Shownotes
In this debut episode of Omni Talk Retail's new podcast series, highlighting investor perspectives on retail and consumer trends, Chris and Anne interview Karl Bracken, Founder and CEO of Ocampo Capital.
Karl shares insights into the venture capital landscape for retail and consumer goods startups, touching on leadership, differentiated IP, and the importance of omnichannel strategies. He also highlights key challenges in today’s market, including the over-reliance on AI trends.
Key moments include:
2:22 Karl’s career background and shift to VC
10:50 Lessons from DTC and Amazon aggregators
16:32 Raising funds in today’s environment
27:59 Emerging trends: AI and upcycled products
35:45 Investing Words of Wisdom
#venturecapital #retailinvestors #consumergoods #startupadvice #entrepreneurship
Music by hooksounds.com
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Transcripts
This podcast is brought to you by the Omitalk Retail Podcast Network, ranked in the top 10% of all podcasts globally and currently ranked in the top 100 of all business podcasts on Apple Podcasts.
Chris Walton:The Omnitalk Retail Podcast Network is the network that we hope makes you feel a little smarter, but most importantly, a little happier each week, too.
Chris Walton:And today's podcast is just one of the many great podcasts you can find from us here at Omnitalk Retail alongside our retail daily minute, which brings you a curated selection of the most important retail headlines every morning, and our signature podcast, the retail fast five, that breaks down each week.
Chris Walton:The top five headlines making waves in the world of omnichannel retailing that comes your way every Wednesday afternoon.
Chris Walton:Hello, everyone.
Chris Walton:I'm one of your co hosts for today's interview, Chris Walton.
Ann Mazinga:And I'm Ann Mazinga.
Chris Walton:And today we are bringing you something new.
Chris Walton:We are debuting what we hope will be a new regular series featuring investor perspectives on the retail and consumer goods industries.
Chris Walton:And joining us for our inaugural episode is Carl Bracken, the CEO and founder of Ocampo Capital.
Chris Walton:Carl, thank you for joining us, and welcome to Omnitalk on what is a maiden voyage.
Carl Bracken:Yeah, thank you guys so much for having me.
Carl Bracken:It's.
Carl Bracken:I feel so honored to be part of this, and it's amazing what you guys have built.
Carl Bracken:So thanks for having me.
Chris Walton:Thank you, man.
Chris Walton:Yeah, Carl and I.
Chris Walton:Carl, we go.
Chris Walton:We go way back, you know?
Chris Walton:We do.
Chris Walton:We cut our teeth at Target right around the same time.
Chris Walton: Started like,: Chris Walton: You started: Chris Walton:2004.
Chris Walton:2000.
Chris Walton: And I was: Carl Bracken: ah, I started as an intern in: Carl Bracken:Yeah.
Carl Bracken:Yeah.
Ann Mazinga:My gosh.
Carl Bracken:Yeah.
Carl Bracken:Yeah.
Carl Bracken:It was a long time ago.
Ann Mazinga:Your OG, bullseye people.
Ann Mazinga:That's for sure.
Ann Mazinga:Don't even go there, Chris.
Ann Mazinga:It doesn't help the situation.
Ann Mazinga:You just gotta.
Ann Mazinga: It was: Ann Mazinga:Don't do the math right.
Chris Walton:Do the math at home.
Ann Mazinga:Well, Carl, I mentioned this as we were just getting ready for the show, but we're really thrilled to have you on board as part of the Omni talk retail family.
Ann Mazinga:And I'd love for you to just kind of start by giving the audience a little bit of background on you and what Ocampo Capital sponsored specializes in, especially from a vc standpoint.
Carl Bracken:Yeah.
Carl Bracken:Yeah, for sure.
Carl Bracken:So I started my career, actually in finance at JPMorgan.
Carl Bracken:Worked in the venture capital group in San Francisco during the.com bubble, which was crazy.
Carl Bracken:It was great until it wasn't.
Carl Bracken:And I think one of the things I really learned from that was I needed operational experience.
Carl Bracken:I was in there advising companies, tech companies on the products that I had no idea what I was talking about, and kind of realized that if I was going to be a good investor, I needed to have operational experience and get some skill.
Carl Bracken:So.
Carl Bracken:So that's what made me go back to business school and what led me to target.
Carl Bracken: ame to target as an intern in: Carl Bracken:I was actually the first merch MBA intern they ever had.
Carl Bracken:So were you really?
Carl Bracken:I was, yeah.
Carl Bracken:So it was.
Carl Bracken:It was.
Carl Bracken:It was kind of a guinea pig experience, but, uh, but it was awesome.
Carl Bracken:Um, and lo and behold, you know, 15 years later, I was still there, and I loved my experience at target.
Carl Bracken:It gave me the opportunity kind of learn how to lead teams, how to manage large p and ls, how to develop big strategies, and then become an operational expert in a lot of different areas.
Carl Bracken:So, yeah, so my experience, as you guys know, was in merchandising and then inventory management and then supply chain and paying benefits.
Carl Bracken:I have to tell you guys, last night, as I was preparing for this, I was watching the news and what comes on the long Sherman strike on tv, and I just had a total flashback and got the heebie jeebies about, like, having to lead how we got containers out of the west coast ports during the port slowdown, like, ten years ago or whenever.
Chris Walton:Right.
Chris Walton:When it was on the other side of the country, right?
Carl Bracken:Yes, yes, yes.
Carl Bracken:Other side of the country now.
Carl Bracken:Yeah.
Carl Bracken:So I would be remiss if I didn't stop, stop for a second and give a shout out to all the inventory management folks out there and supply chain people that are dealing with this right now, because it's got to be horrifying.
Carl Bracken:So, anyway, so that was my target experience.
Carl Bracken:And then after that, I went and was kind of had a brief stint as coo at a beauty brand incubator, and then I was chief merchant and chief supply chain officer at Guitar center.
Carl Bracken:And then kind of decided to kind of bring it full circle to bring my retail and consumer background kind of together with my experience prior to that in venture capital.
Carl Bracken:And so I decided to build a company that would help a bunch of young consumer brands be able to scale faster operationally and to be better funded and that kind of thing.
Carl Bracken:And so I launched Ocampo Capital, and I mainly focused on businesses kind of in the consumable space, so early stage companies and beauty, pet, food and beverage, personal care categories like that.
Carl Bracken:And my goal is to be able to help them operationally and invest and help them scale faster.
Chris Walton:Clay so, Carl, what I take away from that bio is its interesting that you started in finance, left, and then now went back into investing.
Chris Walton:And knowing you as I do, I feel like investing has always been your thing.
Chris Walton:It was always driving you.
Chris Walton:I can remember working with you and you were always talking about the share price, like, you know, of target and other companies.
Chris Walton:And so, so how, how much is this a passion for you?
Chris Walton:And what do you think led you to come back full circle to start this again?
Carl Bracken:Honestly?
Carl Bracken:Yeah, you're right.
Carl Bracken:It has always been a passion for me.
Carl Bracken:Um, and I find it really interesting.
Carl Bracken:And I actually find the intersection between, like, consumer and, like, finance super fascinating.
Carl Bracken:Like, to me, it's, it's so interesting.
Carl Bracken:Um, you know, there's so many companies out there that need help.
Carl Bracken:There's so much opportunity, consumer, such a huge space, and yet there are so there are very few, you know, investors out there that also have, like, a consumer background.
Carl Bracken:And so to me, that's, you know, I love sort of the intersection between those two different disciplines and, you know, trying to help create things new within it.
Ann Mazinga:I think that's what's so unique about you too, Carl.
Ann Mazinga:Like the fact that you just as, you know, as an investor, that you're like, I need more operator experience.
Ann Mazinga:I feel like that's a very rare thing to find because it's like you're, you know, you can only do so much looking at, you know, the same set of information that you're getting as an investment group that somebody else is getting as an investment group.
Ann Mazinga:It's really that like marriage of the art and science of both of those things.
Ann Mazinga:And having operator experience really feels like the way to kind of get that, that edge.
Carl Bracken:Well, I appreciate that.
Carl Bracken:I will say, you know, from where I was standing at the time, I felt like such a pretender that I felt like I needed it.
Carl Bracken:So it wasn't like it was this grand scheme.
Carl Bracken:It just kind of worked out that way.
Carl Bracken:But yes, you went where the water.
Chris Walton:Was flowing, huh, Carl?
Chris Walton:All right, that's great.
Chris Walton:All right, well, let's, let's get in, let's get into why you're here, which is to get your perspectives on, on, on the retail industry and the consumer and consumerism at large, too, I think so.
Chris Walton:So how would you sum up the state of the consumer and retail vc landscape right now?
Chris Walton:What are your thoughts on it from a high level?
Carl Bracken:Yeah, I hate to say it, but now is, honestly, we're coming off probably the toughest time in the past decade for companies looking to raise funds.
Carl Bracken:It's really tough.
Carl Bracken:And there's several reasons for this.
Carl Bracken:One is so many venture investors have gotten kind of enamored with artificial intelligence that they are investing in that precluding any other kind of area of investment.
Carl Bracken:That is for sure a thing.
Carl Bracken:And it is crowding out consumer investment.
Carl Bracken:Secondly, I'd say is since the IPO market has been largely closed for the past few years, venture funds that have been around for a while can't get liquidity events to be able to reinvest in other new businesses.
Carl Bracken:And they can't raise new funds because of that.
Carl Bracken:It's frozen the market for early stage investing for a lot of venture funds out there.
Carl Bracken:Then the other thing id say is when interest rates started to rise, that put a cap for sure and slowed down demand in venture investment in total.
Carl Bracken:Now let me now talk about consumer venture investment.
Carl Bracken:Its actually tougher.
Carl Bracken:And unfortunately, that was just the standard.
Carl Bracken:That was just the standard base.
Chris Walton:Casey, how were to double click even more.
Carl Bracken:Yeah, yeah.
Carl Bracken:So when you look at consumer venture capital, its even worse.
Carl Bracken:And the reason why is because a lot of venture firms got burned over the past few years investing in things like DTC, only businesses, which sounded great because the margins were great but couldn't scale.
Carl Bracken:Or secondly, like Amazon aggregators, there are a lot of Amazon aggregators out there that have gone by the wayside.
Carl Bracken:And then also even like social influencer brands, social influencer brands are really hit or miss.
Carl Bracken:And so if you pick the right one, it can be great.
Carl Bracken:But many kind of got burned on picking the wrong one.
Carl Bracken:I would say that's sort of the negative kind of case on where we currently are from an investment standpoint.
Carl Bracken:That said, venture funds that are focused on consumer and still focused on consumer, it's a really good time to be putting money to work.
Carl Bracken:There's still over 30,000 consumer companies being founded each year.
Carl Bracken:So there's tons of companies being founded.
Carl Bracken:And there's a lot of great companies out there that are having a hard time getting, getting funding.
Carl Bracken:And then putting aside all that nonsense and everything else, there are some consumer businesses out there right now that are raising funds that are going to be home run successes.
Carl Bracken:And if you look back through history, many of the biggest and best consumer brands were actually founded during major economic upheaval time.
Carl Bracken:So look at Apple, for instance.
Carl Bracken:Look at Procter and Gamble.
Carl Bracken:There's so many that fit that bill.
Carl Bracken:And I think this could be another of those times where these companies are being stressed in a tough fundraising environment, but they're going to come out way, way stronger.
Ann Mazinga:Well, Carl, yeah, I mean, you got me thinking too.
Ann Mazinga:Like while brands are having to work harder to get funding, it's not just as simple as like I got this great idea, we got this influencer on board.
Ann Mazinga:Give me the cash.
Ann Mazinga:Like how is that actually helping these companies, like, better prepare to go out and get funding in a way that maybe they weren't, you know, even five years ago?
Carl Bracken:I think they're being forced to go slow, to go fast, honestly.
Carl Bracken:And I think that's actually very, a very good thing.
Carl Bracken:It's forcing them to like make sure that they have their foundation in order before they start building the building on top of it.
Carl Bracken:And it really ensures that they have a really good thesis and a really sound business model before they go out and try to raise funding because it's just harder to get funding.
Carl Bracken:So if they are going out, they're likely going to withstand the heat a lot more than they would have otherwise.
Ann Mazinga:That makes sense.
Chris Walton:Carl, I want to ask you too.
Chris Walton:You mentioned the DTC business, the Amazon aggregators.
Chris Walton:I can remember Ann and I sitting here having discussions about like this felt, you mentioned the late nineties before the DTC rise.
Chris Walton:Felt a little bit like the late nineties to us as we were sitting here because we're like, you know, you're hearing things like, oh, there's this brand tax that we don't, you know, that the companies are having to pay and, and therefore we can figure out how to go cheaper.
Chris Walton:But yet you're forgetting all the supply chain economics to go with going DTC.
Chris Walton:So, like, is your business model really that strong?
Chris Walton:Like what are the lessons learned, you know, from, from the aggregators, from the DTC businesses, you know, over these last few years?
Chris Walton:I mean, is it as simple as just like we should just all be going slow to go fast or is there more to it?
Carl Bracken:I think there's more to it.
Carl Bracken:But I would say that, you know, a couple of things.
Carl Bracken:One is, you're right, it is so similar to e commerce.
Carl Bracken:You know, and with, with e commerce, everyone knew e commerce was going to be big and that there was a huge opportunity there.
Carl Bracken:But, you know, I think the same thing with, with DTC brands.
Carl Bracken:I think DTC brands, it's an interesting model, but the pendulum swings so slowly in retail and you're talking about such a huge industry that to think that all of a sudden overnight everyone's going to go only to e commerce and that all retailers are going to go away.
Carl Bracken:Or on the other hand, with DTC, that you're going to be able to disintermediate every retailer and everyone's going to buy product on your own website.
Carl Bracken:They are way, way overextending the slowness with which, um, that's a good point.
Carl Bracken:These transitions occur.
Carl Bracken:The other thing I would say that people don't really understand is, you know, if you have a product and it is on shelf in, in major retailers, that's a billboard.
Carl Bracken:That is a, like a credibility driver for you.
Carl Bracken:And that's a real way to like, establish yourself.
Carl Bracken:Whereas, you know, if you have a website, you've put up, you have your brand on your own website, you know, what's to drive demand?
Carl Bracken:Like, how do people know that you're good, you know, and that's, I think, what, it's all on you and then it becomes a huge marketing play.
Carl Bracken:It becomes a huge, like, what's your roas know, like, how are you, you know, trying to optimize the algorithm and that, that isn't exactly a way to build a great long standing business.
Carl Bracken:It's a good way to like maybe drive short term revenue growth.
Carl Bracken:But, you know, if you really want to drive a business, like, you got to establish a business and establish a brand and establish all these things.
Carl Bracken:And retail does help a lot with that.
Carl Bracken:So I think there's, it's multifaceted, but I think the pendulum swings slowly and, you know, to get out over your skis with any trend, there will always be kind of a retrenchment.
Ann Mazinga:Yeah.
Ann Mazinga:Carl, I'd love for you to dive a little bit deeper.
Ann Mazinga:Now that we have these consumer brands that are receiving funding that have gone slow, to go fast.
Ann Mazinga:Can you explain a little bit what they're doing right and what that process for going out and raising money looks like?
Carl Bracken:Yeah, I think the first piece, Anne, is exactly what we just talked about as far as, like, get your foundation in order, like, have your business really locked down, you know, understand who your market is, understand, you know, how you plan on growing, understand what your long term path is as a company or what you want it to be.
Carl Bracken:Knowing that things always change.
Carl Bracken:But, you know, understanding that, I think, is really key.
Carl Bracken:I think once you know that the second thing that successful companies realize is going out and fundraising takes time.
Carl Bracken:Like, money does not fall out of trees right now.
Carl Bracken:And so, you know, because of that, you know, you have to take kind of the long game in, in fundraising.
Carl Bracken:And that means you're going to be talking to a lot of venture capitalists, not all are going to say yes.
Carl Bracken:In fact, the majority will definitely say no and then also recognize that due diligence takes a lot of time.
Carl Bracken:So from putting my venture capital hat on, if Im investing in a company, I want to know everything I possibly can know about this company because Im going to be investing in it for seven to ten years.
Carl Bracken:And I would say this is one of the biggest.
Carl Bracken:Yeah, it is.
Carl Bracken:And its one of the biggest differences from when I was working as a merchant is when you're a merchant, you're like, okay, this is a great product.
Carl Bracken:It could do well in my assortment over the next six months or twelve months or 18 months.
Carl Bracken:And that's all you cared about.
Carl Bracken:You didn't think about, is this business going to be viable ten years from now?
Carl Bracken:Whereas as an investor, that is the only thing that matters.
Carl Bracken:And so you have to be able to put out this sort of near term noise of what's the next hot whatever for the next six months.
Carl Bracken:And you have to really think about what's the long term sort of prognosis and health for this business.
Carl Bracken:And so that is part of why it's such a slow process for fundraising.
Carl Bracken:But early stage consumer businesses, I think, tend to underestimate how much time it takes.
Carl Bracken:And so you got to get that down.
Carl Bracken:And then I think the other piece I would recommend to any young consumer business is make sure you know who you're taking money from and make sure that the person, venture fund or whatever that you're partnering with is someone that you really believe in and someone that can really help you.
Carl Bracken:Because most of the time they're just like, we need money.
Carl Bracken:Like, who can give us money?
Carl Bracken:And that, okay, that's great, but you know, that, that, it's like, I think there's Adam Sandler movie where he's like, you know, I love money.
Carl Bracken:You have money, you know?
Carl Bracken:Right, okay.
Chris Walton:You know, that's like prostituted themselves for money basically.
Chris Walton:Yeah, that's kind of what you're saying.
Carl Bracken:Yeah, kind of, yeah.
Carl Bracken:And it's just not, you know, not good enough.
Carl Bracken:Like you really need to have a sense for, you know, why are you raising the money?
Carl Bracken:Are you raising it from someone who's really gonna be able to help you?
Carl Bracken:And what does that look like?
Carl Bracken:And I think the third thing that companies really need to think about is they have to have answers to all the key questions with things like how much working capital do they need for the inventory they're looking to build?
Carl Bracken:Do they really know that?
Carl Bracken:How fast are they going to scale their distribution?
Carl Bracken:What is their marketing plan?
Carl Bracken:When are they going to have to expand their product line?
Carl Bracken:And how confident are they in their forecast?
Carl Bracken:That's a huge thing.
Carl Bracken:And all of that takes money.
Carl Bracken:So if you have really good forecast accuracy, you're going to need way less money, have way less money to put in inventory than if your forecast error is 75% or 100%, which, as we know from our time working in inventory management at target is quite often.
Chris Walton:Yeah, it's probably more often than not that bad.
Chris Walton:Right?
Chris Walton:Like when you're talking about early stage consumer companies, I got to think, yeah.
Carl Bracken:Oh, for sure.
Carl Bracken:Yeah.
Chris Walton:There's always something in the wind and see what.
Chris Walton:Which way the wind blows.
Carl Bracken:Yeah, yeah, exactly, exactly.
Carl Bracken:So, I mean, all those things come into play, and I think the good early stage companies are thinking through all those things.
Chris Walton:All right, Carl, so let's swing this back around to the retail side of things.
Chris Walton:So you've already established that there's less money going around.
Chris Walton:There's still a lot of good consumer startups out there.
Chris Walton:But what does it imply for retailers, on the one hand, who are dealing with the brands that are getting funded, but then vice versa for the brands that are trying to sell into those retailers?
Chris Walton:How should each side think about things as they're sitting across the negotiating table with one another?
Chris Walton:Because the incentives have to align for there to be success.
Chris Walton:Right?
Carl Bracken:You are totally right.
Carl Bracken:I mean, that's a really great question.
Carl Bracken:One of the things, one of the roles I had a target was on the negotiations team, and we used to talk all the time about empathizing with the other side.
Carl Bracken:And I think that is like, it's a skill, but it's also an art.
Carl Bracken:And it's an absolute requirement with early stage businesses if you're going to be a success as a retailer, bringing them.
Chris Walton:In, we hear all the time about every retailer is talking about trying to keep their startup brands, give them more space on the shelf.
Carl Bracken:Absolutely.
Carl Bracken:And I can understand why they're saying that that's a good thing.
Carl Bracken:But at the same time, if you're going into these negotiations and you're saying, give me 90 days dating in order for you to get on my shelf for an early stage consumer business, I mean, that could be the death knell for them.
Carl Bracken:They are running cash to cash.
Carl Bracken:Their goal is to get money back in the coffers as fast as they can so they can produce inventory.
Carl Bracken:And I actually heard about that recently from a major retailer.
Carl Bracken:There was a buyer that was demanding 90 days dating from startups that were selling into their assortment.
Carl Bracken:That is just insane to me.
Carl Bracken:So there's things like that where you really have to empathize with what are the wants and needs of the other side of the table.
Carl Bracken:And it goes both ways.
Carl Bracken:I also think retailers tend to think that if they give a startup company a full store rollout, that's a win.
Carl Bracken:Well, and I think the companies themselves probably think that's a win until they leave and two months later they realize there's no way they can produce in time for that.
Carl Bracken:And then it's a huge loss.
Carl Bracken:And so I think the companies have to be responsible enough to know what can they actually take on, how much is too much to bite off and how do they kind of dial it in so that they can be as effective as they can be to make the retailer happy and vice versa.
Carl Bracken:So I think it's really something that both the retailers and the startup companies are in the early stage.
Carl Bracken:Consumer companies have to keep front and center.
Carl Bracken:It's just know what the other side wants and needs.
Carl Bracken:And how do you find a point of commonality in between that'll be a win win.
Chris Walton:Carl, how do you recommend brands grow with large national scale retailers?
Chris Walton:Do you recommend that they take a regional approach?
Chris Walton:Approach to it?
Chris Walton:Do they have to think about where their supply network is the strongest and grow out from there?
Chris Walton:Like they open up the covers to all that?
Chris Walton:What's your take on that?
Carl Bracken:Yeah, I mean, and you guys know a lot more than I do about how it is, how it manifests itself across different retailers.
Carl Bracken:But I would, I mean, what I advise the companies I invest in is it's good to start on Amazon, it's good to start DTC.
Carl Bracken:That's a good place to like take a first step.
Carl Bracken:Then your second step should be either in a regional portion of a major retailer or a smaller independent retailer or some sort of a small chain so that you can start to get up to speed and learn about that forecast error, learn what the product market fit is, learn what the demand is for the products before you launch.
Carl Bracken:In all Walmart stores.
Carl Bracken:For instance, to go from, I know of some companies have gone from, you know, selling on Amazon $2 million a year to full Walmart sets.
Carl Bracken:That's a big stretch.
Carl Bracken:And to be able to make that jump is hard to do.
Carl Bracken:So you have to be able to insulate yourself and have enough data points so that when you do get into get that big Walmart purchase order, you're ready to rock.
Carl Bracken:And so that's really, really key.
Ann Mazinga:Carl, I'm curious how you think about some of these smaller scale rollouts.
Ann Mazinga:Like, I'm thinking of Target.
Ann Mazinga:Like, we're going to roll you out in 250 stores and then see how that goes.
Ann Mazinga:Like, have you, do you have any advice or have you seen successes or failures on either side?
Ann Mazinga:Because that's, that's kind of your one big shot.
Ann Mazinga:And if you don't pay it off in the 250 stores, there's no way you're going to go chain wide.
Ann Mazinga:What do you, what do you recommend to some of your clients or some of the early stage consumer brands that are, that are, you know, maybe going from that regional player now into a smaller subset of Target or Walmart stores?
Carl Bracken:Yeah, I think, honestly, I would say it's a blessing in disguise to a lot of these early stage consumer brands that think like, oh, we only got 250 stores.
Carl Bracken:No, no, no.
Carl Bracken:Actually 250 stores is great because you're going to either succeed in 250 stores and get rolled out to more or you're going to fail.
Carl Bracken: Well, if you were put in: Carl Bracken:You know, I, the way I kind of liken it is to baseball, which is like, you know, better to like, have your slump, your batting slump when you're playing in single a versus, like, going straight to the major leagues and under the bright lights, having a major batting slump, better to do it, you know, down in the minors, get your sea legs and then be able to move up kind of through the ranks.
Carl Bracken:I think that's actually a good thing.
Ann Mazinga:Yeah.
Chris Walton:Well, the other point I bring up, too, from the standpoint of the entrepreneur, having an, and I live, live the entrepreneurial life now for eight years, is there's a whole lot of collateral damage that comes, you know, at you from a family standpoint, a personal standpoint, if you take on too big of a challenge too quickly as well.
Chris Walton:So that's something to also point out.
Carl Bracken:Amen.
Carl Bracken:Yeah, that's, that's not in the financials, but that's, that's totally true.
Carl Bracken:Right?
Chris Walton:Yeah.
Chris Walton:It's a good thing to keep in mind, though, if you're, if you got your eye on that brass ring that is the full chain rollout before you're ready.
Carl Bracken:Absolutely.
Carl Bracken:Yeah.
Ann Mazinga:Well, Carl, let's shift gears a little bit and talk about trends.
Ann Mazinga:I'm curious to get your perspective.
Ann Mazinga:You're deep in this.
Ann Mazinga:What trends are you seeing now and what trends are kind of dying off.
Carl Bracken:Yeah.
Carl Bracken:So there's I would say a few big, big trends and then there's a bunch of sort of like flavor of the month club stuff.
Carl Bracken:Um, I'm going to steer clear of the favorite flavor of the month club stuff because, you know, I could tell you product trends that are hot, they've been hot the past six months or the past three months or whatever.
Carl Bracken:That scares me, honestly.
Carl Bracken:I steer clear of those most likely because they usually don't have staying cover, you know, and so it's like you.
Ann Mazinga:Were just saying, like, what's going to be here in ten years?
Ann Mazinga:And bingo.
Carl Bracken:Yeah, that's exactly right.
Carl Bracken:So talking more about the big trends, I already mentioned AI.
Carl Bracken:That's a big trend for investing.
Carl Bracken:It's a big trend for investing with genai companies, obviously, and the supporting functions for those.
Carl Bracken:But then there's also tons of consumer businesses that are AI driven that are coming out right now.
Carl Bracken:I've seen a bunch recently, and as we talked about earlier, it is like the.com bubble where everyone knows that AI is going to be huge.
Carl Bracken:I mean, everybody knows it and everyone is investing based on that.
Carl Bracken:Is so many companies that have sort of incomplete business models are getting funded to like a pretty high valuation right now that, you know, that these guys aren't going to be successful.
Carl Bracken:I mean, for every, you know, Amazon, there was pets.com, you know, there for every, you know, and there was all, I mean, early on pets.com and Amazon, it was like Amazon was for books, pets.com was for pets.
Carl Bracken:And they were like the same thing, you know, and to see how they're, you know, there's been such a huge divergence in their paths.
Carl Bracken:It's going to be the same thing with all these AI companies.
Carl Bracken:There's going to be a few that are going to be massively huge and really successful.
Carl Bracken:And there's going to be a bunch that are going to go by the wayside and picking the winners is a little hard to tell right now.
Carl Bracken:Anyway.
Carl Bracken:Not surprisingly, I steer clear of things that are pure AI platforms because you're closing your eyes and throwing a dart at dartboard, then there's going to be a lot of fallout.
Carl Bracken:The thing I do think about for every business I look to invest in is how will AI help this business or how will AI disintermediate it or kill it?
Carl Bracken:You have to think about that.
Carl Bracken:For any kind of platform business, any kind of a service business, it matters a lot.
Carl Bracken:Maybe a little less so for product businesses, but it impacts them too.
Carl Bracken:Thats a big trend that I think you can either invest in directly or indirectly and how it impacts the businesses youre investing in.
Chris Walton:So Carl, so basically youre saying you keep AI top of mind, but youre looking at it more from the perspective of is the company im going to invest in going to get disrupted by an AI technology play that maybe I invest in or maybe I dont, but thats what youre keeping an eye on.
Carl Bracken:Exactly.
Carl Bracken:Yeah, thats really huge.
Carl Bracken:And so probably not surprisingly, I tend to focus more on real differentiated products.
Carl Bracken:And so things that can be sold into retail, things that people are going to demand, things that are tangible and they tend to have a little bit more, I guess, defensibility against AI encroachment.
Carl Bracken:So that's one piece.
Carl Bracken:The things I look at with those is the market demand growing for these kinds of products and also are they really differentiated?
Carl Bracken:There's so many companies out there that I've seen that are me too in product categories that again, it's the same thing.
Carl Bracken:You're closing your eyes and throwing a dart at a dartboard.
Carl Bracken:But if you have real differentiation, like if you have a cornered resource or if you have intellectual property protection or something like that, patents or whatever, that's a way to stay differentiated and it's a way to create a mode that'll last longer.
Carl Bracken:And so that's an area to focus on for sure.
Carl Bracken:The other thing that I definitely look at is sort of a diversified channel strategy.
Carl Bracken:So I don't like the idea of businesses that are only going to be DTC for the reasons we talked about already.
Carl Bracken:And also I can't add as much value there.
Carl Bracken:I mean, my experience has been in retail and consumer less on the DTC side.
Carl Bracken:But I also think that every company that's getting invested in right now and consumer, most are actually DTC first brands or small store brands are going to be omnichannel.
Carl Bracken:That is really where I think people want to be because the thought is omnichannel.
Carl Bracken:You have a diversified base of revenue and you just have a greater likelihood of success.
Carl Bracken:So those are things that I think are growing as far as what is decelerating Amazon aggregators, we talked about that already a bit.
Carl Bracken:I think social influencer brands are still around, but I think it needs to start with product, not start with a social influencer looking for a product.
Carl Bracken:One of the things I talk about is for social influencers or for celebrities that are looking to find a product.
Carl Bracken:It's like rocket fuel looking for a rocket.
Carl Bracken:And oftentimes they'll just take the rocket fuel and pour it into a half built rocket.
Carl Bracken:Well, that doesn't end well.
Carl Bracken:And so I think there's a lot of that where it's like, oh, we raise money on a huge valuation because we have name x celebrity that is back in the company.
Carl Bracken:Great.
Carl Bracken:Well, when you go to raise your next round and revenue hasn't followed, what are you doing then?
Carl Bracken:That is problematic.
Carl Bracken:Sorry.
Carl Bracken:It's a long answer to a short question, but hopefully that gives you a little insight.
Chris Walton:No, it gives us a lot to think about.
Chris Walton:So I'm curious.
Chris Walton:So I want to make sure too.
Chris Walton:So basically, so you said if a founder comes to you, because this is what we heard a lot I can remember, I mean, I can remember some of the conversations we had in this space like four or five years ago, Ann, where.
Chris Walton:So if a founder comes to you and says, so, ive got this great DCC brand I have no interest in ever selling to wholesale.
Chris Walton:I want to keep control of my brand.
Chris Walton:Thats a big red flag for you as an investor, Jeff.
Carl Bracken:For me it is.
Carl Bracken:It isnt for others, but for me it is.
Carl Bracken:It is for me for a couple reasons.
Carl Bracken:One is the lack of diversification.
Carl Bracken:You have risk there.
Carl Bracken:And then secondly, how can I help?
Carl Bracken:I mean, I mentioned at the beginning, sort of my whole piece is venture investing, but also helping them operationally.
Carl Bracken:And it's harder for me to help a DTC brand that's going alone on their website operationally.
Ann Mazinga:Carl, that's funny, because Chris and I are on the same wavelength.
Ann Mazinga:I was wondering, especially given your experience across multiple categories, especially beauty, are there categories that you do think are more successful or likely to have more success still maintaining just d two c sales relationships with their consumers versus a more diversified approach?
Carl Bracken:That's a good question, yes.
Carl Bracken:I mean, I do think that there are certain categories that have a greater likelihood of staying going alone on DTC.
Carl Bracken:I would say high margin, small package size brands where they can reinvest the margin into marketing.
Carl Bracken:Those are businesses that are likely to be more successful DTC only.
Carl Bracken:So you take beauty products that are easy to ship, that have high margins, and they can go out and make a huge deal on marketing via social media or whatever, TikTok shop, whatever, to get their word out there.
Carl Bracken:They're going to scale a lot faster DTC and it'll be easier for them to be successful without getting into brick and mortar retail, no question.
Carl Bracken:Now, I don't invest in the space, but furniture that would not be good.
Chris Walton:Down jackets come to mind.
Chris Walton:And honestly, somebody tried that.
Carl Bracken:So it's totally gallons of milk.
Carl Bracken:You know, like, when was the last time you saw a DTC gallons to milk retailer?
Carl Bracken:Like, you know, very expensive to ship.
Carl Bracken:You know, low margins.
Carl Bracken:Like that would be bad.
Chris Walton:Perishable?
Chris Walton:Yes.
Carl Bracken:All right.
Carl Bracken:Perishable.
Chris Walton:Let's, let's get you out here on this.
Chris Walton:This is the question I think we did.
Chris Walton:Ann and I have been waiting to ask you as we kind of build up to it here.
Chris Walton:But, uh, where do you.
Chris Walton:So with all that said, where do you think the opportunities actually lie in the marketplace?
Carl Bracken:Yeah, um, I will tell you the biggest.
Carl Bracken:I have two things that I'm most focused on right now.
Carl Bracken:Um, and, and these are just sort of conceptual things that I'll get into specific, you know, more specifics.
Carl Bracken:But, um, first of all, and this is probably obvious, but really, really good leadership teams like that, that is a requirement.
Carl Bracken:Um, and so check.
Carl Bracken:You got to have that box checked.
Carl Bracken:And the reason why that matters so much is your business is going to have to pivot many, many, many times.
Carl Bracken:And if you have, like, a decent business with an awesome leader, they will know how to pivot and make the business better.
Carl Bracken:If you have what seems like a pretty good business and not a very good leader, when the business has to pivot, you're in trouble.
Carl Bracken:So that, you know, I would say leadership matters a lot.
Carl Bracken:The second thing that matters a lot to me is differentiated IP.
Carl Bracken:And I know I said that already, but just to like, underscore it, that is really, really important to me.
Carl Bracken:And the reason why it is, is because it gives you differentiation and defensibility in a space consumer where theres very little differentiation, theres very little defensibility.
Carl Bracken:I mean, think about how many food companies out there that have like, the hottest thing theyre going to get.
Carl Bracken:They have a very high likelihood of getting disrupted unless they build a really strong foundation and grow fast really quickly, you know, liquid death.
Carl Bracken:I mean, they're, they're killing it.
Carl Bracken:You know, they're.
Carl Bracken:But it's because their branding is so great, you know, and so that's how they've been able to, like, create a bit of a mode and scale.
Carl Bracken:But from.
Carl Bracken:Yeah, but for me, it's, it's, I tend to think, like, differentiated IP is a really good mode.
Carl Bracken:So I look at that a lot.
Carl Bracken:So, you know, just to give you an example of some of the companies I invested in already, they kind of fit those bills.
Carl Bracken:Like, so the first one is a yemenite hair care company called Small Wonder, actually founded by a target alum.
Carl Bracken:And they actually own IP on water free salon, professional, salon grade shampoo and conditioner.
Carl Bracken:And so the product itself is, the actual product is a powder that is patented as patent protection on it, but they also have a package.
Carl Bracken:They've created the dispensing mechanism that is also patented.
Carl Bracken:And so you can put it in the shower, and the powder doesn't get wet until you want it to get wet and want to activate it.
Carl Bracken:And so it's a really cool company.
Carl Bracken:And they have patent protection from a number of different angles there.
Carl Bracken:So that's one.
Carl Bracken:Another one is, one of the first companies I invested in is called shameless pets.
Carl Bracken:It's a dog treat company made with upcycled ingredients.
Carl Bracken:So they've created a supply chain for upcycled ingredients.
Carl Bracken:So upcycled ingredients are things that would be food waste that are kind of reconstituted into food ingredients that can be eaten.
Carl Bracken:And so it's better for the environment.
Carl Bracken:It reduces waste.
Carl Bracken:And dogs love them.
Carl Bracken:And so they have sort of this cornered resource that allows them to scale.
Carl Bracken:And so that's.
Carl Bracken:That's the second one I could go on and on.
Carl Bracken:There's a bunch of others.
Carl Bracken:One is a platform that has no, don't stop.
Chris Walton:Come on, keep going.
Chris Walton:I mean, there's people listening, going, oh, okay.
Carl Bracken:All right, all right.
Carl Bracken:If this is interesting, I'll keep going.
Carl Bracken:Another one is a company called Coherent Commerce invest in.
Carl Bracken:It was founded by two data scientists, one of which actually is also a Michelin star chef.
Carl Bracken:And this one is.
Chris Walton:Yeah, when you're a dated science.
Chris Walton:I'm also a Michelin star chef.
Carl Bracken:Yeah, yeah.
Carl Bracken:When he told me that, I was like, me too.
Ann Mazinga:Yeah.
Ann Mazinga:Renaissance man.
Ann Mazinga:I'll say.
Chris Walton:He has trouble getting dates.
Carl Bracken:Exactly.
Carl Bracken:And so what they've created is a sort of a platform, starting with food and beverage companies, that can actually take inputs, subjective and objective inputs, from early stage food and beverage brands and can ascertain, kind of via their algorithm, which ones are going to scale fastest.
Carl Bracken:And so that's pretty interesting and for many reasons.
Carl Bracken:And then the fourth one I'll mention is a company I invested in starting kind of the beginning of this year called Persephone Biosciences.
Carl Bracken:This company was founded by two PhD chemists, one from Caltech, one from Berkeley.
Carl Bracken:They've been studying the gut microbiome for the past seven years and have developed a point of view that will lead to oncology products that try to avoid colorectal cancer.
Carl Bracken:But they also have decided they can use the same platform to develop consumer products.
Carl Bracken:So their first consumer products are coming to market this fall.
Carl Bracken:And it's focused on the infant and toddler gut microbiome and reverting it to what it should have been a childbirth.
Carl Bracken:And so, like, they have 20 plus patents.
Carl Bracken:They have this, you know, this platform that is awesome.
Carl Bracken:And they're super smart and great, you know, great people, and they're going to use that to come to market with consumer products.
Carl Bracken:So I'm helping them with their go to market strategy into consumer.
Carl Bracken:So, anyway, sorry, I went down a huge rabbit hole there, but hopefully those are interesting.
Chris Walton:No, that's why we wanted you on the show.
Chris Walton:So basically, the takeaway for me is like, one, you got to have a great leadership team.
Chris Walton:Two, you're looking for the trends.
Chris Walton:So gut health is definitely a trend, but then you're looking for defensible ip within the capitalization on that trend by the companies within which you're investing.
Chris Walton:Is that right?
Carl Bracken:That's right.
Carl Bracken:The only thing I would add is if it was a trend that thought was going to last six months, I wouldn't invest in it.
Carl Bracken:I think gut health is something that's going to be around.
Carl Bracken:I mean, it's going to be a focus area for, you know, research and for products for, for decades to come, in my opinion.
Carl Bracken:And so that's, that's why I feel so comfortable with this company.
Chris Walton:Right?
Chris Walton:Or like, upcycling dog food, too.
Chris Walton:Same, same idea.
Chris Walton:Like, upcycling is going to be a trend that's not going to go anywhere.
Chris Walton:That's.
Chris Walton:That's your point there.
Chris Walton:Okay.
Carl Bracken:That's exactly right.
Carl Bracken:Yep.
Carl Bracken:Yeah.
Chris Walton:All right, man.
Chris Walton:Well, man, that blew by, and I was, I know.
Chris Walton:I was like, this is like edge of your seats.
Chris Walton:Edge of your seat listening.
Chris Walton:For me, I was just like, letting, like, just enjoying hearing Carl wax on about everything.
Chris Walton:So, uh.
Chris Walton:So, Carl.
Chris Walton:Yes.
Chris Walton:So thank you.
Chris Walton:In closing, we appreciate your perspective bringing, bringing great conversations also at omni talk.
Chris Walton:And if people want to get in touch with you for what I imagine could be a whole host of different reasons for those listening to this podcast, what is the best way for them to do that?
Carl Bracken:Yeah, my website for my firm is www.ocampocapital.com.
Carl Bracken:you can reach out to me there or on LinkedIn, or you can also reach me@carlcamplecapital.com dot.
Carl Bracken:That would be just fine.
Chris Walton:Awesome.
Chris Walton:Well, hopefully we'll have you back on again soon.
Chris Walton:That wraps us up.
Chris Walton:Thanks again to Carl Bracken, founder and CEO of the new venture capital firm Ocampo Capital.
Chris Walton:And thanks to everyone out there for listening into our first episode of what we hope will be an ongoing series on investor perspectives across retail and the consumer goods industries.
Chris Walton:Please let us know what you thought of our interview with Carl on social media.
Chris Walton:And as always, on behalf of all of us here at Omnitalk, on behalf of Anne and myself, be careful out there.