There's been a revolution in parenting driven by millennials having kids later in life, and it's a huge economic opportunity for investors and founders

Nico Bossi, financer and entrepreneur, formerly at Citigroup and founder of media finance companies

  • Nico Bossi is an entrepreneur with a background in investment banking at Citigroup and COO of Verasity Worldwide, as well as the founder of two investing and media companies.
  • He always thought he would have kids at a young age, but unexpected circumstances led him to align with the common trend of having kids later.
  • Millennial moms and dads are demanding different kinds of products and services that are more eco-friendly and make parenting more efficient.
  • Bossi said that there are ways companies can capitalize on the delayed parenting strategy, like making what used to be considered luxury childcare techniques accessible to everyone.
  • Visit Business Insider's homepage for more stories.

I grew up in Italy, just outside Rome, and I always thought I'd become a young father. I pictured myself kicking a ball around the yard with my children and taking them with me to watch AS Roma, our hometown soccer team - a pep in my step all the while, my parenting skills bolstered by the buoyancy of youth.

Perhaps I expected to have children young because my mother and father were young when they had me. That was the norm back then: to raise big, rambunctious families. My mother is one of five sisters, and I grew up surrounded by cousins - 12 at the last count. My grandparents also lived nearby.

When I emigrated to America after high school, I maintained both my hope and my expectation that I'd be a young father. Things started according to plan when I met and married my American wife. Yet as it tends to do, life threw us a curveball. Due to illness, we were unable to start a family right away, as we'd hoped. This was frustrating and scary. However, due to the amazing progress in fertility medicine, we were able to "bank" our luck. As I write this, there are some fertilized embryos nestled safely inside nitrogen tanks, awaiting a future arrival date.

Although it felt unusual at the time, the fact that my wife and I have waited to have children aligns us with the broader worldwide cultural shift: More and more, parents are delaying procreation. According to the National Vital Statistics System, 3.8 million babies were born in the US in 2017. Although it sounds like a high number, this was the lowest reported fertility rate in 30 years.

Importantly, this reflects the successful campaign against unwanted teen pregnancies - which are down 55% since 2007, according to NVSS - but it's also a matter of strategy. Some parents are waiting until they feel financially secure and professionally established to have children - which is entirely logical: According to the US Department of Agriculture's Expenditures on Children by Families, in 2015 parents were expected to spend $233,610 to raise a child, from birth to adulthood.

People are waiting longer to have kids. The mean age of first-time mothers is continuing to increase from 21 in 1972 to 26 today, alongside fathers who are now around 31, up from 27 in the same time period. As a result, when couples today do have children, they are more informed and more conscious of safety concerns because they've taken the time to educate themselves.

They're also constantly digitally connected and demanding better and more reliable child-centered products and services.

Some of those products include Cocoon Cam, an AI-vital signs, data-capturing monitor started by a former Tesla engineer; Tinyhood, an on-demand expert advice network which functions as a "ParentTech"-style assistant; and Kidizen, a peer-to-peer resale market for kids clothing and products.

All told, this amounts to a seismic generational shift, both in how parents prepare for raising kids and what they demand out of the technology that helps them do that.

Data shows $300 million in capital flowing to startups servicing this revolution.

What we're also seeing is a broader socioeconomic shift towards products and services with roots in the sharing economy - companies that allow parents to rent, resale, and share rather than buy - as well as the "quantified self" movement: technology that tracks data for self-improvement.

This trend is of deep interest to me, both personally and professionally. I'm not only an aspiring father, but an investor. The ability to see around corners, to understand what's coming next, is a vital skill for early-stage venture capitalists and one I've worked hard to hone. As such, it's clear to me that what we have on our hands is not just a revolution in parenting, but an economic opportunity.

Here's how we should all be preparing for it.

Look for companies that are democratizing parent services for the masses

At Alpha Edison, the VC firm where I work, we make concerted efforts to identify startups who use new technology to bring upmarket services - services which were once only enjoyed by the rich and powerful - to the masses. (We call this strategy democratizing decisions.)

Examples of companies who fit this bill are Uber and Lyft. Both companies made perks like private drivers, for example, available to all.

There are several companies who are democratizing the parent services space in a similar way. Consider the rideshare service for minors, Hop Skip Drive, which has raised $75 million in funding to date according to Pitchbook. In providing child-safe alternatives to Uber and Lyft, their growth will mirror what happens with the industry as a whole.

Other examples of companies bringing "luxury" to the masses within the parenting sector include services like doulas (hypnobirthing meditations, pelvic floor exercises/reminders); after-school EdTech; digital therapists, and coworking spaces with childcare.

In making upscale, desirable parenting services available to a larger percentage of people, these companies have a chance at real success.

Look for companies that alleviate 'silent suffering'

Another category of market opportunity centers around relieving "silent suffering" - everyday irritations that we all just put up with. The kind that, if someone solved them, would unlock massive latent demand.

For example, many women suffer in silence when it comes to the physical recovery from pregnancy.

"As a society, we've made it seem 'normal' that women will pee in their pants, have painful sex, or never regain core or pelvic strength for years after giving birth," said Carine Carmy, cofounder and CEO of Origin, a women's health company. "These issues are far more common than they need to be, affecting one in four adult women, and many women are no longer waiting in pain. They're seeking help and treatment, and the good news is that physical therapy and other noninvasive methods work."

The most obvious form of silent suffering parents presently put up with is the lack of paid parental leave and affordable childcare options, making many parents - particularly mothers - unable to work. According to the Bureau of Labor Statistics, only 71% of US mothers are in the workforce, compared to 93% of fathers. The participation rate drops still further - to 65% - for mothers with very small children.

Both paid parental leave and universal childcare are key pieces of legislation ripe for debate in the run up to the next election. In the meantime, providing safe, affordable childcare is a massive opportunity. Next gen parents want and need state-of-the-art childcare where they can keep in touch with offspring during the workday. They want on-site childcare at coworking spaces.

Companies who can deliver on that in the near future will change lives.

Look for non-toxic startups

Parents today want products that are free of toxic chemicals. They likewise don't want products that promote climate-unfriendly practices.

As a result, a variety of environmentally conscious companies have begun sprouting up. (It just so happens that many of the founders are celebrity parents.) These include Jessica Alba's eco-friendly child/baby line The Honest Company, which has raised around $500 million to date; Karolina Kurkova's wellness line Gryph & IvyRose known as "Goop for kids"; and Emma (Baby Spice) Bunton's Kit & Kin.

Emma Bunton in particular has captured mommy bloggers' universal acclaim. Bunton's company sells diapers made with far fewer chemicals than leading brands and chlorine-free fluff pulp harvested from sustainably managed forests.

In the baby/child food sector, Sarah Michelle Gellar's company, Foodstirs, bills itself as "junk free" organic DIY baking, providing simple-to-use kits with no "bad" ingredients. Gellar told Good Morning America about the power of taking parenting brands direct to consumers: "Customers nowadays want to really know every part of what goes into what they're eating, what they're purchasing, and social media allows that," she shared.

This epitomizes the ethos companies in this space are adopting - and hints at something of a winning formula that investors should be paying attention to.

Look at companies poised to disrupt incumbents

I'm bullish about the companies detailed above because, while many are still small, they nevertheless are direct threats to the biggest players in the baby/child products and services industry They're heralding trends that will only continue to grow in importance over time, as the parenting revolution takes shape and garners influence.

I met recently with Lisa Barnett, the founder of Little Spoon. She reiterated that assisting the parenting revolution is very much something entrepreneurs like her are focusing on.

"2018 was the first year the millennial generation represented the critical majority of new parents," she said. "And in the same way we've seen millennials disrupt so many other consumer categories, they've entered the parenting space with the same demands for high-quality, transparent, health-conscious, and affordable products for their families."

The disruptive potential of entrepreneurs like Lisa is massive. Big picture, the total addressable market for global baby care products is estimated at $73.86 billion, and projected to grow to $109.13 billion by 2026, according to research and data company Statista. It's still a fragmented industry, but Johnson & Johnson (23.2%), Procter & Gamble (18%), and Kimberly-Clark (8%) Statista says are the three market leaders.

And they're susceptible to disruption. In line with the widespread concerns around toxic and harmful ingredients, J&J is still embroiled in a lawsuit around asbestos traces in their talcum powder that is said to cause cancer, which could negatively affect their market share in the coming years. So there's a real opportunity for smart startups to grab market share or make themselves ripe for successful IPO or acquisition.

More importantly, there's a real opportunity for companies and investors to do good and change lives here. For example, when I met with Lisa, our conversation eventually turned to her parenting hopes. "I'd love to be a mother at some point," she said. "But I feel it's really tough, if not impossible, to be an entrepreneur CEO and working mother without masses of support."

I felt for her. It's a horrible choice to have to be between pursuing your dreams and starting a family. Technology designed for the next generation of parents can alleviate some of that pressure and solve for the time-constraint burdens of early-stage parenting. Obviously, technology can't solve all of the problems parents face today, but developed and cultivated strategically, it can certainly make it easier for women to stay in or re-enter the workforce, should they choose to have kids.

The way we raise families has changed - perhaps forever. It's time for founders and the people who power them to change, too.

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