GOAT, Wag Labs Rank Among the Nation's Top 100 Largest Consumer Startups
Six Los Angeles area startups made venture capital firm Andreessen Horowitz's ranking of the top 100 largest and fastest-growing consumer startups and private companies.
Topping the rankings were some of the usual suspects, including Airbnb, Doordash, Postmates, and Instacart. The VC firm labeled them as "some of the most impactful companies in the word economy."
Among the firm's findings is that a small number of marketplace startups — the list's top four — accounted for 76% of consumer spending. And travel, food, and groceries accounted for the largest categories.
"Several emerging categories are intriguing, including local indie brands, celebrity shout-outs, streetwear, fitness memberships, and even car washes," according to the report. "The fastest growing marketplaces are growing really fast — 3x to 5x year-over-year."
Among the Los Angeles startups to make the list:
- GOAT, an online retailer for sneakers and other apparel, ranked No. 16 on the list. The Culver City-based company has some 12 million members and boasts an inventory of 800,000 vintage shoes.
- Wag, the dog walking app considered to be the Uber for pets, ranked No. 24 on the list. The West Hollywood-based company announced last year it landed a $300 million investment from Softbank's Vision Fund.
- Atom Tickets, which uses an app and its website to sell movie tickets and other services, ranked No. 25 on the list. The Santa Monica-based company has a roster of top Hollywood financial backers that includes Walt Disney Co., 20th Century Fox, and Lionsgate.
- Tradesy, an online resale marketplace for buying and selling women's clothes, ranked No. 37 on the list. The Santa Monica-based company counts Kleiner Perkins Caufield & Beyers and Richard Branson as investors.
- ResortPass, an online booking platform for access to hotels for the pool, spa, fitness, and amenities, came in at No. 71 on the list. The Santa Monica-based company has raised about $13 million to date, according to Pitchbook.
- Bloomnation, an online floral marketplace, ranked No. 92 on the list. The Santa Monica-based company is considered an "Etsy-like" platform where 3,500 florists deliver to nearly 5,000 cities.
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While you can’t drink an NFT, that isn’t stopping some beverage startups from looking to capitalize on the blockchain-enabled craze.
Non-fungible tokens have gained traction in the art world, where artists and creators are using the digital assets to create closer connections with fans and collectors.
The idea of building a creative community around a product is not unfamiliar to beverage brands. After all, generations of beverage aficionados gave us the concepts of the bar, the tea house and the coffee joint.
As brands increasingly take to the digital world to increase their exposure, many beverage companies are now experimenting with NFT technology to build interest around their products. Budweiser, for instance, recently signed a deal to mint collectible tokens, as have Bacardi, Fountain Hard Seltzer and the Robert Mondavi Winery.
Three new L.A.-based beverage brands–Bored Breakfast Club, Yerb and Leisure Project–are also using the blockchain to build their companies and engage with customers in different ways. Each is using NFTs to kickstart their direct-to-consumer businesses and build interest in their brands.
The goal is to use the transparency and equity inherent in blockchain technology to attract early adopters—giving them an opportunity to test ideas and products before they’re finalized—and encourage them to invest in a community built around their drinks.
Time will tell if each brand can deliver on that promise.
Bored Breakfast Club's NFT tokens feature the Bored Ape characters and serve as a subscription membership.
Bored Breakfast Club
One L.A.-based effort, Bored Breakfast Club, has looked to leverage the popularity of Bored Ape collectible NFTs to help jump start a new coffee subscription service.
Frogtown-based marketing agency Kley is leading the effort to use Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) intellectual property to build direct-to-consumer coffee subscription memberships that are sold as NFTs on the Ethereum blockchain. The tokens themselves feature a breakfast scene that include BAYC and MAYC characters, and each functions as a coffee subscription membership.
BAYC and MAYC are considered two of the most popular and expensive NFT collections, according to OpenSea, a secondary NFT marketplace that also tracks their value. BYAC NFTs are valued at approximately 74.69 ETH ($244,041) on the platform.
Kley co-founder Brad Klemmer said the idea was to parlay the success of the Bored Apes brand into a new direct-to-consumer offering. Owners of the NFTs get two free coffee shipments and the possibility of more, if the project is a success.
Klemmer said the idea is to build a regular clientele for his coffee brand by shipping it directly to consumers, rather than relying on them to go to a coffee shop or grocery store. “You need a brand and community that puts their product on [consumers’] doorstep on a weekly basis,” he said.
Bored Breakfast Club launched the project on Jan. 10, offering 5,000 NFTs for .08 ETH (approx. $250) each, and promising token holders they would receive a 12-ounce bag of a different variety of coffee for each of two NFT sales thresholds the company surpassed. The NFTs have since sold out, meaning that the project will ship two bags of coffee to each token holder by the end of the month. The company has also created a “community coffee wallet” that could entitle token holders to still more coffee.
A graphic explains Bored Breakfast Club's "wallet" concept.
That’s because the “wallet“ collects funds from a 5% royalty on its NFTs that are bought and sold on the secondary market. Once it collects enough funds, the company will send additional blends to its 5,000 token holders. (Klemmer said they’re waiting to get data from their initial shipments to determine how much it will cost to ship additional bags). That communal “wallet“ will also pay to produce extra bags of coffee and Bored Breakfast Club merchandise to sell to non-NFT holders.
Klemmer said he sees the NFT offerings as a “fun way to buy coffee.” Also, there were “similarities around NFT communities engaging with each other and what the DTC subscription model is trying to be.”
Bored Breakfast Club works with Yes Plz Coffee, which sources, roasts, packages and delivers the coffee to NFT holders.
Yerb was born out of entrepreneur Brett Fink's habit of drinking yerba mate with friends, many of them creatives who were looking for a coffee alternative. The traditional South American drink is said to provide a calmer caffeine-imbibing experience than coffee.
Like Bored Breakfast Club, Fink is hoping to use NFTs to drum up interest in his business early on. But instead of relying on the popularity of a particular NFT brand, Fink sees an opportunity to use the blockchain to heighten awareness of his own brand and, hopefully, develop buy-in for its first product.
Fink, who has past experience building and growing consumer-packaged good (CPG) brands, including cannabis brands, thinks NFTs can help build a creative community around a product.
“If you believe what we believe, and want to create a product for the creative process, you can benefit from it, as there is a massive untapped opportunity in NFT and CPG projects,” Fink said. “You need to get people to believe what you believe, then have them be involved and take ownership of that product.”
Yerb’s first yerba mate drink will be bottled in 12-ounce cans but sold through NFTs that cost 0.039 ETH (approx. $77 USD). The company started offering the tokens in February of last year; each entitles the holder to six cans of Yerb’s first release, as well as an additional six-pack of cans every year that they hold the NFT. Yerb is hoping that the offer will help it identify early adopters who will buy-in to the brand as repeat customers.
Non-NFT holders will be able to purchase the drinks once token holders receive the first shipment. Yerb is targeting April 2022 for that release after hitting supply chain issues last year.
Venice-based Leisure Project is taking a similar approach to Yerb by targeting creatives with an emphasis on community development.
The startup, which bills itself as “the world’s first co-created beverage brand,” hopes to market a kind of natural Gatorade for entrepreneurs, creators and innovators.
Leisure Project was started by former NCAA Division I athletes and brothers Steve Michaelsen, who works at Nike LA, and Alex Michaelsen, who works at TikTok marketing agency GO Ventures in Beverly Hills. The brothers, who have been bootstrapping the project themselves, have spent almost two years creating the brand’s first three flavors.
In December, the Michaelsens announced plans to experiment with minting NFTs that would provide token holders with the first run of their beverages, cheaper pricing on additional flavors and the opportunity to pitch new products. Leisure Project has been sampling its drinks at local NFT events to drum up publicity.
Down the line, the company hopes to use the blockchain to give token holders access to a yet-to-be-defined “creator database” of potential partners and grants.
Leisure Project is in its early stages, but its founders hope establishing buy-in through NFTs and social platforms like Discord will help build an authentic community for their brand, and give them a potentially vital advantage over more-established competitors. “Big brands can’t go backwards and do something community-orientated after the fact,” Steve Michaelson said.
Correction: An earlier version of this post said Bored Breakfast Club would ship four bags of coffee to early NFT holders as sales thresholds were met. The company has since changed that number to two.
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The age of the creator is upon us.
After years of gaining momentum, the creator economy has gone mainstream. Payment processing platform Stripe estimates the number of individuals who now see themselves as full-time “creators”—those who use online tools to sell digital content—grew 48% in 2021, while earnings across the industry are expected to soon eclipse $10 billion.
Major brands have taken notice, as influencers can garner loyal social media followings that outpace those of many Hollywood celebrities. Meanwhile, some top-tier influencers now make more than S&P 500 CEOs. As more Gen Z creators enter the workforce—looking for opportunities beyond traditional models—the industry is poised to grow at a breakneck pace. We talked with Famous Birthdays founder Evan Britton, whose platform tracks and measures the industry, as well as several emerging influencers about what to watch for over the coming year.
1. Gaming Influencers Grow
There is more gaming content now than ever. According to TwitchTracker, which catalogs streamers, 2021 was the most popular year ever for Twitch, which averaged more than 3.1 million daily viewers at its peak in May 2021. January 2022's numbers (2.9 million) are not far behind.
“Twitch streamers have highly engaged fans,” said Britton. He pointed to Twitter as an example of a platform where many brands and personalities find it “hard to get engagement,” yet where many streamers routinely manage to draw “thousands of likes and comments.”
“Their fans are so engaged with them because they’re watching them for hours on end,” he added. “They just want more content.”
Even though demand for gaming content is up, expect gaming creators to become more strategic about repurposing content in 2022.
“As a streamer, one of the biggest things right now is finding ways to continue to grow while being efficient,” said gamer and Twitch streamer Nick Bartels. In the past, influencers in the gaming world would commit many hours to livestreaming their adventures—but when the game was over, traditionally, so was the stream, and few did anything with the resulting content.
Expect to see creators looking for ways to funnel growth into platforms even when they aren’t streaming. Bartels said he’s looking to work with an editor who can repurpose much of the live content he creates.
“One of the bigger concerns is burnout over air time,” said Bartels. “It’s part of the grind initially, but the last thing you’re going to want to do after you stream is edit. You want to have some life balance.”
TinaKitten/ Famous Birthdays
2. The Blockchain Provides a New Source of Income and Experimentation
In years past, influencers relied largely on advertising dollars to monetize their massive audiences and provide them with an income. More recently, however, the blockchain—including cryptocurrency and NFTs— have stepped in, providing a new way to create community while growing revenue.
“The growth of cryptocurrency followed by the explosion of NFTs was a big trend in 2021 that will continue into 2022,” said Britton. “Last year, creators sold digital art and communities sold limited edition collectables offering unique access and clout. This year, offerings will become even more creative.”
Britton said one driver of this trend is entertainment and engagement. NFTs, or non-fungible tokens, provide a way for influencers to reward their most engaged users, as well as a way for audiences to literally invest in the creators they love. “I think it’s a fun way for people to get involved and be part of a community,” he noted. As creators build engaged communities of their own, NFTs could provide additional methods for them to monetize.
But there has been a dark side to influencers’ interest in crypto. Earlier this month, Kim Kardashian and Floyd Mayweather were among a number of influencers accused of taking part in an online pump-and-dump crypto scam. TikTok has since banned promotional content related to financial services, including cryptocurrency, by adding them to its list of “globally prohibited industries.”
While it remains to be seen just how effective NFTs will be as an investment tool, expect interest in the space to continue to grow.
Spencers/ Famous Birthdays
3. More Fun with Food
Food has emerged as a growing subset of the influencer economy, and several new platforms launched in 2021 looking to seize on that growing interest. Restaurants large and small have taken notice.
“One huge tailwind on TikTok has been creators offering up their unique recipes and fun takes on food,” said Britton, who expects this trend to build throughout 2022. “TikTok is about fun, short videos. Everybody loves food and a lot of people like making food. It just has a lot of natural product-market fit with TikTok.”
Videos showing food can be instrumental in convincing consumers to try new restaurants or menu items. In a survey by restaurant marketing firm MGH, 36% of TikTok users said they have visited or ordered food from a restaurant after seeing a TikTok video featuring that establishment.
Influencer Cassie Sharp found success in 2021 by creating bite-sized content around food challenges, like her popular “five random ingredients” challenge.
“I’m trying to find new challenges that garner similar engagement, and take short-form videos and turn them into long-form content so that I can take some of those views on my shorts and apply them on my long-form videos,” she said, highlighting a trend common among creators in all verticals: repurposing content.
“The greatest thing about short-form content is you can throw it out there and see what catches,” Sharp added. “If I get an audience for a specific short-form video, when I start making long-form videos people are already comfortable with it.”
Her biggest takeaway so far: Clear bowls are essential for creating engaging food videos. “It’s just more interesting to watch the butter and brown sugar melt together,” she said.
Lisa Nguyen/ Famous Birthdays
4. Social Shopping Upends Ecommerce
The pandemic helped cement ecommerce’s rapidly growing advantage over brick-and-mortar shopping. As more influencers take to livestreaming platforms, expect the nature of online shopping to change.
“Facebook, Instagram and TikTok each facilitate live-shopping and YouTube launched livestreams to promote shopping ahead of the 2021 holiday season,” noted Britton, who added that he expects live-shopping to become increasingly popular in 2022. “It took a while to get here, but it’s growing.”
Gen Z is certainly keen to buy in real time. Survey results from the 2022 Instagram Trend Report show 27% of users aged 13 to 24 shop directly on social media.
Instagram’s native affiliate tool is just one example of this trend in action. The platform began testing the tool in 2021, incentivizing creators to include shoppable content not just in their feeds but also in their Instagram Stories and livestreams.
Nathaly Cuevas/ Famous Birthdays
Correction: An earlier version of this story misspelled Nick Bartels' last name.
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