Posted on Tuesday, May 11th 2021
If you have been bootstrapping and think you are ready for investors, you need to learn how investors think. First, please study our free Bootstrapping course and Investor Introductions page. Then start looking for entrepreneur – investor fit. Today I introduce you to Tod Francis.
Tod Francis, Managing Director at Shasta Ventures, starts with a discussion on the history of retail, all the way from shoe stores, to departmental stores, and back to specialty retail. This is followed by a similar overview of the history of e-commerce ranging from Amazon’s strategy to how specialty retail is translating into niche e-commerce, and how Tod is looking at investments in the category. You can listen to the podcast interview
here and the entire roundtable program here: VIDEO Sramana Mitra: I think the best question to start out with would be what do you see has happened to the e-commerce business since the 90’s? Tod Francis: I’d go back a bit further to provide perspective on retail in general and consumer commerce because I think, as an entrepreneur, it’s easy to sit there and be like, “Oh, it’s over.” With everything going down, has every category been covered already?
I think it’s important that entrepreneurs realize consumers are always ready for a new and better offering. If you go back even in the early days of retail, we had the shoe store and we had the shirt store. We had all these specially stores. Then we started innovation of a department store. Then we saw the innovation of low price – the Walmart and Kmart.
Then, interestingly, we saw specialty stores come back with an interesting twist – more knowledge about customers, more knowledge about the product. They sold like pottery barn. We see these cycles even in the mall. I would like to use the analogy of the mall, because the mall is always ready for something new. Consumers are always interested in a new concept. So let’s look at e-commerce.
In the mid to late 90’s when the Internet got going, there weren’t a lot of people online. Those who were benefited from the early plays. We were involved with Blue Nile. The play there was to bring in a set of products that are hard to access and bring them all into one place and offer them on one site. They were mostly selling, at that time, other people’s goods. We were assembling an assortment of manufacturer goods and bringing them to the consumer.
That was the first wave and that wave was a really powerful wave because for the first time, if you lived in a rural area, you could access products through that. So it’s really powerful. I don’t think we should look back on 1.0 as a joke. That was monumental in providing access to goods worldwide and at a better price. Things have changed a lot just like in the malls. We saw aggregation of products and pricing variances were seen online. Instead of just books, Amazon then became the everything store. They became the Walmart online. They’ve been able to win through price and knowledge about the customer.
That was moving into the next generation of doing 1.0 better. Now we’re seeing really interesting and exciting evolution with the advantage of following customer interest and of social media Also a very new exciting new trend, which is vertically-integrated direct to the consumer brand where you’re not just selling other people’s goods. They’re creating brands direct to the consumer and cutting out the middleman. The overall view on what’s going on in commerce is change. Change is allowing for better experiences and it’s going to always be changing. We remain very optimistic about the category.
Our conversation continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . How The Intern Group CEO David Lloyd Bootstrapped to $13 Million . How Passageways CEO Paroon Chadha Bootstrapped from Indiana . How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million . Death by Overfunding . How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+ . How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck . TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage . The VC-Entrepreneur Compensation Disbalance . BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering . Tremend CEO Marius Hanganu Bootstraps from Romania . Gesture CEO Jim Alvarez Bootstraps to $10 Million . SproutLoud CEO Bootstraps to $30 Million from Florida . Tuft & Needle CEO Bootstraps to Over $100 Million . Co-founders Bootstrap Linguamatics to Over $10M from the UK . Ownership Matters . Vainu Co-founder Mikko Honkanen Bootstraps from Finland . Entrepreneur Couple Bootstraps to $10M from Colorado . 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Bay Dynamics Co-founders Bootstrapped Using Services . Building an AI Software Company from Dallas . RJMetrics Co-founders Bootstrapped First, Raised $22M Later . Bootstrapping Niche E-Commerce Business BuyAutoParts to Exit . TemplateMonster was Bootstrapped to $15 Million . Bootstrapping Edge Hosting to $18 Million . Bootstrapping, Fund Raising and Exiting with Sefaira . Bootstrapping IdeaScale to $5M from Scratch . Bootstrapping to $10M from Finland . Happy Grasshopper CEO Dan Stewart Bootstrapped to Inflection . Bootstrapping Gravity Pro Using Services . Founder Builds Multiple Bootstrapped Education Software Companies . Bootstrapping to $10M from Australia, Raising $25M from the US . Bootstrapped Y Soft to $30M from the Czech Republic . Bootstrapped from Belarus, Raised Money from Silicon Valley . Bootstrapped SproutLoud to $30M from Florida . Bootstrapped 2600Hz Using Services . A Serial Bootstrapping Entrepreneur’s Journey . 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