fnInvestor: Marlon Nichols on predicting consumer behavior trends to determine investments

26 Jul fnInvestor: Marlon Nichols on predicting consumer behavior trends to determine investments

Marlon Nichol’s investment firm is doing something very unique— they conduct cultural trend analysis to determine which startups to invest in. Founders Network was thrilled to host Marlon of Cross Culture VC to discuss:

How Cross Culture utilizes cultural investing to determine which startups they will invest in;
The top consumer trends he sees a future in;
And the characteristics Cross Culture looks for in a founder.

What makes Cross Culture VC unique?

Marlon: Cultural investing. We look to understand and predict consumer behavior trends by studying global culture. No other venture capital fund is doing that. If you can identify and predict how consumers will behave and you get it right, then you can invest in tomorrow’s next great companies. On another note, unconscious bias does exist when investors evaluate companies. We don’t have any kind of “out of whack” belief systems. For example we don’t believe that Black, male, female, white or purple people are less capable of creating a great company. We strip away that nonsense, and focus on investing in the best founders with the best ideas.

My partner Troy is the founder of a branding agency named Atom Factory. That partnership allows us to add extra support to our portfolio companies at no additional cost. The specific services include communications, branding, and marketing strategy as well as business development. You would be hard pressed to find another Seed fund that is capable of providing similar services to its portfolio.

@CrossCultureVC predicts consumer behavior by studying global culture. No other VC’s are doing that –@MarlonCNichols tweet

What investment and/or startup trends are you excited about right now?

Marlon:

Democratization of healthy lifestyles. Making it so families, irrespective of wallet size will have access to healthy life choices. We invested in ThriveMarket based on that. ThriveMarket is the first socially conscious online store offering organic and natural products at wholesale prices.

Text and chat are becoming the primary means of communication around world and platforms in and of themselves. MSurvey caught our eye for that reason, and is now in our portfolio. MSurvey produces a mobile survey and communication technology connected to mobile network operators, giving brands access to over 200 million users.

At Cross Culture we’re excited about the convenience/on demand phenomena. Skurt is a fleet less rental car platform that delivers cars to your door. It fit the bill, and we invested.

Some trends @CrossCultureVC is excited about: Democratization of healthy lifestyles, text/chat platforms, & the convenience/on demand phenomena – @MarlonCNichols tweet

What portfolio companies are you thrilled about right now, and what made you decide to invest in them?

Marlon: When we think about companies we don’t just consider where a company is now, but where we see the global trends moving in the future. There is something unique in each of the founders backgrounds that qualified them. In some cases that was domain expertise. Take Mayvenn for instance; they fit into the shifting demographic in American themes/ trends. In this case, you have a CEO that grew up around hair stylists, is fluent in Mandarin, and learned the import export business in China. He brought it all together to create an app for hair stylists to sell extensions direct to their clients without taking on the inventory risk— which by the way is a $9B market.

Same thing with the founders of Hingeto, a platform that leverages crowdfunding to allow fashion brands to both showcase/ preview new designs and sell those designs directly to consumers without inventory risk. The founders came from KarmaLoop where they ran Plndr so they came to us with unique and relevant experience.

In @CrossCultureVC‘s portfolio companies, There is something unique in each of the founders backgrounds that qualified them – @MarlonCNichols tweet

What is one book you recommend entrepreneurs/founders read?

Marlon: The alchemist is my favorite book of all time. If anyone is looking to start something, this book speaks about the importance of the journey of striving for, and eventually reaching your goal. A lot of great words for entrepreneurs, even though it’s not necessarily for entrepreneurs.

Can you briefly walk through your investment process and your sell philosophy?

Marlon: Be yourself. Be succinct. Get the message across quickly. Make the value proposition to consumers dead simple. If it’s not simple, it’s hard to sell. We really look to understand the value prop as quickly as possible. Know your audience. My partnership is made up of 3 very different guys, and a venture partner. All with very different career and professional experiences. When reaching out, reach out to the one whose experience is most relevant to what you’re doing.

Just be down to earth. Tell the truth. Make sure you understand your business. That might seem obvious, but that’s a big one for us…that you’re uniquely qualified to do this thing and that you have that intangible hustle we look for. The final thing I’ll mention is to understand what we’re after. That you’re coming with something that makes sense for us. We have a strong focus on consumer behavior. Sometimes we get approached by startups that are doing serious enterprise solutions that don’t have the consumer anywhere in sight. That doesn’t work for us. We need to be able to draw a line from your product to the consumer.

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