Why All the Warby Parker Clones Are Now Imploding

Warby Parker might have started the DTC trend, but the true awakening came with Dollar Shave Club and Harry’s interrupting the somewhat ridiculous Gillette domination of razor blades at mass/retail. Would-be entrepreneurs and VC investors mistook this unique category situation (single dominant incumbent player, ridiculously high margins, small/ligh... See more

Now that a few high profile DTC brands have been punctured on the public market and the economy is crashing, VC-driven DTC business model will likely go into its own recession. Without DTC, there is an opportunity for a variety of smaller, more sustainably funded players who do not seek hypergrowth.

Companies with poor unit economics found themselves propelled by aggressive venture dollars (which themselves were propelled by a low-interest-rate environment). Those companies then turned those dollars into aggressive customer acquisition. Until recently, the market rewarded growth at all costs.

The direct-to-consumer wave began in the twenty-tens as a new generation of startups promising to “disrupt” traditional industries for consumer goods. Instead of leaving the market to century-old stalwarts like Gillette, for example, a company like Dollar Shave Club, founded in 2011, would set up its own supply chains to manufacture razors; add cle... See more

But this isn’t really a story about the consequences of raising too much venture capital, or even about branding. It’s mostly a story about a not-great business that never figured itself out — where customers spent too little and didn’t come back enough.