The CQ | "Understanding the Present So Clearly, The Future Becomes Inevitable"
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 weekend.
From the outside, venture capital can seem like a black box, without consistent frameworks for determining signals. That’s why it’s especially rare to get such a precise and thorough account of the practice as our Founder and Managing Partner Kirsten Green provides in her most recent interview. In this feature in The Generalist, Kirsten goes deep on our investment philosophy — our investment theses, how we weigh ideas, founders, and business model fundamentals, why some consumer businesses stand the test of time while others come and go, and why we believe the only way to predict the future is to understand the present so deeply, the future becomes an inevitability.
See here for full the piece — and we welcome any questions & feedback: investments@forerunnerventures.com
What We’re Talking About on Slack:
Shoppers say they want conscious consumption. But they won’t spend to do it. Research shows the majority of Americans believe in supporting socially responsible products and services, with a third planning to spend more on such brands in the coming year. Still, data from the Conscious Consumer Spending Index paints a different picture. The success rate of Americans following through on these intentions has hit a low, largely due to price concerns. Over half of Americans say the cost of "do-good" products deters them. And while nearly 30% say they are morally opposed to Amazon, the majority of them said they continue to shop there. That’s why often the best strategy for scaling a socially good product is to make the brand so attractive on its own, the conscious consumption becomes a secondary point (ex: Warby Parker, Reformation). Aspirational purchases often outweigh “out of the good of your heart” purchases.
The Wall Street Journal says AI spending isn’t slowing down. For one, the technology is moving away from large language models and towards reasoning models and AI agents, which could “easily use more than 100 times as much computing resources” as LLMs. Google, Microsoft, and Meta are planning to invest heavily in data centers, with capital expenditures projected to reach $215 billion in 2025, a 45% increase in their capital spending from last year. “To look at in the most simplistic way, if new, more efficient AI models based on the insights that went into DeepSeek slash demand for computing power for AI by a tenth, but reasoning models become the standard and increase demand for those models by a factor of 100, that’s still a 10-fold increase in future demand for power for AI.”
The end of children: The New Yorker gives an in-depth analysis of declining fertility rates. This has become a concern globally, but particularly in South Korea where the alarmingly low fertility rate of 0.7 is causing demographic shifts, including shrinking school enrollments and a dwindling workforce because young people are less interested in having children due to economic pressures, lack of childcare support, and negative views of parenthood (last year, strollers for dogs outsold those for babies there). More and more countries, both affluent and developing nations from Japan and Italy to El Salvador and Albania, now face similar challenges. In the U.S., the fertility rate has fallen about 20% to 1.6 over the past two decades. Even countries with supportive social systems, like Finland and Sweden, and others like Hungary and Georgia that have offered birth incentives still struggle with low fertility rates. “The global population is projected to grow for about another half-century. Then it will contract. This is unprecedented. Almost nothing else can be said with any certainty.”
Americans are moving in with strangers twice their age: As the housing shortage worsens, many older adults with spare bedrooms—including empty nesters and retiring baby boomers—are taking in young renters in exchange for affordable housing, light chores, and social connection. They’re finding each other via home-sharing apps like Nesterly, Padsplit, and CoGenerate. This intergenerational home-sharing is growing; between 2017 and 2022, the number of families sharing living spaces with non-relatives increased by more than 500,000. And there’s a lot of available real estate: ApartmentList reports that nearly 60% of homes have at least one spare bedroom, while Zillow says about 21 million homes have at least two extra bedrooms.
Gen Z men are turning to the kitchen instead of college, so they can make $170,000/yr without the burden of student debt. Instead of traditional office careers, men without college degrees are opting for more physically demanding roles such as chefs, truck drivers, and construction workers — with chefs earning up to $173,000 annually. Meanwhile, women without degrees are focusing on front-of-house jobs like waitresses and cashiers as well as caregiving roles like nursing, which can offer salaries between $66,000 and $119,000. The stability and work-life balance offered by these jobs are appealing, especially when AI and automation are increasingly making the future of white-collar jobs uncertain.
The 401(k) has become America’s rainy-day fund. Financial emergencies are driving more Americans to withdraw from their 401(k) accounts, with a record 4.8% of account holders taking early withdrawals last year, up from 3.6% in 2023. About 35% of those withdrawals were to avoid foreclosure or eviction, and about 16% used it to purchase or repair a home. The median withdrawal was $2,200. The IRS allows for hardship withdrawals, though these must be repaid along with income tax and often a 10% penalty if account holders are younger than 59½ years old. In the future, the number of these withdrawals may increase as a provision will allow one penalty-free annual withdrawal of up to $1,000 for emergency expenses.
Consumers expect a higher level of personalization as tech-enabled solutions shift purchasing habits. A new survey reveals that 74% of consumers expect more personalized shopping experiences in 2025, and 66% want brands to make them feel valued. However, only 34% of consumers reported receiving personalized experiences in the past six months, highlighting a gap between expectations and delivery. Additionally, 79% of consumers are loyal to just five brands, and 41% are loyal to one or two brands, emphasizing the importance of meeting their expectations to retain their loyalty.
Coaching is the new ‘asking your friends for help.’ The Atlantic takes a look at how life coaches are catching on for those seeking advice on everything from IVF and career changes to co-parenting, meditation, and even navigating Disney. People are turning to life coaches for a number of reasons, for instance, many have fewer close friends to ask or don’t want to overburden them or they don’t think friends can provide unbiased advice or won’t be able to offer the level of guidance they’re looking for. A Harvard historian explains the rise of coaches as the latest example of “the therapeutic culture that emerged in the United States in the 20th century: a sense of needing to have some kind of expert to help optimize your performance.’ Being ‘normal’ is no longer enough, so people hire coaches to help them transcend normal.” While coaching can fill the gap left by the decline of traditional support systems (friends, church, community), it raises concerns about replacing genuine friendships and mental health care, as some clients use coaches instead of therapists for emotional and psychological issues and the coaching industry lacks standardization.
Portfolio Highlights:
OURA CEO Tom Hale visits Fortune’s Leadership Next podcast, discussing how wearables help users cut back on alcohol and more. Bloomberg also reviews the
TechCrunch reports on how Pie uses AI to help strangers meet friends, with quotes from founder Andy Dunn.
Yahoo! Finance covers The Farmer’s Dog’s $10 million investment in veterinary research.
Job of the Week:
Head of Advisor Performance & Development at Fora, the modern travel agency.
There are ~700 other jobs open at portfolio companies, check ‘em out.