2023 Startup Predictions: The Trends, Sectors, And Tech Worth Watching
2023 is creeping up on us. Thousands of entrepreneurs will be planning to launch startups in the new year.
They are stepping into an uncertain world. We are still learning the lessons of that time three years after the start of the Covid-19 pandemic.
Work is transitioning from the traditional office 9-5 model to something more flexible. And leadership styles are changing.
At the same time, the world is in a state of flux. There’s a lot of economic uncertainty, but also a lot of exciting developments in tech.
How can a new startup navigate 2023? Looking at startup trends can help.
Here, we’ll go through some of the trends, tech, and techniques that startups should watch in 2023.
1. Generative AI
Digital acceleration as a whole has been a big trend over the past few years. 2023 will be no different in that respect.
One way that startups will do this is through generative AI.
‘Generative AI’ is a broad umbrella term that covers a lot. At its most simple, it refers to unsupervised machine learning algorithms. These algorithms create (‘generate’) new things using what they have learned.
For example, a generative coding AI might generate code. This code will get more complex and sophisticated as the AI ‘learns’. This ability could be used to fix bugs and improve features in apps.
There are dangers with generative AI. It’s sometimes linked to things like deep fakes and false news stories. But, when it’s used right, it has a lot of useful applications:
- Generative AI is great for automating the dull, repetitive work of digital creation. For example, it can edit images and audio files to give crisp, clear results. This kind of work is laborious and boring for human engineers, but a generative AI finds it easy.
- Generative AI can create models for testing at speed. These are useful for everything from weather forecasting to audience research.
- Generative AI can come up with content ideas for blogs, social media posts, and more.
- Generative AI can produce digital prototypes very fast. This speeds up R&D.
NFTs (Non Fungible Tokens) are getting more and more popular. Arts and crafts startups are using them to generate quick cash and build their customer base.
An NFT is an original digital item. Usually, NFTs are artworks or digital designs, but they can be anything. When someone buys an NFT, they become the owner of something completely unique. This is very appealing to some customers.
NFTs help startups to scale in several ways:
- Free NFTs are a great loss leader. They’re not expensive to produce and mint, but they do give great value to the customer. So, by giving out free NFTs, brands can bring in new customers and build a community.
- NFTs are quick and easy to mint. So, selling NFTs can be a quick way of boosting profits.
- NFTs help brands to showcase their creativity. They’re a great way to get your stuff out there and make money at the same time.
Brands can also use NFTs as fun alternatives to tickets when throwing events. This gives the attendee something unique to keep after the event is over.
3. Leveraging the IoT
The Internet of Things is about more than interactive fridges. It allows everything from your heating system to your bicycle to become a data portal.
The IoT has been reaching critical mass for some years now. In 2023, it will be more wide-reaching and accessible than ever before.
At heart, IoT devices are communication gateways. Every communication gateway is another opportunity to build relationships with customers. But, startups should be careful. Consumers won’t be happy if their fridge starts piping up with random brand adverts.
If you are going to use the IoT for marketing and communications, give the customer control. Otherwise, you could come across as a pushy and intrusive brand. And that’s the last thing you want when you’re trying to build brand/customer relations.
Startups can also use the IoT to boost business processes. Things like smart trackers help with office management. Intelligent security features can alert you to potential break ins. Card readers for small business can send transaction data straight to your CRM. You could even use the IoT to send instructions to production machines.
4. Outsourcing Cybersecurity
Outsourcing to cloud-based services has been a business trend for the last few years. In 2023, CSaaS (Cybersecurity as a Service) is set to be huge.
Cybersecurity is very, very important. Cybercrime is on the rise, and it’s getting more sophisticated by the day. It’s thought that cybercrime will cost the global economy $10.5 trillion every year by 2025.
At the same time, the penalties for cyberattacks are getting more serious. Legislation like the GDPR and the CCPA crack down hard on brands that fail to protect customer data. Under the GDPR, companies can get fined up to 4% of their entire annual turnover for data breaches.
So, it’s vital that brands are on top of cybersecurity. One of the best ways to do this is to outsource cybersecurity to experts.
Cloud-based cybersecurity companies have a lot of advantages for startups:
- They provide high-level expertise at an affordable price. Many startups don’t have the resources to hire a talented in-house cybersecurity team. By outsourcing, they get the expertise they need at a price they can afford.
- They give round the clock service. CSaaS teams can dedicate their entire jobs to protecting their clients’ systems. So, brands can dedicate themselves to customers without having to worry about cybersecurity.
- They have the most sophisticated security tech available. Top cybersecurity systems are expensive to own. By hiring a CSaaS company, startups can get the benefit of high-end tech without the upfront costs.
5. Conscious Entrepreneurship
It’s no secret that the modern consumer has a conscience. Millennials are the most ethical consumer group to date. And Generation Z and Alpha promise to outdo even Millennials in conscious consumerism.
To attract these conscious consumers, startups need to practice conscious entrepreneurship. Brands no longer can just set up a property and eart from it, but they need to work hard to mitigate the ethical impacts of their actions.
What does conscious entrepreneurship look like? Well, it’s no single thing. It involves an all-encompassing effort to be ethical in every action (and even thought!)
Here are some practical ways to practice conscious entrepreneurship:
- Taking active steps to protect the environment. Using sustainable materials, keeping your carbon footprint low, etc.
- Promoting compassionate leadership. I.e. treating employees with humanity and respect, building an open and supportive culture, etc.
- Giving back through charity and conservation work.
- Making sure that your chain is ethical. For example, don’t work with suppliers who exploit their workers or the environment. Don’t let less ethical brands advertise on your platform. And don’t partner with a brand whose ethics don’t match your own.
Immersive consumer experiences are the future of B2C. And VR is the future of immersive experience.
Companies are already using VR to sell products through the internet. It’s very popular in retail. Here are some examples:
Furniture companies like IKEA use VR and AR to give customers virtual tours of showrooms.
This is a lot more effective than showing a picture in an online catalogue. With VR, customers can ‘walk’ around the product and get a proper feel for its shape and dimensions.
Tommy Hilfiger and H&M
Fashion retailers like Tommy Hilfiger and H&M use virtual showrooms.
These replicate the real-life fashion shopping experience, but with crucial differences. A virtual showroom is never crowded. The assistants are never distracted. Everyone knows your name, and everyone has time for you.
VR gives clothes shoppers an immersive, personalised, and fulfilling experience.
Engineering and construction brands can use VR to give safe demonstrations. For example, it can be expensive and even unsafe to build and show full working prototypes.
But building a digital prototype and showing it in VR is a great alternative. By using VR, companies can put products through their paces at low cost and in safety.
7. Hybrid/Remote Working
Pandemic working conditions opened the world’s eyes to the potential of remote working. Having seen what is possible, employees are reluctant to go back to the office 9-5.
Adopting a hybrid/remote working policy can be very good for business. Especially if you are a small business. It saves on overheads, as you don’t need so much office space and don’t have to pay for employee travel.
For example, website design can be done remotely. This makes the cost of developing a website a lot lower.
You don’t have to pay for employee parking, or for office space, or utility overheads. The costs just of running an office quickly add up!
Hybrid working also improves employee satisfaction and even productivity. But do remember that people work in different ways.
While some employees love being completely remote, others will prefer the hybrid approach.
Then there’s the fact that remote technology gives you access to people all over the world. Recruiting is no longer about persuading talent to move within office-commuting distance. Instead, you have access to the best talent the world can offer.
8. Investment in Leadership Skills
The pandemic revealed a lot of uncomfortable truths about society. One of them was that managers and CEOs are often not all they could be. Moving to remote work was often chaotic.
Since 2020, the world’s working population has gone from 7% remote to 16% remote and 40% hybrid. It’s a massive change, and it can benefit startups if done well.
Managers floundered with no physical space to manage. CEOs struggled to connect with the needs of employees. The result was a disorganised, inflexible mess.
Companies that thrived in the pandemic had something in common: great leadership. Their leaders and managers were both flexible and organised.
They were prepared to listen to employees, and acted on what they heard. They knew the value of employee fulfilment, and they lead by example.
We all hope that a situation like the pandemic won’t happen again. But leadership skills are useful for more than global pandemics. Effective leadership can see a startup through its bumpy first steps and to scale fast.
So, investing in leadership skills at all levels of management is important. Startups that want to survive, thrive, and scale, should develop great leaders.
9. Streamlining Work
A major startup trend of 2022 was using AI to boost employee satisfaction. This looks set to continue into 2023.
AI is great for taking away mundane, repetitive tasks. This frees up time for employees to work on more fulfilling work. It streamlines workflows and improves employee satisfaction.
Taking away time-consuming drudgery also reduces the risk of burnout.
On a similar note, remote working cuts down a lot of unnecessary commute time. This allows workers to focus on work without the stress and distraction of commuting.
All in all, work is getting purged of extraneous extras. No more mundane, repetitive tasks. No more unnecessary commuting. Even meetings are being revolutionised by remote communications technology.
This means that jobs are more streamlined, more focused, and more fulfilling.
Tech and Ethics Rule Startups in 2023
The world of work is changing, and startups are right at the cutting edge of that change. A brand new startup in 2023 will have to navigate a complicated post-pandemic world.
By keeping a close eye on trends, startups can make sure they’re ahead of the curve. In 2023, it’s all about tech and ethics.
Through generative AI and automation, startups can produce new things at speed. They can also streamline workflows and increase employee satisfaction.
The Internet of Things gives new opportunities to connect with customers. But conscientious brands should remember that it’s unethical to be intrusive. Startups must balance the potential of the IoT with customers’ and employees’ privacy.
NFTs are a fun new way to get customer attention and generate quick money. They can also be an ethical way to showcase your stuff. Conscientious companies may struggle to produce in a sustainable way. Digital NFTs, while not 100% green, are pretty sustainable.
Hybrid/remote working and VR expand remote options for brands. This cuts carbon footprints and makes life easier for employees.
Good leaders will make moral choices, and use technology to ethical advantage. And at all times, they will be doing their best to keep customer data secure with great cybersecurity.