People work, and they usually work a lot. The average American spends 90,000 hours working over the course of their life. That’s ~1/3 of your life.
On top of that, ~6.5 hours every day is spent looking at a screen in the workplace - interfacing with email, spreadsheets, applications, etc.
For many of us, even when we leave our desk, it’s still with us in our pockets.
But 53% of Americans are unhappy at work. That’s more than half of Americans who spend most of Monday through Friday every week unhappy, unfulfilled, and uninspired.
Collaborative Fund has always sought to define our investment categories as a reflection of humanity’s greatest challenges. So we are now officially adding “Work” as a category to our investment themes. It makes up a significant portion of every consumer’s life, especially in the US. People demand more from their work.
As a fund with consumer origins, we’re excited to expand our focus to include b2b software and b2b marketplaces. As everyone knows, the distinction between b2b and b2c has become blurred.
SaaS shopping is increasingly transparent. The increase in transparency of SaaS offerings - through social media, resources like G2Crowd, and bottoms up distribution - has led to customers having a clear understanding of all the options in the market for a given problem. This transparent market means products are constantly compared to each other, and none can hide behind elaborate sales and marketing strategies.
End users = decision makers. Get that credit card swipe, and worry about the RFP later. Purchasing and renewal decisions are being made by the many.
Experience matters. Like consumer businesses, b2b tools now also must meet consumer UI/UX expectations, and deliver on an outstanding NPS. If not, the end users will disengage, and lack of engagement is the precursor to churn. As a result, customer success comes first - before scaling acquisition.
Labor is self-serve. Traditional workspaces and structures are being replaced by vertical-specific marketplaces enabling flexible work, remote work, or work that doesn’t involve intermediaries.
Though all of these are important, they do not encompass all of why we’re adding work as an investment category. Our motivation goes back to the 53% of Americans who are unhappy at work. Let’s work on that.
Collaborative Fund seeks companies that are both “better for me” and “better for the world.” That thesis has guided our consumer investing.
Purchasing decisions used to be determined only by carnal, caveman like drives - ego, money, vanity, etc. but recently, due to increasingly heightened consumer conscientiousness, customers care about a new class of factors: is this company also “better for the world”? This change in consumer behavior has driven us to be fortunate enough to partner with companies making the food supply chain more transparent (Sweetgreen), eliminating animal mistreatment and environmental waste (Beyond Meat), creating flexible work (Lyft), betting on the entrepreneurial spirit of those in emerging markets (Tala), and so many more. Not only are these companies making the world a better place, but they’re also home to vibrant, and engaged workplaces. These teams are in it to change the world, not just to make money, and that’s their secret sauce.
We believe companies focused on b2b markets are no different:
Mission matters. B2b companies used to be built soley to drive increased revenue or decreased expenses because that’s what b2b customers cared about. But today b2b customers are just as conscientious as consumers because, ultimately, consumers are employees, and employees are consumers. They are the decision makers. As a result, b2b companies also need to cater to this elevated employee consciousness in order to be truly generational. How will this company make the world a better place? How will it make my colleagues more fulfilled and productive? Does it make my job more satisfying? Do I stand by the impact this product is having on my team, and the world? Does this product help automate the boring stuff and make more time for me to do what I want at work? These questions matter.
In fact, we’ve already seen a new crop of b2b companies that embody this duality, and exist in the overlap between “better for me” and “better for world”. LTSE, from our portfolio, is focused on simplifying the process of going public, and as a result, driving more money into the pockets of employees and mass-market investors, not big banks. Other examples continue to emerge, and continue to scale:
VTS - Enable commercial real estate teams to collaborate and perform more cohesively by digitizing a paper and telephone based workflows.
BetterUp - Make managers better. A large part of our day to day satisfaction is driven by who we work with, and Better Up is focused on making those individuals better able to lead.
Sift Science - Reduce online fraud using shared machine learning insights, so that the long tail of online retailers can compete with the in-house fraud intelligence of giants like Amazon.
UIPath - Automate repeated, monotonous tasks so that employees can focus on what they truly want to do in the workplace.
Substack - Fix publishing, and empower journalists to build their own flexible content subscription business.
RigUp - Help those who work grueling jobs on oil rigs to find better opportunities, and take more money home to their families.
We applaud the founders and teams behind these companies and many more. We’re excited to work hard for the next set of iconic b2b companies, and hope to meet you soon.