As we collectively count down the final hours of 2023, I wanted to take this opportunity to wholeheartedly thank our Members, colleagues at Kearney, and everyone in our network for your friendship, engagement, and support this past year. With another successful turn around the sun upon us, it's a natural point to reflect on the dynamic global landscape that defined 2023 and the significant strides we've made together as an extended community. While the past twelve months have been a journey with turbulence and challenges along the way, so too were there many opportunities for growth and clear moments that highlighted the resilience of the world’s innovation ecosystems.
Macro Trends: Navigating the Shifting Venture Landscape
From a macro perspective, an environment of uncertainty remained omnipresent with interest rates, inflation, and geopolitical events capturing the news and minds. Meanwhile and to the surprise of most, the stock market soared towards record highs. As of this writing, the S&P 500 climbed nearly 25%, while the DJIA leapt over 10% and the tech-heavy Nasdaq rallied an impressive 44% in 2023. Notably a large percentage of these gains can be attributed to what many are calling the
Magnificent Seven stocks, which include Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. At the same time, this was a year marked by seismic shifts in the venture ecosystem; notably the unexpected collapse of Silicon Valley Bank and other similar banking failures and consolidation that soon followed. These events along with the sustained increased cost of capital, a tepid IPO market, lackluster M&A activity levels, and a wave of tech industry lay-offs all continued to ripple through the venture industry. Most VC firms continued to slow their pace of new investments, instead focusing their energies and funds on supporting the health and resilience of their existing portfolio companies. In contrast, Corporate Venture Capitalists (CVCs) demonstrated relative resilience, underscoring the continued growing significance of strategic investments to startups.
Our Milestones: Joining Forces & Global Expansion
Earlier this summer we experienced a transformative moment in our own history as a firm and one that has already begun to significantly shape the trajectory of our business. The acquisition of Silicon Foundry by Kearney has indelibly broadened our horizons and strength of our collective braintrust, as well as accelerated our ability to scale. It has extended the reach of the sectors that we serve, increased our capabilities and the scope of solutions we can offer together. In just the first few months since officially joining forces with Kearney, SiF has benefited from countless impactful collaborations with our thousands of new Kearney colleagues from around the world. We have so much to be thankful for this year at SiF, but without question, becoming a part of the Kearney family is at the top of that list!
While Silicon Valley remains our center of gravity, our day-to-day advisory work and ‘bridge building’ between companies and ecosystems will always take us across the globe and now with Kearney, the footprint of our professionals spans over forty countries. As well, SiF opened an office in the Middle East in partnership with the DIFC this past spring - with dedicated team members now based full-time in the region - marking another key milestone and sign of commitment for the firm. This move is a testament to the dynamism and increasing corporate and governmental commitments and investments into innovation efforts that we are witnessing across the region, and sets the stage for further international expansion for SiF in the coming quarters.
Top Themes: Pioneering AI and Progressing Sustainability
The topic that overwhelmingly dominated news headlines all year, as well as business and social discourse, has been the rise of artificial intelligence and the tectonic shifts that are underway as a result of it. AI has been the “talk of the town” quite literally since the launch of ChatGPT and venture capitalists alone poured $50B+ into AI related startups in 2023. For SiF, an increasing portion of our work with Members was focused on supporting these corporate decision-makers in separating hype from reality, deepening their awareness of and the emerging AI/ML platforms and breakout vertical applications, connectivity to these key players, and informing strategic on-going decisions regarding the adoption of AI across their organizations.
The other near universal focus area for our Members this year has been to identify and leverage decarbonization solutions and services that can be deployed at scale, to achieve real progress towards the top level sustainability goals of their organizations. The sheer complexity, fragmentation and swelling number of sub-segments across the
Climate Tech landscape present unique challenges to navigate and determine where to place these bets. The intersection of sustainability and tech has been at the heart of so many of SiF’s projects in recent years - our professionals have been methodically and continuously mapping, tracking, diligencing a steady stream of advancements and connecting with the incumbents or startups companies behind them - and we fully expect this to only further expand and accelerate and in the years ahead.
Human Experiences: Connecting Beyond the Virtual Realm
In a world that has increasingly embraced virtual communications and collaboration, we at SiF continue to prioritize and place a premium on curated, in-person experiences. We appreciate the fundamental power of ‘breaking bread’ together and role it plays in building authentic and long-lasting relationships, as well as setting the stage for individuals and organizations to fully explore opportunities to partner with one another. Convening senior executives, entrepreneurs, investors, researchers, advisors and thought leaders - through private roundtable discussions, targeted 1x1 meetings, curated executive treks and/or larger scale topical summits - is a core part of what we do. Our event calendar was overflowing with opportunities to connect this past year and this slate will grow be design in 2024. On that note, we are excited to kick off the first few weeks of the new year by co-hosting with Kearney a series of private gatherings in parallel to the Consumer Electronics Show, JP Morgan Healthcare Conference, and World Economic Forum in Europe.
On behalf of our entire team here at SiF, as we conclude this year we wish you, your friends, families and fellow colleagues a restful, safe and joyous holiday season and New Year’s celebration. We look forward to crossing paths and collaborating again together early in 2024!
Neal Hansch
CEO, Silicon Foundry |
