Aron Gebe, CEU iLab
January 18, 2021
2020 was one of the most memorable years in history. The worldwide waves of quarantines not only disrupted the lives of many but also had a significant impact on the economy. While the full effect of the coronavirus on the global economy is yet to be known, one thing is certain: the global supply chain was disrupted in an unparalleled way.
Yet, what disrupted the operating models of large corporations and national education systems has only accelerated the trends and shifts in the startup industry, which - in some cases - had already appeared before the pandemic. From the rapid growth in e-commerce to the confident expansion in telehealth and remote working, everything revolves around consumer convenience and virtual solutions. What’s more is that sustainability will continue to play an integral part of any business, growing to be a global standard.
At the same time, all eyes are on the startups now: the industry is often equated with creative and innovative solutions from new perspectives. That is exactly what we need in the midst of the pandemic. So without further ado, here are 6 trends that will shape the startup industry in 2021.
Remote working is kind of a no-brainer at this point, yet it’s also the one trend that will have the most prominent effect on the job market. Many people might think that the remote working service field is already very saturated with apps and platforms, such as Zoom, Teams, Skype, Slack, and else. However, that doesn’t seem to be the opinion of Venture Capitals. According to a survey by TechCrunch, many investors deem the current remote working solution unresolved from a security standpoint. In the midst of the information age, where booming business models are built on the systematic harvesting of personal data, there is certainly cause for concern. While popular social media sites already capitalize on personal information, the market for professional working habit information is still untapped. Therefore, without surprise, security & compliance were some of the main issues of institutional investors. Experts believe the field has yet to see developments on ensuring data protection, that will not only assure the convenience of users but also comply with the strict compliance regulations of companies.
Another field within the remote working sphere is employee wellbeing. Where in the pre-COVID period employers had a relatively easy job at providing perks aimed at their employees’ wellbeing, the shift to remote working has made such efforts hard-to-impossible to implement. Therefore, instead of the complimentary fruit baskets, the office massage hours, and team-building outings, companies will have to come up with other ways to satisfy their employees. As StartechUp points out, some startups are already experimenting with virtual meditations, online extracurricular activities, online sports, and recreational activities, and other measures aimed at the well-being of workers. Introducing these into an augmented reality format could bring us “the next big thing” in remote working. Employees are certainly the greatest assets to any company, and keeping them in a positive and good state of mind greatly benefits companies in terms of their productivity.
Talking about productivity: the initial discourse on working from home was rather negative. Certainly, employers with no experience and precedent of remote working took the hardest hit. Setting up and especially getting used to a virtual working environment comes at the expense of productivity. This is perfectly reflected by the surveys conducted in the first wave of the pandemic. Fortunately, however, people are seemingly getting used to the new reality; perceptions are shifting and more and more employers report improving productivity levels. A large part of this positive change can be attributed to the gradual normalization of e-leadership. “Many employers still build their leadership culture on close-up monitoring of their employees” - points out CEU iLab’s Achilles Georgiu. According to him, e-leadership starts where empowerment and trust meet employees, instead of the outdated idea of in-person monitoring. Consequently, e-leaders are capable of cultivating a sense of mission through virtual channels, thereby boosting productivity and motivation.
Online education is another obvious contender among the top startup trends. The global pandemic forced a lot of students - ranging from elementary school to post-graduate universities - to move to online platforms. The transition has certainly been smoother, mainly due to the wider use of technology among the younger population. However, the immediate results look rather grim: remote schooling is a large contributing factor to worsening social disparities. The loss of school-based health care and accommodations are the most apparent reasons. But the growing barriers to higher education due to the reduced household income is also a serious cause for concern.
Yet, looking at the bright of things, the current education turmoil will likely result in the overall democratization of knowledge. And this also means startups have a market full of challenges and potential. Massive open online courses, or MOOCs, are already experiencing a surge in their userbase. Platforms, such as Udemy and Coursera provide high-level online courses at giveaway prices. Apps offering interactive learning experiences, let it be in coding, languages, reading comprehension or meditation are in abundance on the market. The list is only growing, creating fierce competition for traditional curricula. Lastly, traditional higher education institutions are also working hard to provide void-filling alternatives to in-person learning. While it is an undeniable challenge, this means that in the long-term, universities will be a whole lot more accessible for people from all around the world.
Entrepreneurs are also eager to offer solutions for the new reality. For instance, a Silicon Valley-based Edtech company, Education Elements, offers tailor-made virtual learning environments, while Perlego, a subscription-based textbook sharing service claims to be the “Spotify of textbooks”. These are great examples of how startups can leverage innovative solutions in the outdated schooling system.
All in all, the education system will certainly stay true to its in-person format for the foreseeable future, yet many interactive and innovative elements will be incorporated into traditional curricula.
The market for digital health was already established at the start of the decade. Pioneers in healthcare, Nordic countries have long been offering telehealth services, as part of their social healthcare. However, with the surge of the global pandemic and due to the infectious nature of the virus, the use-case for digital health seems ever so self-evident: the protection of the frontline workers. Combine it with the latest technology developments of 5G and Artificial Intelligence and you have a recipe for the next generation of digital health providers. The combination of ultra-low latency networks and autonomous search engines accessing billions of medical records instantly can bring us a revolution in healthcare. For instance, Artelus, a leading healthcare startup provides quick and comprehensive AI-based analysis, as well as prediction of potential sicknesses, including tuberculosis and breast cancer. There are also solutions for AI-based virtual assistants, which come in handy for people with chronic illnesses. There are considerable opportunities in drug discovery and development; with the use of AI and machine learning, the long phases of drug developments can be cut drastically, while also allowing for tailor-made medications.
Therefore, the digital health market has huge potential for future startups, with endless opportunities like virtual assistants, custom made drugs, remote surgeries, etc.
Better testability and lower overhead costs for sellers while providing more convenience for buyers? Electronic commerce offers just that. While the business model has already stepped foot among the most popular startup trends, it will continue to grow and expand in further years. Its prominent growth is no surprise since it’s a win-win situation for both sellers and buyers. Sellers can operate with a lower cost basis while leveraging data allowing easy testing of new products. Buyers, on the other hand, may also experience lower prices, due to cutting out the middlemen, while shopping conveniently from home.
While 20 years ago creating a webshop required serious programming knowledge, today, with the help of no-code web apps everyone can create one. And the best part? No-code applications range from webshop engines, such as Shoprenter, to graphic design software, like Canva.
SaaS, - or software as a service - has long been a proven business model, and it won’t be any different in 2021. In fact, SaaS businesses are now focusing on apps that allow people with no programming or developing background to create a webshop, automate workflows, or design web content. This is not only convenient because of the lowered barriers to realizing ideas, but also due to the growing shortage of programmers.
Startups face a growing expectation to be socially responsible, that is; be ethical in their sourcing, commit to social responsibility, and give back to the community. Our world has seen a rapid evolution of new technologies since the first industrial revolution, however, at the expense of disrupting wildlife and biodiversity, while increasing the inequality gap. No wonder why sustainability has become one of the most sought-after goals of companies of all sizes. The more the consciousness revolution gains traction in the mainstream media, the more aware people become of their day-to-day choices. Individual consumption choices constitute the ultimate voting power when it comes to supporting businesses. Therefore, startups will most likely be mindful of their missions in 2021. Beyond being a “trendy label”, sustainability and the circular economy also constitutes a market rich in opportunities. According to the Business and Sustainable Development Commission, it is a 12 trillion dollar segment of business. Social responsibility not only has inherent value to any company, but it may also bring about other benefits. For example, Millenials are more attracted to companies with a greater purpose, while investors, slowly, but gradually shift their money into sustainable businesses.
That’s why from large multinational companies like Apple and Ikea to smaller startups, the new norm is innovation through sustainability and frugality. For instance, a Hungarian startup, Munch, established a platform that aims to tackle food waste. They assist grocery stores, restaurants, coffee shops, and other shops carrying perishable goods, selling their not sold goods. Their catch? Creating extra income from soon-to-be waste, while offering discounted prices for customers. Sounds like a win-win situation!
The market is virtually infinite; from empowering intersectional communities, to tackling microplastic pollution in oceans, innovative sustainable solutions are much needed for the future of mankind.
Market disruption is usually great news for startups: when the status quo is challenged, the barriers to entering the market become lower. At the same time, large corporates and multinational companies are on the lookout for paradigm-breaking solutions, often seeking quick fixes among entrepreneurs and newcomers to the market.
Therefore, the silver lining here is that startups are not only forced to go through a rapid digital transformation, but they also have the perfect market conditions for creating disruptive solutions. And if there’s anything the pandemic has taught us all; it’s the need for resilience. Strive for a lean organization and always expect the unexpected!
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