It has been a wild start to 2016. The public and private markets have cooled. There is palpable discipline and focus on burn rates, unit economics, and valuation in startup and venture capital land. But amongst all of the pessimism, I could not be more excited about making new investments.
As a Series A-focused firm, we at Shasta feel that the best times to start and fund early-stage technology companies are ahead of us. We constantly ask: what’s next? How do we skate to where the puck is going?
Several key consumer trends have emerged over the last few years that could shape our lives for the better moving forward. Here are some initial thoughts on eight areas I am interested in right now:
Brands in unloved categories
We’ve had a history of backing companies at Shasta — from Mint to Nest to Stance — that have reinvented categories and, in the process, have developed brands that consumers love. One of our more recent bets in this vein, eero, announced it is shipping today… do you know anyone who loves their home wifi system?! Several sectors have yet to be dominated by a beloved brand. There are a handful of tech startups going after the pharmacy and prescription drug business, for example. The sector has notoriously low net promoter scores for the major retail players (do you know someone who loves going to Walgreens or CVS?!). Brands enabled by technology will be built in categories like this over the next decade.
Are we finally at the point where science fiction meets reality on human communication with technology? I set up Amazon Echo recently on the recommendation of one of my partners, Sean, and have been blown away. The ease of use of voice when it works 100% of the time far exceeds that of text. I’m excited to look at other applications of voice technology, for commerce, communication, entertainment, and more, now that speaking to “people” like Siri and Alexa is more mainstream.
From mobile check deposit to Robinhood to Acorns, the trend over the last few years is clear. Consumers are comfortable managing money on mobile, and demand a better experience from their financial institutions. I’m excited to see a new wave of startups emerge around investing, insurance, lending, and other financial products and services, particularly those leveraging mobile for a better consumer experience.
A major trend over the last five years has been the creation of a platform for short-term housing — Airbnb. It has changed the way homeowners and investors view buying and renting a property, and the expectations consumers and travelers have for their lodging options. Another factor driving housing trends is more and more people moving to cities across the world, and the desperate need for supply of housing. I expect new innovations and platforms to emerge in short- and long-term housing, including in ancillary opportunities as a result of the changing ways we live — from home lending and insurance, to energy storage, to home design.
Consumers are more aware than ever about the food they consume, including the perils of high sugar products. The low sugar and high protein dietary movement has already led to the creation of a few franchise companies in a short period of time (had you heard of Fage or Chobani five years ago??). There also feels like renewed energy amongst consumers around non-meat and more plant-based diets. I’m excited about new companies capitalizing on and catalyzing improvements in the way we eat.
We humans spend about a third of our lifetime sleeping. And yet technology has done so little to improve the way we sleep. Many would argue sleep has worsened directly as a result of technology. Companies like Casper have shown that consumers are willing to try a new purchasing experience for a new brand to get a better night’s sleep. But can software, hardware, and new innovations actually help people get to sleep and stay asleep? I’d love to meet entrepreneurs working on technologies to help us sleep better.
It feels like we are on the verge of many innovations for consumers as a result of all the research in genomics over the past decade. I’ve been following this for quite some time — my undergrad thesis in molecular biology was on the subject of the $1000 genome and the path towards personalized medicine! The cost of exome and whole genome sequencing will continue to drop, and our computational ability to make sense of this data will continue to improve. Can big businesses be built around applications of genomics now? I hope so.
I am a believer in a future of autonomous vehicles, and my partner at Shasta, Rob, is leading our explorations around this future. It will represent massive disruption across every industry, and I can’t wait to see platforms that emerge on the back of amazing technological developments in how we move around.
Needless to say, if you are an entrepreneur working on an innovative idea fueling or being fueled by these trends, please reach out.