As 2023 comes to a close, entrepreneurs strap down for another year of sprinting towards growth, profitability and funding. Having successfully weathered the worst of the global recession, founders can look forward to a comparatively easier year.
According to Goldman Sachs, the global economy will perform better than most expect, with a major inflation cooldown and worldwide GDP forecasted to expand by 2.6% next year on an average annual basis, rather than the initially predicted 2.1%. A healthier economic outlook spells good news for startups across the globe, but particularly those from emerging markets such as Pakistan.
Despite this, 2024 will still be a year where founders will be feeling the aftershocks of the economic slowdown and must stay ahead of the curve. So here are the top 4 startup trends that will inform the next year:
Increased Integration of AI
While many theorize that the AI hype may soon die down especially after the sudden dismissal and equally sudden return of Sam Altman as the CEO of OpenAI, the fact of the matter is, generative AI has already disrupted how current businesses operate. According to PitchBook, even as overall deals for startups fell by 31% from a year earlier, funding for AI companies climbed by 27% globally in the third quarter of 2023.
AI has bled into every existing industry, helping boost productivity and streamline functions. There’s a noticeable increase in AI businesses, both locally and globally. Increasingly even non-AI startups and companies are integrating AI into their businesses from chat bots such as ChatGPT to AI being mobilized as a customer service tool.
Growth of the Micro-influencer Market
With the rise of short form content and platforms such as Tik Tok, which allow active monetisation, there’s a very prominent growth in influencer marketing. While influencer marketing has been around for as long as celebrities have, today’s social media landscape is birthing a whole new and vast class of micro-influencers that help market products and services.
A micro-influencer is described as a person who has anywhere from a thousand to two thousand followers on any one online platform. Startups in particular, often unable to afford influencers, revert to micro-influencer marketing strategies that help them attract new customers from different and otherwise inaccessible demographics, particularly the fast moving Gen Z market.
Alternate Financing Methods Boom
With VC funding shrinking globally, founders have gotten more creative in how they’re financing their startups, from bootstrapping and pivoting to a more profitable business model to debt financing as seen by Abhi, a leading fintech company that raised $7.2 million and issued $7.1 billion in Islamic bonds, opening up a new vein of funding for startups in the face of venture capital decline. Increasingly, startups are looking for funding options that don't involve having to give up equity.
This doesn’t mean founders should count VC funding out. Pakistan recently established a sovereign VC fund to encourage investing in the startup ecosystem. According to Bloomberg, quoting Umar Saif, Pakistan’s minister for information technology and telecommunications, the fund aims to annually allocate as much as $10 million.
Uptick in Remote and Hybrid Work
Despite the rallying cry for a return to the office, most remote and hybrid workers prefer to stick to these work models. According to ADP Research, more than two thirds of their sample stated they would start looking for new jobs if their company required them to come to the office full time.
But that’s not all. According to leading research conducted by International Workplace Group (IWG), 88% of employees cite hybrid work as a leading benefit they’d expect in a new role while 95% of HR professionals agree hybrid work is an effective recruitment tool. Numerous companies have found a cost-effective solution in coworking spaces that offer the flexibility required by the modern workforce.
2024 promises to be a year of resilience, adaptability, and innovation for entrepreneurs worldwide. Navigating the challenges of economic shifts and embracing these emerging trends will be crucial for founders aiming to thrive in a rapidly evolving business landscape.