New ventures are exciting. It's fun to imagine yourself rich, successful, and famous (if that's your thing). How you'll help others and make your family proud. This excitement can pull you forward for years, even when you intuitively realize that the path you're on may not lead to your desired success.

Know when to change course. Switching course can mean pivoting or changing direction.

In this not-so-short blog, I'll describe the journey of building your dream. And how the journey might look when you think you're building your dream, but fall short of that vision. Both can feel similar in the beginning, but there are subtle differences.

Let’s dive in.

How an exciting journey to a dead end looks and feels.

You want to help many people. You're business-minded, creative, and ambitious. You jump into entrepreneurship. You're excited, free, and in control.

I'll use tech as an example because that's what I know best, but this applies to any entrepreneurial endeavor.

So you start learning the basics of your field, say coding/software development. You read books, take courses, and may even join a bootcamp. You start practicing, and the journey begins. Once you reach a certain level of skill (which can take months, usually 12-24), you gain the confidence to speak with others in the field and find common ground. You might attract a co-founder this way with time. You and this person embark on a journey (Tip: the idea you start with is rarely the idea you end with).

Amateur mistake #1: You spend months building a product before speaking to customers.

Building something pulls you forward blindly. You make mistakes, avoid customers, and build with your co-founder or small team in the dark for months, usually 6-12 months.

You're excited when the product launches. We'll be billionaires! The market won't believe it. This excites you and the team. Launch.

….

Nothing happens.

Some people may sign up out of pity, only to never use the product or service again.

You and the team are confused, discouraged and in denial. They don't get what we've built yet. We need to market it better, we need to talk to more investors, someone will understand our vision.

This is a hopeless path, and your denial could last another 6 months. If you're lucky, while talking to consumers and investors (which you should have done from the start), someone who has been there before would pity you and give you an idea to pivot into that can create income.

Suppose you get this idea and pivot your business. Again, you've just pivoted into something limited by what you've already built. It may be a revenue-generating idea, but it's rarely new. Now you're playing catch-up, doing something others are doing but you can do better. (Tip #2: Don't be late.) Your chances of winning are slim, and you'll likely never catch up.

You're finally seeing revenue and feel successful. You can compete, but if you're not a first mover, you won't earn enough over time. You'll get by or work harder than ever to earn what a skilled trade could provide. You didn't go into business to stress out and make $100,000 or $200,000 a year. When you can make the same amount by becoming a great software developer, electrician, etc.

You become stuck. Either your firm continues this way for years until you realize there isn't enough growth to recruit a strong team and remove yourself from day-to-day operations due to competition. Or a catastrophic economic event forces you to admit that what you were building wasn't new and unique and wouldn't get you where you wanted to be.

This realization could take 6-10 years. No kidding.

The good news is, you’ve learned a lot along the way and this information can be used towards your next venture (if you have the energy).

Key Lesson: Don’t build something if you aren’t one of the first in the space building it just for the sake of building something.

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Let's discuss what it's like to build something that can make your dream come true.

Case 2: Building something the market loves is difficult but rewarding.

It starts with a problem that hasn't been adequately solved for a long time but is now solvable due to technology. Or a new problem due to a change in how things are done.

Let's examine each example.

Example #1: Mass communication. The problem is now solvable due to some technological breakthrough.

Twitter — One of the first web 2 companies that became successful with the rise of smart mobile computing.

People can share their real-time activities via mobile device with friends, family, and strangers. Web 2 and smartphones made it easy and fun.

Example #2: A new problem has emerged due to some change in the way things are conducted.

Zoom- A web-conferencing company that reached massive success due to the movement towards “work from home”, remote/hybrid work forces.

Online web conferencing allows for face-to-face communication.

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These two examples show how to build a unicorn-type company. It's a mix of solving the right problem at the right time, either through a technological breakthrough that opens up new opportunities or by fundamentally changing how people do things.

Let's find these opportunities.

Start by examining problems, such as how the world has changed and how we can help it adapt. It can also be both. Start team brainstorming. Research technologies, current world-trends, use common sense, and make a list. Then, choose the top 3 that you're most excited about and seem most workable based on your skillsets, values, and passion.

Once you have this list, create the simplest MVP you can and test it with customers. The prototype can be as simple as a picture or diagram of user flow and end-user value. No coding required. Market-test. Twitter's version 1 was simple. It was a web form that asked, "What are you doing?" Then publish it from your phone. A global status update, wherever you are. Currently, this company has a $50 billion market cap.

Here's their MVP screenshot.

Small things grow. Tiny. Simplify.

Remember Frequency and Value when brainstorming. Your product is high frequency (Twitter, Instagram, Snapchat, TikTok) or high value (Airbnb for renting travel accommodations), or both (Gmail).

Once you've identified product ideas that meet the above criteria, they're simple, have a high frequency of use, or provide deep value. You then bring it to market in the simplest, most cost-effective way. You can sell a half-working prototype with imagination and sales skills. You need just enough of a prototype to convey your vision to a user or customer.

With this, you can approach real people. This will do one of three things: give you a green light to continue on your vision as is, show you that there is no opportunity and people won't use it, or point you in a direction that is a blend of what you've come up with and what the customer / user really wants, and you update the prototype and go back to the maze. Repeat until you have enough yeses and conviction to build an MVP.

Y Combinators Winter 2022 Demo Day continues the trend of more startups engaging in accelerator Demo Days. Our team evaluated almost 400 projects in Y Combinator's ninth year.

After Winter 2021 Demo Day, we noticed a hurry pushing shorter rounds, inflated valuations, and larger batches.

Despite the batch size, this event's behavior showed a return to normalcy. Our observations show that investors evaluate and fund businesses more carefully. Unlike previous years, more YC businesses gave investors with data rooms and thorough pitch decks in addition to valuation data before Demo Day.

Demo Day pitches were virtual and fast-paced, limiting unplanned meetings. Investors had more time and information to do their due research before meeting founders. Our staff has more time to study diverse areas and engage with interesting entrepreneurs and founders.

This was one of the most regionally diversified YC cohorts to date. This year's Winter Demo Day startups showed some interesting tendencies.

Trends and Industries to Watch Before Demo Day

Demo day events at any accelerator show how investment competition is influencing startups. As startups swiftly become scale-ups and big success stories in fintech, e-commerce, healthcare, and other competitive industries, entrepreneurs and early-stage investors feel pressure to scale quickly and turn a notion into actual innovation.

Too much eagerness can lead founders to focus on market growth and team experience instead of solid concepts, technical expertise, and market validation. Last year, YC Winter Demo Day funding cycles ended too quickly and valuations were unrealistically high.

Scrum Ventures observed a longer funding cycle this year compared to last year's Demo Day. While that seems promising, many factors could be contributing to change, including:

• Market patterns are changing and the economy is becoming worse.

• the industries that investors are thinking about.

• Individual differences between each event batch and the particular businesses and entrepreneurs taking part

The Winter 2022 Batch's Trends

Each year, we also wish to examine trends among early-stage firms and YC event participants. More international startups than ever were anticipated to present at Demo Day.

Less than 50% of demo day startups were from the U.S. For the S21 batch, firms from outside the US were most likely in Latin America or Europe, however this year's batch saw a large surge in startups situated in Asia and Africa.

YC Startup Directory

163 out of 399 startups were B2B software and services companies. Financial, healthcare, and consumer startups were common.

Our team doesn't plan to attend every pitch or speak with every startup's founders or team members. Let's look at cleantech, Web3, and health and wellness startup trends.

Our Opinions Following Conversations with 87 Startups at Demo Day

In the lead-up to Demo Day, we spoke with 87 of the 125 startups going. Compared to B2C enterprises, B2B startups had higher average valuations. A few outliers with high valuations pushed B2B and B2C means above the YC-wide mean and median.

Many of these startups develop business and technology solutions we've previously covered. We've seen API, EdTech, creative platforms, and cybersecurity remain strong and increase each year.

While these persistent tendencies influenced the startups Scrum Ventures looked at and the founders we interacted with on Demo Day, new trends required more research and preparation. Let's examine cleantech, Web3, and health and wellness startups.

Hardware and software that is green

Cleantech enterprises demand varying amounts of funding for hardware and software. Although the same overarching trend is fueling the growth of firms in this category, each subgroup has its own strategy and technique for investigation and identifying successful investments.

Many cleantech startups we spoke to during the YC event are focused on helping industrial operations decrease or recycle carbon emissions.

• Carbon Crusher: Creating carbon negative roads

• Phase Biolabs: Turning carbon emissions into carbon negative products and carbon neutral e-fuels

• Seabound: Capturing carbon dioxide emissions from ships

• Fleetzero: Creating electric cargo ships

• Impossible Mining: Sustainable seabed mining

• Beyond Aero: Creating zero-emission private aircraft

• Verdn: Helping businesses automatically embed environmental pledges for product and service offerings, boost customer engagement

• AeonCharge: Allowing electric vehicle (EV) drivers to more easily locate and pay for EV charging stations

• Phoenix Hydrogen: Offering a hydrogen marketplace and a connected hydrogen hub platform to connect supply and demand for hydrogen fuel and simplify hub planning and partner program expansion

• Aklimate: Allowing businesses to measure and reduce their supply chain’s environmental impact

• Pina Earth: Certifying and tracking the progress of businesses’ forestry projects

• AirMyne: Developing machines that can reverse emissions by removing carbon dioxide from the air

• Unravel Carbon: Software for enterprises to track and reduce their carbon emissions

Web3: NFTs, the metaverse, and cryptocurrency

Web3 technologies handle a wide range of business issues. This category includes companies employing blockchain technology to disrupt entertainment, finance, cybersecurity, and software development.

Many of these startups overlap with YC's FinTech trend. Despite this, B2C and B2B enterprises were evenly represented in Web3. We examined:

• Stablegains: Offering consistent interest on cash balance from the decentralized finance (DeFi) market

• LiquiFi: Simplifying token management with automated vesting contracts, tax reporting, and scheduling. For companies, investors, and finance & accounting

• NFTScoring: An NFT trading platform

• CypherD Wallet: A multichain wallet for crypto and NFTs with a non-custodial crypto debit card that instantly converts coins to USD

• Remi Labs: Allowing businesses to more easily create NFT collections that serve as access to products, memberships, events, and more

• Cashmere: A crypto wallet for Web3 startups to collaboratively manage funds

• Chaingrep: An API that makes blockchain data human-readable and tokens searchable

• Courtyard: A platform for securely storing physical assets and creating 3D representations as NFTs

• Arda: “Banking as a Service for DeFi,” an API that FinTech companies can use to embed DeFi products into their platforms

• earnJARVIS: A premium cryptocurrency management platform, allowing users to create long-term portfolios

• Mysterious: Creating community-specific experiences for Web3 Discords

• Winter: An embeddable widget that allows businesses to sell NFTs to users purchasing with a credit card or bank transaction

• SimpleHash: An API for NFT data that provides compatibility across blockchains, standardized metadata, accurate transaction info, and simple integration

• Lifecast: Tools that address motion sickness issues for 3D VR video

• Gym Class: Virtual reality (VR) multiplayer basketball video game

• WorldQL: An asset API that allows NFT creators to specify multiple in-game interpretations of their assets, increasing their value

• Bonsai Desk: A software development kit (SDK) for 3D analytics

• Campfire: Supporting virtual social experiences for remote teams

• Unai: A virtual headset and Visual World experience

• Vimmerse: Allowing creators to more easily create immersive 3D experiences

Fitness and health

Scrum Ventures encountered fewer health and wellness startup founders than Web3 and Cleantech. The types of challenges these organizations solve are still diverse. Several of these companies are part of a push toward customization in healthcare, an area of biotech set for growth for companies with strong portfolios and experienced leadership.

Here are several startups we considered:

• Syrona Health: Personalized healthcare for women in the workplace

• Anja Health: Personalized umbilical cord blood banking and stem cell preservation

• Alfie: A weight loss program focused on men’s health that coordinates medical care, coaching, and “community-based competition” to help users lose an average of 15% body weight

• Ankr Health: An artificial intelligence (AI)-enabled telehealth platform that provides personalized side effect education for cancer patients and data collection for their care teams

• Koko — A personalized sleep program to improve at-home sleep analysis and training

• Condition-specific telehealth platforms and programs:

• Reviving Mind: Chronic care management covered by insurance and supporting holistic, community-oriented health care

• Equipt Health: At-home delivery of prescription medical equipment to help manage chronic conditions like obstructive sleep apnea

• LunaJoy: Holistic women’s healthcare management for mental health therapy, counseling, and medication

12 Startups from YC's Winter 2022 Demo Day to Watch

Bobidi: 10x faster AI model improvement

Artificial intelligence (AI) models have become a significant tool for firms to improve how well and rapidly they process data. Bobidi helps AI-reliant firms evaluate their models, boosting data insights in less time and reducing data analysis expenditures. The business has created a gamified community that offers a bug bounty for AI, incentivizing community members to test and find weaknesses in clients' AI models.

Magna: DeFi investment management and token vesting

Magna delivers rapid, secure token vesting so consumers may turn DeFi investments into primitives. Carta for Web3 allows enterprises to effortlessly distribute tokens to staff or investors. The Magna team hopes to allow corporations use locked tokens as collateral for loans, facilitate secondary liquidity so investors can sell shares on a public exchange, and power additional DeFi applications.

Perl Street: Funding for infrastructure

This Fintech firm intends to help hardware entrepreneurs get financing by [democratizing] structured finance, unleashing billions for sustainable infrastructure and next-generation hardware solutions. This network has helped hardware entrepreneurs achieve more than $140 million in finance, helping companies working on energy storage devices, EVs, and creating power infrastructure.

CypherD: Multichain cryptocurrency wallet

CypherD seeks to provide a multichain crypto wallet so general customers can explore Web3 products without knowledge hurdles. The startup's beta app lets consumers access crypto from EVM blockchains. The founders have crypto, financial, and startup experience.

Unravel Carbon: Enterprise carbon tracking and offsetting

Unravel Carbon's AI-powered decarbonization technology tracks companies' carbon emissions. Singapore-based startup focuses on Asia. The software can use any company's financial data to trace the supply chain and calculate carbon tracking, which is used to make regulatory disclosures and suggest carbon offsets.

LunaJoy: Precision mental health for women

LunaJoy helped women obtain mental health support throughout life. The platform combines data science to create a tailored experience, allowing women to access psychotherapy, medication management, genetic testing, and health coaching.

Posh: Automated EV battery recycling

Posh attempts to solve one of the EV industry's largest logistical difficulties. Millions of EV batteries will need to be decommissioned in the next decade, and their precious metals and residual capacity will go unused for some time. Posh offers automated, scalable lithium battery disassembly, making EV battery recycling more viable.

Unai: VR headset with 5x higher resolution

Unai stands apart from metaverse companies. Its VR headgear has five times the resolution of existing options and emphasizes human expression and interaction in a remote world. Maxim Perumal's method of latency reduction powers current VR headsets.

Palitronica: Physical infrastructure cybersecurity

Palitronica blends cutting-edge hardware and software to produce networked electronic systems that support crucial physical and supply chain infrastructure. The startup's objective is to build solutions that defend national security and key infrastructure from cybersecurity threats.

Reality Defender: Deepfake detection

Reality Defender alerts firms to bogus users and changed audio, video, and image files. Reality Deference's API and web app score material in real time to prevent fraud, improve content moderation, and detect deception.

Micro Meat: Infrastructure for the manufacture of cell-cultured meat

MicroMeat promotes sustainable meat production. The company has created technologies to scale up bioreactor-grown meat muscle tissue from animal cells. Their goal is to scale up cultured meat manufacturing so cultivated meat products can be brought to market feasibly and swiftly, boosting worldwide meat consumption.

Fleetzero: Electric cargo ships

This startup's battery technology will make cargo ships more sustainable and profitable. Fleetzero's electric cargo ships have five times larger profit margins than fossil fuel ships. Fleetzeros' founder has marine engineering, ship operations, and enterprise sales and business experience.

University entrepreneurship is like a Willy Wonka Factory of ideas. Classes, roommates, discussions, and the cafeteria all inspire new ideas. I've seen people establish a business without knowing its roots.

Chicken or egg? On my mind: I've asked university founders around the world whether the problem or solution came first.

The Problem

One African team I met started with the “instant noodles” problem in their academic ecosystem. Many of us have had money issues in college, which may have led to poor nutritional choices.

Many university students in a war-torn country ate quick noodles or pasta for dinner.

Noodles required heat, water, and preparation in the boarding house. Unreliable power from one hot plate per blue moon. What's healthier, easier, and tastier than sodium-filled instant pots?

BOOM. They were fixing that. East African kids need affordable, nutritious food.

This is a real difficulty the founders faced every day with hundreds of comrades.

This sparked their serendipitous entrepreneurial journey and became their business's cornerstone.

The Solution

I asked a UK team about their company idea. They said the solution fascinated them.

The crew was fiddling with social media algorithms. Why are some people more popular? They were studying platforms and social networks, which offered a way for them.

Solving a problem? Yes. Long nights of university research lead them to it. Is this like world hunger? Social media influencers confront this difficulty regularly.

It made me ponder something. Is there a correct response?

In my heart, yes, but in my head…maybe?

I believe you should lead with empathy and embrace the problem, not the solution. Big or small, businesses should solve problems. This should be your focus. This is especially true when building a social company with an audience in mind.

Philosophically, invention and innovation are occasionally accidental. Also not penalized. Think about bugs and the creation of Velcro, or the inception of Teflon. They tackle difficulties we overlook. The route to the problem may look different, but there is a path there.

There's no golden ticket to the Chicken-Egg debate, but I'll keep looking this summer.

11 science-backed ways to improve health, happiness, healing, relaxation, and mental clarity.

Vagus nerve is the main parasympathetic nervous system component.

It helps us rest and digest by slowing and stabilizing a resting heart rate, slowing and stabilizing the breath, promoting digestion, improving recovery and healing times, producing saliva, releasing endorphins and hormones like dopamine, oxytocin, and serotonin, and boosting the immune, digestive, and cardiovascular systems.

The vagus nerve sends anti-inflammatory signals to other parts of the body and is located behind the tongue, in the throat, neck, heart, lungs, abdomen, and brainstem.

Vagus means wandering in Latin. So, it's bold.

Here are 11 proven ways to boost health, happiness, and the vagus nerve.

1. Extend

“Yoga stimulates different nerves in your body, especially the vagus nerve that carries information from the brain to most of the body’s major organs, slows everything down and allows self-regulation. It’s the nerve that is associated with the parasympathetic system and emotions like love, joy, and compassion.” — Deepak Chopra

Stretching doesn't require a yoga background.

Listen to your body and ease into simple poses. This connects the mind and body.

If you're new to yoga or don't have access to an in-person class, try Yoga with Adrienne. Over 600 YouTube videos give her plenty of material.

2. Inhale

Because inhaling and exhaling activate the autonomic nervous system, we can breathe to relax.

Exhaling activates the parasympathetic nervous system (rest and digest). One inhales stress, the other exhales it.

So, faster or more intense breathing increases stress. Slower breathing relaxes us.

Breathe slowly, smoothly, and less.

Rhythmic breathing helps me relax.

What to do is as follows:

1. Take 4 smooth, forceless nose breaths.

2. Exhale smoothly and forcefully for 4 seconds

3. Don't pause at the inhale or exhale.

4. Continue for 5 minutes/40 breaths

5. Hold your breath as long as comfortable.

6. Breathe normally.

If four seconds is too long, try breathing in and out for two seconds, or in and out for three seconds, until your breath naturally relaxes. Once calmer, extend your breath.

Any consistent rhythm without force is good. Your heart will follow your lead and become coherent.

3. Chant/Hum

Singing, chanting, or humming activate the vagus nerve through the back of the throat.

Humming emits nitric oxide.

Nitric oxide improves blood circulation, blood flow, heart health, and blood pressure.

Antiviral, antibacterial, anti-inflammatory, antioxidant, and antimicrobial properties kill viruses and bacteria in the nose and throat.

Gargling water stimulates the vagus nerve.

Simple ways to heal, boost energy, and boost mood are often the healthiest. They're free and can be done anywhere.

4. Have more fun

Laughing stimulates the throat muscles, activating the vagus nerve. What's not to like? It releases dopamine.

Take time to enjoy life. Maybe it's a book, podcast, movie, socializing with friends, or laughing yoga.

Follow your bliss, as Joseph Campbell says.

Laugh at yourself

Actually. Really.

Gagging activates vagus nerve-connected muscles. Some doctors use the gag reflex to test the vagus nerve.

Grossness isn't required. While brushing, gag quickly. My girlfriend's brother always does it.

I'm done brushing when I gag, he says.

6. Take in the outdoors

Nature relaxes body and mind. Better if you can walk barefoot.

Earthing is associated with hippies dancing in daisies.

Science now supports hippies.

7. Enter some chilly water.

The diving reflex activates the vagus nerve when exposed to cold water.

The diving reflex involves holding your breath in cold water. Cold showers work best.

Within minutes of being in cold water, parasympathetic nervous system activity, which calms the body, increases.

8. Workout

Exercise increases dopamine, blood circulation, and breathing. So we feel energized, calm, and well-rested.

After resting, the parasympathetic nervous system engages.

It's worth waiting for, though.

9. Play music with brainwaves

Brainwave music harmonizes brainwave activity, boosts productivity and mental clarity, and promotes peace and relaxation by stimulating the vagus nerve.

Simply play a song.

My favorite.

10. Make gentle eyes

Eyes, like breath, often reflect inner state. Sharp, dilated, focused eyes indicate alertness.

Soft, open eyes reflect relaxation and ease. Soft eyes relax the nervous system.

This practice reduces stress, anxiety, and body tension. It's a quick and effective way to enter a calm, peaceful state.

Wild animals can be hunted one minute and graze the next.

Put it into action:

Relax while seated.

Gaze at a distant object

Use peripheral vision while looking straight ahead

Without moving your eyes, look up and down. Connect side spaces to your vision.

Focus on everything as your eyes soften.

Keep breathing

Stay as long as you like

11. Be intimate

We kiss, moan, and breathe deeper during love. We get dopamine, oxytocin, serotonin, and vagus nerve stimulation.

Why not?

To sum up

Here are 11 vagus nerve resets:

1. Stretch

2. Breathe

3. Hum/Chant

4. More humor

5. Amuse yourself

6. Spend time outdoors

7. Leap into chilly water

8. Exercise

9. Play music with brainwaves.

10. Make gentle eyes.

11. Be intimate

If these words have inspired you, try my favorite breathwork technique. Combining breathing, chanting, and brainwave music. Win-win-win :)

Decentralizing Web3's soul

Our tech must reflect our non-transactional connections. Web3 arose from a lack of social links. It must strengthen these linkages to get widespread adoption. Soulbound NFTs help.

This NFT creates digital proofs of our social ties. It embodies G. Simmel's idea of identity, in which individuality emerges from social groups, just as social groups evolve from people.

It's multipurpose. First, gather online our distinctive social features. Second, highlight and categorize social relationships between entities and people to create a spiderweb of networks.

1. 🌐 Reducing online manipulation: Only socially rich or respectable crypto wallets can participate in projects, ensuring that no one can create several wallets to influence decentralized project governance.

2. 🤝 Improving social links: Some sectors of society lack social context. Racism, sexism, and homophobia do that. Public wallets can help identify and connect distinct social groupings.

3. 👩‍❤️‍💋‍👨 Increasing pluralism: Soulbound tokens can ensure that socially connected wallets have less voting power online to increase pluralism. We can also overweight a minority of numerous voices.

4. 💰Making more informed decisions: Taking out an insurance policy requires a life review. Why not loans? Character isn't limited by income, and many people need a chance.

5. 🎶 Finding a community: Soulbound tokens are accessible to everyone. This means we can find people who are like us but also different. This is probably rare among your friends and family.

NFTs are dangerous, and I don't like them. Social credit score, privacy, lost wallet. We must stay informed and keep talking to innovators.

E. Glen Weyl, Puja Ohlhaver and Vitalik Buterin get all the credit for these ideas, having written the very accessible white paper “Decentralized Society: Finding Web3’s Soul”.