Happy Sunday and a very warm welcome to all the new subscribers! I’m thrilled and honored to have you as readers and truly appreciate your thoughts and feedback 🙏. Each edition of 3 Things will contain a dive into 3 rabbit holes I’ve found myself going down recently. Subscribe to get each week’s edition straight to your inbox and if you enjoy it, please share (I suck at self-promotion so can use your help)! This past week I’ve been thinking a lot about:
Enterprise Ready Stack
Manscaped for Women
1. Airbnb in-a-Box
As of May 2022, even in a downturn, Airbnb is still a $72B market cap company (down from a peak of over $100B). There are now over 4 million hosts who have listed on the platform representing ~13 million listings in 220 countries. On average, the hosts earn ~$14k/year but many earn well into the 6-figures. In 2021, the platform generated a pretty amazing $48.9 billion in gross revenues, with Europe representing the region that takes the cake when it comes to both listings and consumer demand on the platform. While there are certain things that are great about staying at a hotel and I don’t believe the hotel industry will go away, a vacation rental offers more authenticity and different experience that many Millennial and GenZ consumers prefer and with more remote work, you are seeing the long-term/monthly rentals continue to grow as people opt to be digital nomads, even if just for a few weeks a year.
There have been thousands of local companies that provide property management services for local Airbnb hosts, managing things like cleaning, maintenance, check-in/out, and overall guest experience. Recently, there has been somewhat of a backlash against Airbnb as the prices end up being quite high when you add in the taxes, fees, cleaning, and Airbnb cut. What makes the option more attractive is that Airbnbs are often provide more conveniences than hotels like fully stocked kitchens, living rooms, outdoor spaces, strong wifi, places to work, smart TVs, and stuff for kids. There is a relatively consistent list of things that Airbnbs need to stock to keep guests happy and to warrant the prices they charge. A company could provide an “Airbnb in-a-box” for the tens of thousands (or more) of hosts who are looking to rent out their properties full-time. The company would acquire the checklist of kitchen items (everything like coffee maker, flatware, dishware, wine glasses, pots, pans, etc) , furniture, decorations, towels, toiletries, and baby/kid items like pack ‘n play and highchair. They could buy the items from Facebook groups giving away or selling for cheap, wholesale marketplaces, staging companies, or other avenues and act as the go-to place to set up your Airbnb (or other rental). The business model could be an upfront cost plus a small percentage of every rental and there are great partnership opportunities with the local property management companies so you wouldn’t need to acquire customers one at a time.
2. Enterprise Ready Stack
This idea is another one that gets credited to my fabulous husband ;-) For many B2B startups, the prize is getting to the point where you can sell enterprise contracts to large organizations. Selling to the enterprise means 6-figure+ contracts, oftentimes multi-year deals, more stability, and opportunities for expansion. In a downturn, the safest place to be is selling to larger organizations who have bigger, more stable budgets and who are less likely to go out of business or dramatically cut spend. Most startups, however, don’t start off selling to large enterprises. There are a nontrivial number of features that need to be built and boxes that need to be checked in order to be able to get passed enterprise procurement processes, security audits, and legal reviews. Every startup needs to replicate the same processes and build out the same functionality and numerous startups have cropped up to take some of the load off of individual companies since these areas are not core to their products.
There are a handful of SOC2/ISO-27001/compliance companies like Drata, Vanta, and Secureframe. There is WorkOS to help with SSO (single sign-on), Auth0 to manage role based access control, and LogDNA for audit logs. Replicated, a company that provides a platform for delivering and managing Kubernetes applications in any environment, created an incredibly smart and useful site called EnterpriseReady.io which provides resources, guides, and an assessment for any company looking to sell to the enterprise. While the research and content is very helpful, you still have to go and either build or buy each of the components to get you “enterprise ready”. Similar to my previous Startup Saas Bundle idea, a company can offer a single enterprise-ready stack that encompasses everything you need to start selling enterprise contracts. To start, you could provide a gamified assessment that tells you what you must have in place and then offer a single place to purchase your custom bundle of all the existing 3rd party tools you’ll need. Over time, you could build the most common products and services yourself and bundle those together to take in more of the revenue and not just channel partner kick-backs.
3. Manscaped for Women
The male grooming market in general has been on a tear over the last decade, finally moving beyond just deodorant and shaving cream. It is currently a $75B market and expected to double by 2030. New companies have popped up that cater to men who are looking to pamper themselves or who care about their overall hygiene and appearance. Many startups offer skincare products like creams, serums, and lotions, but the grooming category has been the fastest growing among men’s personal care. While there are tons and tons of modern companies that cater to women’s grooming and personal care (women spend on average 55 minutes a day on grooming and beauty and spend $532B annually), the male market has remained pretty boring
In 2016, a company had the brilliant idea of taking a commodity — mens hair trimmers, and branding them around use for “sensitive areas”. In all reality, you can totally use normal facial trimmers for your nether regions but Manscaped marketed themselves as “precision tools for your family jewels” and starting making a killing. In 2021, the company did $297.2m in revenue, up over 40% from 2020 and only raised $500k from angels. Women have historically been hit with the pink tax and are used to paying a premium for products marketed for them (and usually in colors like pink and purple). Women also spend on average over 53 years and $10,000 - $23,000 removing body hair. A company can take the Manscaped playbook and create fun, slightly cheeky branding, leverage existing hair removal products, and market to women looking to remove the hair down there. This type of company feels perfect for influencer marketing as well as social media to spur growth and create some word of mouth virality. Add in consumables that need to be replenished and you can create a subscription component as well.
That’s all for today! If you have thoughts, comments, or want to get in touch, find me on Twitter at @ezelby and if you enjoyed this, please share with a friend or two!