A Conversation with Ben Lerer and Brynn Putnam at Strictly VC NYC 2024

The Story of Mirror and Brynn Putnam

• Ben Lerer's firm wrote Mirror's first check, a seed series check, and was the first money in, with Spark later leading the series A round (19s).
• Brynn Putnam had a convincing but basic demo for Mirror, a two-way mirror with a computer screen behind it, showcasing what the product could look like with significant funding (41s).
• Before starting Mirror, Putnam had a boutique gym chain where she designed a proprietary contraption similar to a Pilates reformer, demonstrating her inventive skills (1m4s).
• Putnam was 8 months pregnant when she started Mirror, aiming to solve her need for exercising at home with a small child (1m56s).
• Mirror was sold to Lululemon in 2020 for $500 million, a decision Putnam felt was right due to their long-time partnership and the opportunity to expand globally (2m33s).
• Putnam stated that Mirror wasn't looking for an acquirer at the time, but the partnership with Lululemon felt like the right fit to take the company to the next level (2m47s).
• Ben Lerer had an opinion on the sale, acknowledging the power law in venture business, where taking moonshots is common, but didn't elaborate on his specific opinion on the sale (3m31s).
• The power law in venture capital can sometimes lead to a loss of sight of basic, sound business decision-making, and there are general truths in business, such as selling when others are greedy and buying when others are scared (3m48s).
• Hype cycles, like the one seen in at-home fitness during COVID, can lead to offers that make sense, and it's not always necessary to continue pushing for more (4m31s).
• When Brynn Putnam considered taking an offer, different venture capitalists on the cap table had varying incentives, but as an early-stage investor, there was extreme alignment with the founder (4m48s).
• The decision to sell was deemed the right one, despite potential second-guessing, and it ultimately proved to be a brilliant move (5m34s).

Brynn Putnam's Journey After Mirror

• Brynn Putnam stayed at Lululemon for a period after selling Mirror, and the experience provided valuable lessons, including the importance of being gracious and learning from the acquirer (6m16s).
• The experience also highlighted that selling a company is a continuous process, and the best approach is to learn as much as possible from the acquirer and find purpose in the new role (6m49s).
• Brynn Putnam learned a significant amount during the year at Lululemon, but ultimately, transitioning from founder and CEO to general manager was not the right fit (7m13s).
• Brynn Putnam left her previous company due to a significant change that wasn't a good fit for her, and she wanted to build something new again (7m23s).
• After leaving Lululemon, Putnam took stock of her priorities in life, which had shifted to focus on family and relationships, and she struggled to find quality time with her loved ones (8m9s).
• Putnam's new company aims to use technology to build better social relationships and connections, particularly in the gaming space, and is a consumer hardware company (9m23s).
• The company's goal is to enable people to spend quality time together face-to-face, with technology as an enabler rather than the primary experience (9m34s).
• The company is not specifically for children, but rather for friends and families to spend time together, and it's not an education company, although it may have educational aspects (9m42s).
• Putnam's company is launching in 2025, and it will involve both hardware and software components (10m29s).

Investing in Putnam's New Venture

• Ben Lerer is an investor in Putnam's new company, and his firm led the first round of funding, which was more expensive than the initial round for Putnam's previous company, Mirror (10m43s).
• Lerer believes that investing in hardware is challenging, but his firm has invested in hardware companies in the past, and he thinks Putnam's new company has potential (10m58s).
• The venture brand is specific and exclusively early-stage, focusing on people and founder-market fit, with an emphasis on betting on individuals and their ideas, as seen in the case of backing Brynn Putnam, who has immense respect and a proven track record (11m2s).
• Brynn's ability to build and finance consumer hardware products, understanding the hardware-software dynamic, and having credibility to access capital, makes her a strong founder to back (11m49s).

The Future of Hardware and Consumer Tech

• The combination of AI, hardware, and software is expected to lead to a golden age of hardware, with opportunities for new mainstream consumer hardware success stories, as core components become more mature and affordable (12m45s).
• The iPhone's release 17 years ago marked the last major mainstream consumer hardware success, and since then, there have been few notable successes, such as Oculus, leaving room for new innovations (12m58s).
• The use of display technologies has become more possible and affordable in recent years, and AI is opening doors for new ways to interact with devices, leading to the potential for new devices on the market (13m18s).
• The idea of a new shared device in the home, rather than another personal computer, is being explored, with a focus on creating a piece of tech that brings families together (13m36s).
• The importance of creating a simple and user-friendly experience is highlighted, rather than over-indexing on technical specifications, as seen in the success of Mirror, which appeared simple but was more sophisticated than it seemed (14m1s).
• The concept of "withered technology" is mentioned, which involves using mature, affordable, and readily available technologies, combined with lateral thinking, to create innovative products, as seen in Nintendo's design philosophy (14m25s).
• Creating a unique experience around a product by combining hardware, software, and content can be incredibly powerful, as seen with the company Mir, which used commodity hardware to create an interesting experience (14m39s).
• Bringing family and friends together through technology is an interesting concept, with companies like Pi, founded by Andy Dunn, the founder of Bonobos, working on this idea, and it makes sense as people need more reasons to meet in the real world (15m2s).

New Opportunities in Consumer Tech

• There is an opportunity for new formats of entertainment and alternatives to screen addiction, with a focus on getting people off screens and out into the world, and this is an area of interest for investors (15m43s).
• A recent deal was made with an application-level AI company in the travel space, which is exciting and has potential for growth (15m58s).
• Another recent deal was announced with a company in the aftermarket automotive space, which is a large and fragmented hobbyist area, and finding ways to tap into people's passions is a good bet in the consumer space (16m21s).
• The consumer space has seen a trend of unbundling and rebundling, with companies like Apple dominating the market, but there is an opportunity for new, purpose-driven companies to break this monopoly and offer alternative experiences (16m51s).
• There is a swing back towards consumer-focused companies after a long period of focus on other areas, driven by factors such as AI and more affordable hardware, and this trend is expected to continue (17m29s).

The Resurgence of New York's Tech Scene

• The rise of the iPhone, App Store, social media, and Shopify in the early 2010s drove a trend of consumer-focused companies in New York, and this trend is seeing a resurgence (17m57s).
• The current time is great for building consumer businesses with a wide open imagination, as there have been few significant tech changes in the last four to six years to inspire new ideas, but AI is now serving as a catalyst for innovation (18m22s).
• High-quality founders are now getting back into the market, taking advantage of new possibilities that weren't available six months or a year ago, and the slope for using imagination is steep (18m55s).
• The consumer space has been unexciting in recent years, but it's now becoming more promising, with founders like Brynn Putnam and Andy approaching it from different angles (19m24s).
• Many consumer businesses in the past relied on the same playbook, which became oversaturated, including social media marketing and influencer partnerships (19m35s).
• Good consumer founders often build products that solve their own pain points, creating a future that doesn't exist yet, and if done well, these products can resonate with customers without relying on saturated marketing strategies (20m4s).
• To market a company effectively, it's essential to get clear on who the customer is, what problem is being solved, and create an incredible experience that tends to sell itself (20m52s).
• New York City is currently experiencing a resurgence, with people returning after fleeing during the COVID-19 pandemic, and the city is now more exciting than ever, with a thriving startup scene (21m40s).
• New York has a diverse startup ecosystem where companies can be built in any category, with a large customer base available in the city, making it an ideal location for various businesses (22m10s).
• While the Valley has a strong presence of foundation model companies, New York's strength lies in the application layer, making it an exciting place for building applications on top of these models (22m45s).
• The cost of compute is decreasing, and the biggest companies are battling for supremacy in foundation models, but the most exciting developments will be the applications built on top of these models (22m50s).
• New York is expected to be an amazing place for these applications, and there is a growing interest in investing in New York-specific founders and targeting the area for future investments (23m3s).
• Other firms, such as Index, are opening offices in New York, indicating a growing recognition of the opportunities available in the city (23m20s).
• There is no shortage of founders coming out of New York, and the city is a hub where many IVs (likely referring to Ivy League universities) funnel into, with a notable trend of Stanford MBAs choosing New York over San Francisco (23m42s).
• New York has the potential to deliver enormous returns as funds and companies, and its unique culture and opportunities make it an attractive location in its own right, rather than being compared to San Francisco (24m27s).
• There is excitement about a resurgence in consumer-focused startups in New York, and the potential for new and innovative companies to emerge in the city (24m48s).