400k is More than 300k... Why?
New business applications are a step function more than pre covid... why?
Data Story
We have seen a sea change for new business formation. Since the pandemic, hybrid work has taken off and has created a paradigm shift in how the world functions. Since 2020, the US has averaged around 400,000 monthly new business applications. Pre-pandemic this figure was about 300,000 and often in the mid 200,000s. This 33% lift in monthly formations has a lot to do with four underlying trends.
The shift to digital products and services
The growth in the creator economy,
The acceptance of remote work, and
The growing interest in finding work via marketplaces.
For example, the creator economy refers to the increasing trend of individuals creating and monetizing their products or content and doing so through various online platforms and communities.
Last week we shared data around time spent within social apps growing 17%. That data point is in large part due to improving content. Creators can be content creators, developers, designers, makers, influencers, and more. They use platforms such as YouTube, TikTok, Instagram, Twitch, and Substack.
Potential Investment Implications
New business formation is often called the "lifeblood" of the economy and is at the core of innovation and drives economic progress. New businesses bring new ideas, products, and services to the market, which can lead to increased competition and,ultimately better products for you and I.
Many companies serve the new business, the new creator, or the well-recognized professional ready to leap. Companies like Canva allow the designer to flourish, Wix enables a company to get a digital presence, Block provides a point of sale for the new cafe down the street, and Intuits QuickBooks provides businesses visibility into their financials.
Disclaimer: See the disclaimer page. Not a recommendation to purchase or sell any securities mentioned.