Small Business Labs

The Return of the End of Men Trend

There's been a flurry of recent articles on the declining share of men enrolled in colleges and universities.

The Wall Street Journal's A Generation of American Men Give Up on College: ‘I Just Feel Lost’ seems to have started the flurry.  Key quote:

At the close of the 2020-21 academic year, women made up 59.5% of college students, an all-time high, and men 40.5%, according to enrollment data from the National Student Clearinghouse, a nonprofit research group. U.S. colleges and universities had 1.5 million fewer students compared with five years ago, and men accounted for 71% of the decline.

Quickly following were stories from The Atlantic, New York Times, USA Today and others on the same topic.

As the Bloomberg chart below shows, the college gender gap has been in place for several decades.

The gap also widened in 2020, with the pandemic-induced decline in college enrollments hitting men a bit harder than women.

So men struggling academically relative to women is not a new trend.  And it generated a lot of attention a decade ago.

The 2010 Atlantic article The End of Men, released as a book in 2012, focused on the academic underperformance of men relative to women.  

This article and book also covered other issues faced by men and boys.

These include higher rates of incarceration, addiction, suicide and mental illness than are experienced by women.   

We covered these and other issues men face in our 2010 article on the end of men.

This sudden media interest in this topic illustrates an interesting aspect of trends - they can lie low or disappear for years and then suddenly reappear.

In this case, the renewed interest is certainly justified. The problems men and boys face have, if anything, increased over the past decade. 

The Pandemic Accelerated Independent Worker Use of Online Marketplaces

One of the most significant shifts we’ve seen over the 11 years of the ongoing MBO Partners State of Independence study series is the increased use of online marketplaces to find work/customers by freelancers and other independent workers.

As the study chart below shows (click to enlarge), in 2012, only 3 percent of full-time independent workers reported having used an online marketplace to find work or customers in the prior 12 months.

In 2021, 40% said they had.

The pandemic clearly accelerated the use of online marketplaces. Their use grew steadily from 2012 to 2020, then jumped substantially in 2021, increasing from 27% in 2020.

Obviously, the pandemic-induced shift to remote work and the need for people who lost jobs or had their hours cut to generate income resulted in more independent workers turning to marketplaces.

About one-third (37%) of those reporting using online marketplaces say they are their primary source of customers.

For the rest, online marketplaces have become important secondary and tertiary sources of work. Independent workers also use them to fill in gaps in their work schedules, explore new markets, find new clients and learn new skills.

We expect to see continued growth in the use of online marketplaces in the coming years. But we also believe their growth rate will return to pre-pandemic levels.

Moment House and the Blending of Social Media and Digital Entertainment Experiences

Moment House is a live streaming, interactive social media platform for digital entertainment.

Newly launched in 2020, Moment House has produced over 700 concerts, called “moments,” selling one million tickets through its platform. Each unique digital experience can generate tens of thousands or hundreds of thousands of dollars in revenue for creators who can reach audience members from all over the world.

The moments have featured big-name artists such as Justin Bieber, Halsey, Kygo, and Tame Impala, but the creator economy platform also provides opportunities for emerging creators with small audiences to monetize their fans.

Moment House recently closed a $12 million investment round led by Forerunner Ventures.  They plan to use this money to expand their platform to all kinds of events, including comedy, speeches, business events, and interactive podcasts through the use of live audio rooms.

Moment House held a Louis the Child concert on August 29th, which was a recorded experience of the live performance at Colorado’s Red Rocks Amphitheatre on August 27th.

The show was interactive, with a live chatroom for users to talk, and the sound quality was quite impressive. 

Their platform also allowed audience members to use breakout chatrooms during the show, allowing audience members with similar interests to connect and interact in smaller groups.

The camera panned to all different angles of the unique concert venue: up close on stage, to bird’s-eye views of the dancing audience. For a price tag of only $12, this was an attractive deal to fans who were not located in Colorado or could not pay the $60 cost of a normal ticket.

The CEO of Moment House, Arjun Mehta, emphasizes the importance for modern creators to provide more online interactive entertainment for fans, which is achievable through Moment House’s engaging platform.

In the competitive creator economy, the digital experiences of Moment House provide more meaningful memories, ultimately building stronger fan bases for creators with both large and small audiences, compared to pre-recorded and asynchronous events on a typical streaming site.

Moment House nicely illustrates the trend towards online entertainment experiences, the use of social media to better engage audiences, and the growing array of services helping creators large and small reach and monetize their audiences. 

The Independent Worker Surge

After falling by 7% in 2020 due to the pandemic, the number of independent workers (freelancers, independent contractors, gig workers, etc.) rose to 51.1 million in 2021, an unprecedented 34% increase.

This is the key finding from MBO Partners 2021 State of Independence research study. This is the 11th year this study has been conducted.

As the study chart below shows (click to enlarge), the number of full-time independent workers increased by 25%. By labor market standards, this is a huge increase.

But there was even a bigger surge in those working as independents part-time, but occasionally (regularly, but without set hours per week) as independents. Their ranks grew from 15.8 million in 2020 to 23.9 million in 2021, a 51% increase.

Most occasional independents work this way to supplement their income or pursue a passion or a hobby.  

For example, many rideshare and delivery drivers are occasionals. They fit in their driving work hours when they can, usually around other obligations (caregiving, school, a traditional job, etc.).  

Another example is a craftsperson who sells their work on Etsy as a side gig. When their schedule permits or demand for their product is high, they may work 10 or 20 hours, or even more in a single week. But other weeks, they may not work at all or spend very little time on their side gig.  

There is a mix of reasons for the surge in independent workers:

1. The pandemic has many people rethinking what work means to them and reevaluating how they want to live and the type of work they want to do. This has more people turning to independent work for the autonomy, control, and flexibility it provides.  
2. Many lost their jobs or had their work hours cut due to the pandemic. This accelerated the existing trend towards people needing to take on 2nd and even 3rd jobs to supplement their income.
3. Online platforms, marketplaces, and social media have made it cheaper and easier to become an independent worker.  The burgeoning creator economy is an example.
4. The pandemic has reinforced a growing view that traditional jobs are riskier and less secure than they once were. This makes going independent more attractive.

See MBO Partners' research brief for more details.

Emergent Research worked with MBO Partners on this study.

The Metaverse is Coming

The metaverse has been getting a lot of media attention recently, mainly because Mark Zuckerberg announced that Facebook plans to shift from being a social media company to a metaverse company.

So what is the metaverse?

There is no standard, widely accepted definition. The Wall Street Journal, in its article Facebook, Roblox See the 'Metaverse' as Key to the Internet's Next Phase, describes it as:

"The metaverse concept, rooted in science-fiction novels such as "Snow Crash" and "Ready Player One," encompasses an extensive online world transcending individual tech platforms, where people exist in immersive, shared virtual spaces. Through avatars, people would be able to try on items available in stores or attend concerts with friends, just as they would offline."

Facebook's first metaverse effort is a virtual conference room service called Horizon Workrooms. The application allows users to meet in virtual reality conference rooms and collaborate on shared whiteboards or documents while still sitting at their own physical desks.

Facebook's video below provides more details on the virtual conference room.

 

The online game industry is also promoting the metaverse.

TechCrunch's article Fortnite's Ariana Grande concert offers a taste of music in the metaverse describes the integration of the metaverse and popular music artists.

Fortnite (an online gaming company) also held a virtual concert featuring rappers Travis Scott and Marshmello. Over 12 million people watched it live, and the concert video (below) has been viewed over 60 million times.

 

While most of the current metaverse hype is around its use by consumers, there's also a growing array of industrial applications.  Wunderman Thompson's Building the Metaverse describes a joint effort by virtual reality chip producer Nvidia and BMW to build a "digital twin" of the car company's factory in Regensburg, Germany.

This will allow BMW to virtually to test changes in the plant's configuration and workflows digitally before implementing them in their physical factory - saving BMW time and money.

In many ways, and despite our title, the metaverse is already here.  But its use and applications - both consumer and industrial - will become much more common over the next few years.  

America's Growing Diversity

According to the 2020 census, between 2010 and 2020 the white population in America declined  by 5.1 million.  

And as the chart below (click to enlarge) nicely illustrates, all of America's population growth in the past decade came from people of color.  

The chart comes from Brookings' New 2020 census results show increased diversity countering decade-long declines in America’s white and youth populations.  The article point out that white population declines were geographically widespread.  Key quote:

White population declines were pervasive across large parts of the nation, including 61 of the 100 largest metropolitan areas; 196 of the 319 cities over 100,000 population; and 2,458 of the nation’s 3,100-plus counties. 

Back in 2013, the U.S. Census bureau reported that more whites were dying than being born.  So the decline in the number of white Americans is not surprising.

According to a recent Pew Research study, "a majority of U.S. adults say the decreasing share of Americans who identify their race as White is neither good nor bad for society."

But some point to the growing population diversity as a source of political polarization and strife.

In terms of growth, Latino/Hispanic populations led the way, increasing by 11.6 million.

Based on the new census numbers, the U.S. is now 57.8% white, 18.7% Hispanic, 12.4% Black and 6% Asian.

Hidden under the topline figures is the rise of multiracial and/or multiethnic populations.

In 2020, 33.8 million people reported being more than one race, more than a threefold increase from 2010, when 9 million people did.

The Atlantic's The Myth of a Majority-Minority America covers this trend in more detail.  So we won't, except to say that however you look at it the U.S. is getting more diverse.

Tropical Island Digital Nomads

The Wall Street Journal's Some People Worked From Home During Covid. These People Moved to a Tropical Island covers the growing number of Caribbean islands offering digital nomad visas and includes interviews with people taking advantage of these visas.  

As the article chart below shows (click to enlarge), 7 Caribbean islands now have special, longer term visas for people choosing to work remotely from these islands (Bermuda isn't in the Caribbean, but it's close enough - and tropical enough -  to be included in this list).  

All of the digital nomad visas are new, so there's not much data on how many people are taking advantage of them.

But there is some.  Key quote from the article:

Aruba says about 13,700 visitors have arrived for “workations” since the extended-stay packages were launched last September. Officials in Barbados say its new 12-Month Barbados Welcome Stamp visa has drawn almost 5,000 new visitors since last June. And Bermuda says roughly 1,000 people have applied for its Work From Bermuda Certificate since last August.

Not surprisingly, the people interviewed were all very positive about their experiences living in tropical paradises.  

Yes, they had a few complaints.  Island fever was one, and slow internet connections another. 

But mostly, they liked island living.

The number of digital nomads has substantially grown during the pandemic.  And with many companies allowing employees to permanently work remotely, their numbers will likely increase in the coming years.

And many of them are likely to spend time working from tropical islands.

YouTube Has More Than 2 Million Global Creators in its Partner Program

YouTube recently announced that more than 2 million creators worldwide are participating in their partner program.  

They also say that over the last three years, they've paid more than $30 billion to content creators. 

To qualify for the partner program, Creators need at least 1,000 subscribers and 4,000 hours of overall watch time on their channel over the past 12 months.

YouTube, like its competitors, has been working hard to add more ways for creators to make money.

As their chart below illustrates, YouTube offers 10 different creator monetization programs, many of which are new.  Click here are a description of the 10 ways.

They've also created a $100 million YouTube Shorts Creator Fund to attract creators to their TikTok competitor.  This money is being used to bonus creators who create Shorts videos that hit certain viewership targets.

The creator economy is experiencing an almost gold rush frenzy of activity right now, with more people becoming creators and new startups and existing tech firms offering them the digital picks and shovels they need to create and monetize content. 

We've been doing a deep dive research project on the creator economy, and we'll have on this topic in the near future.

Do Gig Workers Want to be Employees?

The quick answer to the title question is most gig workers don't want to be employed in a traditional job.  But some do.

This topic has come up because last week a California judge ruled that Proposition 22, a ballot measure passed in last November's elections that allowed rideshare and delivery companies to treat their drivers as independent workers was unconstitutional.

Labor groups and others opposed to Prop 22 hailed the verdict as a major victory for gig workers.  

But surveys and studies have pretty much universally shown that most independent workers (self-employed, independent contractors, freelancers, etc.) - including most rideshare drivers - are satisfied with gig work and prefer being gig workers instead of traditional employees.

Data from the Aspen Institute's Gig Economy Data Hub illustrates this.    

They point out that, based on a review of many studies, "most gig workers report being satisfied by their work arrangements" and "tend to say they pursue non-standard work out of choice rather than out of necessity."

The studies they've reviewed also point out that most gig workers report preferring gig work over having a traditional job.

The same holds for rideshare and delivery drivers and most California rideshare drivers voted in favor of Prop 22.  

Having said that, gig workers in general and rideshare drivers in particular are not monolithic in their preferences. 

A sizeable minority of gig workers report they would prefer a traditional job. 

And in the case of rideshare drivers, a slight majority of rideshare drivers who work full-time report wanting to be employees.

However, a sizeable majority of part-time rideshare drivers want to remain independent contractors.

As Aspen points out, "the experiences of gig workers are polarized".  

By this, they mean some gig workers like and benefit from gig work, while others don't.  

So was the court decision a big victory for gig workers?  

No.  It was a potential victory for some gig workers and a potential loss for others.

We say potential because the companies said they would appeal, which means Prop 22 stays in place as the legal fight continues. 

Small Business Mobile Banking Use Varies by Generation

Barlow Research Associates A Generational Shift in Business Banking Behaviors Is Upon Us, and It's Not Just Among Your Millennial Customers covers the banking transaction channels used by small businesses by the age cohort of the owner.

As the Barlow chart below shows (click to enlarge), there's a big difference in the use of mobile banking applications.

64% of Gen X and Millennial SMB owners (those younger than 57) regularly use mobile apps for their banking transactions.  Only 41% of Baby Boomer SMB owners (those aged 57 +) use them.

The article also points out that the average age of a small business owner is 62.  

We've covered that the average small business owner is pretty old a fair amount over the years.

But it's worth repeating because younger tech startup owners tend to get much attention.  This leads people to believe the average small business owner is younger than they are.

Barlow, a leading provider of market research and consulting services to financial institutions, defines small businesses as those with between $100,000 and $10 million in revenue.  This means a strong majority of these firms have employees.

Most Musicians Earn Little on the Music Streaming Site Spotify

The Rolling Stone article The Rosy ‘Creator Economy’ Is Music’s Biggest Lie discusses the dramatic lack of revenue for many artists involved in the creator economy. 

Regarding the streaming platform Spotify, a key finding from the article states:

“Spotify's site informs us that just 13,400 artists (0.2 percent) generated $50,000 or above on the streaming platform last year. Of that group, 7,800 generated over $100,000; 1,820 generated over $500,000; just 870 artists made above $1 million.”

Spotify’s “Gold Club", which consists of the top 57,000 earners on Spotify, garner 90% of Spotify's musician royalties.  But they only represent 0.8 percent of Spotify’s total artists.

Furthermore, the majority of the “Gold Club,” 76.49%, made under $50k in 2020, which is not exactly remarkable for being part of what is considered the most elite revenue group of this streaming platform (click to enlarge chart below).  

The Harvard Business Review article The Creator Economy Needs a Middle Class further illustrates the issue at hand.

One unfortunate statistic states that 98.6% (three million) of Spotify's artists made an average of just $36 per quarter.

The article goes on to discuss ten strategies to grow a middle class of creators, and it's clear from the Spotify data that new ways for creators to generate income are needed.

Ultimately, the goal of creator economy should be that creators who aren't celebrities with millions of listens, views, or subscribers, can still receive a reasonable income for their creative work.

There is still much work to be done before the creator economy achieves this goal.

Air Taxi Company Joby Went Public

The urban air mobility (buzzword alert) company Joby made its public markets debut last week.  As with many new public offerings, it was done via a SPAC.

The company is developing a five-seat electric vertical take-off and landing aircraft, pictured below in-flight (click to enlarge).

Their primary target market is urban air taxi services and they claim they're going to build and operate a commercial fleet of air taxis by 2024.

They also see private aviation and specialized cargo as market opportunities.

According to the industrial firm Honeywell, which makes parts for aircraft, the urban air mobility market is expected to be worth about $120 billion in 2030.

Uber sold its Elevate air taxi division to Joby last year and remains an investor in the firm. So Joby has quite a bit of taxi expertise.

Regular readers know flying cars have predicted to be just a few years away for over 100 years.  But recently we pointed out:

"... the technology has reached the point where flying taxis are likely going to happen over the next decade, and maybe even in the next 3-5 years." 

And Joby has a good shot at making flying cars (and air taxis) finally happen.   

Retirees and the Gig Economy

According to the American Enterprise Institute's (AEI) The age re-retirement: Retirees and the Gig Economy, 20% of retired Americans also work in the gig economy.

The article lists the usual financial reasons for working in retirement.  

But more interesting is their description of some of the non-financial reasons. 

Key quote:

Ninety-six percent of over-65 workers reported that an enjoyable job is essential or important to living a fulfilling life. Another 54 percent of this group feel that their job is part of their identity.

So the gig economy may prove irresistible, as it permits “retirees” to earn part-time while enjoying the social and psychological benefits of work without the more limiting aspects of a full-time job.

We've long covered the changing nature of retirement and the reasons why it's happening.

In fact, we covered it so often we wrote back in 2013 that we were tired of the topic.

But we've continue to cover it in detail (see our Baby Boomer section) because the trend towards working later in life is an important social and economic trend.

And, the growing number of retirement age seniors gig workers is one of the drivers of the growth of the gig economy.

Why Traditional Employment Limits Flexibility

The Hill's Gig firms seek Mass. ballot measure classifying workers as contractors covers the plans by a coalition of rideshare/delivery companies to do a ballot measure in Massachusetts that would classify their workers as independent contractors.

The proposed ballot measure would be similar to California's Prop 22, which passed last year.

The article quote we found most interesting is (the bolding is ours):

"The companies also insist that reclassification would rob the workers of flexibility, an argument Lyft made in an email to drivers in Massachusetts on Tuesday morning reviewed by The Hill. It was unclear how full employment status would preclude flexibility."

The simple answer is that if rideshare drivers are classified as employees, the companies will have to schedule them.  

And work schedules reduce flexibility.  

The reason the rideshare companies will have to schedule their drivers is economic reality.

Allowing customer-facing workers complete schedule flexibility would result in constant misallocation of resources. Without schedules, businesses would often have too many workers relative to demand or too few. 

This would result in bad customer service, unprofitable operations, and business failure.

The majority of rideshare drivers are part-timers.  And one of the main reasons they work as rideshare drivers is they need or want a high degree of work flexibility. 

But in exchange, they take on the risk that there may not be customer demand when they work.

This is part of what we’ve long called “the yin and yang” of gig work. 

The yin is most gig workers like the flexibility, control and autonomy gig work provides. But in exchange, they must deal with the uncertainty, unpredictable earnings and other negatives that come with gig work (the yang).

Despite the negatives, survey after survey shows most gig workers (and most rideshare drivers) prefer being gig workers over being a traditional employee.

And survey after survey also shows that a key reason for this is the flexibility gig work provides.

Motivations and Attitudes of Content Creators the Same as Other Independent Workers

the Tilt, a content marketing site, recently released The Unconventionals, a survey and study of online content entrepreneurs.

They describe content creators as:

"Content entrepreneurs (CEs) make money by turning valuable and interesting content into revenue streams. Some are solopreneurs making a comfortable income based on sharing their unique expertise with a niche audience. Others are powering high-growth content ventures that employ many."

The survey respondents split almost evenly between full-time content creators (52%) and part-time content creators (48%).  And the vast majority (roughly 90%) appear to be solopreneurs (the report is a bit hazy on this topic). 

Like independent workers in general, content creators value the freedom and independence self-employment provides. They also choose to be content creators to pursue a passion or interest.

As the Tilt chart below shows, the benefits from being a content creator are very similar to the benefits reported by independent workers in general.

The Tilt study is quite interesting and well worth reading, But be aware they don't mention how they sourced their survey respondents.  This likely means it was a convivence sample of some sort. 

This isn't wrong or bad per se, but it does mean the survey may not be statistically representative of content creators in general.

LA's Creator Townhouse Community

The Hollywood Reporter's New Studio City Townhouses Draw Digital Creators Thanks to Hybrid Zoning covers a new townhouse community designed for artists and creative professionals.  

Quite unusual in LA, the townhouses have live/work zoning approval.  Key quote from the article on the units:

"Located at the edge of Studio City, across from Universal Studios, Thirty Four Fifty West has hybrid zoning that permits people to have a full professional office or creative studio with industrial grade electrical and the like in spaces where they can also live in luxury."

The townhouses are 3 stories (plus a loft above the 2nd story), and according to the article, most buyers use the first and second stories as creative office areas, reserving the third floor as their residence.

The prices start at just over $1 million, so starving artists and creators need not apply.  But by LA standards, that's pretty reasonable.

It will be interesting to see if more communities are built to support the work/life needs of independent workers and creative professionals.

New Pet Industry Buzzwords - Petrenthood and Petriarchy

Regular readers know we like both new buzzwords and pet trends here at Small Business Labs.

So it's no surprise we enjoyed Wunderman Thompson's article On-Demand Pet Care, which is a pet trends article (it covers new on-demand pet services) and has two buzzwords that are new to us - petrenthood and petriarcy.

Even better, they are in the same paragraph in the article.  Key quote:

Rover CEO Aaron Easterly explains that the company’s growth—as well as the growth of the sector—has been fueled by the rise of petrenthood. “There is this broad trend of the humanization of pets,” Easterly told Quartz. “As income rises, people get married later and have fewer children. It creates this vacuum where pets become our de facto children.” According to Wunderman Thompson Intelligence’s research, 89% of single Americans and 91% of Americans in committed relationships believe that pets are like de facto children. As Morgan Stanley aptly put it, “welcome to the Petriarchy.”

Both terms link back to pet humanization, which is a buzzword that's been around for many years.

It's quite common for trend watchers and spotters to invent new buzzwords, even if they are redundant with older ones. 

inventing a new buzzword is considered quite a coup in the trend watcher world.

For example, the creator economy was referred to as a passion economy or influencer economy until about a year ago. 

And what is commonly referred to as the gig economy today has had several names over the years, including the sharing economy, the on-demand economy, the freelance economy and a couple of others.

So we're not surprised there are new pet trend buzzwords.

The Rise of Ecommerce Nomads

The Verge's Road-Tripping With Amazon Nomads looks at people who travel across the country looking for merchandise they can sell for a profit on Amazon.

Key article quote defining Amazon Nomads:

" ... merchants who travel the backroads of America searching clearance aisles and dying chains for goods to sell on Amazon. Some live out of RVs and vans, moving from town to town, only stopping long enough to pick the stores clean and ship their wares to Amazon’s fulfillment centers."

These nomads are a digital version of a business that's almost as old as commerce itself - retail arbitrage.  

Their goal is find products that for some reason - a chain going out of business, discontinued items, etc. - they can buy for less than they can sell it for on Amazon.

As the article points out, this is not an easy business.  Margin's are low, competition stiff and the logistics challenging.

And as the article picture below showing a nomad's van during loading, the hours are long and can easily drag well into the night.  

We've interviewed a wide variety of people pursuing retail arbitrage.  

A more local version is combing through garage sales and flea markets searching for items to sell on Craigslist or Facebook Marketplace.  

These retail arbitragers tend to mostly stay close to home, instead of traveling long distances.  

An example is people looking for rare baseball cards, which have become more popular and valuable thanks to the pandemic.  

Another is an entrepreneur we interviewed who focused on finding, refurbishing and reselling used refrigerators in the St. Louis area.  He mostly sold them us Craigslist and we can confirm the business is quite profitable.

And while it's not an easy business, being an Amazon nomad shares the appeal of other forms of digital nomadism - travel, freedom and a sense of adventure. Key article quote from one of the nomads:

“It’s kind of nice to just be carefree, you know?

How the Pandemic Changed the Way Americans Spent Their Time

The New York Times article More phone calls, less shopping: how the pandemic changed American lives, down to the minute examines data from the American Time Use survey to show the changes in how Americans spent their time last year.  

The article charts below (click to enlarge) shows the biggest winners and losers, timewise. 

The key change from 2019 is that during the second half of 2020, Americans spent ten waking hours a day at home. This is up from 8 hours in 2019.

We spent about a third of that time on leisure activities, with the rest spread out across a variety of endeavors - including getting a bit more sleep.

According to the data, we spent less time on grooming, but only 5 minutes less per day.  This is likely an example of people not telling the truth on surveys. 

Based on our personal experience and anecdotal observations of others, grooming time fell by much more than that.

Combo Social Club/Coworking Space Soho House Went Public

In a clear signal that coworking is coming back post-pandemic, the high-end combo social club/coworking space Soho House went public last week under the name Membership Collective Group.

Soho House is targeted mostly at creative professionals and has 30 current locations across the globe.  It's planning on opening 16 more over the next 18 months.

Austonia's Peek inside Austin's Soho House, a ritzy new club for creatives on South Congress, details the amenities at the Soho House in Austin, Texas. It gives readers a good sense of what you get when you join.  

Key quote from the article:

"From its garden-studded outdoor space and rooftop pool to its cozy-yet-luxury indoor bar and club, Soho House Austin has arrived."

The article picture below shows the pool area.

According to Reuter's Soho House IPO Sets High Price for Entry, the chain has 119,000 members and a waitlist of 59,000 looking to join. It also has attracted celebrities such as supermodel Kate Moss to their clubs.  

Not bad, given most Soho Houses were closed due to the pandemic.

Of course, belonging to a Soho House is not cheap.  Memberships run $3000 - $4000 per year and there are lots of extras.  Drinks at the Austin location, for example, run $14.  

But they are great places to relax, work and network.

Traditional city social clubs have long been a fixture in society. They've been places that combine social and work activities, but most have heavily focused on the social. 

But over the past decade or so, new combo coworking/social clubs - with Soho House being an example - have emerged.  These places provide a social side but are much more focused on work.

And that appears to be a winning combination.

It's Time to Upgrade U.S. Economic and Labor Statistics

Sometimes we post articles on topics few people are interested in. 

This is such an article.  

But you should be interested because the economic and labor data collected by government agencies no longer provide the information we need to properly understand and manage the U.S. economy.

Over the past week several sources explained the problems with government data collection efforts and made suggestions on how to improve them.

Before we go into them, it's important to note both sources state the biggest problem is we've been cutting the budgets of our statistical agencies for years. 

This has hamstrung their efforts to develop new and better approaches to collecting and disseminating data.

Infrastructure: Upgrading the US labor statistics system is a podcast by Harvard's Future of Work program.  It features former U.S. Bureau of Labor Statistics Erica Groshen, who explains how and why we should improve our economic data gathering capabilities.  

Federal Statistical Needs for a National Advanced Industry and Technology Strategy is a report from the D.C. innovation think tank ITIF.  The key takeaways from this report are:

• The federal government has never felt the need to develop strategic economic intelligence to fully understand the competitive position of its traded sectors or to help support overall economic productivity.
• Years of budget constraints have left U.S. statistical agencies with insufficient resources to effectively measure key elements of the economy.
• There are three key areas with major statistical gaps: subnational data, international data, and data to better understand firm behavior at the enterprise and establishment level.
• As part of a national infrastructure package, Congress should make a one-time appropriation to fully modernize and expand federal statistical agency IT systems. It should then increase annual funding on an ongoing basis.

The lack of timely and complete data on the economy has become a problem for the U.S. 

We regularly see this in our work.  For example, there's still no solid government data on independent workers and most government data on small businesses are too old by the time it's released to be of use.

The economy moves too quickly and changes too often for our old data collection methods.  It's time for the U.S. to make the investment required to collect timely and relevant economic data.

Forerunner Ventures on Solopreneur Commerce

Forerunner Ventures was founded about a decade ago with a focus on direct-to-consumer ecommerce brands. 

And they've invested in some of the most successful companies in this space, including Bonobos, Warby Parker, Jet, Dollar Shave Club and others.

They are now investing in a space they call The Empowerment Economy, which they describe as:

"The true power of digital connectivity is set to upend the economy at large, powering a new generation of solopreneuers and financial freedom. This movement stands to uplift more people than any economic evolution to date."

Their essay The next revolution in commerce will be driven by the seller goes deeper into this thesis:

If commerce is a transaction between buyer and seller, the face of the seller is evolving with new tools for discovery and purchase that allow for a personal relationship between creator and customer. Beyond a corporation or mass retailer, the seller is now frequently a person or small business. We are seeing a new long-tail retailer learning how to make the internet work in their favor, enabled by social media and without the need to lean into a digital mass marketplace—they simply need a captive audience, which is easier to attract than ever.

Forerunner's chart below summarizes why think this happening at this point in time.

The emergence of niche and solopreneur ecommerce firms is not a new trend. 

But it appears to be hitting a growth inflection point, helped in part by the rise of the creator economy.  Creators need ways to generate revenue, and an increasingly popular way is by selling merchandise to their fans.  

The growth of solopreneur ecommerce is also showing up in the business applications and formation statistics, with applications from solopreneur retail businesses at an all time high.

So we agree with Forerunner and expect solopreneur ecommerce to continue to expand.

HBR on Why Companies Need Digital Nomad Programs and Policies

The Harvard Business Review's Your Company Needs a Digital Nomad Policy covers the reasons why companies should have formal digital nomad programs and policies.  

Based on an extensive study of digital nomads done by Emergent Research and MBO Partners, the article highlights two key reasons digital nomad policies and programs are important.

The first is that digital nomads, who are well educated and digitally savvy, tend to work in professions where talent shortages are common and attracting and retaining employees is a constant challenge. 

Coherent, explicit digital nomad programs and policies make it easier to hire these in-demand workers and engage, reward, and retain existing employees who wish to travel.

The second reason is that having digital nomads on the payroll can leave firms open to a variety of regulatory and legal risks. Key article quote:

"The laws and regulations that apply to a person’s work are generally based on the jurisdiction where the work is performed, even if the employer is located elsewhere. As a result, digital nomads can easily and accidentally create a new “permanent establishment” for their employer in the state or country where they’re working. That exposes both the employer and the employee to the new jurisdiction’s tax, regulatory, and compliance rules and laws."

As the digital nomad study chart below shows (click to enlarge), 10.9 million workers report being digital nomads.  And, most of them (6.3 million) have traditional jobs.  This means most larger U.S. firms have digital nomads on their payroll, whether they know it or not.

See the article - written by us and Miles Everson, CEO of MBO Partners - for more details.  Also, see our Digital Nomad section for more on this topic.

A VC's Guide to Gen Z

Digital Native is an interesting Substack newsletter from Index Ventures' Rex Woodbury.  

His recent article - A Guide to Gen Z Through TikTok Trends, Emojis, & Language - nicely describes several behavioral characteristics of Gen Z.  

It also covers their often changing and confusing (at least to older generations) use of emojis, language and social media.   

The article breaks the behavioral descriptions into 3 categories:

1.  Authentic & Unique - Key quote:

"Authenticity—while becoming a tired word to describe Gen Z ethos—captures where young people derive status online: status comes from being singular. If Millennials tried desperately to fit in, Gen Zs try desperately to stand out."

2.  Creative & Self-Expressive - Key quote:

"Gen Zs view themselves as highly-creative: over half (51%) say that Gen Z is more creative than previous generations. While Gen Zs deserve some credit (they really are quite creative!), they’re also the beneficiaries of better tools for self-expression. TikTok makes it orders of magnitude easier to be creative than a platform like YouTube."

3.  Pragmatic & Self-Directed - Key quote:

“Traditional” careers are anathema to many Gen Zs. Many grew up watching parents lose jobs during the Great Recession; they have an inherent skepticism of “the system” and refuse to work within it. This manifests in everything from growing populism (see: Donald Trump and Bernie Sanders) to the rise of Dogecoin and side hustles."

The simple article chart below (click to enlarge) is our favorite from the article. It illustrates how much easier for Gen Z to be both creative and entrepreneurial than it was for prior generations.

Gen Z's entrepreneurial interest is most relevant to us.  

But all three attitudes are important in terms of how Gen Z will impact society and the economy in the coming years.

Small Business Applications in May 2nd Highest Ever

May was yet another banner month for new business applications.  As the U.S. Census chart below shows (click to enlarge), 500,219 business applications were filed in May. 

This was the second highest number of applications filed since this data was first collected in 2005.

The recent surge in applications started last summer in July when a record 551,000 business applications were filed.  

The surge has, so far, continued in 2021.

See our prior posts on the business applications surge for more on this topic:

• May 18th, 2021: Led by Retail, The Surge in New Business Applications Continues
• February 12t, 2021: New Business Applications Surged Again in January
• February 9th, 2021: The Long Term Shift in Business Applications to Solopreneurs
• November 10th, 2020: The Surge in New Small Business Applications