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Trends: What to Expect in 2017

There's a Coworking Space for Everyone

Coworking is booming. At this year’s Global Coworking Unconference Conference, Carsten Foertsch, the founder of Deskmag—a whole magazine devoted to, yes, coworking—predicted that by 2018, more than one million people will conduct business from a shared space. Wework has dominated the market since launching in 2010, but the industry is quickly diversifying to cater to niche needs. Here are five alternatives.


By Maggie Wiley
10 min

Above Image | Raj Das Photography. Business District coworking space.

MORE MATURE

“A lot of coworking companies seem built to fulfill the fantasies of male 20-something engineers,” says Industrious CEO Jamie Hodari. But INDUSTRIOUS goes above and beyond to offer inclusivity instead. The company’s 12 locations across the country have private rooms for nursing moms to pump milk, and recently, Hodari says, “our regional director in New York took three hours out of her day to help a member prepare for her citizenship test.” The approach clicks: Industrious raised $37 million in funding in September.

LOW-COMMITMENT

Technically, CROISSANT isn’t a coworking space. It’s an app. Through it, remote workers can “rent” available desks at established coworking spaces in New York, San Francisco, Boston, and D.C. Croissant offers three monthly subscription plans that range from $39 to $299—far less than most coworking memberships. “We just wanted to meet for a couple of hours a week, so $400 per person for one location didn't make sense for us,” says cofounder Nisha Garigan.

FANCY!

BUSINESS DISTRICT is for professionals who care less about free beer and more about the flagship office’s brag-worthy home in an I.M. Pei–designed building. Matt LoGuidice founded the Boston-based company after time spent overseeing his East Coast property management business out of a shared space in Los Angeles. “I couldn’t find a center that occupied the niche I wanted—a center that feels more like a boutique hotel,” he says, explaining his design sense. “We might be the only center of its type in the country where every office has an adjustable-height Herman Miller desk.”

MORE PROFESSIONAL

“We often become the destination for individuals who have ‘graduated’ from coworking as their business grows, either by way of capital raised or by new customer acquisition,” says TECHSPACE CEO Vic Memenas. TechSpace’s offices sport a slick aesthetic—more like what you’d expect from a corporate office than a startup—and cater to entire teams working in offices, rather than individuals camping out on sofas.

MEDIA-FOCUSED

GRIND has a serious media pedigree: Three of its founders hail from Behance, Cool Hunting, and creative consultancy Co:Collective. Upworthy, the viral content creator, is a member, as are plenty of bloggers, artists, and photojournalists. To foster collaboration between its members (or “Grindists”), Grind marks off 30 to 50 percent of its floors to common space.

PLAYFUL AND OUTDOORSY

EL CAMP, a young coworking venture in Los Angeles, is designed like a summer camp—right down to the wooden mess hall and outdoor fire pit. “It’s to tap into the idea of childlike creativity and curiosity,” says Jessica Kim, the community manager. To join El Camp, members need two things: a job in the advertising world and a desire to help the El Camp community. “We are all about sharing resources and capabilities,” Kim says. With that ethos, El Commune might be a more fitting name for this feel-good workplace.



Companies Reevaluate Their Hiring Practices

IMPLICIT BIAS IN HIRING IS SO HARD TO ROOT OUT BECAUSE, well, it’s implicit. Even when managers talk a good game about increasing diversity at the office, their actions rarely match their intent: In three studies, researchers at MIT and Indiana University found that organizations that tout meritocracy actually show the greatest bias against women. And homogeny isn’t only unfair—it’s bad for business. Companies with the most ethnically diverse teams are 35 percent more likely to have returns above the national industry median, according to McKinsey.

But how can a company fix the problem, and avoid fueling managers’ conscious and subconscious biases? A new crop of startups has a solution: blind recruitment. It’s a hiring method that conceals candidates’ gender, race, and education background—enabling a person to interview or perform job-related tests and be considered solely on those merits. Think of The Voice, but with a job offer rather than a recording contract. Here’s how three startups can help you go blind.

GAPJUMPERS

The GapJumpers team strips a job description of subjective junk (like passionate and team player) and creates an objective test for candidates, pulling from more than 750 challenges that span domain expertise and specific skills. “Just by applying blind auditions to the hiring funnel that already exists, we’ve seen a 60 percent increase in diverse applicants making it through to the interview, and a 200 percent increase in women,” says cofounder Kédar Iyer. GapJumpers has done more than 1,600 blind auditions for companies including BBC, Dolby, and Return Path.

INTERVIEWING.IO

This platform allows tech companies to assess coding skills through an anonymous system. If a candidate is up to snuff, the interview can be handled through voice-masking technology that obscures the applicant’s gender. (A 2014 study found that candidates with “vocal fry”—a low-pitched, creaky-sounding speech pattern common among young American women—are perceived as less competent, less educated, less trustworthy, and less hirable.) Twitch, Lyft, and Asana are early embracers of the site.

BLENDOOR

Created by Stephanie Lampkin, an African-American woman who was once told that her background wasn’t technical enough for a job—despite an engineering degree from Stanford and past gigs at Microsoft and Deloitte—this app matches applicants to open positions Tinder-style (but minus photos). Hiring managers can swipe on profiles scrubbed clean of identifying info. If both sides have interest, they set up an interview. Launched in March, Blendoor is being tested by companies including Airbnb and Twitter. —Kate Rockwood


Small Brands Build Relationships in Ways Big Brands Cannot

BY ADAM ELDER

BENJI WAGNER KNOWS A DIRTY LITTLE secret about the outdoor apparel industry: Big brands like Patagonia and The North Face may advertise their gear being put to the test in the highest mountains and at the ends of the Earth, but 83 percent of all camping trips in the United States actually take place within a few feet of a car or a house. So Wagner is going straight at those consumers—people who want to feel comfortable inside a tent perhaps just a few feet above sea level.

“The outdoor industry was founded on mountaineering, but most people are wearing their jacket to go grocery shopping,” says Wagner, cofounder and creative director of Poler Outdoor Stuff, which, since its 2011 launch, now sees double-digit growth every year. “The industry went down the rabbit hole in terms of creating more and more technical products for a consumer that’s essentially a weekend warrior. Poler makes a great jacket, but we’re not going to pretend you’re gonna climb Mount Everest in it.”

It may have once seemed impossible to go up against giant, established brands, but that increasingly just isn’t the case. Poler, and the apparel industry at large, tells an important story that’s true across all types of businesses: Broad but overlooked segments of consumers are being forgotten by big brands’ mass appeal, and even the smallest of players can use the internet to build strong personal connections with those left behind. The key is to tell seductive, inspiring (yet realistic!) stories that resonate, and to give customers what the biggest companies can’t: a sense that Yeah, we get you.

“What many brands have nowadays is the ability to communicate who and what they are,” says Marshal Cohen, a retail analyst with The NPD Group. “Customers today are not looking to be one of a million people—they’re looking to be one in a million. They want to stand out.”

Communicating that doesn’t require big-budget money. Tracksmith, an upscale running apparel brand from Wellesley, Mass., doubled its social media reach in the past 10 months with less than $5,000 in ad spending, and has netted a $4.1 million investment from Pentland Group, which owns a stake in Speedo and licenses for Lacoste footwear and Ted Baker. Here’s how: It saw that household names like Nike, Adidas, and Puma have conflated running with health and wellness in an effort to win the attention of gym rats—which launched in 2011, celeb rated the tradition of running as a stand-alone sport. It chased the habitual runner, creating a visceral brand story with photography that portrays everyday runners training, sweating, and looking exhausted rather than triumphant.

“Running apparel originally lacked any sense of style or substance,” says cofounder Matt Taylor, a former distance runner at Yale. “Brands lost touch with the sport and the core culture, and created a much broader message. That’s fantastic and has gotten a lot of people off the couch, but it’s also left this big void for people who have a deeper connection to running.” To serve those people, Tracksmith created more classic designs that are simple and functional, the opposite of what Taylor calls “the Power Ranger look” of most running apparel.

Small brands are inherently closer to their customers, and that can create all sorts of advantages. Sure, Nike can afford LeBron James as a spokesman, but smaller brands can simply recruit their own users for marketing. “Niche brands provide a forum for people to share in the story,” says The NPD Group’s Cohen. “It’s that testimonial piece of the puzzle that comes from the user, not the brand itself. Customers don’t want to hear you brag about your brand; they want people who’ve used your product to brag about the brand.”

The lingerie company Lively, in fact, crafted its entire brand around its customers. Founder and CEO Michelle Cordiero Grant spent five years at Victoria’s Secret, overseeing the underwear behemoth’s digital merchandising strategy for its core lingerie lines. “At Victoria’s Secret, everything feels very focused around how males are really viewing women,” Grant says. “Lively is about creating something that’s made by women for women, really thinking about how a woman is going to feel in it and what that product does for her mindset in terms of confidence and power and comfort.”

After raising $1.5 million in funding ahead of Lively’s April launch, Grant found more than 50 women—not supermodels—based on their passion and aesthetics as seen on their Instagram accounts and enlisted them as ambassadors of the brand’s designs, which are a hybrid of activewear, swimwear, and traditional lingerie. A refer-a-friend email campaign could earn ambassadors purchasing credit if they mentioned the brand or linked to Lively’s website. The email-collection campaign was so successful, it exceeded its three-week goal by more than 400 percent in just 48 hours and crashed Lively’s site. The brand is now enjoying double-digit sales growth every month.

Some small brands, like Lively and Tracksmith, sell direct online. But when entrepreneurs take their wares out into stores, they’re finding another benefit to being a counterweight to big brands: They get to say, “We’re not just coming in and trying to take business away from another brand you already have.” That’s Wagner’s pitch for Poler; he stresses that his brand will bring new people into a store because he’s serving young people and millennials whom nobody else is. It’s working: Poler is carried in Nordstrom, Urban Outfitters, and more than 500 other stores in 30 countries, selling right alongside the big brands he competes against.


“Smart” Objects Finally Get Smart

We know, we know—plenty of “smart” objects out there are pretty dumb. (Parents don’t need a sensor-laden diaper to know when their baby needs a change; a baby can sound that alarm on her own.) But the industry is evolving. “The problem isn’t delivering solutions as much as discovering opportunities,” says Nick Jones, an industry analyst at Gartner. Sensors, processors, and networking chips are now fairly cheap, and the opportunities for thoughtful entrepreneurs are countless. Says Jones: “This space is more limited by imagination than by technology.” These four products hint at our smarter future.

EKO CORE DIGITAL STETHOSCOPE

For centuries, doctors relied on hollow, sound-amplifying tubes in stethoscopes to hear a patient’s heartbeat. The Eko Core Digital Stethoscope streams the sound waves to the cloud, where they become part of a larger database of medical records, helping doctors detect patterns and abnormalities.

JUNE INTELLIGENT OVEN

The June Intelligent Oven looks like a high-tech Easy-Bake Oven, but it functions like a souped-up computer. The cavity contains a scale, a camera, and a smart thermometer. Pop a tray of cookie dough inside and the oven’s bank of algorithms and preloaded recipes can decipher what it is and how to best cook it. Replacing home-cooked meals with home-programmed meals might sound like culinary sacrilege, but hey, it’s still better than Seamless!

CATFI

The CatFi cat feeder uses facial-recognition technology to identify your cat (versus your neighbor’s pesky cat). The idea is still in beta testing, but a fully realized model would also include a scale to assess exactly how much food your cat needs, based on weight. “Complex and sophisticated pet feeders appeal to owners willing to spend a lot of money on their pets,” says Jones, who is a fan of the smart feeders. “The Internet of Things is enabling all sorts of new gadgets that never existed before.”

EMBER MUG

It’s a fact of life: Coffee gets cold—unless it’s poured into an intelligent mug designed by a thermal engineer. Ember can keep coffee hot for two hours via a heating- and-cooling storage system hidden in the mug’s walls, which communicates with temperature sensors and a microprocessor. At $150, it’s a pricey way to drink coffee—but if it takes off and the tech becomes more accessible, expect future versions to cost less. —M.W.



Many Chatbots Will Die. The Survivors Will Get Better


Industry Norms Be Damned. New Motto: “Do What’s Best for Your Brand”

BY STEPHANIE SCHOMER

CONSUMERS HAVE MORE INFORMATION at their fingertips than ever. E-commerce has changed how people shop. And yet many industry traditions have remained—like, say, fashion’s longstanding insistence that brands create four collections a year. But even the most deeply embedded rules are starting to crack. Tanya Taylor is one of the changemakers: She’s a fashion designer who remade her schedule to focus on just two strong collections a year—which in turn will spend more time on the retail floor, rather than being relegated to the sale section to make room for an impending precollection. Taylor tells us how she bucked expectations—and why it worked out.

You launched in 2012 with two collections a year and in 2015 expanded to four: resort and prefall in addition to spring and fall. But this year, you canceled resort. Why?

When we expanded, I immediately noticed the pressure the extra collections put on our very small team without ever really producing a valuable outcome. This summer, we were working on resort 2017, and I just didn’t feel inspired. What if I could take my energy and put it toward something I really did care about? So I told our team we were canceling the collection—which is a weird conversation to have about something you’re already working on! They thought something was wrong, but I was like, “No, this is a good thing.” It was a great reset.

How did your retail partners react?

I was nervous that we would lose their trust, but overwhelmingly they came out for our spring/summer appointments with a fresh level of enthusiasm. Our precollections were never as strong in sell-throughs. So the extra time let us consider how to really strengthen our main collection.

What did you do differently with your main collection this past season?

We partnered with Saks Fifth Avenue; they came in early and saw sketches and fabrics of our spring/summer 2017 collection and purchased 15 styles in advance—which is larger than our entire resort order would have been. When we had our show for Fashion Week, those 15 styles went live on Saks’ home page and were immediately available for purchase. Brands pay hundreds of thousands of dollars to be on the home page of Saks, but this partnership cost us nothing.

That “see now, buy now” trend is one that more designers are exploring, rather than asking customers to wait six months to buy them. How has the industry responded?

The industry is extremely supportive of disruption, especially by young designers finding what works for them. Earlier this year, the Council of Fashion Designers of America commissioned a study with the Boston Consulting Group examining the future of New York Fashion Week, and the finding was ultimately to do what’s best for your brand! Our product, for example, is emotional, colorful, and print-based. Our customer buys if they think it’s great—timing and the seasonal structure aren’t as much of a factor for them.

You recently ditched runway shows in favor of presentations [where models stand stationary as editors and buyers move about the full collection]. What was behind that decision?

When we launched, we started with presentations. It felt really right for us. But there’s a natural progression where you think runway is what you do when you grow—and so we did runway. And I missed being out on the floor, talking to editors and getting immediate feedback. Reverting to presentations, everyone kind of looks at you wondering why you would go back to where you started. But when we returned to presentations for 2016, our sales almost doubled. It’s what made sense for us, and that’s how we have to keep moving forward.


We’re Finally Done Talking About Millennials (Because Here Comes Gen Z)

The first members of Generation Z will be graduating from college in a few years, and market researchers and trend forecasters are clamoring to tap into their psyches. Will this latest crop of youngsters reshape how we do business tomorrow? We put two generational experts—Scott Hess, EVP of human intelligence at Spark, and Jake Katz, VP of audience insights and strategy at Revolt TV—in the hot seat.

Gen Z hasn’t yet flooded the workforce. Isn’t it a little early to start worrying about them? Katz: I’d rather be early than late. Generations tend to be innovative as they’re younger and then grow more similar as they get older. That’s a mistake folks made when talking about millennials. Employers thought the world would change, but there are always more similarities between generations at the same age than there are differences. Once people apply a generational moniker, though, it’s so common to treat millennials or Generation Z like a unique species.

Hess: When managers call millennials lazy and entitled, they’re most likely referring to the life stage of teens and young adults. Time magazine ran a cover story about millennials called the “Me Me Me Generation.” But 20 years before that, Fortune had a cover story about why boomers hate busters [what they were calling Gen Xers at the time]. Every 20 years, the generation with power and comfort hates the young generation.

Katz: Gen Z has been shaped by the recession. They watched their parents get screwed. Millennials love the gig economy, but our research shows Gen Z doesn’t want any part of that. They want steady paychecks. They’re thinking about college very early on in high school, and they’re not viewing it as an experience but as an investment. Gen Z is much more pragmatic and a lot more prepared, and that worldview isn’t something they’re likely to outgrow as they start their careers.

Hess: They’ve also been shaped by the personalization of media—Gen Z can stream any song, watch any episode at any time. It’s an expectation that travels with them outside of media. They expect to be more networked all the time, they expect to be able to customize things exactly to their preferences. That’s intrinsic to Gen Z and will extend into the workplace.

Katz: When we asked Gen Z what makes their generation different, they said they were both more accepting and more rebellious. For millennials, rebellion was totally absent in their youth culture; they had a very shiny outlook. Gen Z is pissed about the system they’re inheriting. Rebellion is back. —K.R.


The Beauty Industry Gets Better

In the United States alone, consumers spend north of $62 billion on cosmetics, skincare, and haircare products each year. But younger women are increasingly venturing outside their Maybelline and Dior standbys, embracing smaller brands. As the crowded market grows more crowded (hello, Kylie Jenner Lip Kits), we talk to three startups that stand out.

The brainchild of beauty editor Emily Weiss, GLOSSIER skincare and makeup launched in late 2014—arguably inspiring the rush of beauty brands hitting the market today—and quickly became a favorite of cool girls everywhere. “One of our points of distinction is that we’re a very conversational brand that lives only digitally, but we’re not speaking primarily through advertising,” Weiss says. “Most of our growth has been through owned, earned, peer-to-peer traffic. We’re serving the woman who wants to look like the best version of herself—not like somebody else.”

Founded by Stella & Dot founder and CEO Jessica Herrin, EVER skincare follows the social selling model of the popular jewelry company. Brand ambassadors, called specialists, host gatherings to educate friends about the brand’s natural products and four-step regimen. “Skincare has primarily been dominated by the big guys,” says Ani Hadjinian, general manager at Ever. “But the consumer isn’t voting for those brands anymore, so the only growth within the market is in highly specialized and niche lines. There’s a new distribution model with skincare, and I think we’ve truly modernized and used the social platform. It’s highly disruptive and more sustainable.”

FARMACY skincare is what cofounder and chief creative officer Mark Veeder calls “farm to face.” The avid gardener unwittingly discovered a new, ultrastrong form of immune-system-boosting echinacea and patented it for use in his new skincare line, sold at Sephora and on QVC. “We’re farmer-cultivated but scientist-activated,” Veeder says. “We did some lab tests with a third party, and the products increase your skin’s hydration by as much as 50 percent! There are a lot of natural products on the market, and it’s great to not pollute your skin, but they have to also have transformational qualities.”  —S.S.


Food Science Creates Tasty Opportunities

AMERICANS HAVE LONG BEEN OBSESSED with all things eating, and now that means obsessing over how clean their diet is—vegan, gluten-free, organic, or additive-averse. To keep consumers happily fed, chefs and food manufacturers are figuring out how to maximize taste without any suspect ingredients.

“We’ve pushed the limits of how well a crop ships or how long it can sit on a shelf, but when you don’t make flavor a priority, it gets lost,” says Lane Selman, an agricultural researcher at Oregon State University and founder of the Culinary Breeding Network, which connects plant breeders with farmers and chefs to create better-tasting grains and vegetables. But it’s the hearty dose of attention from venture capitalists and tech firms that has recently transformed the granola world of “clean eating” into a science-centric new frontier.

Case in point: The $100 million that investors—including Bill Gates and Google Ventures—sunk into Impossible Foods, a San Francisco–based food startup founded by a Stanford biochemist. When the company’s juicy meatless burger debuted at David Chang’s Momofuku Nishi this fall, the line of diners stretched down the New York sidewalk. And Impossible Foods is hardly alone in the race for beefy flavor without the butcher: Beyond Meat, which counts Twitter founders Biz Stone and Evan Williams as investors, has taken aim at the freezer aisle with faux meat crumbles and chicken nuggets. And for actual animal flesh minus the carbon footprint and livestock squeamishness, some startups are raising meat in labs, like Mosa Meat (Sergey Brin is an investor), which figured out how to grow a burger from bovine stem cells.

For vegan chef and Kite Hill cofounder Tal Ronnen, it was a moment of mortification that motivated him to double down on science: He was hired by casino magnate Steve Wynn to design menus for 12 restaurants, and while Ronnen was walking the team of chefs through alternatives to butter and cheese, one literally spit out a sample. Making a vegan cheese that wasn’t nasty wouldn’t just take years of tinkering in the kitchen—it involved partnering with a biochemist to develop proprietary enzymes that could make pure almond milk form curds like dairy.

Kite Hill now sells 17 unique SKUs, including ricotta, Brie, cheese-filled ravioli, and yogurt. Khosla Ventures was an early investor, and in May, CAVU Venture Partners and General Mills’ VC arm led an $18 million investment in the alt-dairy powerhouse.

But to stretch beyond the 2 percent of consumers who consider themselves vegan, Kite Hill is taking a page from the milk aisle, where alternatives like soy milk and almond milk have shouldered nearly 20 percent market share without ever using the v-word. “We don’t want to make products for only a captive vegan audience,” says CEO Matt Sade. “For people to discover this brand, our products can’t just taste incrementally better—we have to make products that are light-years tastier.” Cheesy but true. —K.R.