Hello readers (all 19 of you)!! I’m back stateside after a couple months in Mexico 🇲🇽 (and pretty sad about it). Hope you are reading this somewhere warm and cozy as the year draws to a close. Wishing you a wonderful holiday season.
Please send skin-care regimens, ski resort intel and Hallmark Christmas movie reviews.
Stuff I’ve been thinking about:
Macro drivers for the medical aesthetics industry
NFTs are just inflation sinks
Stuff I liked lately:
✏️ The multilayered history of baklava- The correlation of the proliferation of sweets and alcohol prohibition is so neat; reminds me of the density of “dirty soda” shops like Swig/Sodalicious in Utah
I’ve been spending time learning more about the wide world of medical aesthetics. It’s a fascinating industry at a nexus of consumerism and biotechnology. I am bullish on the industry because it is positioned to benefit from a number of macro drivers over the coming decade. A few that are top of mind for me:
De-stigmatization of cosmetic procedures, particularly minimally invasive procedures
82% of millennials surveyed indicated that injectable aesthetic treatments are socially acceptable and 98% indicated that they would consider professional treatment in their lifetime (per Allergan’s 2019 consumer survey). The continued momentum around acceptance of professional cosmetic treatments should drive greater penetration and increase frequency of treatments across the population. In particular, there is massive runway for men to increase their utilization of cosmetic procedures, given that they account for just 10% of procedures on a historical basis.
Millennials aging in to the target demographic for aesthetics products and services
… even with relatively less money to spend, millennials have invested in self-care and personal wellness, reportedly outspending baby boomers 2:1 in the self-care industry. With aesthetic medicine falling in the realm of these self-care services, millennials have become avid consumers of this market, seeking cosmetic procedures to improve the overall quality of their life.
Millennials are getting older (not me, I’m a Zillenial) and they are also more willing to spend on self-care. Experiential medical aesthetics, in particular, stand to benefit from increased spend by a generation of consumers that is notoriously less interested in spending discretionary income on material goods.
Increased social pressure to look good driven by the the proliferation of social media
One of the second order effects of people constantly posting pictures of themselves on the internet is that there is tremendous pressure to look good. >30% of U.S. consumers say they “always” use apps to modify their face or body before posting an image online.
What’s crazy is that while people use filters and Facetune to make their pictures look better online, they’re also turning to medical aesthetics to help conform their IRL looks to the Facetuned version of themselves:
"One of the biggest things I tell my patients is, 'You want to look more like your filtered photos — what can we do to make you look more like them, so people don't see you in real life and go, what?'" Dr. Guanche shared with a small group of journalists at an event hosted by Allergan, the makers of Botox Cosmetic.
She regularly works with celebs and influencers — including Olivia Culpo, who is arguably the epitome of Instagram Face — to help them "look a little more gorgeous," in her words. "They ... look pretty when they post their own photos [and] they can do all kinds of things to them," the dermatologist continued. "But when you go to an event, other people are going to photograph you, so you have to be ready with skin that looks good in real life, too."
It sounds like a plot point from a sci-fi film, but today, it's actually entirely possible to make your digitally-enhanced avatar a reality — and quickly, too — with an array of non-surgical injectable innovations. "Non-surgical" meaning no downtime; in most cases, patients are Insta-ready almost instantaneously.
In the Facebook leaks from earlier this year, we saw hard data on how much of an impact its platform is having on self-esteem for young people. What’s bad for the collective self-esteem of our nation’s youth is a potential boon to an industry built around the monetization of our insecurities.
People getting married significantly later in life than ever before
A majority of Millennials are not currently married, marking a significant change from past generations. Only 44% of Millennials were married in 2019, compared with 53% of Gen Xers, 61% of Boomers and 81% of Silents at a comparable age.
What does marriage look like for Millennials who have tied the knot? They are getting married later in life than previous generations. The median age at first marriage has edged up gradually in recent decades. In 2019, the average man first got married at age 30, and the average woman was 28 when she first wed. This is three years later – for both men and women – than in 2003, four years later than in 1987 and seven years later than in 1968.
As people wait to get married later and later, they are dating at older ages than before. This meaningfully prolongs the period in which consumers prioritize looking good. And before you say, “well, not everybody looks good in their youth!” let me pre-emptively say, I know:
It’s the cargo shorts + “invisible” braces combo for me.
Down the Drain
Gold sinks are interesting mechanics built into many popular online games. To avoid inflation of their in-game economy, developers will add drains which effectively siphon the in-game currency away from players and out of circulation:
The economy of such games typically involves players gathering gold from playing the game, which they then use to purchase items or services, or trade with other players. Gold sinks serve to decrease the total amount of gold players have, since without sinks, there will be inflation. Gold sinks are commonly called drains or gold drains.
If you ever played Neopets (deep cut) then you’ve seen a great example of a game which has substantial built-in inflation; players mint in-game currency by playing minigames on the site. There’s no cap to this player-generated currency which means millions of “neopoints” were created every day. To combat this built-in inflation, the gamemakers had created a number of gold sinks, which enabled players to dump their minted currency on items with no utility outside of community “clout.”
The obvious solution is to reduce the amount of neopoints in the economy, which would do less harm than just mass restocking rare items. The most predominant way to do so is of course using sinks.
Sinks are basically features that take away currency from the economy, reducing the amount of currency in circulation- thus making the currency more ‘valuable’. Sinks can be passive or active; however, in the context of Neopets, only active sinks exist, which I shall cover.
Active sinks are where players voluntarily throw away their money, often to obtain a unique item and in Neopets, avatars too. They are faster acting because players can throw as much money as they want!
Neopets chat avatars are the OG bored ape cartoon NFTs.
In our real-world “game” it is the Fed which has printed billions of dollars. This massive throughput of dollar printing has to go somewhere, and one place they have gone is in appreciation of NFTs (in addition to pumping prices in just about every asset class). In effect, the swell in market cap of NFTs has been deflationary to other parts of the economy. The one caveat is that NFTs aren’t exactly sinks, because they are tradeable. I would guess that most of the money “invested” in NFTs is probably staying within the crypto ecosystem, so in that way it still works to take cash out of the conventional economy. Still to the extent that the original purveyors of NFTs are cashing out of crypto based payments to use on conventional goods and services, the deflationary effect is probably suppressed.
Unlike other assets which might have some underlying claim to cash flows or some semblance of basic utility, NFTs are useless (for now) and their prices are built on a house of cards that is precariously positioned as the Fed eventually moves to mitigate inflation with higher interest rates. As soon as there is a reversal of monetary and fiscal policy and liquidity starts to dry up, I would bet on a severe capitulation in the market for NFTs (hello beanie babies).
Unfortunately, you can’t eat clout.
Disclaimer:
This content is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as investment advice, an offering of advisory services, or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. The author believes that the sources from which such information has been obtained are reliable; however, the author cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.
