The Essential Creator Economy
Over the past few months, we have seen investors, politicians, and media leaders stressing the need for innovation in essential industries across our country (e.g. Josh Wolfe on Defense, Katherine Boyle on supporting national interests, Noahpinion on New Industrialism, Ray Dalio on the Changing World Order, etc.). They realized that in order to continue our current economic growth and maintain America’s position on the global stage, there needs to be a shift in focus from “building tech for tech workers” to improving the biggest and most mission critical industries in our country. In the coming decade, there is a huge opportunity for talented entrepreneurs to tackle hard problems in these bedrock industries, instead of building the next social network or enterprise productivity app.
These articles, among numerous others, do a great job outlining why it is a necessity to invest in essential industries, enabling their productivity and diving headfirst into the biggest issues faced by America today (e.g. threat of China’s expanded role on the global stage, a hollowed out manufacturing sector, etc.). Outside of pure need for innovation in these industries, a perfect storm of new societal & economic trends are making this opportunity present itself now.
Brain Gain from individuals moving away from the coasts. Many of our traditional industries (e.g. automotive, manufacturing, steel, aerospace, etc.) are based in cities around the U.S. As former tech workers move to cities such as Austin, Miami, and Denver, they will interface directly with people and industries that have yet to experience the rapid technological innovation commonplace in Silicon Valley. Their experiences will serve as a catalyst for entrepreneurship, tackling a wealth of problems in traditional industries that are ripe for technological disruption.
Significant labor shortages in industries across the nation. Labor forces in industries such as manufacturing, construction, and agriculture are continuing to worsen. The aging out of the current labor force and younger generations’ preference to pursue creative careers (e.g. gaming, consumer internet, freelancing) is forcing companies to adopt new technologies to augment their workforce.
VC as a means to fix the problems in the US, not simply a tech ecosystem supporter. Investors have seen the societal impact and financial outcomes companies like SpaceX, Tesla, Moderna, Palantir, PromisePay can provide. This has inspired a new crop of investors willing to invest in core industries. This shift in mindset is still in its infancy and will continue to become more mainstream over the next decade.
While this is the first time we are publicly writing about this thesis, Signia has been investing in founders tackling these problem areas for the past several years. We have backed companies applying new technologies, such as 3D printing and robotic manufacturing, to building houses (Agorus), building robots and software to help augment blue collar labor (Electric Sheep, Unspun, Felux & Skyebrowse), and improving our defense industry (OneBrief & Fortem).
I believe that the next wave of giant venture scale companies will be tackling bedrock industries located throughout the U.S. We look forward to continuing to invest in essential creators tackling the biggest issues in this country including our shortage of housing, an aging blue collar workforce, and lack of digitization in the industries protecting our national interests.
To read more, follow Essential Creators on Substack, where I will dig in deeper to each of these core industries and the technologies and business models that can help bring us into the future.