At Alpaca, our Field Study program is a cornerstone of our approach to investment. But first, what is a Field Study?

Field Study: Alpaca’s proprietary process for deeply researching a particular theme or topic to understand the investable (and non-investable) areas within a space of interest.

Built internally by our team, the program has steadily grown and proven itself to be a repeatable, thesis-driven engine for deal generation. It has become a hallmark of the Alpaca way of doing business. In fact, several firms have asked us to help them replicate the process internally.

We’re excited to share how and, more importantly, why the program works.

Proof in the Pudding

Across funds, our Field Studies program consistently drives new leads to all our sourcing channels:

In 2022, half of the investments we made were directly related to Field Studies.

Looking at our last 40 deals, 23 were driven by Field Studies. Along with tracking this internally, Alpaca’s David Goldberg publishes an annual Where Do Deals Come From? rundown of each deal we’ve done in the previous year and how it came to us.

Why does it work? Each Field Study conducted by our team drives the following outcomes:

• First and foremost, helps us to take time to get smarter on spaces where we find interest and we think there is potential investment opportunity
• Gets us to a clear point of view in an organized manner, where we can map a market, potential headwinds, tailwinds, risks and opportunities. This way, we have a lucid, prepared mind when speaking with any company
• Gives us research-based conviction on the areas we ultimately believe are non-investible
• Builds our network of potential founders, investors and customers along the way, in areas we want to spend time
• Helps us plant a flag in a particular space and build a reputation as thought leaders that, in turn, generates inbound deal flow through referrals from VC ecosystem partners who know we’re spending time on that particular topic
• Uncovers deal opportunities before they’re in market
• Informs and prepare us for future investment opportunities so we’re armed and ready to move aggressively when something crosses our desks
• Allows us to get to conviction faster and win deals more often, as we’re able to have a third- or fourth-level conversation with a founder on a first call and prove our value

The Alpaca Field Study Playbook

So how do we conduct one of these? A new Field Study begins with a partner identifying an interesting, potentially investable area of the market. By focusing on a specific theme, we are able to be very targeted around the deals that we look at and the strategic networks that we build. This allows us to not only uncover opportunities through our research and outreach, but also to establish a reputation as experts.

Once we’ve identified an area of interest, we spend three to four months speaking with investors, founders, customers and incumbents in that space to understand the dynamics of emerging technology, adoption and what the future holds. The Alpaca MBA Associates program is a key component to this stage in the Field Study process. Selected from top programs such as Wharton and Harvard to work closely with our general partners and investment team, each MBA Associate contributes significantly to at least one Field Study during their tenure with the firm. Along with secondary research culled from industry sources, our team conducts in-depth primary research by speaking to founders, VCs and other leaders.

This research phase typically runs 90–120 days into the identified market, which can be on a macro or micro topic. For example, Alpaca’s Global Supply Chain Field Study led by Aubrie Pagano was actually a multi-year investigation encompassing five distinct, but closely-related studies into different aspects of the supply chain.

From this research, and speaking with dozens of industry players, customers, and startups, we produce an extensive deck (20–40+ pages), market map, and deep analysis outlining our market insights and findings about the investable opportunities we believe exist in the space. We then publish the completed Field Study to the broader market via our digital channels (see below for examples).

Next, we amplify the reach and visibility of each Field Study online and offline by hosting dinners, virtual panels, and branded events on our conclusions that bring together our community around focused conversations. The result: founders and co-investors alike know they can reach out to us about the specific areas featured in our Field Study program.

While timing does vary from study to study, here’s a week-by-week rundown of our typical Alpaca Field Study process:

Week 1: Plant Flag

Objective: attract and engage founders, investors and thought leaders in the space.

Actions: announce new topic to our networks through a blog post, social media, firm newsletter, personal networks and word of mouth.

Weeks 2–3: Engage Ecosystem

Objective: get educated and build relationships.

Actions: reach out and schedule calls with thought leaders, investors and entrepreneurs to conduct a high level macro-overview and uncover industry trends. When speaking with incumbents to determine industry dynamics, we ask things like:

• How is technology being used in the industry today?
• Where are the areas most prone to disruption?
• What is the relationship between incumbents and emerging startups? (i.e. M&A, willingness to partner, incubation, etc.)

Weeks 4–6: Intensive Research

Objective: conduct intensive research.

Actions: build data sets using both a bottoms up analysis and a top-down approach to identify all startups in the space, break down existing processes to determine which parts of the workflow startups are tackling, understand the solutions at play and hypothesize which types of technologies can play a role in changing the market dynamics. We find that hypothesizing at this stage results in less prone confirmation bias later. We also define the Total Addressable Market (TAM) by asking:

• What is the size of the market?
• Which part of the market is most susceptible to change?
• How fragmented is the market?
• Who are the public comps and what types of multiples are they trading at?

Weeks 7–8: Market Map

Objective: categorize companies by “modules” or by business model and understand the pros/cons of varying business models as part of the Market Map creation process.

Actions: document modules and business models in the sector and build out handful of company profiles to show varying examples of what’s at play in the market. Use these findings to build out a comprehensive Market Map. Next, we ask:

• Which models are more/less scalable?
• Which models require multiple stakeholders to adopt the technology
• Which models increase/decrease TAM?

Weeks 9–10: Analysis & Opinion Forming

Objective: take learnings and form opinions.

Actions: as a team, we work to use what we’ve learned thus far in the process and translate them into opinions. Both internally and to industry experts, we aim to test our original hypothesis to determine wither it’s valid or invalid. We ask:

• Which business models will be effective given industry dynamics
• Which module(s) are necessary for adoption?
• Does the solution need to be full-stack or is there a point solution?
• Do industry dynamics and TAM allow for multiple winners?
• Do network effects come into play and, if so, how and when?
• How important is founder-market-fit (i.e. category expertise) for this industry?

Weeks 11–13: Finalize & Publish

Objective: publish our findings.

Actions: we format, design, edit and finalize Field Study content in preparation for publications. An Alpaca Field Study includes three deliverables:

• Research Deck or White paper (e.g. The Intersection of Construction and FinTech)
• Blog Post (e.g. Field Study: Landlord Technology Facilitating Rent Collections)
• Presentation (e.g. The Future of DAOs Roundtable)

Weeks 13–14: Polish & Present

Objective: present findings in a “traditional presentation” format to key audiences of interest. The format differs some depending on the research, findings and sector. In each case, we aim to curate an event that will put our research in front of the right audience at the right time.

Actions: organize, host and promote an event for a key stakeholder audience. The event could take the form of a virtual fireside chat featuring industry experts, a private presentation for our LPs or an in-person gathering bringing founders, operators, investors and experts together to connect. For example:

LP Event: Many Field Studies are driven by interest from our LPs. In order to provide them thought leadership and insights, we present our Field Study research to them by hosting an exclusive in-person dinner or hosting a virtual presentation.

VC Community Event: In some cases, we present our findings to the VC community through a live networking event. This further builds our connection to and reputation in the space. Co-investors, founders and experts in the ecosystem know where we are spending time and will keep us top of mind for relevant opportunities in the space.

Weeks 15+: Monetize & Leverage Research

Objective: leverage research for ‘highest and best use.’ Field Studies can be monetized in four forms:

1. Pre-seed and incubation opportunities either via an Alpaca Fund or through collaboration with other firms
2. Seed investing via an Alpaca ‘core’ Fund
3. Mid stage (Series B and beyond) investing into breakout winners via the Alpaca Built World Fund
4. Strategic thought leadership delivered to LPs to further justify and add value to their LP investment

Other Benefits

By the time of publication, our team has often identified immediately investable opportunities. Other times, we keep this research in our back pocket. When that killer deal comes across our desk, we are more apt to move quickly and potentially win the deal.

Deals are not the only investment outcome of this work. Sometimes, a Field Study’s value is the opposite: we build research-based conviction around the areas where we do not want to invest. When this happens, our team is primed to pass quickly and early on new deals instead of spending time evaluating opportunities that are ultimately unbackable.

We also see additional leverage and value in continuing to promote Field Study content as part of the brand-building process. In addition to publishing our findings and sharing them with key stakeholder audiences through presentations and live events, we promote our Field Studies through additional ongoing outreach. This includes:

• Social media promotion and distribution via our newsletter, The Rundown
• Media/PR
• Speaking opportunities for our investment team
• Thought leadership pieces and contributed articles authored by our team

At each stage of the process, we endeavor to reinforce our team’s standing as potential thought leaders in the Field Study’s given sector and continue to build connections and generate inbound leads as a result.

Field Studies in the Wild

The best way to keep up to date with Alpaca Field Studies is to subscribe to our newsletter, The Rundown, or follow Alpaca on LinkedIn. For a deep dive, you can find all Alpaca Field Studies here. Below, we share a few recent and notable Field Studies.

The Potential of Generative AI

Led by David Goldberg

Generative AI is one of the hottest topics on the block. Every day hundreds of startups are launched in this space. We launched this study to unpack what the generative AI landscape looks like — and how we intend to evaluate opportunities.

Brand Discovery

Led by Aubrie Pagano

Brand discovery is broken, and yet more crucial than ever for companies to crack in order to stay competitive. Starting with an industry survey, we’ve cataloged trends — and solutions — in our first Brand Discovery Report.

ESG Data & Reporting in Real Estate

Led by Daniel Fetner and Ryan Freedman

We investigated the Environmental, Social, and Governance (ESG) standards that

are tightening across the Real Estate industry. We believe the sector will require innovative data capture, analytics and reporting tools to meet them. We continue to

actively monitor the space.

Global Supply Chain: A 5-Part Field Study Series

Led by Aubrie Pagano

This five-part study, spanning more than a year, ultimately honed in on three key areas: enabling Amazon Prime-like delivery for emerging brands (Part 2), end-to-end software solutions that enable cross-border sales (Part 3), and end-to-end solutions for e-commerce returns and circularity (Part 4). We invested behind two of the three themes so far as well, with investments into a cross-border, asset light global 3PL, Mayple; and the returns-to-recommerce platform, Arrive. More potential deals are in the works.

Read the entire Global Supply Chain Field Study Series: Part 1: Global Supply Chains, Part 2: Delivery, Part 3: Cross-Border, Part 4: Returns, Part 5: Conclusion

More Select Field Studies

• DAOs and Tools for DAOs
• Sustainable Building Materials 2.0
• Rooftop Solar Energy
• EV and the Future of Mobility
• Virtual Real Estate & The Metaverse
• The Rise of Recommerce

What’s Next

As a firm, the Alpaca team is continuously conducting Field Studies.

• Do you have a great idea for a Field Study thanks to a pain point you can’t figure out?
• Do you know an expert we should talk to for upcoming studies?

We announce new studies and how you can get involved on Twitter (@alpacavc), LinkedIn and in our newsletter, The Rundown (subscribe here or subscribe on LinkedIn).

Shoot us a note at hey@alpaca.vc. We’d love to hear from you.

Subscribe to our newsletter for tech updates, events, open roles, and portfolio news. Follow Alpaca on Twitter, Instagram, or LinkedIn.

Disclaimer:

Alpaca VC Investment Management LLC (“Alpaca VC”) is a U.S. SEC registered investment adviser. Nothing in this article should be considered investment advice or an offer or solicitation of investment advice; this article is for general awareness purposes only. There is no guarantee that Alpaca VC will continue to source deals from Field Studies or that the percentage of sourced deals from field studies will increase or remain the same. Referenced companies in this article are Alpaca VC portfolio companies.

Alpaca VC’s Field Study Program: A Repeatable, Thesis-Driven Approach to Investment was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

Optiversal uses generative AI to help enterprise retailers create content and drive revenue at scale. Optiversal’s solution discovers missed content opportunities and fills the gaps with AI created landing pages, blog articles, and more. Their platform integrates with product catalogs and UGC to create on-brand content at scale for enterprise SEOs and content marketers.

The Elevator Pitch

Enterprise retailers today struggle to create content that accounts for the breadth of product offerings and customer driven search attributes. Product detail pages often contain gaps or lack relevant details. Customer search queries have a very long tail and landing pages are not curated to reflect this. While well-funded copywriting tools with e-commerce features exist, none are specifically focused on enterprise retail applications. Creating the immense amount of content required to capture the long-tail of search and reviews is labor intensive and costly, at times requiring a whole content team.

Optiversal offers three specific product offerings, including specific curated landing pages responding to the long tail of customer queries, marketing content creation, and distillation/summarization of content (ie., customer reviews).

Optiversal uses generative AI to scale content across large product catalogs. For retailers such as Best Buy and Sephora, Optiversal supports the full life cycle of content, from finding opportunities to create content shoppers are already looking for via search and creating that content to managing and optimizing the content over time.

Part of their secret sauce: identifying untapped demand for product-related content and using AI to produce search engine-optimized landing pages that fill in the gaps and increase discoverability — at a fraction of the cost in a fraction of the time.

“We can look at the catalog and see that people are looking for a laptop for their college dorm room, and that you don’t have a page for that. The AI can automatically create content to fill in that gap,” says CEO and Co-Founder William Underwood.

The It Factor

The Co-Founding team has in-depth entrepreneurial, AI/ML and commerce expertise. Will Underwood and Jarrod Wolf previously founded AddStructure, a review summarization and conversational commerce tool, which was acquired by BazaarVoicein 2018. The third Co-Founder, Lucas Tieleman, was previously Chief Product Officer at BazaarVoice and led the Corp Dev team through the AddStructure acquisition. After working closely together in the consumer generated content space for a number of years, the team saw the opportunity to leverage content as generative AI came onto the scene.

The Optiversal team is very knowledgeable on the technical components of the language models they’re using, as well as how they’re addressing the pain points for enterprise retail customers. They’ve proven early product market fit via multi-year, paid contracts with major retailers (currently driving 7% of Best Buy’s traffic, for example) and they’ve done so in a capital efficient manner (no capital raised to date). The team has played successfully in the enterprise marketing space for several years. We believe this will allow them to leverage existing relationships and learnings. They have also worked together to a successful exit prior to this startup, which gives us further confidence in the ability of the team.

For more on Optiversal, read the company’s official funding announcement here.

Connect with Optiversal

Optiversal on LinkedIn

Careers at Optiversal here and on the Alpaca Job Board

Subscribe to our newsletter for tech updates, events, open roles, and portfolio news. Follow Alpaca on Twitter, Instagram, or LinkedIn.

Welcome to the Herd, Optiversal was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

Each year, Alpaca onboards several MBA Associates during the summer to assist with deal flow, due diligence, fundraising and the Field Studies we publish through our flagship research program. We asked two of our MBA Associates — Rhea Advani and Naomi Goez — to share highlights from their time working with Alpaca this summer.

I’m currently an MBA Candidate at the Wharton School at the University of Pennsylvania. Before Alpaca, I worked across financial services such as Barclays Investment Bank and also with technology strategy and operations for DoorDash and Revolut. Both of these experiences made it increasingly clear to me that being a part of the growth stories of innovative businesses excited me. Coming into Alpaca, I wanted to experience this from an investor lens.

My time in the venture ecosystem has been exciting, and my exposure has broadly been across three buckets: fundraising, sourcing and diligence deal flow, and developing a thesis. On the fundraising side, I helped put together Alpaca’s fundraising deck for their real estate technology-focused, later-stage fund. On the deal flow side, I’ve had the chance to look at a range of business models, from rent-to-own plays to platforms that are providing access to “new” asset classes such as farmland. On the thesis side, Alpaca typically does Field Studies on potential markets the team is interested in and investing in. I’m spearheading the Field Study to develop a view on construction procurement and logistics marketplaces. As someone with little exposure to the construction industry, it’s been exciting to dig in and understand the industry's nuances while having the opportunity to engage with founders and operators in the space.

The best part about working at Alpaca was the autonomy. From day one, MBA Associates are encouraged to source deals and engage with the venture ecosystem. This enabled me to get the most realistic experience of the day-to-day job. Further, learning about PropTech from experts such as Ryan and Daniel, both former founders in the space, provided an unparalleled perspective on the industry dynamics and helped me easily extend my reach within the ecosystem.

You can connect and learn more about Rhea on LinkedIn or Twitter.

I’m Naomi, a Wharton MBA Candidate, and an MBA Associate on the Alpaca VC team. I began my career in the fashion industry in supply chain and operations at Centric Brands (formerly Global Brands Group), where I managed western hemisphere production and sustainability initiatives for West Coast portfolio companies. Prior to Wharton, I also supported and am currently an advisor of a Pre-Seed stage, all-gender, circular fashion startup called ClHu, where I help oversee many functional areas, from market research to production planning and sustainability strategizing.

I’m passionate about the entrepreneurial ecosystem, and I’m committed to supporting founders who are addressing pain points in commerce, fulfillment, and logistics. I was thrilled to join Alpaca and further dive into those areas. I spent the summer researching the fast-growing B2B buy now, pay later (BNPL) space, conducting due diligence on a yet-to-be-disclosed supply chain logistics company, as well as sourcing and assessing investment opportunities across commerce, marketplaces, supply chain, Web3, B2B SaaS and marketing tech (MarTech).

Perhaps cliché, but the best part of working at Alpaca is the team. The “one herd, all grit” mentality is prevalent across the company, demonstrated by the open communication channels, eagerness to support new members, and sincere inclusivity. I feel fortunate to have had an opportunity to learn from former operators who prioritize transparency and genuinely help their founders. Further, it is a privilege to work for Aubrie, a woman VC who establishes a clear founder-focused approach and actively celebrates other women in this ecosystem.

You can connect with Naomi on LinkedIn, Twitter, and Instagram.

Thank you to both Rhea and Naomi for their work during this summer’s MBA Associates Program. Know a talented MBA candidate who’d be great for Alpaca’s future programs? Reach out below.

To keep up with the latest from Alpaca, we encourage you to connect with us on Twitter, Instagram and LinkedIn @alpacavc, subscribing to our bi-weekly newsletter The Rundown here or reaching out directly to hey@alpaca.vc

Field Notes: Highlights from Alpaca’s Summer MBA Associate Program was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

With #supplychainissues today at an all-time high, we are seeing firsthand how fragile our global logistics networks are. Alpaca’s Aubrie Pagano has led an ongoing investigation of these issues for more than a year, with her research culminating in our latest Field Study, a recently published four-part white paper on the current state and future of global e-commerce supply chains.

On the heels of this new research — you can dive deeper in Field Study: Global Supply Chains (Part 1) and Field Study: Global Supply Chains (Part 2) — we were excited to showcase a panel of industry-leading voices for a live conversation on the challenges facing founders in the landscape and the opportunities we see ahead.

Moderated by Alex Konrad, Senior Editor, Forbes, this virtual event welcomed panelists Aubrie Pagano, General Partner at Alpaca, Dave Anderson, Managing General Partner at Supply Chain Ventures, Drew McElroy, Co-Founder & Chairman, Transfix, Rachel Holt, General Partner at Construct Capital and Rick Zullo, General Partner Equal Ventures.

Among the many questions raised during the event:

• Why are we seeing so many supply chain issues now, two years after the start of the global pandemic?
• What does the future hold for the Global E-Commerce Supply Chain?
• Where is the white space for opportunity and investment?
• What areas are investors excited about?
• What are the different issues and opportunities tied to specific stakeholders in the supply chain such as trucking companies, rail freight, cross-border logistics and more?
• Can drones make any measurable difference?

Key takeaways

This has been a long time coming

“We were already in a major transition before COVID, before Ukraine, before any of these other disruptions, in terms of the e-commerce revolution and the movement from what I’ll call a linear supply chain where you move something from a supplier to a plant, you make it, you get it shipped to a distributor, they shipped it to a retailer, and then somebody went to the store and bought it and brought it home. As we all know, those days are gone and omnichannel is omnipresent in terms of processes. And the tricky part is that our technology has nowhere near kept up to it. Most companies today have 30-, 40-year-old technology.” — Dave Anderson, Supply Chain Ventures

It’s still early, early days

“You have to rip and replace the existing infrastructure to go from an economy of scale verticalization approach to something that’s much more network-based, much more decentralized. And with physical and digital infrastructure together, that’s not something that can happen overnight. This is a 20- to 30-year cycle that will play out. Our point of view is that we’re the first bat of the first inning of that transition.” — Rick Zullo, Equal Ventures

Data is king

“The truth is that the supply chain is an ongoing, dynamic problem that requires dynamic solutions. And whether you’re a shipper or a carrier or an intermediary, the more you are using data to be out in front of all the understanding of what’s happening, the more you can mitigate the pain.” — Drew McElroy, Transfix

Cross-border commerce is challenging, but inevitable

“We’ve been thinking a lot about cross border commerce. Like there’s sort of silos around people doing business country to country or continent to continent. I come from a very consumer-driven lens of, where’s the consumer going? There’s just such a halo effect and such a global culture that we live in now, especially for younger generations. And our supply chain is still replatforming its core infrastructure. We are not equipped to have a good shipped from Ohio really seamlessly to a woman in Indonesia who’s just a fan of the brand. So we’ve been looking a lot at how that infrastructure ends up changing crossborder.” — Aubrie Pagano, Alpaca

The mainstays are ripe for investment

“One area that we’re particularly excited about is in the freight rails. There has been tremendous innovation that has happened in almost every other area of supply chain besides rail. Historically, there are many reasons why it’s been ignored. It’s the most painful stack to try to modernize. But it is, if you think about just sort of the macro tailwinds that are coming behind sustainability, it’s far more sustainable behind driver shortages. It actually can be hyper-efficient to send things on freight rail. And when we first started diving into this industry, it was remarkable to me that even the most basic visibility layers weren’t present in freight rail. So I think we still are seeing these big white space opportunities, and I think it speaks to just like the size and scale of this industry.” — Rachel Holt, Construct Capital

For more from the panel, including their take on which areas are most appealing to investors right now, watch the full event here.

To keep up with the latest from Alpaca, we encourage you to connect with us on Twitter, Instagram and LinkedIn @alpacavc, subscribing to our bi-weekly newsletter The Rundown here or reaching out directly to hey@alpaca.vc

Where Does Opportunity Lie in the Global Supply Chain? was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

Welcoming Swoops: an NFT basketball game where users can own, draft, train and stake their players to be used in cash prize contests — transforming the typical passive fan experience into an engaged experience and bringing real ownership to Fantasy Sports.

The Elevator Pitch

In 2022, the sports industry is valued as a $440 billion market, while gaming has become a $175 billion market globally. While many do not have a true stake within the sports industry, they are still passively engaging as fans with the outer edges of the game. Sports still fall under the 1% rule, with owners and players capturing most of the market value. Thus far, team ownership has only been a dream for most fans — until today.

NFT technology unlocks a new, compelling value proposition for the end user and sports fan by allowing real ownership. Swoops is a sports simulation game where users own and manage their starting 5 players, which are NFTs, and compete against other members of the community.

The “It” Factor

Going beyond the court itself, Swoops will empower users to play the roles of Owner, General Manager, Coach, and Player. Users can own, trade, and stake players to be used in cash prize contests.

Ultimately the differentiation for Swoops is the level of complexity and strategy that exist within the game and its surrounding ecosystem — it is truly a game of skill with multiple user profiles and journeys, whether that be owner, investor, or manager. The goal here is not just to be a simple game, but rather a full ecosystem for others to build upon. The gameplay will center on the choice of players users deploy in a game. Users will need to think not just about the individual performance stats of their individual players, but also the chemistry of their players and the resulting team performance. Swoops is a strategy game based on analytics of both your team and your opponents.

You can think of Swoops like a Daily Fantasy Sports (DFS) game, but one that’s built for Web3 on Ethereum and Polygon.

Swoops is led by a team of technologists and NFT enthusiasts who are passionate about sports, gaming, and web3. In Co-Founder and CEO Manish Sinha, formerly the CTO of sports betting startup, Underline, the team has both a true technical leader as well as a diehard, lifelong sports fan. Co-Founder David Goldberg, a General Partner at Alpaca VC, spearheaded the incubation of Swoops after his 2021 Field Study: Making Sense of the NFT Wave uncovered significant white space for opportunity in the emerging NFT ecosystem. He has made numerous investments in Consumer, Gaming, and NFT technology.

Product Excitement

Funds will be used to fast-track the development of the game, building the community, the team, and the creative work behind the ecosystem. With this injection of funding, Swoops plans to create its own original IP of players. Each player will be an NFT, represented by a visual graphic, and have a set of off-chain and on-chain attributes. Some of those attributes will be obvious (height, age, position) and some discoverable over time (basketball IQ, shooting, agility, speed). Their performance will change over the course of their career until they retire, which will allow continued drops and evolution of the game without diluting values.

Swoops NFTs will be released over the course of the coming months with the game promised to be available in Summer of 2022.

To Wrap

We are excited to lead Swoops in its $3.5 million Seed funding alongside Courtside Ventures. First announced on April 12, 2022, the round boasts heavy-hitter partners including Gary Vaynerchuk, Jason Robins (CEO of DraftKings), Slow Ventures, Red Beard Ventures, Future Perfect, Magdalena Kala, Jon Oringer’s Pareto Holdings, and Celtics and 76ers ownership.

Extra Credit:

Learn more about Swoops, its roadmap and community here.

Read about the Swoops launch in Decrypt, Benziga and Cryptosrus.

Connect with Swoops on Twitter, Discord and LinkedIn.

Check out careers at Swoops here.

To keep up with the latest from Alpaca, we encourage you to connect with us on Twitter, Instagram and LinkedIn @alpacavc, subscribing to our bi-weekly newsletter The Rundown here or reaching out directly to hey@alpaca.vc

Welcome to the Herd, Swoops was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

The pitch process is one of the most discussed and dissected parts of the journey for founders seeking venture capital funding. And for good reason: a successful pitch can make the difference between securing the backing you need to build a billion-dollar company that changes the world and an idea that never gets off the ground.

But over the last two years, we’ve watched the art of the pitch change in significant ways. While many of the classic Dos & Don’ts of VC pitching we outlined in our original Founder Playbook still stand, the pandemic has ushered in the era of virtual meetings and digital communication that are here to stay even as in-person gatherings and events return.

This new normal brings shifts in how VCs are likely to interact with founders seeking investment. Below, we’ll give you the rundown on what we have observed working well — and not so well — for founders navigating today’s venture capital landscape.

But first, as intimidating as pitching can be, VCs truly want to understand how your business will become the next billion-dollar company in their portfolio. Your job is to not only capture prospective investors’ attention but also to welcome them into your company’s world and entice them to grab a seat on the rocket ship you’re building — seriously, no pressure.

With that in mind, many founders spend a great deal of time perfecting their pitch. Yet despite how important pitching can be, there often isn’t clear guidance around what VCs are looking for and which best practices founders should employ. In reflecting on investments that we’ve made and passed on over the last two years, we can point to a number of common dos and don’ts that ultimately influenced our decisions:

The DOs:

Do tailor your meeting to make a good first virtual impression

In today’s landscape, remote work and virtual meetings have greatly changed the in-person pitch scenario that was once upon a time the norm for many VCs. Rather than making sure you’ve got your route to the meeting location mapped out so you can show up early, the first impressions you’ll make now are likely to be virtual.

But here’s the thing: whether you’re pitching from home, a coworking spot or somewhere in between, the impression you make is still vitally important. Do create appropriate lighting and a background that speaks to your personal brand. Involve relevant team members for the pitch and be sure to have visual aids like your deck and other supporting materials (financials, demos) cued up and readily at hand for screen sharing. Nothing kills the meeting buzz like a participant fumbling for open tabs and materials.

Do Focus on the ‘wow’ factor and make it easy to understand

There is nothing worse than being 15 minutes into a call and still not having a clear understanding of what a company does and how it makes money. While it’s important to sell the sizzle of your long-term vision, start with what the business actually does today or will do soon in basic, tangible terms.

Remember, you’re the expert — not the investor — so make your pitch easily understandable to someone without your experience. The last thing you want is for an investor to spend half the call trying to piece together the mystery of what you’re selling.

Do know your audience and pitch accordingly

Do your research before you get introduced to an investor. What types of companies do they invest in (stage, sector etc.)? What type of LPs does the firm have (strategic vs. financial)? What value are they likely to add to your company? Understanding a VC’s investment criteria and value-add will help you highlight how your company aligns with what they’re looking for and tell you if this is in fact a good match for your business in the first place.

This same logic continues as you get further along in the investment process. Just as we invest in founders who we believe were put on the planet to run the businesses they’re building, it’s important for founders to partner with VCs they believe are the best fit for their team, stage of business and long-term roadmap.

Before you pitch a VC team, it’s helpful to do even deeper research to get to know your audience. What do the investors you’ll be meeting Tweet about, write about on Medium, share via Substack or post on LinkedIn? Understanding the bigger picture at play not only puts you in a better position to build a connection, but will also help you identify the VC team members who can create value for your startup.

Do use visuals that support your case

You don’t want an investor to be reading dense slides in favor of listening to what you have to say. The pitch deck should be used as a valuable supplement to what you’re telling them, but does not need to repeat every detail. Leverage the pitch deck to visually show your product/service and convey key ideas.

Do be open to and track feedback

Being open to feedback from investors will not only help you understand their key concerns and improve your pitch over time, but it will also signal to investors that you are coachable and willing to take feedback in and use it to improve. For founders we find impressive, feedback makes them better, not bitter. Feedback can also give you some indication of how useful an investor might be to work with — a pitch shouldn’t be completely one-sided after all. Devise a method for capturing and tracking the feedback you receive during pitches. It can become one of your most valuable assets going forward.

Ultimately, you are assessing whether the investor is the right fit for you and your company just as much as they are assessing whether you and your company are the right fit for them.

They’re busy, so do follow-up

Even though an investor passed on an initial pitch doesn’t mean that couldn’t change. Maybe the business isn’t far enough along for them or maybe they want to see a particular concern addressed before they feel comfortable investing. First, ask for concrete indicators the investor is looking for. Then, drop a note to the investor after some material updates to the business. It is all upside to keep an investor informed of your progress, and it will keep you top of mind if an investment or other opportunity makes sense in the future. If you don’t follow up, then you’ll never know.

The DON’Ts

Don’t forget to do your homework

In the last two years, the rapid influx of capital into the venture space has gone hand-in-hand with the creation of many new firms and funds. Looking at the landscape today versus just a few years ago, you as the founder have a lot of options for funding. Take the time to research what you can to understand your potential investors’ unique point of view, their investment thesis, their areas of focus and what kinds of teams they tend to back. Doing so will not only put you in a better position to find the right match, but it will also save you lots of wasted time reaching out to and pitching the wrong people.

Don’t overlook alternative investment vehicles

In recent years, we’ve seen a number of alternative investment strategies gain popularity. For example, equity crowdfunding has transitioned from something of a last resort to become a viable — and even preferred — funding option for startup founders seeking to expand and diversify their cap tables. In fact, our team has been interested enough in this phenomenon to put together the Founder Playbook: When & Why to Raise from Equity Crowdfunding Platforms to help founders navigate this alternative investment strategy as they raise.

The takeaway: whether or not equity crowdfunding or another alternative investment strategy is right for you, be open to the possibilities out there. Especially with the rise of web3, we expect to see more and more diversity in the kinds of investment vehicles and funding options out there to build companies.

Don’t get bogged down in buzzwords

It sounds obvious, but you would be surprised at the amount of buzzwords we hear. Investors are going to be impressed by your passion for the business — not your knowledge of Silicon Valley slang. It will be obvious if you’re speaking out of your depth. Using acronyms, for example, can sometimes come off as presumptuous if they are not well-known and not explained. Likewise, misusing buzzwords or tech jargon happens often and this will only signal disingenuousness. Speak in terms you know and be yourself.

Don’t be vague or avoid details

Vague pitches are not only less clear but less memorable. Including anecdotes and customer stories will bring life to your pitch and help the company stand out. A common mistake is being overly vague when it’s time to talk about money, which is ironic since that’s really the purpose of the meeting. Investors want to see that you’re being thoughtful about how much money you’re raising and are working backwards to that number based on the business’s needs. Being specific will save time, avoid signaling distrust, and demonstrate thoughtfulness.

Don’t ignore weaknesses

Failing to address weaknesses will only raise more concern around them. While you shouldn’t lead with weaknesses, proactively pointing them out and demonstrating that you have thought about these and are in a good position to address them will earn points. Ignoring weaknesses will only cause the investor to spend more time digging in on those points and prompt them to draw their own conclusions. This is your opportunity to control that narrative so don’t pass it up!

Don’t deny the competition

It is a rare occasion when a founder will share their actual competitors, so when that happens, it immediately increases trust. Investors will uncover the competition whether you share it with them or not so why not earn some easy brownie points by being forthcoming? This means not just highlighting the household name players in the space, but also new entrants. A common argument founders try to make is “there is no competition.” We know this is never the case — even greenfield opportunities have some competitors. Pointing to indirect competitors or substitutions will demonstrate a deeper understanding of the market than suggesting that none exist.

Don’t fumble your KPIs

Not knowing basic KPIs is an easy way to reduce credibility right out of the gate. Investors want to know that you are living and breathing the business. Metrics that founders are expected to know include things like run rate, customer count, gross margin %, burn, and retention rate. These metrics don’t need to be up to the minute, but you should know the topline metrics, such as run rate and customer count, from recent months as opposed to last year since they are (hopefully) growing from month to month.

Even though the process can seem daunting, pitching can result in more than just financing for your company. This is an opportunity to broaden your network and bounce ideas off a bunch of smart people.

One last thing: remember to have fun with it! Even if a VC passes on your company now, a good first impression could lead to introductions, advice and maybe even financing down the road.

Subscribe to our newsletter for tech updates, events, open roles, and portfolio news. Follow Alpaca on Twitter, Instagram, or LinkedIn.

Founder Playbook: The Dos & Don’ts of VC Pitching 2022 was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’re kicking off Q2 with lots of momentum funneling us into spring. The pack has been on the move as usual.

Every month, we’re rounding up our team’s news, happenings and updates from around the internet. Here is this month’s Field Notes:

🎟 Ready for a VC showdown? The real question: who isn’t? Grab your tix to watch our GP Aubrie crush the competition during PrimeTimeVC’s next live event in NYC.

🏘 Speaking of showdowns, it would be easy to think virtual real estate is getting ready to face off with actual, IRL real estate given all the metaverse chatter out there today. But our team’s Daniel sees a future that’s full of cross-over and collaboration between the two. Want more? In this four-part video series from CREtech, Daniel gives the full rundown on this exciting space:

Real-World Investing in Virtual Real Estate: Trailer

Real World Investing in Virtual Real Estate: Episode 1

Real World Investing in Virtual Real Estate: Episode 2

Real World Investing in Virtual Real Estate: Episode 3

👋 If you’re a founder or investor interested in virtual real estate, we encourage you to reach out and let us know more about what you’re working on.

🕺 With all the extra free time he has on his hands in between being a father, husband, investor, incubator of companies, BAYC #1800, Miami man about town and dance recruiter, David decided he needed another project. And, zero surprise here, it’s pretty amazing.

👩‍💻 Also amazing: the opportunity to work alongside the team this summer. Daniel and Ryan are seeking a talented MBA looking to break into PropTech to join them. Know someone great? Apply here.

🎨 We’re also seeking a marketing intern with designs skills. Learn more and apply here.

💪 Our MBA associates make a huge imPACK here at Alpaca. A big thank you to the current crew: Andrew Peng, Kennedy Shields, Linna Zambardino, Alejandro Safdie and Stefano Gabella.

🌿 This week, Alpaca launched a Field Study on Sustainable Buildings and we are looking to connect with founders, investors and thought leaders in the space. Who should we tap? DMs open or email us (see below for all our connects).

🚘 But wait, there’s more! Our Field Study: EV, Parking & Mobility Tech is also underway. If you’re working or investing in these areas, we want to hear from you.

🤔 Inquiring minds want to know: are NFTs the beanie babies of today?

Coming up, we’ll be announcing our latest investments, portfolio company news, career opportunities in the Herd and a special project or two our pack has in the works and can’t wait to share. To keep up with the latest, we encourage you to connect with us on Twitter, Instagram and LinkedIn @alpacavc, subscribing to our bi-weekly newsletter The Rundown here or reaching out directly to hey@alpaca.vc.

Field Notes: VC Showdown, Virtual Real Estate Video Series, Intern Opps + Web3 on the Rise was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Aubrie Pagano and Stefano Gabella

What are the next technologies in sustainable buildings that will decarbonise one of the major sources of greenhouse emissions?

As part of our ongoing thesis-driven research program, we are excited to share that Alpaca is launching a new Field Study on Sustainable Buildings.

Buildings are estimated to be a major source of GHG emissions, ca. 9 Giga tonnes of CO2 annually according to the IEA (~15% of total emissions, 2020 data). As a consequence, large investments and innovations will be required over the next decade to comply with government and company-level Net-Zero emissions targets.

Sustainable materials such as low emission concrete, steel and glass will play a role in the transition, as well as low-emissions construction techniques, circular economy and sustainable supply chain solutions. Significant innovations and ventures will emerge to capture opportunities in this space, offering opportunities for venture capital investors looking for financial returns alongside positive societal and environmental impact.

As our team moves forward with our investigation into this exciting space, we are looking forward to engaging with founders, investors and thought leaders over the next few months.

Who should we tap? We encourage you to reach out.

Subscribe to our newsletter for updates, events, open roles, and portfolio news. Follow Alpaca on Twitter, Instagram, or LinkedIn.

New Alpaca Field Study: Sustainable Buildings was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Ultimate Agency List and Selection Guide — 2022

We initially published this Ultimate Agency List and Selection Guide to address an inevitable problem every startup faces: the more you grow, the more you realize that you need to outsource regular tasks to make room on your plate for the things only you can do. From here, you begin the process, usually by narrowing down the players based on former clients, references, and industry expertise and eventually picking a handful of agencies for the job.

But finding the right agency in an ocean of talent to match your needs can be tough. After all, your startup is your baby — you need to ensure the people taking care of your venture are credible, reliable, domain experts who will be dedicated to reaching your goals and a great culture fit for you and your team.

At Alpaca, we’ve seen this strong founder and company bond emerge many times and have watched companies grow together through the different stages. But making that happen all comes down to the perfect match.

To help current and future founders in their search, our team has compiled a list of agencies and professionals known for growing those bonds with their startup clients and going great places together over time. This ever-growing Master Agency List highlights leading agencies in:

• PR
• Digital Marketing
• SEO
• Engineering
• Legal
• Branding
• Product
• Design
• Hiring

Whether you are looking to complement your existing team’s efforts or want to fully outsource a department, hiring a reputable agency can bring a depth of expertise and breadth of skills — quickly — that a single internal hire can’t. What’s key is finding an agency partner that’s a great fit for you and your team. To do that, you’ll need to be equipped with the right questions to ask the firms you are vetting so that you finish with a winner versus a dud.

How to find your agency match

As you grow your company, outsourcing work efforts, and learning how to navigate that process effectively, can be one of the smartest decisions you’ll make. With that in mind, here are some steps you can take for a successful agency search.

1. Place transparency and honesty at the forefront of the conversation

Similar to asking employees to be honest about their triumphs, struggles, and concerns, it’s important to give agencies space to do that as well. Let these agencies in so they can be open with you about where improvements can be made, potential new strategies, and other recommendations.

In the same vein, encourage them to be honest with you about where they’re at — how much time and effort can they dedicate to your company, where they believe they can be an asset, and overall why their background fits this stage of your company’s journey.

2. State your company’s goals

Make sure the agency knows what your goals are for the next quarter, next year, and beyond so they can scale with the company. Tell the agency where you see the relationship going, how you believe they can play a role in the success of your startup, and how you plan on holding them accountable. As long as you’re consistently stating your intentions and goals, you’ll be in a good place to assess the health of the relationship and the future work.

3. Build a process to vet and compare agencies

Hiring an agency can be time-consuming and downright frustrating. By creating a thorough process, you can make it a quick and engaging system that you can repeat as your company’s needs evolve and expand.

Start out with a casual first or second conversation where you focus on communicating your needs and goals. Then, create a list of questions you would like them to answer and ask if they can create a strategy presentation within a set period of time (say, two weeks). More than likely, they will respond with a resounding yes and immediately start working on your questions.

4. Ask questions and get past work examples

Every department or sector will have different vetting questions and styles. Do research into the sector to create a list of questions that’s right for the agency you’re interviewing. If you don’t understand the sector well, ask an advisor or expert to join the vetting process so you can have a more experienced opinion.

As an example, here are some good questions to ask:

• Have they worked with companies similar to yours before?
• How do they track and measure results on an ongoing basis?
• How much time from the start of the engagement does it typically take for them to drive positive results for a company like yours?
• How many clients do they have currently and do they have bandwidth?
• What, in their mind, must be in place to have a great working relationship?
• How frequently do they communicate with clients and in what form?
• What’s their track record like in driving results?
• Are they in your budget?

Again, your venture is your baby, so in addition to above questions, be sure to request references and ask to speak to existing clients before you make any final decisions.

5. Pick your partner and negotiate the contract

Once you’ve selected an agency, it’s good business practice to negotiate and sign a detailed contract or client services agreement with them. Many agencies will have their own pro-forma agreements that you can adapt to your needs.

Be sure to consider the length of the partnership, too. Should it be yearly or monthly? If it’s a branding or marketing contract, what deliverables are expected? Are there mechanisms built into the agreement that allow for reviewing performance and updating or adjusting deliverables accordingly? Sitting down with the person who heads that department or your COO will help you form the answers to these questions.

At the end of the day, you need to feel confident in selecting a new agency and if all goes well, they will become your partner — your co-parent. Together, you hold the potential to propel your business forward.

Be sure to check out the Alpaca VC Master Agency List to discover contractors and agencies that can help grow your business in every area.

Have you worked with an amazing agency that’s not on the list? Want to suggest another agency category for us to add? Please email hey@alpaca.vc. We continue to update and add to this evergreen resource and add new sections.

The Ultimate Agency List and Selection Guide — 2022 was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.

Live is nothing new. “Saturday Night Live” is one of the most successful shows of all time. It’s aired live for 45 years and is broadcasted in over 200 countries. Its alumni are unmistakable, grossing over $70 billion at the box office. So, what is the secret to its successful sauce? I would argue that “SNL” is a well-oiled comedy machine, with 1) a time-tested content formula consisting of practiced sketch comedy and 2) an incredible scouting apparatus for talent. (Lorne Michaels famously spotted Chevy Chase waiting in line for a movie and asked him to audition.) On top of the machine itself, the spontaneity of the show is exciting and engaging. There’s an element of suspense in the live format — of “anything can happen live” — executed with finesse by talented improv actors from the likes of Second City and LA’s Groundlings.

One could argue the same goes for live commerce. Similar to “SNL,” success for live commerce lies in a few key ingredients:

1. Great content
2. A recruitment system for hiring and training hosts
3. Synchronicity

Let’s dive deeper into each of these in this post.

But first, what is live commerce?

Put simply, live commerce is any live video distribution channel that seeks to “recreate, replace or reimagine the energy of in-person shopping,” according to Vogue Business. This includes video shopping through 1-to-1 appointments with stylists, as well as 1-to-many broadcasts with hosts encouraging impulse purchases of hard-to-get items at hard-to-beat prices. Live commerce is huge internationally. In China, two-thirds of consumers have bought products via livestreams by platforms like JD.com, Pinduoduo, Duoyin and TaoBao, the latter of which did $61 billion in live commerce transactions in 2020 alone. Set to approach $300 billion this year, China’s live commerce market is growing exponentially, with the largest categories being snacks, apparel, and skin care.

The U.S. has been slower to adopt live commerce, transacting some $11 billion this year. For one, U.S. consumers aren’t nearly as used to shopping from mobile devices as their Asian counterparts.

Well put by Bertelsmann Digital Media Investments in a recent report, “China’s primary business model for internet companies has historically been transactional, whereas U.S. companies have relied on ads. As a result, media formats in the U.S. have tended to skew towards long-form video and images, as advertising was more difficult to crack in live formats. In China, however, livestreaming evolved much earlier, given user’s ability and willingness to pay directly for influencer content, as well as the payment integrations/infrastructure to do this seamlessly. As U.S. media shifts towards business models outside of advertising (commerce, tipping, subscription), livestreaming becomes a more interesting and revenue-generating segment. In addition, with more commerce and entertainment consumption shifting online due to the Covid-19 pandemic, familiarity with streaming and viewership has followed.”

All this being true, macro tailwinds are propelling the internet toward more synchronicity, or live media. Platforms including Twitch, Clubhouse, Instagram and OnlyFans offer communities and, especially for younger audiences, live shared experiences built on engagement, gamification and social interaction. As a growing number of marketing dollars are moving toward influencer marketing and streaming, it is only a matter of time before consumer appetite for live commerce ramps in the U.S.

Investors believe this also. There have already been some big bets in the space, including investments in PopShop, WhatNot, NTWRK and ShopShops. VC funding in the space totals over $133 million, with a bulk of those dollars coming into the ecosystem in the last 18 months. Deals include:

• Klarna acquiring Hero, an app connecting shoppers with retail staff via text, video and chat, for an estimated $160 million in July.
• Millennial-focused live shopping app Popshop Live raised $20 million in July.
• Commerce app for testing and evaluating beauty products, Supergreat, raised $10 million in July.
• Collectibles live shopping app Whatnot raised $70 million in March.

So what will make live commerce successful in the U.S.?

Let’s revisit our “SNL”-themed best practices to understand how brands, creators and marketplaces can deliver superior shoppable entertainment.

Great content
Just like any other medium, live commerce is only as good as its underlying content. And just like “SNL,” which developed a playbook for great sketch comedy, winners in live commerce need to deliver exceptional content for the live medium. There are a few themes to delivering great live content:

• Creating scarcity. People are not compelled to buy something live that they can get anywhere else, at any time. Instead, live commerce works exceptionally well when there is risk of the product selling out and/or the product is not sold in other channels. For this reason, many sites actively show how many units are left in stock so the buyer can watch supply dwindle. In other words, FOMO drives conversion. This is also the reason why NTWRK has worked with streetwear drops and why WhatNot offers lots of limited-edition toys and collectibles. They are in shorter supply than the demand.
• Accessible price points. Live shopping is similar to e-commerce, where the average AOV is not higher than $100. This means merchants need to think about the accessibility of the featured items, and/or the discount rate at which the items are being offered. An effective strategy is offering flash sales, where products are available for a limited time at a special price. (I like to think of live commerce platforms, like ShopThing, as the next-gen Gilt Groupe.)
• Targeted product assortment. For each show, shoppers need to know what kind of products they’ll expect to see. As such, it is important to establish a product category per show, where a shopper can rely on access (e.g., collectibles, sneakers, handbags, designer sample sales, etc.)
• Discovery vs. curation (and local vs. category). It is also important to train the shopper to understand what kind of show the live stream is: Is it a show about discovering new brands and products (e.g., “shop India” or “shop downtown Las Vegas”), or is it a show about gaining access to a special creator or designer?
• Ultimately, it’s entertainment. In China, livestreamers tell dirty jokes and sing karaoke. On other apps, you can tell the host to feed a fish in the pet store and they’ll do it live. It’s all about engaging content and keeping the shopper enthused for long enough to convert.

A recruitment system for hiring and training hosts
Just like on HSN and QVC, the host drives the tempo and sell-through of the show. If you’ve ever filmed on one of these channels (which I perhaps, unfortunately, have!) you know that the hosts have two audio streams, one in each ear. One voice tells them which camera to look into, and the other is feeding them information about which SKU to push more, what has sold out, etc. It’s actually really impressive how well they maneuver the time on television with a smile, and it goes to show that a well-trained and likable host can make all the difference. It is no different in a mobile livestream context.

• Branded personalities. Each platform has its own unique voice, audience and personality. The hosts of each show should reflect that attitude in their tone, voice and expression, so that no matter when you’re tuning in, you feel you’re watching the same app.
• Superior hiring and training. To create great hosts, some brands have created sales training programs and curricula, in the same way that retail stores or Soul Cycle have created detailed training programs. Others have hired directly from sales floors, where staff members are already trained to sell and serve customers. Still, others are hiring influencers, celebrities and athletes, among others, who can draw their networks to the platform and shortcut acquisition.

Synchronicity
As mentioned before, what made “SNL” so much fun to watch was the improvisation of the entertainment, as well as the “anything can happen” excitement that naturally occurred. It takes effort to achieve that effortless improvisation, and planning.

• Live and scheduled. The key to live commerce is obviously the excitement of the live show and sale, but it’s also important that customers are reminded of when a show is happening. Therefore, creating a proper scheduling cadence and reminder flow is important. The worst thing would be for someone to enter the platform with nothing to watch and nothing to look forward to.
• Social. The fun of live shopping is the ability to interact with hosts and other audience members, so it’s important to address buyers’ questions right away. Often there is a staff of several people answering questions as the host goes on. As these platforms scale, more customer engagement occurs, so CX is an increasing cost center and focus.
• Bandwidth. Little has been shared about the scaling issues associated with livesteams. It’s expensive to host live content, and it’s also hard to scale up and down quickly. Proper infrastructure is required but hard to achieve consistently.

Is there room for more live commerce?

As discussed, there has been significant funding into the live commerce vertical to date, with companies spanning many industries and sellers. That said, there are still areas of opportunity in live commerce. I identify a few below:

Product categories that have yet to break out:

• Luxury fashion is a good use case for driving scarcity where brand affinity has already been earned. Similar to the old flash sale model of Gilt Groupe and RueLaLa, there is white space for live commerce to create deep discounts and frenzy around the ultimate deal.
• CPG, specifically snacks and other e-grocer category leaders, are not yet dominating in the U.S. the way they are in China.
• Larger goods, like cars or even real estate, could be sold via these platforms where interactivity and live video present a more in-depth product investigation experience.

Tech enablement for brands to host live commerce:

• Brands including Nordstrom and Home Depot have already experimented with livestreaming, which “helps brands and retailers build direct, social and meaningful relationships with their customers,” according to the National Retail Federation.
• Building this tech in-house can be difficult and costly, given the bandwidth constraints that exist for streaming as well as the development time. Powering live commerce for other brands is an exciting prospect, as it could drive down the overall cost-to-serve while creating a self-serve tool for marketers to experiment.

Aubrie Pagano is a general partner at Alpaca VC investing in consumer and next-gen commerce. If you’re an amazing founder working in this space, you can DM Aubrie here.

Live Commerce’s secret sauce, decoded was originally published in Alpaca VC on Medium, where people are continuing the conversation by highlighting and responding to this story.