The CQ: Introducing our New Head of Research (Who Will Look Quite Familiar)
Plus the Forerunner Team's Must-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 Saturday.
By Kirsten Green, Founder and Managing Partner
Many of you already know Jason — he’s been an integral part of Forerunner for 5+ years, and in the Forerunner community for 10+ years, having previously worked at a portfolio company. He has proved time and time again that he’s unafraid to challenge common assumptions, wildly driven to take on new opportunities, and a pro at combining analytical nuance with big picture thinking. It was an easy and obvious next step for us to promote him to partner — and for him to assume a new, defining role for our firm: Head of Research.
At Forerunner, we obsess over uncovering why people believe the things they believe, buy the things they buy, want the things they want, and pursue the goals they chose. And as modern consumers grow evermore individualistic and complex, consistent data-driven research is essential to illuminating these cultural dynamics. Jason’s new role as Partner and Head of Research marks our commitments to this practice, and will set us up to remain two steps ahead when it comes to projecting evolutions of consumer needs, aspirations, attitudes, and inclinations — all essential to our work as investors.
Jason is an indispensable resource to our investment team and portfolio companies, who consistently rely on him for strategic guidance rooted in the values that make us Forerunner: teamwork, original thought, integrity, and curiosity. Read more on this new role and join us in wishing him congrats: jbornstein@forerunnerventures.com.
What We’re Talking About on Slack:
Nevermind the 1%—meet the mini millionaires, whose wealth is growing the fastest. Wall Street Journal looks into how about 16 million American families—over 12%—have wealth exceeding $1 million, up significantly from 9.8 million in 2019. Almost eight million families are multimillionaires, up from 4.7 million. Their median wealth jumped 69% from 2019 to 2022. For the most part, they are part of the growing upper-middle class who earn between $150,000 - $250,000 a year, own stocks, (over 90%) and own their home (87%). Many achieved millionaire status slowly by pursuing college degrees, building retirement accounts, and buying houses. “One Economist asks, ‘do households have more excess savings, or is it just wealth now?’ The implication of her question is that as people come to regard the excess cash in their checking accounts as wealth, they might be less likely to spend it.”
The percentage of women working has reached a record high of 78% in what The New York Times calls a “silver lining to the pandemic.” College-educated mothers with children under 5 have made the most notable increase with 80% working, up from 77% in 2019. Being able to work remotely and increased flexibility on when and where work gets done has been a big contributor to these gains as nearly half of moms with young kids have said they work from home at least once a week, which is a larger share than any other group. A potential wrinkle in this progress: with inflation and the current high costs of living, some mothers feel they have no other choice but to work.
The junk is winning on TikTok Shop. While the platform used to be a place to discover product recommendations from real people, in little over a month since its launch, TikTok Shop has become what The Atlantic calls “a low-rent, Gen Z version of QVC,” packed with counterfeits, commission-generating sales pitches, and plastic junk. “Depending on third parties on a huge scale means that listings can be more unreliable or misleading than those created under in-house supervision, and the inventory risks being low-quality or fake—an issue that even the largest and most powerful marketplace retailers have a hard time controlling.”
New online returns fees are driving away shoppers. According to a new survey, about a third of companies say they’ve lost customers since they started introducing return fees for online purchases, even though more than half say the new policy has lessened the amount of goods returned. Another recent survey confirmed this, reporting that 59% of consumers say that stricter return policies have deterred them from making a purchase.
What’s the state of friendship in America? According to new research from Pew, 53% of adults say they have between one and four close friends, 38% report having five or more, and 8% have none. Interestingly, over 60% say close friends are essential to a fulfilling life, which is a higher number than those who chose marriage, children, or money.
Food brands are creeping into the beauty category—further evidence of the blurring between wellness, beauty, food, and self-care. There’s soda brand Poppi’s collaboration with InnBeauty on limited edition lip oils and Froot’s Loops scented nail polish with Nails Inc. Kosterina, which got its start in olive oil, has six skincare SKUs and skincare generates almost 20% of the company’s e-commerce sales. In addition to building buzz, “you’re opening up your brand to a larger segment of consumers. I do think that there would be a benefit of visibility in a higher-end category like beauty. It also provides some kind of brand equity benefits as a halo effect on your main category.”
Homeschooling has become America’s fastest-growing form of education, “as families from Upper Manhattan to Eastern Kentucky embrace a largely unregulated practice once confined to the ideological fringe." Since the start of the pandemic, there has been a significant increase in families choosing to homeschool—a trend that’s stuck post-Covid. The last federal estimate in 2019 reported that there were 1.5 million homeschooled kids in the U.S. According to The Washington Post’s analysis on the U.S. growth of homeschooling, currently there could be anywhere between 1.9 million and 2.7 million. There was no correlation found with the quality of school districts and choosing to homeschool, but a poll from earlier this year revealed that some of the top reasons parents cite for homeschooling are concerns about bullying, school shootings, general quality of the school environment, and the intrusion of politics into public education.
To drive holiday sales, more startups are launching multi-brand marketplaces. As gift-giving season approaches, companies are seeing opportunities in selling their own products bundled along with products from other brands on their own sites. One example is baby monitor brand Nanit, which features 16 brands on its marketplace including Rookie Humans, Vitruvi, and State Bags and has seen marketplace sales grow 108% compared to last year. “The marketplace continues to drive new customers to our site, with 80% of the traffic being new; 32% percent of marketplace shoppers are returning customers, versus 23% of Nanit shoppers are returning customers.”
Will the streaming squeeze ever end? This year, the major streaming services all raised prices. “What Netflix does is a bellwether for what a lot of other companies are going to do. They’re going to see if Netflix can validate a price raise, a password crackdown, or some other major change first. If Netflix is doing it, it makes it a bit more socially acceptable for the other services.” That said, even Netflix has lost subscribers for the first time in over a decade and other streamers, including Peacock and Disney Plus, haven’t seen much growth. They’re realizing their cord-cutting consumers care about pricing, which led streamers to start ad-supported plans to offset rising prices. Apparently, it’s working: Netflix’s cheaper, ad-supported tier amassed 15 million subscribers, triple the number reported in May.
The pandemic is over, but our pandemic stress isn’t, says Bloomberg. Adults have been hit hard by the lingering aftermath of Covid’s social isolation and the current state of the economy and geopolitics. Almost a quarter of those ages 18 to 45 report operating at the highest stress levels, rating it an 8 out of 10, according to a new survey from the American Psychological Association. Parents, in particular, are feeling the strain with nearly half saying it was “completely overwhelming” on most days, and 41% reporting anxiety that impedes their function.
Portfolio Highlights:
Axios reports on the future of pet telehealth medicine with quotes from Joe Spector, Dutch’s CEO.
Glossier sees its first ever Glossier-themed bat mitzvah, featured in Business Insider — plenty of Glossier pink (including staff jumpsuits), its signature font, and giant Cloud Paint and Boy Brow tubes flanking the entrance.
Sandra Oh Lin, KiwiCo’s founder and CEO, is one of 16 founders to offer Inc. advice on how to grow fast without breaking things.
WWD polled 400 beauty industry insiders to curate a list of the most iconic beauty body products, including Nécessaire’s The Body Lotion.
A top Fora Travel advisor is quoted in a New York Times article on the trend of parents taking kids out of school to travel.
Prose and Curology are included in Harper Bazaar’s round-up of best beauty subscription boxes.
Work at a Portfolio Company:
Product Operations Specialist | Fora: Fora is reimagining the travel advisor industry with fresh eyes, building a modern tech-enabled solution that enables anyone to become a travel agent. This role will be a key link between the Product/Engineering and non-technical teams, working closely with the user experience teams to contribute to company growth and operations, technical support and internal and product workflows.
Founding Sales Leader | Sika Health: Sika Health is reinventing healthcare payments through an e-commerce solution that enables shoppers to spend regulated HSA/FSA funds with any eligible merchant, unlocking access to the $150+ billion in these accounts. This role will shape the customer and go-to-market efforts, customer engagement, scaling the health payments offering, and managing and expanding client relationships.
Support and Documentation Lead | Ampla: Ampla is on a mission to build modern financial tools that will fuel growth for companies for the modern CPG brand. This role will be be foundational within the Customer Success Department, providing both proactive and reactive support to our B2B customers across all product offerings while also updating and building out help center documentation.
There are ~558 other openings on our jobs site. Check ‘em out.