1Mby1M Virtual Accelerator Investor Forum: With Gus Tai of Trinity Ventures (Part 3)

Sramana Mitra: The whole experience of curated personal shopping is just barely starting to come into the fore. The computer science required to power that is going to deliver a very different kind of experience once that starts to come into existence. As Gus said, is it a large enough segment? Fashion is a gigantic segment. It’s one sector where I believe there’re going to be more venture-funded companies. Any thoughts on that?

Gus Tai: I do believe the concept behind Uuma would work today. When you’re thinking about starting a consumer-oriented company, it’s very important to understand how that company will be strongly differentiated from the other alternatives that customers will have.

One way to have that is to make it authentic to you and make sure that it’s a large enough market. In e-commerce, the incumbents are Walmart and Amazon. Mostly, Amazon. Rightly so, they’re a wonderfully run organization. If you think about your company in how it’s different from Amazon, it has a higher likelihood of establishing a strong relationship with customers. Uuma would work. Fashion is large. You’re seeing a strong trend towards personalization and consumers liking personalization.

One tip I would give is retention economics, particularly when your solution has a mobile component to it, are very strong. If you read the financial reports of some of the more recent e-commerce companies, they talk about how they were able to retain their customers for a longer period of time. There’s a case in point of Nordstrom recently buying a company called Trunk Club. Trunk Club provided personalized service for men for clothes shopping.

Going back to your original question, I think that there’s going to be an explosion of very successful companies that will hit targeted needs of end user.

Sramana Mitra: What about other sectors? I know you’ve been a successful gaming investor. Also, other segments where you have well-formed investment thesis. Can you share where do you see venture-scale companies developing in the next batch?

Gus Tai: The opportunity for venture-backed consumer companies will relate to mobile-oriented companies. Any time there’s a new channel for customer engagement, customer delight, and customer satisfaction, new companies will sprout out that will move more quickly than the incumbents. Smartphones, in particular, are fascinating on a number of dimensions. I think 1.2 billion smartphones were sold last year internationally compared to the number of desktops.

The amount of time that you could spend with an end user on a smartphone compared to a PC is dramatically larger. It’s always available. What’s under-appreciated about the phone is that the phone is also a communication device through phone calls, texting, chatting, and email. The next-generation e-commerce companies will be mobile first and will focus on engaging with your end user through multi-channel, specifically on phones.

We published a paper that was republished in TechCrunch. We talked about the mobile mCommerce climate. There are three broad segments. There are existing businesses that could be made better by having mobile engagement. If Walmart has a mobile application for shopping, that’s called mobile enhancement. Traditional commerce companies can grow by enhancing on mobile. Mobile enablement is a new trend that would be very difficult to do without smartphones.

One major category of mobile enablement is on-demand services like an Uber where having a smartphone allows better logistics and coordination and suppliers. Another element of mobile enablement would be apps on the phone. Games would be one category.

Another category that we are spending a lot of time on are services that help improve health and wellness. Rather than call the category behavioral modification, you could use the phone to reinforce behaviors. We have habits that are heathy for us. There are habits that pull us to do things that aren’t as healthy or aren’t as aligned to our wellness. A phone could have an app with other services around it that could intercept and catch you when you’re doing behaviors that are good for you.

Then there’s another bucket to finish our taxonomy. These are the infrastructural solutions that help these mobile businesses work. The obvious ones would be related to payments like Stripe. I’m more interested in mobile apps around health.

Sramana Mitra: Just to highlight what you just talked about, there is a very serious issue around loneliness in western societies. If you look at Asian or Italian society, there is a lot more community around a human being. If you’re looking at a western society, these are more individualistic societies. Loneliness is a very big problem.

There are opportunities to think about loneliness and associated issues whether it’s depression and all kinds of challenges that people are facing in their lives due to that particular setup of society that could be addressed with this device that’s constantly with you. That’s some food for thought.

It was a pleasure taking to you.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Gus Tai of Trinity Ventures
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