Growing up on the internet frontier, Millennials became accustomed to, and quite talented at, finding things for free. The best and earliest example was the introduction of Napster and LimeWire. You could search through Peer-to-Peer files and download just about every popular track soon after release. Burn your newly downloaded hits to a CD or upload to your mp3 player and voila, free music on demand. For many, purchasing music became a thing of the past in the early 2000s.
It didn't stop there. Early online purchases were delayed for a few minutes at the checkout page while savvy shoppers searched the internet for Promo Codes. Entire websites are dedicated to warehousing these discounts. Even today, the Safari web browser has a 'reader' mode that is able to bypass many paywalls allowing an enterprising reader to view articles without logging in. Since the dawn of the internet, consumers have been rewarded for persistently pursuing workarounds and subsidies.
Allbirds, the sustainable shoe company set to IPO in the near future, filed it's S-1 disclosure document recently. As is the trend for many IPOs of late they are increasing revenue year-over-year while losses continue to widen. This hasn't stopped the company from being valued at nearly $2B. I assure you this post isn't about the merits of unprofitable companies and their valuations.
Rather, it got me thinking about other big name companies that have achieved quick success while being focused, at least initially, towards younger consumers. Uber, Airbnb, Bird, WeWork, DoorDash, Blue Apron, Peloton (profitable during 2020 for first time but back to not this year), the list goes on and on. Companies that provide a service, often times wrapped in ESG or sustainability, definitely 'tech' adjacent, and claiming to own an audience with the consumers of the next 40 years. Backed by unlimited venture capital dollars and trumpeted as the next can't miss investment opportunity at IPO.
Consumers very well might want sustainability, a better 'experience', and everything else these companies offer. I would like to offer a potential alternative - are young consumers simply talented at utilizing subsidies? Uber is a great example. Uber brought to market real competitive advantages (making it easier to hail a ride, price certainty before the ride, the ability to hop out immediately upon arriving instead of waiting for the transaction to go through or haggling with a cabbie who's card meter was broke). All wonderful features that drove improvement in the competitive landscape for ride providers.
But their big advantage...price! Their rides were more affordable than traditional cabs. We can argue about the monopoly on hack licenses keeping prices higher than they should be or the fact that Uber took advantage of new drivers that didn't understand their true cost per mile, but there is no arguing Uber's prices, especially early on, were incredibly attractive. Why? Uber was able to lose money on a per ride basis to gain scale because of their large venture capital backing. In essence, VCs were subsidizing rides for Millennials. Did they engender loyalty? I'd argue no. Most consumers I know check Uber vs. Lyft for every ride today and simply take whichever one is cheaper.
I don't have data or a massive study to back up my conclusion, but I think there is an argument to be made that much of the hand wringing over Millennial’s preferences as consumers over the last 10 years are perhaps overblown. Yes, clearly there are stylistic preferences that have emerged and as a cohort values may be different from generations before us, but masked in all the noise of marketing and branding, perhaps the true preference has existed all along. All we ask for is pleasant experience and a hefty subsidy on a purchase we had to make anyways thanks to our friends in Silicon Valley.