Welcome to the 69th edition of Heartcore Consumer Insights. Curated with 🖤 every week by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
Over the past 20 years, industries have been redefined by marketplace giants that have upended the way we shop, travel, eat, work, and learn.
At the same time, many of the most successful marketplace businesses don’t reach transformative scale. What are industry-changing marketplaces doing that others aren’t?
For a marketplace to be disruptive, it must identify either new supply, new demand, or both - who were unable to profitably produce or consume goods and services in incumbent channels.
For an example of a marketplace that is not disruptive, consider Angie’s List, which enables providers to list their services to find new clients. While incredibly valuable, Angie’s List did not change the structure of the home services market and did not make home services more affordable/accessible.
By contrast, consider Outschool, a marketplace of online courses for children that allows educators to create their own courses. Outschool’s business model not only enables new families to consume educational content but enables a whole new population of educators to monetize their passions.
Many marketplaces target existing supply and demand in a more efficient or trusted way - they improve existing transactions. Disruptive marketplaces, however, expand market participation by creating new types of transactions altogether. Four novel transaction types that can unlock disruptive potential:
Smaller supply units: before the advent of marketplaces such as Airbnb & Getaround, most people’s homes, and cars were nonproductive assets. These platforms made it possible to carve homes up into smaller rental units and enabled vehicles to be rented over short time horizons. These “smaller supply unit” transactions are often disruptive because they come at a lower price, which makes the product affordable. This also produces a transaction type that incumbents are unable to copy because their business model is optimized for larger-unit transactions.
Bundles: Classpass bundles exercise classes into a “membership”. As a corollary to the smaller supply unit transaction type, bundles are generally inconsistent with incumbent business models. Though gyms offered individual classes before Classpass, the prices were so high that prospective customers were effectively forced into monthly memberships. For someone who previously couldn’t afford a monthly membership, a bundle of class units across gyms can offer a “good enough” whole that is greater than the sum of its parts, creating demand for a new transaction entirely.
New suppliers: countless would-be online sellers have been held back by the sheer complexity of the web. Amazon Marketplace lowers barriers significantly. Similarly, Substack, Patreon, and other platforms have made it substantially easier for writers & artists to monetize their expertise. Reducing supply barriers presents disruptive opportunities in two ways: (a) building a platform that turns nonproducers into producers creates competition, which ultimately lowers the price, (b) matching new supply and new demand enables a degree of personalization that incumbents simply cannot match.
Trust wrappers: certain transactions don’t exist because a trust barrier prevents demand from engaging with supply. Health care data, for example, is highly sensitive and thus difficult to share in a trusted way. But blockchain solutions make it possible for health providers to share data in a trusted fashion without the need for intermediaries.
The past two decades have seen the rise of many valuable marketplace businesses, but the most iconic, category-creating ones have disrupted traditional value networks with the novel transaction types described here.
Understanding such disruption helps us understand how those marketplaces succeeded - and provides a framework for innovators looking to identify the next big marketplace opportunities.
Calm is one of the savviest companies out there when it comes to viral marketing.
The wellness app is consistently innovative in its marketing strategies, building on the zeitgeist and generating significant earned media value.
It's used these strategies to grow to 100M+ downloads:
The Million-Dollar Homepage: Calm co-founder Alex Tew created a website with 1M pixels. He sold each pixel for $1. People & brands bought space on the site. At one point, it was in the top 200 most-visited websites in the world. Alex earned $1M and used it to launch Calm.
Do Nothing For 2 Minutes: Alex created a website http://DoNothingFor2Minutes.com with a countdown clock. If you move your mouse, the clock resets. If you make it 2min, you can enter your email. The site went viral & got 2M visits in 10 days. This was how Calm got emails pre-launch.
2020 Election Night Coverage: For the Trump v. Biden election, Calm sponsored CNN election night coverage. In some much-needed comic relief, the "Key Race Alert" was brought to you by Calm. In a single night, Calm saw 2x more social media mentions than all the previous week.
Naomi Osaka & the French Open: after Naomi Osaka withdrew from the French Open for her mental health, Calm said it would pay her $15K fine. The company said, "Calm will also pay the fine for players opting out of 2021 Grand Slam media appearances for mental health reasons."
2PM @2PMincNews: @Calm will pay fine for mental health-concerned players opting out of Grand Slam media appearances.
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Lessons from games onboarding flows
Acorns investors presentation
Health Care's Long Overdue Digital Shift Is Finally Here
Reinventing Existing vs. Creating New Markets
🇪🇺 Notable European early-stage Consumer rounds :
🇺🇸 Notable US early-stage Consumer rounds :
🔭 Notable later stage Consumer rounds :
🍭 Notable Consumer Exits
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.