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September 10th, 2019

👴 The trillion-dollar business of aging 📈

We break down the Inc. 5000 and discover who has the goods in resale.

Trends member Glen Allsopp posted in our Facebook group last week about the Inc. 5000, which looks at the fastest-growing companies.

We took a deep dive into Inc.‘s data, breaking down the opportunities by category, business location, and more.

The brain behind that analysis was Steph Smith, our newest hire, who’s blowing us away with her data skills (check out this love letter to Excel she just wrote, which trended on Hacker News).

Also new this week:

  1. The trillion-dollar aging market: VC funds and investors are beginning to realize the importance and potential profits in helping people age on their own terms. 

  2. A small business profile: A Hustle reader who contributed to our Small Business Database explains his strategies for building a data center modernization company that’s seeing 300% growth in its second year. 

  3. A Q&A with ThredUP founder James Reinhart: Reinhardt has raised $300m in funding in the crowded resale space by focusing on giving customers a unique, quality product.

The most-clicked items in last week’s email were our searchable Small Business Database, a video featuring a VC’s tips on the perfect pitch, and a Q&A with Vice Ventures founder Catharine Dockery.

Now let’s get to it!

– Mark

PS: We accidentally sent an email about Signals yesterday to Trends subscribers. Sorry about that! For those who asked, Signals is included in your Trends subscription.

PPS: Big congrats to our man Sam, who got married last weekend!
01  Signals
Quick snapshots from across the internet of potential trends before they happen.
Medicine Delivery graph

Medicine Delivery 
Worldwide, particularly in Asia, demand has been rising for companies that deliver medicine to people’s doors. Search interest has picked up since 2017, peaking to its highest levels yet this summer. Unlike in the US, the market is less established in other countries.

Early adopters: GrabExpress, in Singapore, recently partnered with WhiteCoat to increase its delivery capabilities. Milkbasket, which is closing $50m in investments, might start delivering medicine in India.

Reusable Produce Bags graph

Reusable Produce Bags 
Plastic bag use at the checkout aisle has declined for years. Now people are searching for alternatives to those small plastic bags in the produce section. Search volume has gone from almost nothing in 2017 to more than 10k searches per month. 

Early adopters: Vandoona, which makes mesh produce bags, has gotten ink in BoingBoing and the Huffington Post.

Printify graph

Printify is a leader in the new field of on-demand printing. It lets users create products for their own shop (unlike CafePress, Teespring, etc.) and then takes care of the shipping and fulfillment. Referring domains have shot up at an almost vertical-line level in the last 18 months.   

What’s next: Printify recently integrated with eBay. It had previously integrated with Shopify and Etsy.


02  Age Tech: The trillion-dollar market where everyone is a potential consumer

In the United States, 10k people retire every day. By 2030, the share of US population over 65 will be 18%, up from 13% in 2010. Worldwide in 2018 there were about 635m people older than 65. That number could rise to 2B by 2060 (and it almost certainly includes you, reader!).

The potential for startups to build meaningful products and services for the aging population is potentially limitless––and so are the financial benefits. The AARP places the spending power of Americans over the age of 50 at $7.6T. 

Major opportunities are rooted in a few different categories that all help people age comfortably and in their preferred location:

  • Using voice technology to detect degenerative diseases and reduce social isolation

  • Bringing clinical products direct to consumer   

  • Going beyond wearables that monitor issues such as falling, and using technology to prevent those issues

The AARP has an innovation lab and funds age tech startups. Major VC funds have also started investing heavily in the category, particularly Alexis Ohanian’s Initialized Capital, which calls itself the “honeybadgers of venture” (and, incidentally, has one of the coolest websites we’ve seen lately).
Click here for more

03  Our analysis of the Inc. 5000

Every year, Inc. puts out a list of the fastest-growing companies in America. 

With 5,000 companies making the cut, we’re talking tough competition: 15 companies per million people in the US.

We decided to find out exactly what cloth these companies were cut from. 

Some key takeaways:

  • Business Products, Advertising, and Software categories have the greatest presence across the 5000

  • Software, Health, and Consumer Products account for the highest percentage of the 100 fastest-growing companies (>3,000% growth!)

  • We’re seeing lots of promise in AdTech, Supply Chain Logistics, and Health Food

  • Utah, Virginia, and Colorado are the most innovative states, by population

  • Atlanta, Clearwater and Richmond are the most innovative cities, by population

  • 106 companies have made the list for 10+ years!

Take a look at our full analysis here to learn how you can win your ticket to the next Inc. lottery.

Just looking for the highlights? Check out this deck, featuring a handful of perennial Inc. 5000 businesses and a few interesting trends to look out for.

04  News You Should Know

Why services and products must be simple (Twitter/Quora): A popular Twitter post from Andreessen-Horowitz investor Li Jin brought back old advice learned by Jared Morgenstern, who created a service similar to Facebook but was not nearly as successful. Among the lessons he learned: “A service cannot be cool unless it is simple enough for the coolest people in the group it targets.” And be sure to check out Jin’s thread for examples and tips of how to apply this advice.

The key to a billion-dollar podcast (Medium): Is Howard Stern, who makes $90m a year from SiriusXM, not realizing his full profit potential? Tiny Capital founder Andrew Wilkinson thinks so, and he explains why the subscriber route leads to the most profitability for major podcasters and could help others looking to get in the game.

5 rules for making a great mission statement (Entrepreneur): A smart, concise mission statement helps steer employees and hook investors. This general guide recommends: addressing key stakeholders, explaining why you started the business, avoiding corporate lingo, making it exciting, and listening to the input of others.


05  Small business profile: Northshore

Every few weeks, we tap into our Small Business Database and profile a small business owner who has shared their financials.

This week’s business owner: Matt Renner, of Northshore  

Company details: Founded in January 2018 by Renner and Aryn Bergman, Northshore audits and retrofits existing data centers to make them more energy efficient. Northshore was started with $15k in personal funds and made $300k in its first year. Renner expects to make ~$1m this year on $200k in operating expenses. 

The company has three revenue streams:

  1. Discovering and redesigning for efficiency: This process can be anywhere from $25k to $100k depending on the project.

  2. Retrofitting the data center: Northshore makes about 2% to 10% of the cost to retrofit a center. 

  3. Management: Northshore can provide ongoing management to maintain efficiency.         

Spotting the market need: Renner says many companies chase the “golden ticket” of building new data centers, which can cost from $50m to $1B. Not as many people are retrofitting data centers for energy efficiency, even though there are 3m existing centers in the US.

First strategic move: At first, Renner and his partner were essentially consultants and had to learn to structure contracts in a way that would lead to steady cash flow. 

The early key to success: Prior networks. Northshore’s first client was his previous employer. Most of his other clients have been connections he met at industry events, or connections of those connections.

The obstacles ahead: Renner says Northshore has “a bigger pipeline of work than we can handle.” The two founders made their first hire this year, but a shortage of skilled workers has made it tough to expand.


06  Q&A: ThredUP’s James Reinhart on turning trash into treasure in resale

James Reinhart started ThredUP in 2009, when the term resale barely existed. He’s now raised $300m in funding and hired nearly 5k employees.

The key: Reinhardt constantly sought feedback from his customers, including where else they were shopping. He also learned the process of selling was difficult and moved as much work as possible away from the sellers and onto ThredUP.

His advice: Focus on high-quality, unique products.

“Consumers want value, but they also want unique things,” he says. “They’re more conscious as consumers; they care about doing right by the planet. They care about being smart with their wallet. And all those things compound, so if we can deliver the customer the right set of goods and we meet their values, then that’s really a recipe for success.”

In our Q&A, we delved deeper into how Reinhardt turned ThredUP into a power.

Click here for more

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