EIEIO...All We Want For Christmas
Entrepreneurship, Innovation, Education, Impact, and Opportunity
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“It is more blessed to give than to receive.” – Jesus Christ, Acts 20:35
“You can have everything in life you want if you help enough other people get what they want.” – Zig Ziglar
“You could say that I’m a dreamer. But I’m not the only one. Someday you could join us. And the World will be as one.” – John Lennon
Peace in the Middle East. Eradication of poverty. An end to social inequality. Access to quality education for all.
You’re probably thinking, “If ifs and buts were candy and nuts, we’d all have a Merry Christmas”…
While our Holiday Wish List might seem a bit “pie in the sky”, (or partially borrowed from the UN’s Sustainability Goals) we are motivated by solving some of the biggest issues facing the future of our planet.
Accordingly, what we really want under the Christmas tree this year is a game plan to bring a community of entrepreneurs, investors, policymakers, and business leaders together to catalyze our ambition.
In October, we published a piece digging into three overarching pillars that we call Healthy, Wealthy, and Wise when thinking about investing. We do not view these in individual siloes, but as interconnected components that ignite Human Flourishing…which is the real summation of our aspirations.
The world is exponentially healthier, wealthier, and wiser today than it has ever been before. It can be difficult to keep this in mind with the deluge of bad news that is spoon-fed to us day in and day out, but the data proves it.
Don’t equate our optimism with complacency – we’re hungry for better outcomes across the board, and we know that there is ample room for improvement across how we pursue health, wealth, and wisdom. As you’ll see, there is significant overlap between these three categories - and we view that as a good thing. Solutions within one category often have dramatic ripple effects across the others.
Here are a few things we want for Christmas this year, by category.
One positive outcome of Covid was that it woke up many people to the importance of proactively maintaining their physical health and wellbeing. Young people are taking a relatively no-nonsense approach to wellness, and the market is responding to their behaviors. For example, with alcohol consumption plummeting among Gen Z compared to past generations, non-alcoholic beer, wine, and spirits sales have increased 32% so far this year. Five-year-old Athletic Brewing is now a $500 million business and a rising star in the non-alcoholic beer space.
This health focus also manifests in the "quantified self" trend, which has no end in sight as wearables get cheaper, faster, and better, allowing people to track everything from their heart rate to their sleep patterns.
More fuel for the wellness movement is the super-hot longevity craze, with many middle-aged and older people seeking to extend their “healthspan” as long as possible.
While the specifics may vary by generation, the broader theme is an increased focus on proactive health and wellness, often enabled by technology.
42% of the American population is now considered obese - this is a crisis that urgently needs solutions. However, we are hesitant to immediately embrace quick fixes and "miracle" weight loss products as the answer.
For example, the diabetes medications Ozempic, Wegovy, and Zepbound have exploded in popularity off-label for their dramatic weight loss effects. They have also been shown to improve blood sugar control and reduce the risk of heart disease. But these are still pharmaceuticals with side effects, risks, and unknown long-term impacts that require more research. Rushing to them as cure-alls before we fully understand their effects could be dangerous. Further, they appear to create dependency - once stopped, weight is often rapidly regained and potentially even more added back on.
As of 2021, the American population aged 70 and above had a net worth of nearly $35 trillion, according to Federal Reserve data. That amounts to 27% of all U.S. wealth, up from 20% three decades ago. This massive and growing demographic has money to spend and a desire for living experiences that support health and quality of life in their later decades. We want entrepreneurs and investors to lean into services and technology that cater to the “healthspan” space for older generations.
There are plenty of ways to provide value, from senior-tailored fitness to nutrition guidance to chronic disease management. The market opportunities are immense for those who understand this demographic’s needs and preferences.
The number of males who regularly participate in sports dropped from 2012-2019 from 49.1% to 39.1%, while females dropped from 33.5% to 31.7%. This decline is concerning because sports are among the greatest forms of Invisible Learning that exist, providing invaluable benefits beyond just physical fitness.
Through sports, young athletes learn grit, determination, teamwork, selflessness, and a whole laundry list of intangible skills that prepare them for adulthood. Student-athletes have higher GPAs, better school attendance, and perform better in core subjects. College athletes are more likely than their non-athlete peers to land a full-time job after graduation. Fortune estimates that 95% of its Fortune 500 CEOs played sports at some point in their lives.
Our definition of this pillar is slightly unconventional - when we say wealthy we mean “richness of life.” We all know that America has a massive mental health problem, with more than 30% of adults in the US currently reporting symptoms of anxiety or depression. We believe this is downstream of the increased levels of atomization in society, demonstrated by disheartening numbers around loneliness in America. A recent Pew poll showed that 8% of US adults have “no close friends”.
We’re looking for businesses and entrepreneurs that enrich communities and facilitate ways for people to find greater meaning in their lives.
Coach For America
We’re taking this one from Of Boys and Men author Richard Reeves. Reeves articulated his desire for the creation of a Teach For America equivalent he would call “Coach For America” in a podcast interview he did with Scott Galloway. He brilliantly articulated how such an organization would benefit those on the supply side and the demand side.
On the supply side (coaches), he points out that there is unfortunately no shortage of young men who are bored, get little fulfillment from their work, and have nothing to do after 5 pm each day. He argues that countless individuals would get a great sense of purpose and fulfillment from coaching kids. On the demand side (youth athletes), there have been many examples of schools slashing sports programs due to a lack of funding and interest, which has of course contributed further to the obesity epidemic among kids and adolescents. Further, many children in America face a dearth of male role models in their lives, with 1 out of 4 children living without a father in the home. Providing new opportunities to get involved in sports and learn from elders in the community is a win-win-win.
Community creates immunity. The more products that help people get involved in social group settings, the better. We appreciate that people have affinity groups at their fingertips in places like Reddit, Discord, Patreon, etc…which is great. The healthiest people strike a balance - both the amazing world of online living and the irreplaceable benefits of in-person interaction.
Stop Optimizing for Comfort Zones
Today’s kids don’t want to grow up. Roughly 1 in 3 men ages 18-34 live with their parents. Only 60% of teens get their driver’s license these days, compared to 80% 20 years ago. There is less incentive to get behind the wheel when “The party is on Instagram and Snapchat”, and you can DoorDash every meal. There are a multitude of factors that have made this into a widespread lifestyle for young people, but “snowplow parenting” is chief among them.
Knocking down every obstacle before children can face them leads to anxious adults with low self-esteem. In a particularly pathetic data point, it was recently reported that 86% of Gen Z suffers from “Menu Anxiety”… and 1 in 3 cannot even speak to a waiter.
Problems create opportunities. Building a society of self-confident, independent citizens is a cornerstone for a productive future.
This pillar focuses on acquiring knowledge and lifelong learning.
Overall, we want to reimagine the objective and rethink the best way to get there. There are endless point solutions in the world of education, but there has been a habit of missing the forest for the trees. As “the Education Whisperer” Tom Vander Ark said in our recent Ed on the Edge interview, digitizing worksheets does not actually improve education – it just brings the same outdated, often useless practices online.
In With Mastery, Out With Seat Time
Most “modern schooling” was designed to prepare young people for participation in the Industrial Economy – teaching students how to follow instructions to complete repetitive tasks on an assembly line. That’s no longer the case in today’s Knowledge Economy, where the average American will have 17 different jobs and 85% of the jobs in 2030 don’t exist yet.
A Comprehensive, Universal Solution to Childcare
Prof. James Heckman’s research proves that investing in high-quality, birth-to-five early childhood education is one of the most effective ways to create equal opportunity for all. The reality is that there is a 30-million-word gap between rich kids and poor kids. Start behind, stay behind. Poor kids are 5X more likely to drop out of school and 8X more likely to go to prison (and 80% of all prisoners are high school dropouts).
Speaking of Prisons, Make Them Prep Schools
After making a mistake, people should have the opportunity to make up for it. We should train incarcerated people to be productive members of society instead of leaving them for the living dead. There’s perhaps no better example of what this could become than the story of the CEO of TAP (a GSV Ventures portfolio company) Jason Spyres.
Elite = Excellence, Not Exclusivity
The barometer for success in Higher Ed shouldn’t be how many students you reject, but how many you teach. Excellence means tangible, outstanding outcomes…not the social signal of attending an Ivy League university.
Make Invisible Learning A Priority
We need to remove friction from the traditional learning process. In a world of lifelong learning, you’re not going to be dropping out of life to acquire the knowledge you need to advance. Whether it’s through gaming, playing sports, interning, or listening to podcasts on your commute – learning has to happen in your natural course of living.
What students learn outside the classroom is just as important as what they learn through traditional schooling. Invisible Learning should be completely integrated into the education system. 71% of kids aged 2-17 play games, and the average gamer spends 15,000 hours gaming as a child, the same amount of hours spent in the classroom during K-12. There’s a massive opportunity to make that time more valuable than the time spent reading textbooks.
Lucky 7. For the seventh week in a row, stocks moved high, inspired by the Fed’s good news of lower interest rates ahead.
Both the Dow and NASDAQ advanced 2.9% for the week with the S&P 500 up 2.5%.
There were many data points to be cheerful about including inflation last month being up just .1% and retail sales being higher than expected up .3% versus a projected decline for November.
Additionally, while both the NASDAQ and S&P’s strong 2023 performance was driven primarily by a handful of Mega-technology stocks, recently participation has broadened.
Other notable news included the Indian Stock Market (the Bombay Exchange and National Exchange) reaching $4 trillion, surpassing the Hong Kong Exchange, providing more evidence of India’s rise and Hong Kong’s demise.
Epic won its antitrust case with Google which focused on Google’s toll it extracts from different apps on its Google Play platform.
As we head into the end of the year, we expect to see growth companies continue to lead and are optimistic about the New Year.
Maggie Moe’s GSV Weekly Rap
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Need to Know
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GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation. Here’s how these four signals performed last week:
#1: Inflows and Outflows for Mutual Funds & ETFs
December 12 saw the most inflows into the S&P Tech Sector $XLK in the last 5 years.
#2: IPO Market
General Atlantic confidentiality filed to go public this week, joining Shein, Apex Fintech, and Panera on the IPO sidelines.
#3: Interest Rates
The market is now pricing in a Fed Funds Rate of 3.8% by the end of 2024 after Fed Chair Powell remarked on Wednesday that policymakers had discussed beginning to cut rates.
Source: Charlie Bilello
The Congressional Budget Office announced on Friday that they expect inflation will decrease to 2.1% next year.
Chart of the Week
It’s a Global Silicon Valley, but the Bay Area is still the king of venture funding, especially in AI. Bay Area companies have raised 31% of all venture funding and 49% of all AI funding this year among companies on Carta.
Source: Peter Walker
Entrepreneurship: 57% – GenZers who said they would like to become an influencer if given the chance (CNBC)
Innovation: 50,000 – people who have inserted a microchip into their body to serve as their new swipe key or credit card (The Hill)
Education: 62% – percent of Chicagoans who support school choice (Illinois Policy)
Impact: 44% – increase in ESG fund outflows vs. non-ESG fund outflows (IR Magazine)
Opportunity: 78% – Americans who agree that “We should aim for equality of opportunities, not equality of outcomes.” (SPN)
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Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup….EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
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