No Impact without Great Products
Last weekend, I finally watched the 'Social Dilemma.' While I was not surprised by the content, it reminded me 'we simply do not seem to care enough.'
It seems that it has never been a better time to launch a product with a beneficial social or environmental impact. Yet, a frustrating paradox remains.
The intention-action gap
Only a few consumers who report positive attitudes toward such products and services follow through with their actions. 65% said they want to buy purpose-driven brands that advocate sustainability, for example, yet only about 26% do so. Similarly, while consumers say they care about privacy, few place any real value on protecting their data. In a Cisco survey, only 32% of people, who said they care about privacy, are willing to act. But, when asked if they were ready to provide their purchase history in exchange for personalized products and services, 62% of privacy actives were comfortable with the trade-off... We find similar results when it comes to screen time management. (If you have more great data on this, please do share them with me).
As you can see, more people are concerned about stuff that impacts them directly (many realize that too much screen time impacts their wellbeing daily) vs. more indirect challenges (such as the environment or data privacy). Of those who do care, less than 40% take any action to tackle the issue.
The message is clear. If we want to drive impact, we need to build superior products to the current system, even when not accounting for their impact benefits. People just prefer a better product experience than anything else. Even if it means that 'if you are not paying for it, you are the product...'. Similarly, most people are never going to give up flying. Flying is just too fantastic.
Just think about this. I consider myself a mild data protection 'activist.' I do use, for example, DuckDuckGo (DDG) as a search engine. You can't imagine how many times I get this: 'Man, I don't get why you are using DDG. The search results of Google are so much better.'
To narrow this 'intention-action gap,' we need to build better products.
Consumers often have negative associations with sustainable product options, viewing them as lower quality, less aesthetically pleasing, and just more expensive.
Here some examples of superior products: Tesla or the Cowboy e-bike (congrats again @Tanguy for this amazing product! A pity that I don't make hardware investments...).
Tesla, for example, just has an amazing product. I don't know anyone that doesn't rave about Tesla's speed acceleration or center screen when they first test the car. Tesla has an insane focus on its innovative design and functional performance, rather than on its green credentials - a message that resonates with its target market and is supported by its product.
A bunch of my friends bought e-bikes recently. Not so much because it helps them get off their cars or even public transport, but because they love the design, the bike's speed, and agility.
Let's bring the same experience to the software world. There are a bunch of exciting European startups already. Check out this great overview by my friend Pietro.
Much is happening in the space. Stripe, for example, has quietly become one of the world’s largest purchasers of carbon-removal credits, devoting $1 million to extracting carbon from the sky. Last month, it began allowing its customers - the businesses that use its payment software - to buy carbon removal as well. The term carbon removal refers to any technology that extracts carbon from the atmosphere and stores it for a long time, trees being one example. The company’s ultimate goal here is to bring the cost of carbon removal down the “learning curve”- which means, in essence, making it cheaper. By buying from these companies now, Stripe aims to let everyone pay less later at a relatively high price point. And, by offering its customers easy access to buying carbon removal, it can do so faster.
The challenge for most impact products is that it is not clear if there can be many customers.
Right now, in carbon removal, the answer is mostly no. And, Stripe is trying to change that by leveraging its unique reach. 'It is trying to guarantee, in some ways, the existence of a future market for direct carbon removal.'
I suggest we get away from the idea that people will accept any limitations to answer the world's problems. Instead, let's build more superior products that will drive a positive impact. If you are working on a B2B or B2C software with this approach in mind, please do reach out to us.
Last weekend, I removed and planted a new tree...
Life is awesome,
Other Content I have found useful
- Our company K Health announced some great news last week. We announced a strategic partnership with Mayo Clinic, the Gold Standard for Healthcare, and another funding round.
Four years ago, when we seed-funded the company, it was one of our first conviction-driven bets in the digital health space. The team did not have a product, but a world-class team with a bold and clear plan to reinvent healthcare forever.
Their vision: 'Making healthcare universally free.' Their TAM: '8 billion people.' Their strategy: 'Find and leverage existing but inaccessible healthcare data to diminish the costs of healthcare dramatically, while increasing access...'
After that, K went out to build the most accurate symptom checker, allowing users to compare their symptoms to similar patient cases, on top of a telehealth platform.
Soon everyone will have a doctor in his pocket. Consumers will benefit immensely from it, while doctors have more time to spend with patients who need their attention.
- A cool analysis of Airbnb's S-1 by The Generalist: 'Airbnb: The Disaster Artist'
- Here a great Twitter thread on what VCs are looking for in startups. While I don't agree with every point, I think it gives founders excellent insights into VCs' minds. If you are thinking about raising venture money, also look at this post 'Timing is everything. Don't go out fundraising before you've read this.'
- Apple will collect a 15% rather than 30% App Store revenue commission from companies that generate up to $1M in revenue through the store. This is a BIG deal for early-stage #B2CSaaS companies!
- An interesting read on whether 'Zoom Apps will be a hot startup platform'? I see more and more startups play around building essential parts of their business on top of the platform. I can't wait to see what comes out of it.
- A brilliant analysis of the future of online education. One result of Covid-19 is that we all had to rethink online education, and how it could work better. Or, how the author puts it: 'While the recently popular concept of 'embedded finance' distributes financial products at the point of digital transaction, embedded education delivers learning at the point of getting the job done.'
- An insightful post on 'The Unusual Signs of a Billion Dollar Company' by NFX and Elad.
- Language learning app Duolingo is now valued at $2.4B, raising money at a 12x multiple from their $200M in revenues.
- A great article by David on measuring user engagement in bottom-up B2B SaaS. What is good engagement? As is the case with retention tracking (see this post), we first have to properly segment our user base. Why? Well, for engaging products, it is not uncommon for DAU/WAU to be about 50% higher than DAU/MAU! By only looking at MAU vs. WAU, you will consider many less active users that will drag down your average. Across all paid customer users, a SaaS product with excellent engagement might have a DAU/WAU that crests at about 60% (3 workdays per week) and a DAU/MAU that crests about 40% (8 workdays per month).
- Here a list of crazy ambitious projects, and the time it took to get them done. It also includes the Covid Vaccine (see last item). This list tells me humans can achieve remarkable things when they work together on a common cause... Or, how Semil puts it: 'Still can't believe this - in March, upon learning vaccines typically take 3-5 years to make *and* there had never been a vaccine for a novel coronavirus before, I had such a bleak view. And now we learn Moderna decoding the plans for their vaccines in a couple of days. Unreal.' I leave you with this final thought today. See you for the next Opportunities Everywhere Edition!