From Unicorns to Impact: the pivot that is needed in the tech world
At a recent Silicon Brighton Leaders’ event, always possible CEO, Richard Freeman, led a panel discussion about start-up investment. Not about the next big tech trend, but about the genuine impact and the metric by which we measure the success of tech startups.
A brilliant keynote from Amy Lewin, the sharp-witted Editor of FT-backed Sifted made the case for a radical re-think on how we value businesses, and where VCs should prioritise investment.
If you’ve not come across it, Sifted sheds light on Europe’s budding innovators and entrepreneurs, offering insights often missed by mainstream media. Amy, building on a short blog she wrote earlier this year Amy paints a familiar picture of the startup scene: the hoodies, the ridiculous snacks, and the colossal hype about whatever the newest thing to be hyped about is. But she challenges the status quo, questioning the tech world’s infatuation with mythical unicorns, especially given the industry’s recent downturns. And the fact that, when you step back and look, the hyped unicorns don’t actually add the value they promise.
2023 has been pegged as the ‘year of profitability’ for many over-inflated start-ups. Yet, while VCs are still urging startups to just break even, many of these companies are shedding significant chunks of their workforce to meet this target. That is not sustainable. Yet the goal is still to back these crazy horned horses and back them hard – rather than to even consider the tangible impact they make.
Amy’s prefers investments in the honey bee. A creature that’s not only real but also represents teamwork, sustainability, and productivity. With hives that thrive in no small part because it is led by a female.
In 2023, a staggering $18bn has been funnelled into AI tools that merely tweak productivity for a tiny fraction of businesses. What if, instead of chasing these fleeting trends, VC investments had to demonstrate clear social impact? What if funding was directed towards solutions, even AI ones, that address pressing global challenges, from climate change to healthcare? And still made money because people want to buy them – their value is clear and permanent.
On the panel also was Matthew Bagwell from Deep Green who use the heat produced by data centres to warm public and community facilities, such as swimming pools. And Damilola Ajiboye, currently finishing an MSc as a product optimisation specialist who spoke about his experiences of living in Brighton – where tech and social impact should work more hand-in-hand than perhaps it does.
All agreed that instead of getting caught up in the hype of the latest tech fad, let’s shift our focus. Let’s champion startups that will be commercially viable with the right infrastructure, but also make a tangible difference in the world. Are we OK with money following myth, or do we want it to be truly disrupting and change something in the real world?
The wide ranging conversation argued for more support for female founders (not more networking events, actual funding) and for more diversity in investor circles.
How did the world let innovation just lead to ludicrous valuations and then mass layoffs? There are so many potential honey bees out there. Let’s shout about them and get them backed.
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