Ira Ehrenpreis on what the media industry can learn from iconic D2C companies like Tesla and SpaceX

The fact that consumers are increasingly demanding greater values alignment with businesses they buy from has seen the rapid rise of some iconic D2C brands. To discuss how these companies are using a focus on impact as a strategic advantage and connecting in new ways with customers, venture capitalist Ira Ehrenpreis – an early investor in Tesla and SpaceX – joined global expert Robbie Baxter at FIPP’s D2C Summit.

Ehrenpreis is the founder of DBL Partners, pioneers of double bottom line venture capital, a growing field of investing that seeks to optimise both financial return and positive social impact. It’s a position that’s allowed him to gauge consumers’ growing desire for companies to share their values.

“Consumers are demanding that companies now meet a new standard of environmental and social goals – we are seeing this in spades,” he said. “DBL is all about this idea that there is no trade-off. That’s the ethos of our firm – that we find companies where the idea of first and second bottom line have become mutually reinforcing.

“It is technology and innovations that have made this possible. It’s changing how companies operate and we see it resonating with values-driven consumers. We are seeing this play out in real time where some of he best consumer products are going through this metamorphosis and they don’t have to give up anything. They are creating their products either through evolution or revolution that are delivering value along the lines of sustainability.”

A company with drive

The biggest name among these consumer-focused sustainability businesses – and one the media industry can take a lot from in terms of building an ongoing relationships with customers – is Tesla. While Elon Musk’s juggernaut is known for revolutionising electric cars, Ehrenpreis – who serves on the board of Tesla Motors – pointed out that how they sell those cars has been as important.

“When you think about so many industries where the relationship with the customer is everything – how you monetise that, how you build long-term value -it is all built on the embedded relationship that you build with that consumer.”

“One of the key innovations at Tesla was to think about this in a different way. It was the idea that when we were growing up we may have gone to a dealership to buy a car but not the mall. And that’s what Tesla pioneered.

“Tesla upended the assumption that there’s a bifurcation between the OEMs that produce the car and the dealerships that sell the car. It is a profound change in how we think about customer engagement and relationship using innovation.”

Ehrenpreis stressed that being a double bottom line company was not just about being different, but being better.

“Tesla went out not just to build the greenest, most environmentally friendly car but said – what if we build a car that accelerated faster than a Ferrari? At Tesla we did not go out to build a different car, but a better car. That was the profound missionary statement, which in many ways has defined what we think of as double bottom line.

“It’s the idea of not doing different for different sake but to find a way to be better through innovation. One of the real lessons coming out of it was that by building something from scratch or at least questioning the status quo, you are able to just uproot all these dimensions that unlock a set of other opportunities that we didn’t have.”

A healthy approach

An industry where a lot of emerging D2C companies are thriving is food and agriculture, with several upstarts challenging the status quo and building close relationships with consumers.

“The food and agriculture industry is among the largest markets in the world but it also has an enormous environmental impact, “ said Ehrenpreis. “Consumers are incorporating a sustainability lens in ways we haven’t seen before. They have a desire for products that, historically, have not been served by centuries-old oligapolies in the industry. Some of the newfound emerging companies in the space like Beyond Meat are coming into that trend.

“We have backed a number of companies that are trying to meet the consumer demand around these issues. Companies like Farmers Business Network, which is a great example of really trying to democratise access to tools and technologies and the ability for small farmers to deliver to the consumer. It’s this idea of developing a relationship between production and consumption.”

Another example is Apeel, which is tackling food waste by finding a natural way – through materials that exist in the peels, seeds, and pulp of all fruits and vegetables – to extend the shelf life of produce.

“The good news from a consumer standpoint is that it’s even healthier than a typical piece of fruit because spoilage doesn’t occur, but going all the way back to the supplier there’s a value prop across the entire supply chain,” said Ehrenpreis. “It’s a great example of a win-win across the entire spectrum as opposed to the consumer winning but at the expense of the supplier.”

To infinite consumers and beyond

Turning to SpaceX, Ehrenpreis said the work done by the aerospace manufacturer, space transportation services and communications company is related to media companies finding different platforms for its content.

“When you talk about reading news differently today that’s true for you and me and half the world but it’s not true for the other half,” he pointed out. “Half the world is reading the news the same way they did a 100 years ago – they don’t have access to global broadband.

“What SpaceX is doing through Starlink is building a constellation that for the first time ever is going to enable every longitude and latitude to have that opportunity. That technology unlocks a doubling of a potential market that has existed for the companies in the media space.

“The early technologies that enabled the internet have profound implications for media companies and so too does this generation of unlocking have a similar potential impact. It’s about making sure that companies understand these trends and what it means for them.”

While companies can get a window to these innovations through venture capital arms or by building relationships with venture and the entrepreneurial community, the most important thing when making the most of new trends is the right entrepreneurial mindset.

“It’s very easy to march down a path of enabling status quo,” said Ehrenpreis. “It’s very hard to have a mindset to disrupt.”

Ehrenpreis encouraged delegates to be on the lookout for ‘mash-ups’. “Whatever industry you are in, think about another industry that has experienced similar kinds of industry evolutions where the mash-up creates an opportunity.”

A prime example is Better Place Forests, which combines conservation and funeral services. The company has created America’s first conservation memorial forests, creating sustainable alternatives to cemeteries. Instead of graves and tombstones, families can choose a private, protected family tree where the ashes of a loved one can be placed.

“They have created an opportunity to improve end of life and figure out ways to preserve vulnerable forest lands,” said Ehrenpreis. “When you think about consumer choice it’s unlocking a choice consumers have never had before. We have never questioned the idea that we can have a final resting spot in places we consider the most beautiful on earth instead of a very traditional cemetery.”

When it comes to potential mash-ups for media groups, Ehrenpreis recommended a closer look at “immersive audio”. “It changes the way we think about having a relationship with physical environments. A number media companies are super excited about what that can unlock for the way they are tapping into a physical relationship with their customer base.

“Historically we thought of the largest and best audience experiences as being ones that require super expensive audio equipment. What if we can have that same experience in museums or smaller footprints we go to.

“Historically the cost to enable the extension of the physical footprint from an audio experience standpoint has been limited to a very small percentage of where those media assets can go offline. So what this is trying to do is democratise access to a range of physical footprints that haven’t been accessible.”

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