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July 16th, 2019

Two Markets to Rock

Costly weddings fall out of favor, and IPO filings have much to savor.

Today’s word count: 1,755 (~6 minutes)

I took my son on his first college visit last weekend. OK, so he’s only 12, but he thinks he wants to go to Stanford — so we stopped by the university on our last day of vacation.

He just read “Shoe Dog,” a memoir by Nike co-founder Phil Knight, who got a Stanford MBA. And over lunch, he pulled up a YouTube video, “The Zen of Entrepreneurship,” by Stanford lecturer Toby Corey, and imagined himself as a Stanford student.

The cost of college — Stanford costs $74,570 a year — has increased nearly 8x faster than wages, so there’s a growing need for affordable sources of high-quality educational information. On one platform, you can learn the secrets to persuasive negotiation from Yale University, how to develop an entrepreneurial mindset from the University of Maryland, and how to launch and how to scale your business from the University of Pennsylvania.

We’re confident you still need us to teach you about the white space in the market. So this week we have three tales of how young people are disrupting traditional industries. (Click the link to jump to the story.)

  1. Microweddings. Strapped with student loans, millennials are foregoing traditional nuptials. Our writer Mark Dent tells you how to cash in on the emerging industry.
  2. #Vanlife. Big-ass RVs are out. JUCY campers, like we told you about last week, are in. We dive deep into the $114B industry.
  3. Dating. Dawoon Kang and her sisters had spent 3 years running their dating app when Mark Cuban offered to buy the biz for $30m. Find out what happened after they turned him down.

You can find last week’s email here. Our most clicked item? A link to that JUCY van I rented in Yosemite. Our M&A database is also getting lots of traffic.

In our Facebook group, the most commented story was an AMA with Ramon Van Meer, a Dutch high school dropout who builds multi-million-dollar websites.

In coming days, we’ll have several more AMAs:

  1. Trends member Jack Smith, who just finalized the sale of his video advertising startup Vungle for a reported $750m, will chat with us today at 1pm PT.
  2. Alice Li and Andy Wang, founders of the children’s vitamin startup First Day and office mates of ours at The Hustle, will discuss the challenges they’ve faced in their first few months of business. We’ll talk with them on Thursday at 1pm PT.
  3. Tim Alpe, co-founder of JUCY, will join us next Monday, July 21, at 2pm PT.

Now let’s get to it!
     
   – Brad of The Hustle
 


Famous former Stanford students, including Google co-founders
Larry Page and Sergey Brin (top right)


PS: Love Trends? Share it with a friend. For a limited time, we’re offering a $1 trial.

Would you recommend Trends to your friends? 


  • No chance

  • Meh

  • Very much

1. Your future summers may include fewer wedding invites, and that’s good news for microweddings


Even basic weddings are outrageously expensive. First comes a DJ, then comes flowers — wait, why’s there a fudge bar on the list? — next thing you know, the groom’s requesting a $12k cigar bar and he’s never smoked anything without a cartridge.

But, in recent years, people have Marie Kondo’d the sh*t out of costly wedding traditions and aesthetics that mean absolutely nothing to them (a dowry? In this day and age??).

Now comes a new kind of celebration. One with a grander audience than an elopement, but smaller and much cheaper than a full-scale wedding: the microwedding.

Know the numbers: The average wedding cost has dropped ~$2k since 2016. But it’s still estimated to marry $76B in revenue this year.

Who’s who? Numerous startups, like Bloomerent, Anomalie and Our Story Bridal, are helping couples purchase wedding staples like dresses, rings, and flowers quicker and for less.

How you can capitalize: Regional microwedding businesses are easier to bootstrap, and can earn you upwards of $50k a year. So grab your playlists, and learn the chicken dance — it’s microwedding season!

Read More Here

Trends Report

2. The RV industry has long been the lifeblood of the American dream…

For decades, the goal has been to work hard, punch the clock — and, if you do it long enough, you can one day leave it all in the rearview of your RV as you seek a second chance at self-discovery.

But these days, it’s less about Grandpa’s lifetime passion project, and more about that #vanlife. Millennials aren’t waiting until their corns are fully flared to travel the country, and they certainly don’t have a pension from Conagra to buy an $85k tour bus.

The new wave of RV rental startups are betting on smaller, more nimble “Class B” vehicles, called camper vans. And these new trendy upstarts are poised to turn the $114B RV market on its head.

Here are 3 things you should know about the stripped-down RV industry:  

  • Bigger isn’t better: As of May 2019, Type A motorhome shipments were down 22.4%.

  • Started in 2001, Trendy camper van maker JUCY now makes ~ $200m/yr.

  • At $250/night to rent, a single van can reach profitability in just over a year.


Read our full analysis by clicking below.

Read the Full Report

3. News you need to know 

It’s a record-setting year for VC exits (Quartz). Venture capital firms are cashing in with more success in 2019 than in the previous 10 years — and there’s still six months left. The first two quarters saw VC firms collect about $190m in exits. The second quarter was particularly strong, with $138m coming from companies like Uber, Slack, Pinterest, and Zoom. This new record could soar even higher, with Postmates and WeWork rumored to IPO.

The foundation for a men’s makeup boom (Bloomberg). A few weeks ago, we explored the men’s wellness brand Hims in our story about expired pharmaceutical patents. A similar area of that market primed for growth appears to men’s makeup. It’s already catching on in Japan, and China and the US are expected to be next. The size of the global market is $1B and is estimated to expand 25% in the next five years. Why might men finally be OK with toner and primer? Instagram influencers. Teenagers have grown up being exposed to more nontraditional celebrities than in past eras.    

Warren Buffett to MBA grads: Pick integrity over IQ (CNBC). CNBC looked back on a speech the famed billionaire investor made to biz school graduates at the University of Florida in 1998. Buffett asked the students what type of person they would invest in. “You’d probably pick the person who has leadership qualities, who is able to get others to carry out their interests,” he said. “That would be the person who is generous, honest, and gave credit to other people for their own ideas.”

Major firms are leaving China over tariffs (WSJ). China can say goodbye to Crocs, GoPro, furniture maker Lovesac, and Roomba maker iRobot corps. These big companies — and likely others in the future, including Apple — are ending or decreasing production in China because of tariffs that can be as high as 25%. This year through May, Chinese imports to America have declined by 12%. But this doesn’t mean production is returning to America. Companies are eyeing Vietnam, Malaysia, and Taiwan after leaving China.

Obsessions

4. Learning to love IPO data


When a company like Slack goes public, even if you’re not one of the lucky investors (seriously, so jealous right now), you can at least celebrate a small victory. That’s because whenever a company applies for an IPO they must file a Form S-1 with the SEC. The S-1 reveals a company’s basic strategies and their balance sheets. And everything is available online for the public to read. 

You can search for any public company or any company that has filed an IPO here. You can browse through recent and upcoming filings here.  

These forms are a little dense. OK, they’re insanely dense. But they are a great way to see how ultra-successful companies make and spend their money as they grow.

Slack, for instance, is pouring loads of money into marketing, according to its S-1. In 2018, it spent about $233m, more than half of its $400m revenue. Other major tech companies that have IPO’d this year, like Pinterest and Uber and Lyft, are spending closer to 25% to 33% of their revenue on marketing.

Sometimes, they’ll also include great insight on the overall health of an industry. Chewy’s S-1 had this gem about the pet industry: During the Great Recession, while consumer spending fell overall, spending on pets increased 12%, about the same growth rate in the previous non-recession years. And the industry has doubled since 2005.

Down the road we plan on regularly analyzing recent IPO data and sharing the insights. 

Trends Interview

5. How Dawoon Kang turned down a Shark and circled the dating market

Popular dating apps had one thing in common a few years ago: too many potential matches, many of whom were creepy dudes whose only photos involved either their shirtless chests or a Tom Brady jersey.

Which is a large reason why Dawoon Kang and her sisters, Arum and Soo, started Coffee Meets Bagel. It uses a fine-tuned algorithm that lets users cut out the endless swiping and sends matches (who are clothed, thankfully) directly to its users. 

She and her sisters had spent about 3 years running the app when billionaire Mark Cuban offered to buy the business for $30m. Although they were making just $2m a year in revenue, Kang and company turned down the offer from the notorious Shark Tank host.

Now, Coffee Meets Bagel is valued at well north of $30m — in fact, it last raised money at a value of more than $82m

In a Q&A, Kang tells us how she grew Coffee Meets Bagel and how she’s focused on changing startup culture to get more women and people of color involved.

Click below to read her story.

Read the interview →

Startup life

6. We’re doing a live case study with First Day

Alice Li and Andy Wang quit their jobs at Bain to start a children’s vitamin company called First Day. Since they’re at such an early stage (they just started marketing their product in February), we’re letting them work out of our SF office rent-free.

In the coming weeks, we’re planning to introduce a series of stories to help you navigate the various stages of startup life. Alice and Andy will describe some of their learnings in our Facebook group.

We’ll introduce them in an AMA this Thursday at 1pm PT. If you’ve got questions about how they came up with their idea and what struggles they’ve faced in their first days — sorry, couldn’t resist — don’t miss the conversation!

Would you recommend Trends to your friends? 


  • No chance

  • Meh

  • Absolutely
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