The CQ | Real-life, Human Connection — The Next Major Consumer Frontier?
Plus 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.
By Kirsten Green, Founder and Partner
The Forerunner has spent many hours discussing the traditional needs of non-traditional consumers. Because despite so much tech-driven progress, many core life foundations feel scarce in today’s world. Community is a prime example. While we have hundreds, if not thousands, of ways to connect — our society is lonelier than ever. There is no shortage of evidence illuminating this loneliness crisis in the U.S.:
In the last two decades, we have lost 24 hours per month of in-person time with others.
Lacking social connection is considered as dangerous as smoking 15 cigarettes a day.
The US Surgeon General is calling social isolation a pandemic.
This is precisely why we’re proud to back Pie, a platform helping people make new friends, expand their circles, and establish connections in a way that feels natural. Andy Dunn is the perfect founder to take this on: not only has he proven himself as an incredibly effective leader having founded Bonobos, where he helped define a new category and built a tremendous business, he is deeply compassionate and attuned to the emotional needs of our society—he has spent the past few years championing the importance of mental health through openness and honesty about his own journey.
Pie recreates the magic of Facebook events circa 2009, while incorporating the interests-based approach of Meetup—all modernized into a format that helps people form new friendships organically today.
More time connecting with great people in-person is something I think we can all get behind. Pie is currently live Chicago, the company’s first market, where it is now growing 40% month over month. For more on Pie, read about their series A in Wall Street Journal, Axios and Inc.
What We’re Talking About on Slack:
Fed went big on interest rate cuts with a 50 basis point cut, its first reduction since 2020. Reactions range from worry about the state of the labor market given this “unusually large move” to “this is too little too late.” Perhaps the only certain is that the downstream of effects of this will be relatively gradual and only revealed on a longer time horizon.
Nike has a new CEO and its stock is up nearly 10%.
Matthew Ball breaks down OnlyFans’ stunning economics. OnlyFans reported $6.3 billion in gross revenues, a major increase from $300 million five years prior. The company’s revenue growth is largely driven by a shift toward transactional spending, which now makes up over 60% of consumer spending on the platform. The success is largely due to its high revenue share for creators (80%), the draw of high-profile creators, and a market vacuum created by regulatory actions affecting other adult content platforms. It remains to be seen if the platform can keep up the streak in the face of AI-generated content. “It’s just as easy to imagine demand for the ‘real thing’ going down due to the emergence of more substitutes as it is to imagine the premium for parasocial authenticity going up… And given that many of the messages sent by the top creators are actually written by support staff—and may already be powered by LLMs—some fans might even consider generative creators to be more authentic, not less.”
Amazon is stuffing generative AI into its shopping experience to improve the retail experience for both customers and sellers on the platform. The browsing and searching experience is about to be turbocharged, and Anthropic’s Claude will power upcoming Alexa improvements. Says The Verge, “This is a sizable batch of generative AI updates for Amazon, which has otherwise been lagging behind larger players in the industry like Meta and Google.
The generations helping to prop up the U.S. economy: millennials and older Gen Z’ers, thanks to a little—or a lot of—help from their folks, says Financial Times. Young people between the ages of 24 and 38 represent 20% of the U.S. population and they spend five times more than baby boomers on discretionary items. What makes that possible is that a good portion of this age group is benefiting from living with their parents and receiving their financial support. “The spending power of this generation should not be underestimated. They are driving spending in some of the fastest-growing categories of discretionary spending.”
OpenAI releases its o1 model with human-like reasoning. Known internally as “Strawberry,” the model is designed to solve multi-step problems, like complex math and coding questions. The new software will take slightly longer to respond to queries than ChatGPT, pausing for a few seconds to consider several related prompts (what the company calls “chain of thought”) before it summarizes the best answer. According to OpenAI, “As an early model, it doesn’t yet have many of the features that make ChatGPT useful, like browsing the web for information and uploading files and images. But for complex reasoning tasks, this is a significant advancement and represents a new level of AI capability. Given this, we are resetting the counter back to 1 and naming this series OpenAI o1.”
According to a 2023 Morning Consult survey, 57% of Gen Zers want to be influencers—but ‘it’s constant, Monday through Sunday,’ says one creator. It’s even become an aspirational career path for 41% of adults. Their reasons range from wanting fame and money to craving community and creativity. But those who make money as creators—currently about 200 million—say the work can be grueling due to a never-ending schedule which often leads to burnout, online abuse from followers, and, for some, the limited compensation. Less than 30% of creators make more than $50,000 a year, and nearly half make $15,000 or less.
Instagram is putting every teen into a more private and restrictive new account. In addition to existing restrictions that prevent strangers from DM’ing young users, new features are being implemented that include a Sleep Mode that silences notifications from 10pm to 7am, reminder alerts to take breaks from the app, and limiting the types of content that young people can see. Parental controls are also being expanded. Parents can see who their child has messaged in the last week (though not the content) and what topics their teen viewed most often. The platform already has regulations in place to ensure the accuracy of a person’s age, but Meta will also use AI to look for signs that may indicate a user, who has claimed they are over 18, is actually a minor.
Americans are falling behind on their bills. Wall Street is alarmed. As of May, the average credit card interest rate was 21.5% (up from 15% in 2019) and the average interest rate on a 60-month loan for a new car was 8.2% (up from 5.3% in 2019). In the last year, about 9.1% of credit card balances and around 8% of auto loans became delinquent—the highest in over a decade. These signs have worried investors because car payments are among the last people stop paying, as they need vehicles to get around.
Gen Z fantasizes about…monogamy. A new study from dating app Feeld shows that Gen Z, more than any other generation, yearns for monogamy. Related: they cite a desire for going back to “how things used to be.” The stats are pretty astounding: 81% of Gen Zers fantasize about monogamy, with 44% fantasizing about it often—nearly twice as much as older generations.
Portfolio Highlights:
U.S. Chamber of Commerce puts the spotlight on Oura, with CMO Doug Sweeny detailing how the brand was able to scale into big retailers.
BeautyMatter interviews Arnaud Plas, Prose’s CEO and co-founder, on the highs and lows of entrepreneurship. (Be sure to read ‘til the end for Kirsten Green’s words of wisdom.)
AdAge profiles Cotopaxi CBO Brad Hiranaga, a Breakout Brand Leader 2024, on how he plans to scale the brand through doing good.
Chime’s Chief Spending Officer Janelle Sallenave discusses the company’s latest survey and more with Forbes.
Oura Chief Commercial Officer Dorothy Kilroy appeared on a panel for Time Women’s Leadership Forum to speak about how AI can bring healthcare equality to women.
Forbes announces that Faire is launching an advertising tool for brands called Promoted Listings.
Glossy covers the release of Prose’s first TV ads and the brand’s refresh.
Essence announces Glossier’s partnership with the WNBA on a new lip gloss launch.
The New York Times gives a shout-out to Bellies, Wonder’s entry into kid-focused fare, in its latest Off The Menu restaurant round-up.
The Strategist features the launch of Ritual Fertility Support supplements.
There are ~545 open jobs at Forerunner portfolio companies, check them out.