I just read the article “The Beginning of the End of ‘Gimmick Commerce’?” by Jason Del Rey and realized that it overlaps with a topic I have been thinking about for some time.

One of the themes we have been investing in, both as a fund and as an angel investor, has been backing strong teams, going after large opportunities in emerging markets, utilizing proven business models that have worked elsewhere.  This is not very original.  Many investors have been very successful following the same model, including Tiger Global and Rocket Internet.

Our investments in this theme include GittiGidiyor (similar to eBay), Trendyol (VentePrivee and Asos), and Vivense (Wayfair).

What I have learned, though, is that it’s very difficult to determine when a certain model is truly “proven”.  In 2010, many thought that the Groupon business model was viable.  After all, Groupon had grown to billions in revenues and pulled off a successful IPO.  But now we see that the model as conceived back then proved to be not quite sustainable.  Andrew Mason has a good blog post about what went wrong.  Today Grupanya has evolved from a daily deal company to a local commerce marketplace.

Other companies, including Jason’s examples of Gilt, Zulily and One Kings Lane have faltered.  He thinks the reason is gimmicky sales pitches.  I suspect it is the attempt to scale these businesses before the basic business models could prove to be sustainable in the long term.