Tech-Enabled Parenthood: A new generation of parents means huge opportunities for startups + investors
Every generation looks at the ones after it with a critical eye. And no generation has been more maligned than millennials — those who were born between 1981 and 1996 and who came of age during the digital transformation. Millennials have been blamed for the demise of everything from department stores to dinner dates to American cheese. They have been described as entitled and optimistic, impatient and multi-taskers, self-focused and collaborative.
The truth is: Millennials are different from previous generations, and they do wield a great deal of influence over economic and cultural trends. Millennials have more sources of information, especially from their own peers, at their fingertips — literally — than ever before. This generation, financially burdened over the past several years by college debt and underemployment, is also more selective about how they spend their disposable income.
The companies that have thrived as millennials have entered adulthood have been mobile-first, solution-oriented, and design-forward. Today, more than half of millennials are in their 30s. Though they’re getting married and having children later than previous generations, many are now starting families. There lies the opportunity.
Our belief is that this parent is like no other parent before. They have a mobile phone in one hand, a baby in the other. Companies that want to capture the market of today’s parents need to have a share of that phone. And investors who want to make a difference in an underrepresented market should be looking at companies creating products or services for this generation of parents.
That’s the mission of Be Curious Partners: we invest in companies that are reinventing parenthood. Be Curious Partners is the first and only venture capital fund focused wholly on tech-enabled solutions for parents that address the challenges of raising a family as well as the hurdles parents face in their day-to-day lives.
What the Demographics Tell Us
Millennials are growing up. The millennial generation is painted with broad strokes as inexperienced, self-interested and loathe to settle down, but the statistics belie that depiction.
According to the Pew Research Center, more than a million millennials are becoming moms each year in the U.S. and globally, there are 130 million new moms each year. That’s 250 new babies born each minute. Back to the U.S., the number of millennial moms has grown rapidly in recent years and reached more than 17 million in 2016, when millennial women accounted for 82 percent of U.S. births.
Although Millennial women now account for the vast majority of annual U.S. births, they appear to be waiting longer than prior generations to become parents. About half of Millennial women (48 percent) were moms in 2016. By contrast, when women from Generation X (those born between 1965 and 1980) were in the same age range, 57 percent were already moms.
via PEW Research Center
When they do become parents, millennials embrace the role. Responding to a 2015 Pew Research Center survey, six in 10 millennials said that being a parent is extremely important to their overall identity. The same survey found that millennials are having fun with parenting. They were more likely to say that parenting was rewarding (58 percent) and enjoyable (52 percent) all the time than were Gen X parents (51 percent and 39 percent, respectively) or Boomer parents (46 percent and 39 percent).
Millennial Parents As Consumers — and Change-makers
Millennials comprise a quarter of the world’s population and their global spending power will soon be greater than any other generation. Just as millennials have irrevocably changed socioeconomic trends around marriage, home-ownership, and the workplace, they are bound to transform parenthood.
To understand how millennials make decisions, the key is their mobile phones. A recent GlobalWebIndex study found that two-thirds of millennial respondents chose their mobile as their most important device. The report also looked at how millennials search online to connect with brands and find information. According to the GWI report, search engines are the first stop for brand research, with nearly half (49 percent) of Millennials using this channel. Similarly, social networks are also highly impactful for purchasing decisions, with 44 percent of global millennials researching products and services via platforms like Instagram and Pinterest.
Millennial parents are no exception. Millennial moms are spending more than 8 hours online each day, using their mobile phones or tablets to look up recipes and plan meals, search for parenting advice, manage their finances, make and return purchases and contact customer service.
Entrepreneurs who want to tap into the millennial parent market need to address these key success factors.
· Brands that succeed lead with value and utility. Most millennial moms (87 percent) list good value as a very important brand characteristic, followed by safety (85 percent), and products that simplify her life (67 percent).
· Millennials want individualized, personalized experiences. They will research to find brands that reflect their values and lifestyle. The National Retail Federation’s Consumer Review report showed that 50 percent of millennial parents always research a brand or retailer’s views on topics that matter to them personally. Only 19 percent of millennial non-parents and 27 percent of other parents say the same.
· Millennials are socially conscious. Half of millennial parents say they try to buy products that support causes or charities. Nearly 45 percent of millennial parents say they will only shop brands and retailers that reflect their social or political values, compared to 23 percent from other generations.
· Millennial parents are seeking structure and balance in their busy lives.Millennial moms are equally likely to work outside the home as they are to be stay-at-home parents, but the majority of mothers feel time-crunched. Interest in “life-management outsourcing” — or paying someone to manage their daily activities — is nearly twice as high among Millennial Moms as moms overall. For working parents, the work-life balance remains elusive. About half of working dads (52 percent) and 60 percent of working moms said in 2015 that it is very or somewhat difficult to maintain work-life balance. About 30 percent of working fathers and 37 percent of working mothers said they “always feel rushed.”
There’s a strong business case to be made that given the needs of this consumer and generation, a technology product or service that can give parents value, time, peace of mind, and social betterment can be poised to succeed.
The Opportunity: Companies that Make Parents’ Lives Easier, Smarter, Better
The millennial parent marketplace offers something investors are always trying to identify: potential. Less than half (48%) of millennials are currently parents, which means there’s a lot of growth yet to come. Yet most VC firms are overlooking this space.
A look at the sectors that have grown over the past five years — smart home devices such as Amazon Alexa, Nest and Google Home, online grocery including Amazon Prime Now and meal kits like Blue Apron, curated subscription boxes in fashion, beauty, and education, and in-home workout apps including Peloton and Aaptiv — shows that today’s consumers are looking for products that give them innovation, personalization, control, and streamline their lives. Companies that can create these solutions for parents — and earn a coveted go-to spot on their smartphones — are poised to reap the rewards.
This is why we solely invest in companies that are making parents’ lives easier, smarter and better. Be Curious Partners model was designed for co-creation. We are not passive investors — we work alongside entrepreneurs offering the breadth of our expertise to help them build their teams, target the right market, develop revenue models and scale across geographies and industries.
Be Curious Partners’ Success Stories
Be Curious Partners’ portfolio companies epitomize the solution-oriented products and services that are bettering parents’ lives. In the first year of our fund, we’ve invested in five companies, though we are still early in our fund’s life cycle and will be investing more in the next 24–48 months. Each one of our portfolio companies delivers solutions to parents in their role as parents, their role as people (who happen to be parents) and their efforts in navigating life with children.
Motherly is a community-driven, direct-to-consumer brand is redefining what it means to be “motherly” through inspiring articles, uplifting videos + helpful classes that give this digitally native generation of mothers a modern motherhood manual.
Wonderschool launched in 2016 by a group of educators and technologists in California. The company’s mission is to provide quality childcare to every child in the world by building a platform through which people can start infant and toddler programs and preschools out of their homes. Their “preschool in a box” model provides assistance with licensing, curriculum, school setup, and everything in between.
KIDBOX creates a personalized box of style for children ages newborn to 14, offering the hottest brands at an amazing value while providing convenience for the time-starved parent. It’s a company with a social mission at its core. For every box kept by customers, KIDBOX also provides new clothing to a child in need.
Caribu is an education platform that helps parents, extended family, and mentors to read and draw with children, in an interactive video-call, serving customers in 148 countries around the world. The result is an engaging shared screen experience. An in-app bookstore is filled with hundreds of titles from leading children’s publishers, in six languages, and educational workbooks.
Kinedu helps parents and caregivers answer two of the biggest questions parents face: 1) is my child developing “on track,” and 2) what are things I can do to encourage development? Through personalized daily lesson plans of activities, insights, and tools, Kinedu helps strengthen the parent-child relationship and build a foundation for all future learning.
Invest in this Generation and its Approach to Parenthood
It’s time to stop focusing on the industries that millennials are killing, and to start focusing on the business opportunities they’re creating. It’s also necessary to stop thinking of millennials as a young and flighty monolith. More millennials are becoming parents every day, and they’re reinventing parenthood. As they do, they’re reshaping business and even society itself.
It’s also time for investors to rev up for the long runway ahead on tech-enabled parenthood companies and tech solutions. The world’s most influential consumers are becoming parents, and it’s changing their behaviors, needs and desires. Entrepreneurs all over the world are developing the tools parents will use to raise the next generation.
Be Curious Partners believes the reinvention of parenthood offers great opportunity for entrepreneurs, investors, and parents alike.