About the Podcast Episode

In this episode of VCPreneuer, Digjay Patel hosts Vinay Singh, Founding Partner at Fireside Partners for a discussion on investing in new-age consumer brands, change in consumer narrative with a rise of modern D2C brands and the characteristics of Brand 2.0

Vinay started his career with Unilever where he worked across all functions of sales, marketing, business for ~8 years. Next, he joined Bankbazaar, as the Marketing Lead and built the consumer marketplace from scratch. Post this, he co founded Stepni, a startup in the auto service space and and exited with sale to Quikr. After this, he started his VC journey by confounding Fireside Ventures, an early stage investor in consumer brands. What started as a small 50mn$ fund in 2017 to essentially test the theory of investing in new age consumer brands has made 18 investments and is now looking to close its second fund!

Takeaways

• Even in the age of new age consumer brands, building brands that are close to the heart of the consumers and parallely building a brand by doing good to the society go a long way in creating an everlasting iconic image
• Brand 2.0 which differentiates from Brand 1.0 on digital media, distribution, packaging has crunched product innovation cycles, led to faster scale and growth and micro segmentation of products to the audience which were earlier challenges
• Quality of Revenue is an important traction indicator in assessing early stage consumer brand pitches. Here it refers to metrics unit economics, repeat rate, referral rate, same household repeat rate, cohort repeat rate.
• Since Fireside Ventures is focused solely on consumer brands, it has standardised approaches to GTM, consumer tech stack, media that they help entrepreneurs with.
• A consumer brand pitch should clearly define who their consumer is, what segment of the market they will target, why would they switch from what they are consuming today and include aspects on the core mix of Product, Packaging, Pricing, Initial metrics, Unit Economics and Expansion.

NOTES

1.How do you measure your progress as a VC firm?

The first parameter is straightforward is whether they have the returned the capital or not. Second, for Fireside Ventures, their vision is to build 25 iconic brands; brands that do well financially by doing good to the society

2. Brand 1.0 vs Brand 2.0

Key Challenges for Brand 1.0 in the Year 2000 were media and distribution. Before the internet, and ecommerce, the first step in building a brand or a product was to do consumer insighting and makes products accordingly. In Brand 2.0, insighting and innovation of products is a completely online piece and Flipkart, Amazon, NLP accelerate the the timeline of innovation from consumer insighting. Also, mass media which was earlier used as a channel to bring brand awareness required lot of capital but now digital media allows to sharply target micro segments and make media spends of Brand 2.0 very efficient. It allows allows for faster growth and scale.

On Packaging and Formulation

Brand 1.0 required a longer shelf test to check for audience's pick on various packaging and design options for the same product but Brand 2.0 allows for a quick split test on the brand's own D2C website. The latter allows for faster beta testing and conversion rate. This also implies shorter consumer insighting cycles that lead to reduction in entry barriers and makes competition more intense.

Business of brands

Earlier, the key metric was driving penetration which meant targeting large household numbers even with small unit quantities of the product. Now, in Brand 2.0 the mantra is not to become something to everyone but to be in the business of communities and for the audience to buy into the core and ethos of the brand.