Welcome to the Momentum Decade
A new and improved version of the roaring 20s.
ON THE UP: THE MOMENTUM DECADE
Covid-19 bred a renewed sense of resilience and entrepreneurialism. As the business community looks forward to a more predictable and stable political environment, it is time to get ready for the momentum decade.
Risk-taking transformed from a luxury to a survival tactic. Now the rewards of reimagining and reinventing are recognized and businesses can’t get enough. Optimism is driving momentum towards post-pandemic recovery. Voracity for reassessing, experimenting, and taking chances has only just begun.
SPACS, direct listings and IPOs are enabling new types of companies, especially DTC brands like BarkBox, to thrive, go public and maintain focus on consumer needs.
Financial institutions accepting cryptocurrency let consumers experiment with new ways to invest.
Investment platforms tailored towards niche investors groups encourage new types of people to start their investing journeys.
Buy now, pay later solutions like Klarna offer consumers a personalized shopping experience and flexibility in making memorable purchases.
ESG and socially conscious investments are gaining traction as inequality was put under a magnifying glass.
One of the key elements driving the momentum decade is optimism that there will be job recovery in sectors and among demographics (women, minorities, young and less educated workers) that were hardest hit.
THE TAKEAWAY?
Once again, America’s entrepreneurial spirit is on the rise as Americans adapt and innovate into the future — there’s no stopping it now.
ON THE DOWN: PESSIMISM ABOUT ECONOMIC RECOVERY
There’s no room for economic pessimism in 2021. We’re beginning to bounce back, look forward and inspire growth.
THE DEEP DIVE DECODE
Here’s how the business community is hitting on all 5 Drivers of Momentum as we enter the momentum decade.
DISRUPTION: Going public via SPACs, Direct Listings and IPOs
2021 will be the year that SPACs, direct listings and IPOs enable new types of companies to go public.
SPACs were the biggest trend for IPOs in 2020 and their momentum is continuing to rise: up from an MFactor of 6 in Jan 2020 to an MFactor of 34 this month.
DTC companies like BarkBox, Poshmark and Peloton benefited from 2020’s disruptions. They were strong companies to start and 2020 accelerated their growth. We now know that DTC is a more efficient and consumer-centric model in times of disruption. Companies that were able to bypass the middleman and go directly to consumers experienced immense momentum and now have an opportunity to go public.
BarkBox and SPAC Northern Star are leading the way. BarkBox, who’s momentum surged from an MFactor of 10 in Jan 2020 to 22 in Jan 2021, is going public in 2021 via SPAC (special-purpose acquisition company) Northern Star Acquisition (YSE: STIC).
BarkBox’s Executive Chairman Matt Meeker, CEO Manish Joneha along with Northern Star Executive Chairwoman / CEO Joanna Coles and partner Jon Ledecky believe the merger will accelerate BARK’s ability to scale and continue to disrupt the pet landscape while remaining completely consumer-focused.
INNOVATION: Cryptocurrency
2021 is the year large banks & institutions evolve their position on cryptocurrency as the momentum for bitcoin surges from an MFactor of 41 in Jan 2020 to 64 this month. They’ve changed their tune from calling Bitcoin a fraud to investing close to 1% of their AUM.
JP Morgan, Guggenheim, Paul Tudor Jones, MassMutual & more have recently given Bitcoin the seal of approval. Why? Investors believe the Fed & other major central banks will backstop / underpin markets with trillions in liquidity should bond yields rise or stock prices fall. Plus, these institutions are careful not to alienate millennials, who have made their enthusiasm towards the alternative currencies crystal clear.
Visa is partnering with more than 25 digital currency companies on bitcoin-related products and services. Cards are just the tip of the iceberg. Visa is eager to “shape and support the role they play in the future of money,” and say they are the preferred network for digital currency wallets.
POLARIZATION: Investment platforms
The rise of investing platforms are ushering in a new wave of investors. Ellevest, a robo-advisory service, strives to close the “investing gap” among women while Robinhood and StockX leverage addicting, game-like qualities to attract beginning investors.
Ellevest is specifically a “by-women, for-women” firm targeting the largely untapped market of female investors. They’ve created a brand based on education, communication & trust to help women view themselves as investors. CEO Sallie Krawcheck’s mission is to get more money into the hands of women.
Robinhood is sparking a new class of investors who are younger and tend to have more diverse backgrounds. They make trading seem accessible and appealing through a light-hearted experience, showering investors with digital confetti after their first trade. Their rewards programs encourage users to routinely login to the app, building investing habits and brand loyalty.
StockX isn’t your traditional investment platform — instead of investing in stocks and options, StockX facilitates investments in things: from luxury sneakers (e.g. Jordan 1 Retro High Travis Scotts trading at over $1,600) and limited-edition Crocs (e.g. Dimitri Clog Alife Classi trading at over $600) to KAWS collectibles. The platforms’ commodities exemplify the dynamics of supply and demand more tangibly than investing in the stock market. It allows users to build foundational knowledge of markets and grow as investors.
STICKINESS: Memorable Buy Now, Pay Later (BNPL) platforms
Klarna and Affirm are among the crop of fast-growing “BNPL” players, which extend short-term loans to buyers at point of sale(similar to a credit card purchase). This model lets consumers invest in big-ticket purchases that might have previously been out of reach.
Part of the genius of Klarna is its distinct and disruptive branding and positioning. Most traditional credit lenders and banks feel brandless and impressional to consumers. Klarna appeals to modern online shoppers with a personalized experience and branding that is fun and engaging: tailored shopping tips, exclusive deals and the freedom to shop anywhere and pay how you prefer.
SOCIAL IMPACT: Momentum for ESG investing
2020 reminded us of the importance of investing money, time, and resources into social & environmental causes. With President-Elect Joe Biden’s upcoming inauguration, there is renewed commitment to responsible investing.
The last four years led to more growth in socially conscious investing than the previous 12 years. That growth and momentum occurred in spite of “headwinds” — policies & regulations intended to make ESG investing strategies more difficult to wield.
With upcoming “tailwinds” (ESG proponents selected for Biden’s cabinet), we expect the momentum for ESG investing will continue to rise.