The Starship Enterprise (Source:

Ecommerce Trek II: The Wrath of Khan

To boldly go where few people have gone before.

Captain’s Log Stardate 11.28.2018:

To invest in a pre-launch consumer tech company, you need to really believe in the team, and you need to really believe in the idea. Actually you need more than belief. You need absolute conviction.

We have absolute conviction about the company that Imran and Cate Khan are building, and we are putting our money where our mouth is. We are leading the $17.5M Series A in their new company. And it doesn’t even have a name yet. But I’m rooting for them to call it the Starship Enterprise.

I’ve known Imran since he joined Snapchat as Chief Strategy Officer back in 2014. He was responsible, among other things, for strategy, finance, monetization, and partnerships. When Evan and Bobby hired him, Snap had less than 100 employees, ran on Quickbooks and was pre-revenue. When he left a month or so ago, Snap had gone public, with thousands of employees and over a billion dollars in revenue. Over the last few years I’ve gotten to know him well. Like many other people, I was impressed by his strategic thinking, his earnest, can-do attitude, his optimism and his ability to get things done.

I’ve known Cate almost as long. She rose through the ranks at Quidsi, initially running the flagship business, and eventually running all of retail at Quidsi. When she moved to LA, I immediately tried to poach her for one of my portfolio companies, but the work at Amazon was too compelling for her to leave. That did not stop me from trying a few more times, always unsuccessfully.

Shortly after Imran left Snap, he told me what the two of them were up to next. As you would expect from people with their track record of success, they were taking no small swings. They had carefully charted the ecommerce market globally and saw an opportunity in the US.

What followed was not a pitch, but a conversation. No deck. No business plan. Just a three-way conversation that highlighted an opportunity hiding in plain sight. Like the frog in boiling water, I had failed to see an opportunity that existed today because of the culmination of many years of incremental changes. Built on a foundation of innovation, customer delight, discovery and surprise…exciting!

Some people are scared at the prospect of building a new multi-brand retailer. Competing with Amazon is hard. Amazon is a great company, and a fierce competitor. That is why more investment has flowed towards DNVBs and marketplaces than multi-brand retailers over the last few years.

But when we looked at the $1B+ ecommerce exits (value at IPO or acquisition) in the last five years, we saw something interesting. Despite the excitement over DNVBs and marketplaces (which we share), over half of these big exits had been multi-brand retailers (highlighted in blue).

Source: Qatalyst Partners

Now it’s easy to point at any one company and dismiss the data point saying “that’s China,” “world’s biggest acquihire,” “luxury is different,” or “it’s really a big data company, not a retailer.” But when you see the data in its totality, it’s impossible to dismiss. A ton of value has been created by multi-brand retailers.

Cate and Imran have begun to put together an experienced team from places like Amazon, Target, King, Thrive Market and Dollar Shave Club. They will need to continue to hire well, and to merchandise and market well to be able to carve a market out.

But ecommerce is more deterministic than social media. Great, experienced founders have a real advantage. We believe that Cate and Imran are great, experienced founders. So we’re buckled in for Warp Speed!

Source: GIPHY