Roelof Botha, a famous consumer investor at Sequoia Capital, famously said that he invests in companies that let consumers indulge in one of the seven deadly sins. Chris Paik, another highly-regarded consumer investor that helped start Thrive Capital, synthesizes the seven deadly sins framework as follows:
Framework: consumer internet phenomena are borne from the seven deadly sins
Instagram: Pride & Envy
— Chris Paik (@cpaik) March 28, 2018
I’ve been thinking a lot about the seven deadly sins framework when making consumer investments. However, I think it will be obsolete and incompatible with the new technologies and behaviors that will shape the next consumer internet.
Over the past few years, the rise of the wellness economy (a 4.2 trillion dollar industry) has taken fold. Wellness has become a kind of religion for consumers. 1 Wellness has also become controversial; I think Goop and Juicero are frauds. Wellness creates a natural alignment between consumer wellbeing and the company. I think this is why it will win.
It’s important to note that Wellness is not just about fitness and meditation, but holistic wellness. It’s today’s luxury status symbol. All consumer brands sell aspirational lifestyles related to physical, mental, social, and spiritual well-being.
Green lifestyles are information intensive rather than material intensive. There is an emphasis on shared ownership, vibrancy, and materials-and-energy saving. The sharing economy of today and subscription-based services will help expire planned-obsolescence business models from the mass production paradigm. But sustained innovation in 3D printing, renewables, and bio must usurp the previous paradigm.
A passage from “Technological Revolutions Should Make Our Future Better.“
Personalized, on-demand, and subscription business models best capture value in these increasingly long-tail markets. Improvements in NLP, AR, ML, microbiome analysis and enhanced manufacturing enable unprecedented fabulous consumer experiences.
Distribution changes as the customer purchasing journey and top of funnel discovery are disrupted. Business models not native to these new tech enablers and distribution methods will atrophy.
The offline and online world is increasingly becoming more integrated with technology. As wellness becomes ubiquitous in our offline lifestyles, it will dominate our online presence. The moats of today’s largest media businesses are more exposed than most imagine: convex growth via network effects can result in concave decay.
Given all the ad-fatigue and emphasis on user experience, it’s difficult to see how mobile-based ad revenue models are compatible with emerging technologies like AR, VR, and cryptonetworks.
I’m excited about this new paradigm of wellness in building the businesses of the future. If your an entrepreneur creating a product that’s most aligned with consumer wellbeing, I would love to potentially brainstorm with you and potentially support you as an investor.