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Firehose #186: 👗 Pop some tags. 👗
Congrats to thredUP, now $TDUP, on its IPO!
One Big Thought
I’m attempting to the take the week off with family, but I wanted to write a short post to congratulate the team at thredUP on its IPO on Friday!
thredUP holds a special place in my heart both personally and professionally.
On a personal note, co-founders James Reinhart and Chris Homer were friends and classmates from HBS. I have fond memories of brainstorming with them after class. I remember multiple coffee meetings with James over the first few years when he was testing different business models. I recall visiting a small, early office in SF, where boxes were piled everywhere, with clothing spilling out. And I remember walking the floor of the company’s first distribution center in Pleasanton, CA, when it was an empty shell. A year later it was filled with machinery, fixtures, people, and bags of clothing piled high. Getting to see friends build an idea into a finely tuned operation with thousands of employees was both thrilling and gratifying.
Professionally, thredUP is a reminder that valuable platforms take time and considerable effort to build. At my former firm Highland Capital, we first invested in 2012 and celebrated an IPO 9 years later. thredUP was founded 12 years ago. James’ vision has been the same since nearly the beginning, and much of the team has stayed together for the entire journey. Strong leadership and long-term thinking were essential to reach this important milestone.
Here a few other lessons I learned along the way:
Retail is detail. When you’re moving and selling physical products, every penny of cost matters and must be counted. Obsessing over the details is critical.
Improve 1% every week. You can’t just “flip the switch” in operations and see significant unit economic improvements overnight. Nor do you want to jump from manual processes to fully automated right away. The best operators chart a path for consistent, periodic improvements and chisel away at inefficiencies.
Marketplaces must balance. Supply and demand are invariably linked in a marketplace. You can’t grow demand arbitrarily fast because you’ll run out of supply and vica versa. thredUP had to develop sophisticated regulators and incentive systems on both demand and supply to keep the marketplace in balance as it scaled.
The board is a braintrust. James recruited a board of directors with vastly different personalities, backgrounds, and opinions. He viewed the role of the board as a place to test his ideas, get feedback, and ultimately inform his decisions. He managed the board accordingly and held us to high expectations for intellectual output.
For more thoughts on the thredUP IPO, check out my tweetstorm from Friday:
Tweet of the Week
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Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also have economic interest in AAPL, ADBE, AMT, AMZN, BABA, BRK, BLK, CCI, CRM, GOOG/GOOGL, FB, HD, LMT, MA, MCD, MSFT, NFLX, NSRGY, NEE, PYPL, SHOP, SNAP, SPOT, SQ, TMO, TWLO, VEEV, and V.