We hosted Maven Ventures’ 2nd annual Hypergrowth Retreat last month to connect early stage founders from our portfolio and community to the top growth practitioners in Silicon Valley. After a full day of content, workshops, and one on one sessions, we were blown away by the positive feedback we got from our attendees. Here’s one attendee’s review:
“Gaining insights and valuable lessons from some of the most experienced leaders in growth helped us upgrade our pre-launch strategy, and better understand what it takes to build a scaleable product and business.”
Based on this feedback, we wanted to share some highlights from the sessions to help other early stage founders stay informed on how the top experts are thinking about growth today. These insights just scratch the surface. If topics like these are relevant to your business, consider joining us at next year’s retreat.
In his talk, “The Only Metric that Matters,” Josh Elman (Greylock) suggested that once a startup begins to track user data, there is one metric that is of utmost importance: how many times are users performing the core action on the expected cycle? For example, after charting user behavior at Twitter, Josh realized that the people who tweeted twice within 7 days in a given month had a very high likelihood of coming back the next month. So, that became their north star metric.
Andrew Chen (Uber), Elena Verna (Malwarebytes) and Joe Du Bey (Eden) discussed with Parker Thompson (AngelList) “Balancing Your Startup’s Monetization and Growth.” Elena shared the importance of getting Malwarebytes customers to the “aha moment,” the point at which they realized they should pay for the product. For her company, an anti-malware software, the “aha moment” comes when a potential customer downloads the product, because it’s at that point that their system can be scanned and malware discovered. Joe said that investors are sensitive to unit economics but growth is always the north star. By Series A, though, investors start to inquire more about the economics, Joe noted. Andrew added that getting addicted to paid acquisition early on can be a problem down the road; build an organic growth system, leveraging the unique value propositions of your product to ignite virality.
I speak with hundreds of aspiring consumer entrepreneurs and review thousands of fundraising materials and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. Primarily, consumer startups must have a vision worth fighting for to have a shot at massive success.
Which is why the question we always ask founders at our first meeting is: What is your vision worth fighting for? It’s a loaded question and we’re listening closely on several levels:
We want to hear what they are planning to bring into the world that is worth all the time, effort and money required for success. We are also listening carefully if the founders are passionate about this vision. If they don’t have the passion, then they will likely give up when the going gets tough. And, the going gets tough most of the time with startups.
We also want to make sure that the market opportunity is one that would justify a venture investment. There are many great consumer startups solving important problems that would make great businesses but could never scale to a billion dollar business. There’s nothing wrong with growing a successful consumer business addressing a smaller market, it’s just not the right type of startup to seek a VC investment.
Perhaps most often overlooked by founders, is the question of whether there are existing solutions that are good enough that already solve this problem. We often hear from founders that while there are one or more products that have millions of customers already in the marketplace that are solving this problem, these founders will claim, those products don’t work and their new solution will be so much better. You’ll hear some investors say that the new product would need to be 10X, 100X or 1,000X better. They might be right, but almost always, these startups will fail.
We prefer to invest in startups that are solving novel problems, that have discovered a secret that others haven’t noticed yet. We love investing in companies when after they launch, people say, “that’s a great idea, so obvious, why didn’t we think of doing that.” Building a new consumer habit is one of the hardest things a consumer startup founder will need to achieve, and if there’s already existing solutions to the problem that are “good enough,” that almost always spells doom for the nascent venture.
To sum up, the number one key to success for a consumer startup is the founders’ ability to clearly articulate their “vision worth fighting for,” which is a great idea that addresses a big market opportunity and that solves an important consumer need not already being solved by some other existing product. We’re also heavily biased to working with founders building novel consumer products that we’re proud of bringing to the world.
Zoom has become synonymous with our new way of living and working in the hybrid world created by the Covid-19 pandemic. Zoom today helps hundreds of millions of us stay connected to one another for work, school and socializing. Because of this meteoric rise, Zoom is the next platform upon which both consumer and enterprise startups will build billion dollar businesses. At Maven Ventures, we focus on consumer software investing, which is why most of our Zoom App investments over the past year are solving big problems for consumers — mostly at home, but sometimes at work as well. Though it’s not our focus, it’s clear there are abundant opportunities for enterprise startups to build on top of Zoom as well. Recently, I described on CNBC how the new Zoom platform will work.
Consumer technology over the past century is divided into eras of disruptive platforms. From radio, to cable TV, to broadband internet, to the rise of mobile internet, generation-defining companies have been built on these new platforms. But in the years since the proliferation of mobile internet devices, we had not yet experienced another platform to achieve a similar critical mass…until Zoom. Simply put, it’s time for a new platform, which is a rare and exciting time. And I believe it’s just getting started.
Zoom reminds me of previous births of past tech platforms like broadband, mobile, and cloud. I saw these platforms emerge from inside the tech industry, as an internet exec, then an early employee at consumer social companies Friendster and Bebo, then as an Angel investor in many mobile-first companies in the early 2000s, including Zoom. When I started advising Zoom pre-launch, they were building mobile-first and on the cloud. The new mobile and cloud platforms gave rise to Zoom, and now Zoom will enable the launch of many more tech successes. I love how the tech ecosystem keeps enabling new startups to innovate on prior successful platforms. Here are the five reasons Zoom is now positioned to be the next big platform to launch new, multi-billion dollar companies.
Video communication’s rapid, widespread adoption in our personal, social, educational, and professional lives cements Zoom as the next big consumer tech platform. Sudden mass adoption of a product creates a distribution channel (a platform) for new products to reach millions of people overnight, and that’s exactly what’s happening with Zoom. In just a few months at the start of the pandemic, Zoom jumped from 10 million daily meeting participants to over 300 million, and with its global penetration came the opportunity for Zoom to shift from product to platform.
This mass adoption has made it possible for Zoom to realize it’s opportunity as a new platform. By comparison, when Apple launched the App Store with 500 apps in 2008, only about 10M people had an iPhone in their hands. Yet it was still a big enough start to launch the mobile app industry that has propelled so many successful tech companies. By reaching a critical mass of daily users who rely on Zoom not just for videoconferencing at work and school, but also personal uses like exercising, entertainment, celebrating life milestones, and socializing, consumer comfort with video technology is now in a position to support new applications and new multi-billion dollar businesses.
A product only becomes a platform under visionary leadership. CEO and Founder, Eric Yuan fits the bill. Eric has been a visionary since I met him in the early days of Zoom. Eric recognized the global shift towards mobile and cloud computing, and built a mobile-native and cloud-based HD-quality video product that would eventually take over the market. Eric exemplifies the type of founders we want to back at Maven Ventures: those who can see a better future when it might still seem crazy to everyone else and will do everything in their power to bring to the world their vision worth fighting for. He also instilled a healthy culture of trust and happiness amongst employees and customers from day one that’s still very much alive in Zoom today. The culture sets Zoom apart from most other public technology companies — just take a look at the Zoom employee experience shared widely on employer review platforms and in the media. Now that Zoom is the backbone for video communication, Eric is leading the Zoom team in its evolution from a product to a platform. They’ve bolstered Zoom’s video infrastructure, adding three key pieces to its foundation: the Zoom App Marketplace, Zoom Apps, and a customizable SDK, all announced at the most recent Zoomtopia conference and highlighted as Eric’s and Zoom’s key priority in the most recent Zoom public quarterly report. These three critical components will enable Zoom to be the launchpad for the next generation of billion-dollar consumer and enterprise startups.
The Zoom App Marketplace is an open platform where apps built by third-party developers can leverage Zoom’s platform to enhance a user’s full Zoom experience. Put simply, the Marketplace is the distribution channel bringing both third-party and Zoom-built apps and integrations to the hundreds of millions of people that already use Zoom daily.
The Zoom App Marketplace is fully secure, with a comprehensive review process ensuring every application is vetted for security, privacy, and UX. Further, the Zoom team has made app discovery remarkably simple, breaking down the hundreds of apps into a dozen clear categories so users can easily find the app best suited to their needs. Since its launch in 2018, the Zoom Marketplace has claimed more than 400 integrations from both startups and publicly-listed tech companies alike, and boasts over 800 million monthly API calls. The Marketplace is rapidly growing with applications spanning from chat to calendar to telehealth, and we see no signs of slowdown as these integrations enhance the Zoom experience for millions of users.
If the Zoom App Marketplace is the place to discover hundreds and eventually thousands or millions of app integrations for the core Zoom meeting experience, Zoom Apps are a group of selective applications that deeply integrate with Zoom and might be used as stand-alone applications with Zoom as a component.
Zoom Apps allow users to bring their professional, personal, or social applications into the Zoom experience without having to switch between multiple applications on their desktop. Zoom Apps are used within the meeting window and the desktop client (before and after a meeting), and can be presented, used alone, or used collaboratively. As users can seamlessly bring an app into a meeting for all to see and interact with, the introduction of Zoom Apps creates new functionalities within Zoom, and widely expands the range of use cases and distribution methods.
Developers are responding with overwhelming positivity to Zoom Apps’ model for two reasons. Most importantly, the open platform offers strong distribution channels. It offers free distribution to potentially tens of millions of new customers through the Zoom App Store via discoverability, sharing, word of mouth virality, and IT deployment within organizations.
Starting with applications built by 35 launch partners, including Asana, Coursera, and Slack, and Maven portfolio startups, Docket, Fathom, Pledge, HeYo, and Warmly, Zoom Apps seek to transform the way consumers use Zoom by bringing them access to their essential applications exactly where, when, and how they need them.
To access Zoom Apps: 1. Update to the latest client here. 2. Start using Zoom Apps! You may need to ask your IT admin to enable it for you.
In order for a platform to supply its users with a robust suite of applications, it must provide developers with a set of tools from which they can build. App developers have been able to integrate Zoom’s video meeting features into existing applications for years now, but as Zoom’s global influence has grown, so have the needs of developers building on Zoom. To meet the desires for additional flexibility and creative control, Zoom offers two SDKs. The first is a Zoom meeting SDK that enables developers to bring a Zoom meeting into another application. The JavaScript SDK allows the Zoom app to communicate with the client; it shares how the app is being used, when the app is being shared, when the app is being sent, and supports the modification of virtual backgrounds (with one direct API call to the client).
Zoom’s second SDK, next generation & fully customizable, unpacks the meeting SDK so developers can build entirely new third-party applications, incorporating video or audio as a service. With its customizable SDK, developers have the freedom to embed and enrich their own original, external apps with Zoom’s video or audio experience and scalable infrastructure, as well as the ability to create a custom UI, layout, and composition without app users ever knowing the video capabilities are powered by Zoom. By putting more creative power into the hands of developers, Zoom opens its platform up to a world of new use cases and applications and enables more video-based applications to be created than ever before.
Considering our high conviction in Zoom as the newest platform for billion dollar companies to be created, many of the incredibly talented founders from our recent Maven investments are using the Zoom platform to achieve their visions worth fighting for:
Class is replicating the real feel of school classrooms on Zoom, allowing educators to take attendance, hand out assignments, give quizzes, grade work, or talk one-on-one.
Daybreak Health is a digital mental health center built for teens. Daybreak provides individual counseling, group sessions, and wellbeing tools to teens, their parents and high schools.
Docket is a meeting-focused workspace for collaborative agenda creation, decision documentation, and action item tracking.
Fathom is a meeting-based intelligence tool empowering users with transcriptions, and insights on video calls.
Frame Therapy helps consumers find their therapist, schedule online therapy sessions, pay securely, and browse on-demand mental health content.For therapists, Frame is an intuitive practice management solution offering telehealth, marketing support, communication, scheduling, and billing tools.
Heyyo is a feature-rich chat with reactions, threading, pinned messages, group chats, file upload support, and more — all of which last between meetings and are accessible through their mobile app. Heyyo is built by the Glimpse team, who are also working on an AI-powered breakout room assistant.
Luma is a one-stop shop for creators to organize and host their events on Zoom, and manage their audience via events, newsletters, and community analytics.
Pledge is the leading fundraising platform for today’s mission-driven companies, nonprofits and individuals. As Zoom’s official charitable giving partner, Pledge brings frictionless fundraising functionality to any virtual event on Zoom.
Warmly empowers users to conduct better, more productive meetings by providing instant context and insights for everyone you meet on Zoom.
Stealth: Our team has also made one additional recent investment in a live-streaming startup building on Zoom’s platform that has not yet been announced.
With all of the companies we’ve invested in over the past 14 months, our investment process has been completed entirely virtually. Our introductions, pitch meetings, and check-ins with current and potential portfolio startups have been enabled by (you guessed it) Zoom, making us all the more excited about our newest investments.
As our Maven team continues to identify evolving consumer behaviors, in our remote world and beyond, Zoom’s infrastructure has clearly set itself apart as the newest platform for billion dollar startups. If you’re a founder building a consumer startup on Zoom’s platform — we’d love to connect! Shoot us an email at hello@mavenventures.com!
As we head into a new year and a new decade, the pace of innovation and technology adoption has never been higher. Consumer attitudes and interests are changing just as rapidly. Here are ten areas where consumer preferences are shifting and evolving, based on reviewing more than a thousand business ideas in 2019 and meeting hundreds of early-stage startup founders, mostly focused on launching new technology businesses targeting the consumer market. Each trend will drive big opportunities for innovation in the year and decade to come.
A new year brings renewed excitement to meeting hundreds of emerging early stage startups. I expect to see many thought-provoking, creative ideas within these ten big consumer trends. Consumer preferences drive the economy. From new meat alternatives, to software for a thriving home life, to new models for education, there’s no shortage of innovation coming in 2020 and the decade ahead. This article was originally published in Forbes on January 16, 2020.
We hosted Maven Ventures’ 2nd annual Hypergrowth Retreat last month to connect early stage founders from our portfolio and community to the top growth practitioners in Silicon Valley. After a full day of content, workshops, and one on one sessions, we were blown away by the positive feedback we got from our attendees. Here’s one attendee’s review:
“Gaining insights and valuable lessons from some of the most experienced leaders in growth helped us upgrade our pre-launch strategy, and better understand what it takes to build a scaleable product and business.”
JON SHOOSHANI, AVO
Based on this feedback, we wanted to share some highlights from the sessions to help other early stage founders stay informed on how the top experts are thinking about growth today. These insights just scratch the surface. If topics like these are relevant to your business, consider joining us at next year’s retreat.
In his talk, “The Only Metric that Matters,” Josh Elman (Greylock) suggested that once a startup begins to track user data, there is one metric that is of utmost importance: how many times are users performing the core action on the expected cycle? For example, after charting user behavior at Twitter, Josh realized that the people who tweeted twice within 7 days in a given month had a very high likelihood of coming back the next month. So, that became their north star metric.
Andrew Chen (Uber), Elena Verna (Malwarebytes) and Joe Du Bey (Eden) discussed with Parker Thompson (AngelList) “Balancing Your Startup’s Monetization and Growth.” Elena shared the importance of getting Malwarebytes customers to the “aha moment,” the point at which they realized they should pay for the product. For her company, an anti-malware software, the “aha moment” comes when a potential customer downloads the product, because it’s at that point that their system can be scanned and malware discovered. Joe said that investors are sensitive to unit economics but growth is always the north star. By Series A, though, investors start to inquire more about the economics, Joe noted. Andrew added that getting addicted to paid acquisition early on can be a problem down the road; build an organic growth system, leveraging the unique value propositions of your product to ignite virality.
Cat Lee was the first head of growth and now runs culture at Pinterest. She discussed “How a Company-Wide Growth Mindset Built Pinterest” at the Retreat. Aspirational cultures are fine, but company cultures that come with real, actionable values translate to the most success. For example, Pinterest has the company value “Put Pinners First” that can be referenced in any decision a team member faces. This means that all product features are built with the goal of giving pinners the most delightful experience possible. Also, growth is not something that only the growth team should get credit for — the entire company is responsible for growing the product. As Cat put it, “One team, one dream.”
Darius Contractor (Dropbox), Dan Barak (Lyft), and Nick Soman had a conversation about “Growth Hacking the Conversion Funnel.” Nick said that you don’t have a conversion funnel if people aren’t getting to value, similar to getting to the “aha moment” Elena described. Dan added, users won’t get to the moment of value if there is a broken layer on the funnel — identify where people are dropping off and mend the hole. Darius mentioned the importance of building a dashboard that can be easily queried for the effects of certain actions so that you can implement an analytical, number driven approach to growth.
Eric S. Yuan, Founder & CEO of Zoom, sat down with Jim Scheinman (Maven Ventures) to discuss how focusing on customer feedback and building a product that makes users happy has always been Zoom’s primary goal. For example, Eric shared that in the early days of the company he would send customers a personal e-mail if they cancelled their subscription. That kind of customer care is what sets the groundwork for a billion dollar company.
In his presentation “Beyond Product-Market Fit,” Brian Balfour encouraged attendees to not think of market, business model, product and channel as different silos. Lay out a hypothesis on how a new product or feature will fit into the entire framework of the market it’s addressing, the channel it will grow on, and the acquisition model it’s based on. Then, test the hypothesis. Diligently tiering your products and ensuring they have all of these fits will lead to a high revenue, successful business, Brian said.
Building on Cat and Eric’s talks describing growth as more than numerical analysis, but also emotional connection and care, Dave Kashen (Fearless Ventures) explained how to “Make Your Company Culture Your Secret to Success.” Companies that have strong company cultures, data shows, outperform those that don’t. While many leaders intend to create the greatest output by creating fear if deadlines are not met, the more effective strategy is to lead with love. “Inspire the why,” Dave said, and your company will be aligned towards achieving the greatest success.
In the panel Jim moderated on how autonomous vehicles are a new platform for consumer Hypergrowth, Alisyn Malek (May Mobility), Zach Barasz (BMW i Ventures), and Frankie James (General Motors) had a consistent message. As Alisyn put it, finding opportunities to find and surprise riders will be the next step in creating value in autonomy. Zach continued saying that Lyft and Uber have commoditized driving and created the infrastructure to get us from A to B. Now, new companies will need to differentiate themselves based on social or other factors, such as how customers are matched in a shared ride. Frankie added that beyond the social components, technical aspects of automotive — like batteries — need to be innovated for full autonomy to become a reality.
Dan Vallejo (Google) taught attendees that the first step to “Maximizing First 72 Retention” is to make setup as short and painless as possible. Then, don’t inundate your new app users with education on how to use the product at the outset. Additionally, use feature retention analysis to determine which features are associated with the most active users, and focus your initial on-boarding on getting users to that action. (Elena and Nick’s “aha moment” principle is coming into play again!)
Gustaf Alströmer (YCombinator) shared his principles of “Laying the Foundation for Sustainable Growth”: build a culture of data and review experiments often. For every experiment a Product Manager runs, he or she should track closely how it performs against a control group to understand what would have happened if that feature wasn’t shipped. At Airbnb where Gustaf led the growth team, they used A/B testing on a systematic level to validate ideas. Using Cat and Dave’s frameworks for infusing this experiment + validation mindset into your company culture can be a recipe for success.
To conclude the Retreat, Sara Deshpande (Maven Ventures) moderated a panel on “Getting Funded by Top-Tier Investors.” Rick Yang (NEA) explained that deploying a $3B fund, as his firm is doing, means being patient and looking for huge opportunities that may take 10+ years to exit. So, he looks for vision and endurance in founders. Mar Hershenon (Pear VC) felt similarly that a startup mission needs to get her team excited about the market opportunity for them to make an investment. Rebecca Kaden (USV) shared that entrepreneurs that can articulately explain how their product and team are uniquely suited to address the market get funded.
Building products and businesses that achieve Hypergrowth is not easy, and these principles are just the starting point. I hope you find these frameworks for thinking about growth useful — and also continue to push the envelope on experimentation, tracking, and instilling strong team cultures to build the next wave of fast-growing, transformative companies.
Thank you to all of our Hypergrowth speakers for sharing their experiences at the Retreat. And, to Benjamin Hoffman for sharing his diligent notes to make this post possible!
Over the past year, Covid has had an immense impact on families everywhere. This pandemic has been particularly difficult for the tens of millions of families with young kids where all parents are working — which is true of more families than ever before. Mothers, especially, have been disproportionately affected: COVID-19 has reversed decades of progress for women on the work front. With women losing 5.4 million jobs since the onset of the pandemic, the percentage of women in the workforce is the lowest it’s been since 1988 according to the National Women’s Law Center. Mothers have turned down promotions, reported higher stress levels and less job flexibility, and have left their jobs to care for their children.
There’s been so much written about this problem. If you’re reading this as a parent, especially a mom, you get it. I know I do, as a mom of two kids under three, including a baby born in 2020 at the height of the Covid pandemic. But where there’s a major trend and severe pain point, there's a massive opportunity to build and fund technology companies to solve it. Where are the startups serving families, saving their productivity and their sanity? They’re starting to emerge, and there’s a huge opportunity to build and fund new companies in this category, dubbed “FamTech.” Here are a few of the major gaps in the market, highlighting opportunities for innovation:
Managing the Mental Load. Mental load is the behind-the-scenes work of household management. It’s the organization, planning, and execution of how things get done at home, from booking doctor’s appointments to remembering important dates to planning transportation and childcare. The mental load is a heavy burden, and it’s often because of this burden — not because of work — that women are leaving the workforce in droves. The mental load that parents bear on a daily basis, as explained by Dr. Lauren Knickerbocker of NYU Langone, often leads to “resentment, burnout, and frayed patience, especially when it is outside of others’ awareness or shared responsibility.” With over 30 million families in the U.S. with children and at least one working parent, startups that help parents handle mental load will have a tremendous market opportunity in front of them. This can include offerings like scheduling and delegating tasks, or management tools to help outline and share the often invisible work of the mental load. There is some early startup funding in this space, including startups like Maple and Milo, but it remains limited and ripe for innovation.
Creative Care Models. The childcare crisis in America was well-documented before Covid, when childcare was already unaffordable for 63% of parents. Then the pandemic required parents everywhere to balance child care and schooling on top of other professional and domestic responsibilities, quickly exposing the severe inadequacies of traditional child care models. Consequently, the opportunity for creative care models has never been more obvious. Traditional childcare is one area of family tech with many venture-backed companies like UrbanSitter, Winnie, and Brightwheel — yet there’s plenty of room for more innovation in an area where families spend $42B per year on early childhood alone. More startups are emerging to target employers, expanding the market for childcare as an employee benefit, such as Kinside. This sector is poised to grow, as companies with policies and tools that support parents have a leg up in recruiting, retaining, and promoting their people. Beyond the shift in traditional childcare — either adding tech to the existing paradigm, or changing who pays for it — there’s an even bigger opportunity to rethink family care. One of the challenges with the existing childcare model in the U.S. is that it represents a huge share of wallet for parents, who often spend at the very top of their budget, yet caregivers often still struggle to make a living wage (and provide childcare, if needed, for their own kids). Startups will win when they can push the world from where it is, to where it could be — providing great care for families, and increasing supply and access to high-quality childcare, while building a business model that is fair and equitable to care providers. In today’s world, this also includes caring for family members with medical needs or aging parents, further underscoring the size of the market opportunity and the need for solutions.
More Hours in the Day. There might not be more than 24 hours in anyone’s day. But so many billion-dollar companies have been successful in building productivity tools to help make the most of our hours at work, from Slack to Zoom to the proliferation of “future of work” tools. Roles like executive assistants, office managers, and chief of staff exist in droves. With family life more complex than ever, there’s an opportunity to adapt these models to the home, allowing families to delegate, outsource, or otherwise leverage new services or platforms to help manage their homes and families while making the most of their 24 hours. This category is just emerging, with new entrants like Strongsuit, Villo and Bozzy attacking this huge opportunity.
Parenting Tools and Resources. Parents are more informed than ever before, with an immense amount of research and expertise at their fingertips. New startups are emerging to help deliver what parents need when they need it, whether it’s sleep training their babies or providing e-learning for older children. This is a category where new entrants about, yet many leaders have yet to emerge. According to Chian Gong, a Partner at Reach Capital with expertise in the early childhood education market, some of the opportunities include parent support and education as well as tools and services for home learning, empowering “families as a child's first educator.” Examples of early-stage startups in this category include Lovevery, BümoBrain, Beanstalk, and Epic! (disclosure: my fund Maven Ventures is an investor in Epic!)
The need for innovation in the space is striking a chord with gender equity experts, investors, and celebrities alike. In late 2019, author Eve Rodsky published Fair Play, “a time-and anxiety-saving system that offers couples a completely new way to divvy up domestic responsibilities.” The book was a result of her recognition of all the unpaid and unnoticed work she was doing for her family. Fair Play has helped shine a light on the severity and prevalence of unequal labor in the home, which has been exacerbated by a lack of technology, tools, and services to help strike a better balance.
“Women’s unpaid labor at home has increased by 153% during the pandemic. What if we treated our home as our most important organization?” says Rodsky. “There would be a lot more tools that focus on boundary setting, systems, and communication.”
Covid isn’t the only factor amplifying this sector. Startups building solutions for parents might benefit from political tailwinds in the near future as campaigns for gender equity in the home receive increasing support from all angles. In late January, 50 high-profile women, including Whitney Wolfe Herd, Gabrielle Union, and Eva Longoria, ran a full-page ad in the New York Times demanding newly-inaugurated President Biden to enact a “short-term monthly payment to moms depending on needs and resources,” and “pass long overdue policies like paid family leave, affordable childcare and pay equity.” Just weeks after, 50 men in Hollywood, professional sports, and Silicon Valley ran a similar campaign in the Washington Post to show their support. Many states are instituting more generous leave policies, and if any federal administration shows that family-friendly policies are a priority, it might be this one.
While research and policies are a start, more tech-oriented solutions would likely unlock far greater results for parents. Considering under-innovation around many of the day-to-day issues that plague parents at home, many of the smartest consumer venture investors are more focused on the space than ever before. The industry tailwinds coupled with massive consumer needs are causing leading VCs and other leading experts to notice.
Where are the investment opportunities, according to the experts?
Kanyi Maqubela, Managing Partner at Kindred Ventures:
“The market opportunity for family tech companies has become a matter of national crisis, as almost every American family now has first-person evidence that without childcare, you don't have an economy. I like the idea of companies sponsoring more family-first benefits, particularly in financial services. Paid leave in the US is at minimal levels compared to global standards, and the costs of early parenting can be subsidized by employers in B2B2C models, with win-wins for every participant.”
Julie Wroblewski, Managing Partner at Magnify Ventures:
“We're starting to see promising, emerging solutions but overall the area of household management innovation is still nascent and much further behind the pace of productivity innovation we've seen in the workplace. We're now at a point where technology is poised to produce the next wave of labor-saving technology in the home that addresses both physical labor as well as the mental load that working parents and mother, in particular, are dealing with.”
Chian Gong, Partner, Reach Capital
“I am excited to invest in the family tech space. This is not only a huge market opportunity, but also a critical engine to economic growth. The companies that build trusted brands with families will have significant influence over the $4.3T in family spending.”
Eve Rodsky, author of Fair Play:
“Gaps in the marketplace have stemmed from the fact that we don't treat our homes with any respect or rigor. The trends that are exciting me the most are solutions to help recognize that the home is the most important organization.”
These leading experts and venture capital investors — many of them parents themselves — see a huge opportunity for new startups to tackle big consumer problems. We have more work productivity tools at our disposal than ever before, yet we’ve made few strides with in-home productivity, leaving a bulk of the 30 million working families across the United States craving creative care models, more hours in their day, new ways to manage the mental load, and better parenting tools and resources. The Family Tech sector is just at the very beginning. As more companies launch and grow, there’s a wide open opportunity for founders and investors to create new consumer software and tech-enabled services companies beloved by parents everywhere.
It’s the year 1989. It’s a Thursday in June and you’re getting paid tomorrow. You’re walking to Penn Station to take the train back home and you’re wearing your favorite shoes. You’re happy and confident. You decide to put some more money in the stock market; “let the good times roll,” you think to yourself. You pull out your cell phone (it has a large antenna), and call your broker at Charles Schwab; you tell Bobby, your broker, you’d like to buy some Microsoft stock. You tell Bobby to purchase 1000 shares for you when the market opens on Friday; he tells you Microsoft closed at $0.47 a share today. Bobby reminds you of the $70 commission you’ll pay for the trade and confirms the details of your order. You thank him, hang up the phone, and smile. You’re living in retail investing 1.0.
For decades, retail investing was a largely offline, costly, time-intensive, and high-friction process. The very first online trading service, TradePlus, went live in Summer 1983 as a computerized order entry system allowing customers to access time-delayed market information and place trades during market hours. A nearly $200 sign-up fee and the $15 monthly subscription earned customers just one hour of connect-time each month.
In 1992, retail trading was reborn when E-Trade launched as the first deep discount online brokerage platform. They abandoned monthly subscriptions in favor of flat rate trading fees and free market data, allowing customers to transact securities at just $40 per trade. In 1994, as stock investing grew rapidly in popularity, E-Trade became the fastest growing private company in the United States.
After the founding of the World Wide Web in the mid-1990’s, as companies like Fidelity, Charles Schwab, and Ameritrade joined the party, online brokerage platforms were off to the races. With the proliferation of the internet, competition grew, costs and friction fell, and access to information expanded. From 1995 to 2000, the number of online trading firms exploded from 12 to more than 100 and commissions fell as low as $7 per trade. A 1998 survey from the Yankee Group found the top three reasons households executed trades online were low transaction fees (80%), access to online research (45%), and convenience (42%). Retail investing 2.0, however, proved online brokerage platforms were only in their infancy.
It’s a cold, brisk day in January 2012. You’re sitting in front of your computer looking at your credit card statements. With the holiday season in your rear view mirror, you find that you spent drastically less on Christmas gifts and your holiday trip to the Bahamas than you had budgeted. Feeling proud, you open up your Fidelity online brokerage account. You spend 45 minutes looking at a number of high-growth tech companies to invest in before analysis paralysis sets in and you close out of the window. You open up your Wealthfront account and move the cash you’d earmarked for your credit card bill to Wealthfront instead. You breathe a sigh of relief. You’re living in retail investing 2.0.
In 2.0, many components of retail investing were democratized — most notably, traditional financial assets and early alternative assets. Like many of the paradigmatic shifts in consumer technology, 2.0 began with changing consumer behaviors and were fueled by the great strides made by technology over the decades. By the 2010’s, young millennials had lived through two recessions — the former brought on by the collapse of the Dot-Com Bubble and the attacks on 9/11, and the latter induced by the Global Financial Crisis of ’08 and ’09. These experiences instilled in millions of consumers a deep distrust in global financial institutions and financial advisors. Meanwhile, younger generations were becoming increasingly comfortable with the growing role of technology in their everyday lives.
With the inflection point in consumer behavior, robo-advisor platforms emerged with Wealthfront (fka KaChing) and Betterment leading the early charge. These startups automated the jobs of financial advisors using algorithms to manage consumers’ investments. Whereas financial advisors were typically expensive, time consuming, and known for dedicating their best efforts and resources to only their top clients, robo-advisors were cheap, quick, and could yield one customer’s $100 the same return it’d provide another’s $1M if their investment objectives aligned. In some cases, using a robo-advisor could be as simple as depositing the money, choosing your target time horizon, and selecting your risk tolerance on a scale of 1–10. After some robo-advisor startups showed early success (Betterment, Wealthfront, and LearnVest raised a total of $95M in venture funding in just a two-week span in April 2014!), newer startups like Ellevest and Acorns emerged, and traditional online brokerage platforms like E-Trade, Fidelity, Vanguard, and Schwab rolled out robo-advising as well. The straightforward nature of robo-advising lent itself to the creation of easy to use, consumer-friendly mobile apps. As mobile device penetration continued to surge, retail investors gradually moved from desktop-native applications to investing from their iPhone, Androids, and smartphones.
With robo-advisors leveling the playing field for consumer investing in traditional assets — stocks, bonds, ETFs, and mutual funds — early alternatives came next. Real estate, the most commonly known alternative asset, had historically been a high-performing, consistent, low-volatility asset, reserved only for high net worth individuals and enterprises. That all changed when Fundrise, a real estate crowdfunding platform, launched its first project in 2012, raising $325,000 from 175 individual investors. Other entrants like Crowdstreet and Realty Mogul immediately joined the space and higher-end offerings like Cadre followed in the ensuing years bringing tokenized real estate to investors who otherwise would likely not have access.
Tech platforms that supported consumer investing in early alternative assets ultimately enabled the inception of retail 2.5. In the latter half of the 2010’s, as retail investors became increasingly comfortable investing in alternative assets and through mobile devices, a new generation of investing apps emerged. First came Coinbase, whose mobile app launched in 2013, with a UI quite reminiscent of early Venmo, and allowed users to send and receive Bitcoin payments. Shortly thereafter, an update to the app in early 2015 empowered users to directly invest in cryptocurrency with buy and sell functionality. Today, Coinbase has 56 million users and a public market valuation more than half the size of Goldman Sachs’.
Next came Robinhood. Robinhood launched their mobile app in March 2015, offering users commission free trading of stocks and ETFs. At the time, major brokerages like Fidelity, Charles Schwab, and E-Trade still charged commissions of $7 on the low end. Incumbents didn’t start offering commission free trading until October 2019, but by then Robinhood had already grown to nearly 10 million users. Because of Robinhood’s early success, other no-fee trading apps quickly emerged in the form of Webull, M1 Finance, TradeZero and others. More importantly, however, Robinhood’s zero-commission trading made retail investing fully mainstream; not only did Robinhood lower the barrier enough for everyone to participate, but it encouraged a social, gamified culture and experience around investing.
While retail investing 2.0’s legacy was democratizing access to more traditional assets, 2.5 represented the early adoption of crypto and a paradigmatic shift to mainstream, mobile-first investing applications. The dynamics created by Robinhood and Coinbase in 2.5 were critical to the next stage of retail investing as we transitioned to 3.0 at the turn of the decade.
It’s April 2021. You finish your 5th back-to-back Zoom call and decide to catch up on some reading. You head to Medium and click on an article you’ve been wanting to read for the past few weeks: it’s called “Retail Investing 3.0.” You read through the piece and really enjoy it, especially the final section in which the writer frames 3.0 with an Inception-like scenario. You start to think about how wild the current times are for retail investors, and ironically, you consider purchasing the article as an NFT. How convenient — the writer has already minted an NFT version of the piece and listed it on OpenSea. You, a lover of irony, purchase the piece for roughly $500 in ETH. You’re living in the era of retail investing 3.0.
Retail investing 3.0 is still just a nascent era. But, largely thanks to Covid-19, it’s early innings have been incredibly dynamic. Covid-19’s K-shaped recovery created the perfect breeding ground for what some have deemed the “Boredom Economy.” The confluence of social isolation, disposable income, and quite possibly the largest experience deficit in history transformed investing from an activity to a phenomenon and experience. If your WiFi has been down since 2019, here are few highlights:
Despite these extraordinary events, it’s far too early to define the era. However, these moments and the platforms that have enabled them suggest a common thread for retail investing 3.0: There are essentially no limits to what we can invest in. If it can attract consumer interest, chances are it will attract dollars. What does this suggest about the platforms leading 3.0?
As it stands, I currently see retail investing 3.0 as three relatively distinct buckets. The first bucket is stocks and startups; the second bucket is digital and physical assets (“digi-fizzy”) which include cards, collectibles, sneakers, art, wine, and a host of other cultural assets; the third bucket is made up of cryptocurrencies and, most recently, NFT’s. Despite their distinct characteristics, the platforms that support each of these buckets show a number of parallels. Most importantly, a critical majority are mobile native, have social components, demonstrate incredibly low barriers, and are passion-driven.
Unsurprisingly, many investing platforms of 3.0 are mobile first. The percentage of Americans with smartphones in 2019 was 81%, up from just 35% in 2011. With such a simple, easy (arguably too easy) mobile trading experience, Robinhood laid out the blueprint for others that followed in its tracks. Public, the newest commission free-trading app boasts a similarly effortless, low-friction trading experience. Similarly, Republic (no relation to Public), a platform for investing in startups, advertises its iOS app with the phrase “One-tap investing.”
Many of today’s investing platforms often aim to create a social experience with built-in network effects. Public dubs itself the “Investing Social Network,” and recent YC-grad Finary is “the online community for investors excited to discuss stocks with friends.” Both apps attempt to capture the collaborative, fun, and communal dynamic of r/wallstreetbets or even stock-investing corners of Twitter, and bring it directly to your smartphone. Commonstock serves a similar purpose: users link their brokerage accounts to the platform and the app curates an insights-driven community around its top investors. NFT marketplaces like OpenSea, Foundation, Rarible, SuperRare, and Zora aren’t inherently social like Republic, but enable users to interact with each other’s content through likes or favorites. More direct communication within the community is supported by Discord channels as large as 40k, which might suggest an opportunity to build native communication features. Finally, considering the popularity of visual art on these marketplaces, the four most popular NFT marketplaces have a combined 415k followers on Instagram.
The next hallmark of a 3.0 platform is an incredibly low or nearly non-existent barrier to investing. Recognizing that the average retail investor couldn’t afford to invest in a single share of AMZN, the platforms of 2.0 and 2.5 popularized fractional investing in traditional assets. The platforms of 3.0 have taken it up a notch; nowadays consumers can buy small portions of anything from ETFs to sneakers to GIFs. Not only have many of these platforms lowered the barrier to investing, but they’ve empowered each consumer with educational tools and content. For example, Alinea simplifies stock investing by offering bite-sized research and pairing investors with stocks that fit their interests and are subsequently easier to understand.
The last badge worn by retail investing 3.0 technologies is undeniably the most dynamic: they are passion-driven. The platforms that have dominated 2020 and 2021 so far, outside of Robinhood and Coinbase, are intrinsically driven by cultural phenomena enabled by passionate communities. From my observations, the most popular and important of these phenomena are the acceleration of cultural asset creation, widespread acknowledgement of a booming creator economy, and the seemingly overnight adoption of NFT’s.
Investing in cultural assets is certainly not new, but there’s tremendous novelty in the assets we’re able to invest in today, their liquidity, and their zeitgeist. I’ve written and tweeted (ad nauseam) about digital, physical, and “digi-fizzy” Cultural Assets — see here and here. Plus, in the past two months alone, there have been enough think pieces on NFT’s to warrant me not dedicating an entire paragraph to how NFT’s have transformed retail investing.
What few have explored, though, is the intersection of the creator economy and retail investing. I believe it rounds out the theme of passion-driven investing; emerging 3.0 technologies allow consumers to invest in creators and their content. The creator economy has become such a buzzword in the last 12 months that it encompasses endless trends, occupations, and demographics. The one thing that’s for sure is that there are more creators today than ever before, and the value they’re creating for business, their fans, and themselves is skyrocketing. That means there’s tremendous value in spotting and supporting high-potential talent early. This is a game-changer. If analyzing and picking stocks, real estate or cryptos isn’t your jam, but you have a differentiated skill set for identifying talented musicians, athletes, artists, or designers, the platforms of 3.0 allow you to utilize that by investing in creators.
There are a handful of creator investing platforms that stand out in terms of originality, traction, or approach. In a world where artists are increasingly anti-music labels, Indify connects promising music artists with early-stage partners such as investors, managers, and lawyers (Alexis Ohanian of 776 identified Leah Kate early, and her career has since taken off). Though not the first to do it, Bitclout tokenizes social currency, allowing users to buy or sell a creator’s token based on reputation, following, or even perceived career potential. Most of the tokens to date are of popular athletes, startup founders, investors and the like. As of mid-March, the network had already drawn in more than $160 million in Bitcoin deposits. Finally, depending on whether or not you characterize athletes as creators, PredictionStrike is a performance-based stock market where users can invest in their favorite athletes and yield returns based on their performance.
The investing platforms of 3.0 are unique because they’re an amalgamation of both the old-school strategies of 1.0 and the new school blueprint laid out by 2.0: democratization, socialization, and content creation. But what I find most exciting about them is the speed and depth with which they’re expanding the universe of investable assets and investors. With the platforms of 3.0, there’s no telling who, what, where, when or how we’ll be investing but if history is any indicator, consumers will always find new ways to make more money. That being said, I have a few predictions for where things might go from here. Here’s a stab at how things will look 5 years out, in 2026:
If you’ve got ideas or insights on retail investing 3.0 (or even 4.0!), or are building a high-growth consumer investing platform, I’d love to connect. And if I missed any notable startups or trends, or you think I got something completely wrong, please shoot me a note or DM!
Huge shoutout to my friends Jackson Bubala, Halle Kaplan-Allen, Kelsey Willock, and Lia Zhang for lending their FinTech genius and editing skills to this post.
*Disclaimer: Maven Ventures is an investor in Wealthfront
Due to the danger of the global spread of the Coronavirus, we’re all feeling under siege, trapped, and no longer free to do what we want. The necessary extreme measures required to control the spread of this deadly virus—social distancing and shelter-in-place procedures—are exacerbating the toughest issues millions are dealing with today. Many people are facing unprecedented fears around health, financial, and job security, which has led to major behavior changes. In Working From Home (WFH), I’ve been observing and fascinated by these emerging consumer trends and behaviors, many of which are driven by three core basic human needs: the desire to connect with one another, be creatively productive, and have the means to support oneself or a family. Here are a few of the trends I’m seeing:
As they say, necessity is the mother of invention and in the coming months and years we will see which of these nascent consumer behaviors harden into new societal norms in our personal and professional lives. I’m sure there will be many more and I’d love to hear your thoughts in the comments on other new trends you’re seeing that might impact future consumer behaviors. It feels necessary to end on a cautionary note. We have to be careful and thoughtful of the many unintended consequences these new behaviors might create. Some of these trends really may only be necessary during this time of crisis, and when we get back to ‘normal,’ some emergency measures might not be appropriate. These will be issues that business leaders, politicians and consumers will be grappling with for years to come. We’re living through a unique moment in time that’s causing us to reflect on what’s really important in our lives and a reminder that we’re all connected. Tragic as this time is, it’s up to all of us to help each other and our businesses, families and ourselves to make it through and come out stronger. I am cautiously optimistic that we will see many of these emerging consumer behaviors continue and thrive post COVID-19 to make this a better world.
Silicon Valley has been ridiculed for its infamous culture of “Brotopia.” But major cultural shifts are ushering in an era of Femtopia. The term Brotopia encapsulates the chauvinistic and fratty culture (often disguised as a “meritocracy”) amplified by some Silicon Valley startups. To me, Femtopia is the exact opposite.
Generations of educated, financially savvy and secure, confident, highly-skilled women are now taking the reins as business leaders and transforming their role as consumers. This represents a major opportunity for both startups and investors. I’ll share a bit about one investment I’ve made in this category, and why I’m confident we’ll fund more.
I was sitting in the audience at YCombinator Demo Day when I first learned about Carrot Fertility. Carrot works with medium and large employers to provide fertility benefits to their employees.
I already knew anecdotally this was a growing sector. I saw it all around, as friends navigated the egg freezing process and new startups emerged like Modern Fertility, Future Family, and more. Personally, my husband and I had just decided we were going to start our own family, so I was hyper-tuned in to the topic. My firm Maven Ventures invested in Carrot almost immediately, and the industry continues to experience massive growth.
This isn’t just about fertility. For me, the Carrot investment was a direct result of a much broader trend we’d been following at Maven for a while: a massive tidal wave of the financial and professional independence of women, or, the rise of Femtopia. I expect this will have major financial, cultural, and demographic implications.
I felt my anecdotal experience was encouraging but not sufficient. So, I started looking for data. The rise of Femtopia is rooted in major changes to families, education, and finance.
Families: Women are getting married later, or choosing not to get married at all.
For 100 years, the age of first marriage for women effectively didn’t change, hovering between 20 and 22. Then, over the last 40 years, it jumped dramatically from 22 to 27. As a result, 10 years ago, for likely the first time in history, there were more single women in the US than married. That balance continues to shift, with the percentage of single women inching up annually, as further covered in the 2016 book on this topic, "All The Single Ladies." The age women are having children is similarly rising, resulting in growth across the fertility care sector. The traditional American family structure is being impacted in other ways as well: as people marry later in life, we’re seeing an increase in interfaith marriages, one of the factors leading to an overall decline in religion. While religion used to be a pillar of many families, this community support network is loosening, and families must now fulfill this need in other ways.
Education: Women are the most educated gender, and the gap continues to grow.
As of 2015, there were over two million more women than men enrolled in undergraduate programs. Women also make up the majority of advanced degree students across all levels. These educational pursuits, and the employment opportunities to which they lead, often result in women moving away from their families and hometowns. Women are on the move more than ever, changing cities in the pursuit of better careers, and need to rebuild their communities along the way. As more women move into the role of “breadwinner,” we’re seeing them expect more from their life partners as they seek mates who are their financial and educational peers, in addition to contributors at home.
Finance: Women are more financially savvy, and frequently have their own financial foundation prior to marriage.
Nearly half of the US workforce is made up of women now, versus only a third in 1950. This increase in income, coupled with the delay of marriage, has led to women buying homes at impressive levels. Single women account for 17% of homebuyers in the US, while single men account for 7%. This is happening across generations: unmarried women over 55 are one of the fastest-growing demographics of home buyers. Additionally, 71.5% of moms with kids under 18 are in the labor force — working full-time, part-time or actively looking for work. This percentage is on the rise, and even larger in some areas outside the stereotypical coastal cities, including the midwest and great plains.
These shifts in families, education, and finances will make way for new billion-dollar opportunities across sectors. There’s been a surge of startup activity in “femtech,” a term used to describe technology aimed at women’s health. This is an interesting area and an important result of the rise of Femtopia — but it’s not by any means the only one.
What are new business, investment, or customer opportunities now emerging because of the rise of Femtopia? Here are a few I’m watching:
I recognize I’m not alone in watching this phenomenon. The rise of initiatives like All Raise and movements like #MeToo are further evidence of these trends. As women continue to advance financially, personally, and professionally, we’re collectively ushering in the era of Femtopia. Women are an increasingly powerful customer base, and there will be a tremendous amount of money made by entrepreneurs and investors who act on these major demographic trends. I hope women put themselves in position to take their share.