Rising Above the Noise in Consumer VC with Kirsten Green of Forerunner | E1961

**Mark Suster** (0:00)
Say anything the f**k you want. I'm going to riff off you and take it in different directions, okay?

**Kirsten Green** (0:05)
Something has to be both novel and both a utility. It needs to have an element of uniqueness to stand out in the market and cut through the noise. Okay, yes, you address the need. Then you also have to wow people. You have to give somebody a reason to want to talk about it, a reason to want to try it, a reason to tell somebody else about it, something that captures the imagination to trial. And then you have to deliver on something that's really good.

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**Mark Suster** (1:36)
Welcome back to This Week in Startups. I am not Jason Calacanis. I am Mark Suster of Upfront Ventures. I'm so excited for my guest today. It's Kirsten Green, who is the founder of Forerunner Ventures. She founded it 12 years ago, has raised, in my estimation, about $2.3 billion. And for anyone who doesn't know, to go from zero in 12 years founding a firm raising $2.3 billion is an enormous achievement.
She is probably the best known consumer investor in venture capital of our era, having backed players like Chime, Warby Parker, Dollar Shave Club, Glossier, Hotel Tonight, and others.
Welcome to the show.

**Kirsten Green** (2:22)
Thank you, Mark. And thank you for that very kind introduction.

**Mark Suster** (2:26)
It's pretty succinct, right?

**Kirsten Green** (2:28)
It's pretty succinct.

**Mark Suster** (2:30)
I hit amazing highlights in 45 seconds or less. Listen, I want to start with founder advice, okay? I like to just get into the meat and then we'll back up a bit and we'll talk about the market. I want to start out with a bit of advice for founders so we can give some value before we step back and talk more broadly about the market. If I look at my data, I think about 7% of VC dollars are going into consumer companies these days.
That's pretty small relative to what it was in the past. Let's say it's out of favor right now. Hopefully it doesn't stay that way.
But if you were a founder trying to raise money in this market where only 7% of the dollars are going into consumer, what would you do to stand out? And why are you still so bullish about consumer?

**Kirsten Green** (3:16)
I think that to start with, why is so little funding going to consumer businesses is relevant to state that, which is it's been expensive to build consumer companies. There was this thing called social that came online. It really created an opportunity for businesses, digital businesses to get in front of consumers and for there to be network effects and all of that. And I think it allowed discovery and propelled discovery. It has gotten expensive. It's gotten crowded. It's gotten expensive. One of the things that I think is exciting about consumer businesses is they do have the potential to go after large markets, but you also have to get large audiences to really demonstrate and show your product. And that can be, that is an expensive endeavor to get after. So one, it's just a lot of upfront marketing and cost. Two, it's a very crowded marketplace because there are low barriers to entry. There's high barriers to scale, but there's relatively low barriers to entry. The internet has become an overwhelmingly crowded space.
And rising above the noise is hard. It's harder than ever before. And in the face of crowded ad markets and expensive ad markets, it's even harder. And then there's the reality that consumers can be fickle.
And I think that scares people more than it needs to, but that's a prevailing perspective.
And so all of that sort of has people leaning out on consumer in general from the investment side. I think things do go cyclical.