In the tech world, a successful player never stands still — and so we, too, must keep moving forward, as we look to see what 2024 will bring.
The conversation topic looming on the collective conscience of the entrepreneurial ecosystem as a whole is whether venture capitalist (VC) money will pick up, or at least improve. As we recently reported, only $77.5 million of capital was raised in the commonwealth for the first nine months of 2022.
Still, there is money out there for the right opportunity and the right synergy between startup and investor.
“Patience. Capital is available," said Louisville-based investor Brook Smith, when asked for advice he had for founders after being named as a recipient of one of our 2023 Inno Fire awards.
Funding aside, though, what will drive the headlines in 2024?
I looked back at the predictions members of the local tech community provided in 2023 — and many of them hit the nail on the head when it came to AI. My first notable exposure to it was when I covered the 2023 Future of Work Summit at the Muhummad Ali Center in Downtown Louisville. That’s when Ben Reno-Weber opened up the event by having ChatGPT write an opening speech to the crowd.
Yours truly can receive up to five story pitches — many of them of the robo variety, probably generated by ChatGPT or another AI tool — per day about, yep, AI.
If I had to make one tech prediction, it’s that we will inevitably see some pushback from AI. Especially in a business atmosphere typically found in Kentucky and Southern Indiana that still prides itself on customer service and traditional people interactions, I think you might see some businesses publicize the fact that they are AI-free in certain aspects such as everyday external communication practices — especially those that want their narratives to rise above the automated messaging of their competitors and provide more of a human touch.
One other prediction: The 2024 version of Startups to Watch will be another great time on Jan. 30 from 4:30 to 6:30 p.m., so get your tickets today!
Enough from me. Let’s hear from some local and regional tech leaders (in alphabetical order):
Jackson Andrews, managing director, Endeavor Midwest
“Venture Capital will remain constrained in the Midwest. Conversely, 2024 will end up being a strong vintage for venture returns and thus spells a big opportunity for those willing to be greedy when others are fearful. AI and Large Language Models (LLMs) will continue as a leading trend. Seed and Series A [rounds] will be steady, but by no means booming. Entrepreneurs will need to remain capital efficient with steady growth rather than ‘growth at all costs.’ 2024 will be formative for the next generation of successful tech companies.”
Lisa Bajorinas, executive director, Kentucky Innovation Hubs; program director, Vogt Awards
1. Artificial intelligence (AI) and machine learning (ML): There will continue to be the widespread adoption of AI and ML influencing various industries such as healthcare (diagnosis, treatment, and drug discovery), finance (fraud detection) and manufacturing (supply chain optimization). An increased focus on workflow process redesign shows AI and ML technologies are increasingly automating routine and repetitive tasks, allowing human workers to focus on more complex and creative aspects of their jobs.
2. Cybersecurity innovations: With the increasing frequency and sophistication of cyber threats, innovations in cybersecurity, particularly with behavioral analytics, including AI-driven threat detection and response will continue to grow.
3. 5G technology: The rollout and adoption of 5G networks to enhance connectivity will provide significantly faster data transfer speeds. 5G is designed to and will handle the massive scale of [Internet of Things] devices, connecting many sensors, devices and machines.
4. Augmented reality (AR) and virtual reality (VR): Advancements in AR and VR technologies and the utilization of these technologies will impact various large industries including gaming, healthcare and education using immersive and lifelike experiences in virtual worlds.
5. Robotics and automation: Continued advancements in robotics and automation will impact various industries, from manufacturing to healthcare.
6. Biotechnology and health tech: As we saw huge developments of the Covid vaccine, and more biometric data being made available to consumers, ongoing developments in biotechnology, personalized medicine and health tech will play a significant role in improving healthcare outcomes.
Sam Ford, executive director, AccelerateKY
“As we move beyond the ‘Web 2.0’ paradigm into the next phase of tech development, the models for investment and for scaling new ventures will require a new era of approaches and infrastructure. We’ll need systems that prioritize patient capital, slow innovation, and ‘tough tech,’ that values distributing innovation via nodes throughout the country. [This is] not just [for] the commercial real estate of a handful of cities. [The tech] embraces fractional resources that can help grow and scale startups — and that realize that a collaborative, aligned ecosystem is the single most important factor for attracting talented people to grow impactful companies.”
Patrick Henshaw, managing director, Render Capital
Our prior predictions have been following through — you can see below the S&P 500 over the last year doing precisely what we predicted, especially post Black Friday with retail spending on the rise. Two years ago we talked about consumer spending and the drive towards e-commerce. Those predictions are also panning out — and are a big reason why our portfolio includes both high growth consumer packaged goods (CPG) brands that are outpacing their category in growth as well as business to business e-commerce tools like Xena Intelligence that are leaning into the power of artificial intelligence to help brands better understand their consumers and drive through their value-proposition more efficiently and effectively.
For 2024, we also see health tech to continue to grow in both adoption and effectiveness with the U.S. population so rapidly aging with boomers and now their caregivers and family members wanting solutions to help those boomers live their best life and make care more transparent. This is also why we invested recently into the team at Primary Record — their transparent caregiver/family healthcare EHR platform allows caregivers and patients alike be more aware of what medications, conditions and treatment plans are in more real time across their support circle.
A final note is we are seeing a rise in how AI and language learning models (LLMs) are not only affecting and helping improve e-commerce marketing (like with Xena), but also in the supply chain. As the world as a whole moves to a more transparent and efficient supply chain we will continue to see a rise in how businesses want to become more efficient with tools like Render Portfolio company Vsimple at the same time being more transparent with their investors and shareholders by being able to better accurately forecast the future with platforms like Render Portfolio company Forecastr.
Gill Holland, investor
“We will start to see every Zoom conference call or in-person meeting accompanied by an AI ‘stenographer,’ which will email out a transcript after the meeting.”
Evan Knowles, co-founder, Symba (exited) / co-host, Middle Tech podcast
“If you’re not already building AI today, you will be next year — and if you aren’t next year, you’ll be dead. I think that every company is going to have to rethink [its] technical architectures, and just think about how they’re going to incorporate AI into their existing workflows to make it better. It doesn’t matter how big or how small implementing any kind of AI technology is, you’re going to have to in order to stand out and compete.”
Brad Luttrell, CEO and co-founder, GoWild
“Coastal techies are already saying ‘we’re so back.’ It’s important for Midwestern founders to not be sucked into this narrative — [as] we as a region are not back. Tech fundraising and valuations will start to bounce back in Q1 for coastal and southern VCs that have stronger funding networks, but the Midwest will lag behind due to a timid investor climate. Midwestern companies attempting to move to Series A will continue to struggle to raise over the next six months, as Midwestern investors remain cautious and look for mature companies with proven metrics. This lack of support could push our regional founders to focus more on profitability, less on growth, and will likely lead to some founders exiting earlier than they anticipated. Founders need to stay hyper focused.
Chris D. Redd, investor/co-founder, Network N’ Chill
“The venture capital landscape will continue to transition in 2024, influenced by the lessons learned and obstacles faced in the previous year. The environment is changing, with new standards and expectations.
“A slow but steady recovery is anticipated for the investment environment. Even if investment activity might increase in comparison to the prior year, caution and careful thought will probably be the order of the day. This points to a more controlled approach to finance and more diligence on the part of both founders and investors.
“It is expected that the path for entrepreneurs looking for funding will be more demanding and drawn out. The focus will be on holding more in-depth and frequent conversations with possible investors. Furthermore, there will be increased demand to show a workable route to profitability early in the business lifetime.
“There is probably going to be a return to the importance of observable proof of product-market fit, with an emphasis on customer engagement and revenue creation in particular. This tendency indicates a move away from more speculative metrics of success and toward basic business principles.
“When resources are more limited, quality will be prioritized more. It is anticipated that investment would focus more on businesses showcasing not only innovation, but also robust unit economics and flexibility in response to shifting market conditions. There will be more competition as a result of this tendency where only the most robust startups attract significant attention and funding.”
Buddy Steen, CEO, Western Kentucky University Innovation Campus
“I believe that the use of AI in 2024 will be revolutionary, far beyond anything we could dream of in 2023. It’s not just evolution, it’s like a leap into the future! Combine this with a few more major advancements in quantum computing and we’re not just talking about change; we’re talking about a monumental paradigm shift that could impact everything."
