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Pundits are slinging a lot of doom and gloom these days, predicting that this will be a lean year for startups, marked by limited funding and a new obsession with profitability. They’re not wrong.
Economic uncertainty, shifting consumer demands, changing regulations, scarcity of venture funding and layoffs will demand attention over the near term. But that turbulence masks a thrilling bigger picture.
Taking a longer view, the startup scene is poised for its next leap forward. After three years of disruption, adaptation and deep reflection about purpose and priorities, we are on the cusp of a new cycle of tech and innovation. In 2023, amid the belt-tightening and other survival strategies, we’ll see signs of this larger transformation taking root.
I’ve been investing in companies for two decades, and I’ve never been so bullish about the bigger picture. Here are three trends particularly poised for explosive growth.
Related: What You Need to Know About Launching a Startup in 2023
Digital health takes hold
Good health is priceless, but good healthcare has been costly and cumbersome. In 2023, we’ll see a dramatic expansion in digital health solutions that ease the burden for patients and providers and set the stage for long-term transformation.
The pandemic blew the door open to digital health, acquainting millions of consumers with telehealth and at-home testing. Once a novelty, consumers now expect the convenience and safety of digital health services. Late 2022’s launch of Amazon’s virtual clinic is just one company’s early response to this new market demand.
At the same time, there’s been an explosion in the use of wearable health monitoring devices like smartwatches, wristbands and hearables. It’s estimated that more than one billion devices are now in use. These connected devices are giving people the unprecedented ability to monitor health markers like heart rate, blood sugar and blood oxygenation in real-time and provide rich data for providers. In 2023, we’ll see more providers use this resource to provide more efficient, effective care for long-term conditions and enlist patients as partners in health.
Finally, expect healthcare professionals to take greater control of their careers after years of begging employers for relief from chronic understaffing and stress. The expansion of gig work into the professional class means that nurses and others will be able to make full use of their professional training while creating schedules that work for them, as well as patients, and decreasing the risk of burnout.
Related: ‘Everyone’s Got a Story of How the Healthcare System Has Fallen Short.’ This Founder Is on a Mission to Change That.
Climate solutions leap forward
Climate urgency, consumer demand, government funding and tech innovation are creating a “perfect storm” moment for climate. In 2023 the winds will blow in a positive direction for a change.
First, consumers increasingly demand sustainable, environmentally friendly businesses and new solutions to problems (In one recent poll, 71% of millennials and 67% of Gen Zers called climate change a top priority). At the same time, the soaring popularity of alternative financing methods, like crowdfunding, is shifting companies’ accountability from shareholders to these customers, further accelerating the change.
Sweetening the pot are financial incentives from governments finally appearing to get serious about the global climate emergency. In the U.S., for example, federal lawmakers recently earmarked $1 billion to fund new global climate investments, with President Joe Biden vowing to make further investments. In response, private investors have poured hundreds of millions in additional money into renewable energy exchange-traded funds, spearheading energy development from wind, solar and other renewable resources.
Meanwhile, 2022’s tech-sector layoffs have freed thousands of smart, skilled innovators to dream up new technologies and form alliances, leading to more experimentation and innovation. In the U.S. alone, more than 90,000 tech workers were handed pink slips this year. That’s a lot of latent potential to be redirected to purpose-driven projects. Researchers have clocked a 38% annual increase in “green talent” and a 237% increase in green jobs focused on environmental sustainability. In 2023, that pool is only going to grow.
Related: How Startups and Small Businesses Can Address Climate Change in the Workplace
AI goes mainstream
Everyone is talking about the recent rollouts of powerful new systems like ChatGPT and DALL-E. As an entrepreneur and investor, it’s clear to me that we’ve reached a tipping point. Moving forward, any company that fails to integrate AI systems into its operations will be left behind.
Significantly, these emerging systems are decentralized, openly sharing their cutting-edge research and partnering with other organizations to develop and deploy AI technologies. The power and potential of generative AI is so impactful that the tools must transcend IP ring fences and company boundaries. In short order, AI will transform every kind of work, even venture capital and investment. As such, ensuring equitable access to these powerful tools is a must.
Much has already been written about AI’s seismic impact on the creative professions, like content creation, marketing, and the arts. But it’s important to tally the gains with the losses. Whether they are creating and publishing a children’s storybook over the course of a weekend, exploring novel digital marketing strategies or writing code snippets, humans in AI-assisted roles will reach new levels of creativity and productivity.
At the same time, AI assistance will pave the way for new businesses and opportunities across industries and professions. I expect similarly revolutionary impacts across sectors like healthcare, education, transportation and environmental protection. AI will transform any industry involving complex problems that are difficult or impossible for humans to solve alone.
While the next year will be challenging for innovators and startups, it will also prove to be a fertile time that leads to a new, transformative era. New funding mechanisms, consumer-focused innovation and the embrace of AI across industries will lead to an unprecedented democratization of innovation — and a brighter horizon beyond the short-term troubles of 2023.