We surveyed Gen Z following our GEN Z VCs SUMMIT — and here’s what we found
By: Meagan Loyst, Associate @ Lerer Hippeau & Founder of Gen Z VCs
Everyone is trying to understand Gen Z — what they’re thinking, how they’re interacting. The fascination makes sense: Gen Zers represent 35% of the global population, $143bn in spending power, and are influencing tech trends and culture at a more rapid pace than ever before.
In September 2020, we hosted the GEN Z VCs SUMMIT in partnership with the Gen Z VCs community & our sponsors (AWS Startups, Silicon Valley Bank, Carta, Vouch, and Welcome). Our Summit saw over 3,000 attendees from 71 countries — a mix of founders, students, VCs, and operators alike. After the Summit, we surveyed the group on their likes, dislikes, feelings, and predictions — and here’s what we found.
Segments examined:
- Top Trends and Favorite Companies
- The Gen Z Identity
- Sector Insights: Future of Work, PropTech, Data Privacy, Social & Shopping, FinTech & Crypto
- The biggest problem our generation is facing & how we’ll change the world
- The COVID Impact on Gen Z
And lastly, we’ll share a forward-looking view on why all of this matters & what to expect from Gen Z.
Top Trends & Favorite Companies
Top Trend: FinTech
FinTech is the #1 trend that Gen Z VCs are following & Gen Z Founders are building in. Enterprise SaaS, Consumer D2C, and Creator Economy are not too far behind.
When I polled 71 Gen Z VCs last year, the top Gen Z trends investors were following was the Creator Economy. However, FinTech has since taken the top spot. This development is unsurprising given the interest among our generation in making money through side hustles, investing in the public markets or in crypto, and generally building wealth in creative ways.
Favorite Company: Apple
Apple has overwhelming power over Gen Z because of our reliance on our iPhones — simply put, we can’t live without them.
Gen Z overwhelmingly loves next-gen brands (founded post-2008), skewing toward consumer companies. Mission-driven brands like Patagonia also took top spots, as well as many of our portfolio companies (Glossier, Allbirds, Parade, Topicals, SIMULATE/Nuggs, Warby Parker).
The Gen Z Identity
Gen Z starts with those born in 1997 (or 1995 depending on your sources) and spans 15 years to those born in 2010. We have strong opinions about our identities.
When we asked Gen Z to describe themselves using one word…
We answered with resounding positivity and emphasized action. Words like innovative, passionate, bold, ambitious, and revolutionary rose to the top.
When we asked Gen Z about who inspires them…
Most of the Gen Zers surveyed work in Tech & VC, so it’s not surprising that Founders (like Elon Musk, our most popular response) are top of the list. Family is a very close 2nd, with Investors in a distant 3rd.
Given how values-driven & entrepreneurial Gen Z is, turning to family & founders as role models makes a ton of sense. 42% of Gen Zers want to start a business one day.
Sector Insights: Future of Work, PropTech, Data Privacy
Future of Work
Gen Zers value flexibility in the way that we work, with 75% of those surveyed preferring a hybrid work environment. It’s important to remember that the oldest cohort of Gen Zers are 25–26 and largely new to the workforce or have started working during COVID-19. Therefore, many of us are naturally accustomed to remote work because for many of us, it’s all that we know.
When it comes to choosing an employer or career, having a competitive salary was most important, with the company’s mission/impact not too far behind.
In addition, 46% of the 282 Gen Zers we surveyed had side hustles, but more telling is what they’re actually up to.
- The most popular side hustles listed were around skilled work — mainly consulting, advising, tutoring, and freelance creative work. Only 1 person listed gig work as their side hustle.
- The 2nd most popular was investing, which included angel investing, managing a portfolio of public stocks, or building a portfolio of different currencies. Flipping & trading NFTs was listed as well.
- The 3rd most popular was around owning a small business or reselling. This ranged from building eComm businesses on Shopify, to selling on Etsy/eBay, and reselling clothing, furniture, and sneakers across platforms.
PropTech
Home ownership is important to Gen Z, with 90% wanting to own property someday. We’ll continue to see technologies built to support this type of wealth creation.
- Group / shared ownership
- Home financing options as prices / affordable housing in urban cities continue to skyrocket
- Education on real estate investing / home ownership
- Tools to facilitate the home-buying process
Data Privacy
The jury is still out on the importance of data privacy for Gen Z, with only a slight majority (56%) being willing to sell their data for money.
- Those who were unsure noted that it really depends on the type of data and would consider it on a case-by-case basis.
- Being able to sell data offers an interesting use case to make passive income on the side, and startups that cater to this will likely find mass within Gen Z.
Social & Shopping
When we asked Gen Z what social platforms they spend the most time on… Instagram remains incredibly popular among Gen Z, but TikTok is gaining a share in comparison to older demos. Candidly, I was surprised that TikTok wasn’t more popular.
When we asked Gen Z how they find products they love… the majority of Gen Zers (64%) still rely on word of mouth to find trusted products, but reliance on influencers & creators is becoming increasingly important.
- This undercuts the importance of community & organic growth for companies trying to reach Gen Z.
- Leveraging influencers and creators in an authentic way can also be a huge asset to companies looking for new paid marketing channels.
When we asked Gen Z who their favorite influencers/creators are… Emma Chamberlain came in at #1. The overall set was a mix of YouTubers, TikTokers, and Tech/Twitter personalities who are founders and VCs alike. Again, given these 282 Gen Zers surveyed largely work in Tech & VC (or aspire to), there are more tech-first individuals on this list.
There was also an extremely long-tail here, as the highest concentration in choosing Emma Chamberlain as their favorite creator was only 8 of 282. In my mind, this displays the broad variety of niches and areas of interest for Gen Zers especially as we see more creators emerge on TikTok, YouTube, Twitter, and beyond. The barriers of creation have never been lower, and the interest in becoming a content creator has skyrocketed among Gen Z.
When we asked Gen Z about their spending habits… Gen Z cares about the climate and sustainability, but when it comes to shopping, ultimately we’re still fairly price-sensitive and trends are driven by culture or convenience. TLDR: a sustainable product isn’t always enough to drive purchasing intent.
And when it comes to where we’re spending the most money each month, dining was the clear winner and top choice.
When we asked Gen Zers if they thrift shop / buy secondhand clothes… we noticed that thrift shopping is more popular among Gen Z (56% do it) than previous generations (only 48% do). With Gen Z’s focus on self-expression and individuality, thrift shopping presents an opportunity to find unique pieces. It also seamlessly contributes to living a more sustainable lifestyle vs. shopping from fast fashion players like SHEIN, Cider, Zara, and others.
FinTech & Crypto
Gen Z is taking action when it comes to growing their personal wealth, with 60% actively picking investments. There’s also a heavy reliance on crypto within our personal portfolios compared to previous generations, and NFTs are quickly gaining traction.
The biggest problem facing our generation & how we’ll change the world
The Climate Crisis is the largest global concern among Gen Zers
Gen Z is most concerned (41%) about the climate crisis as the largest problem faced by our generation.
With forest fires, earthquakes, hurricanes, and other natural disasters becoming an almost regular occurrence, this is unsurprising, especially paired with public Gen Z activists like Greta Thunberg's inspiring conversations and action. Healthcare/Mental Health and Poverty/Income Inequality were a distant second.
How Gen Z will change the world
There are three powerful trends in play that center around Gen Z’s mindset & desire for impact:
- More than anything is an empowered mindset — that no voice is too small, idea or goal is unattainable, or belief that a societal problem is too large to tackle. We’re a generation that thrives on disrupting the status quo & what’s accepted — and we’ll see more innovation & inclination towards action as a result when it comes to social change, improving the climate, and beyond.
- Living more authentically and intentionally in everything we do: from the people we meet, to the products we buy, to the way we interact with the world. We’ll see more empathy and inclusion holistically.
- Technology empowering decentralization of major systems, increased ownership in a world of Web3, the rise of digital identity, and ease of collaboration across borders to align around mission & community
These were the common themes among the 121 Gen Zers who responded to this optional question. This compelling quote sums it up:
“We were born in a world of climate change and now are in college during a pandemic so it feels like the world is about to end. What better way to live than with the mindset that everything is an unknown door? Shoot for the stars while a meteor is crashing down. We are the definition of go big or go home. We’re not afraid of big changes because there’s no other solution.”
COVID’s Impact on Gen Z
COVID-19 created opportunities for growth & self-discovery
Most Gen Zers (46%) took the pandemic as an opportunity to reflect on every aspect of our lives, and make changes as a result. Put simply, the pandemic changed everything.
- Career was the most popular category mentioned in these open-ended responses. Many people lost jobs but simultaneously took the time off as an opportunity to make a career change for the better or start a business.
- Many moved home & spent more time with family, discovered they liked working from home, were more introspective and focused on relationships / mental health, etc. The pandemic forced a strong return to living by your values beyond just work.
As mentioned above, there’s an inherent positivity in the way we view ourselves… and we have a bias towards taking action to make a change. Experiencing COVID-19, the defining moment for our generation is no different.
Why it matters
The findings above give a view into a small group of Gen Zers — how we think about work and life, which spaces we’re passionate about, and how we’re going to make an impact to improve the world around us.
My take is that we’re going to see more entrepreneurs emerge from Gen Z than ever before — 40% of Gen Zers want to start their own business one day. This equates to more startups changing the way we interact with one another and the world around us. These startups will market to consumers and businesses in new ways. Gen Zers are the current kingmakers of platforms — just as we saw the rapid adoption of TikTok shift from Gen Z to other demographics, the same will be true for the Web3 platforms of the future and other revolutionary companies. We’ll be the first users and early adopters that shape how companies are built, and we want to be active participants as both owners and investors. We’ll be building and influencing the future we want to see as a larger collective, but with individual agency putting our own time, mindshare, and efforts towards the projects and missions we align with most closely.
Expect big swings and social movements tied to the rise of new startups. We’re no longer engaging only with companies, but with what they represent — a cleaner world, a more equitable future, greater connectivity with our global friends, and beyond. We will identify with the communities these startups build around their ideas, and help them grow by contributing UGC and spreading the message on socials and via word of mouth. This is the future, and Gen Z will be leading the way — together.
Watch the recap from the GEN Z VCs SUMMIT here to see our Keynote and all of the sessions.
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Are you a founder building a company for Gen Z? Or do you have thoughts on how this space is evolving? Email me at meagan@lererhippeau.com — I’d love to meet you.
