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the profound contextual change he is seeing in front of him: “We can’t overstate,” Schmitt says, “the extent to which the planets are aligning for a seismic change in this entire category.”
Schmitt talks compellingly about the economic changes he sees, alongside the shift his co-founder articulated around consumer preferences: changes specifically in the economic context and the economic opportunity for challengers. In the past, he argues, consumer goods were shielded from disruption, because the barriers to entry and advantages of scale meant that only those with considerable capital behind them could confidently launch a packaged goods brand. The last 20 years, he believes, have trained an entire generation
to discover products differently, shifting the advantage potentially from scale to focus, and from conventional distribution to DTC. And this has been accompanied by a dramatic change in the investment landscape:
“The first wave of technology was about the platform wars. All of the big brands that we know – Google, Facebook, YouTube – are all platforms, and those wars have been largely won. So what you find now
is that the flow of venture capital into tech ventures is decreasing. If you talk about Peak [Silicon] Valley, the peak of tech innovation happened in 2014, and now there is already a third less capital flowing
into tech ventures than in 2014 – even though the amount of capital raised by venture capital funds has more than trebled over that time.
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