When Brynn Putnam offered her final firm, Mirror, to Lululemon for $500 million in the beginning of the pandemic, the editor thought she might need offered the good health firm too quickly.
As a substitute, the timing proved good. The house health craze crashed nearly as instantly because it peaked within the first yr of lockdown. In the meantime, after a yr as CEO at Lululemon, Putnam had new operational insights, a giant win below his belt and a brand new concept that he has since became a brand new firm that may go public in 2025.
Enterprise agency Lerer Hippeau has already participated in a extremely aggressive spherical for that indignant startup — the agency additionally led Mirror's $three million seed spherical years in the past — and on Wednesday evening in New York, I met with each Lerer Hippeau managing associate Ben Lerer. and Putnam to speak about what he's constructing. We additionally talked a couple of broader comeback lastly occurring for client tech — a few of it led by founders who led the final wave of profitable client startups.
The next are excerpts from that chat, barely edited for size. You may as well watch the total interview beneath.
Ben Lerer when he wrote his first verify:
Once I invested [in Mirror]Brynn had a really convincing however completely lame demo that was principally a type of two-way mirror with a pc display behind it to point out you what a mirror would appear like if they may increase tens of tens of millions of to supply really one thing like that. Curiously sufficient, she had designed an instrument that she owned [own line of boutique gyms at the time] . . . and after I noticed her, it was clear that Brynn was not solely a sensible enterprise builder who constructed a superb gymnasium model for herself, however she was additionally an inventor. Brynn received us over very, in a short time and we might have appeared loopy for a couple of years, however finally much less so.
Brynn Putnam offered the Mirror simply 4 years after it was based:
I used to be not on the market. We weren’t on the lookout for an acquirer. We simply launched. However we've had a long-standing partnership with Lululemon. I've labored with them at my gyms for a couple of decade and spent plenty of time with them making content material and doing cool occasions with them, and it simply felt proper for us to have the ability to actually take Mirror into properties from all around the world with pace and security. We actually felt prefer it was this chance that we couldn't go up.
As for whether or not Lerer weighed in with recommendation on this sale, he mentioned:
I had an opinion about it. Look, danger is a humorous enterprise due to the ability regulation and the concept that you're presupposed to do these moonshots and also you're going to have a bunch of losses, however your huge wins are going to vary the entire world. I consider within the regulation of energy, however I additionally consider that generally danger loses sight of simply making primary, good, sound enterprise choices. And there are some common truths in enterprise resembling: promote when others are grasping and purchase when others are scared. You don't all the time must maintain coming again to the on line casino repeatedly and once more. On this case, when Brynn got here up and mentioned, “Hey, I bought this provide, I'm actually desirous about taking it,” I mentioned, “Yeah, it’s best to do that for your self; that is wonderful to us. And should you get rejected from different folks [like later-stage investors with a different cost basis]I'm glad I'm attempting to be useful, however truthfully, you're a lot stronger and stronger than I’m, and also you'll deal with this. For a yr or two after that, I feel Brynn in all probability had a couple of folks second-guess her, and now I feel individuals are seeing the arc of the entire class and realizing that it was only a completely good transfer.
Putnam later labored as an govt at Lululemon, which later threw within the towel on the Mirror:
An investor I love. . .He then advised me that I needs to be variety and study that all through the lifetime of your organization, you might be promoting your organization. You promote it in small items, otherwise you promote it in greater items, however you all the time promote your organization. And one of the best factor you are able to do when you've made the choice to promote is to study as a lot as you’ll be able to from this enterprise you've chosen to promote to and attempt to strategy one thing purposeful on this new position. And that's what I did. And I realized an unbelievable quantity within the yr I used to be there, and it was extremely attention-grabbing. However I feel finally once you go from being a founder and CEO to really being a CEO of a division, it's a extremely huge change, and for some folks, it's a superb match. And for me, it simply wasn't. I'm really a builder.
Putnam on what led her to develop her new startup:
Once I left Lululemon, I used to be actually at a distinct stage in my life. I went from being pregnant to having two youngsters and actually took inventory of what was necessary to me on the time. Mirror was very a lot about me. It was my reflection, my efficiency, it was about enhancing your self. In that subsequent part, my life was actually rather more about my household and my pals and my relationships and people issues that I assumed had been necessary. I used to be actually struggling to search out high quality time with my family members the way in which I grew up – you understand, we might sit across the desk and have a meal, play a board sport, stare at one another. For my youngsters who grew up glued to iPads or smartphones, the expertise of high quality time was tougher.
So I began pondering, how might I take what I realized at Mirror and apply these classes to the gaming class? How might I take advantage of know-how to construct higher relationships and social connections? And that's what I'm engaged on now. It's a brand new client firm, however within the gaming house moderately than the health house, actually geared in the direction of how we spend time collectively face-to-face, the place know-how isn't the expertise, however actually an element that helps construct higher relationships.
Requested if her new product is for youths (or if it suits in her pocket, or wears it on her face), Putnam replied:
It's for everybody. It's for pals and households spending time collectively. This isn’t an organization for kids, though we hope you’ll attend together with your kids. It's not an schooling firm, though we hope folks discover it attention-grabbing and strategic and artistic, however it's actually about utilizing know-how to attach folks to one another. (Right here, Lerer said that Putnam was sworn to secrecy.)
We're attending to the confluence of synthetic intelligence and and software program that appears to be essential to founders and traders unexpectedly:
I feel we're about to enter a golden age of . All of the VCs right here can be so excited to spend money on founders quickly, hopefully [because a] few issues occur. The iPhone got here out 17 years in the past and we haven't actually had a client success story from Oculus. I feel there is a chance out there for one thing new. Most of the core elements of those applied sciences have gotten rather more mature and subsequently inexpensive, so the power to construct, in our case, show applied sciences, is feasible in a method that it wasn't 10 years in the past. After which clearly AI opens the door for the way we work together with our gadgets. So, naturally, there can be new gadgets in the marketplace. We're betting on the thought not of one other private pc, however moderately of a brand new shared machine within the house, which is what we did with Mirror and what we're doing once more right here. This concept that there can be a chunk of know-how that may enable you convey your own home and household collectively is the place we expect the long run is headed.
To not focus an excessive amount of on the technical specs of the , however as an alternative focusing extra on the general expertise created, Putnam mentioned:
I not too long ago realized about Nintendo's design philosophy. They’ve this idea that they’re utilizing “sneaky” know-how with lateral pondering. So the thought is to make use of mature, inexpensive, extra available applied sciences, however create a extremely attention-grabbing expertise round them, and that's what we've carried out with Mirror. It was extra primary . It was not frontier know-how. And [that’s] what are we doing once more now
On bringing household and pals collectively as an funding theme (right here, this editor introduced up Bonobos co-founder Andy Dunn's new startup Pie, which focuses on bringing folks collectively offline), Lerer mentioned:
I’m an investor [in Pie]! Look, I’ve younger kids and I’ve the identical challenges that each one my pals have and everybody has: we're all addicted to those gadgets, and at a excessive degree we're curious about options to that dependancy and new types of leisure or alternatives to get folks off their screens or out into the world. Very not too long ago I did one [related] yet-to-be-announced providing in an application-level AI firm within the journey house that I'm very enthusiastic about. And we simply introduced a deal final week in one other app firm within the automotive aftermarket house, which is definitely the pastime space that spends essentially the most within the US. Discovering methods to faucet into folks's passions is all the time a superb wager within the client house.
On the sense that “client” as a class is making a comeback — thanks partially to a brand new $500 million fund introduced final week by well-known consumer-focused agency Forerunner Ventures, Lerer mentioned:
As a fund, we’re founders first, however we’re additionally New York first and [with] first [founder] generations in New York within the early 2010s, there was plenty of consumerism, plenty of media, plenty of direct-to-consumer commerce. And there have been a couple of traits that actually drove that. You had the rise of the iPhone and the App Retailer. You had exploding social media and the advert arbitrage ecosystem alternative to go and get prospects quicker than ever. Maybe the rise of Shopify has additionally created a good time to construct client companies with wide-open imaginations.
Within the final 4, 5, six years, there have been only a few huge technological modifications that encourage folks to do something that doesn't really feel incremental. And I feel AI is that catalyst proper now. We're seeing a bunch of very high-quality founders saying, “Now’s the time to get again within the pool.” There are issues which are potential at the moment that weren't potential six months in the past or a yr in the past, and the slope is steep proper now by way of utilizing the creativeness. So I'm extra excited concerning the client than I've been in a very long time, which is actually thrilling for me as a result of that's my ardour. I constructed a client enterprise. I really like investing in client founders and it's been fairly unhealthy the previous few years to be trustworthy.