Roman Kirsch on Direct-to-Consumer, Lesara's Failure, and SPACs

About this episode

Roman Kirsch is one of Germany's most prominent serial entrepreneurs. Starting his first ventures straight from university, he built a reputation in the startup scene through various founding experiences and investments. Today, he co-builds two direct-to-consumer brands per year, invests in multiple startups, and recently took the SPAC Tio Tech A public on the New York Stock Exchange alongside Dominik Richter (HelloFresh), Jan Beckers, and Victor Jacobsson (Klarna).

The Path to Entrepreneurship

Roman's entrepreneurial journey began during his master's studies with his first venture. He emphasizes the importance of network building through renowned business schools like WHU or CODE. For aspiring founders, preparation before the first funding round is crucial – investors have clear expectations regarding team preparation and commitment.

A defining experience was the Casacanda and fab.com merger, triggered by a Rocket Internet investment in the competition. After his exit from fab.com, new projects emerged, including Amorelie with Sebastian Pollok, where Roman also became active as an angel investor.

The Balance of Passion and Business Opportunity

When founding a company, the question often arises: What weighs more – personal passion or market opportunity? Roman sees a clear difference between B2B and consumer brands and has specific criteria for ventures he co-builds. The example of everdrop demonstrates how value creation in direct-to-consumer companies is evolving.

Direct-to-Consumer: More Than Just E-Commerce

In direct-to-consumer brands, customer satisfaction takes center stage. The Net Promoter Score (NPS) serves as an important benchmark – but what constitutes a good NPS? Product development must focus on maximizing customer satisfaction, as brand relevance is crucial in e-commerce.

An important correlation: Customer Lifetime Value directly correlates with product quality. Longer customer retention and higher Customer Lifetime Value allow companies to spend more on customer acquisition. Marketing channels come in waves – after Facebook and Instagram, TikTok is the next big thing.

Changes from iOS 14.5

The iOS 14.5 update fundamentally changed performance marketing on Facebook and Instagram. Companies must adapt their strategies and find new ways to reach customers.

The Lesara Chapter: Learning from Failure

One of the most honest chapters in Roman's career is the story of Lesara and its evolution toward Agile Retail. What went wrong with this "too big to fail" company? Timing proved to be a critical success factor for startups.

Roman openly addresses failure and emphasizes the importance of transparent communication about difficulties with fellow founders. The public pressure after Lesara's collapse was enormous, but failure is part of the entrepreneurial process. He used the time afterward for self-reflection and developing new routines.

SPACs: An Alternative Route to Public Markets

Special Purpose Acquisition Companies (SPACs) are Roman's latest project. Together with Dominik Richter and Jan Beckers, he set up a SPAC – but why? SPACs are ultimately just another way to go public.

Regarding the size and selection of SPAC targets, the question arises: How do you choose which company to take public? Are there enough good companies for SPACs? Tio Tech's positioning shows a clear strategy.

Quality Determines SPAC Success

An important point: Do good companies stay private as long as possible? Roman is convinced that the quality of the company determines whether a SPAC succeeds – not the type of process used to go public. Due diligence in SPACs is quite comparable to that in IPOs.

The current SPAC hype raises questions. One problem in Germany is the lack of financial education regarding the stock market. Ultimately, everyone must decide for themselves whether they believe in SPACs – but understanding the mechanisms is crucial for making informed investment decisions.