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November 11, 2019

⌨️ Niche SaaS – Encrypted Browsers – Boozy Tea 🍵
We explore untapped opportunities for software as a service and nontraditional tips for raising funding.

Happy Tuesday, folks. Big news on the Trends front: We have a new website. We’re still working out a few kinks, but the latest version has a sleeker design and a search function, which many of you have asked for.

Other exciting news: Our Facebook group AMAs are back. Next up? Pat Walls. He’s interviewed over 600 startups and will be online Wednesday at 2pm PST to answer your questions about bootstrapping a business and building an online presence.

New this week: A niche SaaS case study on AppFolio, which has outperformed Facebook and Amazon in the stock market… Dozens of ideas for raising money outside of traditional VC… How Jen McEwen built a successful niche internet browser… Why D2C brands should consider corporate gifting… And more!

Ready to hustle?

01 Trends Signals
Quick snapshots from across the internet of potential trends before they happen.
Boozy Tea graph

Boozy Tea
The nontraditional liquor scene has never been hotter, with spiked seltzers winning the summer and alcohol-infused coffee gaining steam. Like these successful beverages, boozy tea is expected to grow next year and beyond.

What’s next? If you believe that American trends start in New York and migrate elsewhere, then boozy tea may be ready to explode. The spike in search traffic is most pronounced in New York. Owl’s Brew is the foremost brand, but the market is still relatively open.

Native Shoes graph

Native Shoes
Ever heard of Allbirds? Native Shoes is another environmentally conscious DTC sneaker brand. Its products are made from 50% recycled knit and are 100% waterproof.

What’s next? Brands are going green in order to drive more carbon-conscious demand (sometimes referred to as “greenwashing”). Amazon has vowed to be carbon neutral by 2040, while Nike has already created a carbon-neutral facility. Others are developing new materials, like duedilatte and qmilch, fabrics made from milk. Meanwhile, carbon-zero products, like the carbon-negative bracelet are made with carbon captured from the air.

Gochujang graph

Despite 110k monthly searches, gochujang hasn’t hit the dinner table for much of the Western world. The fermented hot pepper sauce has been a cornerstone of Korean cuisine for thousands of years, known for its simultaneous sweet, savory, and spicy profile. Sometimes referred to as the “Korean ketchup” or “Korean sriracha,” gochujang is getting 👀 alongside the rise of Korean cuisine.

What’s next? Korean dishes like kimchi, bibimbap, and bulgogi have also risen in popularity. Restaurants are increasingly incorporating exotic flavors into their dishes, like the KPOP burger, while others are capitalizing on this interest through worldly subscription boxes.

02  Trends Recommends  

💰 Advice:

  • Use corporate gifting to build a D2C brand (ModernRetail): One way to get large orders — and your product in front of large audiences — is to broker deals with other companies to gift your product to its employees.    

💪 Opportunities:

  • Retrofitting buildings and gene editing for crops (Bloomberg): Have significant money to invest? Don’t miss these emerging opportunities in the sustainable economy.    

🙋 Trends Facebook conversation of the week:

  • Businesses to start on the fly (Facebook): Laris Orman asked what businesses could be started quickly with under $1k. The Trends group provided several great ideas.

03  The SaaS case study: AppFolio

AppFolio is a niche B2B SaaS that is mostly focused on the real estate property management industry. Since 2015, its revenues have tripled and its stock has outperformed the likes of Facebook, Amazon, Netflix, and Google. 

AppFolio’s success suggests entrepreneurs can create successful software services by following these strategies:

  1. Avoiding the attention of major tech players by choosing a medium-sized market.

  2. Continually expanding products.

  3. Creating tight feedback loops with customers. 

Some niche markets that may be ripe for SaaS companies include: 

  1. Dental practice software

  2. Fitness software

  3. Horse software (seriously!)

Read the full report.

04  Looking to raise money outside of VC? Follow this guide.

A few weeks ago, we did our first “Trend Set,” where we asked you what you wanted to read. Now, we’re back to deliver this guide on options outside of traditional venture capital.

There are many alternatives to raising money through VC firms, including: 

  • Micro VC’s: Hundreds of these firms invest locally and often less than $100k.

  • Revenue-based financing: Similar to a profit-sharing model. RevUp and Founders First are among the involved firms. 

We walk you through these alternatives and offer a successful case study to help you build your next business.

Read the full report.

05  Q&A: How Jen McEwen built an encrypted browser that's been downloaded 2 million times

Three years ago, when Jen McEwen and her co-founders told friends they were starting a new internet browser, the friends questioned their sanity. “But actually it was great timing,” McEwen says.

Their company Tenta Browser has encrypted browsing, an ad blocker, and a built-in VPN. Why the great timing? Because of scandals like Cambridge Analytica, average people are becoming aware of online security risks. 

In its third year of business, Tenta Browser has been downloaded 2 million times on Google Play. It has experienced rapid growth the last several months after following the lead of WhatsApp and decreasing the price of its premium offering to hook more customers. 

We talked with McEwen about how Tenta has gained an audience for its niche browser and other related opportunities.

  • One key takeaway: McEwen believes privacy-focused blockchains will continue to grow, as well as mesh networks, which can allow users to connect and share without the internet.

Read the full report.

06  Flash feedback + Vote for our next story

Last week, we did our first flash survey: How much should businesses spend on marketing in their first year – and what should they spend it on?

  • Average spend: $16.4k, or 22% of revenue

  • Median spend: $10k, or 20% of revenue

Where people are spending it:

  • Most prominently on ads (FB, IG, Google Ads, YouTube). Others spend on their website, user research, PR, and social.

Specific advice:

  • “Every industry is different, but I would diversify across 3 channels, much the same way as you would diversify an investment fund across industries.”

  • “(SPEND) ONLY ON THINGS THAT GET CUSTOMERS TO PAY YOU MONEY. Know your audience, target them, and sell to them in a native way that they want to buy what you're selling.”

  • “Depends on your segment. B2B might be highly targeted content and placements with a few key accounts or a trade event, B2C might be more broad SEM or influencer. Both should invest in email, fairly old school but still delivers.”

Now, for v2 of Trend Set – your chance to weigh in on our next report. Click on the idea that makes you 🤤 and we’ll deliver it.

The economics of...

💌 This week's Trends send was brought to you by Mark Dent, Steph Smith, and Brad Wolverton. Let us know what you think by hitting the Smileys below.

Mark Dent
Mark Dent
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