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November 5th, 2019

🚐 Mobile Everything – BottleKeeper’s Secrets – Airport Sleeping Pods 🛌🏿
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Why mobile businesses can be much more than food trucks, and the key to winning a patent.

Happy Tuesday, people. Did you know that we have proprietary financial information on more than 600 small businesses? We’ve updated our database — now called the Trends Guide to Small Business Growth — which can help you discover fast-growing companies and how they scaled.

We’d also like your input on the best ways to grow a business, so we’re going to start regularly surveying this group. For today: How should you spend your marketing dollars when you start a business? Take our flash survey — we’ll share results in next week’s email.

New this week: We unpack dozens of opportunities in mobile businesses… show you how BottleKeeper beat copycats… describe the keys to success for an adjustable-desk company growing ~50% YoY… track down the secret Google acronym for a successful business… and much more.

Ready to hustle?

01  Signals
Quick snapshots from across the internet of potential trends before they happen.
Sheet Mask graph

Sheet Mask
Scroll through enough Instagrams and you’re bound to find this fixture of K-beauty: a facial mask made of anything from cotton to coconut pulp that acts as a moisturizer.

What’s next: With more celebrities pushing the product, demand is likely to accelerate. There’s a market for sheet masks on the low end and high end. 

Tigernut Butter graph

Tigernut Butter
Across the alt-milk market, tigernut milk is relatively unknown. The drink is highly popular in Nigeria, but is only
beginning to touch the shores of the United States and the United Kingdom. The fiber-filled superfood is rich in vitamins and vegan-friendly.

What’s next: Similar to other “nuts,” tigernuts can be made into milk as well as alt-versions of butter and flour, both of which are taking off in searches. Others are repurposing the product for tigernut pancakes, ice cream, or even burgers.

Airport Sleeping Pods
When’s the last time you had a long airport layover? With any luck, you found a cushioned row of seats where you could catch a few zzz’s. Luckily, some airports have started investing in sleeping pods. So far, they’re mostly in Europe, where they rent for anywhere from €10-20/hour.

What’s next: The airport layover hasn’t been disrupted in years. There’s opportunity to dream up new airport experiences that generate additional revenue, like exercise classes or healthy lounge food.

See the archive of our Signals here and browse through dozens more Signals based on Inc.’s 5,000 fastest-growing companies here.

02  Trends Recommends  
Advice:

  • The secret Google acronym for successful businesses (Inc.): Ever heard of EAT? Expertise, authoritativeness, and trustworthiness. It gets you to the top of Google — and whatever industry you’re in. 
  • Keys for pitching VCs (GeekWire): A big one: Think about Step 2 and Step 3 of your company and decide whether you need VC money at all.
Opportunities:
  • Video recruitment (TechCrunch): CampusReel built a platform for prospective college students to view authentic campus videos, rather than travel for an official tour. Could a similar product be made for other recruiting techniques? Perhaps for selling vacation destinations? 

Must-reads:

  • Can capitalism fix burnout? (BuzzFeed): The marketing agency Gin Lane helped promote the frenetic #goals millennial lifestyle. It has now rebranded as Pattern and aims to help people enjoy life and relax.

03  Identifying mobile business opportunities

Thanks to the proliferation of food trucks, consumers want all kinds of products on the street.

Although startup costs can be high, these businesses carry lower costs than many brick-and-mortar stores and offer the potential for heavier foot traffic at all times.  

Opportunities include pet care, such as grooming and veterinary work, dentistry, bike repair, and personal training. 

San Diego-based entrepreneur Kush Kapila started Sterlings Mobile Barber & Salon Co. 7 years ago. His current annual revenue is $600k, and he is expanding to other cities.   

  • The key: Kapila partnered to be on the campus of local firms, giving him a steady stream of customers.

We explain how Kapila did it and more opportunities. 

Read our full report.

04  How BottleKeeper won in the $5B drinkware market

BottleKeeper, which makes outer shells that keep bottles cold, has enjoyed a dream startup trajectory. The company received early momentum — and financing — through a crowdfunding effort. Then, on Shark Tank, it received the backing of Mark Cuban and Lori Greiner.  

But not everything has been simple. BottleKeeper had to spend six figures fighting copycats through patent litigation.  

Co-founder Adam Callinan shared how he has fended off the competitors and BottleKeeper’s plans for the future. His main takeaways: 

  • Focus on doing one thing really well. Callinan says to learn how to best serve your customer before fragmenting into different customer acquisition strategies. 

  • You gotta fight for your right to party. There will be copycats and people trying to eat your lunch. When push comes to shove, fighting will likely be expensive. Make sure it’s worth it. 

  • Harness your power before negotiating. Tempted with many retail contracts early on, Callinan chose to focus on building BottleKeeper’s brand. Today, BottleKeeper is able to attract much more favorable contracts. 

Read the full report.

05  A refashioned guide to small business growth

If you’re new to Trends, you might’ve missed our small business database — now known as the Trends Guide to Small Business Growth.

Over 600 companies have given us an inside look at their financials, including how much money it took to start their business, how much profit they make, and much more.

We’ve compiled the information in a searchable spreadsheet that can help you start your next business. Check back often, as new companies are submitting their numbers all the time.

We ran a few numbers of our own, based on what companies have told us. Here are a few highlights:

  • Only 7% of the businesses in our database have taken venture funding
  • The median cost to launch a business: $10k
  • The median profitability of VC-backed companies? 44%
  • Median profitability for companies financed by personal savings: 60%

Many of you are eager to start businesses but are unsure of how to secure the capital. Obviously not every business needs VC backing, so next week we’ll be dropping a piece on raising capital outside of traditional VC.

Keeping tabs: Every Monday, we feature one business from our Trends Guide to Small Business Growth in The Hustle Daily email. See our archive of startup stories here, or submit your own entry for our database. And don’t miss our step-by-step guides to growing a business (like this one).

06  The premium desk innovators

The latest in our installment on how-to guides for building small businesses is Ergonofis. 

Based in Montreal, Ergonofis has been making motorized sit-stand desks since 2016. The company is on track to make $2.3m this year and is growing about 50% YoY. 

Co-founder Samuel Finn shared with us: 

  • How to prototype a design for a product 
  • Why ecommerce businesses shouldn’t focus completely on D2C
  • Marketing tactics for building consumer evangelists

Read the full report.


This week's Trends send was brought to you by Mark Dent, Steph Smith, and Brad Wolverton. We'd love to hear from you.


Mark Dent
Mark Dent
SENIOR WRITER
Steph Smith
Steph Smith
SENIOR ANALYST
Brad Wolverton
Brad Wolverton
HEAD OF CONTENT
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⌨️ 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

Gochujang
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
SENIOR WRITER
Steph Smith
Steph Smith
SENIOR ANALYST
Brad Wolverton
Brad Wolverton
HEAD OF CONTENT
🤜🤛 Did a friend forward you this email? Become a Trendster today.
Copyright © 2019 Hustle Con Media Inc., All rights reserved.
251 Kearny St. Ste 300 • San Francisco, California 94108 • United States

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