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July 1st, 2019 at 11:26 am

Five traditional industries on the verge of an innovation boom

 

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According to the technology and data company Crunchbase, an astounding $825 million in venture capital investment has flowed into legal and legal-tech sectors just since the start of 2018.What do you think about when you hear the terms “disruption” and “technological innovation?” What industries and sectors come to mind?

Autonomous cars, cloud computing, artificial intelligence, genetic testing, cryptocurrencies and various other technologies likely populate the top of your list.

However, if you strictly limit your perception of innovation to these flashy concepts, you could be missing out on transformational booms that are happening across industries that wouldn’t be categorized as cutting edge.

Because of significant injections of investment capital and a traunch of fresh ideas, new companies and opportunities are arising in traditional fields that may challenge your perception about which markets are hot versus which are not.

Here are five industries that are on the verge of innovation and transformational boom:

Baby Boomer and Senior Services

The implications of an aging population in the United States is well known and documented. Yet, by some standards, this demographic is grossly under-served.

Seniors have critical consumer needs, ranging from money-management needs to transportation requirements, to basic social and community needs. The size of these demands will only grow as the population continues to.

Fortunately, it seems that 2019 may be an inflection point where this market is beginning to get addressed in unique and meaningful ways.

To understand the sheer size of the market, you should know that this portion of the population maintains control of nearly 54% of all United States household wealth, with projections showing this number growing drastically through 2030.

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Allison Barr Allen, an Uber employee who often writes about finance and tech, recently wrote a detailed piece about the opportunities associated with Baby Boomers and seniors. In it, she describes how today’s product designers and tech founders don’t always consider the full spectrum of users that their products and services reach, and then goes on to describe a few interesting startups in this space that have found success through a strict focus on the senior population.

Silvernest, one company mentioned in Allen’s piece, takes the modern concepts of roommate matching and house-sharing and applies it to an audience that historically had limited options like living with their children or going into a retirement home. Here, seniors can house-share and live together to build communities.

Then, you have interesting companies like Stitch that provide companionship activities for baby boomers or Umbrella that offers home-repair and maintenance services, catered specifically to those 65 years and older.

While this is only a small sample size of fast-growing companies in the space, they represent the start of a larger wave of startups serving a big market.

Legal Services

Similar to healthcare and finance, legal expertise is a closely guarded domain where professionals control the flow of information and demand dictates how high a customer’s bill can go. Most legal services that a consumer needs require jumping through hoops and speaking with specialized experts to get the guidance you need.

While platforms like LegalZoom and others have made some processes easier, the vast majority of legal needs still requires hands-on expertise and servicing. For example, things like estate planning, divorce settlements, legal defense work, among numerous other services, demand large hourly-bills and significant research into historical or situational circumstances.

With the advancements and sophistication of artificial intelligence and machine learning, this is an area where the sphere of services will get unraveled and simplified significantly. Last year, one startup called Atrium raised over $65 million to address part of this challenge, using technology to digitize the document creation and review process and lower the cost of services.

Their customers, which are other startups and small businesses, can now minimize expenses usually allocated for these important items.

According to the technology and data company Crunchbase, an astounding $825 million in venture capital investment has flowed into legal and legal-tech sectors just since the start of 2018.

Education

The concept of education has forever been a paramount part of society, but the value of certain educational institutions have come into question in recent years.

Amid rising university costs and student debt surpassing $1.4 trillion, post-secondary education is facing a crisis because many graduates aren’t receiving the value of a degree that they were once promised.

Paying $100k for an education that gets you a $40k/year job doesn’t necessarily make sense, yet that is the case many graduates fall into.

Back in 2017, I wrote about the growing field of educational platforms that are enabling professionals to gain the skills they need, without going through traditional schools and curriculums. Since then, this space has continued to flourish.

New players in the market like Lambda School offer risk-free options to education that focus on greater outcomes without huge upfront investments. Instead of leaning on university endowment funds, state funding and alumni donations, the educational startup actually turned to venture capitalists to help get it off the ground.

With Lambda, you don’t have to have to pay tuition or take out loans, and the school only makes money when you enter the job market and earn over $50k per year. The model may not be ideal for all prospective students but it does provide entry to education with much less liability.

I predict that we’ll see more options like this emerge in education as society grapples with how to address trillions of dollars in student debt.

Mental Health Services

The field of mental health is riddled with challenges ranging from access to the right resources, social stigmas and unclear ownership of accountability between the public and private sectors.

Individuals seeking out assistance often compromise between being serviced by cheap and lower-quality care or selecting to get high-quality care at wallet-denting prices.

For reasons both good and bad, the last few years have brought forth a change in the general discourse of mental health. National tragedies, social equality movements, and social media all contribute to changing dynamics where talking about mental health are increasingly common and acceptable.

The value of mental health services is now being appreciated in a new light. With nearly 20% of American adults experiencing a mental illness in a given year, according to the National Alliance on Mental Illness, the opportunity to change lives is enormous.

This sets the stage for a large field of new companies and organizations to step into the market and change how consumers and patients access services.

In an article published last year, Ed Gaussen, founder of Mantra Health, and the team at White Star Capital did an amazing job mapping out some of the rising startups that are tackling one or more critical challenges that patients face involving mental health.

Nearly 70 companies, ranging from well-known startups to emerging names in the field, are categorized across a variety of offerings, including products and services that help people get diagnosed with mental conditions, services that make it easy to get access to specialized experts via video and text technology, platforms that serve as a community or online support networks, among a host of other services.

While it’s difficult to highlight just one of the companies getting traction in this space, it’s worth noting that the sheer volume of new players represents an innovation boom that will undoubtedly result in more available services and tools.

Government Services

The fifth category where a big wave of technological innovation is occurring is within the government services field.

Often referred to as govtech, this space encompasses local, state and federal government services that utilize technology as a catalyst for improvement of systems. This can include using technology to make cities smarter, to manage how citizens interact and communicate with local officials or simply how the government manages public safety processes.

As you can imagine, like many things government-related, the scale of these opportunities is large.

State and local governments are expected to spend over $107 billion in 2019 alone, according to industry experts. Pair this with the fact that billions of dollars are being invested in govtech startups and your perspective about government services may expand to mean something more than just long lines at the DMV.

Urban Us is a venture capital firm focused on solving problems for cities and doing things that are good for people and the environment, still with the goal of creating shareholder value.

The firm’s portfolio companies attack a broad set of problems that local and state governments face, including how to improve the slow and complex procurement processes, how to streamline the inspection of road conditions, and how to turn government offices into eco-friendly paperless environments.

Although it’s clear that there is still much more progress that needs to happen, this new wave of innovation and investment demonstrate that improvements are on the way.

Continued advancements in hardware, software, artificial intelligence, and other technologies will fuel the way governments identify, address and solve the countless challenges that they face.

Via Forbes

 

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