Culture Kills (Heals)

Life is incredibly challenging, but also incredibly rewarding. We hope you are all well, and stewing in the things that bring you joy while triumphing over challenges a little bit every day…

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If you were to describe the biggest causal factor for the happenings of the last year in one word, would anything be bigger than culture? Swifties, Beyhive, 50 years of Hip-hop, Barbenheimer, the good things, the bad things, the scary things…

Texas Instruments’ culture nearly 40 years ago and the ‘bamboo ceiling’ still shape the global manufacture of semiconductors and the geopolitical landscape today. So much of who we are and how we are can be attributed to our customs for dealing with each other and the world around us. Merriam describes culture as the customary beliefs, social forms, and material traits of a racial, religious, or social group or as the set of shared attitudes, values, goals, and practices that characterize an institution or organization. It is no surprise that commerce is deeply affected by culture. Peter Drucker famously shared that “culture eats strategy for breakfast.” Yet, culture is still often relegated to some squishy afterthought in commerce discourse and analysis. But Yoga and Tacos tell us to stay woke, culture is a big deal.

Yoga is >5,000-year-old Indian metaphysical and callisthenic discipline that now powers everything from SaaS applications like Mindbody to leading apparel companies like Oya and Alo Yoga. And, who among us does not love a good taco or two… It’s estimated that Americans eat around 4.5 billion tacos each year, at an average cost of $1.50 (not NYC prices) per taco. The direct US taco economy is about as big as the Maldives’ economy, and that’s before chips and guac.

GENTRIFICATION & APPROPRIATION

Could you imagine what the world would be like without yoga or tacos? Culture is special and invaluable. We have long sought to protect it. One of the best stories at the intersection of culture and commerce involves Chinese silk production. Silk production began in Neolithic China during the Yangshao culture in the 4th millennium BC. According to legend, Princess Xi Lingshi discovered that a silkworm cocoon could be unraveled to produce a thread after one dropped into her tea while sitting under a mulberry tree. Chinese people kept silk a secret for over 1,000 years, but in 550 AD, two monks from the Byzantine Empire smuggled silkworm eggs out of the country after years of Europeans coveting silk’s luxurious qualities.

Culture pulls at some of our very most primal tensions — habituation v. familiarity. Early infants display a remarkable affinity for familiarity in faces, sounds, flavors, etc. that carries throughout our lifetimes. But just as early, humans display a tendency to habituate to stimuli in favor of novel experiences. Culture is simply our inherent need for safety and belonging juxtaposed against our sense of creativity and insatiable curiosity.

This dichotomy is reflected in debates around cultural appropriation and cultural appreciation. The former can be described as the act of taking or using aspects of a culture that is not your own, especially without showing that you understand or respect that culture. The latter… as the act of honoring another culture by exploring and seeking to understand its traditions, beliefs, and culture. But why does the distinction matter?

It all comes back to the fact that culture is the heart of commerce. The way we style our hair, where we live, the songs we bop to and so much more… they all have meaning beyond their intrinsic value. Yes, the sweet nourishing feeling you get from eating warm toast with black sesame paste speaks to our gustatory papillae and provides the lovely release of dopamine rewards. But our brains also reward the sense of belonging that derives from shared experiences with friends, family, and even strangers. And, where there are rewards to the mind, remuneration soon follows.

For example, consider rap. Rap music grew out of 1970’s Bronx dance music into a commercial and cultural phenomenon. Along the way it had pivotal court cases around free speech, been the subject of parental advisory, and more recently has seized the attention of most Americans as the leading genre of music. While people like Thomas Sowell denounce Black culture and rap music in particular as the causal factor for racial economic disparity rather than systemic racism, the Forbes 400 list tells another story. Black people are a rarity on the list, with Michael Jordan, Bob Johnson, David Steward, and Robert Smith as the rare few. But if you look at the long tail of wealth creation in America, arguably no other single sector has minted as much long-held wealth as the rap industry. Jay-Z, Rihanna, Sean Combs, and Dr. Dre sit atop thousands of entrepreneurs who directly or indirectly convert the cultural influence of music into entrepreneurial endeavors including headphones, apparel, beauty, and other sectors. Of the $200 Billion estimated revenue of Black small businesses, rap is estimated to directly account for about $15 Billion annually.

This is why arguments from people like Coleman Hughes that blame Black culture for economic disparity never really hold water. They conflate entertainment with culture. The next Sexy Red and Ice Spice are not applying for internships at Goldman Sachs or DCVC. Tope Awotona wasn’t rejected by hundreds of VCs before heading to Ukraine to build Calendly himself because he just couldn’t help but twerk like Miley while he described his early GTM strategy. That would be a ridiculous thing to think, wouldn’t it? In some circles, folks assert that the dearth in funding allocated to Black founders can only be fixed by creating a “Black Paypal Mafia.” But there are already many incredible staid founders who have broken through the goo of intransigence. It is more likely that those who shatter walls that were similarly met by Mo Chang, Wemimo Abbey, and many other entrepreneurs are to be led by “the culture.” Resilience, rebellion, a channeled disquiet… If history is a guide, the avant-garde are more likely to be troublemakers than inertia receptacles. When you’re talking about ~15% of the population receiving ~26 bps of innovation funding, change makers are more likely to resemble Roc A Fella Records, Fred Hampton, and the NWA (this is a metaphor referring to challenging status quo only), challenging the soft bigotries of status quo maintenance than they are to be sated with incrementalism and strictly personal aggrandizement. They have no choice but to be bold and audacious. Too much is at stake, and there’s far too much to gain. Where great pains can be resolved, remuneration soon follows…

The efficacy of “the culture” over time can be gleaned by examining the journey of folks like Calvin Broadus. How many people who “love Snoop Dooooogg” in 2024 would have held the possibility of such affection in 1994?

On the other hand, take gentrification as one example of the perniciousness of appropriation. Gentrification can be described as the change in character or displacement of peoples through economic or political means. More recently, you may have heard stories about how Dollar General hollows out commercialization in communities. However, gentrification has a long history of displacement. Often, it is the direct embodiment of desire for the character and cultivation of people, but not the people themselves. And this must be distinguished from revitalization. Detroit, some parts of Houston’s Third Ward, and many other neighborhoods reflect community revitalization, where investments occur and some displacement is incurred, but the community’s character remains intact. New neighbors are additive rather than extractive. This contrasts meaningfully with what we’ve witnessed in downtown Brooklyn, Harlem, off Canal St, and in many other areas. Redlining and segregation created unique pockets of culture and community who found a way to thrive given their unique cultures, but are now dissipated and scattered in the name of DoBro and SoHa blanding… Without the defense of robust community-driven commercialization, neighborhoods are left to the mercy, whims, and narratives of big box stores, ‘opportunistic’ developers, and appropriation without participation…

The cringe you feel at utterances of challah bread or chai tea is warranted as they often betray a lack of exposure or appreciation of the people who bring such wonders into existence. There is generally no requirement that one be from a particular culture to appreciate or participate in its customs and beliefs. Sharing our cultures extends its value and builds empathy. It is undeniable that culture has value. It’s equally true that the people behind the culture have value too.

THEY JUST DON’T MAKE MUSIC LIKE THEY USED TO

Another part of the cultural quotient for commerce is the incessant revolution on aesthetics. If you jammed to the Beatles, Killers, or Fleetwood Mac, do Greta Van Fleet, Billie Eilish, and Renee Rapp slap? If you loved Eric B. & Rakim, NBA YoungBoy & 21 Savage might be hard to listen to. If you grew up on Randy Travis and Shiner Bock, Jelly Roll and White Claws might be a little unsettling. If your tastes are attuned to Victoria's Secret’s runway shows then you may be taken aback by the advent of companies like Love Vera, Adore Me, or Cuup. Today, it’s no longer Pepsi v. Coke or even Coke v. New Coke. Now, it’s 15 flavors of kombucha or Spindrift, Poppi, Olipop, and LaCroix.

Culture shifts taste. Taste determines product. The intergenerational struggle for taste is as old as the Tarkhan V-neck. But the combination of longer lifespans and the digital erasure of borders constraining information flows has resulted in the relatively unbounded pollination of culture. For the first time in recent history, you have four generations in the workforce. They are all earning some non-de minimis income and accruing meaningful buying power to pull at received conceptions while instilling their views on what’s cool and what’s acceptable. Logos are dying, while nostalgia roars. Two categories of diapers are selling in meaningful quantities. While many have attempted to cater to behavioral changes in consumption with varying distribution models or expanded consumer credit, other questions loom… Over 70% of retail shopping today is digitally influenced. Single elder millennials are aging and so are their parents. Values and culture are taking greater primacy in decisions not only on end product, but also on sourcing, packaging, and broader implications for society…

THE QUEEN IS DEAD!

Culture is more diffuse. Culture permeates commerce more deftly. Culture is more and more permissionless. Elizabeth II of England recently passed and her death is a personification of a sea change ready to burst at the seams. There are 195 countries in the world today, 196 if you consider Texas. Each of these states can be further subdivided into different regions, each of these regions subdivided into cities, and further and further into distinct neighborhoods with distinct cultures. Each neighborhood shares characteristics with others while maintaining its own idiosyncrasies. Thus commerce manifests in unique ways. Merchants serve these neighborhoods in both uniform and unique ways.

We love brands. Part of why we are all in on Daraa is because we believe that the unbundling of the British East India company has been hundreds of years in the making and finally ready to come to a head. India has overtaken the UK’s GDP, Africa is decoupling from the baguette’s lack of reciprocity, and more and more the way to be is who you are. While this will continue to be uncomfortable for many, diversity in human expression has mostly resulted in an expanded economy. The rise in US immigration had a concomitant rise in US productivity. This isn’t merely due to linear increases from increases in labor or capital. Since the U.S.’ inception, cultures “bumping into each other” expanded agricultural production techniques, expanded the market for commodities like chocolate, and expanded human ingenuity generally.

Two distinct trends are happening today that we find compelling. (1) The Reagan amnesty babies and their parents are shaping culture globally and in the neighborhood specifically. Companies like Weee! are scaling access to ‘home.’ But other companies like Fly By Jing, Omsom, Ayo Foods, and more are not only reaching their audiences, but expanding them as the American palate is more diverse, intersectional, and flavorful. Like, have you ever had an Australian corn fritter or freshly made babka. (2) As the labor force seeks more independence, and corporations are downsizing, it means more Americans are building businesses to serve distinct audiences. We saw this with DTC 1.0 and the rise of the creator economy, but something different is in the air (insert Phil Collins instrumental). As adherents to Solow’s growth model, and technology lovers, we find this super exciting. More businesses are being started focused on the core economy and are digitally native at inception. The ‘Robloxification’ of everyday businesses bodes well for our determination to reinvent the store. Amazon eliminates store hours, Shopify makes anyone a merchant, Stripe and Square eliminate the register. Daraa erases the four walls and four corners of the “store,” so brands can bump into their audiences with a little less friction... For those of us who like nice things, why have less when you can have more? Culture is the fuel for more…

And Daraa is the fuel for culture through commerce. Daraa is the OS for Neighborhood Fulfillment, not because we’re literally going into homes to “Uberify” warehouse distribution. For us, the neighborhood is always centered on the neighbor. Daraa celebrates the unique smells, insights, loudness, quiet, and the special considerations each of our neighbors offers… All the ways in which we are different, and all the ways we are the same… Surfacing these qualities on behalf of brands, consumers, and communities while delivering best-in-class fulfillment experiences is what we obsess over. We believe our unique appreciation for what it means to be a neighbor is a key differentiator in how we build technology and an advantage in the unique times we are in. The Taylor Swift Economy is said to have brought in >$5B in 5 months. Yonce, about the same. Spending time with one of our design partners as thousands of silver-clad patrons entered NRG stadium, $10B feels like an understatement. The queen is dead, but the queens are alive. Culture heals our divides, and kills our ignorance. Culture is Queen!

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