Brandless raised $200 million from SoftBank to sell generic products at $3 each, but collapsed before finding product-market fit. The hosts blame premature funding, high customer-acquisition costs, and a flawed subscription model. Kirkland Signature does $39 billion annually, showing what a generic brand could be.
Kirkland brand sells $39 billion of products.
So Brandless, people don't know, they went out of business. What they were trying to do was they were like, look, don't pay for the name brand. You should just have high quality products and they should just be brandless. And because we take away the name brand, we can lower the price. That was like the initial promise or the premise of the business.
Awesome idea.
Awesome idea. I'm glad you said that because a lot of people are shitting on them now because they like failed. No, but I still think fucking awesome idea. And actually, of course, ironically, Brandless is a good brand. Um, and so I think that that was really cool. They raised a shit ton of money from SoftBank, like $200 million before they really achieved any product market fit. And that sort of like was the death note for the company because it was just a, the expectations when you raise $200 million is you're gonna be, you know, a billion dollar plus company. And if you do that too early and you haven't actually proven out your model, you haven't figured it all out. What expectations crushed the business?
I actually, so I didn't prepare because I just thought about this, but what do you, what's the biggest grocery store chain in America? You think Albertsons?
Albertsons, maybe Safeway. I don't know.
Okay. Let's use Safeway. Can you look up, try and find this just, just a headline. Try and tell me what the revenue or how many sales, like, generic brands for grocery stores or like the Kirkland brand or whatever, look up how much revenue the Kirkland brand does. Well, I mean, I bet you it's astronomical. And so actually, I mean, if you think about what Brandless could become, it is the generic, the generic brand, trusted Kirkland brand. Yeah, I think, and I think it's a great idea. Yeah. The problem was that they raised all that money right off the bat. I have a problem. There was some incompetence with leadership. I don't actually know this.
Yeah.
Kirkland brand sells $39 billion of products.
Fuck, Henry, quick with the trigger. I like that.
What's that source?
Uh, Business Insider.
What's the source?
You think he's lying? You think he's making this up?
Costco's Kirkland brand drives growth.
Wow, $38 billion in one year.
So, so one thing I loved is I—
sale of Costco's Kirkland Signature private label brand grew to $39 billion in 2018.
Okay, and that's just Kirkland.
Kirkland crazy. So I, I listened to her on a podcast, Tina Sharky, I think is her name, and she's like an internet OG. She'd been around with a bunch of companies. Um, all of which I think have not done super great, but she went on this podcast. She said this thing that I liked, which was, she was like, think back to when you were a child and like, let's walk from room to room. You're in the laundry room. What brand are you gonna see? You're gonna see whatever, you know, Tide. You're gonna see whatever. Go to the pantry. What are you gonna see? You're gonna see Fruit Roll-Up and, uh, Pop-Tarts and all this stuff. And then open up your fridge. What are you gonna see? And you see these brands and actually it's kind of like, You've seen these stats where the S&P 500 turns over, like, I don't know, 20% of the S&P 500 turns over every decade. Basically the same thing happens with these household brands, these brands that seem like staples of your home, right? A lot of them are like Minute Maid. It's like, fuck Minute Maid, you're out. Like, you know, now, you know, Tang. Yeah, Tang. You know, like these brands just like, like they are not— they can come and go generationally. They don't all make it from one mom to the next mom. And I actually believe that premise. And she was like, look, the moms of this generation, they don't wanna pay for this, like, the, the consumer package, good brand in the same way. They want to know it's high quality ingredients sourced, you know, ethically. And, you know, they don't wanna overpay. They want to be, you know, value conscious. So I liked a lot of the premise. I'm sad it didn't work, but somebody, I believe, I believe you should just go out today and pitch, I'm Brandless without SoftBank. And I think I would, I would invest in— it's an incredible entrepreneur.
I agree with you. I think I had 3 people reach out to me that said, hey, can you ask, can you introduce me to the people who are selling Brandless? I mean, I don't know them, but I just tweeted it and I got an intro and I introduced 3 different people who are wanting to buy the assets.
And what are, what are the assets? What are you getting?
You get the name, maybe a little, some inventory, probably.
Okay.
The name.
And, uh, an email list.
And then unfortunately, probably a bunch of an incompetent team.
I mean, right.
No disrespect, but look, if they couldn't pull it off, they're by definition—
well, you'll, you'll need to restart for sure. Right. You'll need a clean slate and you'll need to lower the burn.
Yeah. Um, I think it's cool. I would probably charge a mem— do they do membership?
They did a subscription cuz they started off with everything was $3. I forgot to mention that. That was like a key selling point. It was like, dude, I think that's— everything's $3. Look like $3 store.
And people say the CAC was too high, that it cost too much to acquire customers. That's probably true. But like Wish is doing it.
