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By Mitch Wagner | February 2021
When three startup backers talked recently about the startups we need that don’t yet exist, they focused on startups to tackle world-scale problems: food shortages, the struggle to care for aging or sick family members, and healthcare shortcomings. These problems have long existed, but the COVID-19 pandemic has made them starker, creating a new urgency to address them.
“There are so many big issues to solve—so many options. Making a meaningful impact on the world is something we want to focus on,” said Danielle Cohn, vice president of startup engagement and head of LIFT Labs at Comcast NBCUniversal.
Cohn spoke on a panel titled “Investor Wish List: What Startups Should Exist, but Don’t Yet,” at The Information’s Future of Startups: Lessons for Next-Gen Disruptors event held on February 3 and 4, 2021, cosponsored by Oracle for Startups.
Startups powered by “massive amounts of compute and storage” can help improve food availability in Africa and in “food deserts” in inner cities, said Jason Williamson, vice president and global head of Oracle for Startups and Oracle for Research.
Founders with diverse backgrounds will bring perspectives essential to solving big problems, such as eldercare and other family caregiving, Cohn said. Job losses for women in particular have been catastrophic since the pandemic outset, and these women have first-hand experience of problems they can found companies to help solve.
Cohn cited the odd-jobs and errands company TaskRabbit as an example of a startup that solved a big problem, founded by a woman bringing first-hand experience of that problem. (IKEA acquired TaskRabbit in 2017.) TaskRabbit founder Leah Solivan, now general partner at Fuel Capital, also spoke on the panel.
“At Fuel, we talk a lot about founder-market fit,” Solivan said. “Why is this founder perfect for this opportunity? There’s always space for new entrants, new founders, to come in with new ideas, because their perspectives are so different.”
Other industries, such as financial technology, need more of the female perspective, Solivan said. “There is room for a great fintech company to be founded by a woman right now, and bring a different perspective and really speak to that community and that user in a different way.”
Women and other underrepresented founders may have trouble getting funding, but it’s available to them if they persevere, panelists said.
“There is always room and space for new entrants and founders to come in,” Solivan said. If a founder has a tough time getting funding at one firm, another might prove more friendly. “There are always other places to raise money or other sources of capital that could be a match.”
Funding is out there, said Williamson. “We’re in the golden age of funding. Checks are getting bigger at every stage, allowing companies to stay private longer. At the same time, more companies are going public through new vehicles." These new vehicles include special purpose acquisition companies (SPACs) and direct listings.
“The traditional IPO process is being disrupted,” said Williamson. “And that’s really exciting, and a good thing because it’s unlocking new ways of funding, going public, and accessing liquidity. Definitely crazy times, but innovation always is.”
“Everything is moving 10 times faster than it used to,” Solivan said. Meetings that would previously have waited until they could happen face-to-face are now happening over Zoom.
“It isn’t that corners are being cut,” Williamson said. “It’s that efficiencies are being realized. There are more deals because there are more opportunities.”
Solivan thinks the move to online meetings democratizes the funding process and provides greater access for underrepresented founders, such as women and people of color. “Exciting things are happening around capital and giving people access to capital,” she said.
“The traditional IPO process is being disrupted. . . . Definitely crazy times, but innovation always is.”
The Oracle for Startups program doesn’t offer capital—or, importantly, take any equity—and instead offers free cloud credits, a 70% discount for two years, access to enterprise customers, marketing assistance, and other resources. At the outset of the pandemic, the Oracle for Startups team expected a slowdown in the number of companies seeking to work with the program, but the opposite has happened, Williamson said. New potential members are coming from around the world, not any particular regions or cities.
Healthcare in general is booming, Solivan said. Rapid development of the COVID-19 vaccine showed that healthcare can move much faster than it used to.
Not all the opportunities are in healthcare and sciences. Sports and gaming are being transformed, with dramatic growth in esports and streaming platforms, such as Twitch, on which fans watch players game. Even chess is exploding as a spectator sport, said Williamson, who has watched his son take a strong interest in Chess.com. Streaming chess tournaments have gained a mass market audience.
Casual gaming is particularly interesting, presenting opportunities for content creators, developers, virtual reality, augmented reality, and mixed reality, said Cohn: “Not necessarily deep gaming—just having fun with family and friends playing goofy games.”
Solivan cited Fuel Capital’s investment in Caribu, a company that integrates children’s games into video calls, so kids can play games with grandparents or other family members they can’t see in person.
Comcast is working with Glow Up Games, a company with female founders of color, whose mission is to democratize gaming. Glow Up Games provides a platform to build games specifically for women and persons of color, with a particular focus on letting players create avatars that look like them. “People want to see themselves in a game,” Cohn said.
Solivan agreed. “My 7-year-old girl on Roblox spends more time changing her avatar than actually playing the games," she said. She thinks that social distancing and home schooling has awakened interest in gaming that her daughter and other kids like her might not have otherwise had.
The pandemic will transform life even after the emergency ends. And startups have a big opportunity today in figuring out what elements we are going to keep from our pandemic experience in areas, such as sports, concerts, and work, and which we’re going to dump as fast as we can.
“Will we ever go back to where we were a year ago? No,” Solivan said. “Everything is different. We’ve entered a different world, and a different way of interacting with each other.”
But the panel also offered a note of caution: Startup founders working in trendy areas need to be careful that their solutions are original. For example, a plethora of marketing tech and sales pipeline optimization startups are offering similar solutions to similar problems, Williamson said.
“We never want to discourage, but we aren’t seeing interesting solutions to these problems,” he said. “My gut said, ‘I don’t want to see any more of this,’ but the truth is I don’t want to see more of the same.”
The panel also urged people in the startup world to keep a broader perspective. While the startup market is booming, many people are experiencing hard times. Cohn previously worked in the travel sector, which has been particularly hard hit by the pandemic. Many of the women who’ve left the workforce worked in hospitality and travel.
“Go down the street in any big city now and every small business is really trying to keep the doors open. The real question for me is, ‘How can we help some of the industries that are hard hit?’” Cohn said. “It will take a long time for the travel and tourism industry to make a comeback, and that impacts a lot of people who are making $10 an hour.”
She added, “There is this great VC world we live in, and there is the rest of the world.”
Illustration: Wes Rowell