Keeping up with the Gen Zs:
Why is it important to study behavior shifts in the new generation?
We already know what today’s preeminent *technology* shift is: generative AI. AI is the most important tech shift since at least Intel’s 1971 development of the microprocessor.
But the biggest startup opportunities often come when a technology shift *collides* with a behavior shift. Three examples:
➡️ Robinhood rode a technology shift (mobile) that intersected with behavior shifts around people becoming more financially educated, motivated, & independent in a post-Great Recession era.
➡️ Instagram also rode the rise of mobile, including rapidly-improving smartphone cameras. At the same time, people were learning to live more public lives and build parasocial relationships.
➡️ Figma, meanwhile, rode a tech shift in WebGL (released in 2011, WebGL let you render interactive graphics in the browser) alongside the rising importance of design in a digital world & the expanding definition of “designer."
So what are the new behavior changes that will drive new startup opportunities?
This week's Digital Native looks at a few key characteristics of Gen Z:
The first focus was "The Era of Self-Expression." An example here is the rise of Chappell Roan, who has skyrocketed from 1M monthly Spotify listeners in January to 30M in July, powered by Gen Z.
In my mind, Chappell’s success comes down to her unapologetic self-expression. She's one of the most interesting new celebrities to study because she embodies what the younger generation cares about: authenticity, creativity, internet fluency.
So how do startups build on the cultural shift toward more self-expression?
This cultural shift actually dovetails nicely with the AI revolution. The internet unlocked distribution, which allowed people to express themselves more *broadly*; now, AI arms them with the tools with which they can express themselves more *deeply*.
We see this with new creative tools. Suno in music, for instance, is one of the most impressive consumer tech products in years. Captions and Hedra are doing cool things in video. I think we’re going to see an explosion in creative tools, underpinned by new tech (AI) and new behaviors (self-expression).
Related to self-expression: a phenomenon I call "Everything Is Social."
Among digital natives, everything is social. We see a steady march toward more social products. Past tech players have been more single-player: Tinder in dating, Teladoc Health in mental health, Robinhood in investing, Shopify in commerce. We see new upstarts embed social into their DNA. Examples from the Daybreak portfolio in the same categories: Amori (dating), Marble Health (mental health), AfterHour (investing), Flagship (shopping).
The socialization of everything will only continue.
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The full piece also digs into how Gen Z impacts big segments of the economy like Finance, Health, and Sustainability.
You can read the piece & subscribe to Digital Native here 👇