Just like marriages, relationships between retail companies and investors often fail, but Zola and Lightspeed have one of those strong partnerships that’s based on shared values and a common vision. For the third episode of our four-part “Retales From the Frontline” Shoptalk series, presented by Mastercard, host Matt Rubel sat down with Zola CEO Shan-Lyn Ma and Nicole Quinn of Lightspeed Venture Partners to talk about why their relationship is so strong—and why you should never partner with an investor who isn’t as excited about your business as you are.
Ma and Quinn share a passion for entrepreneurship and a clear understanding of consumer behavior. They recognized a significant opportunity to reinvent the wedding business by addressing the pain points couples face when creating a registry and planning their big day. The partnership enabled Zola to create a new e-commerce business model that targets younger consumers in all the right ways.
Ma and Quinn say venture investors are seeking e-commerce businesses that:
- Create retail models that are magnets for the next generation. Brands that cater to millennials and Gen Zers are building in lifetime value. Young consumers like the whole shopping journey to have a consistent look and feel and to include fun, interactive elements that allow them to connect with both the brand and each other.
- Build in viral growth. With gift registries and similar businesses, each primary user naturally shares the brand with hundreds of others, reducing acquisition costs and building brand awareness. Companies with high organic word-of-mouth rates are also attractive investment targets.
- Reinvent an outdated industry. A product or service that’s relevant to today’s consumer but has yet to be modernized represents a great opportunity for change and growth. Disruptors that use new tools and technology to solve a need hold special appeal for venture investors.
- Start in one category and then quickly expand into new ones. Nimble businesses that specialize in one category or vertical can build on the consumer trust they’ve established in that space to expand into adjacent categories faster than their competitors.
For investors and early-stage companies, finding the perfect match is worth the effort. To learn more about what makes for a successful retail-investor partnership, listen to the full episode.