Proctor & Gamble's Consumer Products (Long DNVB Disruption)

Proctor & Gamble Co. ($PG)announced that its Gillette brand will be releasing new razors that, counter to previous new product launches, won't include another blade and a higher price point. Thank G-d. We're old enough to remember when the three-blade razor was a big deal, let alone the 179-blade razors that are in the market today. Clearly PG is yet another example of a large incumbent company suffering from Innovator's Dilemma while hungry nimble startups nip at its heels. Notably, Gillette's sales fell 6% in the current quarter and U.S. sales of razorblades fell 18% YOY in the TTM. Why? Well, we have Harry's and Dollar Shave Club product users here. The big innovation? A new five-blade razor that will cost "roughly the same" as those sold by the aforementioned up-and-comers. Who ship direct-to-consumer. So, hmmm. If the cost is "roughly the same" and one can just show up in my mailbox, why would we even bother with this new product? No wonder Nelson Peltz is up in arms. 

Unicorns (Short the Hype)

Calling Out Digitally-Native Vertical Brands (DNVBs)

"You know what? F*ck unicorns." Let's not lose perspective here: a number of tech startups (or, shall we say, alleged "tech" startups) are valued at $1b+ merely because the market is awash in so much money and such a hunger for yield that deals are getting priced upwards. To think that a $400mm exit is anything short of successful is bonkers. Meanwhile, a number of those unicorns are digitally native vertical brands (DNVBs). Think Warby Parker. And thisthrows some serious shade on them. Choice quote, "Given all of the expectations surrounding Digitally-Native Brands and their limited optionality, it’s unlikely that many of them will be around in their 47th year, let alone as independent companies. There will always be exceptions to this rule—Dollar Shave ClubGlossierProper Cloth—might outlast the pack as brands that either successfully exited or are mostly in control of their future. But other than these rare exceptions, over the next few years this gold rush will probably turn into a bloodbath" (emphasis ours). In other words, don't count the chickens until they hatch.