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Alexej Pikovsky
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Alexej Pikovsky
@AlexejPikovsky
Investor & Operator in Health & Wellness - CEO of Alphawell Group (NUOPTIMA, 96NORTH)
NY/ London/ Lisbon Katılım Temmuz 2015
661 Takip Edilen8.3K Takipçiler

Its been 2 years since we raised 244% of our target on Seedrs
Total round £2.4m, 650 investors
I had enough time to understand what the negatives and what the positives of crowdfunding are. I summarised it below!
youtu.be/BHQhd6YLqiU

YouTube
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1 year ago, I wouldn't have posted on YouTube
Now I have
Check this
youtube.com/watch?v=j-LTGS…

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Thrasio (we sold a brand to them in 2020) is going bankrupt after raising $3.4 billion and ALMOST making it to IPO 😵
several people asked me, "will there be good opportunities to try to buy their assets?"
here's why the answer is no, and 3 factors that killed their business.
from 2019 to 2021, Thrasio was hoovering up any Amazon-centric ecommerce brand that hit the market. they raised billions of dollars to do so... and they weren't paid to sit on that money. so they did a ton of deals.
the brands they were buying had short histories, and huge Amazon platform risk. an algorithm change, poorly timed stock-out, or review sweep could tank their portfolio overnight.
it's similar to mortgage backed securities in 2007; buying 150 Amazon-heavy brands doesn't really give you diversification, it just handcuffs you to the Amazon ecosystem.
Thrasio's team were experts at finance and doing deals. in our experience, they were an awesome acquirer and great to do business with. but i think they were pretty naive when it came to e-commerce operations.
the brands they bought were not scams or anything, but their extreme Amazon dependence basically had Thrasio walking a tight rope where any operational error could push them off a cliff that would be very hard to climb back up.
running out of stock is one key example. selling on Amazon is all about momentum. as your product sells more, Amazon ranks it higher, then it gets more reviews, so it converts better, so it sells even more... it's a flywheel that is awesome on the way up.
but if you interrupt the flywheel with poor inventory forecasting and are out of stock for 60 days, it can be incredibly difficult to revive a listing.
we've experienced this a few times where we had a product that was going absolutely gangbusters (and inevitably ran out of stock), we placed a huge reorder, but then we were never able to regain traction and had to write off a bunch of dead inventory.
between operational missteps and who-knows-what that's going to happen in the bankruptcy process, i think most of the brands Thrasio owns will end up worthless.
it's a lot easier than you might think to send an Amazon-heavy brand's value straight to $0 through operational error or plain bad luck. the brands Thrasio owned have mostly binary outcomes where they are either doing well or are completely worthless (as opposed to say slowly bleeding down 15% year-over-year).
here are the 3 main factors that i think did Thrasio in:
1. overpaying: Thrasio raised an incredible amount of money and spawned tons of copycats. the market for e-com businesses got so frothy as all of these aggregators bid on every listing as soon as hit the market.
they also generally did not get super high quality assets for the prices they paid. at one point they were public with their portfolio of brands, and it looked pretty questionable. they suffered from adverse selection where anyone with a 'meh' brand was for SURE going to try to sell it in 2020... but a lot of the real gems just stayed pat and cashflowed.
2. shaky operations leading to underperformance: Thrasio drastically underestimated the complexity of running 150 e-commerce brands. they mostly pushed the founders/owners of brands they bought to the side after closing, which didn't help either. again they just didn't have much margin for error here; 20% worse execution than the previous owner could easily lead to a 100% destruction of value.
3. variable rate debt: combine overpaying with underperformance... now sprinkle on a bunch of debt, and drastically increase the interest rates on it. revenue is decreasing as fast as debt servicing costs are increasing, and at some point the debt just becomes impossible to get out from under. Thrasio came soooo close to making it to IPO, but the macro climate turned against them just in time to sink their plans.
in 2021, everyone and their mom was trying to launch a new Amazon aggregator. this phenomenon was one of the most interesting parts of this cycle, and with Thrasio going under it's coming to a close.

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When you go to SXSW looking to party, have fun and relax
… but @andruyeung places you on a growth panel during your first day there to talk about @getsaturdayapp.

Austin, TX 🇺🇸 English
Alexej Pikovsky retweetledi

2023 New Year Resolutions for Ecom Brands.
#1 - Start SEO.
That's it.
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If you’re an ecom brand setting big goals for 2023 . .
SEO is probably #1 thing you can invest in.
Warm, inbound traffic directly to your product pages with $0 on ads.
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