Speaking about the “best industries” for startups, Evgenii Chebotov, syndicator and co-founder of Prosto VC, does not include IT – in his opinion, this industry is not self-sufficient and only adds efficiency to traditional businesses. Attention functions as currency in today’s world, so it is better for founders to focus on “hits” related to basic human needs.
Evgenii told us about five such areas where an entrepreneur can find promising options for venture projects.
Food
Food-related startups are ubiquitous- their number is only growing every year. The global foodtech services market will reach $300bn by 2027, growing at more than 20% per year.
Today the prominent trend is the creation of related infrastructure for the food industry. For example, during the pandemic, a huge number of startups appeared.
A lot of opportunities are still available, so it makes sense to keep acting on it. Most countries in the world do not have sophisticated and modern food delivery services. This is a huge untapped market, where there is a space for both large and small projects.
Recently, Whizz, a company that rents electric bicycles to couriers, raised $3.4 million from Sergei Dashkov’s investment fund Joint Journey, TMT Investments and a group of business angels.
And YallaHub, a logistics project founded in Dubai raised $600,000 from the Regolith international financial ecosystem.
Health
Ilya Strebulaev, a professor at Stanford and one of the authors of the New Economics for Venture Investors (NEIC) course, said that in 15 years biotechnology and medicine will move so far ahead that an average life expectancy of 80-100 years will become absolutely normal.
Technologies in medicine are developing at an extraordinary speed. No one is surprised that it is now possible to change the human genome.
Remarkable progress has been made in the diagnostics at the molecular level. It is expected that by 2025 the total global biotechnology market will reach $742 billion, and the annual growth rate of the global healthcare technology market will be at least 5%.
Startups have a lot to expand.
Sleep
It would be beneficial for everyone to go to sleep for a strictly defined amount of time – no more, no less – in order for the body to have time to fully recover and at the same time stay within the correct biorhythm.
Mental and physical health are closely related, one can influence the other.
The topic of good sleep is virtually endless, more and more startups related to this area will appear in the market. In particular, founders around the world are developing so-called “calm services” to help people get a proper night’s rest.
Prominent examples include the Loona.app service (an app for relaxing and preparing for sleep) which has been in development since 2016 mainly in the US.
We see completely different business models that are trying to solve a big problem of humanity, and all of them have a chance of success.
Communication
We have witnessed how social networks and the blogosphere have begun to draw on advertising flows that used to go only to traditional media.
As a result, some projects emerged and began to serve the “new media” by:
- automating business processes for them,
- calculating budgets.
And now the industry is already discussing the sunset of “new media” – it is being replaced by an iteration of the Internet web 3.0, which allows online communities to independently select new opinion leaders and support content creators financially.
Attempts to set this trend in 2017-2018 include the international blockchain social network Steemit. At that time, the market was not ready for such innovations. However, in 2022, the move-to-earn trend emerged, which allows you to earn not only by communicating and sharing interesting content, but also by doing various activities that are needed by the community. An example of this is the Stepn project, where you have to walk in real life wearing virtual trainers and receive rewards from the community.
It is obvious that in the future organised communities of users will take over content management and distribution. In the next three to five years, this concept will be actively pursued.
Love
The first dating sites appeared back in 1965. Today, there are 8 thousand different online dating services in the world and more than 320 million of their users. The total global market is $2.8 billion. In addition to the difference in technology, the applications differ in business models:
- Conditionally free (most features are free of charge).
- With paid subscriptions.
- With advertising.
Tinder is the industry’s number one earner – $1.8bn a year. The size of the market can accommodate quite a few unicorn players. Therefore, projects related to love and relationships will be in demand and can significantly increase the capitalisation of this business.
Improvements in artificial intelligence technology will lead to the fact that we will soon see a new stage in the evolution of software products that allow people to develop relationships.
Wherever a startup puts its efforts: food, sleep, health, communication or relationships, it will be able to grow in any economic environment. Satisfying basic human needs is not fashionable – but unlike hyped products, which come and go fairly quickly, they are less likely to falter in times of crisis.
