But this lament is nothing new or particularly exceptional to the startup world.

Q3 2022 saw the highest number of FTSE-listed companies issue profit warnings since the global financial crisis. Moreover, with inflation at 10.1% in March 2023, consumers are facing substantially higher bills including food price inflation rate of 19.2% over the last year.

With that rather gloomy backdrop to contend with, a more positive picture emerges when we flip the problem on its head. Businesses that can survive through economic downturns are notoriously successful. Microsoft was founded during the 1970s oil embargo recession, Airbnb received its Seed funding during the 2009 financial crisis and Walt Disney saw the start of the 1930s Great Depression within its first year of operations. 

In fact, it could be argued that businesses that rise to the challenges faced by consumers, positioning themselves as an ally rather than another drain on resources have a much longer projected lifespan. The ‘Adapt to Survive’ mindset is the foundation of ongoing business transformation. Making an offering indispensable to cash strapped consumers is an undeniably sensible place to position oneself in times of trouble.

In fact, the CBI reported last year that businesses founded during the pandemic could add £20.4 billion to the UK economy and, more recently, many companies (Nous, and Equiwatt to name a few) are seeking to build their own success from supporting consumers during the cost of living crisis. 

At HumanForest, we also seek to achieve these two goals in tandem; company success that genuinely benefits the end user. Our most immediate and obvious product is our shared eBike service, but behind this is a powerful digital marketing tool which allows us to pass on cost savings to our riders. 

With an objective to be (and remain) both the most affordable and sustainable micro-mobility operator, we are acutely aware of the challenges and the benefits of ensuring that we put the consumer at the heart of what we do. The eBikes must be good quality and the operations must be sustainable, but they must also be affordable to become ingrained into users' daily habits, especially given the extortionate financial pressures facing households. 

Since our inception, HumanForest’s mandate has been to give users free minutes of cycling, every day. This has been made possible by partnering with corporates (such as Nutmeg, Bloomberg, Acer, UPS and Net A Porter) who have been looking for innovative ways to approach out of home marketing. Every time a user gets on a HumanForest eBike, they receive an inapp notification from a partner company connecting their free ride to the ‘sponsor brand’.  After a recent £7mn investment into our app, the eBike rental app now includes a ‘watch to earn’ function where users can watch a short partner video in exchange for extra free minutes of cycling.

Using adtech is an interesting way to adapt and diversify. Despite forecasts that the adtech industry will be worth $1 trillion by 2030, there are question marks with regard to the power it holds over user’s data and privacy. Data collection has been thrown into the spotlight since Zuckerberg’s cringeworthy Senate appearance in 2018 and only this week Meta faced its most recent fine of €1.2 billion for EU-US data transfers. Google, the King of Data itself, has announced it will be removing third party cookies from its Chrome platform from 2024.

However, we know that large swathes of consumers (particularly younger generations) continue to value digital marketing and targeted advertisements. Facebook saw approximately 63.5 million shoppers in 2022, with that number forecast to increase to over 69 million by 2025 and 47 million by 2025 on Instagram. But it's undeniably important for users to feel they are being approached through trusted spaces where consent to connect with them is given.

With users valuing digital marketing but looking for more trusted outlets, HumanForest saw an innovation opportunity. We built a proprietary digital marketing platform within our eBike rental app in house which, despite higher costs, allowed us to create an entirely bespoke experience. Inhouse creation gave us a deeper understanding of the platform, flexibility for our partner companies and the ability to iterate and improve over time. It also allowed us, importantly, the ability to maintain data privacy and security, whilst also seamlessly integrating the adtech with our existing other internal systems and processes. Ultimately, it gave us a key differentiator from our sector peers. 

The tandem goals of building an innovative, successful and sustainable (in all definitions of the words) company, whilst also keeping costs down for users, are a hefty combination for any company, let alone those operating within a tricky economic climate. For us, the HumanForest adtech platform has been a vector for this, enriching the user experience and resulting in both corporate success and user cost savings. Whilst the current outlook for startups is mixed, those that thrive will be those who face up to the challenges and continue to innovate. By finding ways to ensure that their successes do not come at the expense of the end users but rather enrich and support their user base, companies will be able to emerge more resilient and ready to face future periods of growth.