Yarden Horwitz & Olivier Zimmer, founders of Spate, photographed by Garry Tan

How to Predict the Future

Trends don’t start at the top. They ebb and flow in a spate of data.

Alexis Ohanian

As the co-founder of Reddit, I got a front row seat to witness how the Internet has democratized the way mainstream culture shifts. No longer are trends defined and dictated by a handful of elite tastemakers or companies. New trends and ideas can come from the bedroom of any teenager with extra time on their hands.

Given that new tastes, styles, and aesthetics can come from anywhere, that’s created a new challenge for people running businesses — how do you know if your hunch is based on something real or not?

Yarden Horwitz and Olivier Zimmer, who built up the trendspotting division at Google, both left to co-found a startup called Spate that recognizes and leverages this new power dynamic. With Spate data, it’s no longer a guessing game for brands. I’ve worked with the leading CPG brands and they’re convinced data is core to understanding their market, but rarely are they able to build and retain the teams to do the heavy lifting of data-science and artificial intelligence required for the long-term. Tech companies struggle for the best engineers in the world — what chance do CPG companies have?

Enter Spate: using machine intelligence, Spate analyzes billions of consumer signals from across the web to identify the next big trends in beauty and food.

Tapping our collective online consciousness.

We led Spate’s seed round because its relentless focus on data and the founders’ roots at Google create a special kind of DNA for it to become the Nielsen of the next generation. What people post on social media or what they say in surveys may not always reflect what’s actually happening. But by analyzing data points, including search (where you learn what people really think), one can gain a strong understanding of the online consciousness — or what consumers really want, need, and desire.

For example, Spate found that consumer searches for lace-front wigs are growing by more than 37 percent year-over-year, even though that’s not something consumers necessarily talk about publicly. When you’re talking to a person or looking at their Instagram feed, you might not even be able to tell if the person is wearing a wig or not (especially if they perfectly laid their edges). According to Spate data, wigs are the top growth opportunity in terms of revenue within the beauty category, but Got2B is the only brand that is top of mind for consumers when it comes to wig-related products. This kind of data can bring brands confidence in making product decisions by providing supporting numbers.

Quantifying trends to make decisions

If you don’t know what product to go with, Spate can provide data to tell you what’s here to stay or what’s just a fad. By quantifying trends, Spate’s machine intelligence can identify patterns and predict the trajectory of a trend.

For example, if you were to launch a new makeup product — would you choose eyebrows or eyelashes? It can be hard to decide, especially since strong, defined eyebrows, like Cara Delevingne’s, have been all the rage for the last few years. However, by looking at consumer search data, we can see that interest in eyebrows is down 5.7 percent year-over-year, but interest in eyelashes is growing at 16.6 percent year-over-year. Consumers are turning their attention from eyebrows to eyelashes — so it would make sense for your next product to be focused on this growth area, as well.

On top of that, Spate’s data brings context to sales. It’s hard to act on a trend without getting context on what’s driving interest and where demand is heading. By looking at search data, you can understand the kinds of questions, formats, concerns, benefits, and brands consumers are searching in association with a trend. This helps you understand what kind of content to create, whether this trend is aligned with your brand, and how competitive the landscape is already.

For example, CBD, a cannabinoid derived from the marijuana plant, is a very hot trend right now. We’re seeing it put in everything. But what’s driving that?

Included: CBD balm, CBD lotion, CBD cream, CBD coffee, and even CBD lube

Well, when you look at the CBD trend, search data demonstrates that consumers are searching CBD as a way of dealing with anxiety. This highlights a bigger consumer need: people need ways to cope with anxiety, stress, and depression. There are many other products and ingredients beyond CBD that can also help consumers with this. By identifying the underlying driver for the CBD trend, you can understand the real consumer need and figure out alternative ways to address that, perhaps even more effectively.

There’s an entire ocean of these trends, subcultures, and tribes online, and social media has completely transformed how they start and spread. As a result, consumer dynamics are becoming more complex.

Indie, online-native brands have capitalized on this by moving more quickly, but big brands also need to act faster and stay on top of trends. The technology to do this now exists. With machine intelligence, brands can use Spate to survey millions of consumers at once based on behavioral data. They have the budgets and distribution to act on those trends fast, delighting their customers, and likely attracting new ones.

Initialized Capital

Stories and thoughts on early-stage entrepreneurship from a venture capital firm. We fund and help startups with their first check. https://initialized.com/our-startups

Alexis Ohanian

Written by

🚀 Co-founder & managing partner, Initialized (early stage VC, $36B in market value so far); bestselling author; co-founder, Reddit.

Initialized Capital

Stories and thoughts on early-stage entrepreneurship from a venture capital firm. We fund and help startups with their first check. https://initialized.com/our-startups