Investor Spotlight: Taylor Brandt

Taylor Brandt is an investor at Headline, an early-stage fund that invests in category-defining names like Acorns, Bumble, Gopuff, Sorare, and The RealReal. Her own active investments include Swell, Tydo, and Violet. 

Before working as an investor, Taylor spearheaded growth and analytics at Rockets of Awesome, the DTC children’s apparel brand, for over half a decade. 

We sat down with Taylor to learn from her unique position as both a deep operator and an established ecommerce investor. We cover topics including: 

  1. Merchant pain points she’s experienced firsthand

  2. Why she invested in Violet

  3. Investing frameworks and predictions for ecosystem shifts

“Affiliate platforms are quite frankly built on a poor click attribution model business. As a channel you’re paying the deal sites, but those are precisely the people you don't want to be paying. They’re scraping and finding random codes that you as a marketer want to isolate for your best customers. That broken affiliate model is one problem Violet addresses head on by offering a completely integrated, scrape-less solution.” 

‍Brandon: What learnings did you take away from your operating career before moving into investing? I’m thinking specifically around omnichannel distribution and acquisition.

I think the pain points were across many things, but they all had to do with scale and growth:

  1. Channel integrations: Brands can only scale so much through direct-to-consumer only, largely because of obstacles they hit as they try to go across more and more marketing channels to reach their customers. Each of those channels requires a lot of engineering time to build integrations with your online store. Even if you have something like Segment to help with data collection, the engineering team still has to be involved. Because they are so much work to build, additional integrations just aren't a big internal priority, which gets in the way of adding more sales channels. 

  2. Architecture: What works for a company’s data architecture in year one may not work in year five, or even two. At Rockets of Awesome, when we started expanding the business to new kinds of products it became clear that our original SKU architecture no longer served us. At major growth points like that, re-building your data architecture, whether it’s with SKUs or another kind of data can be a big growing pain, and feel like you’re trying to change the tires on a moving car.

  3. Data and analysis: Because of my background in business intelligence, growth, and analytics, I’m always thinking about how best to collect and leverage data. In ecommerce specifically, I’m sensitive to how omnichannel growth can muddy your data collection if you’re not careful. At Rockets of Awesome, for example, we would oftentimes bring in retail exclusive SKUs. And so we had to figure out how to store that in our inventory management system, but not surface them to the customer. This sounds like a very in-the-weeds challenge, but those infrastructure and architecture questions add up to giant challenges as you try to grow, especially when you’re trying to analyze your business. If different channels have different touchpoints in their funnel, you’re screwed without a strong tech stack to help compare and track across all your different distribution channels. 

I think these pain points are actually why there has been such a delay or lag in what has now emerged as the creator economy, and why it took so long for brands to work with creators. Building that integration is an entirely different tech initiative, an entirely different internal process, and an entirely different data build. 

Brandon: So given those pain points, can you walk me through when you first started running into  the need for a unified API for ecommerce, and then the rationale that led you to invest in Violet? 

Well some of that rationale has to do with Violet today, and some with where I see Violet in the future. 

Today, one of the main pain points I’ve struggled with is affiliate marketing. Affiliate platforms like ShareASale or Commission Junction are quite frankly built on a poor click attribution model business. As a channel you’re paying the deal sites, but those are precisely the people you don't want to be paying. They’re scraping and finding random codes that you as a marketer want to isolate for your best customers. That broken affiliate model is one problem Violet addresses head on by offering a completely integrated, scrape-less solution. You replace these cost ineffective middlemen with a single, straightforward integration. 

Another near-term pain point I think Violet helps with is taking a huge weight off of internal headcount. When we did creator landing pages at Rockets of Awesome, it was an extremely painful internal process. If you are not a Shopify business (and there are many brands that are not) you can’t easily connect with outside channels. With Rockets I wanted to test out loop returns, returns management, and partial refunds, but setting something like that up was brutal for us. Everything was a manual build. That wasn't something out of the box that we could get, and I only had so many engineers to be able to run that business. It was a very complex engineering operation for the size of the business. If we had had something like Violet, I could have been able to set up something that was both easier to use and required far less of my engineering team to set it up. That’s tremendous.  

In the long run, Violet frees up internal teams, for both channels and merchants, to devote a lot more time and energy to testing, experimentation, and innovation. That long tail is everything to me: getting the right tools that make peoples’ lives easier so that they can tackle the more challenging and interesting problems. 

Brandon: I'm curious about the phases of your investing career so far: from angel investing, to Red Sea Ventures, to Headline and more angel investing that you're doing now. How have you become more sophisticated over time? Are there metrics and spaces you're paying attention to more versus less? 

Early on, I advised and angel invested in both brands and software. 

When I started, I was just trying to learn from as many businesses as possible within commerce. The way that I think about commerce may be a little unusual, but I think of it very broadly as the buying and selling of goods, software, or experiences to people on behalf of themselves or their companies. The way that I buy software in the HR department for my company, or the way that I buy a good for myself, is essentially the same: at the end of the day, people are humans, and humans are making the decisions. So at the beginning, it was really just about learning: what does a beauty product look like? What does an apparel product look like? What does an intimate product look like? Each of those have different margins, have different repeat rates, different return rates, and I wanted to learn as much as I could about each of them. 

At the same time, I was also really interested in the tech stack. When I was learning to work with data, I had a data scientist that was kind of showing me how to build a warehouse, but I kept wondering "Why is this so hard?" It became clear that learning SQL is easy, but learning how to connect AWS and DBT, and Stitch, and Fivetran, whatever your choice of stack is, is not. So when I was building out a data warehouse and tech stack for Rockets, I organized a data meetup just so I could learn from the best companies out there. Glossier was part of it, Harry's was part of it, Daily Harvest was part of it. And in talking to these companies you could see the through-lines of why they were successful. The more of these conversations I had, the more I started getting interested in and building out lots of different tech stacks, including data, marketing, and creative. I became fascinated by those technologies, and wanted everything to be as easy as possible. That’s when I really started to hone in on infrastructure.

Today, I've combined these interests to become more specialized, covering what I call re-imagining commerce, which includes commerce infrastructure and enablement, B2B marketplaces/vertical software with inventory, and go-to-market technologies. It’s an exciting place to be because commerce infrastructure and enablement space has step-functionally evolved over the past ten years, and will continue to step-functionally evolve in the next ten with companies like Violet and Swell.

Within that landscape, I try to find the intersection of data and step function problems. There are certain companies where I'm going to get conviction on data alone. Then there are other companies that I'm going to invest in based on step function problems alone. I might only have a couple customers to go off of, or the go-to-market motion might not be entirely clear, but I know that the problem is real because I know the industry. I've talked to customers. 

I think that having that combination of conviction from data and deep industry knowledge provides the kind of risk tolerance I like to see in my portfolio. 

Brandon: What other step function problems within ecommerce, specifically within ecommerce enablement, haven't been tackled yet that currently are pretty compelling opportunities for founders that are interested in building companies in that space?

Well, for starters, I think there's a difference between problems where solutions have been started and problems where there’s already a runaway winner. If we’re talking about solutions that have only just started, I think there are three big ones:

  1. Meeting customers where they are–digitally, physically, etc. Today, the construct of a site and where you buy, and how you buy is going to change meaningfully.. And you even see that with models like Gopuff. As an investor, the question is: will  I know from the jump? For example, if I was at Headline when they invested in Gopuff, would I have been like, "This is going to be $40 billion plus business." Probably not. But it just goes to show that we’re trending towards making it easier and easier for people to buy and spend, and get things anywhere they want across the world. 

  2. Payment models: I believe our payment models are about to change. People’s crypto wallets have grown. And the way that people are spending, and wallet share, and all of that massive step function changes that we're going to see. We're still at the earliest stages of what the sharing economy, peer-to-peer economy, secondhand economy, and re-commerce could ultimately become. 

  3. Supply chain: We're still early on in the supply chain evolution. Everyone is still very dependent on China. I think we still don't really know how things are being made, if or where they're being sourced. What happens if you have a good product, but because of supply chain challenges you suddenly have to fly every product in to get it sold? Are people actually thinking about the way things are produced? I don’t think they’re thinking about it enough, but they’ll have to in the next decade. This sort of goes back to the intersection of supply chain and blockchain, and creating digital logs of how things are created, what's in them, how ownership transfers. That’s barely been tapped. 

A lot of people are going after features right now, and not after industry changing problems. But I think the founders who are really onto something are the ones who go after something that can be generationally different–like Swell, Tydo, and Violet. 

Brandon: That seems like a great place to end. Thanks Taylor!

Thank you!