🚀 The year’s biggest business trends


January 23, 2021

PLUS: 2021 predictions.
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Fun fact: More than 2 out of every 3 Hustle readers identify as entrepreneurial-minded. Today’s email is for you — a short guide filled with business-building tips and tales of successful startups.

H/T to our Trends analysts for helping out. If you want more insights like these, give Trends a try.

The Big Idea

What trends will impact businesses the most this year?

During the early days of the pandemic, our Trends analyst Steph Smith compiled a 67-slide deck titled “COVID-19 Trends: Looking Past First-Order Effects.”

It was one of our most popular reports of 2020 — and it’s now free for all Hustle readers.

Nine months later, we asked our analysts to share one macro-level or industry-specific question they’re thinking about, and how they see it playing out this year.

Here’s what they had to say… 

  1. Amy’s question

Loneliness, already labeled an epidemic before the pandemic, became even more widespread last year.

The entrepreneurship world seemed to wake up to this, with $1.37B of VC money pouring into mental-health startups through Q3, surpassing 2019’s investment of $1.06B, per PitchBook.

“Community” as a theme was also strong in 2020. From cohort-based courses to online events, a paid community is now the holy grail for any indie maker’s monetization plan.

But does explicit productization of connection and belonging work? Which companies have figured out how to measure results well? And is funding going toward populations that need change the most?

With remote work continuing, companies are taking more responsibilities for employee mental health (see Microsoft’s rollout of wellbeing and productivity features in Microsoft Teams and Outlook, including “virtual commutes” and integration with a mindfulness and meditation app). 

Coworking will return in smaller, more intimate ways, such as an in-person version of Order In Club.

Meanwhile, Google searches for “coworking space near me” climbed to 50.9k searches in November, nearly surpassing pre-pandemic numbers. 

  1. Julia’s question

In South Africa we have a saying: “Local is lekker!” It basically means, “Local is awesome!”

With people locked up in their homes and within their national borders, one of the biggest trends of 2020 was the rise of localization — from shopping to experiences to food.

I can’t help but wonder how long “local is lekker” will last, if and when international travel resumes.

Will the longing for foreign travel and experiences trump this newfound appreciation of our own backyards? And for how long will small businesses leverage the localism trend?

The data suggests localism may be short-lived. According to a recent travel sentiment survey, more than half of American travelers would feel comfortable traveling internationally after 6 months of a vaccine becoming available.

Demand for ethnic food experiences is also on the rise: Search interest is rebounding strongly after a significant dip across the board in April:

  • “Conveyor belt sushi”: 18.1k searches in November (+190% from April)
  • “Teppanyaki”: 301k searches in November (+94% from April)
  • “Korean barbecue”: 27.1k searches in November (+30% from April)
  1. Steph’s question

In the last economic downturn, a host of companies emerged that define today’s business landscape.

From Uber to Airbnb to Stripe to Square… the sharing economy democratized people’s ability to buy or sell rides, homes, or basically anything online.

2020 made us all look inward, spurring a decade where we invest in ourselves (our bodies). We will continue to see innovations in:

  • health tech (think Sleep Number mattresses or Oura rings)
  • biohacking (think CRISPR kits)
  • workout tech (think Cubii or Zwift)
  • fertility tech (the cost of sequencing is accelerating faster than Moore’s Law).

And have you heard of the AlphaFold breakthrough? It could pave the way for decades of innovation.

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Snippets

We asked our Trends members where they see growth and opportunities in 2021. Here were some of the best responses…

  • “Search Funds are going to start doubling and tripling…

2000 – 5 funds raised

2010 – 10 funds raised

2015 – 25 funds raised

2020 – 88 funds raised.”

(Rand Larsen)

  • “Second passports are becoming a status symbol of the New Rich and considered one of the greatest generational gifts for your children (beyond a trust fund).” (Elizabeth Shores)
  • “Crypto. Global Citizens. Digital Nomad life for adults and families, not just hipsters. Psychedelics. And Bio Hacking.” (Cameron Herold)
  • Keep an eye on WHOOP, ZWIFT, and Playbook.” (Max Novi)
  • “Real estate — mehh. Maybe it goes up a bit. Crypto and EVs will steal the show.” (Matt Loberstein)
 
Small biz solutions
question mark

What questions should businesses be asking themselves in 2021?

With so much uncertainty, sometimes it’s worth going back to basics.

Below are 5 smart questions our analysts came up with to help guide you and your business this year.

  1. What are 3-5 values driving your company?

At The Hustle, we try to embody our values in our work. Three of our core values are:

  • Default to optimism
  • Foster a growth mindset
  • Disregard ego

List your values, then ask yourself: Can you match a milestone you want to reach in 2021 to each of them?

  1. What is one subconscious assumption you’ve made about the new year? What’s your backup plan if it’s wrong?

Examples: “Things will go back to ‘normal’ in 6 months” or “the shift toward [ecommerce, remote work, telemedicine, etc.] will be permanent.”

  1. What will you deprioritize this year to make room for what matters?

As you add or change priorities for your business, what are you saying no to?

  1. Why do people love your product or service? What holds them back from loving it?

How would your customers feel if they could no longer use your product?

Truth test your answer with Superhuman founder Rahul Vohra’s product/market fit test.

  1. What’s the one thing you do better than anyone?

Costco does cost tangibly better. Apple does quality tangibly better. Amazon does speed tangibly better.

What’s your secret sauce? And how can you lean into that more this year?

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Their 99% CSAT score reflects a near-perfect customer experience — even more impressive when you consider that the Solo Stove sells large items (some over 2 feet wide and 45 lbs), making shipping a huge challenge. 

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The end result?

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Want to save more while also scoring more repeat purchases? Try Route for your business today.

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Buzzworthy
branding

This year’s most valuable skill? Branding.

Businesses today face more competition than ever. Five years ago, the typical business had just 2.6 competitors. Today? That number has almost quadrupled, to 9.7.

AWS, Shopify, and no-code significantly lowered the barrier to entry, which shifted the risk from, “Can I build this?” to “Will anyone care?”

How do you compete?

Brand is the key to unlocking a cult-like following. Here are a few things to keep in mind when you’re building one:

  • Tell a story. Drift’s brand narrative has been passed around every B2B marketing team and helped them nab $114m in funding. Just remember that the main character in the story is your customer, not your product.
  • Stand for something. Brand is not throwing a product on pastel backgrounds with sans serif font. You must stand for something meaningful: “Think different” (Apple), “Real beauty” (Dove), “Arm the rebels” (Shopify). These brands have manifestoes that don’t accommodate indifference — you’re either in or out.
  • Show how. Finish this sentence: “The best electric car is [blank].” Most of us aren’t thinking Nissan Leaf. Tesla offers a more compelling path to reduce oil dependence. Your dominant selling idea needs to be important, believable, and memorable to your market.
  • Pick a fight. Without conflict, there’s no story. Jason Fried and David Heinemeier Hansson’s contrarian views helped build a $25m Basecamp business. Last year they picked a fight with Apple over fees during the launch of Hey, their new email product. Apple eventually approved the app… but not before the internet heard about Hey.
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Small Business of the Day
FLIK co-founders

FLIK co-founders Ravina Anand (left) and Michelle Kwok (right)

New startup connects female students and founders, advancing women in business

In 2019, college students Michelle Kwok and Ravina Anand were thrilled to take part in a Canadian entrepreneurial leadership program.

But when they discovered that just 18% of their cohort were women, the excitement dissipated.

To help raise that percentage, they launched a media company called FLIK to interview female founders and highlight their stories.

In countless FLIK interviews, they heard the same thing: “Female founders are under-resourced, undercapitalized, and wished they had mentors when they were starting,” Kwok told us.

The numbers don’t lie…

While female-founded startups have doubled in the last decade, funding is at a 3-year low.

But Kwok and Anand saw opportunity: They had like-minded peers interested in learning from the bootstrapped founders highlighted in FLIK’s stories.

So they transformed FLIK into an apprenticeship platform to connect female students with female founders — giving students on-the-job experience and mentorship, and founders much-needed extra hands.

With positive testimonials circulating on Slack channels, FLIK’s small team started generating revenue late last year, charging founders $50/mo to use the platform. As of today, they’ve facilitated apprenticeships for over 1.6k women.

With a 10k-person newsletter community and members in 52 countries, the women-led business is on track to bring in $600k in revenue this year.

For female founders and students, “it’s a win-win,” Kwok told The Hustle. As for her team, they “can’t wait to continue advancing women’s economic participation globally.”

  • Founders: Michelle Kwok and Ravina Anand
  • Employees: 7 employees, 3 contractors
  • Year of launch: 2020
  • Cost to launch: $1k
  • Funding methods: grants, accelerator, some bootstrapping
  • 1st-year revenue: $35k (since Nov. 2020)
  • Current annual revenue: $600k (projected)

Want more startup stories? You can read dozens more here, including tales of:

  • A red light camera defender
  • The “TurboTax for reputation management”
  • A “younger, more profane” Hallmark Shoebox card company

Want your company featured? Fill out our SMB survey. See financials on hundreds of companies by subscribing to Trends.

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Today’s email was brought to you by @TrungTPhan and Jacob Cohen.
Editing by: Brad “… is lekker” Wolverton, Lou Gubrious (Financial Forecaster).

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