A VC's reflection of staying out of the consumer start-up arena.
By Kam Phillips-Sadler
As I hung up the phone a few weeks ago, I fought to suppress the urge yet again. I'd just heard from another former customer reaching out to ask us to bring Dream Delivered boxes back to market.
It was a wild ride, that box life. We jumped off a cliff and got wings on the way down, spurred by a desire to diversify revenue for our nonprofit arm and to reach children around the world. We achieved both of those objectives and our customers loved the product. We had what I, as a VC today, look for in a consumer brand. The energy around a product that prompts social referral capital: our customers wanted to be the ones to be the first to tell their friends about Dream Delivered. They got their school's PTA to buy it as a classroom addition (one school even dedicated an entire new curriculum component to our boxes and decorated the hallways in Dream Delivered theme) and another customer begged for a Dream Delivered birthday party (to my surprise, we obliged!).
I'll never forget the excitement of seeing our first run of boxes in production or the tears I shed as we delivered boxes to children around the globe. I'm immensely proud of what we built but did we build things the "venture scale" way? Absolutely not. Did we source materials optimizing for margins and efficiency? This is the part of the movie where we flashback to me in the aisles of Dollar Tree in our early days grabbing things like an old episode of Supermarket Sweep. Moreso, did we begin with the end in mind, mapping out a product roadmap over time and focusing on intentional scale? I think you know the answer to that by now, dear reader.
But we had the ever elusive product-market fit. And today, in a society where children are home with limited options, the prospect of a bright blue box filled with imaginative possibilities is more appealing than ever. With schools stripped to bare bones education, supplementary materials are crucial. And while it may be tooting our own horn, Dream Delivered was developed to be anything but ordinary: we tested activities and curriculum around the clock pushing the bounds of the box to insure that every experience was innovative and worthy of inclusion.
The customer who called wanted a monthly bulk order contract for a socially distanced Girl Scout Troop. The idea came from her granddaughter, who had received our boxes for over a year and recounted in great detail activities and lessons such as set design in our theatre box, DNA extraction from our forensics box and went on and on sharing all that she'd learned at such a young age with enthusiasm. It was the glimmer of hope and kind of feedback I needed those late nights at the office, promising my team that next month, we'd switch up fulfillment. Next month, we'd figure it all out. Two other customers reached out recently to request our boxes for their school districts, "you could make a killing right now!" they all say. That could be true. But for a business to work, the CEO needs to be energized, passionate and laser focused. While I'm all of that venture capital, the thought of dusting off the old box is something I simply can't fathom.
The point of going to business school was to acquire the skills needed to scale and reach the international demand we'd seen in China, Canada and beyond. Did one year of HBS give me what I needed? Maybe. But, if I'm being real with myself, I'm enjoying VC more than I ever imagined and I want to make a career of venture capital. What does a re-launch look like without me at the helm? The nonprofit I founded in 2009 is still running on college campuses today because it was created with a long term sustainability at the forefront of every aspect of the infrastructure. Dream Delivered was launched in 2015 with big ideas and phenomenal support but I didn't design every layer with the thought that I'd want to step aside and let someone else lead. Foolish, maybe. But 'twas reality. I've lightly explored Entrepreneurship Through Acquisition partnerships on campus and have chatted with a few students about handing over the keys. As Founder, I'm proud of what we built and I think Dream Delivered could crush it with a relaunch but will my reputation as a VC suffer if the company I founded [and would now advise] has a CAC:LTV ratio that isn't perfect? Would we have proprietary distribution channels? What's going to make DD's supply chain exponentially more efficient than it was two years ago? How does COVID change that? So many questions in and out of the box.
But the overwhelming nature of all of the fancy MBA and VC questions is balanced with the mental images of happy kids elated to have our boxes in hand during these trying times. I'm further spurred by the promise of enterprise contracts and larger accounts than the company had previously ever seen. Bigger dreams, brighter futures- delivered to their doorsteps. As I push forward in my last year at HBS, those memories and possibilities are the ones that I hold dear. A few weeks ago, a professor asked if VC had made me catch the entrepreneurship bug again. For now, I truly don't think I've caught it. But the demand is so strong, it'd be a beautiful legacy to figure out a way to relaunch the dream from my seat at the [cap] table.
🎉 You made it this far. Woot, woot! Here's a bonus illustration of why career exploration is so important today: