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The Biggest Trends For Startups In 2022

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After two years of pandemic-fuelled disruption and uncertainty, entrepreneurs are pondering their business prospects for the year ahead and anticipating the trends that could impact their plans.

Advances in digital technology are a given, particularly around the automation of repetitive processes and workflows to boost productivity and support hybrid working models. With the advent of low code and no code automation this technology is well within the reach of small businesses. But what else is on the horizon in 2022? Six business leaders make their predictions.

The funding challenge

In a survey of startups in the U.K. and U.S. by the Angel Investment Network (AIN) about their prospects for 2022, three quarters felt confident about the next 12 months; a dramatic turnaround from the picture a year ago, especially as almost 60% had reported growth impacted during the pandemic. “Raising investment remains the biggest challenge going forward, according to 85% of all startups we surveyed,” says AIN founder Mike Lebus.

He also believes that governments will have an important role to play in helping create the right conditions to stimulate investment for early-stage businesses, principally through tax relief to encourage further angel investment; the lifeblood of early-stage funding. “There should be no backsliding on these schemes, which have the potential to snuff out the recovery we are seeing by disincentivizing investment,” adds Lebus.

Going public

Lavell Juan, CEO of eSports social network Brag House, is predicting a rise in the number of startups going down the IPO route. He says: “With less than 1% of VCs investing in startups, I think we will see more startup companies moving towards the IPO route earlier than commonly expected to gain access to capital markets to scale more rapidly. This is especially true for esports and digital companies that are better prepared to operate under Covid-19 restrictions and the need to meet in-person.”

The rise of the project worker

When it comes to hiring, the focus for many businesses will be on highly skilled project-based work, as automation and technology continue to reduce the need for permanent full-time admin staff. That’s the view of Albert Azis-Clauson, founder of freelance platform UnderPinned who predicts that businesses will increasingly use the growth of remote working to create hybrid teams where freelancers and employers are interchangeable.

“Value will now be drawn from the most highly skilled service providers working on specific and niche projects, rather than from in-house teams,” he says. “However, the cost of international skilled labor will also rise due to the globalization of freelancing and lack of the requirement to be based in a specific location.”

Makers on the move

A return to domestic manufacturing is one of the big predictions for the year ahead by Sophia Procter, CEO of Munchy Play, which designs and makes plates for toddlers and preschoolers. “Our plates are manufactured in the U.K. and I've seen first-hand the advantage this has given us as a small business, helping us to be agile and competitive in the face of big brands suffering supply chain problems,” she says.

Establishing a domestic manufacturing base helps reduce the impact of importing issues created by the pandemic and new regulations around Brexit. “There’s already a trend towards companies ‘reshoring’ back to the U.K., least of all because there’s never been a better time to support the British economy,” says Procter.

Outsourcing to fuel growth

One important lesson learned by many companies during the pandemic was to focus on what they do best and to bring in experts when specific solutions are needed. Joanna Swash, CEO of Moneypenny, believes this trend will continue. “Many businesses outsourced their phones, Live Chat and receptions during the pandemic, and realized the benefits in terms of cost and efficiency,” she says.

In addition to the outsourcing of communications, she anticipates a broadening of this trend to include other functions, including HR, marketing, and sales. She adds: “Businesses that adopt this outsourcing model can grow, innovate and pivot faster, and become more competitive in this constantly changing and evolving business environment.”

Mastering the hybrid model

The transition to hybrid working has presented challenges for companies of all sizes, however, James King, founder of VC firm Fig, believes that startups will be quick to develop the skills needed to develop and effectively manage the work culture of hybrid teams.

He says: “It's been said by conventional managers that you can't build a culture or train people remotely and that we should return to the office, but I highly doubt that. Startups will figure out how to excel in this new way of working.”

King also anticipates the emergence of new business tools that address wastage that was acceptable when in the office, including, new procurement systems, new equipment request systems, and tools to connect them.

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