Photo by Michael Dziedzic

After years of building, advising, and investing in startups, I’ve realized that while I love supporting high-growth companies, I am most passionate about companies that solve the problems of the future. For example, it’s incredible that while the Biden administration recently passed more incentives to accelerate electric vehicle adoption, companies like ChargePoint and WeaveGrid have been working for years to support the incoming energy demands.

It’s obvious in retrospect but how did these companies guess the future? How can they tell what the solutions of tomorrow look like? Coming up with good startup ideas is hard, add on top of that trying to guess the future, and it becomes an insurmountable task. After speaking with founders at these types of companies, I’ve learned that if you are looking to create a future defining company, you must find trends as they start, you’ve got to look for inflection events.

What is an inflection event?

An inflection event is a major turning point that enables a dramatic change and opens up the world to new possibilities. It signals a tectonic shift within industries, companies, economies and more. The event typically creates new opportunities for innovation rather than direct outcomes.

What are examples of inflection events?

Inflection events can include technological advancements, regulatory changes, or societal changes. I’ve put together pivotal events across each of these industries and businesses that were a result.

Technological Advancements

Whether it’s the App Store enabling Uber or the creation of Ethereum enabling NFTs, from logistics to art, technological advancements literally unlock solutions that were previously impossible. One recent example is the launch of the generative text model GPT-3: grossly simplified by example, it allows blog posts to be generated from 2 lines of texts, software to be written by translation from english text, and even create an image from a provided description. The future unlocked by GPT-3 is just beginning. One such company is Compose.AI which reduces the amount of effort you take to write emails. You can imagine that it will eventually go from emails, to documents, perhaps even to reduce and short-cut slack conversations!

Regulatory Changes

The term “regulation” doesn’t usually invoke thoughts of future-building, but since the government’s job is to create a better future for its citizens, sometimes laws are passed to incentivize the private sector to help build that future. When multiple states passed laws in 2016 that forced insurance companies to cover telehealth costs, startups like Him+Hers and Talkspace were able to target specific health-issues in a more convenient manner at reasonable prices.

Even more recent is a federal law that forces health care providers to give patients all of their information … for free; previously health care providers would lock this information up or charge high “processing fees” to reduce churn. What use-cases will be unlocked for patients now that they can get information from any doctor they visit and take it with them? On the provider side, current information request processes are inefficient, what problems will they face in the future?

Societal Trends

The more ambiguous type of inflection event is societal. This type requires analyzing changes in how people live, work, and play. Societal inflection events are identified by researching population trends like: access to high-speed internet, number of people working side-gigs, or number of people who fear climate disaster. While companies like Notion, Zoom and Slack seemed perfectly positioned for COVID-19 lockdowns, they were actually built for the increasing number of remote workers which has been doubling every year since 2012.

So what trends are coming up outside of more remote workers? Our aging population! The number of people older than 65 years old went from 35M in 2000 to 50M in 2020 and projected 80M in 2040. This increase has put a strain on the Medicare and Social Security programs, both of which will start costing more than their incomes in 2026 and 2034 respectively (ie. 100% won’t be paid out due to lack of available funds). By 2029, it is expected that 54% of seniors won’t have enough money to cover their living/health expenses. While elder care has been stagnant as an industry, it’s clear that the aging experience for this next batch of seniors will need to change! For example, companies like Papa have been working to make assisted living cheaper by creating on-demand assistants.

How to identify opportunities using inflection events

More often than not, an inflection event presents opportunities rather than exact answers. As entrepreneurs it is our job to look across industries, speak with real people, and consider how to leverage inflection events to create 10x better solutions. While your investigations should be fluid, I think that following the following 3 steps can get you pretty far:

1. Keep track of inflection events - as an entrepreneur building the future, you should be constantly researching how the world is changing, internalizing how you think that future will look like, and connecting those predictions with problems you discover.
2. Talk to industry folks or customers about problems - you can’t avoid talking to people! Talk to friends but more importantly talk to people who have problems that you want to solve. Keep those conversations going to create opportunities for problems to connect with inflection events.
3. Predict a solution / Predict the future - Think out loud! Whether it be by formally pitching over the phone to a customer or writing emails to folks interested in the space, there is no way to know if you can predict correctly without trying to predict. Share your thoughts with industry folks, VCs, colleagues and most importantly: get feedback. From the entrepreneurs I talked with, you should aim for 50% of feedback being “that’s brilliant” and 50% “that’s impossible”.

Final Thoughts

I’m super excited for companies solving the problems of tomorrow. My advice if you’re looking to build that future – do so through the lens of inflection events. Leverage societal, technological and regulation changes to be a part of the next wave of innovative companies. As always, speak to customers, colleagues, me, and industry leaders to validate your ideas: feedback being 50% “that’s brilliant” and 50% “that’s impossible” is the goal. Good luck friends!