🧱 11 Trends to Follow in 2022

Overlooked #102

Hi, it’s Alexandre from Eurazeo (ex. Idinvest). I’m investing in seed & series A consumer and consumer enablers startups all over Europe. Overlooked is a weekly newsletter about venture capital and underrated consumer trends. Today, I’m sharing trends that I’ll follow in 2022.

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In this post, I'll share 11 specific trends that I'll dig into in 2022. I also compiled 160+ trends on this Airtable. I tried to pick only specific trends (vs. general trends) and trends may be under the spotlight in the short run (next 12-24 months vs. 10y trends). I think it's both a great source to understand where the world is heading and to find inspirations for topics to dig into as an entrepreneur.

Obviously, if you’re building or investing into one of these trends, I do want to meet you. Please send me an email at adewez@eurazeo.com!

Trend n°1 - Ultra-verticalised consumer marketplaces

Many consumer marketplaces became multi-billions businesses by unbundling Craiglist, Amazon or Ebay. In Europe, companies like Vestiaire Collective (second hand fashion), Backmarket (second hand electronics), ManoMano (DIY products) or Farftech (luxury goods) followed this playbook.

I believe that all these un-bundlers can go one step further and still generate multi-billions outcomes. In the sneaker/streetwear category, GOAT and StockX are two great examples of unicorns built on an ultra verticalised niche.

Being ultra-verticalised also opens the path for other revenue streams beyond a take rate on the marketplace like a proprietary brand (Wethenew) or a subscription to access the marketplace (Solesavy).

Trend n°2 - Fintech-powered free SaaS

Several SaaS categories will be disrupted by new entrants which will give the SaaS for free and which will monetize via payments and additional services.

"Both Ramp (expense management) and Sunday (consumer payments in restaurants) are adopting this playbook successfully. It's next to impossible for SaaS incumbents to compete with these new players for two reasons: (i) you cannot react without jeopardizing your economical equation and (ii) a free product can have an extremely fast go to market.

Trend n°3 - Tech + real assets

Many consumer verticals cannot be reinvented without a fullstack experience in which you own and augment real assets with tech. For instance, a SaaS like Doctolib is not enough to reinvent healthcare because it does digitize all the processes and it does not change the habits of all the stakeholders. This is why some doctors are copy-pasting their appointments from Doctolib to their paper agenda.

I believe that to reach the next step in the digitalization of many consumer sectors, we need to have players which have a more holistic approach and which accept to include real-assets in their model. To come back to the healthcare industry, it's something that Avi Medical is doing in Germany buying the real estate of general practices and digitizing both the patient's and the doctor's journey from scratch.

Trend n°4 - Post covid travel consumer innovations

The travel industry is being turned upside down by covid. New travel behaviours are emerging: more local, more nature, digital nomadism, longer and more frequent stays etc. It opens new opportunities for travel startups who will be able to build new consumer offerings for these behaviors.

Trend n°5 - Next generation materials

Many materials can be augmented with technology and used across many industries (automotive, construction, fashion). If these new materials can combine 4 key attributes compared to existing materials (cheaper, no process change, more sustainable, scalable production), they become no-brainer.

Trend n°6 - Verticalised orchestration platforms

Bundling, unbundling and orchestrating are the parts of the perpetual innovation cycle. I feel that we’re entering an orchestrating phase with many unbundled verticals to be orchestrated. For instance, Primer helps merchants orchestrate their payment flows by combining many stakeholders and by customising the flows to optimize conversion.

Trend n°7 - Vertical SaaS for local businesses

If you're a regular reader of this newsletter, you should know by now that I love vertical SaaS for local businesses. Many local businesses remain completely under digitalised using pen, paper and excel. When they use software, there are using a combination of solutions that are not inter-connected, expensive and sometimes on-premise.

You can unbundle Yelp like marketplaces have unbundled Craiglist. You pick a category of local business and try to build the all-in-one SaaS to help local business in this category to manage their business.

Trend n°8 - Augment your e-commerce checkout experience

Startups will replicate the BNPL playbook (Klarna, Affirm, Afterpay) starting by improving the checkout experience and then expanding to a broader platform.

To convince a merchant to add your solution in its checkout, you need to bring him benefits such as increased conversion rate, higher AOV, lower return rates or better consumer experience. Once you're in the checkout, it's a unique positioning to build a next-gen platform - like Klarna has been doing with its own mobile app which is becoming both a neobank and a ecommerce platform.

Trend n°9 - Crypto as the next business model revolution in gaming

In gaming, the largest paradigm shifts have been driven by business model innovations - the last main innovation being free to play games (e.g. LoL or Fortnite). Instead of paying €50-80 for a game, you can play for free and pay if you want to augment your experience with cosmetic items and/or game boosters.

Crypto-based games are a business model innovation for gaming that has the potential to reshuffle the cards of the gaming industry by bringing new mechanisms to games like play-to earn, interoperability between games, decentralized item ownership etc.

Trend n°10 - Breaking down Salesforce

Salesforce is the most used CRM in the world but it's an horrible product hated by most of its users. It will take several decades to disrupt Salesforce but I'm sure that we'll get there. Companies going after Salesforce start by building an alternative 10x better to a Salesforce's feature before expanding into a broader platform that could end up dismantling Salesforce.

I've 3 approaches in mind: (i) building a vertical CRM which is Veeva's playbook in the healthcare vertical, (ii) building a tool to manage sales remuneration, (iii) leveraging sales call video recording to make salespeople much more efficient which is Gong's playbook.

Trend n°11 - Social+

a16z's team says that as long as a consumer category is not dominated by a social first player there is room to create one and win the category. I agree and I'm proactively looking for vertically social network that can disrupt consumer categories like gaming, travel, fashion or food.

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Thanks for reading! Thanks Julia for your feedback! 🦒 See you next week for another issue! 👋