Venture capitalists are always trying to spot trends. The good ones see these trends before they happen. The bad ones spot them when it’s already too late.
Still, the ability to see trends and position a fund so it can benefit from the trends upside is what makes or breaks a successful VC firm. Therefore, venture capitalists are always looking for the next “hot thing” to invest in.
This is often why the startup environment is referred to as a “copycat league.” As soon as one small company hits sustainable growth there are dozens of VCs who missed out on the opportunity and who want a second shot with a new company in the same space. Before long you have an overcrowded bubble ready to pop.
However, this doesn’t mean that you should shy away from venture capitalists pet trends. In fact, you might want to follow the VC lead and try to profit off of these trends too. Because you know the money's there, and you know the consumer or business demand is there.
All you have to do is enter the foray and try to become the best company in the niche trend or industry. But isn’t that what you’re trying to do anyways? Might as well do it in an environment where VCs are watching.
To help you start - or iterate - a company that has investor appeal, we’ve outlined the top 5 business trends that investors like:
1. VIRTUAL REALITY
Virtual reality has been a hot topic that’s only gotten hotter over time. Yes, it’s been a darling VC trend for a while, but that doesn’t mean the trend has any chance of slowing. In fact, over time, as technology gets better and better, virtual reality will only get hotter and hotter.
Virtual reality has almost limitless applications. It can be used for gaming, training, education, and entertainment. For example, virtual reality companies are making gaming products that teach a real life surgeon the intricacies of specific surgeries by letting them perform them virtually first-hand.
Other companies are targeting consumers. One of our clients The Wave VR, for example, is revolutionizing the way music lovers interact with their music. The company is building the first-ever interactive video platform and trying to democratize the concert experience.
2. HEALTHCARE TECH
Healthcare technology is another trend that’s been around for a while but that also has no sign of slowing down. This is because like virtual reality, as technology continues to evolve there will be more and more opportunities to innovate a somewhat archaic healthcare industry.
For example, another one of our clients, Digital Medical, is changing operating rooms across the nation. Their two products, TimeoutOR and CompleteOR, helps operating rooms conduct their procedures and even schedule the use of medical devices.
This is streamlining the way that surgeons operate...literally. It also changes the way that O.R. staffers and employees conduct their business for the better, all at the benefit of the person going under the knife.
While we don’t have a client in cybersecurity, it’s still a fast-moving trend that is catching the eye of venture capitalists. Cybersecurity has two fronts: the consumer side and the corporate side. However, the concerns of the consumer and the concerns of the corporation are the same, and that is the concern of data integrity.
Because that’s what cybersecurity is. It’s the protection of data. And now, with the increased usage of mobile phones, cybersecurity has taken a leap from the desktop to mobile, increasing the frontier and making the trend even more powerful.
4. ARTIFICIAL INTELLIGENCE
Artificial intelligence, like virtual reality, has been a pet trend of late. And who can blame the venture capitalists? Artificial intelligence is awesome!
Artificial intelligence, also known as A.I., is any type of computer-based system that can solve problems on its own. Today, A.I. is most commonly seen in chatbots like Siri, Alexa, and Google Home. But A.I. is a much broader field that’s only going to get more broad over time.
Which is lucky for us at Xcelerate, since we just onboarded our first ever A.I. client! Logical A.I. is a series of cloud-based neural networks that automates corporate data entry and helps companies make better decisions. So cool!
5. ON-DEMAND PLATFORMS
Finally, on-demand platforms are the 5th trend to take venture capitalists by storm. On-demand platforms are exactly what they sound like. They’re online platforms that connect consumers with various on-demand services.
For example, one of our dear clients Hutch (formerly Homee) operates as an on-demand virtual interior designer for your home. All you have to do is take a photo of the space you want to style, browse curated looks, and see how various products look in your space.
And the best part? Well, you can order the products on-demand, delivered to your doorstep in a matter of days. And who said shopping was stressful?
Overall, you should always stick to your gut. If you don’t have experience with these trends or have a business idea outside of these niches, that’s totally fine.
But remember that it’s sometimes hard to fit a square peg into a round hole. For example, you might have the best idea in the world, but if no one wants to invest in it, then you’re dead in the water. It might be a good idea to mind the trends that VCs like and then tailor your business model to take advantage of these trends.
For more information, don't hesitate to contact us directly.