It was a rollercoaster year for startups in 2016. We saw growth in venture capital funding at the start of the year and towards the end, a slew of high profile startups struggle. Additionally, global corporations acquired some of the most interesting and innovative startups in 2016.
So, what can we expect in 2017? According to venture capitalists, there are plenty of reasons to be optimistic about the startup industry, particularly in terms of fledgling tech companies. An industry expert even said that, “I think 2017 will look a lot like ’16, which is good companies will get funded. People are back in the motion of doing deals, the IPO market is healthy.”
There are different trends that will influence the startup market in 2017, and here are some of the things you shouldn’t miss:
We have seen a handful of startups being acquired by corporations, with 3 out of 4 of the notable acquired startups being bought by American companies. There are different key assets of startups that market leaders look for before acquisition, such as:
- A superior team
- Disruptive innovation
- Potential market share
- Complementary product
- Intellectual property
A great example was Apple’s acquisition of nine startups in 2016. The company has been known to buy smaller technology companies from time-to-time. Although they never discuss their purpose or plans for doing so, it’s quite obvious that they leverage these companies to assist them in developing innovative technologies such as 3D, augmented reality and other innovations that can be integrated into their mobile devices and laptops.
The most recent acquisition is that of Flyby Media, a computer vision augmented reality startup. This further fuels the rumor that Apple is working on their own AR device, especially since industry experts think that is the reason why they left the headphone jack off the iPhone 7 so the company was able to foster wireless technology. Apple introduced the new wireless EarPods, which made the handset much louder than the iPhone 6s. With these recent acquisitions, Apple is ready to build more innovative technologies soon for its future devices.
There will be stronger support coming from the government in the future for startups. The government sees the startup market as a great catalyst to create economic growth. In turn, such support will increase the chances of creating more jobs and will help high-growth businesses in the long term.
For example, Canada has discussed their plans to boost spending on local startups through their ‘Build in Canada Innovation Program’. They hope to encourage small Canadian businesses to sell their products to them to benefit the whole country. This is their way of combatting the increasing number of startups being acquired by other countries, such as the US.
“We think the government can play a major role…to be a marquee customer [and] to help validate products and services to allow companies not only to succeed in Canada, but globally,” said Canadian Innovation Minister Navdeep Bains.
Cyber security carries on
As technology continues to be at the center of everything, with houses and cars now connected to the internet, digital security remains a major concern and is hindering its full potential. Currently, mobile devices including some wearable technologies are able to gather and view online content on the go with the help of their own SIM card slot that is compatible with LTE connection. According to O2, SIM cards now offer reliable 4G data internet, which mobile devices use to stay connected and consume online content.
While technologies such as this have many benefits, they also pose some threats particularly in data security and privacy. As a solution, cyber security startups have begun trying to remedy the issues at hand.
Last year, the industry experienced a ‘funding drought’ where many startups were forced to sell up or cut spending. Many new ventures struggled to gain traction as they had difficulties in standing out from the crowd and providing customers with sophisticated security solutions to the increasingly advanced cyber issues.
But cybersecurity startups have the potential to fair better year in 2017.
“Given the increasingly polarized nature of international politics, 2017 will likely see an increase in cyber threats, and in startups that combat them,” detailed tech expert Adam Rowe in a recent interview.
There are plenty of other things in store for startups in 2017. But the aforementioned trends will help pump investment into the industry and further lead many fledgling companies to success in the coming years.
Exclusively written for Startup Success Stories by JenTechStories