How Mirror became Lululemon’s Crown Jewel

Highlights from ✨Hot Deal Time Machine✨⏳ -- On Clubhouse Thursdays at 8PM ET

Below are highlights from last week’s Clubhouse episode featuring Byron Ling, Partner at Canaan and seed investor in Mirror.

Sign up for reminders about the show ✨Hot Deal Time Machine✨ here and listen in to hear the BetterUp story this Thursday.

🃏The Bet: Exceptional founder trumps hardware risk 

Many VCs steer clear of hardware investments, pointing to a long list of HW casualties (RIP Juicero, NJOY, and Hello). Ling points out that one of the main risks around HW is the capital needs. Will the start-up be able to deliver a product on the determined timeline? (almost never). Will follow-on investors be willing to put capital into the company pre-launch? In the case of Mirror, it was the exceptional talent of the founder, Brynn Putnam, that trumped this capital risk in Ling’s mind. Putnam had demonstrated that she not only had the unique insight to build the right product for the end customer, but she also had the vision and story-telling skills to attract an incredible team and convince VCs to invest outside of their comfort zone. While it did take longer than anticipated to get the initial product to market, Spark Capital saw the same promise in Putnam that Ling had to lead the Series A ahead of the product launch. 

💪🏼The Hustle: From ballerina to builder

Putnam did not come from a typical Silicon Valley founder background. She started her career as a professional ballerina. At the time that she and Ling met, Putnam was running a boutique fitness studio in NYC called Refine Method. It was in this studio that she was able to A/B test the elements of the fitness experience that customers loved. One thing that continued to stand out? The studio mirrors were central to every individual’s experience. From here, Putnam taught herself about software and hardware engineering to build an initial prototype which she presented to Ling at the seed round. Her unique insight, coupled with her tenacity and product vision were what led to that initial investment. 

🤦🏼‍♀️The Oh Shit Moment: Peloton expands

In the early days, Peloton was a beacon of light for Mirror - a connected fitness bike that proved the demand curve for Mirror to build a HW device in an adjacent category. However, in 2018 when Peloton launched Peloton Digital (off-bike content including yoga, strength training, pilates), Mirror came face-to-face with a direct threat from a looming giant. Despite this, Mirror was able to thrive based on two key factors. First was top-tier content and instructors. While it is incredibly difficult to compete for the best instructors against Peloton, Putnam’s deep network within the fitness community as an instructor herself gave her the inside track to the best talent. Second, the at-home connected fitness market was massive and growing - with more consumers entering the market each year over the prior year. Ling and Putnam were betting that the market was not winner take all, even as companies began to overlap on verticals - and Mirror proved that it could be one of those winners.

💵 The Acquisition: $500M and scaling with Lululemon 

Lululemon announced that it was acquiring Mirror in 2020, less than 2 years since Mirror’s public launch. To many, it was surprising to see the clothing retailer make such a large move into tech. Yet in 2019, Lululemon detailed it’s three-fold vision to be a brand that doesn’t just sell clothes like leggings and sports bras, but that encourages people to sweat more - and Mirror would help them to do just that. For Mirror, the acquisition provided a heavy-hitting partner for reach and scale. As a well-loved fitness brand, Lululemon has provided Mirror a scalable acquisition channel (both online and via retail stores) for fitness enthusiasts. In addition, Lululemon’s international presence brings the opportunity for efficient global expansion. The most recent LULU earnings call highlights management’s enthusiasm around Mirror: plans to add two more studios and triple the number of live classes - with the expectation of driving $275M in revenue for FY2021.


👉🏼 Up next this Thursday: Hear from Aditi Maliwal, Partner at Upfront and early investor in BetterUp on how the coaching platform democratized access to enable >100K professionals work with purpose.

👉🏼 ✨Hot Deal Time Machine✨⏳ is a 30-minute weekly Clubhouse show where we travel back in time to the early stages of some of today’s hottest deals. Hear from founders and investors on the original pitch and thesis…and how things actually played out, Thursdays @ 8PM ET