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September 3rd, 2019

đź“Š Dig into the financials of 400+ small businesses đź’¸

The hemp craze hits the pet store, and small businesses that soar.

If there’s one thing we believe in at The Hustle, it’s moving fast. It’s part of our mission (“Bold. Fast. Fun.”). Sam is such a believer, he has the letters “BFF” tattooed on his leg!

Two weeks ago, we gave you a sneak peek of our new Small Business Database. And I’m proud to say that we’re rolling out a much more complete version today.

Starting this week, Trends subscribers will have full access to the financial details of 400+ small businesses, including thousands of rows of data. Want to search the fastest-growing, most profitable companies? We give you the tools.

Also new this week:

  1. Pot for pets: The CBD and hemp craze has hit the pet store, with pet CBD products expected to grow at a 57% CAGR. Plus: Don’t miss our new Pet Index, which can help you identify the most pet-friendly cities and businesses.

  2. Hearing loss: Half of all people over age 75 have a hearing problem, but 80% of them don’t seek help. We break down the opportunities.

  3. The future of vice: Catharine Dockery founded Vice Ventures this year to invest in traditionally forbidden businesses, such as those involving marijuana or liquor. She explains how she raised $25m and reveals the vice industries on the rise.       

The most-clicked stories in last week’s email were on niche job sites and a Q&A with Gumroad founder Sahil Lavingia. Our spreadsheet analyzing job boards also got a lot of hits.

Now let’s get to it!

– Brad

PS: Some of you have asked about group subscriptions to Trends. If you’re interested, holler at [email protected]

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

Vegan Bacon
Beyond Meat and Impossible have perfected plant-based burgers and chicken. No leader has emerged for bacon, which has an easier taste to replicate given its salt-heavy flavor. Search interest is exploding.

Early movers: THIS, a plant-based food manufacturer, launched a vegan bacon product in the spring and has received about $3m in funding.

Swapfiets graph

Swapfiets
This Dutch bicycle company has a long-term bikeshare product, charging a fee to let customers rent a bike for a month at a time. Swapfiets’ organic search traffic has gone from almost nothing in summer 2017 to 21k searches/month. Referring domains have increased similarly. It has big expansion plans in Europe.

What’s next: Swapfiets, which has ~130k subscribers, is plotting moves to more European countries, Japan, and possibly the US.

Hearing Aids graph

Hearing aids
Search traffic for hearing aids has picked up steadily in recent years, and millions of people with hearing problems don’t have hearing aids. We explore this Signal in greater depth below. 

Early movers: Audicus, which sells D2C hearing aids, made about $10m last year.

02  21st century catnip: CBD reaches pets

The pet CBD market, valued at $20m, is expected to grow at a 57% CAGR.    

Bill Bookout, founder of the National Animal Supplement Council, has been tracking pet supplements for 20 years. Rarely has he seen a phenomenon like pet cannabis.

The competition may seem daunting, but no companies have established themselves as a leader. Many also lack experience––they’re traditional pet or traditional CBD companies trying to cash in without extensive knowledge of either pets or CBD.

One standout: Vancouver-based True Leaf specializes in pet CBD and has gone from making $40k in 2015 to $2.3m last year.   

The opportunities:

  • Accepted uses of cannabis could soon expand. For now, hemp products can be sold only as pet supplements. Eventually they could be allowed in food and treats, which would offer new opportunities and even higher sales.   

  • The booming supplement market isn’t limited to cannabis. The broader $600m supplement and wellness industry is growing at a 5% annual clip. Bookout says it is more stable and “growing stronger with more activity” than ever.

  • Invest in different forms of healing. Other plant-based supplements with anti-inflammatory qualities, such as turmeric and yucca, are also becoming popular.

Where you can get involved: View our Pet Index to find which dog-related searches have been most popular in America’s largest cities.

Read more here

03  Our new small business database provides a window into successful startups

Entrepreneurs average 3.8 failures before finding product-market fit. What if you had a real-time tool to help you see what was working and not working for small businesses?

The latest version of our Small Business Database provides just that––a look at dozens of fast-growing, highly profitable companies, many of which have been started in the past year.

Search the database to find:

  • Financials on hundreds of small businesses that have already tested the waters, giving you insight into successful startups in dozens of industries.

  • Companies with expected double- and triple-digit year-over-year growth.

  • The industries that are growing the fastest, helping you scout out where you can make your mark.

We’d love to get your feedback on the database. Let us know how we can make it more useful by filling out this short survey. And if you haven’t already, please add your own data and tell your friends to enter their numbers. The more data points we have, the better we can serve you.

Click here to search

04  News You Should Know

A better orthodontics startup (Bloomberg): More people are turning to inexpensive orthodontics than ever. Invisalign makes $1.5B every year. And the startup SmileDirect is valued at $3.2B. But there’s a quality issue. Orthodontists have attacked SmileDirect and want regulators to intervene. There’s room for new companies to disrupt.

How to pitch a VC (Quartz): Convince them the market is big enough. Explain how your idea solves a current problem. Illustrate a strategy to reach customers. And more tips.

Rethink mental health care (Medium): An estimated $2.5 trillion in productivity is lost each year globally to mental health issues. The startup Modern Health has created a digital platform that helps companies emphasize mental well-being and raised $11m in funding.

05  The growing demand for hearing aids and “hearables”

Several new studies have come to a similar conclusion: Better hearing may prevent or delay cognitive decline. As scientists continue to connect the importance of good hearing with a healthy mind and more Boomers reach their golden years, the stigma portraying hearing aids as a sign of weakness is likely to dissipate.

Sales of hearing aids have already increased to nearly 4m units in the United States last year, from 2.5m in 2007. The global market is valued at $5B and expected to grow at a 6% CAGR. 

The potential market is much larger: According to the journal Gerontology, half of all people above age 75 have a hearing problem. About 78m US Boomers are headed toward the north side of 75 in the next 15 to 20 years. And the World Health Organization believes 900m people worldwide will suffer from hearing loss by 2050. 

But an estimated 80% of people with signs of hearing loss don’t seek help or lack the financial resources, even though 95% of hearing issues can be improved with hearing aids.

Hearing aids that move beyond the stigma are typically nearly invisible.

Two winners:

  • The startup Audicus has made hearing aids like this that can also be operated from iPhones and iPads.

  • Starkey has an app called Trulink that allows them to modify volume and sound preferences based on specific situations and surroundings. 

To get involved, make a “hearable.” Hearables are a cross between hearing aids and headphones and do not require the same regulations. They help enhance certain sounds and cancel ambient noise.

The most successful new companies will get customers by helping them skip doctor visits, selling at prices below the current average of $2,300 and embracing new technology.

06  Catharine Dockery discusses the future of vices

When Catharine Dockery personally invested in Bev, the D2C rosé company, major VC firms expressed interest in investing. But Bev could never close the deals, and it wasn’t the company’s fault.

The vice clause always tripped up the VCs. It’s an old-fashioned rule that prevents most traditional VC funds from investing in businesses related to sex or drugs (and probably rock and roll). This year Dockery started Vice Ventures, which invests in all the industries the other funds have spurned.

Vice Ventures has $25m, built from contributions from the likes of Bradley Tusk and Marc Andreesen. The fund has invested in Bev, InDose, Players Lounge, and Recess. Dockery says she mostly looks for really strong brands that have cultivated followings in their crowded spaces.

The next big thing: Dockery believes harm-reduction nicotine––products like e-cigarettes––will increase in prominence. Right now, e-cigarettes and Juul are still mostly viewed as hazards for young people. But Dockery says that with nicotine patches and gums being an unpopular, “terrible tasting” preventive course, more people will eventually need new harm reduction methods to cut back on tobacco.

Read more here

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