EPISODE SUMMARY

Brian Sugar is the Founder and General Partner of Sugar Capital, a venture capital firm investing in the future of commerce. Previously, he co-founded POPSUGAR, where he serves as CEO & board member. He is also a Co-Founder and Chairman at Novel.

EPISODE NOTES

On this episode of DTC Pod, Brian joins Blaine & Ramon to talk about his career in digital commerce, media, and venture capital which has spanned 4 decades. Brian is a seasoned operator and investor, having led investments in companies including Everlane, Snif, Feastables, Caraway, Afterpay, Archive, Disco, & Tydo to name a few. This episode covers topics including the overlap of web3 and commerce, what makes businesses attractive to invest in, the evolution of digital media, learnings from the best brands, what the future of commerce looks like, and how brands can think about evolving loyalty and retention frameworks, social commerce, and more.

EPISODE HIGHLIGHTS

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12:30: Web1, Web2, Web3 😉

So as many people have spoken about, Web1 was about read only, WEB2 two was about read-write where you can post on social networks, and WEB3 is all about ownership. And to me, ownership from a brand really is about super fans and loyalty, right? Like what can you do with your super fans?

13:40: Where Brands Should Focus in 2022

Brands can't acquire customers efficiently through the paid channels like they used to in the past. Brands need to focus on increasing conversion rate, increasing average order, lowering abandonment, dealing with the traffic that they have now, like 97% of the people that come to your site, don't buy. There's like plenty of opportunities to do things there and I think Novel gives the tools to the brands to help enhance that.

32:17: The Real Reason Social-Commerce Hasn't Taken Off

I don't think shopping is social by human nature. Like I think people pride themselves on them finding and discovering things at good prices at great brands. Like they want to be the person that is wearing it out there first, and then their friends ask them. It's not like you want to go shopping with your friend, and like find the same thing.. and then what are you going to do? Both wear the same dress? I just think inherently shopping, maybe isn't social.

35:17: THIS is how much to spend on Marketing

So one question we ask is how much money, or what percentage of revenue do you spend on paid marketing? And if that number's like 20 or 25% or greater, it's just not for us. We want a scaled DTC brand to be 12% or less. Okay. If you're spending more than on paid marketing, you have a drug habit, you are addicted to the high of spending money to make money. And it just won't last because your tolerance will just increase and you'll never be able to go to rehab and get off that drug. So spend the money on content creators and content studios, and build like own the house that your audience is  in, don't rent the house.

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