By Alan Soclof
The company aims to be a platform-agnostic service that connects quality brands across the internet and allows them to sell products within each other’s stores.
Below, read my conversation with Bennett in which we discussed all things Canal, how his experience at a16z prepared him to crush it in this role, and so much more. Enjoy! (The interview is edited for length and clarity.)
Pictured: Canal CEO Bennett Carroccio
Alan Soclof: First of all, congratulations man! $22.5M is big time!
Bennett Carroccio: Thank you so much! We are super excited over here. Your recording won’t get this, but I just realized my eyes are not fully open. It has been a fun week. We are not partying, but a lot of friends have been reaching out and congratulating us. It has been extremely validating.
AS: Awesome. Jumping into it, how would you describe what Canal is doing at the highest level?
BC: We are building the inventory layer of the future of commerce. We are building a backbone of what it actually takes to sell products online. We are a two-sided network, matching brands who are looking for distribution channels with brands who are looking for access to inventory. We make it extremely simple to look into our curated network of brands, where we vet every single one in order to create the best relationships for every party involved.
At a macro level, we have incredible tailwinds. Brands are looking for new distribution channels with the new iOS 14 update. The unit economics across the board are deteriorating. If you are a brand selling to a coastal consumer on their phone through Facebook ads, the day of the iOS update, your return on that ad spend was cut in half.
AS: You and the team raised the seed round just six months ago. I would love to know the story of when you realized, “Damn, maybe we should start looking to raise more money.”
BC: Before we decided to go after this opportunity, we were extremely diligent. We knew there was something here in what we are building. We raised our seed after we came out of stealth and the waitlist exploded.
I was the only one fielding sales calls and also doing customer success. Literally hundreds of brands were coming inbound to us. It was validation for us that what we are building there is extreme demand for.
On the business side, we realized we needed to grow our network— which means more people to work with brands, build trust with brands, and make sure they onboard effectively. There was also so much we had to build from a technical side as well. This Series A is really just adding fuel to the fire.
AS: From a founder’s perspective, how do you stay diligent when you have all of these big brands reaching out to you?
BC: It is ruthless prioritization and constantly stopping to make sure that how we are organizing our day and the expectations we set are in line with what we can execute against.
Everything we do revolves around trust. We are a partner maker that matches brands with other brands. We facilitate partnerships. We put our necks out and recommend partnerships as well. There is trust there and trust with the partner entrusting us.
AS: Was a big part of this round to try and build up the tech/coding team?
BC: If I may say so myself, we did a great job with the initial integration with Shopify. Shopify has a great waitlist feature where we can see all of the brands that are knocking down the door that want to work with us. The crazy thing is these brands aren’t even on Shopify. A lot of the bigger brands that are selling a ton of products that want to sell more are not on Shopify.
Our long term vision is to be an e-commerce enabler that makes it so easy to sell products that we even redefine what it means to become a seller.
Alan: How do you think your 4 years as a consumer investor at a16z helped you turn Canal into a success?
Bennett: The most important thing it did was validate that I want to be a builder and not be an enabler of other builders. That allowed me to pursue this opportunity with full conviction. Imagine what my parents had to say when I told them I want to leave my job with Andreesen. My then girlfriend and now wife’s parents were like “Are you crazy?!”
I think the biggest thing is that there is literally a table. There are two sides of the table: founder or investor. Which side of the table do you want to be on?
Working for four years at Andreesen, I worked closely with some people that will be mentors of mine forever. I learned a ton. The network that I kept was filled with charismatic, passionate founders, and being on their boards was a phenomenal experience.
I realized that I wanted to be in the trenches with them and go deep on one thing that I absolutely love and am obsessed about. For me personally, it is tough to spread my attention across different things. I would rather go deep and put my heart into something one hundred percent.
It was great to spend some time with Bennett, and I am a huge believer in what Bennett and Canal are building.
My main takeaway from Bennett is the importance of experience. In the startup world, it’s often the ones with patience and experience that will be the most successful. Hearing Bennett discuss his experiences at Andreessen Horowitz, it’s clear what he learned there helped him succeed in leading Canal.
Being a founder is extraordinarily hard, period. But being a founder without deep professional experience is even harder. In April, I’ll be writing an essay on the collective success of older founders, so stay tuned!
Three other points that stood out to me from our conversation were:
- We. We. We. — In the few paragraphs above, Bennett used the word we around ~30x. A CEO is a leader of the team and the simple messaging of talking about “we” vs. “I” says a lot about the company that Bennett & Co. are building.
- The right place at the right time — Online, DTC shopping is exploding, and as Bennett mentioned, so many of the biggest brands are not even on the platform yet. When you take this into account with the macro iOS changes, it’s clear why investors are excited about Canal’s trajectory.
- 1+1 = 3 — The best business relationships all have one thing in common: everyone wins. The network effects that Canal is building are off the charts, and the fact that everyone involved in the relationship will benefit greatly from working with one another will be a big reason for Canal’s continued success.
WHO IS RAISING?
What Do They Do: QEWD is a platform agnostic search, discovery and curation application for all streaming video content. QEWD indexes content from every domestic VOD service, social media service and from hundreds of linear channels to provide a unified, personalized and socially enhanced discovery and sharing platform for all streaming video content.
By using QEWD all of the WEBs streaming video content becomes accessible on one platform, and for the first time, consumers will be able to see everything their friends, family and favorite influencers are watching and recommending in one place.
How Much Are They Raising: $4.5M seed round (Over $800K already invested in design and development from the founders, friends and family)
Stage: Pre-revenue. Currently in Beta
CEO: Zak Kadison: Contact: [email protected]
President & Owner of Polymouth Group
Media and entertainment consulting firm with a portfolio of clients from diverse industry segments including high tech, media, gaming, and numerous Fortune 500 companies.
Co-Founder and COO of Imperative Entertainment
An entertainment studio that produces, finances, and distributes movies, television shows, video games, and other media content funded by billionaire Dan Friedkin.
Founder & CEO of Blacklight Transmedia
A next generation production company funded by WME and acquired by Imperative Entertainment
VP of Production @ 20th Century Fox
A movie studio focused on the production, financing, and distribution of major motion pictures such as Avatar, X-Men, Avatar, and Titanic
First and foremost, how about Zak’s experience?! His professional experiences and achievements are off the charts and, as I noted above with Bennett, I cannot stress enough how important experience is to the success of a venture.
Additionally, the problem Qewd seeks to fix is one that consumers know all too well. There are so many streaming services and it is incredibly overwhelming. I love Qewd’s angle of trying to make this process simpler through beautiful UX (which I have seen!), and their heavy reliance on social/word of mouth discovery is brilliant.
In many industries in the world of business, it’s not what you know but who you know. This is true in particular in the media space, and Qewd has gathered top leadership from Zak as well as a strong team and board of directors from companies we all know.
If you’d like more information on the company, specifically the pitch deck, make sure to shoot Zak an email.
What They Do: Cyber security provider for private 5G networks
Amount Raised: $8.2M seed round
Lead Investors: Grove Ventures and Viola Ventures
The Rundown: Everyone knows about the impacts that 5G will have on our lives, but many do not know the large push that many will be making into creating private 5G networks.
Deloitte projects that “by 2024 the value of cellular mobile equipment and services for use in private networks will likely add up to tens of billions of dollars annually.”
OneLayer’s goal is to provide robust cyber defenses for these networks in the private 5G sector.
I am surprised that we are not hearing more about ventures and their push into 5G in mainstream startup coverage—which makes me think that OneLayer is set up to see serious success.
What They Do: Artificial intelligence company focused on defense sector
Amount Raised: $5M seed round
Lead Investors: Geoff Lewis, Bedrock founder & managing partner
The Rundown: Modern Intelligence looks to make a splash in the defense sector using top-notch AI. Their first product is an AI solution that enables Navy operatives to track anything and everything related to ocean terrorism threats, detecting threats with great precision.
The seed round will be used to deliver the company’s solution to a US Naval exercise this summer to test the viability of the product.
The most exciting part of the product, in my eyes, is the fact that it is a turnkey solution, meaning it could be bolted on top of the current processes and not cause significant disruption.
What They Do: Manufacture plant-based fish products
Amount Raised: $12.45M seed round
Lead Investors: State of Mind Ventures
The Rundown: Plantish looks to do to seafood what BeyondMeat and Impossible Burger did to the fake meat markets.
The company’s first product is a salmon filet which they will be launching in select locations in late 2022, and nationwide in 2024. Plantish claims that their salmon product has a remarkably similar texture, taste, and appearance to salmon while being healthier and more sustainable for the environment.
BTW – I would 100% say yes to a taste test review if Plantish is interested. I think it could be good fun for everyone.
What They Do: Comprehensive allergy care platform
Amount Raised: $8M seed round
Lead Investors: Juxtapose & Obvious Ventures
The Rundown: Nectar looks to disrupt the massive $360B healthcare allergy industry. The Nectar platform incorporates in-person clinical evaluations with virtual care.
A big part of Nectar’s story is the management team. Nectar is led by Dr. Kenneth Chahine who was a founder of AncestryDNA as well as former EVP at ancestery.com. There’s no doubt that his experience will play a critical role in Nectar’s push to success.
What They Do: Cannabis wellness company
Amount Raised: $5M
Lead Investors: N/A
The Rundown: Jointly’s goal is to create a consumer app that allows users to track their cannabis experiences in order to create a community and database filled with consumer reviews. The company already has 3,000 brands, 75,000 products, and 200,000 cannabis experiences rated.
Here is a very interesting quote from CEO David Kooi on the company’s approach to cannabis:
“Cannabis isn’t about ‘getting high.’ It’s about living your best life, naturally. Whether it’s to relax, sleep better, recover from exercise, focus, or energize the mind, Jointly helps you achieve the experience you’re after.”