What capital can’t do

In July of 2018, Brandless raised $240M from Softbank’s Vision Fund. The funding event would have caused a stir in the Listen office given our questions on their anti-branding approach.

But for us it was a particularly startling announcement, as just a week earlier we had invested in Public Goods — a high quality essentials brand that exists for the benefit and well-being of the public. A company that many viewed as a competitor to Brandless. Our round was $3M. Only 83x less than Brandless’s new money.

A few weeks later, an investor we revere named Bill Gurley was quoted as saying:

“If your competitor is going to raise $150 million and you want to be conservative and only raise $20 million, you’re going to get run over.”

By Bill’s definition, Public Goods — and by proxy our capital — was about to get run over. Fast forward 2 years, and Brandless is bankrupt and Public Goods is thriving.

Why?

The past decade of combining software and capital has compressed the time between company ideation to scale. Faster product development, assembling expansive teams more quickly, and larger media buys all accelerate a company’s path to market.

Attempting to do that in months instead of years results in a lack of cohesion so grave that each incremental employee is untethered from the north star of the company. And that disconnect quickly manifests in product or marketing affecting the consistency of the consumer experience.

Separately, early stage startups need to learn how to fight. In fact, it’s the learnings from the missteps and misfires that strengthen the muscle memory of an early stage company. An abundance of capital often covers up these miscues, thereby limiting the reps a company needs to prepare to run through the inevitable next brick wall. Or worse, it leads to bad behavior. As our partner Brentos said about Brandless vs. Public Goods:

Similarly, building a company can’t be fully subsidized by capital, it needs to be rooted in purpose and cultivated by people over time.

By that lens, Morgan and Michael from Public Goods are the right founders to build a brand and company that matters. They are patient and ambitious, and have prioritized brand and company building. Grateful for their leadership.