Having worked for Bridge’s early investor (Pearson), I appreciate that you wrote on them because they are considered the model in the low-cost private school paradigm that is rapidly spreading through Africa and south Asia. They were able to spread rapidly because of laser-like focus on cost efficiency and efficacy (especially compared to public school alternatives), and their success has opened the door for new LCPS chains such as Sudiksha (India), SPARK (South Africa), and APEC (Philippines). Two major challenges that remain for the entire space, however, are 1) learning gains at scale and 2) return on investment. Bridge has run into recent controversy because multiple longitudinal studies have cast doubt on its true learning impact on students (as well as that of other prominent LCPS chains). Meanwhile, investors like Pearson are wary to take on seed or Series A stage investments in these companies because the return profiles over 7-10 years are modest at best, and their thin margins are critically dependent on maintaining cost efficiencies at scale.
As someone who has tried out nearly every shaving company (Gillette, Art of Shaving, Dollar Shave Club, Harry’s), I appreciate that you took time to discuss how Harry’s is the only one that’s vertically integrated. The value in price to the consumer is undeniable with Harry’s and Dollar Shave, but I’m cautious about these companies because of the blade design patents that Gillette has secured over time. For example, Gillette’s line of razors use multiple (3-5) blades lined side by side, each one nearly parallel to the face when shaving. Harry’s, on the other hand, has blades that are more perpendicular to the face, causing far more irritation when shaving. I wonder how much this will matter to consumers over time, and if they’ll be able to take significant market share from Gillette despite having less-than-stellar reviews from those who have tried out multiple brands and styles of razors. I also would not be surprised if Gillette acquires Harry’s as a preemptive measure.
CG presents an interesting model that compares well to Indochino (the company I did my post on). While CG is entirely vertically integrated, Indochino is moving in that direction by sourcing raw wool and assembling suits in Chinese factories once built for mass production of branded suits. It will be interesting to see where the menswear paradigm shifts over the next few years — will consumers prefer the value that comes from a suit that cuts out the middle man, or will they opt for a custom-fitted suit that costs twice as much? I bet on the latter because factories are slowly moving production processes toward mass customization, allowing costs of custom-fitted clothing to decline over the next decade. It seems that CG also is bullish on this shift, as they’ve started moving to a bespoke suit model.