Which Industries Have the Strongest Tailwinds — and Which Are Struggling
A founder's job is to build something people want. But there's another job lurking underneath: building it in a sector where the wind is at your back.
Not all industries are made equal right now. Some are riding a wave of policy support, capital inflow, and structural tailwinds that make the founder's path smoother. Others are fighting upstream against aging infrastructure, regulatory headwinds, or a market that has already decided on incumbents. The difference in difficulty is not subtle.
We think about this a lot at Oncor, because the sector you choose shapes the constraints you'll face. A brilliant founder in a struggling sector can still build something valuable—but they'll have to build harder, fund longer, and convince more skeptics. A competent founder in a sector with strong tailwinds can move faster and raise easier capital. This isn't fair. But it's real.
The sectors with real tailwinds right now
Semiconductors and chip design. India has decided this matters. The PLI scheme, the ISRO mandate to use Indian chips, the policy push toward fabless design and semiconductor self-sufficiency—this is not accidental. There is now real capital, real demand, and real government support flowing into semiconductor startups in a way that didn't exist five years ago. A fabless chip company with a real customer and a credible tape-out plan can raise money today. Five years ago, they would have been told to "come back when you have revenue." The tailwind here is policy-driven and structural. It will last.
Deep tech in critical infrastructure. The energy transition, water systems, advanced manufacturing—these are sectors where the capital allocation is shifting fast. Not just venture capital, but also institutional capital, development finance, and strategic buyers are now writing checks for hard-tech solutions that solve real infrastructure problems. A startup building cost-down solutions in renewables, in grid modernization, or in industrial decarbonization is riding a tailwind that comes from multiple directions: policy, capital, customer demand, and the existential requirement for energy independence.
AI applied to domain problems. There's a difference between "an AI startup" and "a company using AI to solve a specific industry problem." The former is struggling—there are too many of them, the economics don't work, and every large company is now building its own. But the latter, a company that uses proprietary data and AI to solve a problem in semiconductors, energy, finance, or biotech, is riding a strong tailwind. The tailwind here comes from the explosion of AI capability, from the scarcity of domain expertise, and from the fact that large companies still don't move as fast as startups.
Space and satellite infrastructure. India's ISRO roadmap is public, and it is ambitious. The private space sector is no longer a moonshot—it's becoming infrastructure. Manufacturing and operations are moving to India. A company building components, launch services, or ground infrastructure for India's space ambitions is riding a government-enabled tailwind that will last for years.
Renewable energy, specifically manufacturing and installation. Not the pure generation play, but the machinery and systems that make renewable energy cheaper and faster to deploy. The cost curve on renewable energy manufacturing in India is still moving down, and there is capital and demand waiting for companies that can accelerate that curve further. A company building better solar panels, better installation systems, or better grid-integration software is riding this tailwind.
The sectors that are stalling
Generic SaaS for emerging markets. The venture capital playbook for "build B2B SaaS, sell to India/Southeast Asia" is exhausted. The multiples have collapsed, the TAM is smaller than the numbers on the pitch deck, and there are already five competitors for every possible use case. A founder building generic SaaS in India is not riding a tailwind—they're swimming against one.
Services businesses with a software wrapper. Staff augmentation, consulting, managed services, anything that disguises what is fundamentally a labor arbitrage play as a software business. These are not broken businesses, but they're not capital-efficient, and they don't have venture-scale returns. The capital available for these businesses has dried up, and for good reason.
Consumer social and content platforms. The platform wars have winners—Meta, Google, TikTok—and the opportunity cost for new entrants is now very high. A consumer startup is fighting against both incumbents and the fact that every second of attention is already spoken for. Unless you have a genuinely different insight into social behavior or a unique community, you're not riding a tailwind here.
Fintech for basic payments and lending. The space is crowded, the unit economics are hard, and the regulatory risk is real. A payment app in 2026 is not a new idea. Unless you're solving a genuinely different problem (like payments across borders, or lending to a specific underserved segment), you're not riding the tailwind—you're in a category where the tailwind has stopped and the head winds are beginning.
Real estate tech and property management software. The sector is mature, the margins are thin, and the consolidation is nearly complete. A startup in this space is fighting against larger, entrenched players and a market that has already optimized for efficiency. This is not a tailwind sector.
How to think about this as a founder
The difference between a tailwind sector and a headwind sector is real, but it's not deterministic. A strong founder can still build a massive company in a headwind sector—they'll just have to earn it. But the smarter choice, when you have it, is to pick a sector where the structural forces are working with you, not against you.
Here are the questions to ask:
Is there policy support? Policy is slow, but it's durable. If the government has decided your sector matters—as it has with semiconductors, with renewable energy, with space—that creates a long-term tailwind.
Is capital flowing into the sector? Look at the last 12 months of funding announcements. Is your sector getting capital, or is it getting talent and attention but no dollars? Attention without capital is a headwind.
Is there genuine customer demand? Not "we believe there will be demand," but actual customers today who have a problem and are willing to pay to solve it. Tailwind sectors have real demand. Hype sectors have interest.
Are incumbents slow? This is the underrated one. If the large companies in your space are moving fast and consolidating the market, that's a headwind. If they're slow, asleep, or unable to move fast, that's a tailwind.
Is the cost curve moving in your favor? In semiconductors, in renewable energy, in AI—the cost curves are all moving down, and faster than expected. Building in a sector where the cost curve is moving up is a headwind. Building where it's moving down is a tailwind.
The honest bit
We are obviously biased toward sectors with tailwinds. Semiconductors, deep tech, renewable energy, AI applied to domain problems—these are our thesis sectors. We are not objective about this. But we're biased this way for a reason: because we've seen what happens when a founder picks a tailwind sector and executes well. They move faster. They raise easier. They recruit better. And they hit revenue and profitability faster than they expect.
The inverse is also true. We've seen brilliant founders in headwind sectors grind for years, raise expensively, and still struggle to hit the growth curves that venture capital expects. That's not a statement about them—it's a statement about the sectors they picked.
If you're a founder and you have a choice, pick a sector where the structural forces are with you. You'll move faster. You'll convince faster. You'll win faster. And that momentum will compound.
If you're already in a headwind sector, then you need to be that much better, that much more differentiated, and that much more efficient than founders in tailwind sectors. It's possible. It's just harder. And it's worth being honest about.