📈 The Big Business of Privacy – Addressing the Coronavirus – LGBTQ Weddings 👨❤️👨
A few days ago, Sam posed a question in our Facebook group: How often should we send Trends? The vast majority of you said you want an email every week -- so we’re returning to our regular cadence.
We’re excited to introduce a slightly different format. You loved our Signals-heavy send last month, so starting this week we’re sharing a new batch of bigger, better Signals you can pounce on, along with an "anti-Signal" we think you’ll love.
We’re also going deep on 1 industry as part of a new weekly deep dive that will include case studies on individual companies and reports on emerging sectors.
Please let us know what you think of this new format, or how we can improve it, by hitting the smileys at the bottom.
Now onto the show: People are finally putting a price on privacy, and startups are capitalizing. We identify dozens of opportunities in the fast-growing space... LGBTQ weddings are on the rise... LED kits are lighting it up for TikTok users... And we investigate the virus everyone’s talking about, with an entrepreneur’s eye.
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Practical tips for investing and growing your business.
Quick snapshots from across the internet of potential trends before they happen.
The rush to understand and help address the coronavirus
The signal: In the wake of an epidemic, the world must come together to find novel solutions. In recent weeks, we’ve learned more about the disturbing spread of the coronavirus, which has spread from Wuhan, China, across the world. As of this morning, it was affecting more than 20k people, with 427 known deaths.
With much unknown about the virus, research is pouring in. According to Nature, over 50 English-language academic papers have already been published on the topic, with most surfacing in the last few weeks. Other sources cite thousands of scientific articles in existence.
In times like these, misinformation can also spread quickly. Some people have associated the deadly virus with the Mexican beer brand.
Source: Google Trends
The opportunity: It’s important to note that any opportunities associated with the virus are not meant to take away from the seriousness of the problem or the people suffering from it. Instead, they’re meant to showcase ways people are getting involved and how major worldwide events can trigger innovative responses.
Compared to other global outbreaks like SARS, Swine, and Zika, people seem to be responding differently this time. Search for terms like "face masks" or even more specific products like "N95 respirator masks" are surging and in unexpected places, like the UK, the United States, and Australia.
The signal: In 2019, we wrote about weddings going micro. In 2020, they’re LGBTQ. Last year alone, 4 countries legalized same-sex marriage (Northern Ireland, Ecuador, Taiwan, and Austria), giving marriage rights to a potential population of over 70m people. There are now 30 countries that allow gays and lesbians the right to marry.
Source: Pew Research Center
For some perspective, 2 years after the US Supreme Court gave gay couples the right to wed, more than 1m LGBTQ couples had married. That means over 500k same-sex marriages took place, equating to billions of dollars in wedding-related revenue.
Source: Pew Research Center and Wikipedia
The opportunity? Weddings aren’t easy to plan. And experts say queer weddings can be even more challenging. For example, some venues still turn away same-sex couples. In response, online communities like the LGBTWeddings subreddit share tailored tips and tricks.
Source: Subreddit Stats
But perhaps more compelling is the money in the wedding business. US couples are more willing to shell out wads of cash than any other day in their life, spending, on average, some $33k for their wedding.
Approximately 1.3B people live in countries where same-sex marriage is legal. That means that over 6B people reside in a place where they don’t have this option. However, as the gates open up (ex: Thailand has a population of 69m and polls already sway for the cause), more same-sex couples will wed and seek support, whether it be finding LGBTQ-friendly venues, vendors, honeymoon locations, planners, or same-sex products, such as a "mr and mr cake topper." Search volume for these products is still relatively small, but expect it to increase alongside social acceptance.
Around November of 2019, the Google search trend for "TikTok lights" began to take off.
Why? Well, apparently adding LED light effects was a sure way to get "TikTok famous" by supercharging anyone’s short TikTok clips.
The search interest in "TikTok lights" has come down from recent highs but with the recent release of Byte -- the short-video looping app being dubbed Vine 2.0 -- the appetite to pimp up social videos isn’t going anywhere.
Anti-Signal: Greeting cards are no longer welcome in physical retail
The Signal: Over the final week of January 2020, Tennessee-based Schurman Fine Papers -- which sells artsy stationary and Papyrus-branded greeting cards -- filed for bankruptcy with a stated intention to close all 254 of its stores and unload its inventory.
Specifically, it is the speciality store chains bearing the names that will be no more. The Papyrus brand will live on (via American Greeting) and cards can still be purchased at retailers such as Target and Whole Foods.
The stated reasons for Papyrus shuttering down its brick ‘n mortar stores -- overexpansion and falling foot traffic -- is consistent with other recent retail bankruptcy filings. However, the reality is that the entire greeting cards business is shifting away from the brick ‘n mortar retail model, with retailers like CVS looking to repurpose that precious real estate.
Email, text, Instagram posts, and all other manner of digital communication are swiftly replacing the humble old greeting card.
The industry’s most notable name, Hallmark, is aggressively re-orienting its business for the 2020s by:
Combining card and retail operations
Overhauling the Hallmark app to make it easier to buy and send personalized paper cards
Finding real estate within other highly trafficked places (hospitals, hardware stores)
The Opportunity: With the greeting business in flux, physical cards finding success in the space have spiced things up by: 1) doing irreverent, meme-y, fun, and playful cards targeted at millenials (Central 23, previously featured as a Hustle small business of the week); or 2) creating truly unique and highly designed cards (LovePop, which makes 3D pop-up cards and notably secured an investment from Shark Tank’s Kevin O’Leary).
Privacy pays: Where the money is in 2020
Many people are starting to recognize that their data not only has a price, but they are questioning whether they’re willing to trade it away. This collective consciousness is giving rise to new businesses that preserve privacy, including companies that:
Give users an option to pay for their privacy by disrupting existing products that sell data or compromise privacy (ex: Brave Browser, DuckDuckGo)
Enable people to safeguard or clean up their information (ex: password managers, VPNs, online cleanup companies)
Educate the public on digital privacy (ex: sites like Krebs on Security which has $560k in organic traffic value, according to Ahrefs)
If you’re looking for businesses that scale, you might need to be patient. But consumers’ changing expectations around protecting their data will help many early entrants become huge.
How YouTube makes money (Business Insider). A breakdown of the $15B the site brought in last year, some 9% of Alphabet’s total revenue.
14 tech trends to watch in 2020 (CB Insights). Includes an analysis of patent filings and what executives are saying on earnings calls.
9 unforgettable startup pitches (Business Insider). One way to win over investors? Have a detailed, long-term strategy.
What brand are you loyal to and why? (Reddit). "Patagonia is the shit."
What’s your best example of doing something that doesn’t scale? (Twitter). One founder sent a personalized video to every new customer. Another CEO just called them all.
Alcohol takes over zero-proof drinks (The Washington Post). Hard cold brew and hard kombucha have big booze brands playing catch-up.
A rising alternative to going public with an IPO (WSJ). The Special Purpose Acquisition Company, aka SPAC.
7 investors dish on how to become a full-time VC (Fast Company). Learn before you earn and network your tail off.
SaaS named hottest sector, while mega ($100m+) and seed rounds are down
PwC’s MoneyTree venture capital funding report for Q4 2019 highlighted some notable trends:
US VC funding for 2019 fell by 9% YoY to $108B. Despite the decline, the full-year funding total was the 3rd-highest on record.
The top 5 most-funded US sectors were: 1) Internet (574 deals; $10B total); 2) Healthcare (203; $5.1B); 3) Software (non-internet/mobile), (135; $1.7B); 4) Mobile & Telecommunications (132; $2.7B); 5) Consumer Products & Services (64; $500m)
Looking specifically at deal verticals within the internet, SaaS deal activity was extremely active in Q4 2019 for Accounting & Finance, BI/Analytics, Advertising/Sales/Marketing, Security, HR, Healthcare, and Education.
Top 5 deals in Q4 2019 were: 1) Bright Health ($635m; Healthcare); 2) Chime ($500m; Accounting and Finance); 3) Databricks ($400m; Data Management); 4) Convoy ($400m; Supply Chain); 5) Vacasa ($319m; Travel).
By fundraising round in Q4 2019, seed and late round (series E+) investments were down, while series B and C were up.
Fundraising mega-round ($100m+) reached an all-time record in Q2 2019 (67) while Q4 2019 saw a sharp decline (38), likely due to the post-WeWork effect.
At the end of 2019, there were 199 US VC-backed unicorns (valued at $1B+) vs. 149 from one year earlier.
This week's Trends send was brought to you by Sam Parr, Steph Smith, and Brad Wolverton. Let us know what you think by hitting the Smileys below.