- Startup founders and employees are fed up with the hype over cryptocurrency, machine learning, and virtual reality, according to a new survey.
- Venture capital firm First Round polled over 900 founders and employees of startups for their annual State of Startups report, published this week.
- The most underhyped startup trend is agriculture tech, according to respondents.
- Visit Business Insider’s homepage for more stories.
The world of startups may be running out of patience for heavily-hyped trends like cryptocurrency, virtual reality, and autonomous vehicles, according to a new survey published this week.
To findings were published by First Round, a venture capital firm that compiles an annual “State of Startups” report. The survey polled 950 founders and employees of startups, and asked each respondent to name three overhyped trends.
In addition to ranking the most overhyped technologies, survey respondents were asked which startup trends are the most underhyped. Agriculture tech was named the most underhyped trend, followed by construction and digital health.
The survey also found that startup founders are increasingly worried about the startup “bubble” popping. Over 47% of founders said we’re in a bubble for tech companies, and 32% said it’s close to popping, while just 21% said they don’t think there’s a tech bubble.
Here are the most overhyped tech startup trends, according to 950 startup founders and employees surveyed by First Round.
13. Personal finance apps
Broadly, personal finance apps are platforms like Venmo and Wealthfront that let users move money around or manage it using their smartphone. 7.5% of startup employees and 5.6% of founders said personal finance apps are overhyped.
One of this year’s most-hyped fitness startups, Peloton, had a disappointing Wall Street debut, falling below its IPO price in October. 8.4% of employees and 7.3% of founders said fitness is an overhyped startup trend.
11. Productivity apps
Productivity apps help companies or individuals get work done more efficiently, like Slack, Trello, or Asana. 7.3% of founders and 12.6% of employees said the trend is overhyped.
10. Dating apps
This year, Facebook hopped on the dating hype train, launching an in-app dating service to compete with Tinder, Hinge, and Bumble. Dating apps were ranked as overhyped by 13.4% of startup employees and 8.2% of founders.
The esports industry is undergoing massive growth – investments in esports rose to $US4.5 billion in 2018 from just $US490 million the year prior, according to Deloitte. 9% of startup founders said esports are overhyped.
Several direct-to-consumer brands that built audiences on Instagram and YouTube, like Glossier, Away, and MailChimp, are now attempting to secure their long-term appeal with their own branded content studios. 10% of startup employees and founders said direct-to-consumer is an overrated trend.
7. Social networks
Social media startups are notoriously risky investments, but backers are still drawn to them because of their potential to attract young users abandoning ageing social media platforms, according to Investopedia. 13.4% of startup employees and 12.9% of founders said social networks are overhyped.
6. Meat alternatives
The imitation-meat industry is booming, fuelled by customer concern over the environmental and ethical downsides of meat production. However, 12.3% of startup employees and 15% of founders said the trend is overhyped.
5. Autonomous vehicles
Autonomous vehicles are seen as the future of industries ranging from shipping to ride-hailing, but concerns over the safety risks of self-driving cars, and the maturity of the technology, only intensified in 2019. 17% of startup employees and 22.3% of founders said autonomous vehicle startups are overrated.
4. Venture-backed beverages
Investors poured millions into trendy beverage startups this year – Liquid Death, a canned-water company with a punk marketing aesthetic, raised $US2 million from angel investors, while “smart drink” maker More Labs raised $US8 million in VC funding, according to TechCrunch. 11.9% of startup employees and 22.8% of founders said venture-backed beverages are overhyped.
3. Virtual reality and augmented reality
Virtual reality is taking longer to catch on than investors expected. Facebook, which purchased VR headset maker Oculus for $US2 billion five years ago, is now facing challenges with getting people to buy the product, but Mark Zuckerberg said he’s “still optimistic.” 19.4% of startup employees and 26.6% of founders said virtual reality and augmented reality are overhyped.
2. Artificial intelligence and machine learning
The world of tech is fascinated with AI – from 2011 to 2018, investors poured more than $US110 billion into 9,800 rounds of fundraising for AI startups, according to MIT researchers who argue that the trend has “the trappings of a financial bubble.” 19.8% of startup employees and 40% of founders said AI is overhyped.
By most accounts, the cryptocurrency bubble has already popped – by mid-2019, assets across cryptocurrencies fell by more than 75% from their peak in 2017, and could take decades to return to their prior value, according to analysts. Facebook’s push to establish a new cryptocurrency also stumbled this year, with several high-profile partners backing out of the project. 44.9% of startup employees and 56.2% of founders said they believe cryptocurrency is overhyped.
On the other hand, agriculture tech, digital health, and construction topped the list of the most underhyped startup trends.
Startup founders and employees were also polled on which trends are the most underhyped. Agriculture tech was the clear leader, with 34.8% of employees and 30% of founders ranking it as underhyped.
Other underhyped trends, according to survey respondents, include construction, digital health, vertical software-as-a-service, synthetic biology, and low-code platforms.