The CQ: Musings from HLTH and the Rise of Wellcare
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.
A Note From our Team:
We want to acknowledge this has been an incredibly challenging week with the news of war. Our focus has been on checking in directly with our team and companies, and supporting one another. We’ll be the first to admit that we’re not experts here, but we believe it’s uncomplicated to condemn terrorism of any kind and acknowledge that innocent lives lost is an incomprehensible tragedy. We hope everyone is finding ways to care for themselves. 💙
Musings from HLTH and the Rise of Well-Care
By Eurie Kim, Managing Partner
Many say the healthcare system is “broken” — but some will tell you that the healthcare system is actually quite effective at serving its intended, longstanding purpose: to see sick people and address their illnesses or injuries. While it’s easy to bemoan healthcare for being reactive, the system is overburdened dealing with these reactive issues alone — from the dramatic increase in chronic disease (projected to double from 2020 to 2050) to the rise in mental health related emergencies.
Still, the widespread consumer frustration with healthcare is certainly justifiable. There is now an abundance of research about ways people can get ahead of critical health issues without standardized pathways guiding consumers through these journeys. In this absence of standardized support, consumers feel like they’re climbing a mountain trying to proactively own their health journeys alone, with an ever expanding scope of wellness considerations to optimize (a daunting task instead of an empowering one). And generally, people today expect to have much more agency over what’s important to them and more transparency about what it takes to get there, based on new standards set by progress across nearly every other consumer category.
At Forerunner, we’re long-term believers in the need for reliable, proactive efforts to live healthy informed lives. We’re passionate about a concept we call Wellcare: sophisticated, healthcare-grade tools and services applied proactively in the wellness capacity.
“Wellness” — while a massive and important category — has, at times, struggled to cement its legitimacy in the healthcare world due to a lack of regulation around claims, ambiguity of underlying research, and the general facade of green juices and crystals (and not to knock those things — they’re great). Wellcare marks a true merging of healthcare’s clinical excellence and impact with wellness’s proactive framework — an evolution of the trends fueling both that meets the white space in traditional healthcare’s reactive system.
After speaking at HLTH this week, it’s abundantly clear that Wellcare is a driving force behind the booming healthtech market, from at-home testing for a range of health biomarkers to get ahead of larger health problems (Everly Health, Verily, 23andMe), to powerful longevity aids (Prenuvo, Tally Health, Modern Age), nutrition and sleep solutions (OURA, Big Health, Season Health, Noom), and more.
Some of the questions the Forerunner team has as we continue to invest in the rising Wellcare space:
How might employers, insurers and providers work together to avoid a purely cash-pay system, where the financial responsibility falls entirely on consumers?
What governing bodies will set the clinical standards for Wellcare when the FDA and CDC are designed to only govern a specific set of domains?
How will research be prioritized in the public and private sectors to advance Wellcare solutions?
The consumer demand for Wellcare is blindingly clear — people want to stay healthy to pursue their passions and career, support their kids, and invest in themselves, and only addressing conditions once they surface is a non-starter. The industry’s opportunity is to deliver solutions that are trusted, accessible and highly effective, balancing the right cost structure and distribution channels with consumer education. With healthcare making up 20% of the US’s GDP, the Wellcare subcategory stands to be a boon for the market and consumer spend at large.
What We’re Talking About on Slack:
Living to 120 is becoming an imaginable prospect. Centenarians are currently only about 0.03% of the population in the U.S. and Britain. The Economist explains how new drugs on the horizon could make it more common for people to reach 100 and beyond. There are several reasons why they’re not fully approved and in market, including the fact that drug-approval agencies don’t recognize old age as a treatable condition approvable for testing, trials require thousands of participants over a period of many years, and the proposals use out-of-patent molecules that drug companies have little interest in. Still, some trials are underway, but it may take years for the age treatments to become reality. Related: Tally Health Co-Founder David Sinclair believes the first person to live to 150 years old has already been born.
According to a new Gallup survey, consumers are less interested in brands taking stances on socio-political issues. Only 41% of Americans believe businesses should weigh in on current events, down from last year’s 48%, and the number who said they are more likely to buy from brands that share their own values dropped to 52% from 65% the year before. Religion, abortion, political candidates, and international conflict were particularly taboo, but 55% were on board with brands advocating for sustainability. “Rather than speaking out on issues, respondents said they wanted companies to make a positive impact by providing employees with fair wages and quality healthcare benefits, avoiding major pay gaps between chief executives and lower-level employees, and operating in an environmentally sustainable way.”
The U.S. economy’s secret weapon: seniors with money to spend. For one thing, there are a lot of them —18% of the population is 65 or older (the highest on record going back to 1920). They generally have less debt, are less at-risk for layoffs, less likely to need to borrow money to buy a house, plus they are more active than ever before. Last year, they accounted for 22% of spending, an increase from 15% in 2010. Spending by older households is up 34.5% from 1982, compared with 16.5% for younger households.
The New Yorker reports on why the internet isn’t fun anymore. Interacting with friends and discovering a little-known meme or pocket of the web isn’t as easy as it was years ago, primarily thanks to social networks controlling content discoverability via algorithms that favor broadcasting over social exchange. “There’s this divide that wasn’t there before, between audiences and creators. The platforms that have the most traction with young users today—YouTube, TikTok, and Twitch—function like broadcast stations, with one creator posting a video for millions of followers; what the followers have to say to one another doesn’t matter the way it did on the old Facebook or Twitter. Social media used to be more of a place for conversation and reciprocity. Now conversation isn’t strictly necessary, only watching and listening.”
Time magazine presents portraits of teens and their challenges with mental health concerning everything from social media, body image, and gender identity to gun violence, climate change, and bullying. “Other generations are telling us that we’re a weak generation [...] and how we haven’t lived through this and that. But they haven’t experienced half of what we’ve experienced.”
Birkenstock, the last major company left on the IPO calendar for 2023, made its NYSE market debut Wednesday 250 years after it was founded. “This shows how you can make a fortune from easily produced, workday items like jeans, sweats and sandals with the right fashion marketing spin. There’s not many, if any, other companies of that size that have nearly doubled their valuation since 2021.”
Amazon Prime-Day shoppers opt for low-cost items instead of big-ticket buys. On average, consumers spent $38 during the sale’s first eight hours, up 2% from last year. About 60% of products sold were under $20, while 3% were over $100, according to data from the first day of the sale. What’s interesting is that Amazon is using this event to monitor customers’ browsing activity to then offer them customized deals later in the year when there’s a possibility they may be more willing to splurge. “This is a master class of how to have foresight into the consumer ahead of the season. Each shopper will have their own symphony of offers heading into the holidays.”
New York’s Airbnb ban is descending into pure chaos. Due to new strict requirements, the number of short-term listings on Airbnb fell over 80% from August to October, and consequently a black market of illegal rentals has begun to crop up on Facebook, Craigslist, Houfy, and other platforms. Supporters of the law say it will free up apartments for New Yorkers who pay high rent and have trouble finding housing, but opponents — including small-time hosts who own and occupy single-family or double-unit homes — said it would eliminate a source of extra income without making much of a dent in the supply crisis.
Marketers’ funny social media posts are coming off as try-hard. Over the past decade, many brands have tried to appeal to younger people by using quirky humor or by outright mocking consumers. “When you see that everyone is doing this lowercase funny, sarcastic posting, or outlandish slang-based advertisements, what happens is you have to continue to one-up it. The quality is kind of dropping across the board.”
Teens watch YouTube more than Netflix. According to the latest Piper-Sandler survey of more than 9,000 Americans of the average age of 16, teenagers spend 29.1% of their video watching on YouTube, edging out Netflix, at 28.7%, for the first time. (Hulu came in third, followed by Prime Video and Disney+.) "We wonder if this is a push or a pull in regards to the changing consumption habits, as content on YouTube appears to be improving over time and the streaming industry becomes more and more competitive.” In terms of social media, teens are spending more time on it than ever before, averaging four and half hours per day, and TikTok is the favorite platform for 38%.
Portfolio Highlights:
Axios announces that Dutch has raised $18 million Series B with quotes from CEO Joe Spector and Forerunner Partner Nicole Johnson.
Vogue and Refinery29 cover how Glossier has started shipping to 180 countries globally.
Lauren Cooks Levitan, chief financial officer of Faire, weighed in on the major retailers’ early holiday sales on GMA.
Lindsay Dahl, chief impact officer at Ritual, is quoted in Women’s Health talking about the environmental impact of collagen.
Faire released their latest research report detailing how Gen Z shops.
PYMNTS covers Duos’ launch of Duos+AI, an AI-powered platform, that will connect seniors to resources like primary care and transportation.
Forbes reports that Oura has partnered with Headspace and has released a new Daytime Stress feature.
Work at a Portfolio Company:
Growth Marketing Lead | Atticus: Atticus makes it easy for any person in crisis to get the life-changing aid they deserve. In just three years, Atticus has become the leading platform connecting people with disabilities to government benefits. This role mixes traditional marketing and acquisition (testing new platforms, managing campaigns, gathering and analyzing data) with responsibilities unique to a quickly scaling a tech company (developing partnerships, working with product leaders to tailor our UX to different audiences, creative briefing, and building our data infrastructure).
Senior Director of Product | Fabric: Fabric’s mission is to accelerate the gross merchandise value of the internet by ending the pain of replatforming and optimizing digital commerce so everyone can shop seamlessly. This role will lead our fabric core commerce services product management team by driving innovation through features and enhancements, while establishing strong operational standards and rituals that effectively drive the product roadmap.
Community Events & Experiences, Senior Manager | Fora: Fora is reimagining the travel advisor industry with fresh eyes, and building a travel agency that is modern, tech-enabled and empowering anyone to become a travel agent. This role will bring intention to all in-person experiences, evolve and implement current offerings, and support Fora Advisors’ business growth.
There are ~479 other openings on our jobs site. Check ‘em out.