How This Serial Entrepreneur Built an Incubator That Powers Multiple 8-Figure DTC Brands

Blazar Capital is an incubator and venture capital firm specializing in direct-to-consumer brands. With 8-figure businesses in a multitude of industries, Blazar Capital's brands span everything from home goods to fashion to cosmetics. CEO Christian Arnstedt launched the business in 2017 by building brands from scratch. Now as an investor on Denmark's Shark Tank (Løvens Hule), he’s helping other founders reach their potential. In this episode of Shopify Masters, we sit down with Christian in his Copenhagen office to hear his learnings from building direct-to-consumer brands, what he looks for when investing, and how he navigates failures.

Blazar Capital is an incubator and venture capital firm specializing in direct-to-consumer brands. With 8-figure businesses in a multitude of industries, Blazar Capital's brands span everything from home goods to fashion to cosmetics. CEO Christian Arnstedt launched the business in 2017 by building brands from scratch. Now as an investor on Denmark's Shark Tank (Løvens Hule), he’s helping other founders reach their potential. In this episode of Shopify Masters, we sit down with Christian in his Copenhagen office to hear his learnings from building direct-to-consumer brands, what he looks for when investing, and how he navigates failures.

 For the full transcript of this episode, click here.

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Show Notes

• Website: Blazar Capital
• Stores: Nordgreen, MessyWeekend, Moonboon, Chamberlain Coffee, Scandinavian Biolabs, Project Nord, Copenhagen Cartel
• Social Profiles: Facebook, Twitter, Instagram

Leaving a successful career in consulting to building Blazar Capital 

Shuang: Tell us about how Blazar Capital was founded.

Christian: Blazar was founded by me and a couple of partners who are Pascal (Sivam) and Vasilij (Brandt). Pascal was an old colleague from my former job in McKinsey, and Vasilj came from an ecommerce company called The Hut Group in the UK. And we teamed up some years ago, and I thought it could be a lot of fun to make a house that helps to incubate new consumer brands. So brands that are typically born digitally, many of them are actually born using the Shopify platform to do their sales. And then we help to scale these brands fast. We have this house that we have set up to support new brands in the way that there’s a tech team that supports them with everything they need. On the tech side, we have a paid media team and an agency that supports everything that's needed on paid media. And then we are also supporting on other functions, such as handling logistics globally and setting up finances in the first couple of years where a founder may have a lot of other tasks on hand. So we try to really set up a house with all the different things that you need as a new business.

Prior to funding other DTC brands, Christian Arnstedt and his partners Pascal Sivam and Vasilij Brandt created Noordgreen, a watch brand that brings Danish-designed timepieces to the masses. Blazar Capital

Shuang: It's impressive because your team also built your own brand and within a couple of years it scaled beyond 8-figures. So tell us about the first brand that you built, Nordgreen, and how it all started.

Christian: So Nordgreen was one of the first things we started with Pascal and Vasilij. And it has just been a great ride. It came from the idea that Danish design is known in many countries as high-end design and aspirational. And then we got an opportunity to work with one of the lead designers who has designed a lot of the collections for the Danish brand called Bang and Olufsen, known for its headphones, speakers, televisions and so on. And Jacob was just an international design star, and being able to do Danish design together with one of the leading Scandinavian designers was just a very interesting opportunity for us. So we launched this watch brand called Nordgreen with Jacob. And the name Nordgreen stands for Nord is because we are from the Northern part of Europe. So it's N-O-R-D, the Danish way of writing that. And then green comes from that the fact that brand is very dedicated to CSR and to making a positive impact in the world. So that was the start there. So it's been a combination of a design story and a CSR story.  It got good traction within a few years. Within the third year it got to be an 8-figure brand. And it's still growing nicely. That has been one of the fun journeys that we have been so lucky to be on the last couple of years.

Shuang: It's amazing that within a few years since 2017, your team was able to scale so much. What are some key pivotal decisions that you felt really contributed to the scaling?

Christian: I think a couple of different things. The reason why we are able to work across multiple brands is that we have a good strong team on each brand. So every brand has a dedicated leadership that is able to fully run that brand, of course, they are also tapping into all the support functions that we have in the house. But there is somebody in charge of each brand. We are working with 15 to 20 brands at any given point in time right now. That local ownership and leadership is important to us. Then of other things, I think the world has become very interesting in the sense that with platforms such as your own Shopify, the barrier to entry of starting something has actually become very small. You can start a website with a limited amount of money and a limited amount of resources, but what we have done by making this infrastructure of all of these specialists available, where you can get a part of a logistics person, you can get a part of a developer that has done 50 Shopify stores. That just means that we have been able to help many of the brands that we work with, take the right decisions at the right point in time and not have to go on too many detours when figuring out how to do things by being able to apply what they can see some of our other brands are doing. So we are trying to also work with cross facilitating knowledge between the brands. So every brand is not operating in a silo. They are able to either by talking by the coffee machine or in more formal meetings set up for this purpose to discuss what is working for them, and what is not working, and sharing that knowledge.

Shuang: So after Nordgreen, where did your team move to next?

Christian: Then we moved into our sunglasses and ski glasses brand called MessyWeekend. And MessyWeekend is a challenger to the sunglasses industry. They're doing super high-quality sunglasses at between $70 to $100 typically, which is below the price that you would normally find for equivalent quality, quite a lot below actually, and its also a vibrant and young brand. So that has been a fun journey as well. Being deep in ski equipment has been a little bit more friction filled during COVID given that traveling has been difficult. Unlike yourself, you're from Canada, so you can ski at home, but for many other countries like Denmark, we don't have mountains, which means customers typically buy this before they go on a ski trip but people haven't been able to. So we have some businesses that have been completely not impacted by this period that we went through. We had some that grew and had a boost from it. And then we had other things like ski equipment, which is more challenging.

Product size matters when investing in DTC brands 

Shuang: Let's talk about what kind of businesses your team has been helping to scale and the different industries that they're in?

Christian: So we generally like smaller things the most, and the reason why we like that is because our model is typically built on international sales and exports. And shipping big things like a sofa long distance, if it goes out to the customer and then they figure out that the color feels different from what they saw when they looked at the pictures, then it's expensive to ship it one way. It's expensive to ship it back. So we prefer smaller things as sort of a criteria of when we do invest into new brands. We are in many different categories. So watches, accessories, we are also in home decor. We are in baby equipment. We have a couple of apparel brands that are leading on sustainability. Then we have a ready-to-drink brand here in Denmark. We are part of a coffee brand in the US. So we are in different areas, but all of them have the same thing in common that they are all direct-to-consumer brands where we can replicate a lot of the same processes and a lot of the same functions.

When investing in DTC brands, Blazar Capital’s team is more interested in smaller products that have repeat purchase potential. Blazar Capital

Shuang: What are the lessons or suggestions you would give for people who are starting to build? 

Christian: That's a good question. I think there are different things that matter. One thing that I think matters more and more compared to before is your content. So having content that's sufficiently interesting that people want to look at your brand rather than another brand because, in many things that you are selling online, you typically would have a lot of competitors. When we are in a watch category, or sunglasses category, or food category, there are plenty of other businesses to choose from that is not ours. And I think being able to cut through the noise and actually be the one that people find interesting and want to buy from is a challenging task.

Shuang: I think all of the stores within Blazar are very editorialized and they are beautiful sites to look at. And they have their own story of why they started.  So I can see how content plays a big part. 

Christian: We think that this story is important. The content is important. Obviously it goes without saying that the product needs to be good. If you don't have a good product, then you may get a few customers in the beginning, but then that's it. So you definitely need good product, that goes without saying. Then one thing that we also like as a house is we like companies that have a strong CSR (Corporate Social Responsibility) agenda and are doing something in this space. We believe that it's going to go from something that just a few companies did to something that you need to be strong in to have a right to play. So that's important. We work with a company called Copenhagen Cartel that works with a lot of different fabrics that is very innovative in the way that they are using reused material to create their fabric. And we see that the employees actually have a lot of pride in working in these companies because they feel engaged. They see the purpose, they see the vision, and they're proud to be a part of that journey. So we think that's good and also it’s also the right thing to do.

Shuang: How do you go and approach industry leaders to talk about these partnerships and get them on board with something that's so new?

Christian: So I think one thing is that our team can set up ideas and work with new ideas, and we have a reputation of having done it before. So I think there is some trust when we reach out to someone that there's a bit of track record. So they are willing to trust based on our past experiences and what some of our other brands have done before. For example for MessyWeekend, we are coming out with a sunglasses collection with one of the biggest YouTubers in the world. It's not public yet who it is so I can't include all of it, but there we have something coming. In our coffee business, that's actually not a business that was founded by us. That was founded by Emma Chamberlain, where we are supporting Emma. Emma is one of the world's most inspirational creatives out there. She's so good and her content is absolutely phenomenal. And we have the pleasure of being able to help Emma on the business and help bring her vision to life.

Shuang: For me, I knew about Chamberlain Coffee and I had to trace my steps back and finally link it back to you guys in Copenhagen and realize that Blazar is helping to build her brand. So how did you guys were able to kind of get this partnership with her and be the team that she chooses to support her business?

Christian: That's a big question. I think that's best maybe not for me to answer, but I think we understand the vision that Emma has and found good chemistry in supporting the vision that she has and where she wants to take her brand. 

Shuang: Your team is now helping her turn those ideas into physical products that are also successful. I think she just won a Streamy award for the creator product of the year. So congratulations to you guys for doing that as well.

Christian: Yeah, we are very excited about the work that we are able to help with there, and find a lot of fun. We also find the vision of the brand, it's all organic, it's speaking to a young audience and doing coffee in a very different way than coffee has been done before. So I sometimes get a little bit surprised when I compare Chamberlain Coffee with many other brands out there, and see how different it is.

Experiments and expansions into retail as a digital-first incubator 

Shuang: Blazar is a digital-first house but I see that Chamberlain Coffee has popups and it recently got into Erewhon, which is a very nice grocery store in LA. So have you guys have been experimenting and expanding into retail with other brands, and what are some key steps that your team is doing when you do retail experiments?

Christian: We are working with many of our brands in retail. Most of the things that we work with are born digital-first, but we definitely still see retail as a relevant channel. And as something that is going to be meaningful for as far as we can see into the future. So it's definitely something that we are all prioritizing. In our watch brand, as an example, we have a big retail presence in some of the Asian markets. We have a big retail presence in some of the European markets, and the same across many of our brands. So I definitely think that many brands can benefit from being open to an omni-channel strategy.

Expanding their various brands into retail has been a priority for the company. Blazar Capital

Shuang: For all of the different brands that you are looking at, I wanted to talk about the marketing aspect and see if there are universal marketing tactics or strategies that people can think about that would be helpful for when they're starting out to launch?

Christian: I think there is something when you launch about trying to build momentum and excitement for when the product is coming into the market. So doing what you can in getting people signed up to your email newsletter before launching, so you are able to get some of those first sales when you go live. Also, trying to get a bit of noise through other channels could be by arranging with some influencers when you go live. Are you able to attract some PR when you go live and sort of use all of these channels that you can tap into to create a buzz. And then I would combine that buzz that you created with retargeting ads. In particular, retargeting is generally more efficient than the top funnel where you need to get new prospects to see your brand. And initially, you may not have a lot of money when you launch a brand, so if you can combine some of these buzz-creating activities with some retargeting spend, I think that's a good way to start with a smaller budget. If you have a bigger budget, then you can obviously hit prospecting much harder and go out more heavily, but try to do these different things. And then I think doing some activations also that people find interesting. Doing something different. Every Instagram or Facebook user is seeing so many ads every week that just being another ad has become difficult to stand out in the crowd. So I would definitely think about how to go broader as a business in your scope and think of your good market approach.

What this serial investor looks for in Shark Tank pitches 

Shuang: You are also an investor on the Danish Shark Tank. So you also see a lot of pitches. What is it about different businesses that attract you to them and what is the thing that you look for when you're ready to invest?

Christian: So a couple of different things. I like repeat products. It gets more and more expensive to market online and making sure that you get enough lifetime value of the customer in the category that you are in becomes increasingly important. Then when you have found the right category, to me, it's all about the team. When a business is at an early stage, it's really dependent on a few people. And if those people have the magic to make it happen, then there's a good chance that it becomes a good business. But in my mind, it is really people-dependent. We have seen mediocre ideas become great because it was the right people that were behind them.

For Christian, team dynamics and the people within a brand are more important than the business idea when he invests in new companies. Blazar Capital

Shuang: And speaking of how important teams are, how did you initially pick out your team?

Christian: So Pascal, who was my colleague, we knew each other very well. And he came to me at one point and said, "I'm thinking about leaving McKinsey to go out and start a company. So what do you think about that? And would you maybe be interested in investing in it?" And then I was working on the idea of Blazar at that point in time. And then I said to him, "That's really interesting. I actually have an idea that goes along the same lines. Why don't we go out and start Blazar together?" And then we quickly agreed that we thought that was going to be a fun mission. We then embarked on the journey. And then our third co-founder is Vasilij, Pascal knew him before, he was in The Hut Group, which is also a very big ecommerce company. And he was excited about the mission of coming in and building this platform to support new brands.

Shuang: Having all these successful brands, I'm assuming the majority of them grow out of Denmark, so cross-border selling is very important. What are some things that you've done to make sure that selling international becomes a little smoother?

Christian: So one thing we have done very actively is we have worked to recruit foreigners into our office. So more than half of the people that work here are not Danish natives, they're coming from abroad. We are doing so because when we are entering a new market, by having one or two people that understand the market, understand the culture, understand what are the relevant media to work with. What are the relevant payment gateways in those markets. What do people expect to see. We find it really important to have a diverse team in order to localize brand experience on our international stores. We typically work with a model for each country that we try to target, where we hire a country manager that is native to that country, that leads the efforts towards that market. And that's definitely a thing that I think has helped us with some of the international sales.

Finding the momentum to keep scaling past major milestones and failures 

Shuang: So I think an outsider looking in might think that having a consultancy job, especially at a globally recognized firm that is already lots of people's dream jobs. For you personally, why were you having this drive of wanting to do something different?

Christian: That's a good question. I think I have always found it fascinating and had a childhood dream of creating and building something. So when I joined McKinsey, I felt like McKinsey is really interesting, and I really liked being in McKinsey, but I had this feeling in my stomach that I hoped I would have the courage to go out and one day build my own company. And I said to myself, "You need to go out and do this at some point." And I ended up being quite a few years with McKinsey and really enjoyed it there. So there was definitely also a scenario where I would've stayed but just decided at some point that I needed to follow this dream.

Christian’s momentum of building multiple brands stems from the interest in new ideas and seeing them develop beyond their pitches. Blazar Capital

Shuang: A lot of people viewing from the outside would assume you've had a smooth sailing success story because you were a student at one of the top schools in Denmark, you graduated early, you're able to have this admired job. And now you're able to build not just your dream company, but also a hub that allows other companies to grow. What keeps you going forward? Because someone might have stopped at the first company but you've continued on that momentum.

Christian: First thing first, you said that it looks like smooth sailing. There's definitely a thing in startups that every week there are new problems. And when you started the week, you typically didn't anticipate those problems. You anticipated other problems then what actually became the problems that you needed to work on that week. So there's not a single week where our brands don't have issues to tackle. So this idea that you can sometimes get through the media that somebody just had a perfect seven-year journey where they started in point A, and then they were in a straight line to point B, which was a success. I don't think that has ever happened. Every startup has struggles and has challenges. And ours definitely have had them as well. So that's important to clear up. I think it's also important for any listeners to know that it is normal to face challenges in the journey and just prepare for it.

And then in terms of what is giving me energy and drive, I think I'm fascinated about building and seeing things grow. I love when somebody comes to me with maybe only a PowerPoint or something that's very early stages. And then seeing this small seed become a small plant that becomes a tree, that gets bigger and bigger roots. Seeing the metaphor, which goes from being this PowerPoint idea to a prototype to a business that hires its first couple of employees to a business with 10, 20, 50, 100 employees, I just think that journey is really fascinating and it's very rewarding to be able to see.

Surpassing social impact goals and future plans for Blazar Capital 

Shuang: Are there any goals you have for yourself in the next chapter, or what are some future projects that you can share with us?

Christian: So we set up a small office in California. So we might be doing a bit more business in the US compared to Europe going forward with that presence that we established overseas. Then I also think that some of these companies that we are in that are deep into the CSR space, I also find those really fascinating and they have a special place close to my heart. So I hope that we will also get to find and fund a couple more really cool mission-driven companies.

Blazar Capital’s team has expanded to San Francisco to work closely with social impact brands and other founders within the creator economy. Blazar Capital

Shuang: That's very exciting. And I think it makes a lot of sense because there is a huge hub of influencers and social stars within America that might potentially be able to work with your team as well. So that's very exciting to hear.

Christian: We'll see what the future brings, but definitely at least some of these mission-driven companies I hope we'll get a chance to find some of the right ones in that segment.

Shuang: What else would you like to share with our listeners? 

Christian: I think the only thing is to tell the newer entrepreneur that's listening to your podcast, that failure is normal and that they also help us. And that as a new startups trying one, two, or three times is definitely okay. And just the best of luck to everybody that wants to start building their wonderful new businesses.

Shuang: And I think failure, as long as you keep working at it could just become a hurdle and an interesting story you tell about your journey. It's only when you stop, then it becomes an actual failure.

Christian: Of course, failure is really painful for almost everyone when they're going through it. But it can be a learning path to what could then later overcome a success.