Press commentary on the over-hyped expectations for many digitally-native brands. Read the full article

On the amount of money invested in digitally-native brands and how this changes expectations for scaling:

According to an October study by retail research firm Loose Threads, more than $1 billion VC dollars have been pumped into direct-to-consumer brands since 2008. In 2018, the VC well of cash will continue to dry up and two camps will emerge: The digitally native brands that actually have a profitable future ahead of them, and the ones that don’t. The ones that have padded their businesses with big investment rounds are already in trouble.

“Money creates expectations,” says Loose Threads founder Richie Siegel. “We’re now looking at an environment that’s full of hype that doesn’t live up to reality whatsoever.”

On the difference between communities and networks:

“A community is just customers who have something in common. A network exchanges value,” says Siegel. “That’s going to raise the bar.”

On trying to change the playbook when there is no point:

“This degree of hubris — like claiming, ‘The store is dead, we’re charting a new evolution of retail!’ — has come back to haunt these founders,” says Siegel. “If someone today tries to pitch the Warby Parker for belts, I’d hope they’ll be asked to leave.”