The world is changing faster than ever before, and it’s having an effect on businesses across all sectors. Our latest webinar looked at which verticals are going to expand and change over the course of 2019, signposting what you should be looking out for.
We spoke with three experts in the startup area, Daisy Stapley-Bunten whose magazine Startups Magazine aims to help startups connect the dots along their entrepreneurial journey, and Damien Lane and Meriwether Beckwith who work for Episode 1 Ventures and Oxford Capital respectively.
Both these companies are constantly on the hunt for the next great startup, and as such, Damien and Meriwether are sharply attuned to where the next big thing will come from.
All three of our panelists agree: personalisation is the general direction of the next big thing.
This doesn’t just mean printing people’s names on otherwise finished products, though, rather it’s a mindset and a practice to apply across the supply chain.
Damien Lane defines personalisation as trying to identify what consumers really want. He gives the example of an FMCG business Episode 1 are working with, who are trying to end the one-size-fits-all attitude that’s prevailed in this area since it began.
DL: If you think about drinks, for example. There are so many flavours of various brands: Pepsi, or Coca-Cola, cherry or vanilla. And beyond that there are nutritional options: do people want zero sugar, or a diet version? Since people are more interested in what’s going into their bodies nowadays, it feels like an opportunity to be tailoring these offerings to the individual.
MB: This trend towards personalisation is majorly enabled by technology. What we’re seeing really break out is the personal mobility sector, and even mobility for businesses. The personal scooter sharing model, for example, is already finding success throughout Europe and it’s likely we’ll see this in the UK.
DSB: I agree, personalisation is huge. We’ve just featured a business called Candy Mechanics in Startups Magazine. They use CNC (computer numerical control) machines to 3D carve chocolate lollipops in the shape of your head. So it’s about as personal as it can get!
Damien explains that you can now custom-make parts much more easily, as CNC machines become more widely spread and improved. This means shorter runs, which can shorten the whole supply chain allowing for more nimble adaptation and personalisation.
With this technology so readily available now, as well as the hyper-targeting and instant feedback provided by digital products and media, there’s much less room for the one-size-fits-all approach. For Meriwether Beckwith, this means there are certainly sectors that have had their breakthrough brands, but are now over the hill.
MB: What we’re increasingly finding less interesting are pure digital or physical products that aren’t differentiated depending on consumers. There are some areas that have perhaps reached their peak this year: the dating apps space, for example, or the subscription model. A recent set of data I looked at showed that in particular, UK consumers are less amenable to subscription models than people in the US.
The potential rigidity of subscription models gives Daisy cause for concern, too. In her opinion, on-demand is a much greater trend for 2019.
DSB: Startups are being disruptive in every sector, but they’re having most success when they’re in line with the culture of convenience. Everyone wants everything now, and on-demand services are really taking off. This isn’t just in terms of software, but physical products too, that slot into increasingly busy lives.
Tailoring your product to granular specifics makes for an offering that feels much less easy to ignore: it simultaneously makes the product stand out, and helps it connect more with the consumer. It’s a trend that all three of our panelists are particularly excited about.
Another area that’s of particular interest is the health tech sector.
Damien Lane explains that the broad categorisation of ‘well-being’ is seeing a huge rise in interest, from healthcare, to food, to exercise. He talks us through an investment they made in 2015 into a health tech startup that’s really taking off, called Push Doctor.
DL: We were aware that there are structural problems with British healthcare simply because the NHS is so overburdened. And part of this is the uneven spread of supply and demand across the country. So in London, typically you’d only wait 1-2 days for a GP appointment but the countrywide average is 14 days. In a lot of places you’re waiting 4 or 5 weeks. So Push Doctor wanted to aggregate supply and demand with the marketplace model and digitise it, so that you don’t need to go to see the GP in person, and this really solves a need.
It was crucial to Damien that they were a brand who built for consumers. For him, this was a measure of future success.
DL: At the time, Push Doctor were the only brand in this space wanting to build as a customer brand, rather than partnering straight away with the NHS and we saw this giving them a lot more freedom to adapt quickly.
Deloitte has estimated that the global health market is worth £43bn and rising, with a proportion of this driven by health apps. It’s an interesting space to watch, and one we can quite safely say will be a success considering the extent to which consumer interest in leading health-conscious lives is growing.
Whether it’s assessing if a startup is promising enough to merit investment, or invigorating enough to feature in a magazine, all three agree on what they’re looking for.
MB: When we’re looking for a breakthrough brand, we’re looking for an entrepreneur who understands a customer need, and a customer pain point so well that they can design something the customer didn’t even know they wanted. The company will be one that architects around consumer needs.
DL: It’s these entrepreneurs who understand the customer and then find a way to differentiate the solution, who we’re really interested in.
Daisy Stapley-Bunten speaks about one such startup, who are a very interesting prospect to watch called Yellow Label.
DSB: The UK throw away over £13bn worth of food every year, which is insane and a huge waste. Yellow Label are a tech startup who took this problem, and innovated around it. Their app allows people to find those yellow-label reduced items in food shops and supermarkets near them. It’s sustainable and economically suited for their audience: it’s a win-win for everyone. For me this is an example of a real breakout brand: they’re solving for a real problem that’s happening now, and they’re fixing it in several different ways for the various groups involved. Retailers have less food waste, and get the opportunity to make money where they would otherwise be wasting stock; consumers get cheaper products; and it creates a more sustainable world.
Daisy is also keen to stress that money isn’t the only measure of success.
DSB: The startups who will have most success will be exceptionally consumer-centric, but will also think about having a social impact to make them sustainable businesses.
Having a longer term view—and one that extends beyond just monetary gain—is becoming a necessity now. It’s no longer enough just to make a great product. The startups who’ll find success in 2019 will need to think carefully about plastic and energy use, company culture, and CSR in a world where we expect companies acting responsibly as a baseline requirement.
Key takeaways from our panelists for those at the beginning of their entrepreneurial journey
- Focus on building a business that you care about and that improves the lives of your consumers. Focus too much on investors and you’ll lose sight of what’s important, and probably veer off course
- Crowdfunding is a great place to begin. It allows for trials and tests, with smaller budgets, but a lessened need to produce returns immediately
- Think about what investors should be offering you in return: it’s not just an injection of money. Mentorship and input from an investment relationship is a really crucial thing to ask for
- Think about diversifying your location. There’s a sense that London is perhaps not the status symbol it always has been. Meriwether Beckwith thinks Manchester is certainly the next big up and coming area. Meanwhile, Daisy Stapley-Bunten mentions Capital Pilot, a platform hoping to move investment around to different regions in the UK so that investors can make meaningful connections with startups outside of big cities
Whatever your idea is, if you’re looking to breakthrough to the big time in 2019, all our panellists agreed that you’ll need to be consumer-centric.
Learn what consumers’ pain points are as you craft your idea, and check in with them as your entrepreneurial journey gets underway, ensuring you’re prioritising the bits of your business they’re going to spend money on, and changing the things that aren’t working.
Get in touch with us to talk to consumers about everything from how they currently interact with your sector, to work out where you can best fit into their lives, to validate product-market fit, and to test your designs and ideas on real people.