Pre-IPO Profits

Keeping an Eye Out for Startups That Automate Work

Keeping an Eye Out for Startups That Automate Work

The labor market is tight. The American economy added 678,000 non-farming jobs in February as the unemployment rate fell to 3.8%. New jobless claims are at their lowest levels since the start of the year. There are approximately 1.7 job vacancies per available worker. And all of this happened as the labor participation rate (number of Americans seeking jobs) increased by more than a percentage point to 62.3%.

I spent a few hours this weekend chatting with a CEO and a managing director who hires a lot of tech workers. They’re both struggling to find qualified candidates to hire. This matches what many founders have been telling me as well. Across the spectrum, companies are struggling to hire talent.

The problem is particularly severe in the hospitality (hotel and restaurant) and healthcare industries. And we have no idea when — or even IF — these labor problems will go away.

That’s because the nature of work is changing. Some jobs are tailor made for remote work or hybrid work weeks (a few days in the office and a few days at home each week). Other jobs require people to be in an office, a store, a construction site or a restaurant. But the people who have to report to work — including manufacturing workers, manual laborers and healthcare workers — want to work from home. In fact, at least 70% of workers in every sector want to work remotely.

That’s why I’ve been looking into startups that automate labor. From AI to robotics, every sector of the economy is looking to automate work. It’s one of the biggest and most important trends in the markets. 

Papa John’s is closing stores early or temporarily shutting down some stores because it doesn’t have enough workers. Starbucks has been closing stores early due to staffing shortages as well. It’s become an untenable situation. And industries need to adapt.

There are some very interesting startups operating in this space. I spent some time in California recently looking at a few of them. We’re doing our due diligence on them now, hoping to find one that we can recommend to our members. We’ll keep you posted.

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