Sarah Kunst of Cleo Capital redefines venture capital by investing in companies addressing fundamental human needs rather than discretionary wants. She discusses how focusing on essential services, exemplified by portfolio companies like plastic-free grocery delivery service Zero and beauty professional platform StyleSeat, yields impactful and sustainable businesses. This episode offers critical insights for operators looking to build ventures with genuine market demand and societal value.
Key takeaways
Identify 'basic needs' gaps in the market for sustainable business opportunities, rather than focusing solely on 'nice-to-have' products.
Leverage community-building, even simple platforms like Slack channels, to foster innovation and support aspiring entrepreneurs.
Consider "scout programs" as a model for sourcing and funding early-stage companies and empowering new angel investors.
Focus on enabling potential founders to overcome the "zero to one" hurdle by providing support and connections, rather not waiting for fully-formed business ideas.
Look for opportunities to support the "creator economy" and service professionals with tools and platforms that help them grow their businesses.
Cleo Capital's Sarah Kunst thinks the investing landscape focuses a great deal on the top of Maslow's hierarchy of needs -- in plainspeak, that's stuff that isn't really essential. Or, in Kunst's words, the kind of product that answers the question: "what will make you feel better in the moment?"
Her investments are in companies that supply basic needs. "There's the whole thing on the bottom: where you do you live, where do you eat, how do you feel loved?' Kunst said on the Modern Retail Podcast.
That includes Zero, which calls itself "the first plastic-free grocery delivery service" -- and is available in the Bay Area only, for now -- and StyleSeat, which aims to help beauty professionals run and grow their personal businesses.
Kunst also started a scout program -- "when a venture fund pays for you to angel invest" -- and Chrysalis, a fellowship for tech workers laid-off as a result of the coronavirus (and curious to start their own businesses). "This wasn't us flying everybody to a private island for six weeks, it was 'hey, we have a Slack channel,'" Kunst said. "When you provide space for people, a lot of creativity just kind of flourishes."
"We didn't turn people into founders. We took people that we believed could be founders and we showed them that a lot of what was holding them back was that zero to one. Candidly, they didn't even need an idea. Not every person started their own company. A lot of them joined with other people," Kunst said.
What does this episode say about founder & leadership?
Identify 'basic needs' gaps in the market for sustainable business opportunities, rather than focusing solely on 'nice-to-have' products.
What does this episode say about finance & fundraising?
Leverage community-building, even simple platforms like Slack channels, to foster innovation and support aspiring entrepreneurs.
What does this episode say about dtc strategy?
Consider "scout programs" as a model for sourcing and funding early-stage companies and empowering new angel investors.
What does this episode say about founder & leadership?
Focus on enabling potential founders to overcome the "zero to one" hurdle by providing support and connections, rather not waiting for fully-formed business ideas.
What does this episode say about founder & leadership?
Look for opportunities to support the "creator economy" and service professionals with tools and platforms that help them grow their businesses.
