Yeah, Naked Wines turned out to be a disaster. Redbubble too. However, the moves Martin has made since reclaiming the CEO role do make sense to me, which is why I'm long. Let's see how he delivers going forward
As always, a good -to the point- article ! I like that you look at this company with the startup goggles. Quite some 'marketplace scale-up companies' listed make the same mistake. It seems like incentives must be pointing toward building opulent boards of directors and selling an infinite growth story of a scale tipping point turning into an absolute moat... This reminds me of Naked Wine ($WINE). If those projects (I prefer this word than "companies") are declining from a startup stand point (market-fit, clear UVP, nice Customer Xp, etc.), they tend to unhook and fall no matter how much top line numbers are moving. When, as a founder, you aren't challenged on fondamental strategy assumptions because your board are groopies and satelites, hard to stay the course.
You are spot on on this risk. Again great write-up !
late to the party but this was a great article. Question - have they managed to increase purchases/customer. I remember back in 2021 it was around 1.1x. Their problem was that unaided brand awareness was terrible. Most people didn't even know that they were buying for redbubble - ie the googled something and then found the item on redbubble but never connected the dots. until this improves they will alwasy be a slave to the 'google' tax.
Thanks! There's unfortunately no data on purchases per customer. I agree with you. Maybe "repeatable purchases," which is kinda similar metric is also useful to follow to assess brand loyalty/awareness
Thanks. Yes, saw that tweet as well. Red flag but I'm not as rigid as you are hahah. End of January yep. So it doesn't take into account cash that came through the door during elevated spending in December and has yet to be sent to fulfillers(creditors)
Bit of a random thought but is there any possibility of them commercialising or getting disrupted by AI generated art? Could potentially greatly scale the content whilst expanding bottom line taking out artist cut or just make the business more commoditized and prone to disruption, sure if they announced it would get a strong ST market reaction. Or is this already impacting artists using AI tools to mass copy/generate content?
Martin was asked a similar question during the H2 earnings call and this is what he had to say:
"We have seen that for us, AI is a net benefit. Artists are using AI to generate art and then changing it and transforming it as they've always used the latest tools. We're not seeing -- there's not been a rapid uptake at this point of the use of AI simply to generate images by consumers that then get printed. We are, of course, clearly looking at that, and we have the potential to participate in that market if it becomes necessary through the group structure, which I put in place. We have seen some structural changes in the overall landscape"
I tend to agree with what he said about artists using the latest tools and am glad that he has a structure in place to participate in the market if necessary (in that case I believe they'd start a whole new AI dedicated marketplace)
However, I do worry about mass generation of unoriginal designs, which is why the recent changes in tiers and getting rid of copycat content should be one of the top priorities.
Will it get commoditized, idk. I doubt it and think a more likely bet is that the competition among the artists intensifies. Does this lead to more content or a higher quality content? A bit of both? I'm not sure
Interesting point to think through. Thanks for contributing!
Thank you for the kind words, Sacha!
Yeah, Naked Wines turned out to be a disaster. Redbubble too. However, the moves Martin has made since reclaiming the CEO role do make sense to me, which is why I'm long. Let's see how he delivers going forward
As always, a good -to the point- article ! I like that you look at this company with the startup goggles. Quite some 'marketplace scale-up companies' listed make the same mistake. It seems like incentives must be pointing toward building opulent boards of directors and selling an infinite growth story of a scale tipping point turning into an absolute moat... This reminds me of Naked Wine ($WINE). If those projects (I prefer this word than "companies") are declining from a startup stand point (market-fit, clear UVP, nice Customer Xp, etc.), they tend to unhook and fall no matter how much top line numbers are moving. When, as a founder, you aren't challenged on fondamental strategy assumptions because your board are groopies and satelites, hard to stay the course.
You are spot on on this risk. Again great write-up !
late to the party but this was a great article. Question - have they managed to increase purchases/customer. I remember back in 2021 it was around 1.1x. Their problem was that unaided brand awareness was terrible. Most people didn't even know that they were buying for redbubble - ie the googled something and then found the item on redbubble but never connected the dots. until this improves they will alwasy be a slave to the 'google' tax.
Thanks! There's unfortunately no data on purchases per customer. I agree with you. Maybe "repeatable purchases," which is kinda similar metric is also useful to follow to assess brand loyalty/awareness
Thanks for sharing. Just took a swipe at Hosking's twitter and found immiedate reason not to own the stock -> https://twitter.com/Martin_Hosking/status/1750613319462080661
Cash position $41m in Jan? Is that post payment of (some) payables owing at 30/12/23?
Thanks. Yes, saw that tweet as well. Red flag but I'm not as rigid as you are hahah. End of January yep. So it doesn't take into account cash that came through the door during elevated spending in December and has yet to be sent to fulfillers(creditors)
Comment more a euphemism for not liking arrogant execs.
Thanks for the great article
Thank you!
Bit of a random thought but is there any possibility of them commercialising or getting disrupted by AI generated art? Could potentially greatly scale the content whilst expanding bottom line taking out artist cut or just make the business more commoditized and prone to disruption, sure if they announced it would get a strong ST market reaction. Or is this already impacting artists using AI tools to mass copy/generate content?
Martin was asked a similar question during the H2 earnings call and this is what he had to say:
"We have seen that for us, AI is a net benefit. Artists are using AI to generate art and then changing it and transforming it as they've always used the latest tools. We're not seeing -- there's not been a rapid uptake at this point of the use of AI simply to generate images by consumers that then get printed. We are, of course, clearly looking at that, and we have the potential to participate in that market if it becomes necessary through the group structure, which I put in place. We have seen some structural changes in the overall landscape"
I tend to agree with what he said about artists using the latest tools and am glad that he has a structure in place to participate in the market if necessary (in that case I believe they'd start a whole new AI dedicated marketplace)
However, I do worry about mass generation of unoriginal designs, which is why the recent changes in tiers and getting rid of copycat content should be one of the top priorities.
Will it get commoditized, idk. I doubt it and think a more likely bet is that the competition among the artists intensifies. Does this lead to more content or a higher quality content? A bit of both? I'm not sure
Interesting point to think through. Thanks for contributing!
What do you think?