What do you do if you're a Venture Capital professional trying to anticipate emerging trends?

1 Scan the horizon

One of the first steps to identify emerging trends is to scan the horizon for signals of change. These can be anything from new technologies, customer behaviors, regulations, competitors, or social movements that could affect your market. You can use various sources and methods to collect and analyze these signals, such as newsletters, podcasts, blogs, reports, surveys, interviews, or workshops. The key is to be curious, open-minded, and diverse in your inputs.

2 Filter and prioritize

Not all signals are equally relevant or impactful for your VC goals. You need to filter and prioritize them based on your criteria and focus. For example, you can use frameworks such as STEEP (social, technological, economic, environmental, and political) or PESTEL (political, economic, social, technological, environmental, and legal) to categorize the signals by their drivers and implications. You can also use tools such as impact/uncertainty matrix or trend radar to rank the signals by their importance and likelihood.

3 Connect the dots

Once you have a list of prioritized signals, you need to connect the dots and see how they relate to each other and to your industry. You can use techniques such as scenario planning, roadmapping, or backcasting to create plausible and coherent stories of the future that incorporate the signals. These stories can help you explore different possibilities, challenges, and opportunities for your VC strategy and portfolio.

4 Validate and test

Before you act on the trends you have identified, you need to validate and test them with real data and feedback. You can use methods such as experiments, prototypes, or pilots to test your assumptions and hypotheses about the trends and their impact on your market. You can also use metrics such as traction, growth, retention, or revenue to measure and compare the performance of your potential investments.

5 Learn and iterate

Anticipating emerging trends is not a one-time activity, but a continuous process of learning and iterating. You need to monitor and update your signals, scenarios, and tests regularly to account for new developments and changes. You also need to share and discuss your findings and insights with your team, partners, and stakeholders to get different perspectives and feedback. And most importantly, you need to be flexible and adaptable to adjust your VC decisions and actions accordingly.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?