Forerunner Ventures is best known for funding early direct-to-consumer, online brands like Warby Parker. Bonobos and others.
Their latest investment thesis is "digitally native franchises," which they describe as online platforms that enable people to start their own business with meaningful ownership and flexibility, but also the playbook and support of a centralized platform.
As the Forerunner chart below shows (click to enlarge), they see digitally native franchises as providing independent workers more control, freedom, and financial upside than gig workers - and greater support and less risk than traditional small business ownership provides.
Forerunner says the drivers of digitally native franchises are:
- Broad, rising interest for people to be able to work themselves (though current market conditions can make that daunting)
- An unbundling of historical service industries (healthcare, education, personal finance, home services, and more)
- New tech making structures more efficient and scalable (yes, AI)
Forerunner uses Fora Travel, which they have invested in, as an example. Forerunner describes Fora as:
"a unified platform enabling anyone with a passion for travel to monetize that expertise as a modern travel agent."
We're not sure how different a digitally native franchise like Fora is from the many existing online platforms that connect small businesses and solopreneurs to customers.
But given Forerunner's success at spotting and building new businesses, we think following their efforts in the digitally native franchise space is well worth doing.
TechCrunch has a good article on digitally native franchises and Forerunner has a detailed white paper on the topic.