When Brynn Putnam sold her last company, Mirror, to Lululemon for $500 million at the start of the pandemic, it seemed like this editor sold the smart fitness company too quickly.
Instead, the timing was great. The home gym craze plummeted almost as quickly as it peaked in the first year of lockdown. Meanwhile, after a year as general manager at Lululemon, Putnam has new operational insights, big wins, and fresh ideas for transforming the company into a new company that will launch publicly in 2025.
Venture firm Lerer Hippeau has already participated in a highly competitive round for the stealthy startup. The company also led Mirror’s $3 million seed round a few years ago. And on Wednesday night in New York, I sat down with Lerer Hippeau Managing Partner Ben Lerer. And Putnam talks about what he’s creating. We also talked about the broader rebound that’s finally happening in consumer technology. Some of them are led by founders who led the last wave of successful consumer startups.
The following is an excerpt from that chat, lightly edited for length. You can also watch the full interview below.
Ben Lerer on writing his first check:
When we invested (in the mirror), Brynn had a demo that was very convincing but completely janky. It was basically a sort of two-way mirror with a computer screen behind it to show her what the mirror would look like if she could. Actually producing something like that would require raising tens of millions of dollars. What’s really interesting is that she designed a device that she owned (her own boutique gym line at the time). . . And when we looked at it, it was clear that Brynn was not only a clever business builder who built a great gym brand for herself, but she was also an inventor. Brynn won us over very, very quickly and we probably looked crazy for a few years, but in the end we weren’t.
Brynn Putnam has sold Mirror four years after founding it.
We were not for sale. We were not looking for an acquirer. We just launched. But we’ve had a long-standing partnership with Lululemon. I have been working with them at my gym for about 10 years and have been spending a lot of time with them creating content and running interesting events. Mirror homes around the world quickly and reliably. This seemed like an opportunity I couldn’t miss.
Asked whether Lerer had advised on the sale, he said:
I had an opinion about it. See, venture is a fun business because of the power law and the idea that you have to moonlight and lose a lot, but your big win will change the whole world. I believe in the power law, but I also think that sometimes ventures overlook some really basic, good, sound business decisions. And there are some common truths in business. In other words, sell when others are greedy and buy when others are fearful. You don’t always have to keep going back to the casino. In this case, when Brynn came to me and said, ‘Hey, I got this offer and I’m really not sure if I should take it,’ I was like, ‘Yeah, you need to do this. This is surprising to us. And if you get pushback from others (like late-stage investors with different cost bases) I’m willing to try to help, but honestly, you’re much stronger and more powerful than me. ‘Take care of this.’ I think in a year or two Brynn will probably have people second guessing it. And now people will see the arc of the entire category and realize that it was just a totally brilliant move.
Putnam later worked as an executive at Lululemon and later threw in the towel at Mirror.:
An investor I respect. . .told me at the time that you have to graciously learn that for the life of your company you are selling it. You may sell it in small pieces or you may sell it in larger pieces, but you are always selling the company. The best thing you can do after making the decision to sell is to learn as much as you can from this business you have chosen to sell and try to solve something with purpose in this new role. And that’s what I did. And I learned an incredible amount in the year I was there, and it was incredibly interesting. But ultimately, going from founder and CEO to virtually general manager of a business unit is a very big change, and I think it suits some people. And for me it wasn’t like that. I’m really a builder.
Here’s what prompted Putnam to develop her new startup.
When I left Lululemon, I was really at a different stage in my life. I got pregnant and had two kids, and I really looked at what was important to me at that point. The mirror made me feel very much about myself. It was my reflection, it was my performance, it was about making yourself better. At that next stage, my life was much more about family, friends, relationships, and the things I thought were important. I was really struggling to spend quality time with my loved ones like I did growing up. We would sit around the table eating, playing board games, and looking at each other. For our children, who grew up immersed in iPads and smartphones, experiencing quality time has been more difficult.
So I started thinking about how I could apply what I learned from Mirror to the category of play. How can we use technology to build better social relationships and connections? And that’s what I’m doing now. It’s a new consumer hardware company, but it’s geared toward how we spend time together face-to-face, in the gaming space rather than fitness. Here, skills are not experiences, but are actually the enabler to build better relationships.
When asked if her new product was for children (or would fit in a pocket or be worn on the face), Putnam responded:
It’s for everyone. It’s about spending time with friends and family. Although we are not a company for children, we hope you will participate with your children. We’re not an education company, but we want people to think of us as interesting, strategic, and creative. But in reality, it’s a company that uses technology to connect people with each other. (Here Lerer declared that he had been sworn to secrecy from Putnam.)
Putnam said the confluence of AI, hardware and software is suddenly of the greatest interest to founders and investors:
I think we will soon enter a golden age of hardware. Any VC here will soon be very happy to invest in a hardware startup. Because (a) I want a few things to happen. The iPhone launched 17 years ago, and there hasn’t been a mainstream consumer hardware success since Oculus. I think there is an opportunity for something new in the market. Many of the core components of these technologies have become much more mature and correspondingly cheaper. So in our case, building display technology is possible now, unlike it was 10 years ago. And clearly, AI is opening doors to how we interact with our devices. So, naturally, there will be new devices coming to the market. We’re betting on the idea of a new shared device in the home, not just another personal computer. This is exactly what we did with Mirror and what we are doing again here. The idea that there will be technology that helps bring home and family together is where we think the future is headed.
Putnam spoke about not focusing too much on the technical specifications of the hardware and focusing more on the overall experience it creates:
I recently learned about Nintendo’s design philosophy. They have a concept of using ‘withered’ technologies along with lateral thinking. So the idea is to use technology that is mature, affordable, and more readily available, but create really interesting experiences around it. This is exactly what we have done with Mirror. Rather, it was commodity hardware. It wasn’t frontier technology. And (that’s) what we’re doing again now.
On bringing family and friends together around an investment theme (where this editor introduced Pie, a new startup from Bonobos co-founder Andy Dunn that focuses on bringing people together offline), Lerer said:
I am an investor (in Pie)! Look, I have young children and I’m going through the same struggles that all of my friends and everyone else is going through. We are all hopelessly addicted to these devices, and at a high level we are interested in alternatives to that addiction and in new forms of technology. Entertainment or opportunity that gets people off the screen or out into the world. We recently closed a yet-to-be-announced (related) deal in an application-layer AI company in the travel space that I’m really excited about. And we announced a deal last week with another application company in the aftermarket automotive space. It’s actually the largest hobby by spending in the United States. Finding ways to tap into people’s passions is always a good option in the consumer space.
Commenting on the feeling that the ‘consumer’ category is making a comeback thanks to a new $500 million fund announced last week by renowned consumer-focused firm Forerunner Ventures, Lerer said:
As a fund, we’re founders, but we’re also New York first, and we’re often directly involved in a lot of consumers, a lot of media, and consumer commerce, with the first generation of (founders) in New York in the early 2010s. And there were a few trends that really drove this. The iPhone and the App Store arrived. Social media has exploded and the arbitrage advertising ecosystem has the opportunity to acquire customers faster than ever before. Perhaps the rise of Shopify has made it a great time to build a consumer business with a broad imagination.
There have been very few large-scale technological changes in the last four, five, six years that have inspired people to do things that don’t feel progressive. And I think AI is the catalyst for that right now. We’re seeing a very high-caliber group of founders who are saying, ‘It’s time to get back to it.’ What was impossible six months ago or a year ago is possible today, and the slope is steeper now in terms of imagination. So I care more about the consumer than ever before. It’s really exciting because it’s my passion. I built a consumer business. I love investing in consumer startups. To be honest, the last few years have been pretty crappy.
