Demographic Change Drives Tomorrow’s Startups
Demographic Change Drives Tomorrow’s Startups (Slideshare)
I did a talk at LAUNCH Scale about emerging demographic categories and how startups can best position themselves to understand and build products that serve these emerging consumer groups.
Here are the slides and some speaker notes.
- For many years, there were massive changes in platform and delivery (desktop to laptop to cellular to smartphone to tablet).
- Today, smartphone adoption in the US has leveled off and while the delivery is essentially the same, now, it’s the users who are changing.
- Today, over 48% of Gen Z and 44% of Millennials are LatinX, African American, Asian, or multiracial
- People of color are on track to become the majority by the year 2044 and more than 37% of the US population will be African American or Latino
- The rise in Spanish language and bilingual speakers is increasing steadily. The US is currently the #2 Spanish speaking nation and is on track to be the #1 Spanish speaking nation with a projected 138M Spanish speakers by 2050.
Impact on Technology
- Even today, there is an often unacknowledged truth: That consumer technology — it’s adoption, consumption, and distribution is driven by young women and people of color
- This impact on technology will become even deeper as the U.S. moves to majority-minority.
- When it comes to technology consumption, these emerging consumers over-index in several categories, including time spent on mobile and time spent streaming video [see Slide 10]
Startups that Fit the Profile
- Mitú recognized that today’s young Latinos are more active online than other groups, but didn’t have relevant digital media that reflected their culture and interests.
- Similarly, Blavity saw a missing voice in media that did not reflect the interests of Black Millennials. It’s founder was inspired by the Ferguson protests and when mainstream media wasn’t showing her the perspectives she wanted to see and legacy black media was moving too slow — she decided to create her own media platform for digitally native and highly connected people of color.
- Those are two obvious examples of a category where the influence of LatinX and Black users has the power to create a large and highly scalable business.
But there are also non-obvious examples of companies that will be impacted by the increasing numbers of Black and LatinX users.
- Siren Care makes a connected sock for diabetics that monitors the temperature in the foot to provide early detection of diabetic ulcers and ultimately, decrease the number of amputations due to diabetes.
- 18.7% of all African American adults (nearly 5M people) have diagnosed or undiagnosed diabetes — 77% more than non-Hispanic whites. And as the LatinX population is growing, they are also the fastest growing rates of diabetes.
- While not obviously targeting Black or LatinX users, the large (and steadily rising) number of diabetics across both of these demographics, means that they will nevertheless be one of SirenCare’s largest user groups.
Understanding Emerging Consumer Groups Through Personas
- I use my unique understanding of these growing user groups to my advantage by investing in new companies. But many of you in the audience already have startups.
So how do you use this information to future-proof your business and build a company that is still relevant for tomorrow’s consumers?
- Let’s start where all good discovery should start — PERSONAS.
Personas help us understand who the new super consumers will be, what their goals and challenges are, and how their behaviors, things they care about, and ways of communicating may be different from what we’ve done before.
- The biggest challenge for many of you will be moving beyond your existing networks to gather user insights from these emerging consumer groups.
- Creating high-definition personas requires talking to real people and understanding how their problems, goals, and approaches differ from others.
- Let’s walk through a couple of example personas for a new fintech startup that uses AI to help you reach your financial goals and provides content on money management. They’ve previously been targeting young families in urban centers like SF and NY. But they realize that there is a new market emerging.
Personas: Ana and Alan
- Enter ANA…
- Gen Z is the largest generational group in the US and over half are non-white [see persona on Slide 19].
- Gen Z Latinos are often US-born, less likely to use Spanish as their primary language, and consider themselves ‘digital natives’ — especially when researching money management options.
- Now let’s meet ALAN…
- Black Millennials are show high interest in financial improvement, but often have low engagement with financial professionals. This creates an opportunity for more technology-focused financial management that speaks to the way this group spends, saves, and manages money. [see persona on Slide 20].
- After talking to new sets of consumers, what a product team should come away with is that these groups have differently nuanced needs often based on culture and behavioral patterns
- You can do this for many emerging consumer groups.
- Earlier this year, a Sharia-compliant investment platform — WAHED — launched to address the 3.3M Muslims in the US — a number expected to double by 2050.
- This is market share being taken away (or truly, never realized) by fintech sector leaders like Robin Hood and other robo-advisors
- Our world is changing and more importantly — the people who use and are most impacted by technology are too.
- Founders need to understand the change that is on the horizon and discover new ways to make your startups ready for the future.