The $100M Pimple Patch
They say there are more neural pathways in the brain than there are countable particles in the observable universe. But one of these neurons dies a slow death inside my 40-year-old brain every time a thought leader rediscovers how to ✨business✨ on Twitter.
Today’s rant was inspired by a tweet, which has been anonymized to protect the innocent:
I think the future of DTC brands is revenue diversification.
Owned products, dropshipping products, NFTs, affiliate revenue, ad revenue.
The brands with the strongest DTC channels will have multiple revenue streams from it.
Take NFTs out of it, and this is a truism for every business that has ever existed. Sell in more channels, create more offerings. Expand category. Bro down. Profit. Only in the SaaS era, where the barrier to entry is so negligible this could be considered epiphanic.
Another tweet from this week, paraphrased:
Until my family stops asking for Amazon gift cards for Christmas, there’s work to do.
What’s the alternative? Sending a Shopify gift card to your family?
Last I checked, marketplaces that provide variety and aggregate demand were necessary for the rest of the ecosystem to even exist. In fact, marketplace channels are a necessary component for modern DTC growth. Just ask Ju Rhyu, founder of Hero Cosmetics, maker of the Mighty Patch, who saw sales grow to $100M this year:
Hero Cosmetics depends largely on Target to acquire, and Amazon for retention. They have 18 skus, but are best known for one: the Mighty Patch. Ju tweets infrequently and doesn’t often offer advice or guru tweets but is building a revenue-diverse business that is to be envied.
While the Twitters have provided an audience for those learning and growing in public, it also reveals that those with enviable followings have a long way to grow and mature in creating successful and sustainable businesses. Or, conversely, that those who have the time to tweet aren’t busy enough; or those busy doing the work don’t have the time to tweet? Pick one.
Maybe I’m too critical. I’ve tweeted off-the-cuff aphorisms before that couldn’t possibly stand up to the very type of critical thought and scrutiny that I’m leveling here. But it also reveals that we’re at a lower point on the maturity curve that the eCommerce community than maybe any of us realized.
It’s true. The future of DTC brands is revenue diversification. The future of literally any business is revenue diversification. That’s how we build sustainable businesses.
Okay, VR, we see you. Oculus outpaced Xbox sales in 2021. AR/VR is about to go off and this twitter thread is showing us through the numbers.
Sold in the U.S.A. Sony confirmed a massive deal struck with Bruce Springsteen this week. Springsteen sold his entire musical catalog to the entertainment company for nearly $550 million. This is becoming a trend, as multiple other stars have sold portions of their catalogs as well, including Bob Dylan, Stevie Nicks, and Neil Young.
More Sights & Sounds. Square announces an alternative to Intuit via Cash App Taxes. Kickstarter is not backing down from its new crypto and NFT commitments. Amazon Pharmacy founders are demoted to consultants leaving us to wonder if there’s trouble in paradise. And Kat Cole is named President and COO of Athletic Greens.
Eyerolls please... Way too much NFT news this week. Deep breath. Okay: GigLabs launched an app to design and sell NFTs on Shopify. Then the next day, Shopify announced a beta program to create, list, and sell NFTs. Ouch. Other wild NFT drops this week include democratic congressional candidate, Shrina Kurani, and none other than Melania Trump who is sharing with us a watercolor artwork of her eyes… thank God this is on Solana. Adidas botched their drop with a 5-way collab NFT with Bored Apes. OK. My brain hurts. Let’s move on.
Emission-free LBD. Zara has partnered with LanzaTech to bring a little black dress to market made partially from carbon waste. And at just $69, the dress is reasonably priced. In a fantastically innovative process, steel mill emissions were collected and transformed into polyester yarn to make the look. More of this, please.
Munchies beyond the stratosphere. Uber Eats has won the race we didn’t know was happening and can now claim the title of the “first to deliver food to space.” Zowie... it’s the future.
Schmear shortage. This holiday season, Kraft is paying a select number of people $20 to not make aunt Kathy’s famous cheesecake recipe and other Philadelphian fromage-y family favorites. Their Spread the Feeling initiative comes after the supply chain struggles to keep cream cheese on the shelves.
More tasty Palate news. White Castle jumps on the NFT train and invites us all to “The Sliderverse” for its 100th birthday. Chipotle announces a digital-only kitchen to open in Ohio. No dining room, no in-person ordering, just good eats. And McDonald’s cuts the carbon and opens a net zero location in England, likely the first of its kind in the UK.
Metablocked. Instagram blocked an Australian artist’s account with the handle “@metaverse,” stating she was “pretending to be someone else.” This was five days after Facebook’s rebrand. Instagram has now apologized and reinstated the account, and also declined to comment on whether or not the block was related to the reveal of Meta. And while we’re saying sorry [sensitive content ahead], another apology that went out this week was from a Roman Catholic diocese in Italy, after a Bishop told some children that Santa wasn’t real.
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