✍️ WHAT CAUGHT OUR EYES
Consumer Subscriptions - Nikhil Basu Trivedi
Everywhere we look, it feels like there’s a subscription service lurking.
Of course, this is not a new insight. Subscription services such as the cable bundle are decades-old.
A natural question given the number of subscription businesses that are out there is “have we hit peak subscription?”
The “subscription economy”, by definition, presumes that the overall “economy” is shifting over to “subscriptions”. Thus, to claim that consumers have “subscription fatigue” is to say that they have “spending fatigue”.
For decades, consumers have bought TV, music, toothbrushes, cars, and Microsoft Office. What’s new is that they all have similar models – digitally-based, predominantly direct subscriptions. This changes nothing about the individual value or baseline need for them.
Of course, the “subscription economy” does mean that step one of a recession will be to “re-evaluate all subscriptions”. However, this does not mean subscription fatigue should be considered a defining element of modern-day competition.
Furthermore, payment model is irrelevant to what’s “re-evaluated” and not. Some subscriptions are “necessities”, while others are concerned with discretionary spend, such as Netflix or Tinder. This latter group isn’t competitive because they’re “subscriptions”, but because there is, as always, finite spending money for non-essential items.
Additionally, Subscriptions are still a very small fraction of consumer spending.
Consumers in the U.S. spent on average $640 on digital subscriptions in 2019.
With an average household spend of $63k in 2019 and an average of 2.5 people per household, the $640 spend on digital subscriptions represents 2.55% of an individual’s annual expenditures.
How Founders Should Think About Marketing - David Sacks
Articulate the problem better than anyone else: As marketing guru Lochhead pointed out, if you speak more articulately about the problem than anyone else, people will assume you have the solution. Successful political movements do this. When the audience connects with the critique on a visceral level, they are much more likely to embrace the political program.
Attack the status quo: Your startup has an opponent, but it’s not your competitors; it’s some version of the status quo. Inevitably, as your startup becomes more successful, it will attract competitors. Don’t fall into the trap of seeing copycats as the enemy. Treat them as validation that the world is moving to your point of view.
Use “grassroots” customer testimony: As Benioff explains in his book Behind the Cloud, the most powerful marketing weapon you have is customer testimony. People will naturally be suspicious of any claims that you make.
Work with press in the right way: Many of the things tech reporters want to talk about (like financing plans and valuations) are inside baseball and not relevant to your movement. Talk about the change you want to make in the world. Make sure you are serving your movement, not the insiders’ game.
Stay grounded: Keep the conversation grounded and focused on business value. You are not “elevating the world’s consciousness,” as WeWork claimed. Using grandiose language like that will subject you to mockery and ridicule. Make sure you back up your claims and avoid aggrandizing and arrogant language.
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Consumer Subscription Software Insights Report - 2020
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👏 WHERE THE MONEY WENT
🇪🇺 Notable EU early stage Consumer rounds :
Daybridge, a UK-based productivity and time management calendar app, raises $0.8M with Passion - link
Superlist, a Germany-based productivity app by the makers of Wunderlist, raises €2.5M with Cherry - link
Soundboks, a Denmark-based consumer electronics company that designs and manufactures portable sound systems, raises $8.4M with Jägermeister/Vækstfonden & Heartcore 🖤 - link
Curio, a UK-based curated journalism audio platform, raises $9M with Earlybird/Draper Esprit/Cherry/Horizon - link
🇺🇸 Notable US early-stage Consumer rounds :
Carewell, a US-based vetted e-commerce platform aimed at family caregivers, raises $5M with e.ventures/NextView - link
NewNew, a US-based social network whose social graph is based around shared interest in videos or visual content, raises an undisclosed amount with a16z/Founders Fund/Canaan/Shrug - link
Odyssey Interactive, a US-based gaming studio developing mobile titles for players who like accessible yet competitive games, raises $6M with a16z/Golden Ventures - link
OK Play, a US-based educational kids app that focuses on the real-world play of parents with their kids, raises $11M with Obvious Venture/Forerunner/Greycroft/Abstract - link
Behold, a US-based personalized shopping recommendation app, raises $5M with Upfront/Greycroft - link
Roam Research, a US-based note-taking tool for networked thought, raises $9M with True Ventures/Lux Capital/Stripe co-founders Patrick & John Collison -link
🔭 Notable later stage Consumer rounds :
VanMoof, a Netherlands-based e-bike brand, raises $40M Series B with Norwest/Felix/Balderton - link
Zwift, a US-based online fitness platform that immerses cyclists and runners in 3D-generated worlds, raises $450M in funding with KKR/Permira/Highland/Novator - link
Everlane, a US-based online apparel retailer focused on ethical basics, raises $85M in Series F funding led by L Catterton - link
Orchard, a US-based home buying and selling platform, raises $69M in Series C funding with Revolution Growth/FirstMark/Accomplice - link
Opendoor, a US-based "all in one" home buying and selling platform, agrees to go public via a reverse merger with Social Capital Hedosophia Holdings Corp II, a tech-focused SPAC led by Chamath Palihapitiya - link
🖤 - HEARTCORE
Super happy and proud to have Soundboks join the Heartcore Family 🖤
Our Partner Christian discussing everything femtech alongside our friends @EQT & @MakiVentures.
Much 🖤 from Heartcore