I'm the Co-founder and CEO of The Grommet. We launch undiscovered consumer products. It's also the birthplace of Citizen Commerce. I write about design, cultural anthropology, and start-ups, mostly.

VC’s should eat their young (before they are born)

My youngest son recently told me that lions and rats sometimes eat their young if their eco-system is strained for  food and other resources.  In so doing, the lion and rat parents actually protect the greater good of the lion pride.  (Or rat pack.)

I’m watching VC’s do the opposite:  they are knocking each other over to fund every possible iteration of the daily deal space.  Groupon spawns Living Social spawns Buy With Me (and over 50 others, at last count).  Vent Privee spawns Gilt Groupe spawns Rue La La spawns Haute Look spawns Ideeli.   I know this is typical behavior, for which VC’s are routinely ridiculed.  But in a space that has the double whammy of being both inventory and consumer-mindset constrained, this ecosytem is really going to be the equivalent of an overpopulated rat pack.

If I were a VC (and I’m sure I would be a terrible one), I would look at the basic drivers behind the rocketship success of the first entrants in this space, and fund THOSE advances.  Not little tweaks–but the big differentiated innovations that play on similar technology and consumer behavior drivers.  This really seems so simple to me.  What am I missing?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Basic HTML is allowed. Your email address will not be published.

Subscribe to this comment feed via RSS

%d bloggers like this: