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Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

news.ycombinator.com

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Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#61

Post by skeeter2020 »

admn2 wrote: post #14
55555 wrote: post #10

What's the actual business model here? Y Combinator shouldn't be backing a tiny PE fund, so this can't be that. What's the angle? There must be some financial engineering in the buyout or some unique plan for post-sale.

Not saying you're wrong, but where do you see that they are backed by YC? This reminds me of Thrasio and all the similar companies that have had success with buying Amazon businesses. I assume they have quantities of scale with in-house devs, operators, etc., which gives them a built in advantage. Edit: nevermind, I see now that they are in fact YC-backed. Don't think I've ever seen YC back another "fund"

This shouldn't be surprising; YC is no longer a tight group of like-minded nerds sitting around a table, despite what image they still try to market. It is a giant machine that is growing in both scale and breadth. Where the signaling value used to be very valuable to a particular segment of the population, it's now the same as getting an investment from a prominent traditional VC. Still has value but in a much more general sense.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#62

Post by cjisakow »

AllanFischMB wrote: post #59
jsonne wrote: post #46

Most of the bigger and better DTC marketing agencies I know are making the same move as your concept. Buying or starting internal brands as they can scale them better and more effectively than their clients can. Why are you different / better?

What makes us different than DTC marketing agencies starting or buying brands is that we are looking to grow our portfolio of companies not just through growth marketing strategies, but by providing a better customer experience overall. We're also looking to create a founder-friendly company; one that simplifies the acquisition process, is transparent about how we value companies, and that offers founders a seat at t…

I'd also add that its hard to run an e-commerce business, you need to source products, manage supply chains, manage teams etc... We know this is going to be hard and went in eyes wide open this is not just about marketing or just about financial engineering. And we have experience running operationally intensive companies that utilize and develop technology.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#63

Post by skeeter2020 »

bsid wrote: post #58

Just want to preface by saying - this is not a comment on you but rather YC. You're trying to improve the VC process for consumer brands, and I'll take you at your word for that. I'm surpised, and a bit saddened, to see YC investing in a PE rollup kind of play. I’m probably reading too much into it, and maybe I had a misconception about YC was supposed to be, but to me, the brand was about innovation and scrappiness.…

Everything you state describes YC a decade ago, or even more recently but none of their current actions beyond empty words have demonstrated this sort of focus or commitment. I don't doubt that all the partners are genuine, honest and ambitious, but it's hard to see from inside the machine. YC is moving up market.

The good news is it's never been easier to bootstrap the phase YC traditionally got you through, and there are a lot more resources and higher level of sophistication from other providers. This is thanks to YC in a large part, but their role and focus has changed.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#64

Post by cjisakow »

skeeter2020 wrote: post #60
55555 wrote: post #10

What's the actual business model here? Y Combinator shouldn't be backing a tiny PE fund, so this can't be that. What's the angle? There must be some financial engineering in the buyout or some unique plan for post-sale.

"Selling your eCommerce business is broken. We're disrupting this space with AI-informed ML that doesn't suck. We're building Uber for SaaS companies, where we're Uber and the owners are drivers." There, now it's YC compatible.

Not sure i ever want to be the uber of anything, but you are spot on that there is a ton of data, that we can use machine learning to both better identify acquisitions and grow brands. And yes for many founders the process is broken

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#67

Post by cjisakow »

snug wrote: post #65

Do you have any success stories? I see nothing on the site Also your blog points to a couple of generic blog post.

We've been hyper focused on executing on finding great companies and now operating and growing them with the entrepreneurs, so embarrassingly haven't posted any content yet. BUT we just brought on an awesome content marketer and will begin telling our story. magnetoboards.com was among our first acquisitions if you are looking for a longboard!

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#68

Post by indominus123 »

How does Moonshot quickly and effectively perform due diligence on prospective acquisitions? Have you built any in house tools for such purposes?

I ask because a good friends of mine who works in private equity was telling me about how ridiculous and inefficient he though the process was. Apparently it's a drawn out process of emailing Excel spreadsheets back and forth.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#69

Post by jxramos »

cjisakow wrote: post #13
MattGaiser wrote: post #2

Is your goal to essentially become a conglomerate of niche e-commerce firms or do you eventually intend to resell the companies you acquire to others?

We plan to be long term holders, eventually taking the company public. We look at Constellation Software up in Canada (where Allan is based) as a great model. The entrepreneurs often stay with the company since they know the customer and product better than anyone. Then with shared resources, best practices, and talking to their peers they can grow their business.

sort of reminds me of physicians or lawyers sharing a practice than going at it alone.

Re: Launch HN: Moonshot Brands (YC W21) – We buy and grow e-commerce companies

#70

Post by callmeed »

55555 wrote: post #10

What's the actual business model here? Y Combinator shouldn't be backing a tiny PE fund, so this can't be that. What's the angle? There must be some financial engineering in the buyout or some unique plan for post-sale.

First, they have "Private Equity" job openings, so that's definitely part of it.

More specifically it will be about scaling the brands they buy and cross-selling when possible. A lot of e-commerce brands/founders hit a ceiling around $1-5M in revenue. At that point, you need more experienced operators to get to $10M or $100M. People who know how to optimize marketing, conversions, fulfillment, and who can move into new channels (eg get on shelves at Target or Costco). A lot of online store founders don't want to deal with that.

Once they hit a certain number of brands under their umbrella, there will be cross-selling/marketing opportunities (assuming they're not just buying Amazon FBA drop ship brands). They can combine email lists and will eventually have good data to power product recommendations.

I'm guessing here, but the long-term play is eventually put all brands under a single online store–in other words, a new amazon.

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