GZV #4: Fourth Edition: A new look

Startups. Trends. News. All from a Gen Z view.

the flow

***this section will be used to highlight the recent funding deals in the past two weeks, in other words, where money has been flowing. I will give each of them a rating out of 10 to show what the Gen Z view is of the investment round. Here is the rough scale;

1/10: Would never see a kid my age use this product
2/10: The idea may have 1-5% of Gen Z engagement
3/10: The idea is not going to have a big reach, shift is needed in business model
4/10: The idea will have low percentage of Gen Z using this service
5/10: The idea could swing both ways. Too soon to tell
6/10: The idea has potential, but may need an extra feature or two
7/10: The idea is solid, investors looking at a 1-5x return as long as the execution is there
8/10: The idea should capture around 60-80% of the market
9/10: The only people who won’t be using the service are Gen Z stragglers and really aren’t up-to-date
10/10: I’m going to use this and so will everyone I know. Massive success.

April 14th, 2020
Muze
Seed round of $5.1 mil

Score: 3.7

Muze is sort of in stealth mode, I wish I could have more information on them, but their website only gives a few preview pictures. Crunchbase says Muze, “... is a creative messaging app that expands how users can communicate”.

In our view, communication is a tough market to try to penetrate. Gen Z has communicated through the same means for years now, and there aren't a ton of deficiencies. Our main methods are texting and snapchat. Within texting, we don’t need any add-ons, no one has ever looked at texting and been like, “wow this is boring”. We use texting for communication and really don’t need anything added to it.

Another question, Is this app an entire separate messaging app in itself, or an extension of imessage? This is really where the 3.7 score comes into play, I’m assuming this app will try to serve as an extension to iMessage, from that perspective I can see a 5-10% of people using the app to spice up their conversations. If this is a separate app, I really can’t see a future where Gen Z uses this app, it is trying to add too much to a sector that’s already pretty satisfied.

April 14th, 2020
Sparkcharge
Seed round of $3.3 mil

Score: 5.9

Fast forward 5-7 years and this company has a 7.9 instead of 5.9.

This company is making portable electric car chargers that allows electric car owners to charge anywhere. When looking at my generation, we are way more conscious of climate change and will be making cleaner decisions for years to come. This includes owning electric cars.

In general, the entire car industry is starting to turn electric, but a full transition is still 10-15 years away from my view. In about 5 years, Gen Z kids will be exiting college, or in the workforce for a few years and free to make the decision of what car to buy. As the years go on, electric is going to become more of the go to decision. Most of us have portable batteries for our iphones, wouldn’t it be reasonable to have the same with your car?

April 14th, 2020
Cloosiv (YC Company)
Seed round of $500k

Score: 7.1

It seems that this 500k was an extension to a previous seed round of $1 mil raised in October. In our current contactless-payment world, that seems very reasonable and a smart move by the Cloosiv team.

Outside of a Covid-19 world, I really like POS (point of sale) companies for the future. It's no secret that Gen Z is at the heart of the Amazon era. We are not patient and are used to getting things within a 2 day time span at most. If we walk into a coffee shop and the line looks pretty long, we aren't going to wait, we are just going to go next-door to the other coffee shop we know. The amount of times I have tried to grab a coffee 5 minutes before class and not been able to because the line is too long is well above 33% of the time. I know others share the same problem. If my coffee shop at Elon University incorporated this system, I would guess revenues would jump at least 20%.

POS systems are the way of the future, and ones that incorporate local mobile ordering are just going to grab that much more of the market. I would keep an eye and see how Cloosiv emerges from the Covid-19 crisis and see when they raise a Series A round.

Investing with TikTok in mind
Tom Lombardozzi

When looking at the Gen Z market, it is no secret there is one app that has taken our generation by storm, that app is tiktok.

There are a few reasons that this app is so popular and why it made a great investment for any private investor. To start, it's simple short-form entertainment. As I touched upon in the Cloosiv piece, Gen Z is all about getting satisfaction as quickly as possible, when it comes to tiktok this satisfaction comes in the form of dopamine. Videos can be no longer than 60 seconds and are usually accompanied by music in some manner. These short videos can be addicting and entertaining, and users are spending an average of 52 minutes a day on the app getting caught up in this loophole.

Within most social media platforms, this is a common source of dopamine. However, what makes tiktok above all other platforms is it's virality component that feeds the human brain more dopamine than any other social media app.

Let me explain. Kids these days look up to influencers, those people that have millions of followers and can do whatever they want because they have a pretty good amount of money. Tiktok has some special component of it's algorithm that allows for any user to get hundreds of thousands of views. All you have to do is make a really good piece of content and then release it. To prove this, I made a short 15-second video about the stock market one day and got 3500 views. Not going to lie, it wasn't a terrible feeling, and that is what every kids posting a video is trying to do. The difference between old platforms and tiktok is that kids know it's possible to go viral on tiktok, they just have to make a good content. How hard can that be?

Tiktok unfortunately is a subsidiary of it's parent company, ByteDance, which is valued at $70 billion. This means that there really isn't much of an investment opportunity in tiktok itself.

It is no secret that the psychology behind why this app is so popular is the multiple features that spur dopamine within our brains. So, It's important to remember tiktok next time a social media company approaches you for an investment. Ask yourself, does this company has enough features that produce dopamine like tiktok to succeed? If it only has one or two features, similar to instagram, it may not have enough to provide a meaningful ROI. This space is crowded and you need a homer to win.

the lookout
***in this section, I will highlight a trend that everyone should look forward to in the coming months/years

Gen Z is locked in quarantine and most of us are doing school work and relaxing. Watch out though, for the select few who are building a startup. I predict in the next 2-5 years we will see a good portion of Gen Z founders come into the startup world, and over half of those startups will be founded in 2020.

Reach out to info@genzvoice.com with any feedback or thoughts.

And follow us on social media below!

-GZV