Demographic Revolution: First Slowly, Then All at Once [Excerpt]

Cake Ventures recently released our foundational report on demographic change. This is a high-level overview and you can access the full whitepaper here: https://www.cake.vc/whitepapers/demographic-revolution-first-slowly-then-all-at-once

Demographic changes are broad shifts in population over time that materially change user behavior and long-term demand trends. In venture capital, these changes signal emerging market opportunities, shifts in product-market fit, and evolving enterprise dynamics.

Demographic changes reflect changes to the internet user base and are inherently TAM-expansion events. In combination with technology like artificial intelligence, these changes will drive new user needs and behaviors. At Cake Ventures, we believe that this intersection is where the next generational companies will be built.

There are four major ‘layers’ of demographic change where we see the opportunity to use technology

1. Our global population is aging. In almost every nation worldwide, our populations are getting older and have the expectation that technology will help as they age. Our aging population is creating demand for technology that helps people age in place, manage late-life financial planning and retirement, and increase overall longevity through preventive healthcare. People who are now aging into the 50+ cohort spent most of their lives using technology and now expect it to keep pace with their needs, just as it did in other phases of their lives.
   
2. The trillion dollar female economy. Women have more spending power than ever, and their financial access is only expected to increase over the next decade. The female dollar will accelerate companies across almost every category, but we should pay special attention to healthcare, which remains one of the industries most accelerated by women’s economic activity. Healthcare spending is 18% of U.S. GDP and outpacing GDP growth at 8.3%. While women’s health funding is rising, this isn’t even the only healthcare category that remains deeply influenced by women’s activity.
   
3. The evolution of the super consumer. The profile of the super consumer is changing, and along with it, their behaviors and needs. The profile of the super consumer is changing, and along with it, their behaviors and needs. Gen Z and Gen Alpha are the two most diverse generations in history, with the impacts of immigration and globalization becoming increasingly evident. Even in the face of a changing and uncertain U.S. immigration policy, government policy will not completely reverse the ways the population has evolved. We continue to see the permanent effects of an increasingly diverse population, even as our immigration policies evolve.
   
4. Software for the deskless workforce. Deskless work makes up 80% of the global workforce, yet we’ve barely scratched the surface of building software for these jobs. More than 2.7 billion workers are in jobs that we interact with every day – healthcare, retail, manufacturing, infrastructure, and other vital industries. Meanwhile, venture capital has historically been more concentrated in software categories like developer tools (especially AI tooling), serving the estimated 30 million software developers worldwide, but covering less than 1% of the workforce. This gap presents an opportunity.

Our framework for demographic change provides a foundation for founders and investors to identify opportunities within each layer and at their intersections. There are important considerations when building or investing in these demographic changes and converting them into venture-scale companies.

The most powerful companies built for these emerging super consumers will not be gated by identity.

Companies building in these spaces have three considerations in building not just for demographics, but for user behavior.

• Start from behavior, not identity.
• Build your product roadmap from beachhead to adjacency.
• Avoid ‘artificial gating’

Read a deeper exploration of these demographic changes and how we think about companies building in these categories in Cake’s latest whitepaper. The full 15-page report is available here:
https://www.cake.vc/whitepapers/demographic-revolution-first-slowly-then-all-at-once