3 Things: Theme Parties-as-a-Service, b8ta for DTC Mattresses, Unbundling GLG
Happy Sunday and welcome to all the new subscribers! I’m thrilled and honored to have you as readers and truly appreciate your thoughts and feedback 🙏. Each edition of 3 Things will contain a dive into 3 rabbit holes I’ve found myself going down recently. Subscribe to get each week’s edition straight to your inbox and if you enjoy it, please share (I suck at self-promotions so can use your help)! This past week I’ve been thinking a lot about:
Theme Parties-as-a-Service
b8ta for DTC Mattresses
Unbundling GLG
1. Theme Parties-as-a-Service
When I was in college, nearly every party was themed. Whether it was Graffiti, Toga, Pajama, 80s, Masquerade, Foam, Derby Days, Seven Deadly Sins, or my personal favorite… Exotic Erotic, parties that forced people to come in costume and assume an alter ego were way more fun and engaging and let people truly get out of their daily grind and let loose. After college, young adults are constantly looking for fun things to do on the weekends since the manufactured social engagements and parties of school days are not as readily available. More recently, there has been a big trend towards experiential entertainment with concepts like combining a bar + bowling, arcade + DJ + bar, painting + wine, and many other options that typically incorporate alcohol, an activity, and sometimes music. People are willing to both pay a pretty penny for these types of events, and also to pay and schedule these activities in advance as they typically sell out quickly and have limited capacity.
We’ve all been isolated and socially starved for nearly a year and a half and everyone is predicting that this year will start the “Roaring ‘20s” of the 21st century. Additionally, so many businesses have shut down leaving a glut of vacant commercial and retail space in cities across the country. A company can go from city to city creating experiential theme parties and selling pricey tickets to a young adult audience. Rent out venues, warehouses, large bar/restaurant spaces (or you could even set up massive tents in parking lots like Cirque du Soleil), go to town decking it out with theme appropriate decorations, hire a cool band/DJ, bring in bartenders and mixologists, and throw a party to remember. Sell tickets well in advance and create scarcity by staying in each city for a limited amount of time (say a month), hosting parties each Thursday, Friday, and Saturday night before moving on to the next city. Create multiple Instagram-worthy spots for people to take pictures that will get posted to social media, creating even more buzz and hype around the events. This model is highly scalable both in cities as you rotate themes but have a playbook for venues, vendors, permits, etc, and across cities when you create the model for a specific theme.
2. b8ta for DTC Mattresses
Around the holidays during 2015, I remember walking to my office in downtown Palo Alto and seeing a bunch of onlookers eying a new futuristic-looking store that was opening their doors for business. The store was b8ta and the best way I describe it to people is the modern Sharper Image (one of my absolute favorite stores growing up). They offer a retail-as-a-service experience for cutting edge hardware brands that you’ve probably never heard of such as Emmesphere which makes bluetooth necklace headphones, LuDela which makes a remote controlled real-flame candle, or Willo which sells a tooth-brushing robot for kids. The most fascinating part of b8ta to me is actually not their product mix, but their business model. They don’t make money on any sales from their stores. They get brands to pay them for in-store placement, getting in front of consumers without the overhead of setting up their own retail experiences, and for data. b8ta from the very beginning built a proprietary software platform that “uses in-store cameras, machine learning and data analytics to give brands near real-time visibility into how consumers are interacting with their products.” For most online brands, anything offline is a complete black box, but there is extremely valuable information to be collected when people get to physically interact with your products (and your competitors’ products!)
One of the newer trends in DTC big-ticket items are all the online mattress companies. Pioneered by BedInABox back in 2006 and popularized by Casper which was founded in 2014 and went public in January of 2020, there are now over 175 different online mattress vendors! Most of these mattresses cost $1000+ which is an extremely large and important purchase for most people. Given how personal mattress preferences are, it’s shocking that this industry could survive online only. These companies all offer anywhere from a 90 day to a 1 year trial period where you can sleep on it and return it for a full refund. These mattresses can’t be reused or resold and while a portion are donated to charity, up to 40% end up in a landfill. A company could take the b8ta model and apply it to the myriad mattress-in-a-box companies as well as all of the other DTC sleep companies selling pillows, sound machines, and other sleep-related products. They’d get paid by each brand to create and manage retail experiences and provide them with consumer data. Timing is great right now as retail space is at a record low price in most cities. The company could also follow in b8ta’s footsteps and partner with big-box stores to do in-store popups or installations and bring new experiences to legacy brands.
3. Unbundling GLG
GLG, or Gerson Lehrman Group, was founded all the way back in 1998 by two Yale Law School graduates and today is the largest expert network claiming 900,000 freelance “experts” across a wide range of industries and categories. The company sells primarily to consulting companies, PE firms, hedge funds, professional services companies, VC firms, and other financial industry professionals and makes money by connecting these clients with specific experts to aid in diligence on specific transactional or strategic opportunities. As of 2019, the company was reported to do $550M in revenue so clearly this is a large and profitable industry. They have many competitors including AlphaSights, Guidepoint, and Third Bridge, plus a host of more regional players. The common thread is that all of these platforms target similar clients and are generalist expert networks aggregating freelance consultants across as many industries as possible. While that might seem like the natural way to grow, it also dilutes the quality and navigability on both the expert and client side.
While large (and medium-sized) financial and consulting institutions might cover a wide swath of industries, typically individual teams or practices focus on a specific niche, going deep to truly understand the nuances, dynamics, and changing landscapes of their target industry. Many of these spaces are highly regulated and being able to speak with someone who directly understands the regulatory environment is critical in making an investment or strategy decision. From my personal experience and from hearing similar stories from dozens of others, most of the time, these expert calls on GLG and similar platforms (which cost $400-$1000+ / hour) are mediocre at best and a complete was of an hour and money at worst. I think there is an opportunity to unbundle GLG and build best-in-class solutions for specific industries like healthcare, fintech, e-commerce, CPG, hardware, frontier tech, and emerging markets. By laser focusing on a niche, you can not only better curate the expert network and the clients, you can also tailor your offerings for the specific use cases of that industry. It creates the opportunity to not just match “experts” with information seekers but provides the ability to match advisors, board members, panel speakers, conference keynotes, webinar/roundtable guests, and much more. It also creates unique opportunities to build peer-to-peer experiences in addition to just providing the ability to monetize their time and knowledge.
That’s all for today! If you have thoughts, comments, or want to get in touch, reply to this email or find me on Twitter at @ezelby and if you enjoyed this, please subscribe and share with a friend or two!
~ Elaine