One Minute Markets
Each month we review hundreds of pitch decks from founders building the future. Although we only get to invest in a handful every year, this broad view of the market gives us great insight into where founders are investing their time. This is great way to understand what’s coming next.
In this post, I break down the most exciting of these markets in a minute or less and outline why I find them so exciting.
If you’re building a company in one of these markets and are open to discussion to share ideas, I’d love to hear from you.
Artificial Intelligence Regtech
AI is consistently tackling some of the world’s largest problems. From cars that drive themselves, to chatbots that can perfectly mimic a human conversation. AI is a $94Bn market with an expected CAGR of 38% until 2030.
However, in spite of its growing power, AI does not always get it right. 2018 saw the first ever self-driving car fatality after a pedestrian was struck by a test vehicle. In 2016, Microsoft’s twitter chatbot, Tay, tweeted sexist and racist remarks causing its creators to take it offline.
Whilst these incidents were in (relative) isolation, AI is now at the core of critical decision making within healthcare, manufacturing, transport and finance. If and when AI makes mistakes, it can increasingly have a major impact on the world.
This is a real concern within the academic community. In fact, Elon Musk listed ‘Artificial Intelligence going wrong’ as one of his top 3 concerns for the human race. Worryingly, Nick Bostrom, of the Future of Humanity Institute at the University of Oxford, described the current quest for intelligence as ‘small children playing with a bomb’.
Regulators are stepping up in response. Last year, the European Commission released the world’s first draft regulation for Artificial Intelligence, which could go live as soon as 2024. Regulations include: the necessity for quality data in training, the need for technical documentation, ongoing monitoring of AI outputs and human oversight (with an ‘off’ button).
This is an entirely new regulatory category which will require significant technological innovation to ensure adherence.
Opportunity
The artificial intelligence market is huge and will soon face stringent regulation for the first time. Companies will need to create new technologies to assist with documenting, monitoring and training AI systems.
Serverless Architecture Tools
Serverless is a young and fast-growing segment of cloud infrastructure, with an estimated market size of $7Bn in 2020. This is expected to grow to $30Bn by 2027. It allows developers to build and run services without having to manage the underlying infrastructure, which is outsourced to the cloud provider.
The benefits? No server management is required, developers are only charged for the amount they use (rather than what they might use), and the solution is scalable and allows for rapid deployment. Some of the biggest companies in the world have shifted their entire stack serverless, including Netflix, LEGO and Nordstrom. Many startups are now building serverless-first; all signs point towards it playing a significant part in the modern technology stacks of the future.
However, there are a number of challenges faced by companies adopting serverless. Not only does serverless architecture require a paradigm shift from a technical point of view, it also obfuscates much of what a developer is used to doing. Monitoring, debugging, observability and security all require new approaches within serverless technology applications — each of these problems will require new approaches and perhaps specialist vendors.
Serverless architecture is changing the way technology applications are deployed. In the same way that titans such as Datadog ($30Bn) and Splunk ($18Bn) rode the transition from monolithic infrastructure to cloud, there may be opportunity to build serverless specific tooling to solve common problems when adopting this new technology.
Silver-Surfer Fintech
The meteoric rise of modern fintechs and neobanks has not been particularly engaging for the over 60s. 72% of Monzo’s users are aged between 18–34. And if the amount of emojis on their marketing emails is anything to go by, fintechs are generally focussing on acquiring GenZ and Millennial consumers. 👀 🤑 💰
This is unsurprising. Younger consumers are more likely to be digitally native, reachable via social media and more willing to try new things. This makes them lower-hanging-fruit for customer acquisition.
However, there are reasons why the elderly might be an interesting target for tech-enabled communities:
- Over 55s hold 75% of all societal wealth. In fact, this number has increased from 50% over the past 20 years showing a widening generational wealth gap.
- 21% of our life is spent in retirement (and growing). The lifestyle and product needs for a person in retirement might be very different to those without.
- Internet usage is massively increasing within this group. The 65–74 age range have gone from 52% internet users in 2011 to 83% in 2019. The market is huge and growing.
Despite the elderly being the wealthiest demographic and increasingly tech-enabled, modern fintechs simply haven’t built products for them. If incumbents don’t focus on this huge and growing market, it will be exciting to see how new entrants can engage this overlooked group.
