Heartcore Consumer Insights 🚀

13/11/2020 Edition

✍️ WHAT CAUGHT OUR EYES

Pinterest and Grubhub’s Former Growth Lead on Building Content Loops

• Casey Winters (led growth at Grubhub from Series A to IPO, and Pinterest from 40M active users to +200M) believes startups should explore a frequently overlooked acquisition approach: building a content loop.

• For the startup seeking to create a content loop, here’s the process that Winters suggests to get started:

1. Find ways to get content from your users: ask yourself: "Do I have some sort of asset that's being created that I can lean into?’”. It’s okay if there isn’t content being created today. There’s a lot of low-hanging fruit to go after. You’d be surprised how powerful a simple review is. It doesn’t have to be rocket science. At Apartments.com, Casey and his team grouped apartment listings into regional and category-specific landing pages and distributed these to Google. He adopted a similar strategy at Grubhub by creating landing pages that organized restaurants into regions and types of cuisine, so users could search for Thai food and come across a curated page of local Thai restaurants in the results.

2. Trace traffic back to the source to tweak your product: When content loop campaigns at Pinterest initially started bringing in more Google search users, his team found that they were converting at lower rates. That was because Pinterest’s onboarding flow focused on surfacing content from their friends that were already on the network, which didn’t match up with their intent. “If users searched for Chukka boots on Google, landed on a Pinterest board and signed up to see more, their feed focused on content from their Facebook friends. But that typically had nothing to do with Chukka boots — not exactly the ideal experience, so we changed the onboarding flow to show topic recommendations instead and saw a massive increase in activation rates."

3. Convert, activate and add some friction to feed the loop: “If you came to Pinterest from a Google search, we would show you a bunch of related pins, but after you started scrolling, it would actually block you from scrolling more until you signed up. It worked very effectively”. If you’ve created value, you can feel comfortable introducing some friction. It’s the higher quality users who are going to withstand.

• Beyond those elements, always great to keep in mind that every company requires a different approach. Growth articles on the Internet often say, "I did this thing and it worked so everyone should do it, but at every company I’ve worked for, the 1st experiment I tried was based on an idea that worked at the last company — and 100% of the time that experiment failed miserably. You can’t copy a growth strategy from one place and paste it on top of a totally different business. You won’t know what will work for your product until you start the most important loop of all: testing, failing, learning, and testing again.”

Democratizing Access

• There are 3 types of companies that democratize access: (1) those that make something that was previously paid free (2) those that make something expensive cheaper, (3) those that make something hard to use much more convenient.

• Examples:

1. Free: perhaps the most powerful way to democratize access & a very powerful go-to-market strategy. Of course, the businesses that offer up a service for free must still have a business model to be viable:

• Robinhood: free stock trading was a simple yet very powerful innovation, and led to word-of-mouth growth and ultimately the industry having to lower its fees to compete. The company monetizes by capturing a small margin on each trade, and through subscription premium up-sells.

• Pill Club democratizes access to women’s healthcare by offering free birth control prescription and delivery. This is a healthcare company with a unique business model: insurance, therefore enabling the service to be free to consumers.

2. Cheaper:

• Chime and Tally are fintech companies that are democratizing access to banking and overcoming credit card debt by offering lower fees to customers by being digital-first companies, with lower fixed costs than incumbents and a data-driven understanding of their customers.

• GoodRx democratizes access to prescription medication by helping consumers get discounts and find the best price.

3. More Convenient:

• Shopify: the company democratizes access to entrepreneurship by making it easier to start, run, and grow a business online. The initial adoption of the Shopify product by merchants was primarily due to it being the most convenient way to set up an eCommerce store.

• Uber democratized access to transportation and to flexible work. Its original vision was to be everyone’s private driver and to make transportation as reliable as running water. While UberX and other options ultimately made Uber a cheaper alternative to taxis, its original product UberBlack was simply more convenient than hailing a cab.

• The three categorizations — free, cheaper, and more convenient — are not entirely distinct or mutually exclusive. But if you’re building or evaluating a company that democratizes access to a product or service, be sure that it fits at least one or more of these three buckets.

TOP CONTENT:

• Etsy: A Handmade Giant in the Passion Economy

• Everyone’s Playing Among Us

• 4 Frameworks to help prioritize & conduct your conversion testing

• Casper Aside, Consumer brands are thriving

• Robinhood's Bull Market

• The State of Gaming App Marketing

👏 WHERE THE MONEY WENT

🇪🇺 Notable EU early stage Consumer rounds :

• Seller X, a Germany-based acquirer and operator of Fulfillment by Amazon brands, raises an undisclosed amount with Cherry/Felix/Village Global- link

• Heroes, a UK-based acquirer and operator of Fulfillment by Amazon brands, raises an undisclosed amount with 360 Capital/Fuel - link

• Vivid Money, a Germany-based neobank, raises $17.6M with Ribbit - link

• Lockwood Publishing, a UK-based cross-platform game developer, raises $25M with Tencent - link

🇺🇸 Notable US early-stage Consumer rounds :

• Great Jones, a US-based maker of cookware and bakeware, raises $1.75M with NEA - link

• FidoCure, a US-based company that identifies possible cancer-causing mutations in dogs, raises $10M from Polaris/Borealis - link

• PushParty, a US-based notification entertainment app by MSCHF, raises an undisclosed amount with FoundersFund - link

🔭 Notable later stage Consumer rounds :

• Carbon Health, a US-based “omnichannel” primary and urgent care company, raises $100M with Dragoneer - link

• Better.com, a New York-based mortgage lender, raises $200M with L Catterton - link

• Tier, a Germany-based e-scooter rental startup, raises $250M with SoftBank - link

🍭 Notable Consumer Exits

• goPuff acquires BevMo for $350M. Bevmo is a US-based wine and liquor retail chain - link

• VFCorp acquires Supreme for $2.1Bn. Supreme is a US-based fashion streetwear brand - link

🖤 - HEARTCORE

• Congrats to TravelPerk for launching its full Value Added Tax (VAT) solution that allows organizations to reclaim VAT on their business trips!

Much 🖤 from Heartcore