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Ukrainian officials are helping five countries in the Middle East and Gulf region counter attacks on their territory by Iranian drones, while the United States and European countries are among others who have requested support, Ukrainian President Volodymyr Zelenskyy said Friday.

Ukraine is also looking into whether it can have a role in restoring security in the Strait of Hormuz amid the Iran war, he said.

Ukraine has become one of the world’s leading producers of cutting-edge, battle-tested drone interceptors that are cheap and effective. They play a key part in its defense against Russia’s more than 4-year-old full-scale invasion.

“Our teams are already working with five countries on countering (Iran’s) ‘Shahed’ drones — we have provided expert assessments and are helping build a defense system,” Zelenskyy said on X.

Zelenskyy has previously said he hoped to provide expertise to Arab Gulf countries targeted by Iranian Shahed drones, versions of which are heavily used by Moscow’s invading forces, in exchange for advanced air defense missiles that Ukraine needs to counter devastating Russian aerial attacks. Kyiv fears it will get fewer of the sophisticated missiles it needs to fend off the Russian strikes as the Iran war burns through stockpiles.

Ukrainian expertise helps protect civilian and critical infrastructure

Rustem Umerov, the head of Ukraine’s National Security and Defense Council who led a delegation to the Middle East and Gulf this week, said that Ukraine has deployed interceptor units there to help protect civilian and critical infrastructure and is working to expand that protection.

He said on the Telegram messaging app that Ukrainian military specialists are operating in the United Arab Emirates, Saudi Arabia, Qatar, Kuwait and Jordan.

Ukraine is assessing further steps for long-term security cooperation with each of those countries, Umerov said.

The U.S. has asked for expert support for their military personnel in two areas of the region, Zelenskyy said, adding that Kyiv is also reviewing requests from European partners whose forces are based in the region.

The relationship between Washington and Kyiv on drone cooperation has been unclear.

Zelenskyy said last week that Ukraine was awaiting White House approval for an agreement on drone production. But a day later Trump spurned Ukraine’s offer of assistance, telling the “Brian Kilmeade Show” on Fox News Radio: “No, we don’t need their help on drone defense.”

Ukraine looks to resume talks with US, Russia

Zelenskyy said late Thursday he has sent an official delegation to the United States in a bid to move forward suspended U.S.-brokered talks on ending Russia’s invasion.

The trilateral talks, which have yet to produce any breakthrough on key issues, have been on ice while the Iran war has dominated international attention.

The White House did not confirm any meeting with the Ukrainian delegation.

A senior Kremlin official indicated Friday that a new round of U.S.-mediated negotiations between Moscow and Kyiv will likely take place soon.

“The pause is temporary, we hope it’s temporary regarding the continuation of the trilateral format,” he said.

Western European officials have over the past year repeatedly accused Russian President Vladimir Putin of dragging his feet in negotiations while he tries to press his bigger army’s battlefield initiative and capture more Ukrainian land. Russian forces hold nearly 20% of Ukraine.

Middle East conflict impacts Russia-Ukraine war

The latest conflict in the Middle East that began Feb. 28 with Israeli and U.S. strikes on Iran has diverted international attention from Ukraine’s plight.

At the same time, Russia is getting a financial windfall from a temporary U.S. waiver on oil sanctions while Ukraine is desperately short of cash and still waiting for a 90-billion-euro ($103 billion) loan promised by the European Union.

Putin is widely expected to launch new offensives as the weather in Ukraine improves, piling further pressure on Kyiv.

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Associated Press writer Michelle Price in Washington contributed to this report.

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The White House on Friday released its framework for how it wishes Congress will address the issue of artificial intelligence.

The legislative blueprint, released on its website, outlines a half-dozen guiding principles for lawmakers to keep in mind when developing policies governing artificial intelligence. Those areas include: protecting children and empowering parents; safeguarding and strengthening American communities; respecting intellectual property rights, preventing censorship and protecting free speech, enabling innovation and ensuring American AI dominance, and educating Americans and developing an AI-ready workforce.

“The Trump Administration is committed to winning the AI race to usher in a new era of human flourishing, economic competitiveness, and national security for the American people,” the White House said in announcing its framework. “Achieving these goals requires a commonsense national policy framework that both enables American industry to innovate and thrive and ensures that all Americans benefit from this technological revolution.”

The White House said “strong federal leadership” is needed to make sure the public can trust how artificial intelligence is being used in their lives.

Members of Congress from both parties, as well as civil liberties and consumer rights groups, have pushed for more regulations on AI, saying there is not enough oversight for the powerful technology. President Donald Trump signed an executive order in December to block states from crafting their own regulations, arguing that a patchwork of rules would hurt growth in the sector.

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Some of the most valuable private companies in the world right now have a problem that has nothing to do with their product, their team, or their market. They have too many investors, too many competing agendas, and a cap table — the record of who owns what and under what terms — that has become so layered with complexity that it is actively preventing them from moving forward. Call it cap table gridlock: the condition where a company’s ownership structure becomes the constraint on its growth, rather than capital itself.

Cap table gridlock isn’t a new concept. Founders have always had to balance investor expectations, dilution, and governance. What is new is how pronounced the problem has become, driven by three structural shifts: the concentration of venture capital into fewer, larger companies; the dominance of mega-rounds; and the continued extension of private-company lifecycles as IPO and M&A timelines stretch.

Recent data from Crunchbase underscores this reality. In 2025, a small handful of AI companies raised an outsized share of total venture dollars, while a significant majority of capital flowed into $100 million-plus rounds. AI alone accounted for nearly half of global venture funding. The result is a late-stage ecosystem defined less by broad participation and more by scale, concentration, and complexity.

For founders, that complexity shows up most acutely on the cap table.

Large startups today often carry multiple classes of preferred equity, layered liquidation preferences, bespoke investor rights, and shareholders with very different time horizons. Some investors are underwriting long-term category dominance. Others are seeking liquidity. Still others are managing portfolio exposure after years of extended private markets. When companies stay private longer — as many are choosing or being forced to do — those competing incentives compound.

The practical consequence is gridlock. Companies still need capital to grow and invest — but raising traditional equity can reopen valuation debates that no longer reflect operating fundamentals, trigger dilution that disproportionately impacts certain stakeholders, and intensify misalignment among investors who agree on the company’s promise but disagree on timing, structure, or risk. What once might have been an uncomfortable board conversation becomes a strategic impasse.

In some cases, that impasse goes beyond financing. A single shareholder or class of shares may hold blocking rights that can delay or prevent a sale at what management, the board, and the majority of investors view as an optimal time. When incentives diverge, governance provisions designed to protect stakeholders can instead constrain strategic flexibility. Gridlock stops being a financing problem and becomes an exit problem.

This dynamic is particularly visible among large, capital-intensive companies. These businesses require enormous upfront investment, often well ahead of predictable revenue. They also command valuations that make repricing difficult without signaling weakness or inviting unnecessary scrutiny. As IPOs are delayed and private markets absorb more of the growth lifecycle, founders are being asked to solve a problem that neither traditional venture equity nor private debt were designed to address on their own.

Structured equity — financing that sits between traditional venture equity and straight debt, often with flexible terms designed to avoid repricing the entire equity stack — is gaining attention because it offers flexibility in a market where flexibility is increasingly scarce. When designed thoughtfully, it can provide growth or bridge financing without forcing a wholesale repricing of existing equity, helping companies extend runway, fund expansion, or manage liquidity needs while preserving alignment across stakeholders.

The capital markets founders operate in today are structurally different from those of 2018 or even 2021 — capital is concentrating into fewer companies, mega-rounds are layering complexity onto cap tables, and the path to public markets is no longer linear or time-bound. The tools designed for faster IPO cycles and less concentrated markets are not fit for purpose in a world where private companies routinely remain private for a decade or more.

Some might argue that companies should simply raise equity at lower valuations, tighten spending, or wait for public markets to reopen. In some cases, that may be the right answer. But for many large startups, those options carry real tradeoffs — sacrificing momentum in winner-take-most markets, destabilizing governance at critical moments, or deferring necessary investment in the hope that timing improves.

The more interesting question is not whether structured equity replaces traditional venture capital — it doesn’t — but whether founders have access to a broader set of capital strategies that reflect the realities of modern growth companies.

Cap table gridlock is emerging as one of the defining challenges for unicorns in 2026 precisely because it sits at the intersection of success and constraint. These are not struggling businesses — they are often category leaders with strong demand, ambitious roadmaps, and long runways ahead. But their scale and longevity in private markets have introduced frictions that founders must now actively manage.

As capital continues to concentrate and private timelines extend, those frictions will only become more common. The founders who navigate this era successfully will be the ones who treat capital structure as a strategic tool — one that requires as much deliberate thought as product, hiring, or go-to-market. The cap table isn’t just a financial document. In 2026, it’s a leadership challenge.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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Good morning. In today’s Fortune:

• In Iran, the likely next phase is a ground war—troops, ships, jets, and helicopters are on their way, as the White House declined to rule out “boots on the ground.” The goal will be to reopen the Strait of Hormuz. We’ve got a map of the safe route through Hormuz (though those ships will pay a steep fee).
• Oil’s “demand destruction”: The price of oil eased but remains above $100. Stock traders did not celebrate, and U.S. futures were in negative territory this morning. Analysts are worried that sustained high oil prices threaten “demand destruction,” where certain industries simply cease to function—and there are signs of that in Asia already.
• Shock as the founder of Supermicro was arrested in a chip-smuggling probe. 
• The French really are thinner than the rest of us.
• Fetch my clubs! Are you really a Fortune 500 CEO if you don’t have a country club membership?

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Good morning. CFOs of public companies may soon need to rethink the cadence of financial reporting—and everything that comes with it.

The Securities and Exchange Commission is reportedly preparing a proposal that could allow U.S. public companies to report financial results semiannually instead of quarterly, with the agency expected to release the measure as soon as April, according to The Wall Street Journal. It would make quarterly filings optional rather than mandatory, though it has not yet been finalized or adopted.

I had a conversation with J. Eric Johnson, partner and co-chair of the Public Company Advisory Practice at Winston & Strawn, who told me that the topic is already generating debate among practitioners. “That’s actually one of the first things that comes up,” Johnson said, noting that his firm discussed the issue at a recent internal corporate luncheon.

Questions he’s fielding: What would an investor relations strategy look like? How do you maintain transparency? How do you stay in front of your investor base, telling your story, getting out in front of them, and continuing enthusiasm around your stock?

For over 50 years, quarterly earnings have given companies a structured moment to shape their narrative. Under semiannual reporting, that cadence disappears, Johnson said.

“Yes, some companies may save money,” he said. “They may save time. But you’re going to have to rethink a lot of things.” He continued, “The market participants, the investors, are going to demand information in some form or fashion.”

Johnson also raised concerns around Regulation FD, which prohibits selective disclosure. Under the current cycle, executives can speak more freely because financial results are fresh or imminent.

He added that semiannual reporting could strain board oversight. Audit committees are used to quarterly reviews with management and auditors. Removing that rhythm creates a governance gap, likely requiring informal quarterly check-ins—eroding cost savings. “Yeah, we didn’t print a 10-Q, but we’re still doing a lot of heavy lifting in the background.”

There could also be capital markets challenges, he said. Underwriters typically require very recent financial data, and a six-month cycle could leave information stale.

Shivaram Rajgopal, an accounting professor at Columbia Business School, doesn’t view the shift as beneficial. “It will save trivial compliance costs in the short run but lead to more demands on the IR groups for updates,” he said. “I suspect most well-followed companies will file quarterly statements voluntarily anyway.”

Smaller firms, however, may not. “In the case of smaller firms, insider trading might go up, and volatility in the stock will likely also go up,” Rajgopal said. “Surprises or sharp swings in stock prices will become more common.”

Johnson also warned of increased volatility. Less frequent reporting means negative trends could compound before disclosure.

“We had a 5% decline in revenue over three months, but now, when we talk about it at six months, it’s actually 10%,” Johnson said.

Rajgopal shared this anecdote: “I have heard a prominent board member say the following: ‘The market pays you 20-25 years of your earnings today (via the price-earnings ratio).’”

“And we hesitate to supply the market with quarterly data?” he continued, “That’s odd. Imagine hiring an employee and paying them 25 years of their annual compensation. How closely are you likely to monitor that employee? Just once in six months?”

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

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Pentium was once one of the most recognized technology brands in the world. Scion was Toyota’s most successful attempt to reach a new generation of buyers.

Neither failed because of a bad launch, a weak product, or a flawed strategy. Both were killed by something far more insidious: a long sequence of individually rational decisions that nobody stopped to question. In both cases, the organizations involved misunderstood the same fundamental principle — brands do not fail because they are poorly conceived. They fail because their meaning is not actively managed.

Pentium: When a Category Brand Becomes a Commodity

When Intel introduced Pentium in 1993, it solved a structural branding problem few technology companies had cracked: how to create consumer preference for an invisible component. Microprocessors had been defined by technical codes — 386, 486 — that carried engineering meaning but little emotional or commercial power. Pentium changed that.

The results were immediate and dramatic. Intel’s revenues grew from $8.8 billion in 1993 to more than $20 billion by 1996, with net income reaching $5.16 billion. Backed by the Intel Inside campaign — which would ultimately account for billions in cooperative advertising spend — Pentium transformed a component into a consumer signal of performance and reliability. By the late 1990s, it had become one of the most recognized technology brands in the world.

Pentium worked because it meant something specific: premium computing power from Intel. That clarity allowed Intel to command price premiums and shift competition away from raw specifications toward brand trust — an extraordinary achievement in a component category.

The erosion did not come from a single mistake. It came from a sequence of understandable decisions. As competitive pressure increased, particularly from AMD, Intel responded not by defending Pentium’s meaning, but by stretching its reach. The name expanded across multiple performance tiers and product generations: Pentium Pro, Pentium II, III, 4, M, D, Dual-Core. At least seven distinct “Pentiums” entered the market over thirteen years. What had once been a precise signal became a broad label. Over time, consumers could no longer tell what “Pentium” guaranteed, or why one Pentium mattered more than another.

This is what might be called vertical erosion — the systematic dilution of a brand through downward extension. Each new tier was individually rational. Collectively, they dismantled the brand’s meaning from the inside out.

The inflection point came in 2006, when Intel introduced the Core brand and repositioned performance leadership under a new name. Pentium, once synonymous with “best,” was implicitly redefined as “good enough.” It continued to sell, but primarily in price-sensitive segments. Its role shifted from value creation to volume maintenance.

By the time Pentium was formally retired in 2023 and replaced by the generic label “Intel Processor,” the brand’s meaning had already collapsed. Thirty years from one of the most recognized technology brands in the world to a category descriptor. Pentium didn’t lose to a competitor. It lost to itself — one incremental extension at a time.

Scion: When Strategic Intent Is Lost Through Accumulation

Scion was created to solve a different but equally clear strategic problem for Toyota: how to reach younger, first-time buyers without diluting Toyota’s core brand or undermining Lexus’s premium position. The answer was a distinct brand with its own voice, retail experience, and cultural posture.

At launch in 2003, Scion was sharply defined. It stood for individuality, design-forward thinking, and accessibility. Its early lineup was intentionally limited and visually distinctive, supported by fixed-price retail (no haggling, no trim levels) and lifestyle-driven marketing. The strategy worked. By 2006, Scion was selling more than 173,000 vehicles annually in the U.S. — 70% were new Toyota buyers, and the average Scion buyer was 35 years old, compared to 54 for the typical Toyota customer.

Scion’s strength was semantic clarity — it was not simply “Toyota for young people” but a cultural counterpoint to the broader Toyota brand. The erosion, when it came, was gradual.

As Toyota’s global portfolio expanded, Scion absorbed increasing internal pressures. Product decisions optimized for coverage and volume rather than coherence. The second-generation xB — redesigned in 2008 to be larger, smoother, and more conventional — abandoned the distinctive proportions that had made the original iconic. Sales collapsed. New vehicles were added, revised, or rebadged without a clear unifying idea. By the end, most of Scion’s lineup consisted of rebranded Toyotas and partner vehicles — a Mazda here, a Subaru there — wearing a Scion badge that no longer meant anything specific.

This is a different failure mode than Pentium’s — what might be called lateral drift. Where Pentium eroded vertically through downward extension, Scion eroded horizontally through the accumulation of unrelated products and fragmented messaging. The brand didn’t stretch below its original meaning; it scattered away from it.

Meanwhile, Scion’s own customers were aging. By 2011, the average buyer was 43 — eight years older than at launch and closing in on Toyota’s core demographic. The brand built to capture youth was growing old with its original customers and failing to attract the next generation. In 2016, Toyota discontinued Scion, folding remaining models back into the Toyota lineup. From a branding perspective, the decision was the predictable outcome of accumulated ambiguity. Scion did not fail because its founding idea was flawed. It failed because no one was protecting it.

The Shared Lesson: Stewardship, Not Inception

Pentium and Scion represent two distinct modes of brand failure. Pentium suffered vertical erosion — the progressive dilution of meaning through downward extension. Scion suffered lateral drift — the dispersal of meaning through accumulated, unfocused decisions. But the underlying failure was the same: both organizations stopped treating brand meaning as a constrained asset that must be actively protected.

Both brands began with high semantic precision that created real economic value. And both gradually surrendered that clarity through well-intentioned decisions made without sufficient regard for long-term meaning. In both cases, the decisive factor was the same tension: product logic and brand logic were in direct conflict, and product logic won every time. Intel’s product team had sound reasons to launch a lower-priced Pentium. Toyota’s portfolio managers had sound reasons to add models for coverage. Each individual decision was defensible. But no one was asking the brand question: does this decision make what we stand for clearer or more confused?

Brand failure is rarely dramatic. It is managerial. It occurs not in moments of crisis, but in the accumulation of decisions where short-term product logic overrides long-term meaning.

The Ferrari Exception

The opposite pattern exists — and it’s instructive. Ferrari caps annual production at roughly 10,000 vehicles, deliberately manufacturing fewer cars than the market demands. Scarcity is inseparable from what the brand means. There is no lower-priced Ferrari, no Ferrari for the mass market. The product team does not get to override the brand. That constraint isn’t a limitation on growth — it is the source of Ferrari’s pricing power, loyalty, and a market capitalization that dwarfs competitors producing ten times the volume. Ferrari understood what Pentium and Scion eventually forgot: meaning is finite, and every decision either reinforces it or erodes it.

Implications for Leaders

These failures suggest a set of principles that are easy to state and difficult to practice:

• Brand meaning is finite. Stretch without guardrails leads to dilution — whether downward (vertical erosion) or outward (lateral drift).
• Product logic and brand logic often conflict. The most dangerous brand decisions are the ones that make perfect sense to the product team.
• Early success increases risk. A strong brand invites overuse. The better the name works, the more people inside the organization will want to borrow it.
• Confusion is more damaging than rejection. A brand that people ignore can be repositioned. A brand that people can’t place is already failing.
• The most consequential branding decisions are made long after launch. Creation gets the attention. Stewardship determines the outcome.

Brands do not fail at birth. They fail when stewardship lags strategy. There is one question worth asking in any organization with a brand worth protecting: When was the last time someone said no to a revenue-generating decision because it would blur what your brand means? If the answer doesn’t come quickly, the erosion may already be underway.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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Nvidia CEO Jensen Huang doesn’t foresee a sudden spike of AI-related layoffs, but that doesn’t mean the technology won’t drastically change the job market—or even create new roles like robot tailors.

The jobs that will be the most resistant to AI’s creeping effect will be those that consist of more than just routine tasks, Huang said during a December interview with podcast host Joe Rogan. 

“If your job is just to chop vegetables, Cuisinart’s gonna replace you,” Huang said.

On the other hand, some jobs, such as radiologists, may be safe because their role isn’t just about taking scans, but rather interpreting those images to diagnose people.

“The image studying is simply a task in service of diagnosing the disease,” he said.

Huang allowed that some jobs will indeed go away, although he stopped short of using the drastic language from others like Geoffrey Hinton, a.k.a. “the Godfather of AI” and Anthropic CEO Dario Amodei, both of whom have previously predicted massive unemployment thanks to the improvement of AI tools.

Yet, the potential AI-dominated job market Huang imagines may also add some new jobs, he theorized. This includes the possibility that there will be a newfound demand for technicians to help build and maintain future AI assistants, Huang said, but also other industries that are harder to imagine.

“You’re gonna have robot apparel, so a whole industry of—isn’t that right? Because I want my robot to look different than your robot,” Huang said. “So you’re gonna have a whole apparel industry for robots.”

The idea of AI-powered robots dominating jobs once held by humans may sound like science fiction, and yet, some of the world’s most important tech companies are already trying to make it a reality. 

At Nvidia’s GTC (GPU Technology Conference) this week, Huang said so-called “physical AI,” especially robotics, is the company’s next trillion-dollar-plus market.

Tesla CEO Elon Musk has also made the company’s Optimus robot a central tenet of its future business strategy. Musk last year predicted money will no longer exist in the future and work will be optional within the next 10 to 20 years thanks to a fully-fledged robotic workforce. In a January podcast interview with XPRIZE founder Peter Diamandis, Musk went further, predicting the cost of labor will eventually fall to zero, and claiming there was no need for people to “squirrel away” money for decades to be able to retire.

AI technology is advancing so rapidly that it already has the potential to replace millions of jobs. AI can adequately complete work equating to about 12% of U.S. jobs, according to a Massachusetts Institute of Technology (MIT) report. This represents about 151 million workers representing more than $1 trillion in pay, which is on the hook thanks to potential AI disruption, according to the study.

Even Huang’s potentially new job of AI robot clothesmaker may not last. When asked by Rogan whether robots could eventually make apparel for other robots, Huang replied: “Eventually. And then there’ll be something else.”

A version of this story originally published on Fortune.com on Dec. 6, 2025.

More on robots:

• More people will own a humanoid robot than a car by 2060, BofA predicts
• Robot dogs priced at $300,000 a piece are now guarding some of the country’s biggest data centers
• One man accidentally gained access to thousands of robot vacuums, exposing the AI cyber nightmare risk facing millions of Americans

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• In today’s CEO Daily: Diane Brady shares insights from the Fortune CEO Initiative dinner
• The big leadership story: The corporate “war room” becomes more than a metaphor
• The markets: A small rebound
• Plus: All the news and watercooler chat from Fortune.

Good morning. Three speakers took turns addressing the room at the Fortune CEO Initiative dinner in Manhattan’s Hudson Yards on Wednesday night. One was Trump’s UN Ambassador, sharing insights on the Administration’s strategy for Iran and the rest of the world. One was a Kennedy scion with a strong message for business about the next generation and leadership in the digital age. And one was a longtime diplomat and State Department official, sounding the alarm about a nation declining in ways we don’t often talk about. Together, their words were a clarion call to business leaders to look at how these trends create a need to step up and speak up.

Ambassador Mike Waltz spoke off the record to share frank insights about his prognosis for everything from Iran to the future of the UN. His perspective was in stark contrast with Richard Haass, a veteran diplomat, scholar and senior counselor with Centerview Partners who’s been a longtime critic of Trump’s policies. He pointed to two crises, in particular, that are “eroding confidence in American competence and leadership.” The first is a disdain for expertise, whether it’s scientific expertise or the policy expertise that’s guided previous presidents in making decisions such as whether to go to war. The second is the fiscal crisis as U.S. national debt this week surpassed $39 trillion. If unfunded entitlements are added, the fiscal gap is closer to $100 trillion. Said Haass: “I think we’re living on borrowed time.”

Few are more aware of that than younger Americans who are struggling to find jobs, afford homes, and see themselves in the political parties that claim to represent them. It was especially refreshing to speak with Jack Schlossberg, a Democratic congressional candidate and grandson of JFK, who told attendees that the Democrats’ “reactionary” and “anti-everything” stance has been a turnoff to many younger voters.  “The Republican Party has embraced modernity in a way the Democratic Party used to own,” he told us, later speaking of priorities like service, innovation and opportunity.

There were disagreements, some vehement, and an energy that I value at these gatherings. One takeaway for me was the high number of CEOs who start their day at around 5 a.m. (A lot) And another was the sense that opportunities to come together from different sides of the table with a shared desire to learn are rare. One CEO told me it’s hard to even get opposing sides of his family to talk these days, saying “I miss a good debate.” I agree. If you want to find out more about the CEO Initiative, click here  or reach out to my new colleague, John Pentin. 

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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Facebook, Twitter, and MySpace once promised to bring humanity closer together. They delivered something else entirely.

The screen economy that emerged around these apps at extraordinary speed optimized for attention. Time spent and daily active users were the twin metrics upon which this economy lived and died. Engagement loops got stickier and friction fell away from increasingly measurable interactions. The promises of internet-induced belonging, of social cohesion, of a new global intimacy all failed to materialize.

Instead, people retreated into their screens at such a scale that major social health organizations started sounding the alarm about a global loneliness epidemic. The World Health Organization found that 1 in 6 people worldwide experienced persistent loneliness, contributing to 870,000 deaths per year and costing governments billions in healthcare, employment, and education. Loneliness often manifests on balance sheets as absenteeism, which costs the U.S. economy alone $406 billion annually.

People are starving for the meaningful social connection they haven’t found online, and now they’re willing to pay. That hunger is quietly giving rise to a brand new market — and a generation of startups racing to serve it.

How social isolation created a new demand 

Humans are social animals. We’re biologically wired for social cohesion, which has been a matter of life or death since the days of hunting woolly mammoths and sleeping in caves. As our species marched forward, we built this cohesion into institutions: schools, religious communities, trade associations, sports clubs, civic organizations, even entire nations. Multigeneration families living together were the norm and  every city was dotted with bars and cafés for informal gatherings.

When such institutions enter a protracted decline, the desire for community remains. Enter the IRL economy, which I loosely define as an industry that deliberately facilitates in-person belonging. The end goal of all these businesses is to get people offline, together. How a given business goes about doing it is somewhat secondary.

The first phase of this economy arrived in the form of city-specific meet-up apps. Meetup, arguably the most popular of these apps, actually predates most social media platforms, having been initially founded to bring New Yorkers together in the wake of 9/11. Post-Facebook, so to speak, these platforms proliferated, and Meetup eventually proved so successful that WeWork bought it for $200 million in 2017. New startups meanwhile coordinated curated dinners, coworking spaces, running clubs, and shared activities. At WeRoad, we came to it through travel.

We organize trips for small groups of people who do not know each other before departure, specifically targeting young adults in their 20s and 30s. Wherever our travelers go, the base product is the same: guaranteed connection with like-minded people. We saw solo travel become a bona fide phenomenon and we figured many solo travelers still want to meet others along the way. We offered them a way to solo travel together.

It worked. When you give people the chance to rebuild social scaffolding, they will take it.

The economics of the new social scaffolding

Real-world participation has not disappeared. It has, however, slipped through the cracks of an atomized world. In dismantling social scaffolding through the decline of third spaces, real-world participation became difficult to access spontaneously. Going out was no longer a surefire way to meet someone, and the dating apps that emerged within the attention economy didn’t guarantee meaningful connections either.

IRL economy businesses sell that structure. We’re selling context more than a single, easily defined product. We commercialized travel at WeRoad, but we’re actually serving a different need. If we didn’t exist, the solo travelers who use us would still go all over the world. What they wouldn’t necessarily get is the connection we offer. That’s what they’re paying for, more than any specific trip to Mexico or Morocco or Indonesia.

The real product is always connection. We achieve it through structured immersion: 15 strangers together for ten days, away from their routines and homes. Introduce shared logistics, a little unpredictability, and the mild discomfort inherent to being in an unfamiliar place. Titles fade, social bubbles soften, interaction is a matter of course.

There’s basic economics in play, too. Real-world connection feels scarce and scarcity drives demand and increases value. The global travel and experience economy is already valued at over $1 trillion. IRL businesses are meeting that demand by contextualizing real-world connection in abundant, active economic sectors—not just through travel, but also dining out (a global industry valued at $3.9 trillion) and live music (valued at $38.5 billion). But since belonging doesn’t operate like behavioral metrics, its economic value will always be harder to measure than in the attention economy.

It’s too early for formal valuations of the IRL economy. What we do know is that VC investment in consumer startups, which includes IRL business, rose 25% between 2023 and the end of 2024. We can also point to funds like the Jägermeister-backed Best Nights VC, which specifically invests in startups dedicated to nightlife and going out together. And Tinder is now beta testing an in-person events tab offering pottery classes, raves, and bowling nights. Something big is happening here.

Friction-maxxing and mass atomization

In 2026, we’re seeing a new trend emerge: friction-maxxing.

Friction-maxxing is the deliberate rejection of seamless convenience — the transactional optimization that virtually every consumer-facing company has ruthlessly pursued for a decade. You order dinner without speaking to anyone. You rent a bike by scanning a QR code. You work from home, stream on demand, and feel constantly stimulated while remaining physically alone. Friction-maxxing refuses that bargain.

The friction-maxxers, however, need somewhere to go to find the connection they seek, and this is where the IRL economy comes in.

None of this is precisely new. Although social atomization exploded in the age of social media, it had already begun to take hold in the wake of the Industrial Revolution. Family members moved away from one another. Professional environments became increasingly tenuous as places to build community, despite colleagues being the only built-in social circle for many young professionals. Traditional community structures continued to decline. Digital communication emerged as the default, a development accelerated by the pandemic. In other words, we’ve been headed this way for a long time. 

The IRL economy is still emerging, but the demand behind it extends far beyond the 1 in 6 people experiencing persistent loneliness. The friction-maxxers aren’t just rejecting their phones — they’re signaling that the next trillion-dollar consumer market won’t be built on a screen.

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