According to Inc., several startups have successfully cracked the code on attracting Generation Z customers by aligning with their unique digital behaviors and values. Margins, a San Francisco-based book tracking app founded in late 2023, leveraged the BookTok phenomenon to grow from 400 to 60,000 installs in just 12 days, eventually surpassing 100,000 users by April 2024. Doji, a NYC fashion tech startup founded this year, raised $14 million in seed funding for its virtual try-on technology that lets users create avatars to test designer clothes. Czech mental health platform Elin.ai, founded in 2023, addresses the generation’s mental health concerns by using AI to analyze screenshots and offer personalized advice. Photo-sharing platform Swsh, mapping app Corner, and food social network Beli have all found success by integrating social elements with practical utilities, with Beli now boasting over 60 million reviews globally. These examples reveal emerging patterns in what resonates with this digitally native demographic.
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Table of Contents
The Digital Native Expectation Gap
What these successful startups understand is that Generation Z doesn’t just use technology—they expect it to function as an extension of their social and emotional lives. Unlike previous generations who adapted to digital tools, Gen Z has never known a world without instant connectivity, which creates fundamentally different expectations for user experience. The most successful startups aren’t merely creating functional apps—they’re building digital ecosystems that mirror the complex social dynamics this generation navigates daily. This explains why platforms like Margins that integrate with existing TikTok communities see explosive growth, while standalone utilities struggle to gain traction.
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Mental Health as Core Feature, Not Add-On
The success of platforms like Elin.ai points to a broader trend where mental health support is becoming table stakes for mobile apps targeting younger users. Research from the Walton Family Foundation indicating 42% of Gen Z struggles with depression isn’t just a statistic—it’s a design requirement that forward-thinking startups are building into their core architecture. What’s particularly innovative about Elin.ai’s approach is its passive monitoring capability through screenshot analysis, which addresses the generation’s preference for support that doesn’t require active help-seeking behavior. This represents a significant evolution from traditional mental health apps that demand users to manually log feelings or schedule sessions.
The Social-Commerce Evolution Beyond Traditional Platforms
Platforms like Corner and Beli demonstrate how social media is evolving from broadcast platforms to utility-driven discovery engines. Corner’s mapping approach—built from user contributions rather than scraping existing data—creates authentic local discovery that resonates with Gen Z’s preference for genuine recommendations over algorithmic suggestions. Similarly, Beli’s transformation into what Taste Cooking describes as a “dating app of sorts” for foodies shows how social platforms are becoming hyper-specialized around specific interests. This specialization addresses Gen Z’s desire for communities that reflect their multifaceted identities rather than one-size-fits-all social networks.
The Sustainability Challenge for Gen Z-Focused Startups
While these early success stories are impressive, the real test will be whether these business models can scale beyond initial viral growth. Many Gen Z-focused startups face the “coolness paradox”—the moment they become mainstream, they risk losing the authentic appeal that attracted their core demographic initially. There’s also significant pressure on unit economics, as Gen Z users have high expectations for free, ad-free experiences while being notoriously difficult to monetize through traditional means. The mental health and privacy implications of platforms like Elin.ai analyzing personal screenshots or Swsh using facial recognition also present regulatory risks that could emerge as these companies scale.
What This Means for the Broader Market
The patterns emerging from these successful startups suggest we’re entering an era where social features, mental health support, and hyper-personalization will become expected components of most digital experiences. Established companies looking to attract younger users will need to integrate similar functionality or risk becoming irrelevant. We’re likely to see more startups adopting “community-first” launch strategies that leverage existing social platforms rather than trying to build audiences from scratch. The most successful future ventures will likely combine multiple winning elements—social discovery, mental wellness features, and personalized experiences—into cohesive platforms that serve as digital homes for Gen Z’s various interests and needs.
