D2C vs. Tech founders - who does what better?

Mahalakshmi Reddy

Jan. 4, 2023, 11:04 a.m.

D2C vs. Tech founders - who does what better?

Most people (who are not consumer brand founders or marketers) would not notice a subtle but extremely important detail in Papa Johns Pizza’s latest rebranding exercise - the absence of the apostrophe. It wasn’t a random design choice. It was meant to get rid of the possessive form and distance the brand from its founder John Schnatter, who was accused of using a racial slur. Such stories are quite common in the consumer world, where even little details play a large role in the consumer’s buying decisions.

Now compare this to the famous stories in the tech space, like Whatsapp’s legendary account of scaling to one billion users with just 100 employees! Or Airbnb’s inspiring story and how it went from renting out air mattresses to pay the bills to building a ~$60 billion company.

Take it from someone who has worked in both these spaces- these aren’t one off instances but show how D2C founders and tech founders think differently, and can therefore really benefit from learning from each other.

Things tech founders could learn from D2C founders:

1 Branding: All successful D2C founders are brand-obsessed from day 0. In some cases the brand positioning and persona is ready even before the product samples are. Consumers today don’t want to buy things, they want to buy stories, experiences and/or causes. While most consumer startups (tech or non-tech) do this to some extent, the hyper-focus on branding stands out in new-age D2C founders. Everything that the startup does, from social media posts and captions to the curvature on the font used in the logo, is designed around the brand persona. I’ve been a part of hour long discussions about the shape of the CAP of the bottle and how this might affect the customer experience of the brand. This obsession with tiny details is what leads to a pleasant consumer experience at every touch-point.

2 Unit Economics:There’s a lot of focus around unit economics in the tech space after the economic downturn. But in D2C, it’s a question we have always asked founders on the first call itself, and almost all founders have an unambiguous, accurate answer. Sure, calculating the unit economics of a physical product is much easier than it is for tech, but being extremely vigilant about this from the get go is an admirable skill.

Things D2C founders could learn from tech founders:

1 Dreaming big, like extremely big: Almost every tech founder I met in my short career-span, really, genuinely wants to change the world. They’re always looking at the bigger picture, both qualitatively by enabling a real impact on lives, and quantitatively, in terms of scale. This passion and determination to disrupt their respective spaces is extremely infectious, both for the team and the investors. After my first few weeks at Prime, surrounded by big dreams and bigger innovations, I was reminded of why I love being in VC so much.

2 Data- driven and data obsessed: I remember seeing an extremely extensive, detailed excel sheet shared by a young, first-time tech founder. I was super impressed and shared this with my colleague, and he told me that this is normal, even expected. And he was right! Over the next few weeks I saw how diligently each founder tracks their metrics: excel sheets with 30 tabs, dashboards with crisp graphs, and even meeting notes and action items carefully articulated. I thought there can’t be too many numbers to obsess over at a seed or pre-seed stage, but boy was I wrong! Data- driven decisions can be and should be made at every turn and at all stages!

There are reasons why founders are good at these specific things. The business demands what it demands, and founders need to adapt. But the four qualities we discussed above are essentially the ingredients any business, in any sector and at any stage, needs to succeed. The proportions required might vary, but as someone who has interacted with hundreds of founders, I feel like D2C founders often ignore the skills that are deemed non-negotiable for their tech counterparts, and vice versa. The culmination of tech and D2C is happening as we speak, which I’m hoping means the two ecosystems don’t operate in silos anymore. There are startups that have all these skills solidly covered amongst all the founders even today, but I’m excited to see this become a norm, not an anomaly.

I’d love to know, do you know of any startups that have founders that do all of these things really well?

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