Underserved startup areas

February 27, 2024

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Welcome to Startup Strategist by StratupAI. It's Tuesday and we’ve curated three news stories, one article and two resources for you.

Before we get started, I wanted to give a quick update on the startup-guide we are creating. We plan on releasing the first version by the end of March, and it will serve as a chronological guide for the very early stage prospective founders.

We’re committed to creating something valuable, as we plan on following it ourselves for our own ideas.

To make the guide, we’ll be reaching out to founders from accelerators like YC to see what they’re reading, utilizing, and the types of questions they ask themselves and their customers. (Further, the mistakes they made or common pitfalls to avoid.)

  • News: (1) Why VCs Are Betting Robots Will Help Build Your Next Home (Crunchbase), (2) Geothermal startup Fervo Energy is tapping fresh $221M round, filing reveals (TechCrunch) (3) Buffett Releases shareholder letter

  • Underserved Startup areas: FiftyYears

  • Resource: How to get startup Ideas (by YC startup school)

  • StratupAI Idea: Adaptive Learning Platform

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News

1) Why VCs Are Betting Robots Will Help Build Your Next Home (Crunchbase)

The article notes shifting investment interest from SaaS to labor automation, driven by labor shortages in industrialized nations. Monumental, a Dutch startup specializing in construction robotics, recently secured $25 million in funding from European investors Plural and Hummingbird, showcasing growing attention to labor automation technologies as a potential solution to these shortages. (Crunchbase)

2) Geothermal startup Fervo Energy is tapping fresh $221M round, filing reveals (TechCrunch)

Fervo Energy, a Houston-based company, is raising $221 million after completing a geothermal power plant in Nevada. The company's innovative drilling techniques, using fiber optic cables and sensors, have reduced costs and improved well drilling. Fervo's investors include Jeff Bezos, Richard Branson, Bill Gates, and Masayoshi Son. (TechCrunch)

3) Buffett releases annual shareholder letter

Respect was given to recently passed away Charlie Munger, who Buffett refers to as the architect of Berkshire Hathaway. Some notable quotes from the letter:

“It’s harder than you would think to predict which will be the winners and losers.”

“Rail is essential to America’s economic future. It is clearly the most efficient way – measured by cost, fuel usage and carbon intensity – of moving heavy materials to distant destinations. Trucking wins for short hauls, but many goods that Americans need must travel to customers many hundreds or even several thousands of miles away. The country can’t run without rail, and the industry’s capital needs will always be huge. Indeed, compared to most American businesses, railroads eat capital.” https://www.berkshirehathaway.com/letters/2023ltr.pdf

Underserved startup areas

As discussed in early editions of this newsletter, one of the things to think about is which areas/industries are saturated.

Edition 4, Startup Strategist by Stratupai: “Founders tend to congregate around certain areas of the market, thereby increasing founder supply, and reducing the relative ratio of market demand to founder supply, which can be a bad mix as there are often other areas of the market that are underserved. And, the main reason they aren’t being served may be because of social/herd dynamics.”

Charlie Munger was a proponent of inverting. Instead of asking “what’s the best place to focus on”, he might also ask “what area would I focus on if I wanted the highest chance of failure?" Then, he would avoid that.

If an area is already saturated, think about whether there's enough reason to still pursue work in that field.

Relating to this idea, I came across the Substack of “Fiftyyears”, and discovered they have, in a way, formalized this system.

“Too many startup founders are focused on advancing progress within the same few familiar areas, like SaaS or low-code dev tools. This over-concentration comes at an enormous cost: brilliant people who could discover the next massive leap forward instead grinding out incremental innovations that others would have soon found.”

Fifty Years

“The number of startups competing for customers in a single $50B market can vary by a factor of almost 1,000.”

Here is a link to their tool: https://progress.fiftyyears.com

Low saturation does not guarantee success, as no indicator is perfect.

Here is a chart they provide of the “Top Underfunded Opportunities”:

If a particular area looks interesting and you want us to investigate further, feel free to respond directly, or in the “thumbs up/down” poll at the bottom.

Resources

1) How to get startup ideas, according to YC: https://www.youtube.com/watch?v=Th8JoIan4dg

2) The Network Effect: Why VCs Should Set Up An Entrepreneur Collective (Crunchbase): https://news.crunchbase.com/venture/entrepreneur-collective-immigrant-founders-malobrodsky-one-way/

StratupAI Idea: Adaptive Learning Platform

“Personalized and adaptive learning platforms that cater to each student's unique learning style and pace, addressing the frustration of one-size-fits-all education methods. This startup idea stands out due to its emphasis on personalization and adaptation to each student's learning style and pace, addressing the limitations of traditional one-size-fits-all educational approaches. By leveraging technology to tailor educational content and methods to individual needs, this solution offers a more effective and engaging learning experience that is tailored to each student's unique preferences and abilities.”

Disclaimer: The startup ideas shared in this forum are offered for general consideration and discussion. Individuals utilizing these concepts are encouraged to exercise independent judgment and undertake due diligence per legal and regulatory requirements.

Meme

That’s all for today, thanks for reading. See you on Friday.

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The startup ideas, strategies, and suggestions shared in this forum are provided for general discussion and informational purposes only. Any individual or entity considering implementing these concepts should exercise independent judgment and conduct thorough due diligence in accordance with legal, regulatory, and industry-specific requirements. Startup Strategist does not guarantee the accuracy, completeness, or suitability of any information shared. It is recommended to consult with legal, financial, and other relevant professionals before proceeding with any business ventures or decisions.