YouSaid · the spoken record

Lydia Jett

lines on the record: 60
first: 2022-06-21
most recent: 2022-06-21
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“About who I am as a leader of my team. And how do you make sure you take time out to give people feedback along the way that just helps them to establish confidence in what they're doing? I am just really thankful to all of the incredible people who have bothered to spend snippets of their time with me to give me feedback on what I'm doing.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Find the list on that is really long for most of us, hopefully. I start with my mother who was just this extraordinarily hard charging leader in my small town in a way that made it acceptable for me to understand that that was a role that was open to me as well and to my father who actually supported her version of events in all of that. I think a more tactical answer that I was thinking about is just the hundreds and hundreds of people who have given me feedback over the years. I was a pretty insecure person growing up. You kind of want to hide. You don't really know what value you have to add. And every person along the way who pulled me aside and gave me feedback positive or negative. And a lot of positive feedback that made me feel like something I was doing was right, negative feedback that allowed me to learn and pivot. It makes me think all the time.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Capital as a class, and I think the people we term to be great investors often are the people who've been standing the longest. Do you have an ability to continue to amass capital to invest? Have you been around the table for 15 years to be in and out at cycles? Have you been fortunate enough to be on one or two or maybe three journeys that have worked? But there's so much luck involved and patience. I do think the beautiful thing about this industry is the longer you're in it. Hopefully the calmer you get because of the reality that the impact you have on these companies is a lot smaller than you think it is going to be when you enter any of them and just needs to be a lot more grace and humility and patience, frankly, in the sector.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“This almost harkens back to the earlier comment there are so many great ways to make money. The concept of great investor, I think you have to apply pretty broadly. The thing that is striking about the venture capital as a class is it is so much more driven by luck and good fortune than traditional investing is, public market investing, private equity investing. These are very quantitative roles where you are really orienting yourself around math and understanding businesses in quantitative form with an understanding that management teams can be changed in and out when they're not performing it. It is a much more established expected set of operations. Venture is just so different. The reality is this is a people business. Big companies that are built are built on the back of tremendous aggregation of talent, of people. And that in some ways is very hard to predict in every way it's hard to predict. I look at venture capital.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Stands up with humility and says, I was wrong. I'm going to change. Here's what I'm going to do different. But he really takes personal responsibility and grants trust very freely. And I think it allows organizations, it allows founders to think very big. Nobody's operating from a position of fear. People are operating from a position of optimism and excitement. As I take a step back and I say, despite all the tough headlines we've had over the years, I feel like our brand has been extraordinarily strong with founders. Founders love the concept of Softbank. They love the ideal of MASA. They love someone who grants trust freely, who really believes in them, who is doing this not to make money, but solely because he wants to work with founders and he wants to build big things. And that has sort of been intoxicating position to be in the middle of.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Operate in a high trust environment. This business is so hard in that it takes so long to figure out if anything you're doing is right. The feedback loop is just wild. And most people don't have the luxury of having a long time to prove out what they're doing. You know, the reality of partnership dynamics around firm dynamics, dynamics with your LPs is nobody really wants to give you 10 years of doing things that look wrong to everybody else to prove yourself out. I think one of the beautiful things about MASA is he is someone who grants a tremendous amount of trust to the people who work in the investing organization. Well, there is, of course, accountability in every investment organization. I think he is really supportive of people doing what they believe in. And I think he is the first person to stand up when he makes a mistake and say, I was wrong. We see it over and over in our earnings calls. We saw it in McCase. We work. We saw it last quarter.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“To be, and I'm going to be this for the next three funds as I come back to raise my next funds. My strategy is what I will do. Organizations tend to be pretty sclerotic. You say this is who I am, it's how I do what I do. It's why you don't see that much change in venture outside of new entrants. Mus is the opposite. If he believes something is fundamentally changing, he can pivot and a big organization so fast to follow that thematic. And I think it's why in this wild period of upheaval in the capital markets over the last five years, I've been in the capital markets for 20 years. I've never seen change the way I've seen it in the last five years. It's why Softbank has been able to continue to stay in the forefront of headlines. Now, we can debate whether headlines are good or bad. Most of these headlines are bad, but it does really help to be able to orient your business as quickly as he is able to orient it with the big fundamental frameworks guiding his decisions. That's sort of aspect one. I think something else that's beautiful about him is he really does.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Depends on the period of time. Every single one of us, whether we want to acknowledge it or not, are a product of the market environment we're in. What's so important for founders today, almost the first principle I lean into is understand the market you're in because you have to learn how to operate to it. This man has the ability to build very strong conviction in very big ideas. He really doesn't mess around with the small ideas. He doesn't get distracted by details. He builds a big vision that is supported by fundamental economic tailwinds and he pursues it with a lot of clarity. But the other thing I think that he has, which I think is beautiful, is he can change on a dime and turn and do a 180. And as I look back at my 10, 12 year career before I joined Softbank, for most financial institutions, for most investors, you can't do that. You've made a covenant with URLPs. You have defined your strategy. You said this is how I'm going to go.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Digital businesses surpass the margin profile of the big offline retailers yet. We're still two human capital intensive. There is not enough automation in these businesses. Now, what these businesses have is growth. They're certainly eating consumer discretionary spend. But I think we all have to work harder to prove that we can have an advantaged economic profile relative to traditional businesses.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't start from a position that I so often hear in founder pitches about how traditional operators aren't good. I mean, I think we so often hear that insurance companies aren't good or retailers aren't good. But the reality is I actually think these companies are extraordinarily good. They've built very, very efficient businesses. Insurance companies have built very quantitatively adept businesses. I start from a position of I think if you try and compare yourself to a Walmart or a Target as a retailer, you're competing against a really strong, efficient organization. And what are the margin profiles on these businesses? You're talking about single digit margin profiles. When you know you're starting supposition once you get past product margin and then delivery margin is negative, you have to get to significant scale. You have to find ways to automate your processes in a way that can just get back to parity from a margin profile perspective. And that's why we haven't seen a lot of”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Quantitative framing because the economics of these businesses are so hard, you have to get them to massive scale to make the economics pay out or something has to change about the economics. I think DoorDash has shown that consumers are willing to pay far more than anyone thought they would for delivered food. I never thought that the consumer demand would stretch as far as it has. So I think that has been an extraordinary learning there. But I also think Tony has been just a beautiful operator. You asked our e-commerce CEOs different. I think they are. I really think you have to be extraordinarily disciplined because you are starting from a position of having impaired margins or an impaired economic profile. And the question is, how do you improve your economic profile to just match an offline profile? And then how do you support it getting better? And it means you have to be really focused on the couple things that matter in your business as opposed to distracted by all of the other adjacencies you could lead into.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sit in my camp where I think there are very, very few exceptional companies and very few exceptional leaders. I think if we walk away from this grand experiment with 20 exceptional founders out of a 300 founder portfolio, and if by exceptional, what do I mean? I mean building a 20, 30, 40 billion dollar company. I think we're all going to feel really good about ourselves because there just aren't that many people on the planet who can both be high enough to set a vision, who can understand the thematics of setting the strategy and where you need to go, but can also dive deep enough to really understand the core drivers of the business. There are so few people who can do that high-low transaction, transition on any given day. When it comes to these really operational businesses, I think you have to be someone who can dive deep enough to really understand the core of the business. I think you have to be analytically minded. You have to be able to run an organization with the”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is bringing them around the table, being really authentic and open about what's not working, and then making sure that you focus the attention on what you believe really matters most. And I think that is a good way to correct for all the learnings that we're amassing along the way.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think what we around the table hopefully as board members are doing are creating a safe space where you can say this was what I had conviction in. We went and tested it. This is what we learned. And we think it's time to change. And I think it's why it's so important to build a relationship of authenticity and trust because what I have found is the founders who lean in and share the mistakes and the learnings and how they're changing are the founders that I build the best trust with. And those become the relationships that you get really excited to lean into as an investor. I think that the founders who feel a need to keep static and metric because that's what they told us they would do and aren't comfortable, aren't confident enough to tell me that it was wrong. That's where relationships don't develop in a way that you really need in a down market like this. I would encourage everyone to lean into the radical idea that everything is messy. It is worth really bringing that people, your constituency is around the table with you, your investors, your employers.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think about that all the time because one of the learnings that I've had is that every decision you make as a founder will have an unintended consequence in probably three. The really brittle businesses that get built are those where you aren't paying attention to understand what consequences are coming your way. To the specific question, business building is messy. Every single business I work with is a mess, including big corporate businesses, including softbanks, including Amazon, including Google. It's really important to just acknowledge it and say it over and over again. Every business is a mess. And the question is, can you as a business leader identify what really matters and focus on making sure what really matters is happening? Are you going to get that wrong? Absolutely. I mean, this is a game of learning for all of us, for me, for you as an interviewer. It's for the operators who run businesses. If you form a static view and refuse to input new learnings, then I think you've already made a mistake.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think it really does mean that you need a strategic finance person. You need someone who can help you think through key KPIs that are going to be the most obvious set of KPIs and help you understand them. You can't just put them together, but you have to have a real view on them.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“That companies always turn and ask what specifically are you looking for? What specific metrics do you want us to hit? The reality is there is just very rarely a magic number that we're looking for. We are looking at a company in the context of an overall picture. We're looking at it in the context of the team and product, but really where we as growth equity investors start is an understanding the core economics of the business. So we are always spending time looking at unit economics. We are always spending time looking at cohort retention. We're always spending time looking at how does engagement change over time. I think that requires that your organization is collating data and parsing it and starting to think early about what are those things that your growth equity investors are going to be looking for so you're prepared to have those conversations. So does that mean you have to have a CFO on board versus a VP of finance?”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of that founder's charisma or ability to recruit, and on the basis of some early inclination of what a market might look like, an early product. But at that point, most of these founders have not really learned that they are making financial contract with those later stage investors. Here is a financial plan they're expected to hit. And it really comes down to an underinvestment in that financial aspect of your business, understanding that financial aspect of your business. We spend a lot of time talking about how do we work with companies to strengthen their financial organizations to help them understand strategic finance and operational finance, because it is understated as you get more mature, and I think it is fundamentally necessary to raise capital from growth investors.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“By their venture capitalists who are beautiful visionary optimists. No one knows how to read a balance sheet. No one's paying any attention to the balance sheet of these businesses. I think it is incredibly important to make sure that you have visibility into the financial aspects of your business and are really thinking about capital allocation from the beginning. At its very core is thinking about operational efficiency. And I think it's a really interesting transition as I look, this is independent of the market we're in, but what we did with Vision Fund two is we started to invest in earlier stage assets. We said Vision Fund one, we backed all the big companies in the world and we'd like more diversification and we think we can go slightly earlier. The smaller checks, the Vision Fund too, our average check size is maybe a quarter of what it was with Vision Fund one and we were backing Series B companies. And the biggest differential in my mind between the Series B and the Series C companies is Series B companies had only ever really raised in the past off the base”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think Uber is an extraordinary example that is going to be very, very hard to replicate. People love to use examples of Uber or Alibaba or Amazon, but the reality is a very special set of circumstances in time that the last companies and in a market of wash in capital, it's just a different environment than Alibaba was in or Amazon was in than Uber was in, that their orientation or their launch. So I have seen so many companies get big before they have figured out operational discipline and then realize too late that there is just no time to course correct. I really am a believer that you need to invest as a founder. You need to invest in a really smart financially oriented right hand person who can help you see around corners on that capital allocation, who can help you understand your balance sheet. So often as I sit around board meetings with founders who are these beautiful visionary optimists”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I hope that we're all paying attention. We're all learning and listening along the way. It is really hard to put a check of that size. Attack industries with capital that people have written off, either because the market is too small, the TAM is too small, how do we get the structural things right and make sure we have a disciplined enough team that we're really thinking smartly about capital allocation with that capital?”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“A list of investors that was more than a page long who could write a $200 million check that really didn't exist in 1617 when we launched the Vision Fund. So the world's got really excited by the concept of technology being bigger than we thought it would ever be and being able to put this much capital to work. And I think a lot of different factions got excited to put money to work. You had the crossover funds start to come to being public markets oriented investors who started to go into the private world. You had corporate investors. You had LPs. You had the launch of individual investors and syndicates and SPVs. Felt like everyone was coming into this market the last couple years have basically been the vision fund in distributed form, meaning we were all playing what Vision Fund one did together, but with hundreds of players around the world. What were my lessons from that period of time over the last seven years? There have been so many lessons.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a fundamental belief that probably, by the way, is largely correct too much capital causes a lack of discipline, which causes fragile businesses, it causes bloat, it causes a lack of focus that keeps you from reaching the end of your journey. There were so many lessons learned by the entire technology investor ecosystem over a long period of time that supported that you couldn't put this much capital to work in the technology industry and vision fund. One was really hard for people to comprehend. Envision Fund 1, we backed North of 80 companies and had an average check size of 600 million dollars and I just don't think that the world understood at that point in time that companies could absorb this much money. We can talk later about absorbing it smart, but I think just can companies take that much money. I think what was really astonishing to see for me, almost the watershed moment was when financial raised $14 billion back in 2018. That was the first time I'd seen”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Thing I'd say is we've learned a lot. I've lived in three pretty explicitly different soft banks. I lived in Softbank group before the Vision Fund was started. And our strategy was actually much the same as it was for Vision Fund one. Let's just establish clear market leaders and let's aggressively capitalize them to continue their pace. Vision Fund one, we were writing $1 billion checks into companies. We were just writing them very, very infrequently. And I think our asset selection was probably pretty good then. I think it was astonishing to the outside world to understand how you could put a billion dollars into a company. Just astonishing. When we launched Vision Fund 1 and had $100 billion, it allowed us to continue the same strategy but increase the velocity of the number of companies that we were investing in. And I think that just, I don't know if that terrified people or made people want to laugh until they couldn't laugh any further.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“He really believes in an aggressive style of build, one that moves faster than other traditional sources might tell you to move. That's obviously not going to work for every business. It's not going to work for every business that we've built. But I think it is instinctually aligned with how do we generate returns as a fund. And you can't build a fund of this diversified set of companies without believing that you're going to generate more than two to three times return on each individual company. It very much is core to how he has built his own business in terms of enormous ambition and aggressive style of build, but also in terms of how do we think about driving returns for LPs.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“First thing I'd say is I've had the advantage of working on three different investment platforms and have been in this world for a very long time. There are so many ways to build a great company. And SoftBank is just not the right fit for the vast majority of companies. And I don't think venture capital necessarily makes sense for the vast majority of companies. So knowing who you are and what you're targeting and having a clear vision of who you want to be is important because once you jump on this venture capital ride and once you jump on a softbank ride, you're committing to something very different. You're narrowing your set of options. I do think that perspective is broadly speaking right. I think that MASA has this incredible ability to clarify and to boil things down to a very base level. And that's why we all get to kind of chuckle when we look at the slides because they're so simplified. The thesis is right.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hard fought because they are on a unit level. It's every day. You're dealing with the crisis of human capital, of inflation, of not having people show up to work with COVID. You're dealing with these crises every day. And so they're not the big needle movers that negotiating a new contract is a big immediate needle mover. In my world, there are actually very few things that kind of blow your mind because something happened. It is the cost, the hard won cost of everyday getting incrementally better in very small ways and then getting to look back at a 48 month period and say, wow, look at how radically different my business is than it was. But I don't know that they'll blow your mind in terms of the unit variables.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I like to frame these in terms of when you look at a PL and you look at unit economics, which was something we spend a lot of time looking at, we think about what are the really big buckets in any particular set of unit economics, which is basically your P&L stripped down to a unit basis. If you ask me, what is the most extreme pickup I've ever seen, it has been in extracting further margin on product. It's just negotiating leverage when you gain scale. That's because the businesses I work with fundamentally, their cogs end up being the majority of their cost structure. The second level efficiencies are always those operating efficiencies of how do we actually take a dramatically unid economics negative business because we are subscale in six regions that we have determined have the ultimate ability to become scalable and we've decided these are our six hubs but we've got to get to scale and then we're going to rationalize along the way. I think those wins are very”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you meaningfully change the economic value proposition? Think about those two factors in the what do you have to believe landscape of what really matters back to where we started this conversation? Those are the big bets that we end up making and then tracking very closely. But I will tell you, in every great investment, the underlying drivers and how they have operated have not mapped to the forecast that we built at investment. We've been surprised in every case.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Operational efficiencies, which are core to the heart and lifeblood of these companies, has actually been a bigger lever in getting that unit economics positive position that you need to be in. This is a funny job because you are making bets about things that do not exist today. Generally speaking, I find myself getting irritated when people say they look for big tam. I can't even think of a big consumer company that had a big established TAM when it got started. It doesn't logically make sense if there was a big TAM, they would have eaten it. You know, I look at the great list of consumer companies around the world. They all lived the experience of investors telling them the TAM was too small. I think the question that we spend a lot more time thinking about is what would have to be true? What levers do you have to be able to pull to either improve a customer experience by a factor of five or ten times? Because a consumer isn't going to stick with you because you're marginally better. So how do you make it significantly better?”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe I would ask does anything ever happen unintentionally? Just as a starting point, I could give you a large number of companies, arguably all the companies we've invested in, where we have had to improve margins over time, where the fundamental unlock came through improving margins. And I am a believer that with scale amassed, you have more power to extract margins, that sort of undeniable truth that that should be true. The question is, how do you make that true? We have had to make big bets, I think. Kupong was a very obvious big bet. Flipkart was a very obvious big bet of companies where the unit economics were not positive at our time of investment. And we had to believe the operating efficiency would get better to support positive unit economics. And I think what we were ultimately surprised by, and maybe this is obvious in retrospect, as you amass scale your negotiating power gets better in combination with the”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Day, but we can improve them by layering on adjacencies and other services. We're setting yourself substructurally for a lot of pain. We have to prove out that core business model works. And that's where we spend a lot of time looking at contribution margin.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I actually love this pivot that we're in now from a market that was focused on growth to one that's focused on margin because I think we have made a mistake, those of us in capital provider seats over the last handful of years in focusing companies too much on revenue growth because in the process you end up building large companies that are very inefficient and it is incredibly hard to move backwards and improve margins from there. It just requires too much of a cultural shift. It requires a personnel shift. Just take a step back and think about how do we orient ourselves with these operationally intensive businesses. It is first and foremost can we prove out margins on small scale? So can we prove it out in a specific geography? Can we prove it out against one specific customer? What is that margin base look like? Because fundamentally it should only get better from there as opposed to worse. I think when we look at businesses and we say the economics don't make sense to”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“If we're focused on just sortation, if we're focused on just fulfillment, it really is that integration that allows you to rethink form factor, allows you to rethink experience that is pretty radically different. And that just requires a big capital efficiency and a big capital investment, both at the same time.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“The benefits of that vertical integration are exceptionally clear because it has allowed them to be very creative and innovative in terms of how they think about utilizing the advantage they have. We like to talk about some pretty simple advantages, but how do you rethink packaging in a way that increases density that you can get into the form factor of a van? How do you eliminate the context of needing boxes? How do you think about a returns network? I think these are all really interesting applications that continue to improve density and therefore economics of your business that require just an explicit focus on rethinking aspects of your business that's very hard to do when you're not spending your full attention focused on it. As we have been trying to think about how do we mimic some of the examples of that in the US, we have found it really hard to do if we're focused on a specific point, if we're focused on just last mile.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“The vertical integration that coupong has pulled off, I put it that way because this is not an organic build that I think could have, it of course was an organic build, but one that was pre-funded very significantly by Softbank. We had $3 billion of capital put into the ground on the thesis that it was the right thesis and it was worth making that upfront capital investment into it. I don't think you can do it successfully unless you throw all of your attention and focus as an organization against it because it is so hard to do. I think we're going to see a lot of examples of companies in the Western world where they are building fulfillment and logistic networks from the ground up but haven't figured out the efficiency required to operate them. And that is something that coupong is just exceptional at. They really drive towards efficiency first before they scale as opposed to scale and then try and figure out how to push efficiency through a big organization which is next to impossible. I think”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Where it is a long tail of assortment listed by merchants and they don't handle the fulfillment experience that is fundamentally a subpar experience to a fully owned channel like coupon has built and invested and developed in developed over a large number of years. I'm a believer that I think”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“E commerce penetration. And you have some large conglomerates and large retailers. But my experience with coupon was just this beautiful unwrapping of all of the nuances why Korea doesn't look the way Western investors expect them to look like. So the big offline retailers aren't retailers in the form of a Walmart. They're not making one peep purchasing with purchasing power and long assortment. They're more like real estate companies that are leasing space to small merchants. You have a really under-retailed economy with a very limited skew count with very high prices, which is almost just a perfect setup for e-commerce. I believe that Korea and e-commerce penetration should be higher than it will be in other parts of the world because the offline experience is not sufficient to support a competitive product. Then you turn to the online world and there are a handful of e-commerce marketplaces that look akin to an eBay in terms of the experience.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's such an interesting reflection as I look back at the course of our time with Kupong. When I got involved with Koupong, we had just sold Flipkart to Walmart. And that journey had been taken to an end much faster than I anticipated, but I learned how much I really loved that model of owning the entire customer experience in a way that previously had not been shown by competitors in market. When I spent time with coupon, they'd actually met a lot of Western investors. And I think most Western investors had passed on the opportunity with the fundamental belief that Korea just wasn't big enough. That's why you see Koupon today talking about how big Korea is because they had heard, they'd learned over and over, that's what Western investors care about. Western investors also tend to look at a pretty developed economy where you have meaningful commerce penetration.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's a really interesting analog. Now, Cameo, of course, is a one-to-one model to my understanding where they're producing content on a singular basis for a singular fan that has purchased it. The question we keep coming back to for scalability is how do you reach a broader audience than a one-to-one model or LTK? You are that influencer is speaking to their entire network of audience. I think similar but slightly different in terms of less targeted on individual basis.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“When I started my career, the media outlets in America were pretty consolidated. It was your traditional offline TV terrestrial radio. You had big consolidated reach that maybe as myopically as could get down to a city level through some sort of regional network. With these new networks allow us for you to actually quantify and qualify what you're looking for in the influencer you work with. These networks allow you to come to LTK and say, I'm looking for a voice from the south, someone in this age set of parameters, someone of this demographic, looking for that individual who really resonate to a specific audience base. They will then work with those influencers to get their product in front of that influencer's own owned base of consumers. And so those own bases of consumers, of course, come through big social platforms, but also reside on the LTK app as well.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“That allows them to build their own small businesses become economically viable on their own, but to also be a distribution partner to retailers in a way that provides advertising budget as well to work with. It's through matching both sides that we found an economic model that we're very excited about.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Scaled business models because there are structural reasons why I think it is a little bit less relevant in the US, where we ultimately got very excited was finding a large-scale platform that not only provides the economic wherewithal for creators to build a real business out of utilizing their voice, but also is a very significant partner to some of the biggest retailers in the country. We invested in a company called LTK, or like to know it, which is very under the radar Texas-based company, founded by a creator herself and her husband, then they have become some of the biggest distribution partners to retailers like Nordstrom's big partners to Walmart, big partners to big retailers who are fundamentally thinking about how do we in a more authentic, trusted way, reach a new consumer base. I actually think it's been the pairing of both those models, the model that you mentioned at the beginning, which is how do you take a small cut, very small cut, almost the infrastructure layer like fintech assets have established from creative.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's another great example of something in which we are very much trailing the east. There are large companies in China in particular, in Southeast Asia that have really been set up to accommodate providing customers with the trust that they need in brands. And so just taking a big step back, we in the United States have brands that we trust. You trust the retailer that you shop from because you know returns will be processed. You trust the brand that you purchase from because you know the quality of goods will be high. There are celebrities and trusted individuals in America that can stand up and speak to product quality and have for a long time. What we saw developing across Asia, which was a very different model, was this long tail of influencers. It was effectively taking people who were just good at sales and putting them in front of consumers with product to authentically speak about the quality of that product. So for a long time we looked for this in the United States and really struggled to find”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Established high quality retailers because we have such dominant online retail platforms in the US, we haven't really seen as much innovation trying to figure out how do we actually get that next layer of providers in front of customers. We spent a fair amount of time thinking about how do we support innovation, whether that is through helping bring next gen best breed tools to e-commerce companies to reach customers. So companies like Fabric or Firework, as I mentioned earlier. And we spent a fair amount of time thinking about healthcare. And I think that that's a complicated one for me. My parents are actually in the medical field and I grew up believing health care was really complicated and ugly. The incentive systems aren't logical in any rational way. There's not only regulation, of course, but there are payer provider dynamics that are just messy and hard to find our way around.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Just flip back to 2021 because I wasn't that long ago. We spent a lot of time thinking about the least penetrated categories of commerce. And I think this wasn't terribly different from a bunch of the crossover investors who have historically looked at the world in a much more top-down macro oriented way. We really looked at food and said we feel like this is an area that has meaningfully taken off in other parts of the world where the economics of the businesses have been proven in other parts of the world where we have figured out hybrid, if not fully digital approaches to food in the US, we've really only done that in the construct of prepared food delivery, i.e. door dash or Uber eats. So we spent a lot of time in 2021 trying to think about how will food consumption and purchasing change in the new forward 10-year economy. We spent a fair amount of time trying to think about e-commerce enablement. I think because we have such strong”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll never forget actually heading to Indonesia in 2015 and I was working with a colleague at Softbank who had a product background and he looked at the apps, this Indonesian e-commerce company was operating and he said, man, like that's a mess. Look how messy it is. So distracting, so cluttered. And he's right from an American perspective. I think we have really veered to a very clean UI in terms of what we build in the US. You've seen the exact opposite in China, in Indonesia, India. You've seen countries really establish a consumer preference in a single landing page that offers them all of the consumer services that we might in the US fill our homepage with. So I do think there's a very different aesthetic that was way too easy for us to suggest was the right way, maybe right for our culture, not right for other cultures, but I think it's a really stark example of just how different these countries are in terms of”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“Velocity of build is over in China. I think obviously the last year has been very complex and hairy and has caused a lot of investors to rethink their thesis there. But I do think it is a really beautiful testing ground for really turning everything you know upside down.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“It would be hard to argue any place other than China to have your socks blown off. I'm constantly thinking about what a gift it was to join this wild organization in 2015-2016 time period when the US investor base was really myopically focused on Silicon Valley. That wasn't that long ago. And yet it was pretty strange to be spending time internationally. I think the thing that knocked my socks off was just the scale and velocity of company build that happened in China. When I joined in 2015, we really didn't have a China strategy. We believed that we would accrue the value of China through our position in Alibaba. We thought between Alibaba and Baidu Tensat, that would be most of the Chinese technology market. And man were we wrong. And so it has been really fun to just watch the scale of innovation on a consumer side stand up. There are so many examples of how different the scale of ambition and the”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've been thinking a lot about Softbank and the founders that we tend to back. I have a pretty myopic view. I do our consumer e-commerce investments as opposed to across biotech and enterprise and other categories. But in my world, we certainly do have a bent to a founder that more often than not is an immigrant does have a wider worldview, perhaps has actually come from China or India and has a more natural tendency to look outward and look at innovation. If you look at the list of companies that we've backed over the last couple years, it has been a really international cohort of people who are very curious about different trends around the world and trying to think about how to model them to our home country here in the US.”
2022-06-21 · Invest Like the Best · Lydia Jett - Investing in E-commerce - [Invest Like the Best, EP.282] · IDENTIFIED FROM THE TRANSCRIPT · source