💑 Dating App Economics, Rent Everything, Strava’s Niche Advice 🚴🏿
Greetings from Oakland. Hustle Con is in full swing, and we’ve been meeting hustlers and Trends members from around the globe. One woman came from South Africa. Two guys are here from Scotland. See highlights from Day 1 below.
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The D2C genetic testing market is expected to triple in the next few years, and the established companies have major flaws. Just 0.2% of beer purchases occur online, presenting possibilities for disruption. The new hotspot for techsters and young professionals is the Mountain West. How much do people love their pets? Enough to freeze dry them, and fewer than 10 major competitors exist in this space. The DL gave an insider’s look at the balance sheets of businesses at the Seattle-Tacoma International Airport.
Quick snapshots from across the internet of potential trends before they happen.
Instant noods conjure up the image of late college nights on a budget. “Broth” that’s essentially salty water paired with flash-fried noodles were a recipe for survival, rather than an enjoyable meal.
People are instead looking for ramen in a less mechanized way, with ingredients you can actually pronounce. Similar to the airplane cocktail kit Signal, there’s one major DTC player in craft ramen, despite 2,400 searches per month.
Mike’s Mighty Good Craft Ramen sells packs of 6 for $16.50 ($2.75 a pop), with the founder starting with the question, “Why doesn’t the ramen in stores taste like the ramen in the best ramen bars?”
What’s next?People love their ramen. Searches for vegan ramen (4,200), organic ramen noodles (1,300), and keto ramen (2,400) are all on the up. And with the rise of craft beer, tacking “craft” onto any product that’s made in a more traditional way gives you a surprising edge.
With 40m km of roads around the world made up of asphalt (aggregate and hydrocarbon-based bitumen), MacRebur is one company looking to instead use non-recyclable plastic waste instead.
What’s next? Look out for other opportunities where companies are swapping out other materials for low-cost plastic.
With the availability of non-recyclable plastics still being so high and the alternatives being incineration or the dump, innovators who can find ways to repurpose it effectively can find themselves on the favorable side of the supply/demand curve.
Kapwing is a platform for simple video production for people and companies. The baseline service, on which users can do things like resize posts for Instagram stories, is free. Premium tools cost money. Among Kapwing’s big clients: Google and Airbnb.
What’s next? The “pivot to video” may have been a failure for media companies, but brands are likely still headed in this direction. Some 70% of consumers have shared a brand’s video, and about half say video gives them more confidence to make a purchase.
As video-savvy Gen-Zers grow up, expect more opportunities for companies that can make video easy for brands.
See the archive of our Signals here and browse through dozens more Signals based on Inc.’s 5,000 fastest-growing companies here.
💸💑 The Economics of Online Dating
Single people looking to hook up is nothing new. But over the last two decades, technology has reshaped the way we think about finding a potential mate.
Although there are more than 8k online dating sites, there is still white space in this market. The global online dating market brings in some $3B a year, with some expecting it to reach over $9B by 2025.
We analyzed 50 of the largest dating apps to give you an idea of what singletons are willing to splurge on, and how much money there is in digital courtship.
With Americans less tied down to homes (there were more renters in the US in 2016 than at any time in the previous 50 years), they are looking to own fewer possessions.
It’s led to a new economy of renting. Once dominated by predatory companies like Rent-A-Center, short and long-term rentals of items like furniture, cars, linens, and motor scooters are becoming increasingly popular:
The rental goods industry has maintained a 4% CAGR over the last two decades, growing through recession.
There’s an estimated $14B in white space for virtual and ecommerce companies in the rental industry.
Yet there are only ~300 rental-related startups, according to a Trends analysis.
Opportunities exist for startups that can master niches: The furniture rental company Fernish has raised ~$30m in funding by offering a wide selection. New startups could focus on exercise equipment rentals and interior design, as well as logistics platforms for rental companies.
Location also matters. The most mobile populations in the US are college towns, according to Census data the Trends team crunched. A rental goods company that resonates with students and their families could find a massive audience.
Among other things, college students spend big sums on clothing, shoes, automotive, and fitness.
Last month, Trends member Chris Luck mentioned a company that has flown under the radar: Gleam. Gleam is a privately owned, fully remote team that has quietly grown to over 1m total users since its inception in 2013. What started as a rewards-focused company has expanded to support users with a suite of marketing resources.
This week, we have Gleam co-founder John Sherwood on deck for an AMA. Post your questions here, and he’ll be around to answer them on Thursday at 2 p.m. PST.
Strava’s Mark Gainey on passing ‘The Starbucks Test’
When Strava’s founders envisioned their target audience, they came up with the name MMLS (pronounced mammals) — as in, middle-aged men in lycras. It wasn’t a massive audience, which was exactly what they wanted.
Of course, plenty of investors didn’t see that. They wanted a huge market and turned Strava down.
“There was a need. There was an opportunity,” Gainey says. “[We thought], ‘Forget the naysayers. Let’s go an inch wide and a mile deep with this group.’”
Since its nichey beginnings in 2009, the fitness app is now available in ~200 countries and has ~50m users. At Hustle Con, Gainey shared a few tips for building an early-stage business.
Pass the Starbucks Test: Don’t worry about building something for everyone at the coffee shop. Focus on a particular group gathered at one table that have a close bond. For Strava, that group was cyclists. “Picking one table at Starbucks leads to the conversation and customer confidence that lets you expand,” Gainey says.
Succeed in single player mode: The product must be useful or entertaining for one person as much as for a group. “We had to keep asking ourselves, ‘If we had one cyclist who’s using the app, what’s the magic they get back?’” Gainey says. “Unless we give them high utility and entertainment, we’ll never be able to think about a community on Strava.”
Focus on great, not big: Gainey says an early focus on quick growth among a large addressable market is fleeting. “But if you focus on product market fit and build patience in and create something great for that initial customer,” he says, “now you have the kind of loyalty where you won’t see (the highest) acquisition rates, but you won’t see this churn.”
Lastly, Gainey says, always “have confidence in the niche.”
📊 Trend Set 3.0
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