Inflation is rising and consumer confidence is falling. Therefore, ecommerce startups hoping to weather the ongoing downturn need to expand their product offerings.
Does that sound counter-intuitive?
“The more complementary and additive a product is to your catalog, the larger your cart and the more likely a customer will return,” says Bennett Carroccio. Before founding Canal, he worked with hundreds of companies as a consumer investment partner at Andreessen Horowitz.
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In a post to londonbusinessblog.com+, he identifies two cost centers that are easiest to control (user acquisition and product R&D) and shares three tactics for “averting the brand pocalypse.”
Increasing your marketing budget during a recession is the wrong choice, as “margins are everything” and consumers are more skeptical than ever.
Instead, look for ways to increase LTV with a larger catalog and use third-party vendors to lower the cost of goods sold.
Bringing in a new customer is several times more expensive than keeping an existing one, “and that number is likely to increase as acquisition costs rise,” Carroccio says.
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Last week, the world’s largest retailer announced its plans to dive deeper into the healthcare sector with the purchase of concierge provider One Medical.
Three members of the TC+ team shared their thoughts on the potential impact of the deal on patients and Amazon’s operations:
- Walter Thompson: Amazon is the black hole created by the death of the Main Street retail industry
- Miranda Halpern: Following a logical progression
- Alex Wilhelm: What happened to the value of focus?
“Titanic” came out in 1997, but people are still arguing about whether there was enough room for Rose and Jack on the floating door she used to stay alive.
That makeshift raft had plenty of room for both lovers—the problem was buoyancy: With two people on board, neither would have been protected from the icy water.
Investors can afford to offer bridging rounds to founders struggling to keep afloat, but figuratively speaking, everyone would still be getting wet, Rebecca Szkutak reports.
“I think the roadblock with these bridge financing investors is that you have to prove that you are really building the bridge,” said a founder who recently completed a round.
Startups hoping to partner with corporate venture capitalists should be prepared for a thorough due diligence examining everything from revenue to diversity.
In a guest post from TC+, Luisa Rubio Arribas, head of Telefónica’s digital innovation hub Wayra X, shares her advice on how founders should approach negotiating with CVCs and what to expect.
“When an angel investor or traditional VC backs a company, their primary interest is to get a good monetary return,” she writes.
“CVCs don’t just want financial results, they want to capitalize on the innovation and disruption you bring.”
Everyone wants to get their business off the ground, which is why it’s critical to find an investor who shares your values and perspective.
It’s especially tempting to accept the first offer that comes, but “choosing the right partner for the right stage of your business can make the difference between building a multi-billion dollar business and losing control.”
Partners Evan Kipperman, Paul Hughes and Len Gray of law firm Wiggin and Dana shared a post with TC+ exploring the intricacies of working with institutional investors, angels, friends and family, and capitalists of other styles.
“As it gets harder to get funding, your risk tolerance may change, but your investor evaluation process shouldn’t.”