Gen Z is Shaping the Future of Companies: What to Build for and How to Work with Gen Z?
Many companies we invest in are either led by Generation Z or are building products and services for Gen Z.
This blog focuses on Gen Z and their interaction with technology, a world in pandemic, and more. We spoke with Alex Hofmann, former President of musical.ly (acquired by Bytedance/TikTok for ~$1bn) and Founder/CEO of 9 Count, focused on building online communities for Gen Z, and Tara Reddy, Co-Founder/CEO of Loveshark, focused on providing camera games to Gen Z.
Gen Z, consisting of individuals born between 1995 and 2010, are the single largest generation alive today; they represent 32% of the global population. They strive for inclusion (48% are ethnic minorities), crave self-expression, and are even more progressive. Simultaneously, this generation is the loneliest generation yet and have greater incidence and reporting of mental illnesses (27% vs 15% of millennials), and unfortunately have the highest suicide rate (jumped 56% for 10-24 year olds since 2007). In our conversations, we are eager to find out why these CEOs are passionate about building for this generation, and how they can see themselves contributing positively to the youth via technology.
Alex Hofmann. Photo by: Andrew Toth/Getty Images for WSJ. Magazine 2017 Innovator Awards
Progression: Why are you passionate about building for Gen Z?
Alex: When I was younger, MySpace was groundbreaking because it allowed me to connect with people who I would never be able to meet in real life, living in a small village in Germany. I had big, out-of-the-box ideas, and suddenly I could talk with other young people from around the world who were like me.
This social connection had a tremendous positive impact on me in my youth, and I’d like to make an even bigger positive impact in the world with what we build. Looking at Gen Z, I believe their generation has the power to effect real, positive change. They are a very empowered generation, educating themselves and getting information at the touch of a button. So for us, building for Gen Z, helping them feel connected and happy, will allow us to have that desired impact in the world.
Progression: How has COVID-19 affected Gen Z?
Alex: Although I believe COVID-19 is affecting our society in far more complex ways than we can anticipate now, I can speak on what I have seen from professionals researching the topic. One of the key things that COVID-19 has affected, among many others, is mental health. A recent 4-H survey of teens found that 61% of participants reported their feelings of loneliness have increased during this pandemic, and 64% believe that the experience of COVID-19 will have long-term impacts on their generation’s mental health.
What we’re seeing is just the tip of the iceberg. I can’t say I know what the future will look like with COVID-19 or the mental health of Gen-Z, but many studies already indicate that Gen Z will face a battle with loneliness, and will need the tools to augment their mental and physical well-being. Part of that is finding more ways to feel connected with one another.
Progression: How can we use technology to solve these problems?
Alex: Mental health professionals are suggesting that Gen Z stay connected with friends to combat the loneliness caused by COVID-19 isolation, and some even mention that parents may consider loosening screen time rules while seeing friends face to face may not be a safe option. While technology, specifically social media, tends to get a bad reputation when it comes to mental health, we have a huge opportunity to use innovative app ideas to provide the social connection Gen Z is lacking right now.
I firmly believe that, with apps like Wink, creating ways for Gen Z to connect with new friends online can help improve their mental health during such a challenging time in their formative years.
Tara Reddy. Photo by: Mateusz Baj: mateuszbaj.com
Progression: What is Gen Z looking for in new social tools?
Tara: There are 3 major buckets that social platforms for Gen Z fall into:
Common interest - Discord
Creative tools - Trash, Voisey
Social games - Fortnite, Among us, Mochi
I think these trends will continue and go deeper with greater value creation. Over the next few years, the social tools that will be needed, in my opinion, will be tools that are utility/creativity driven in nature, allow one to meet people, and respect the importance of privacy.
At Loveshark we are building “Mochi” a camera game community for Gen Z and I believe that the time is ideal now. Due to COVID-19, the ability to meet new people has greatly reduced so instead of schools and malls, this generation is now using online spaces to meet people and have social interactions. Gaming has already grown rapidly and I believe that it will continue to do so - not only because of its direct utility and entertainment value but also because it provides an avenue to get lost and forget about the world.
Progression: Gen Z is now about to enter the workforce. How do you think the future of work will change due to their addition and what can employers do to attract this new generation?
Tara: The impact of Gen Z will be marred by the impact of COVID-19 as they are happening concurrently. Having said that, Gen Z craves autonomy and flexibility. Employers who want to win with this generation will need to provide them the digital tools to get the job done but also provide them ad-hoc support and help mechanisms. Finding the right balance between autonomy and support will be the focal point over the coming years.
With that said, I think employers are pretty bad at thinking ahead for the next gen. The conventional thought has always been that “young people are always distracted” and it takes time to realize the power of this generation which craves to be emboldened and empowered. I think by being mission-driven and embracing differences in a way that is fulfilling and allows for self-sufficiency will be important as Gen Z aims to learn fast and have a route to promotion. The experts in the field will also take advantage of the fact that Gen Z are digital natives and they understand technology more intricately than previous generations. The tricky part might be that Gen Z has already learnt that everyone has a voice and employers need to hear this voice, take it seriously, and maybe provide a platform to amplify it. Also, there needs to be a move towards more inclusive organizational practices. For example, at Loveshark, we now have many social events that do not involve alcohol - something that would be considered impossible at my past professional experiences. But the younger generation is looking for more wholesome activities.
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