When Bryn Putnam sold her last company, Miller, to Lululemon for $500 million at the beginning of the pandemic, it appeared in this editor's eyes that she sold her smart fitness company too soon.
In fact, it turns out the timing was perfect. The at-home fitness boom crashed almost as suddenly as it peaked during the first year of lockdown. Meanwhile, after a year as Lululemon's general manager, Mr. Putnam had new business insights and a fresh idea for a new company that would become a huge success and then go public in 2025.
Venture firm Lerer Hippeau has already participated in the stealth startup's fiercely competitive seed round – it also led Mirror's $3 million seed round years ago – and on Wednesday night. , in New York I met with Ben, managing partner of Lerer Hippeau. Lerer and Putnam discuss what she is building. We also talked about the broader recovery that is finally happening in consumer technology. Some of them are led by founders who led the last wave of successful consumer startups.
Below are excerpts from that chat, lightly edited for length. You can also read the full interview below.
Ben Lerer says of writing his first check:
when we invested [in Mirror]Brin had a very convincing but completely junky demo. It was basically like a two-way mirror with a computer screen behind it to show what the mirror would look like if she were able to raise tens of millions of dollars. actually make something like that. Interestingly enough, she had designed her own device. [own line of boutique gyms at the time]When we saw it, it was clear that Bryn was not only a smart business builder who built a great gym brand for himself, but he was also an inventor. . Bryn won us over very, very quickly, and although we probably seemed crazy for a few years, we ended up not so much.
Bryn Putnam says of selling Miller after just four years in business:
We weren't for sale. We weren't looking for an acquirer. We were just really starting up. But we've had a long-standing partnership with Lululemon. I've been working with them at the gym for about 10 years. I've spent a lot of time with them creating content and organizing interesting events. And we felt like it was a really good fit for us. Mirror homes around the world quickly and reliably. We really felt we couldn't pass up this opportunity.
As for whether Mr Lehrer had considered the advice regarding the sale, he said:
I had an opinion on that. You see, ventures are an interesting business. Because of the power law and the idea that if you take a moonshot, you will lose a lot of money, but if you win big, the whole world will change. I believe in the power law, but I also think venture companies sometimes lose sight of really basic, good, sound business decisions. And there are some general truths in business. For example, sell when others are greedy and buy when others are fearful. You don't necessarily have to keep going to the casino over and over again. In this case, when Bryn came to me and said, “I got this offer, and I'm really thinking about taking it,” I said, “I've got this offer. I'm really going to take it.” This is surprising to us. If you are receiving pushback from others [like later-stage investors with a different cost basis]I'd be happy to help, but frankly, you're much stronger and more powerful than I am, so you'll be the one to solve this problem. ”But it was the right decision. Over the next year or two, I think some people probably had second thoughts about Brin, but I think people are now seeing the flow of this whole category and understanding that it was a totally great move. .
Putnam then told Miller about his time as an executive at Lululemon, where he threw in the towel:
He is an investor that I respect. . He said to me at the time, “You should politely learn that throughout the life of your company, you will be selling your company.'' You can sell in small units or larger units, but you are always selling your company. The best thing you can do after you decide to sell is to really learn. Get the best you can out of this business you've chosen to sell to, and try to be purposeful in this new role. And that's what I did. I learned an incredible amount in the year I was there, and it was incredibly interesting. But ultimately, going from being a founder and CEO to essentially being a general manager of a division is a pretty big change, and I think that's a good fit for some people. And for me it wasn't. I'm really a builder.
Putnam explains what inspired her to develop her new startup:
When I left Lululemon, I was really just at a different stage in my life. I went from being pregnant to having two children and actually reaffirmed what was important to me at that point. Mirrors were very important to me. It was about my reflection, my performance, and making myself better. In the next phase, my life became all about family, friends, relationships, and what I felt was important. Just like when I was a kid, I really struggled to find quality time with the people I loved. We sat around the table eating, playing board games, and looking at each other. For my children, who grew up glued to their iPads and smartphones, the experience of quality time was even more challenging.
So I started thinking seriously about how I could apply what I learned from mirrors to the play category. How can we use technology to build better social relationships and connections? And that's what I'm working on now. The company is a new consumer hardware company, but it's more about gaming than fitness, about how we spend time together in person, and where technology is less about experiences and more about building better relationships. Masu.
Asked if her new product is aimed at children (or something that they can put in their pockets or wear on their faces), Putnam replied:
It's for everyone. It's for friends and family to spend time together. Although we are not a children's company, we would appreciate it if you could join us with your children. While the company is not an education company, hoping people find it interesting, strategic and creative, it's really about using technology to bring people together. (Lehrer here declared that he had been sworn to secrecy by Putnam.)
Putnam describes the convergence of AI, hardware, and software as something that suddenly comes to mind for founders and investors.
I believe we are about to enter a golden age of hardware. I think all the venture capitalists here will be very excited to invest in hardware founders in the near future. [because a] Several things are happening. The iPhone was introduced 17 years ago, but there hasn't been a mainstream consumer hardware success story since Oculus. I think there is an opportunity in the market to create something new. In our case, being able to build display technologies is now in some ways possible, unlike 10 years ago, because many of the core components of these technologies are becoming more mature and therefore more affordable. It has become. And clearly, AI opens the door to the way we interact with our devices. So, naturally, new devices will appear on the market. You know, we're betting on this idea of having new shared devices in the home rather than separate personal computers. This is what we did with Mirror and what we're doing again here. I think this idea that there is technology that can help bring your home and family together is where we are heading into the future.
Putnam says of focusing less on the technical specs of the hardware and more on the overall experience being created.
I recently learned about Nintendo's design philosophy. They have the concept of using “withered” technology with lateral thinking. So the idea was to use technologies that are mature, affordable, and more readily available, but create really interesting experiences around those technologies, and that's what we did with Mirror. It was more of a commodity hardware. It wasn't a frontier technology. and [that’s] What are we doing again now?
On bringing family and friends together as an investment theme (here, this editor brought up Bonobos co-founder Andy Dunn's new company Pi, which is focused on bringing people together offline) , Lehrer said:
i am an investor [in Pie]! Look, I have young children and I have the same challenges that my friends and everyone has. We are all hopelessly addicted to these devices, and at a high level we are interested in alternatives to that addiction and new formats of equipment. Entertainment and the opportunity to take people off the screen and into the world outside. We very recently did the following [related] I'm really excited about the yet-to-be-announced deal with an application-layer AI company in the travel space. And we just announced a deal last week with another application layer company in the aftermarket automotive space, which is actually the hobby sector with the largest spending in the United States.
In the consumer space, finding ways to tap into people's passions is always the best bet.
Regarding the sense that “consumer” as a category is in retreat, including thanks to a new $500 million fund announced last week by famed consumer company Forerunner Ventures, Lerer said: He said so.
As a fund, we're founders first, but we're also New York first. [with] first [founder] Generations of New York in the early 2010s had a lot of consumers, a lot of media, and a lot of direct-to-consumer transactions. And there were some trends that were really driving that forward. There was the rise of the iPhone and the App Store. The explosion of social media has given the arbitrage advertising ecosystem the opportunity to acquire customers faster than ever before. Perhaps the rise of Shopify also created a great opportunity to build a consumer business with a broader imagination.
Over the past four, five, six years, there have been very few major technology changes that didn't give people a sense of incrementality. And I think AI is the catalyst for that right now. We're seeing a very high-quality group of founders saying, “Now is the time to get back in the pool.” There are things that I can now do that I couldn't do six months ago or a year ago, but in terms of using my imagination, the slope I'm on now is steep. So I'm more excited than ever about Consumer. That's really exciting to me because that's my passion. I built a consumer business. I love investing in consumer founders, but frankly the last few years have been pretty terrible.