Pietra: Powering Creativity for the Next Million Entrepreneurs
An analysis of pietrastudio.com and why I'm excited about the future. TLDR: skip to the bottom for an executive summary.
In order to make money in venture capital, you need to be contrarian and right, which is much harder than being contrarian and wrong. That means you need to look for things that are disliked for reasons that are bad.
Pietra is misunderstood, but more than that it has a good chance of changing the face of commerce forever.
What looks like a simple logistics solution is powering the greatest advance for creativity and merchant enablement in e-commerce since Shopify.
Originally, Pietra set out on a simple mission: help people find designers and jewelers who can make custom pieces.
These days Pietra does a whole lot more than that. The platform offers a full-stack solution and allows entrepreneurs to start and scale e-commerce businesses without juggling any other software.
The platform is modular, so entrepreneurs are not tied to it for anything they don’t want to be. That means you can choose which of Pietra’s products you want to use at any point in time across: sourcing, designing, storage and fulfillment, and marketing.
Every single new brand needs to source ‘a guy’ for their products. Going from idea to sale takes on average between 10 - 12 months because every new brand needs to source a quality manufacturer, find somewhere to store their products and someone to fulfill their orders. After the logistics are addressed, brands can then start to think about how to sell their products.
With Pietra, entrepreneurs only need to think about who to source their product from out of a pool of pre-vetted manufacturers and where/how to sell it. Pietra gives entrepreneurs back the freedom to think about their business and brand instead of their operations and logistics. You can launch a brand that is ready to sell product in 60-90 days, cutting the time to value by 75 - 80%. Velocity matters, and Pietra is letting brands hit the ground running faster.
Why is it so painful to launch a brand today?
Aspiring brands often navigate clunky interfaces akin to Craigslist on platforms like ThomasNet (pictured below), Maker’s Row, and battle language barriers on Alibaba. Today’s tools are not easy to use and are clunkier visually. The next generation of creators have grown accustomed to modern tools for modern problems and expect consumer-grade solutions.
Meanwhile, you can effectively start a business in 5 quick steps on Pietra.
Vetted manufacturers are a challenge, especially overseas, making sourcing quality goods and samples a pricey, time-consuming ordeal, not to mention communication hurdles. If that wasn’t painful enough, manually tracking communications and logistics is also a suboptimal process. Pietra simplifies this too with a supplier portal where you can manage your manufacturer interactions.
By offering a way to start a business, sell products across channels, and accept payments (among other solutions), Shopify made it dramatically easier for people to start online businesses without needing to build a website with payments flows, UIs, etc. With Shopify, all you need to worry about is selling what you make. Shopify did more than just make it easier for brick-and-mortar sellers to sell online. Rather, they enabled a new class of merchants who didn’t need brick-and-mortar at all, growing the pie in the process.
Pietra will have a similar effect on new brand creation: with Pietra you don’t need to stress about sourcing, sampling, storing and fulfilling — only designing and selling. Pietra’s marginal customer is a new brand operator (someone who wants to sell some physical good). The seller is the factory making the product on behalf of the brand. The sellers, however, to some degree are substitutable. Buyers don’t particularly care whether their product is made at Factory A or B, so long as the product meets the desired spec. In this sense, Pietra has a lot of power as a marketplace that aggregates buyer demand and is able to give that back to new brand operators who need Pietra in the form of operating leverage. If sourcing, fulfillment, and storage cost ⅔ as much and happen 2x as fast as a private quote, Pietra more than 2x’s the operating leverage of an e-commerce business.
BFD: By solving the critical high-friction sourcing bottleneck and empowering a new age of creativity in physical goods, we should expect Pietra to get new sellers of physical goods off the sidelines like standard storefront software empowered a new age of digital-first entrepreneurs. In 2022, direct-to-consumer product sales were estimated to represent $117B in sales by established brands, and $38B for digitally native brands. Put plainly, the DTC focus from incumbent brands like Nike, Adidas, etc still represents ~3x the sales of newer, digitally-native brands. If Pietra’s vision of the future comes true, we should expect that ratio to dramatically change in the next 20 years. This might mean that newer, digitally native brands should be 50% or more of the sales volume of incumbent brands in the future.
The Product
Most people believe that Pietra is a logistics company, although that’s not the best characterization.
Pietra is fundamentally solving supply chain problems with software and adding on logistics solutions to make life easier. Software is the bread and butter, but logistics are the icing on the cake. There are five huge operational bottlenecks with starting a brand: sourcing suppliers, designing goods, storing the products, selling those goods, and finally fulfilling the orders!
Pietra’s solution starts with a portal for sourcing manufacturers and works its way up the production process to warehouse solutions, fulfillment, sales distribution(one-click listings to 15+ channels including wholesale, social media, Shopify, etc), and purchase order management. Pietra’s biggest value proposition is serving as the quickest avenue (<90 days) from idea to sale.
The process starts with Pietra’s Design Studio, which leverages genAI to help new brand operators dream up and design their wildest imaginations.
I’ve been getting into jewelry recently, so I asked Pietra to help me dream up some men’s gemstone jewelry.
By pre-negotiating MOQs(minimum order quantities), sample-order rules, payment terms, and delivery to their warehouse in Brooklyn, Pietra gives creators leverage in dealing with factories. By leveraging the strength of their volume and giving factories free leads, Pietra gets to standardize terms for the customer’s benefit. This gets us to the crux of Pietra’s first business ‘power’: scale economies. This is incredibly exciting because as Pietra aggregates more brand demand, they get more leverage with their suppliers and pass that increased business power back to their creators as operating leverage, drastically improving odds of success for operators.
Behind the scenes, Pietra is enlisting a network of product suppliers(the people who make the stuff), packaging suppliers (custom branded boxes and bottles) and creative service providers(the people who tell you what to put on the custom branded boxes and help market it).
But Pietra isn’t just atoms - it’s bits too. They have an ops team and a fulfillment center in Brooklyn, where creators’ products arrive after production. That’s where the items get picked, assembled, and packed for customer orders, ensuring that Pietra is the last touchpoint on your order. This gets us to our second business power: switching costs. If your entire businesses’ life (starting from idea to order shipment) is run through one platform, it’s pretty painful and often even less convenient and price effective to strip it down to its parts and replace them individually. This leads to a stickier product with less churn.
Pietra is verticalizing a highly fragmented backend sourcing and supply chain problem, and starting with mid-market creators because they have the most sensitivity to the effort/payoff ratio they need to put into building a brand. Mega creators(MrBeast, Kim K) have teams to manage all their efforts, and smaller, new creators probably don’t have the resources to do it.
Market Trends
In the heyday of department stores, creators launched their product collections in conjunction with existing retailers and let their corporate partner manage most of the non-creative work. Justin Timberlake launched William Rast with Target. Vera Wang launched her first clothing collection with Kohl’s. Martha Stewart launched an upscale houseware collection with Macy’s. Collections that would be launched under the umbrellas of big retailers have already gotten unbundled and have gone in the direction of independent brands.
Today, the most notable examples of successful DTC physical goods businesses are run by creators and influencers. Cosmetics by Kylie is worth $1.2 billion. Skims (Kim Kardashian) is worth $4 billion. Fenty Beauty is valued at $2.8 billion. All three of these ‘digitally native’ brands started as DTC and soon after grew their omni channel presence and expanded into brick and mortar.
One thing is clear: commerce has fragmented. Department stores have been stagnating in sales for the past 20 years. In the year 2000, department stores saw their highest spending and 20 years later, that spend is about half of what it once was at its peak. Consumer spend no longer goes to a handful of brands.
Estimates say there are 110,000 DTC brands in the U.S, but these companies are not necessarily thriving. A few years ago, during the rise of Casper and Allbirds, the venture narrative was that DTC was the new way of doing business. That’s not the case: DTC still follows a power law, just like venture capital and most new brands are still finding their footing. However, novel discovery engines like TikTok and Instagram Reels have given independent commerce more of an ability to acquire new customers and sell to them than ever before.
These digitally native brands are growing, on average, at triple the rate of overall e-commerce. This emergent customer profile that has come to form in the last 15 years is precisely what venture bets are made of -- market risk in a category where the marginal customer, a new DTC brand, can only exist because of Pietra’s services.
Market Size
Alibaba makes ~$2B (converted to USD) in revenue / year from B2B international commerce, which would be the bucket of revenue that Pietra is competing for.
The biggest value propositions for a vendor marketplace are: diversity of vendors, quality of vendors, and time to value. With 200,000 suppliers, Alibaba certainly doesn’t struggle with diversity of vendors, but it does with quality and time to value. Alibaba does a remarkably poor job of helping consumers sift through the noise with many manufacturers consistently below the quality bar, putting the onus on the consumer to do their research before entering into an agreement. This creates huge amounts of friction to getting started on Alibaba, especially for e-commerce outsiders.
Pietra unlocks latent demand by helping sellers get off the sidelines who were otherwise constrained by time and effort overhead. That means they aren’t just competing for the same market opportunity that Alibaba is; Pietra is bringing new sellers into the market who otherwise would not be able to do so, growing the size of the pie. So at a minimum, we should believe that the opportunity is worth over $2B a year in revenue.
Risks
Let’s pause for a second -- as we’ve hinted at -- it’s certainly not all sunshine and roses for Pietra. There are a number of key risks that Pietra must manage against.
#1. 8 out of 10 DTC businesses fail.
This is a big problem because if you spend $10 to get a customer and that customer dies before they can pay you back $20, you don’t really have a business. To win, Pietra needs to not only help start new DTC businesses, but also keep them in business long enough to make some subscription money from them.
#2. End-customer demand risk.
If end customers don’t buy the new products that get built on the platform, Pietra is dead in the water. The corollary of this statement then must also be true, which is that for Pietra to work, they must make their brands and operators more likely to succeed and survive than if they started the company through other available means. That means not only helping them start and sell, but moreover sell through efficiently.
Along a spectrum of maximum handholding to minimum handholding, Pietra must find a happy medium of involvement such that they’re not an agency nor purely FAQs. That’s a tough balance indeed. If only there was some technology that could help brands have personalized interactions at scale with customers…
#3. Focusing on operational priorities.
They make money in two ways primarily: packaging and fulfilling shipments + the software membership. Fulfillment and distribution is a commodity, low-margin business and can quickly become a hair-on-fire problem to manage.
Storage and fulfillment is closer to a loss leader that gets people in the door to pay for SaaS than it is independently a good business. That said, in e-commerce investing in the hard things is what allows a company to deliver a great customer experience and Pietra is doing things the harder way for a better long-term customer value.
I think the core question for Pietra will be how many brands on the platform end up being profitable and secondarily what happens to the brands that are successful (do they churn and run the backend on their own?)
To some degree, these remain known unknowns.
The Exec Team
Pietra is a company that runs a warehouse, makes software for internal operations + self-contained e-commerce storefronts, and works with suppliers and creators to help start and grow new brands. That’s a whole lot of things you need to know how to do well.
Let’s take a look at the leadership team and see what they’re working with.
Ronak Trivedi, Founder + CEO - Ronak spent 3y at Uber as a PM on UberPool and before that was a PM at Microsoft. One thing you probably develop as someone who works on shared mobility is an appreciation for operational complexity and the tradeoffs associated.
Tala Akhavan, COO — Tala was also at Uber and worked with Ronak there on products like UberPool.
Lauren Schiller, VP of Product — Lauren is a fashion-native, coming from Gucci and Marc Jacobs, but what’s more notable is that she worked her way up from Director, Client Acquisition and Retention while at Pietra. Something tells me she knows a thing or two about what creators want. I love a good internal promotion sequence.
Pete Gilligan, VP of Growth — Pete was previously Chief of Staff to Keith Rabois at Founders Fund and Openstore. Before that he spent 9 years at Google, working across partnerships, growth, and the core search product. That’s a high-signal hire. Pete probably has options, given relationships with others in the portfolio.
James Li, Senior Director, Strategy and Operations — James was previously a GM at Doordash on New Supply Chain Ventures. He’s the man with the plan for factories and runs sourcing at Pietra.
Curtis Tan, VP of Finance — Curtis was also a GM at Doordash on New Ventures and before that worked in Strategic Finance. He’s going to help entrepreneurs get access to cash when they most need it.
Xinyu Wu, Head of ML/AI — Xinyu previously worked at Uber ATG(Advanced Technologies Group) on self-driving cars + UberEats and later at Lime. You can guess that both companies did a lot with ML…ATG, in particular, was at one point a core bet for Uber.
Noelle Suifan, Head of Eng — Prev at Google.
They’ve got a good handle on managing their core risks and there’s a lot to work with in terms of fundamentals. The question is always -- will it work?
I’ve got no crystal ball, but I would have invested early if I had the chance.
This post was written with public information. All factual errors or omissions are my own only.
The executive summary was authored by ChatGPT :)
Executive Summary:
Venture capital success requires being contrarian and right. Pietra, often misunderstood, is challenging the status quo in online commerce. Initially a platform connecting jewelers and customers, Pietra has evolved into a full-stack solution, streamlining the DTC journey. It provides tools for ideation, sourcing, purchase management, and omnichannel distribution. Pietra's value lies in simplifying the complex world of supply chain management for new brands, akin to how Shopify transformed e-commerce.
Pietra's Unique Value:
Pietra empowers brand operators to start asset-light DTC businesses by addressing common industry bottlenecks: quality control, language barriers, cost, and minimum order quantities. The platform aggregates buyer demand, providing leverage for both new brand operators and factories, significantly expanding access to quality suppliers that were previously hard to find.
Market Opportunity:
Pietra aims to unleash a new wave of digitally-native brands, potentially shifting the balance with incumbent brands. In 2022, DTC sales reached $117B for established brands and $38B for digitally native ones. Pietra's vision could redefine the market, making digitally native brands take over 50% of total sales in the coming years.
Market Trends:
The landscape of commerce is shifting from traditional department stores to independent DTC brands, led by creators and influencers. The rise of TikTok and Instagram Reels has empowered DTC brands to acquire customers at an unprecedented rate, growing three times faster than overall e-commerce.
Risks and Challenges:
Pietra faces challenges typical of DTC businesses, including an 8 out of 10 failure rate. The platform must stimulate consumer demand for new brands and strike a balance between involvement and independence for brand operators. Operational complexities, particularly in fulfillment, pose potential hurdles.
Pietra's Approach:
Pietra is not just an e-commerce company; it's fundamentally a supply-chain company with a unique value proposition. Leveraging genAI in its Design Studio, Pietra accelerates the journey from idea to sale in under 90 days. The platform's business strength lies in scale economies and switching costs.
Market Size:
Pietra aims to verticalize the highly fragmented backend of sourcing and supply chains, initially focusing on mid-market creators. By unlocking latent demand, Pietra isn't just competing with existing markets; it's expanding the pie from a minimum of ~2B/rev per year.
The Team:
Led by Ronak Trivedi (CEO), Pietra's team brings diverse expertise from companies like Uber, Gucci, Marc Jacobs, and Google. Their collective experience positions Pietra to navigate operational complexities and deliver on its ambitious vision.
Conclusion:
While Pietra faces risks inherent in the DTC space, its innovative approach to supply-chain challenges and commitment to empowering new brands make it a compelling player in the evolving landscape of online commerce. The potential to reshape the DTC market and drive significant revenue makes Pietra a venture worth watching and working for.