The pandemic has brought in many resets, the most stunning one has been to the start-up world where the founders have to suddenly be concerned about the bottom line for their survival from a euphoric growth and scale-at-all-costs model. I am repeatedly asked questions why investors prefer growth at all costs and not a sensible profitable model and I have explained that if you are raising money from a closed-ended fund seeking an alpha return, scale and the speed of achievement of scale will always trump profitability as a desirable or credible metric.
The pandemic has brought in some new thoughts and start-up entrepreneurs may want to carefully look at how global and domestic capital pools are looking to reset expectations. One thing that COVID has done is it has brought into sharp focus the need for a resilient and sustainable world. The world of capital, which roughly has the US $300 trillion assets under management, does not like to be disrupted. COVID has suddenly brought the fear of long-term disruption to the boardroom of these multi-trillion dollar managers and thus, you would see a significant flow of capital to the businesses that include sustainability or its better known alternative ESG (Environment, Social and Governance).
I have always believed that major disruptions take place and real global and national trends are formed in business when high-quality talent starts spending significant time using technology to disrupt traditional sectors. As investors, we are always looking for emerging trends by keeping an eye on what problems the talent is trying to solve and if there's a case of technology in scaling these disruptive ideas. As capital providers, our job is to follow these trends and back the best talent in the right sector. As young entrepreneurs prepare to look at new problems to solve that are worthy of becoming disruptions in the next decade, I would like to stick my neck out and predict one global mega-trend, one Indian mega-trend and one serious disruption that would define the next decade.
My first prediction is that climate start-ups and solutions will be the global megatrend in the next decade. The maximum amount of global capital across all asset classes would be invested in making the world sustainable through climate action. It could be in mobility, sustainability, fuel or simply recreation of nature, but this would be the real global megatrend and it would impact every line of business from Housing to Mining. My suggestion to all entrepreneurs is to look at this megatrend carefully when you look for new ideas.
My second prediction is that AgriTech would produce a large number of unicorns in India in the next decade. The agriculture sector is seeking some of the most unique convergence of interest with this traditional sector, seeing massive curiosity from the best Indian talent to solve problems using technology at scale. What convinces me about its future is that rarely does policy, framework and capital align themselves to support this disruption so early.
My final point is that in the post-pandemic world, work from home is not an option but is the new strategy. The future of work would thus be a unique new disruption that would bring new talent to the market, a new opportunity for gender balance and a new economic movement like the gig economy.
As I conclude I want to see the next decade pushing us to build a world free of hunger, poverty and inequality. I aspire to see impact unicorns that touch a billion lives while delivering a billion dollars in market capitalisation.
Vineet Rai is the Founder and Chairman of the Aavishkaar Group.
