I have mixed feelings about the coming year. Usually, I’m pretty optimistic in these posts where I discuss the coming year. However, what I’m seeing and what I’m hearing from business owners and startup founders worries me. The reality on the ground is not lining up with the folks who talk in terms of billions and trillions of dollars. With the way that 2026 is looking, organizations like EntrePartners are going to be crucial to keep things moving forward.
Why am I feeling this way? It’s a combination of things that all will hit around the same time over the next year or two. Population characteristics, economic conditions, and international diplomacy all play a part in this. Artificial intelligence won’t play as large a role as some think it will – very few jobs are going to be replaced in the next year only due to AI. As I’ve discussed on the We Are All EntrePartners Substack, agentic AI may replace some career paths, but in the long run, it will make other jobs more resilient and reduce the need for burgeoning startups to hire as quickly. Generative AI will also make a small dent, but I believe that, for the most part, that technology is starting to reach its upper limit. The biggest AI companies have already swallowed up all of the organic data that’s out there, which means that new AI models will be consuming their own content.
Let’s start with population: starting January 1, the first Boomers will turn 80 and the youngest Boomers will begin to turn 65, putting the generation completely within retirement age by the end of the year. Tens of thousands of small businesses are owned by this generation, and many of them will close. Over the next few years, there will be a fundamental shift in the composition of brick-and-mortar retail in small towns and large cities. We’ve already started to see some of this with an uptick in retail vacancies since the pandemic and the death of malls across the country.
Commercial real estate has some serious issues to overcome in the next few years. The cost of operating a physical retail location becomes more of a money loser as time goes on. Employee pay must keep up with the competition and street level rent in some locations has become astronomically expensive. Brick-and-mortar retailers need to have an online presence in order to survive, and many are opting to become online-only, working through larger platforms like Amazon and TikTok. The economics for brick-and-mortar only operations don’t work anymore.
Much of the national discussion of commercial real estate has focused on office space, but I think the conversation will switch to street-level retail in the next couple of years. Smaller, well-organized business districts will be able to keep their storefronts mostly occupied. Larger cities will start to see more vacancies as rents outpace economic viability. If a business district has any sort of crime problem, either perceived or real, expect retailers to leave when leases expire. There aren’t enough vape shops and liquor stores to fill all of these gaps, and the presence of these low-quality stores will just accelerate the decline.
Tariffs are also harming some small businesses and startups. Large companies have the ability to withstand prolonged instability and price hikes from overseas suppliers – business that run on smaller margins and those just starting out don’t have this luxury. Capital expenditures are also going to be affected, especially for businesses needing to acquire equipment and supplies that aren’t manufactured in the United States. Some of the equipment that we will eventually need for the Innovation Center is nearly 50% more expensive than it was just a few years ago – some of this is due to the inflation of the past half-decade, while some of it is due to tariffs. The prices of consumable goods have also been affected by instability across the globe, both due to armed conflicts as well as trade battles.
A bit of stability in the coming year would help many of the startups and small businesses based in the Innovation Center. It’s been difficult for some of our members to plan more than a quarter or two in advance, and they’ve considered pivoting into new industries in order to ride out the storm. It’s hard to advise founders on certain topics when the details shift so often and so quickly. I end up functioning as a sounding board or a counselor rather than a true business advisor during Coworking + Accountability each Saturday morning. This isn’t fair to our members, but there’s not much I can do about it.
At a certain point, something has to give. While we are planning to lean into the AI revolution through training and education at the Innovation Center, I believe that we’re sitting on a major AI bubble driven by billions of dollars of IOUs being passed back and forth between major companies in a demented game of hot potato. The AI bubble is sitting on top of other bubbles, including a major debt bubble and the commercial real estate bubble. Most people and institutions are out of money – households are going to pull back on spending the moment assets start to decline in value, and local governments are going to have to substantially cut services in order to balance budgets in the coming years. Colleges and universities need to begin downsizing in the next year or two, as we’re already over the enrollment cliff.
2026 is going to be a painful year all around. Most of what I’m seeing and hearing is pointing toward a recession. Layoffs are going to happen, which is why organizations like EntrePartners are going to be critical in the coming year and beyond. I have a bunch of new programming planned, and some programming that launched last year is coming back again. Our Side-Gig Seminar Series, Follow-Up Weekend, and Startup Weekend Iowa City are going to help those with new and existing ideas and side businesses become independent enough to weather job disruptions in the coming months. Startup Weekend Iowa City will line up with EntreFest, which returns to downtown Iowa City this June. Coworking + Accountability and Iowa City Open Coffee will foster conversation and potential collaboration between members of our community. I’ll be continuing to publish both the Unfireable newsletter, which turns two years old in the middle of 2026, and the slightly newer We Are All EntrePartners on Substack.
Our newest project is the launch of Startup Grind Iowa, bringing a little bit of Silicon Valley to eastern and central Iowa. This program will be designed for emerging tech startups of all varieties – no franchises and minimal retail. Startups who present will be somewhere between initial founding and series A/B funding, with the audience composed both of community members and those who want to partner or help fund these endeavors. We’ll be holding Startup Grind Iowa events in Iowa City, Des Moines, and Dubuque, with events at least once a month in each city. We’re trying to differentiate this program from 1 Million Cups as being more focused on emerging technology and startups with a higher level of selectivity of presenters. Many of the recent 1MC Iowa City presenters have been life coaches and franchise owners, neither of which will qualify to present at Startup Grind.
We will also be ramping up our Kauffman FastTrac® advertising to local startups and small business owners who may feel stuck and unsure of market conditions. I hope to enroll at least five businesses in the spring cohort in both Iowa City and Des Moines, with another five at both locations in the fall. I know that the Innovation Center could handle up to ten businesses per cohort, but I’d be happy with five. We hope to work more closely with 1 Million Cups chapters across the state, as the Kauffman Foundation looks to better integrate the two programs after discussions at the 1MC/FastTrac Summit this past summer.
I would also like to onboard twenty new members at the EntrePartners Innovation Center in the next 12 months. This past week, I just onboarded an old startup friend from Denver who recently moved to Des Moines and was searching for the kind of community that we’re building at EntrePartners. We have plenty of room for solo entrepreneurs and small teams looking for more than just a place to work – we’re continuing to build a network of people who want everyone to succeed and want to bring back the kind of startup community that’s been missing from downtown Iowa City (and, I guess, missing elsewhere in the state) these past couple of years.
Education, resources, and a community of support are the basis for resilience in the coming year. The biggest challenges to building this community will be overcoming larger community incumbents. We’ll be continuing to reach out to other organizations for partnerships and new opportunities to collaborate. Unfortunately, these organizations tend to demand top billing while putting in almost no work. I think we’re well positioned to work around some of these obstacles, but we’ll never close the door to productive partnerships across the region.
I’m not completely negative on 2026. I just think that we’re facing some major headwinds over these coming months. Solidifying the support we have and growing our existing programming will be the way to help the most people in the most effective way. I don’t plan to do a lot of traveling in the coming year – my calendar is surprisingly full already with programming in eastern and central Iowa. Growth is slow but it’s still trending in the right direction. As more people catch onto what we’re doing, forward momentum will be easier to maintain. We have a solid group of friends and fans right now, and the community can only increase in size.
I truly hope that I’m wrong about the dire situation it seems we’re facing in the new year. However, it seems like we’re at some sort of breaking point as a society. The solutions are there, but it seems like nobody in power wants to solve anything. As long as things don’t break on their watch, it’s mission accomplished. Unfortunately, I think things have begun to break. The Great Depression in 1929 and the 2008 financial crisis broke slowly for months and then collapsed all of a sudden. At Iowa City Open Coffee, we’ve discussed potential scenarios where the “other shoe drops.” None of the scenarios are good.
Take what I say with a grain of salt – usually, my predictions are wrong. However, I’ve never felt this uneasy about the future. For all of our sakes, I hope things turn out well. If we haven’t talked for a while, let’s reconnect. If any of the programs we run could benefit you or someone you know, please reach out. Let’s weather 2026 together.