SxSW Interactive

Digital Natives Disrupting Time-Honored Industries @ SxSW

“A big belief for us is there’s a whole wave of population and we call them digital natives. The population is typically called millennials or gen z,” explains Michael Smerklo, co-founder of Next Coast Ventures, an Austin, Texas based venture capital firm.

Michael is making his opening remarks before he continues on to host the panel discussion we were fortunate enough to sit in for. The topic: digital natives disrupting time-honored industries. The place: a packed and eager room of people in Austin, Texas at the famed South by Southwest Conference.

Michael continues on, offering statistics from the Center for Generational Kinetics which explain why this generation of digital natives is so critical to understand and appeal to, when developing an idea and building a brand. 83 million people in the United States are categorized as millennial or generation x, which is half of the population and growing. Growing because there will never again be a generation of non-digital natives.

The Panel: Digital Entrepreneurs (Not All Digital Natives)

All three panelists are founders and CEO’s of Austin-based businesses all operating primarily on the digital platform, but all in radically different markets.

First we have Joah Spearman, founder and CEO of Localeur, a startup revolutionizing how people experience travel.  Currently offering recommendations in 75 cities across the globe, Localeur connects travelers with the recommendations of experienced locals rather than relying on the often misleading advice of tourists. Travelers use the online platform or app to explore and plan things to see and do, as the locals do.

Next is Julia Cheek, founder and CEO of EverlyWell. EverlyWell is revolutionizing the way people access what have always seemed to be unattainable results to costly lab tests. Online, consumers order a test to find food sensitivities, check your metabolism or thyroid, and more. A kit is delivered to your door for sample collection, and the consumer ships it to the lab, receiving results days later.

The third panelist is Eric Korman, founder and CEO of PHLUR, a man who insists fragrance is much more enjoyable when removed from the pushy department store environment and instead sampled in real life. PHLUR sends 3 samples of USA and cruelty-free made scents right to consumer doorsteps, with the option to purchase the full-size at a discounted rate.

Michael: What was your inspiration? 

Eric: Like Michael, Eric is not a digital native himself and actually came to fragrance later in life. Once Eric became a self-proclaimed product geek of the category, he realized that he shared a trend with digital natives: a desire for transparency. “Water, alcohol, and fragrance are the 3 ingredients…what is fragrance?” Eric realized that he could fill the void in the marketplace by offering a more comfortable, and honest fragrance experience by providing total transparency with the ingredients of all of PHLUR scents.

Julia: “I have no background in healthcare and was coming at this problem as a consumer of healthcare,” begins Julia. She had an experience in which she fell ill, was forced to order a bunch of unknown and expensive tests, and her doctors never ended up disclosing the nature or results of those tests. Julia, feeling deceived and underserved realized that other people likely shared her frustrations. “Diagnosis are critical to preventative health,” stresses Julia, explaining why putting this power in the people’s hands is so valuable to overall well being.

Joah: “It wasn’t until college where I had disposable income and began to travel. Travel began to represent a form of lifelong learning.” Joah, like Julia, is a digital native and he can relate to the hunger for experiences that millennials have. “Thinking about the best experiences, they’re always when you find something awesome and local,” he continues.

Michael: Once you found the problem and formed the idea, how did you think about the potential buyer when you first started the business?

Joah: “Catching people at the inspiration discovery phase is where the opportunity is,” he starts. When shaping his business for the target customer, Joah emphasizes focusing on anticipating the kind of experience a traveler wants to have before they recommend it to you. “We ask our locals to describe a place as if they were texting their friend about this place. We want that authentic feel.”

Eric: “Selling fragrance online might seem tough. You can’t sell through your screen.” Because of this PHLUR focuses on a visual and audible online experience. “The delivery is the first moment we physically appear. How is the unboxing and sampling experience? Do they know how to properly apply scent?” In order to deliver scent with education, Eric focuses on treating consumers like friends, not customers, allowing for a more authentic experience.

Julia: “I had to be careful that I wasn’t just projecting my experience,” explains Julia of developing her concept. Once she realized that plenty of other consumers were facing this problem, she sprung to action. She began researching behaviors and experiences that would cause a consumer to look for an alternative, scrutinizing demographics and spending patterns.

Michael: What do you think is least understood about digital natives and what unique opportunities may they present?

Eric: “People picture a millennial doing something with their iPhone,” says Eric, but it’s really not just millennials anymore. “People are becoming vocal advocates for a brand.” He explains that while the typical starting target audience is millennials, older generations are beginning to take cues from younger generations in terms of shopping habits.

Joah: “Just because millennials are digital natives, not everything needs to be in digital form,” Joah claims as a major misconception. “A year ago we introduced our first quarterly print magazine. We’re an app who figured out that people still want to touch something physical.”

Julia: “You have to be careful in how you communicate a brand to make it trustworthy. We’re seeing a shift in people willing to try new products. Our most prominent demographic is millennials, followed by 40-50 year olds.” Julia is also touching on the shift of tradition in older generations following the patterns of younger generations.

Joah: “With all of our industries, the word of mouth is fundamentally different because of social media and how much more media is out there. Older generations usually have access to more information which influences younger generations. Now, younger generations have access to information faster and can share it faster which is why it is influencing older generations.”

The Importance Shaping Consumer Experiences For Digital Natives

Though the panelists represent three rather drastically different companies, the undeniable theme is that digital natives are the most heavily targeted demographic in today’s market for many reasons. While trends appear to lean towards digitizing everything, the panelists stress that there is still value to tangible objects. But above brick and mortar versus online, customer engagement and company transparency is key.

Julia finishes up emphasizing, “to build a huge company or brand with digital natives demands engagement and tapping into their ethos.” Eric believes in putting the power in the people’s hands. “Give them the tools and information so they feel like they have an influence on the ultimate direction of the brand. Now they’re a huge advocate, and now they’re excited.”

These panelists reinforce the importance of influencer marketing as companies like PHLUR, Localeur, and EverlyWell continue to inform and engage their audiences, establish their niche and disrupt established markets for the better and for the future.

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