Dan Levitan on Maveron’s Bay Area Expansion, Its Latest Stealth Startup, and His First Starbucks

11/19/09Follow @gthuang

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Maveron’s portfolio. “They’re gaining share because of their value orientation,” Levitan said. “One of the great things about the Internet is it is a ‘disintermediator’ of things. We’re focused on Web-enabled consumer services.”

I took this to mean there is still plenty of opportunity for lean, mean startups to solve real problems for consumers by cutting out middlemen and other inefficiencies. But with all the doom and gloom around consumer Internet sites and online ad sales, I wondered how Levitan sees things shaking out in the recession.

Not surprisingly, he is cautious but optimistic. “There’s little doubt that the psychology of the consumer has shifted radically. Perhaps more radically in the last 12-18 months than in our lifetimes,” Levitan, 52, said. “The shift is more toward value.” That means people are focusing inward on things like family, friends, and pets, and they are staying away from public indulgence and excess—things like private jets and high-end wines at restaurants, he said.

But Levitan also pointed out that historically, consumer spending has been about two-thirds of the U.S. gross domestic product. In the past decade, that figure shot up to 72 percent. Now it has dropped a little below 70 percent, he said, but it’s “still above historical norms, and a huge percentage.”

I asked whether consumer companies, particularly on the Internet, need to be focused on a particular niche or vertical market, now more than ever. Levitan pointed out that Amazon became known for selling books before it went deep into other markets. He said Jeff Bezos has been “brilliant” about balancing the cash flow and profitability of Amazon’s core categories while expanding into adjacent areas. “Companies have to be known for something in retail, and have a clear brand image and value proposition,” Levitan said. Successful ones, he added, “have a psychological contract that brings consumers back on a repeat basis. We try to find consumer businesses that integrate into people’s lives.”

That brings us to the latest startup Maveron is funding, which has been getting some buzz … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • http://dailygrommet.com Jules Pieri

    Dan sounds like he has great consumer instincts…I particularly appreciate his nuanced understanding about what “value” means. Less sophisticated observers of the consumer zeitgeist think “value” only means a focus on cheap prices. Dan is right that it is more about approaching life/products/services in a thoughtful way. “How will this purchase support my values, relationships, my current goals, etc.” That’s where the big commerce shifts and opportunities lie.