Big Problems That Are Ripe For Startups To Solve

“What areas might a start-up have a better chance of succeeding in today, and in the foreseeable future?” I was asked that question a year ago on a panel for incoming third-year business students at Berkeley. As a businessperson and technologist with an intense interest in realizing social benefits, doing well by doing good, here is how I answered.

Prerequisites

Before diving into a new venture, put your concept through these screens.

Your Foundation: Focus on What Fires You Up

Why? Because you have to keep getting back up after you get knocked down. New ventures are a 24-7-365 life with supreme highs and lows. It’s not just a job, it’s a lifestyle. In my experience, you can only persist if you have a burning interest in your venture’s mission.

Do Not Mistake Technologies For Solutions

Technologies are tools. They are not solutions. You’ll use AI and robotics and Internet of Things (IoT) and blockchains and digital biology and materials science in different combinations to tackle big problems. Beware of cool projects that don’t solve real problems. Example: a connected toaster that receives messages from your phone and prints them on your breakfast.

Find A Big Problem That Will Ache For A Better Solution

Find problems with huge markets, such as the entire world. As the saying goes, If you want to make a billion dollars, figure out how to help a billion people.

Look for trends in demographics, politics, climate, and technology pointing to significant future needs coupled with the conditions required to solve them.

My Five Favorite Problem/Opportunity Areas

With these cornerstones in place, here are five opportunity areas that I strongly recommend to teams who want to take their shot at a new venture.

• Cyber Security
• Food
• Brain-Machine Interface
• Services to enable senior citizens to live safe, happy lives
• Clean Energy Infrastructure: Better batteries and smarter grids

Cyber (In)security

Our money, relationships, property, and careers live online. Despite our growing awareness of cyber-threats, invasions are multiplying in number and force.

The threat is personal: our devices can become spies. Almost 50,000 persons, many of them opposition politicians, human rights activists, journalists, lawyers, and political dissidents, were targeted by the Pegasus Project’s spyware. Once silently slipped into your phone, the clandestine agent sends back a continuous stream of photos, messages, and audio/video recordings.

Cyber-insecurity multiplied during the COVID-19 pandemic when distributed IT and work-from-anywhere paradigms became the norm. Nearly 80% of senior IT and IT security leaders believe their organizations lack sufficient protection against cyberattacks.

Even the most sophisticated IT companies get victimized by bold and well-organized attackers. The US Departments of Homeland Security, Treasury, and Commerce and Microsoft, Cisco, Intel, and Deloitte were penetrated by a hack to SolarWinds server management software. Microsoft points to China-based hackers, “DEV-0322,” as the perpetrators.

In May 2021, the vital Colonial Pipeline that supplies a significant portion of the Southeast United States’ fuel was knocked out for six days by Russian hackers. Known as “Darkside,” the gang only relented when Colonial paid them $5million in Bitcoin. The cyberwar isn’t one-sided. Clever “good guy” cyber agents at the FBI recovered 60 of the 75 Bitcoin ransom.

Ever-increasing amounts of wealth and infrastructure are accessible online. Just think of how connected new cars have become. The number of connected devices will explode by 2.5 times, to 25 billion, by 2030.

The cybersecurity startup community is thriving. Most are employing machine learning in their quest to thwart threats to remote devices, access privileges, and identities.

The enormous payoffs in money, information, and strategic leverage for successful cyber-breaches will keep cyber-crooks working overtime. It will be a forever war between digital poachers and game wardens.

Food

We all need to eat, and two billion more of us will need to eat in 2050. The changing climate, our preferred diets, and fast-growing technologies combine to create boundless needs for novel systems to feed humanity’s growing multitudes.

The wealthier societies become, the more meat they eat. Meat production skyrocketed from 1961 to 2018:

There is no escaping the truth: humans love to eat meat. Raising livestock is also resource-intensive and a significant greenhouse gas source. Leveraging synthetic biology and 3D printing advances, multiple new companies leverage synthetic biology and 3D printing to create actual beef and chicken in labs.

Critically, if current trends continue, sometime in the next ten years, these products have real potential to cost less to produce than farm-raised meat and taste just as good. Notable suppliers are Aleph Farms, Redefine Meat, Future Meat, and Upside Foods (previously Memphis Meats).

Heavy hitters in the food business are making rich investments in lab-grown meat, including Cargill and Tyson, whose CEO, Tom Hayes, famously told Bloomberg in 2016, “If we can grow meat without an animal, why wouldn’t we?”

That rhetorical question can also be asked of fish. Cultivated seafood could help alleviate the conservation pressure on wild fish caused by overfishing. Wildtype Foods, fueled by just $16M in Seed and Series-A funding, is already demonstrating salmon cultivated from the fish’s egg cells.

Start-up funding in this segment grew from $109M in 2018 to $444M in 2020.

Fresh water is a food issue: 72% of all fresh water used goes to agriculture. About 4 billion people, 2/3 of the world’s population, experience severe water shortages for at least one month per year. Opportunities abound for creating more water-efficient crop varieties, including those made by new digital biology tools like CRISPR, efficient irrigation systems, and improved rain-fed cultivation schemes.

Climate Change Impacts All Aspects of Food Production

Climate change affects every part of our food supply. Temperature and rainfall dramatically impact not only crops but also cause shifting insect population dynamics.

There are timely openings to apply IoT, AI, and synthetic biology to monitoring climate and pest populations, creating better modeling and prediction tools, and developing pest and drought-resistant crops. 420 Ag-Tech start-ups raised $5.15B in venture capital last year, a funding bump of 35% from 2019.

Brain-Machine Interface (BMI)

We’re all online, we all eat, and we all think. The amazing fact is that we have no idea what thinking is. Noted neurosurgeon and author, Dr. Henry Marsh, said in a 2019 interview, “Everything we are thinking and doing is generated by the activity in our brain, but we really don’t know how.” Monitoring and interacting with activity in the human brain represents a profound opportunity to do well by doing good.

Incredible BMI systems are being prototyped to help people overcome physical and cognitive disabilities. These solutions are elegant convergences of sensors, AI, materials science, and neuroscience.

• Researchers at UC San Francisco and UC Berkeley trained a system to interpret electrical impulses from the brain of a man who had lost the ability to speak 15 years ago, and display them as words on a video screen.
• BrainGate uses a high-density sensor array implanted in the brain to exchange signals with neurons. With BrainGate’s system, persons with tetraplegia can feed themselves, walk, and use the internet by controlling robotic arms and a computer mouse with their minds.
• BrainPort® Technologies Vision Pro enables persons with blindness to see, literally, using a sensor array on their tongues interfaced with a camera.
• LA-based start-up Kernel will soon start shipping a non-invasive device to measure blood flow and magnetic flux in the brain. The $50,000 system dramatically lowers the cost of studying brain activity, potentially enabling scores of researchers and entrepreneurs to explore new, life-changing solutions.

The need is enormous: more than a billion people live with disabilities. These are early days in creating and commercializing BMI products, and I think there will be opportunities for new companies and products for many decades. Venture Capitalists recognize the potential and have poured $133 million into BMI start-ups this year, more than in all of 2020.

Services for senior citizens to live safe, happy lives

We’re all online, we all eat, we all think, and we are living longer. By 2050, one in six people in the world will be aged 65 years or over (Here, p. 7), a larger portion than at any time in history.

Granted, thanks to better lifestyles and healthcare in many societies today’s 65 is not elderly. The American Association of Retired People (AARP) advises members to plan to live to 100.

The AARP’s recommendations for how older persons can live secure, happy lives is literally a list of topics for products and services to meet a rapidly growing population’s needs:

• Plan to live to 100
• Legal plans: Have all of your documents up to date and available.
• Financial plans: Hire a certified financial planner.
• Health care: Be mindful of preventative care, and monitor your health regularly.
• Cognitive stimulation: Take part in challenging activities.
• Socialization: Spend time interacting with other people.

This list screams opportunities in FinTech, Telemedicine, robotics, sensors, remote presence, social networking, and more.

For example, how about VR travel for persons with diminished mobility? There are many excellent VR travel products today. VR gear, like Oculus’ Quest 2, will continue to drop in price and improve in speed and resolution, making VR excursions increasingly accessible.

Finally, having a sense of purpose improves your health and your life span. Many seniors want to keep working, not because they need the money but because their careers are important to them (or they are white males in the United States Congress). Continuously improved Work-From-Anywhere tools will be a boon for seniors desiring challenging occupations.

Clean Energy Infrastructure

As we live longer, healthier, more online-connected lives, we will increasingly want clean energy. Why? Because it is becoming cheaper than burning fossil fuels (here, p. 8-9) with an unlimited supply. The 2022 Al Dhafra solar project in Abu Dhabi will deliver electricity at $13.5/MWh, roughly 1/8^th the cost of coal. Innovative energy companies, even North America’s biggest coal user, get it and are investing heavily in renewables.

Two fundamental unsolved renewable energy problems are storage and distribution. Less expensive, smaller batteries and smarter distribution grids are ripe targets for entrepreneurial time and talent.

Electric vehicle (EV) designers will constantly clamor for smaller, lighter batteries. Mercedes, General Motors, Volkswagen, and Volvo have all touted their forward focus EVs. While today’s EV batteries are passable for commuters, long charging times and limited capacities leave a wide opening for new solutions.

It can take up to 12 hours to charge your Tesla Model 3 by plugging in at home. MotorTrend found that Tesla’s highly-touted V3 Supercharger took 37 minutes to charge a Model 3 from 5% to 90%. Hanging around a charging station for 40 minutes is clunky, whether for commuting or for road trips.

Two well-funded start-ups capitalizing on the need for improved batteries are QuantumScape, funded by Volkswagen and Bill Gates. Sila Nanotechnologies has investments from Samsung and Daimler. Both ventures exploit advances in materials science to create novel battery architectures with much lower weight and size and substantially faster charging times.

Battery storage joins forces with AI software to improve commercial electric grids. The primary purpose is to match power generation, like from a wind turbine or coal-burning power plant, with power use by homes and businesses. Sources like solar and wind, which don’t provide power when the wind isn’t blowing or the sun isn’t shining, exacerbate an already frightfully complex calculus. Batteries can smooth the supply-demand match by storing excess clean power when it can be generated and releasing it when it cannot.

11-year-old Stem develops AI software to enable battery storage on power grids. Stem’s pre-IPO investors included Peter Thiel’s Mithril Capital and French oil and energy giant, Total. Stem went public this April.

Go Do Well by Doing Good

The venture capital spigot is wide-open for strong teams with compelling concepts. Even in the middle of the greatest pandemic in 100 years, global venture funding is smashing previous records, including $288B invested in the first six months of 2021.

That money flow can be piped into forward-looking solutions for trending global challenges. If one is calling to you, then plan how to take your shot.

Cover Images:

Solar array photo by Andreas Gücklhorn on Unsplash;

3D printed meat image source: Redefine Meat

Brain image photo by Alina Grubnyak on Unsplash

Photo of people by Christian Langballe on Unsplash

Originally featured on Peter Wicher's Future Resolve.