Why I Invested: Faire
Why I invested: A writing series on early stage angel investing chronicling the rationales behind various early stage tech bets by Pete Kazanjy.
I owe my investment in Faire to my wife. Before she went back to school to do a graphic design degree, she was a buyer for Williams Sonoma, one of the most impressive merchants in the world. The way they sourced products was medieval. Catalogs and trade shows and faxes and more. She would have to travel to Chicago twice a year to mill around in a massive exhibit hall. Fly to China. Fly to India. And this was the best organization in the world at this. Yikes.
So when I was initially introduced to the Faire team in 2016 (“Indigo Faire” at the time - cutest name ever) by my friend Lauren Farleigh, founder of Dote, I was primed to comprehend what they were working on. (I had worked with Lauren closely on Dote, and she thought I could be helpful with early go to market for them.)
Max and team explained that even though as product managers at Square they had made the sell-side transaction low friction for SMBs, the buy side was still a huge pain in the ass. It was clear that there was a serious opportunity to be the “Source” tab in the local store POS (where the POS itself was the “Sell” tab) - whichever the point of sale.
When looking at marketplace startup dynamics, you want to ensure that there’s a huge amount of federation on the supply and demand side. You don’t want to be standing between a few dozen market actors on one side and a few dozen on the other. In the case of merchandising for local businesses - there are tens of thousands of products trying to connect with hundreds of thousands of retailers. That problem sounded like it really needed a marketplace.
Further, unlike B2C marketplaces, with small order values (Instacart, Doordash, Uber, etc.) - in this case, these were serious orders (many hundreds or even thousands of dollars of merchandise, off of which Faire would take a serious rake), and moreover, these transactions had intrinsic recurrence built into them (if you found a product you wanted to stock in your store - you’re probably going to re-order it on an ongoing basis - and better to do that digitally, versus via fax / email).
Couple all this with the democratization of online / offline commerce with Square, Shopify, and other commerce engines, it was clear there was a huge opportunity. In terms of “how right this could go”, this was a potential response local commerce had to adopt against Amazon - pointing to a potential Amazon-scale business. Or, said differently, if you imagine Amazon and Walmart as a “full stack” of merchandise sourcing, logistics, and ecommerce, Square and Shopify’s market caps represent the “ecommerce” piece of the “rebel commerce stack”, the local business’s real estate is the “logistics”…and Faire was positioned to be the “sourcing” layer. Pretty compelling target to go after as a business.
The team had worked together at Square, was well positioned to raise capital well, and had an unfair engineering advantage in their Canadian market access. And had serious grind. They had adopted the “work on Saturdays” ethos of early Square - which, say what you want about that approach, it certainly selects for staff who are *there to win.
One of my first meetings with Max, Daniele, and Marcelo was in their rented office / apartment (epic view of the Golden Gate Bridge and Bay from the top of Nob Hill) on a Saturday where we talked about SMB direct sales and scalable outbound for half a day. It was clear they were all in.
If only I had put $25k in instead of $10k. Facepalm. But at least it was before they did YC and went to the moon. They’ve gone on to raise from Khosla, Forerunner, Sequoia, Lightspeed, and more.