📶 lab-grown luxury

a16z backs lab-grown diamonds, why audiences are flocking to standup comedy, and a visual on how Wall St works

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“Everybody wants diamonds. Nobody wanna work in a coal mine.”

That’s the gist of this week’s piece on a lab-grown diamond company and the market opportunity for synthetic luxury.

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TL;DR:

NEWS
Synthetic luxury is coming 💎

You know who loves diamonds? Everybody.

You know who can afford diamonds? Not everybody.

Pascal is trying to change that, and smart money is following along.

Why it matters: 

Pascal wants to democratize access to the diamond market.

They do this by offering lab-grown diamonds that mimic the real deal but at a fraction of the cost (with some pieces starting as low as $70). According to the CEO, the company has projections to generate between $20 to $30 million in revenue this year and a shiny customer repurchase rate of 20%.

There are two interesting themes that this is playing on:

  1. Lowered purchasing power means less demand for luxury products. However, if you can reduce the purchase price for a lookalike (ie. Pascal), you can create more demand by expanding the ideal customer profile to include those in lower economic buckets.

  2. People want luxury (even if they can’t afford luxury). This isn’t a new phenomenon. People have always wanted ways to feel rich even if they know they’re not (living in Miami, you see this a lot). Pascal is a way to capitalize on that trait.

What happens next: 

As mentioned earlier, Pascal is projecting $20-$30m in revenue this year, so it’s safe to say that they have PMF. If their success is any indicator, we expect to see more companies built around the idea of synthetic luxury.

Some possible markets include:

  • Lab-grown leather (jackets, bags, and shoes)

  • Synthetic pearls (jewelry and decorative items)

  • Lab-grown wool and cashmere (clothing and textiles)

  • Synthetic silks (high-end fabrics for fashion and home decor)

  • Lab-grown exotic woods (furniture and architectural elements)

  • Synthetic fragrances and oils (perfumes and essential oils)

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RESULTS

Here are the results from our poll question in last week’s piece:

Do you think there is still a future for income share agreements (ISAs)?

🟨🟨🟨🟨🟨🟨 Yes - in education (78)

🟩🟩🟩🟩🟩🟩 Yes - but in a different field (80)

🟨🟨🟨🟨⬜️⬜️ No - this is just a fancy word for debt (60)

218 Votes

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