.   Zudio rose from <INR 150 cr in 2017 to INR 6000 cr+ currently with ASP of <INR 500.   Lab grown diamonds are 60%+ cheaper than mined diamonds while being physically/ optically/ chemically the same. From 2016 to 2023, they expanded market share from <5% to 50%+ (by volume).   Janaushadi stores (Govt operated pharmacies selling "generics") rose < INR 150 cr revenue in 2017 to INR 2400+ revenue RR in 2024. They sell 50-70% lower priced medicines.   Physicswallah rose to $200m+ revenue in 4 years with ~20% of incumbent's pricing.   Globally, late entrant Temu rose to $40B GMV RR within 2 years on the back of low pricing. Imagine threatening Amazon's territory   But low pricing as a strategy is an outcome. It looks simple but behind it lies extremely complex inputs that make it possible. It involves opening up exclusive low priced supply and creating the most optimized and lean operations to squeeze out every penny. - Temu/ Shein had access to China's low cost manufacturing capabilities, longtail China suppliers who weren't able to monetize well in China's competitive domestic market, regulation of De minimis in US where they don't pay import duty taxes via air drop shipping - Zudio did end to end manufacturing in-house at low TAT at reasonably low MOQ that enabled entire inventory refresh in < 2 months, leading to limited inventory losses. They made a strong call of spending zero on marketing/ branding - Physicswallah spent 8 years to conquer YT led distribution (45m+ subscribers) leading to limited CACs vs incumbents who spend 30-40% of their revenue on sales / marketing (via feet of street) - Meesho opened up "direct from manufacturers" supply with their low (zero) commission model - LGD/ Janaushadi are both product innovations (same quality at exceptionally low prices)   Because of this, it's nearly impossible for incumbents to replicate the low pricing strategy almost instantly. As they are not just mimicking the prices but also tightly run operations, new supplier partnerships, marketing advantage.   If you want to disrupt pricing for a market, an ideal question to ponder on is how will your supply chain enable that..

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At the CFA Society Indianapolis Venture Breakfast last week I mentioned how SaaS is losing its VC footing to AI. A couple of folks asked for more information, so I figured I'd share today's PitchBook newsletter on the topic. (https://lnkd.in/eJ285n-a) Amid shifting landscapes in the tech sector, corporate innovation funds and investment dollars are increasingly pivoting towards AI experimentation. As traditional SaaS startups experience a deceleration in revenue growth, the focus is shifting. 💡 As we witness this transition, it's crucial for professionals in tech and investment sectors to understand how AI can drive not only efficiency but also innovation. ❓ Let's discuss how your organizations are adapting to this shift. Are you experimenting with AI? What impacts do you foresee in your industry? #AI #CorporateInnovation #TechTrends #StrategicInvestment

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🚀 Venture debt covenants might sound like a small part of the deal, but they carry huge implications for your startup’s future. 📈 You need to be strategic in your negotiations to avoid any pitfalls down the road. It’s all about setting yourself up for success, not stress. Dive into more details in the original Kruze Consulting post. The link is in the 1st comment. 👇

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This is fascinating. My two portfolio companies on the fastest path to Series A have kept the leanest teams. Both of them are lingering around cash flow positive on a monthly basis. One is growing gangbusters, one is growing nicely. Good data below to show that these activities are being rewarded. We're still in cockroach times. Also fwiw, I'm constantly amazed by and learning from Peter Walker. If you're interested in the data of venture funding (AND IF YOU'RE A FOUNDER, YOU SHOULD BE), then follow Peter.

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The Consumer Subscription Trifecta Most consumer AI cos monetize via subscription - and I spend a lot of time with founders around what “best in class” looks like. In my opinion, a good business has 2/3 of the below. A great business has 3/3. - If you have high conversion and strong retention but have to pay for users...you can generate cash (and maybe even profit!) Your main challenge will be your ability to manage CAC and payback periods. This will determine how much $ you can spend on growth. - If you have high conversion to paid and organic acquisition but poor retention…you can build both a user base and a revenue base. Your main challenge will be low lifetime values (LTVs) - and therefore relatively little “cushion” if you do ever need to acquire users via paid. - If you have strong organic acquisition and retention, but poor conversion to paid…you can grow a user base, and probably quite quickly! Your main challenge will be extracting value from users who are clearly finding value (turning a great product into-> a great business). - If you have all three…you have a (fairly!) non-leaky bucket that refills itself! This gives you some wiggle room if these metrics erode as you scale beyond early users.These are often the businesses investors are looking for! If you're using a subscription business model for your consumer AI company, I'd love to hear from you! 👋

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DeepCast shipped a number of really cool new features recently in advance of a broad outreach push to podcast listeners. One new feature is our new Daily DeepDigest tool that sends you a concise daily email including any new episodes from the trailing 24 hours from any podcasts you Subscribe to (on DeepCast). Think daily podcast cliff notes or podcast news ticker tape, with a hint of Morning Brew various brews or PitchBook News—it's increasing information throughput when you're pressed for time. And this feature is rapidly evolving to distill other key extractions from shows you're already interested in, but also exposing you to other shows you might be unfamiliar with that also have nuggets to share—and thus increasing your aperture yet still conscious of your time. Want to go deeper on any given episode? Click the episode detail and you're off to an episode on DeepCast, where you can subsequently read a longer form distillation of that episode or go straight to the source and listen to the episode. (And podcaster friends, these pages are definitely increasing indexing and thus Google entry points to your shows!) I'm loving this feature as a user, personally. Can't wait to see what others think! #BuildingInPublic #Podcasts #AllTheWorldsInformation #HowYouWantIt

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WE DID IT! After 2 years of pushing through the biggest downturn in VC in decades, Matthew Stotts 🌐 and I made it to the finish line with Fund I! We couldn't have done this without One Small Planet (Will Peterffy and Jack Wielebinski 🙏), Regen Network and Regen Foundation (Austin Wade Smith Gregory Landua and Will Szal), and a dozen other family offices and angels who believed that we can build a nature-positive economy utilizing our eye for software and our history as founders from day 1 A shout out goes to all of our founders (only four announced today, but watch this space - there are multitudes!) who trusted us enough to give us a spot on their cap table for this 10-15 year journey. This is the best job in the world, and it's because we get to work with people like you who have weird ideas in the best possible way. Using Bitcoin as anchor base load to decarbonize residential housing in America's most expensive energy market? Make every complex supply chain legible to machines so we can find and eliminate deforestation in commodity supply chains? Build deeply liquid environmental asset markets to price ecosystem services, on a blockchain, that no one needs to know is a blockchain? I'm so excited to get to work on this stuff for the next 10-15 years minimum, and to see what we can accelerate with our tiny fund in the next 5-6 years as we approach 2030 Onward! https://lnkd.in/gy3B-DFe

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