Startups End After 2035

The term "startup" has become synonymous with innovation, disruption, and rapid growth. It evokes images of young, ambitious entrepreneurs working tirelessly in garages or co-working spaces, fuelled by dreams of building the next big thing. But what if this iconic concept becomes obsolete by 2035? While it may seem far-fetched, a confluence of technological, economic, and societal shifts suggests that the traditional notion of a startup, as we know it, is unlikely to survive the next decade. Here are the reasons why:

Rise of AI-Powered Innovation

Artificial intelligence (AI) is rapidly transforming industries and redefining the nature of work. By 2035, AI will likely be capable of automating many of the tasks currently performed by startup teams, from market research and product development to customer service and marketing. AI-powered tools will enable established companies to innovate faster and more efficiently, diminishing the competitive advantage that startups currently enjoy through agility and resourcefulness. Startups often rely on lean methodologies and rapid iteration, but AI will allow large companies to achieve similar, or even superior, results with greater speed and accuracy.

Hyper-Consolidation of Industries

Mergers and acquisitions are a common occurrence in the business world, but the pace of consolidation is expected to accelerate in the coming years. As industries mature and become more competitive, larger companies will seek to acquire smaller, innovative players to expand their market share, access new technologies, and eliminate potential rivals. This trend will make it increasingly difficult for independent startups to survive and thrive, as they will constantly face the threat of being acquired or outcompeted by larger, more established firms. The startup ecosystem will essentially be absorbed into the existing corporate landscape.

Dominance of Platform Economies

Platform economies, characterized by digital marketplaces that connect buyers and sellers, are already reshaping industries like transportation, hospitality, and e-commerce. By 2035, platform economies will likely dominate even more sectors, creating winner-take-all markets where a few dominant players control the vast majority of the economic activity. Startups attempting to compete with these established platforms will face an uphill battle, as they will lack the network effects, brand recognition, and economies of scale necessary to succeed. Instead, new ventures will likely focus on integrating with or building upon existing platforms, rather than attempting to create entirely new ecosystems.

Ubiquity of Corporate Venture Capital

Corporate venture capital (CVC) is the practice of established companies investing in startups for strategic purposes. As the pace of technological change accelerates, CVC will become even more prevalent, as companies seek to stay ahead of the curve by investing in promising new ventures. However, this trend could also stifle innovation by making startups more beholden to the interests of their corporate backers. Startups that rely on CVC funding may be less likely to pursue truly disruptive ideas, as they will need to align their strategies with the priorities of their investors. This could lead to a homogenization of innovation and a decline in the number of truly independent startups.

Rise of Decentralized Autonomous Organizations (DAOs)

Decentralized autonomous organizations (DAOs) are blockchain-based organizations that are governed by code rather than traditional hierarchies. DAOs have the potential to revolutionize the way businesses are structured and operated, by enabling greater transparency, efficiency, and decentralization. DAOs could become a viable alternative to traditional startups, as they offer a more democratic and equitable way to organize and fund new ventures. DAOs eliminate the need for centralized leadership and traditional venture capital, allowing individuals to contribute their skills and resources directly to projects they believe in. This could lead to a more diverse and vibrant ecosystem of innovation, but it would also blur the lines between startups, open-source projects, and community initiatives.

Democratization of Technology

The cost of technology is decreasing rapidly, making it more accessible to individuals and small teams. By 2035, powerful computing resources, sophisticated software tools, and advanced manufacturing technologies will be available to anyone with an internet connection. This democratization of technology will empower individuals to create and launch new products and services without the need for significant upfront investment or specialized expertise. While this will undoubtedly lead to a surge in innovation, it will also make it more difficult for startups to differentiate themselves from the competition. The barrier to entry will be so low that anyone can become an “instant startup,” leading to a crowded and fragmented market.

Changing Nature of Work

The traditional model of employment is being challenged by the rise of the gig economy, remote work, and freelancing. A large portion of the workforce will likely be composed of independent contractors and freelancers who work on a project basis for multiple clients. This shift in the nature of work will make it more difficult for startups to attract and retain top talent, as individuals will be less willing to commit to long-term employment with a single company. Instead, startups will need to compete with established companies and other startups for the services of skilled freelancers, driving up costs and reducing their competitive advantage.

Increasing Importance of Open Source

Open-source software and hardware are becoming increasingly popular, as they offer a collaborative and transparent way to develop and share technology. The open-source principles will likely extend beyond software and hardware to other areas of innovation, such as drug discovery, materials science, and energy technology. This trend will make it more difficult for startups to protect their intellectual property and build proprietary advantages. Instead, startups will need to focus on creating value through community building, service integration, and customized solutions, rather than relying on exclusive ownership of technology.

Rise of Social Entrepreneurship

Social entrepreneurship, which focuses on addressing social and environmental problems through innovative business models, is gaining momentum. The social entrepreneurship will likely become the dominant form of entrepreneurship, as consumers and investors increasingly demand that businesses operate in a socially responsible and sustainable manner. This shift will require startups to prioritize social impact alongside financial returns, which may make it more difficult for them to attract traditional venture capital and achieve rapid growth. Startups will need to find new ways to measure and communicate their social impact, and they may need to adopt alternative funding models, such as impact investing and crowdfunding.

Maturation of Emerging Markets

Emerging markets, such as China, India, and Africa, are experiencing rapid economic growth and technological development. These markets will likely become major centers of innovation and entrepreneurship, challenging the dominance of Silicon Valley and other traditional startup hubs. As these markets mature, they will develop their own unique ecosystems of investors, mentors, and talent, making it more difficult for startups from developed countries to compete. Startups will need to adapt their strategies to the specific needs and characteristics of these markets, and they may need to partner with local companies to succeed.

Increasing Regulatory Burden

As technology becomes more pervasive and complex, governments are likely to increase regulation to protect consumers, ensure fair competition, and address social and environmental concerns. The startups will face a more complex and burdensome regulatory environment, which will increase their costs and slow down their growth. Startups will need to invest in compliance and legal expertise, and they may need to lobby governments to ensure that regulations are fair and reasonable. The increased regulatory burden will disproportionately affect small and early-stage startups, making it more difficult for them to compete with larger, more established companies.

Limits of Growth

The traditional startup model is predicated on the assumption of unlimited growth. However, as the global economy becomes more resource-constrained and environmentally conscious, the limits of growth are becoming increasingly apparent. Startups will need to adopt more sustainable and circular business models that minimize their environmental impact and promote resource efficiency. This will require them to rethink their value propositions, supply chains, and production processes. Startups that fail to adapt to the limits of growth will face increasing pressure from consumers, investors, and regulators.

Decline of Venture Capital

The venture capital (VC) industry has played a crucial role in funding and supporting startups. However, the VC model is facing increasing challenges, including high fees, limited access, and a focus on short-term returns. Alternative funding models, such as crowdfunding, angel investing, and revenue-based financing, may become more prevalent, reducing the reliance on VC funding. Startups will need to explore these alternative funding options to secure the capital they need to grow. The decline of VC will also lead to a shift in the power dynamics between investors and entrepreneurs, giving founders more control over their companies.

Changing Definition of Success

The traditional definition of startup success is often equated with rapid growth, high valuations, and a lucrative exit (e.g., an IPO or acquisition). However, as social, and environmental concerns become more prominent, the definition of success is likely to evolve. By 2035, startups will be judged not only on their financial performance but also on their social and environmental impact. Startups that prioritize purpose over profit and focus on creating long-term value for stakeholders will be more likely to attract talent, customers, and investors. This shift in the definition of success will require startups to adopt new metrics and reporting frameworks that capture their social and environmental performance.

Democratization of Technology and Resources

One of the primary drivers behind the rise of startups has been their ability to leverage new technologies to challenge incumbents. However, access to technology will likely be even more democratized. Cloud computing, open-source software, and readily available AI tools will significantly lower the barrier to entry for anyone with a good idea. Instead of forming a separate "startup," individuals and small teams can seamlessly integrate innovation into existing organizations or pursue independent projects with minimal initial investment.

Rise of Corporate Innovation and Intrapreneurship

Large corporations are increasingly recognizing the need to innovate to stay competitive. Many are investing heavily in internal innovation programs, fostering intrapreneurship, and acquiring smaller, innovative companies. By 2035, these corporate innovation initiatives will likely mature to the point where they can effectively replicate the agility and creativity that were once the exclusive domain of startups. Talented individuals will find ample opportunities to pursue their entrepreneurial ambitions within established organizations, diminishing the need to create independent startups.

Ubiquity of Automation and AI

Automation and artificial intelligence are already transforming industries, and their impact will only intensify in the coming decades. As AI becomes more sophisticated, it will automate many of the tasks that currently require human intervention, including those performed by startups. This could lead to a scenario where individuals with innovative ideas can leverage AI to bring their visions to life without the need for a large team or significant funding, effectively bypassing the traditional startup model.

Evolution of Funding Models

Venture capital has played a crucial role in the growth of startups, but alternative funding models are gaining traction. Crowdfunding, angel investing, and even blockchain-based fundraising are becoming increasingly popular. These alternative funding models could become so prevalent that they render the traditional venture capital model less relevant, reducing the need for startups to seek external funding and allowing them to grow organically.

Gig Economy and Freelance Revolution

The gig economy is already transforming the labor market, with more and more individuals opting for freelance work. This trend will likely accelerate, with a large proportion of the workforce operating as independent contractors. This shift could lead to a decline in the number of startups, as individuals with specialized skills will be able to offer their services directly to clients, rather than forming a company.

Blurring Lines Between Companies and Communities

The traditional notion of a company as a hierarchical organization is being challenged by the rise of online communities and decentralized autonomous organizations (DAOs). These new organizational structures allow individuals with shared interests to collaborate and create value without the need for a formal company structure. These communities could become powerful engines of innovation, effectively replacing the role of startups in some sectors.

Increasing Importance of Ecosystems

Startups often rely on ecosystems of support, including incubators, accelerators, and mentors. However, as ecosystems become more mature and widespread, they could become integrated into existing organizations or communities, making it less necessary for startups to form independent entities. Individuals with innovative ideas could simply plug into these existing ecosystems to access the resources and support they need to succeed.

Shift Towards Sustainable Business Models

The traditional startup model often prioritizes rapid growth and profitability above all else. However, there is a growing awareness of the importance of sustainable business practices that consider environmental and social impact. By 2035, sustainable business models will likely become the norm, and the focus will shift away from creating new companies and towards transforming existing organizations to be more sustainable and responsible.

Consolidation of Industries

Many industries are undergoing a period of consolidation, with larger companies acquiring smaller ones. This trend is likely to continue in the coming decades, leading to a decrease in the number of independent startups. As industries become more concentrated, it will be more difficult for startups to compete with established players, making it less attractive to launch new companies.

Regulatory Landscape

The regulatory landscape can have a significant impact on the startup ecosystem. Governments are increasingly scrutinizing startups, particularly in areas such as data privacy and competition. By 2035, regulations could become even more stringent, making it more difficult for startups to operate and potentially discouraging the formation of new companies.

Changing Demographics

Demographic shifts, such as an aging population and a declining birth rate in some regions, could also affect the startup ecosystem. As the workforce ages, there may be fewer individuals willing to take the risks associated with starting a new company. Additionally, a decline in the birth rate could lead to a smaller pool of potential entrepreneurs.

Focus on Education and Skills Development

Education and skills development are crucial for innovation. By 2035, education systems will likely be more focused on preparing individuals for the future of work, including the skills needed to innovate and create new solutions. This could lead to a scenario where individuals are better equipped to contribute to innovation within existing organizations, reducing the need to start their own companies.

Rise of Impact Investing

Impact investing, which focuses on generating positive social and environmental impact alongside financial returns, is gaining momentum. By 2035, impact investing could become a dominant force in the financial world, shifting capital away from traditional startups and towards organizations that are addressing pressing social and environmental challenges. This could lead to a decline in the number of startups focused solely on profit maximization.

Evolution of Work Culture

Work culture is constantly evolving, and the traditional startup culture of long hours and intense pressure may not be sustainable in the long run. By 2035, there could be a greater emphasis on work-life balance and employee well-being, which could lead to a shift away from the startup model and towards more sustainable and fulfilling work environments. People may prefer to contribute their skills to established organizations that prioritize employee well-being over rapid growth.

Semantic Shift: A Name Change, Not an Extinction

Finally, it is important to consider that the "death" of the startup might not be a literal extinction. Instead, the term itself could simply fall out of Favor, replaced by new terminology that better reflects the changing nature of innovation. Perhaps we will talk about "innovation hubs," "agile teams," or some other phrase that captures the essence of entrepreneurial activity without the baggage and limitations associated with the word "startup." The spirit of innovation and the drive to create new solutions will undoubtedly persist, even if the label we currently use to describe it fades away.

In the end, while predicting the future is always a risky endeavour, the confluence of these trends suggests that the traditional concept of a "startup" may indeed become obsolete by 2035. The democratization of technology, the rise of corporate innovation, the ubiquity of automation, and the evolution of funding models are just some of the factors that could lead to this transformation. However, it's important to remember that innovation will continue to thrive, albeit in different forms and under different labels. The future of work is uncertain, but one thing is clear: the ability to adapt, innovate, and collaborate will be more important than ever.