The CQ | #Desperate for Work Job Seekers, Millionaire HVAC Entrepreneurs
The Forerunner Team's Top Reads of the Week
The CQ is Forerunner’s weekly newsletter rounding up the most pressing consumer news and analysis, plus some bonus musings from our investment team. Subscribe now to get the latest edition in your inbox every weekend.
Forerunner | @ForerunnerVC
What We’re Talking About on Slack:
They’re desperate for work—and being brutally open about it. A number of LinkedIn job seekers are resorting to using a new pink status banner with the word #Desperate (a play on #OpenToWork). While the September jobs report points to a strong labor market, there are signs showing that finding a job has become overly competitive, including last week’s Labor Department data revealing that fewer workers are quitting — the lowest rate in over four years, suggesting people are apprehensive about being able to land a new job. There are also 2.5 job applicants for every one open job on LinkedIn, up from 1.5 in 2022. Industries like marketing and brand management have cooled, while construction is still going strong.
The new fame: For creators, 2024 is the best of times…and the worst. According to a recent Goldman Sachs report, the content creator industry could surpass half a trillion dollars by 2027. However, staying relevant is increasingly difficult as platforms have become more fragmented and algorithms more competitive. “Diversification of platforms, diversification of revenue streams. It’s not enough to be single-platform dependent or single-revenue-stream dependent anymore.” Mental health issues, burnout, and lack of labor protections are also prevalent: “About 90% of creators struggle with burnout and more than 70% have considered quitting, according to a recent study.”
Everyone loves a good head-to-head: on stage at WSJ’s recent CIO Summit, Aaron Levie (Box CEO and Cofounder) and Arvind Narayanan (author of “AI Snake Oil”) debate, Is Generative AI Actually as Good as We’ve Been Told? Aaron Levie advocates for the use of AI in a functional business capacity and gives Box’s use cases for the technology, while Arvind Narayanan brings skepticism.
Here’s the latest intel from Piper Sandler’s Taking Stock with Teens Survey: Teen self-reported spending was up 6% year-over-year and up 4% vs. the spring. Nike held the top spot in both clothing and footwear, with Adidas, New Balance, American Eagle, and Lululemon following behind. Top destinations for beauty are Sephora, Ulta, and Target, with e.l.f. noted as the favorite cosmetic brand. Fragrance is the fastest-growing category, at 25%. In terms of social media, TikTok ranks number one at 39%, with Instagram in second place at 32%. Also interesting: Almost 30% of teens plan to upgrade their Apple hardware in the next six months because of Apple Intelligence.
The Wall Street Journal explores America’s new millionaire class: plumbers and HVAC entrepreneurs. The trend of private equity acquiring home services like HVAC and plumbing and electrical companies has taken off, with nearly 800 companies purchased since 2022, providing significant payouts to family operators and creating new millionaires. Many former owners are opting to stay involved in their companies after the sale, due to the increased support and resources. “For private-equity investors, the strategy is one that has been put to use in industries as varied as car washes and nursing homes: Roll up businesses to create larger players and improve their margins by adding managerial know-how, back-office efficiency and beefed-up marketing and recruiting budgets. Critics of the PE model say it can mean higher prices for consumers and less competition, but others say it can improve service quality and boost the bottom line.”
After years of increases, companies are rolling back prices. Responding to decreased consumer spending on non-essential items like furniture and sneakers in light of higher costs for essentials like food, energy, and housing, IKEA announced a 10% global price drop, its largest ever, to attract shoppers—the company reported a 5.3% drop in annual sales, as customers spent less. Meanwhile, Nike is offering discounts to clear out excess inventory, resulting in a 10% revenue decline and a 28% drop in profit. Restaurants are also feeling the heat with brands like Domino’s, Olive Garden, and McDonald’s all offering more deals.
Health costs and flat raises are set to squeeze paychecks. Merit raises are projected to only have a modest average bump of 3.3%. Still, the cost of employer-provided health insurance, which jumped 7% in 2024 for the second year, is expected to increase again. Companies’ total health-benefit cost for an employee is expected to increase an average of 5.8% in 2025. Some companies may start passing these increased costs onto employees through higher deductibles and premiums, adding more financial strain on workers.
“Concierge wellness” becomes a new primary care. Routine checkups are increasingly incorporating cash-only services like weight-loss drugs, anti-aging treatments, and extensive blood screenings, driven by a growing market focused on wellness and longevity. High-income consumers are particularly attracted to concierge wellness options, like Equinox's $40,000 concierge program to optimize whole-body health. Some independent physicians are drawn this because there’s no hassle dealing with insurance, there’s more income, and less time commitment involved. Yes, but: critics warn that while some wellness recommendations are beneficial, many lack solid evidence and may overlook critical health issues as well as potentially widen health disparities and misallocate medical resources.
After scrapping health clinics for people, Walmart is expanding into pet care with five more pet services centers opening this fall in Arizona and Georgia. In addition to cat and dog grooming, the centers will provide wellness exams, vaccines, and minor medical services. Walmart could be looking to compete with Chewy and Petco—both retailers started offering pet services, which are higher margin than pet food. “The pet category has also been a way to reach younger and more affluent shoppers. Gen Z is the fastest-growing segment for Walmart’s pet category, as the group ages into pet ownership. The number of customers shopping the pet category with a household income of over $100,000 grew by 36% year over year, as of the end of July.”
Portfolio Highlights:
New York Times profiles Glossier founder Emily Weiss, who speaks about the brand’s latest perfume launch and more.
Fortune reports that KiwiCo has surpassed $1 billion in lifetime revenue, while Good Morning America covers the launch of KiwiCo Clubs.
The Wall Street Journal shares “why the Oura smart ring has a cult following.”
Wired, TechCrunch, The Guardian and The Verge also reviewed the Oura Ring 4.
Chime makes Time’s list of the World’s Best Brands of 2024.
Daydream, Fora, and Mindtrip make Startup Savant’s 100 Top Startups to Watch in 2024.
Ritual Founder and CEO Katerina Markov Schneider wrote a guest commentary for Motherly about using supplements for fertility.
WWD reports that Pie founder Andy Dunn Project spoke on a panel at the Healthy Minds World Mental Health Day Festival in New York City along with singer Demi Lovato, New York Govenor Kathy Hochul, and Julie Rice of SoulCycle and Peoplehood.
Portfolio Company Job of the Week
Director of FP&A and Wonder, the platform reinventing quick service restaurant meals and delivery to scale chef-designed, excellent quality food.
There are ~720 other open jobs at Forerunner portfolio companies - check ‘em out.