1. The Trend
If you ask me, parenting tech should be renamed desperate parents tech as, in reality, what people really look for when using such products is not so much to be better parents, but rather to survive through parenthood (parents for whom it’s easy don’t need it). I’m speaking from experience, I have two fantastic kids, five and two years old, that I love deeply 💖💖👼 (especially when they are in kindergarten).
Somehow I have the impression that a new wave of startups for desperate parents is emerging with different approaches::
Community & classes. These startups are building communities and marketplaces where desperate parents can connect with other parents or experts who will help them with a variety of issues such as sleep deprivation, partner relationship problems, depression, etc… See Weehuman, Taking Cara Babies, Village for Parents or Weldon.
Deep Tech. These startups leverage new technologies to build products that help parents in various ways. For example, Zoundream is developing a portable translator for baby cries. The device listens to your baby cries and through pattern recognition will indicate whether your baby is hungry, has stomach pain or just need to have his diaper changed. Can’t wait that they do the same with parents’ cries.
Drugs. There’s a growing trend called “Psychedelic parenting” where parents microdose psychedelic drugs (such as psilocybin/ magic mushrooms) to ease their parenting experience. As we’ve seen in this newsletter already, psilocybin can be useful beyond recreational use (to treat depression for example), and altering the parenting experience is maybe another one. Read also: “It makes me enjoy playing with the kids’: is microdosing mushrooms going mainstream?”
As you can see there’s an increasing number of options for desperate parents out there. Whether these are efficient or not is a separate question, but at least you can try different approaches.
2. The Startup Memo: Taking Cara Babies
I picked Taking Cara Babies because I wanted to change a bit and instead of analyzing a company from a “VC compatible” perspective, I wanted to analyze one that has many ingredients for a great bootstrapped business.
Taking Cara Babies is a direct-to-consumer company that teaches (desperate) parents how to make their baby sleep better at night. The company sells online classes composed of pre-recorded videos (not love classes) and text booklets (prices range from 34$ to 300$), together with personalized phone consults (75$ per 40 min).
- 👍: Awesome
- 🤔: Question
- 👎: Problem
|Customers||Use Cases||Value Propositions|
|Desperate parents of babies aged between 0 and two.||Their baby doesn’t sleep well and they don’t know how to improve the situation.||* For the baby: better night sleep.|
* For the Parents: be less exhausted and improve their quality of life.
IMO the need section is probably the most important aspect to validate before launching a bootstrapped company. Your path to monetization will be easier if:
- Customers: You have clearly defined customers/personas and the end-user is also the buyer. If you have complexity/unclarity in your personas structure, your path to monetization will be complex.
- Use case: the need that you address is easy to explain and you don’t need to conduct user education. Market/user education is one of the most difficult things to do.
- Value proposition: what you sell is a “must-have” and not a “nice-to-have”.
👍 I’m not saying that you cannot succeed if you don’t have these three ingredients, but for sure it will be more difficult. In the case of Taking Cara Babies I believe that they have the three.
As a note, some might argue that these are good ingredients for VC backed companies too, which is true, but when you raise capital early you can afford to explore the customer aspect (you don’t need to monetize right away) and to conduct market education which takes time and cash. Basically, money buys you time.
When it comes to the market aspect, the major difference with a VC compatible business is that the size of the market matters much less. Ideally what you want as a bootstrapped business is to target an underserved but healthy niche, meaning that the TAM might not be big, but the customers lack solutions to the problem you solve and they are ready to pay for it.
👍 & 👎 In the case of Taking Cara Babies I believe that they do have a healthy niche (people are ready to pay for it), but it’s not an underserved segment as many books, online classes, and Facebook groups already exist for parents in that situation. So the company needs to stand out from the competition with a better product and a trusted brand. The good thing is that the niche of parents with kids between 0 and 2 yo is a pretty big one as there were 3.7M births in the US in 2018 alone (so their total market available is two times that). 3.7M potential new customers per year is not a bad market.
👍Their main product is a static online class (video + pdf, no live video) which advantages are that it’s easy to create (no technical challenges) and it can scale. They can sell one thousand classes per day, there’s no scalability issue (they don’t sell their time).
👎 The two main drawbacks of the current model are that there is no barrier to entry (no product defensibility) and they have a limited repeat rate. Once the parents buy one or two classes on the website, it’s finished. Same as soon as the babies are older than 2 years old.
Distribution & Branding
Most bootstrapped businesses cannot afford to spend a lot of money on acquisition, this is why word of mouth, affiliation and organic traffic are most of the time key drivers.
In the case of Taking Cara Babies according to Glimpse, one of their major acquisition chánnels is through referral websites such as BabyList.
I find the idea behind Cara Babies a great one for a bootstrapped business. Most VCs would pass on such companies at early stage mainly because of the lack of product defensibility (the product is an online class with a low repeat rate). But if they manage to build a trusted brand and expand their line of products, it can definitely become a VC compatible business (classical consumer brand play).