It is an exciting time to be an entrpreneur and an investor in tech startups. The history of tech investing is a series of waves or megatrends that come one after another. Mainframes to minicomputers to PCs to client server to Internet, for example. But right now we are in the midst of a number of these megatrends all happening at the same time. There are at least four big ones going on at the same time:
– Mobile – yesterday I wrote that at least 16% of the visits to this blog are coming from mobile devices and that number is up from essentially zero six quarters ago
– Social – Facebook will have 1bn users in the next year or so
– Cloud – A third of Netflix' new subscribers are opting for the streaming only plan
– Global – companies like Skype, Facebook, Twitter, Google see upwards of 80% of their users from outside the US and these numbers are growing faster than ever
Each one of these megatrends would be an investable wave on its own. But we are in an environment when all four are crashing on the shore ata the same time. Twitter, for example, is mobile and social and global. It is the world in your pocket. And it is changing the world too.
All of this is happening in the context of a very frothy investment climate. Investors are acutely aware that this is a time of great opportunity in tech investing. Capital has come gushing into the venture capital and startup sector. Maybe it is appropriate given all the opportunity. Or maybe it is irrational exuberance. But as my friend Tom Evslin says, "nothing great has ever been built without irrational exuberance."
Investing in the midst of these megatrend crosscurrents is both exciting and challenging. And I certainly wouldn't want it any other way.
Amen——-the new Disqus @ mention functionality is going to kick ass – BIG TIME.The elastic interest graph has arrived.
I don’t get the connection of Disqus mentions and the “elastic interest graph”. What do you mean “elastic interest graph”?
We can pile/be invited into threads which we care about. Be notified via email as to updates and then can auto-disband when the discussion ends.
This is pretty cool @liad:disqus
i just figured out that they rolled out that new feature here at AVC last night
now AVC still needs to get the ‘previous post’ and ‘next post’ buttons swapped (at the end of each post, before the disqus section).nice gadgets. it’s also now clear how you can embed an image:@kenberger:disqus @kenberger:twitter
Does that really need to be fixed?
Yep.Today this page has just one arrow for ‘next post’. But that arrow’s link goes to your *previous* post (from yesterday). You haven’t yet written your next post.See most any other blog, for example: http://curbed.com/archives/…
see my reply to Fred. Previous means past. Next means future. Just like with Desperate Housewives episodes.
no, about the image embed- I remember trying to explain to Fred with thisredesign that I found that buttoning confusing…..
I have still not figured out yet. When you type a name after the @ symbol, does it have to be their Disqus name, Twitter name or what? Okay, testing. Hola @ccrystle:disqus
I would add big data, sensors, internet of things as more megatrends currently happening.
Big data will be, well… big.
We are still at the dawn of the technological revolution. There will be peaks and troughs and car crashes on the way but fundamentally the only way is up, I believe.
That is metaphor mixing of the highest order Richard. A remarkable feat. My hat is raised as high as it will go, well done!
LOL….thanks David, the scary thing is that I did it without even thinking…
Indeed. The first 3 trends are collapsing global barriers and making the world more homogeneous and harmonious which lubricates more collaboration and commerce for everybody.Let’s call it controlled exuberance?
The only way is up and what is wild is the word big that will be bandied about in the comments is something yet to happen.The power of the dev is rising if we look at doing things that complement and/or enable other devs to do more.We need to promote backing of engines that help break global barriers. I hope the folks at Twitter are doing the obvious one. If so, the communication between niches will grow into bigger niches due to automatic translation.Then the next stage of revolutions from within will be enabled.
that’s cool. how did you embed that twitter follow widget?
maybe it’s an old invention called html 🙂
actually it is a new feature disqus rolled out last night here at AVCnobody told me about it but it is awesomeyou mention someone with their twitter handle and they embed the widget automatically
@getabl:disqusthat is very cool!
@leighh:twitter oh this is fun….
Actually, there are 2 options- you can mention the Twitter name and it will link to the Twitter Intent page, or you choose the Disqus profile and it will link to the Disqus profile. Both will be visible in the auto-complete.
He’s used the new Twitter “Intent” url which shows up when you click on the new Follow+ (Twitter changed the Follow API- I know because we’ve implemented). It offers a way to find out more about the person before you follow them.Here’s yours, but am not sure how it gets embedded.http://twitter.com/intent/u… @wmoug:disqus
Ah, just type the AT with your twitter name and wait for the [email protected]:twitter
Nice William, @victusfate:twitter
But, it gets stripped out in the email.
It is this peculiar combination of megatrends that makes valuation very difficult.
A newspaper seller, who got caught up in the G20 protests was found to have been unlawfully killed by a police officer yesterday. http://www.guardian.co.uk/u…The footage that brought this to mass attention was filmed on a camera phone by an American tourist and uploaded to YouTube. 10 years ago, I’m not convinced this inquest would ever have happened.Thats’ pretty amazing.
You mean like Rodney King in 1991?
🙂 fair enough
I was being somewhat flip.If you had an amazing video you could get it aired, even 20 years ago. There’s a lot of amazing stuff up on YouTube now that has not gone viral, it’s never reached the critical mass of the right people to spread it.To me what’s amazing now is everyone has a video camera with them all the time. How many more “Rodney Kings” were witnessed but not documented? That’s what I see as really transformative.
I think another major consideration that is not being talked about enough is the social acceptance of technology as a core essential in lifestyles. We take it for granted how the world has evolved around the formation of technology. These current trends continue to support this acceptance and help it expand. Computers are now COOL, like mainstream cool. They have been disguised as phones but they are miniature computers. I think the opening scene of last weeks South Park really illustrated that. People are connected all the time. Imagine if you gave an iphone to someone 50 years ago. It was unthinkable, it was black magic. Its good to be a technology creator or investor now, well because technology adaption has become so mainstream. My Mom and Dad are on Facebook more then me for crying out loud.
computers are cool and devs are rock stars
users are fans, and VC’s are record labels?
Hey, don’t call Fred record label, he’s a nice guy 🙂
hahah ok are they the tour managers then?
VC’s are more like the drug dealers if you want to use the music scene comparison. The money is the drug and the irrationally exuberant take it like rockstars take their drugs………disregarding the downsides for all the potential upsides. :-)For some reason can’t respond to Charlie’s comment but just updating here:Charlie, what part of the fact that we’re comparing to the music industry did you not understand? 😉
@pjozefak:disqus (since I can’t answer below) so are the economics of VC just a more expensive version of drugs as described by this Steven Levitt paper ?http://www.sociology.columb…
@pjozefak:disqus doh sticking it to @ccrystle:disqus @ShanaC:disqus I’m digging the at symbol interpretation, but everyone is coming up as me when I click it.sweet embedded link goodness.
@ccrystle:disqus is just getting a fun response from me @ShanaC:disqus . This is all tongue in cheek! VC’s are never as good as drug dealers at what they do! 😉
thats not a comparison i’d be too happy with.
Not totally. Record labels allow artists to market, expand, and become bigger stars. They are selective and are focused on ROI, but that doesn’t mean their evil. Its not all negative.
the new incarnation of the label – maybe. The old one – blood sucking sucubuses.
@markslater:disqus CORRECT TERM “SUCCUBI”.ME, GRIMLOCK, STICKLER FOR SPELLING. GRAMMAR? NOT SO MUCH.
Agreed.The mainstreaming of technology has changed the world. Steve Jobs has had a lot of do with starting that boulder rolling.What’s cool about the social web and designing services and products, is that now, I never think of technology, I think of people and behaviors as the elements to be arranged in a natural order. When they line up, it works; when they don’t, keep iterating.
I talk about this a lot actually. I think its very interesting how social perception and interaction has changed in regard to technology.People used to talk about the Digital Divide being between people that have access to computers and those that do not, but I’m seeing a clear divide between people that actually use technology and those that don’t. This is particularly clear with people that choose to not be on Facebook or Twitter.I think they are missing out on being a part of society. I think its comparable to not having a telephone 20 years ago or not having a TV or radio 10 years ago.10 years ago it was unthinkable to not have a TV and I think the same can now be said about the social web.
The biggest challenge to becoming enmeshed in social media is the loss of privacy. Once you make the first step, you are in free fall.Employment decisions, litigation, relationships are all impacted by one’s perceived public persona.When you have kids you will be constantly telling them not to post drunken and unclad pictures of themselves on public sites. They will not listen.This monumental loss of privacy is in direct conflict with the fundamental rights to privacy which were a founding principle of this country.Drinking from the fire hose is not a comfortable technique for many folks.It is also very, very regional with the heartland of America being very skeptical.
I agree, privacy and data overload are defiantly concerns for some people. See my other comment in response to Peter. http://www.avc.com/a_vc/201…
so you think there is a counterculture (referencing your response to Peter) around the privacy and data overload issue?Agreed.Why is the only model for sharing personal data the public “social media” model? I would pay for a wall to protect my farflung family to take advantage of existing technology to share pictures of kids, memories of grandparents when they die. This information is of no value to anyone but us.
Is email + facebook not enough?What else are you looking for?I don’t know what the counterculture will look like yet. It could be people rejecting Facebook and Twitter in response to privacy or it could be people going “offline” in response to data overload.I see hints of user frustration in both and I have no idea how it will turn out, but I think it will be a small minority of people.
David, out of replies so here’s the answer:Firstly, everything on Facebook is public and email is just not designed for “group curation.”When your brother dies and Facebook keeps pinging you to connect with him because he’s been inactive you realize just how not personal and intrusive it is.Didn’t Facebook take off because it offered privacy and no ads when MySpace was public and had ads?
I really think we need new navigation to privacy issues.A) I think some of the social media issues is largely that small town gossip is taking a mass scale. For a lot of people, as uncofortable as small town gossip is, it is is even odder when it moves so much more quickly.B) I’m with Fred on this- we never had much privacy to begin with once the internet got created, and possibly before that (party lines???)C) I think we need a new language to discuss privacy, social networking, the media, on the individual level. EG: I do think it is a good thing when Breast Cancer survivors and suffers sit down and talk online- what should the site’s relationship be with the users, and what should drug company and other services be? Insurance? Everyone in this situation has some right to the information- the extent for each is very different
Perhaps there is a difference between personal privacy and compartmentalized social networks.I have enjoyed immensely getting to know ShanaC here on AVC but the truth of the matter is that in a more formal business setting I would be very uncomfortable having such a dialog as it would be imprudent in my view.I have never ever had a meeting w/ a single woman in my office. Old fashioned — but necessary to my duties as a CEO.So in the compartment of AVC, I am almost unguarded in my thoughts regarding privacy (of course, it is just a bit anonymous but not really) and in my personal dealings, I am quite sensitive to privacy issues.
I have to admit to being curious about why you think it would be imprudent. Let’s pretend I am flying through Austin and have to stop over for a day, and I know you are there – does locale for a discussion make a difference (aka, not in your office).Though I total respect the old fashionedness – I was brought up somewhat similarly.I guess my thoughts came up mostly because this paper passed through my indbox : http://www.brookings.edu/pa…And although we sometimes disagree, I have learned a ton from you, and have enjoyed getting to know you as well.Lastly, I’m not sure if it personal privacy and compartmentalized social networks – since I think there is probably a network of say, family, that would be under the personal privacy rubric- there seems to an element of degrees that we’re not talking about because we have yet to develop a language to talk about “new privacy”
Shana, agree with your point about needing a new language – maybe a new starting point to talk about privacy.But, the example of party lines is great. People paid a lot to get a private line and off of the party line. Also before there were cellphones, there was CB radio. And CB radio users were among the first to recognize the need for cellphones and paid big premiums.So what if the internet as we know it is in this same turning point.Funny, I just remembered I wrote about CB radios in 2009 – http://www.comradity.com/co…
I live in the heartland (Chattanooga, TN). Maybe that’s why I think about this a lot 🙂
Well said. But it’s not really a choice anymore. We all live in public. The power that comes with that leap is significant.Made me think of a post I wrote a couple of years ago after the first Facebook privacy gotcha become public (http://bit.ly/kaCAJ4).
Good read. Thanks.
I enjoyed that one then and now.
Thanks Mark.Our blogs are truly tracks of our thoughts over time. I get triggered to look back at posts especially over these resurfacing issues like privacy.This must happen to you a lot Mark as your blog is really a chronicle that your readers journey with you. And as one of your fans, it’s an interesting journey.
It would happen more often if I had a sharper memory.My current strategy is to learn faster than I forget, so far so good 🙂
why don’t we have a choice and must all live in public? If people were willing to pay for it (by the way, maybe they weren’t at one point but would see the value more today), why wouldn’t giving people a choice be a good business model?
I’m not getting what your driving at….sorry.As soon as you are online, on social nets or just searching you are putting your behavior on display. It’s more overt with a video certainly, but it’s there with every click with every cookie from every site you’ve ever visited.
Arnold, I certainly agree public is the status quo.And I understand that some people enjoy the exposure of a public life. However there are others who are more discriminating. They want the freedom to choose.Evidence: MySpace people moved to Facebook because it offered personal control – only self-appointed friends saw content.When Facebook switched the default to public we do not know how many left, opted out, or just stopped sharing. We do a lot of growth is from outside the US.
Now I’m curious.How many people think Privacy is completely dead?Let’s start a poll.
Like this post if you think Privacy is DEAD.
Like this post if you think Privacy is NOT dead.
I think there will be a small group of people that will form a counter-culture to this technology wave. Anytime something new is COOL, there is a minority that rebels against it. I haven’t really seen that yet and I’m not sure what it will look like, but I think its interesting to think about. Hopefully they will not have a great impact on the incredible innovation we are seeing today.
I think there is plenty of rebellion to technology. Not technology as a whole, but people who rebel against the iphone and buy an android phone. Or the people who rebelled against facebook and started open source social networks. I think that rebellion is something that can also drive innovation.
Wow – 80% of mainstream digital media brands’ audience is from outside the US. That makes targeting digital tactics for relevance to local culture and competition rather challenging.
these brands are social media, not traditional mediathe users customize the services and generate the targeting themselves
Ironically, those are remarkably similar words to those used by the Vendor Relationship Management and Personal Data Ecosystem folks use to describe alternatives to Social Media.As a “consumer” I’d prefer to have a choice – privacy for all my personal assets and public for personal assets I choose to share. And I would prefer to share personal assets publically with media which respect my trust and share the value of my assets. I do not think Social Media fits that description.As a marketing consultant I’d prefer media who behave like a really great party host. Someone who provides a separate venue, invites individuals who are receptive to each other and inspires great conversation “ice breakers” with a theme that is culturally relevant.
what about in between assets?
By that do you mean assets shared by two individuals, like a conversation or a business transaction?If so, then think about the real world. If we have a conversation and you want to tell someone what you learned and respect the trust I have in you, you will ask me if it’s ok if you share it or identify it as coming from me. If we do a business deal, it is very normal for a terms of the deal to include publicity and what information can be shared. The internet should execute this better than real life. First, simply a matter of checking boxes. And second performance can be tracked.
No I mean the idea that there is a section of data assets that I only want to share some of the times to specific parties.Let’s take the specific example of BankSimple or Mint. Mint has access to my financial data. In exchange, I’m supposed to make better financial decisions, and they can advertise banking third parties to me.BankSimple has a semi-similar model- they charge me a fee (well, if I had banksimple, I don’t) to use their bank service platform, in which they provide a service (even more data crunching about my finances and fun phone goodies).Let’s pretend BlueKai then decides to sit down with Mint or BankSimple and ask them for my data (not so cool) in order to help advertisers target when I spend and on what and all sorts of other goodies (a new aged credit score to be jumbled together?)I never sat down with BlueKai-yet bluekai has a vested interest in said dataset. Meanwhile so does mint and banksimple, who I did “sit down with.”If blue kai can offer me something awesome- (like an actually relevant advertisment) then it may be helpful to share the data- but not if I suddenly mysteriously get stuck with a crappy mortgage (aka, they now know too much and are manipulating the data to not my benefit)In that sense, the data is inbetween. It’s clearly personal, it is clearly useful, and those uses depend very much about your moral backbone.Edit for clarity: part of the reason I think of mint/banksimple as a party in all of this is I recognize that my data is only useful if it is compared to other people’s data. However unique I am, it’s really not that unique when you start comparing behavioral assets.
Shana, I think if a service business you have signed on with respects the trust you’ve put in them when you share info with them, then they behave the way you’d expect, no conflicts of interest.In the scenario you present below, they approach you when BlueKai offers to pay for your data to see if you want them to sell it for you. You opt-in to the specific data you want to share with a term, they are transparent about the fee they get for selling your data. And you get paid. If you also get a relevant offer and you use the money you’ve earned to buy it, everyone wins.
I think using (it may be an expansion) of the Curation term applies. Within that, IMHO, some are getting too ‘local’ in their thoughts.
In theory I like this statement – in practice i realize that technology’s limitiations and cultural limitations create some interesting juxtipositions – what we expect as a limit could be a growth in other places.EG: twitter usage in China – it’s a 140 characters, and when each character is a word, tone becomes very very different
Twitter is blocked in china. It basically doesn’t exist there
I thought numbers are low, but there are those who use it when they go above the great firewall (I mean I have seen chinese tweets)Besides, japanese tweets would have the same issue (kanji)
The great firewall. Nice one Shana!
I’m under the impression the tech savvy there leverage vpns to bypass restrictions. A network provider can’t block content or access when they don’t know where you’re going.
Nail one megatrend and you have a great company.Nail a couple of them and you have a category defining company that can ride the wave for a long time.
These Megatrends depend very deeply in high bandwith availability and new smart hardware (mobile devices, boxee’s, …) both of them at affordable prices.
I think being global and adding local thinking is the more challenging of the four: Companies usually expand globally using a strong central thinking,For example page rank in Google doesn’t work very well searching for pages in many countries because the “link structure” is very different between cultures or they lack a complex link structure like in US.Also, can we add “Data Science” as a new derived megatrend from the four?
Why wouldn’t it be independent?
If I use the page rank example I can say that it takes more resources for Google to adjust their algorithms and probably with very low ROI.We can also think in companies trying to enter countries like China with a western centric mind. The aesthetic of a UI depends on culture.
I’d agree with that
I’m particularly interested in how the Global trend will impact companies on a go forward basis. Being from Canada working both here and in the US, Global often means taking the American centric strategy, positioning and culture and applying it to “the home” country. Example, I was speaking to a big digital media company just the day who is struggling to see how the “Global” positioning fits as even the product offerings in the US (which the Global strategy is based upon) are dramatically different.While social companies likely have a leg up understanding network effects and applying a digital culture vs. a nation culture to their products and services, as they get bigger (ebay, facebook) i think this becomes more difficult. Will require a far less top down management approach that empowers and enables teams across geographies to collaborate – something that doesn’t often happen well currently.
Are Twitter and Facebook really getting 80% non-US use? Or is that maybe new-user count? Or maybe site-traffic ignoring API-traffic (for Twitter)?
I don’t have access to FB numbers and I can’t disclose twitters. But this isin the range
Just in case anyone misses- http://www.semissourian.com… Rental chain spies on PC users, suit claims- is an AP story re Aaron’s doing the spy thing based on gaining back equipment from those that skip payment.”The manager tried to repossess the computer because he mistakenly believed the Byrds hadn’t paid off their rent-to-own agreement. When Brian Byrd showed the manager a signed receipt, the manager showed Byrd a picture of Byrd using the computer — taken by the computer’s webcam.Byrd demanded to know where the picture came from, and the manager “responded that he was not supposed to disclose that Aaron’s had the photograph,” the lawsuit said.”Why in the Hell, do they need to have a camera shot of the user?DATA is the BIG thing that will move a lot of capital. It comes down to there being a lot of info the avg user doesn’t care being out there, especially if some anonymity is maintained. When you add this kind of crap to mix, it is not helpful in the bigger picture.
I think we have seen the last of the Global internet companies in the form of Google, Facebook, Skype and Twitter where they grew organically.The future is going to be filled with local versions of most technological innovations succeeding in the local markets. A local competitor will have gained significant traction in their own country by the time any US company starts to dominate the US market.If a company wants to go global in such a scenario they might have to do it through acquisitions like Groupon. And they will continue to face significant and different competition in each market. Tough scenario to build a truly global company.
I’m not sure that is true outside of china, Russia, Korea, and possiblyjapan
It is not true today but that is my prediction for the next five years. Let me also rephrase: a new global company will not be born in the app layer of the internet. For a company to be truly global they need to have significant technology innovations that are hard to reverse engineer for a few years. Thats the reason Apple with the iphone and Google with Android are global successes.I would predict the same for India and possibly Brazil. There is a significant population of Indians who got an MS in the US, have worked at startups here and returned back to India. And they are getting into the fray in a large way now. And they are well connected to the trends in the US. Combine China, India, Korea, Russia, Brazil and that is 60+% of the world’s population. I think the new global is US + Western Europe + Australia as one market, China, India, Middle East, Russia, South America as individual separate markets.Also there are huge cultural differences to marketing in India. When any of my friends suggest that we should do a startup for the Indian market, I say right away “The market is too different. I do not understand the customer while living in the US for the last 10 years. So I am not going to do that unless I am willing to go live in India for 4 or 5 years.”
To fuel that further, education is becoming much better online through screencasts, incredible documentation, free lectures, etc.
Agree 100% with that. And guys like you who blog about details, making it easy to find answers to specific problems that people have. Dont remember who wrote the blog post recently about “books are dead”, because people can find the exact thing they need by googling or by searching on stack exchange etc.
Books have taken a hit, but it’s hard to get the context without a good book. And don’t forget reading for entertainment. Our imagination is still the best visualization tool, and it’s programming language is, well, language :).
“It is an exciting time to be an entrpreneur and an investor in tech startups.”Yes, very! And the technology has gotten to the point to where the not-quite-so tech(ish) entrepreneurs (or non-coders) are now figuring out how to use the technology in these megatrends to execute on their own ideas. Don’t think we’ve seen the explosion yet, but the fuse has been lit!Stand back.
Wanting to expand these a bit to deal w/ some combinations that seem saturated (e.g. Social). It seems entrepreneurs should be tapping emerging trends like Machine-to-Machine (M2M), Learning Management Systems (work/personal), natural language based personal assistants (e.g. IBM Watson vs Google’s X vs Apple Siri), et al.I’m struggling to find inspiration around social these days– everything seems to be another ‘pull all your friends into one feed – my feed’. Too many feature-based startups.And Mobile (with the exception of voice-based services feels equally stale- we’re just making tablet based versions of websites?).I see more return around entrepreneurs building infrastructure of the next web – learning systems, workflow automation, M2M, natural language, et al… GG (Brooklyn NY)
Problem is, we are in a transition phase. I could go into how narrow Watson, X and SIRI is and how to do it for real, but it is sometimes hard for some to grasp just what you can truly do with the real thing.To gain what some will start feeding into the comments section, we have to realize getting there requires true interface between machine and human… simple.This post is not meant to be offensive to anyone, just the straight up as usual.
I would say: hybrid computer/human systems.In the past many spoke about crowdsourcing but the crowdsourcing ala Digg, Slashdot was more about groupies voting together. It’s important to understand that real crowdsourcing is about maximizing human/computer added value, and it’s not just voting!Hacker News is working, Stack Overflow is working, and the recent Amazon’s Mechanical Turk for sentiment analysis goes in that direction (obviously much better than algorithmic sentiment analysis only with machine learning)If we look at science and chess we have a lot of food to put into this thinking:- Advanced Chess: http://en.wikipedia.org/wik…- Project Euler: http://projecteuler.net/- Computer Assisted Proof: http://en.wikipedia.org/wik…- Lego Algebra Group: http://www.cs.man.ac.uk/~pe…
Yes, but right now I would say that is long term more in the category of implanting sensors into me (body person) and becoming a cyborg
My blog is like a cybernetic memory enhancer whenever I’m online. Same with twitter and instapaper.
MMM… CYBORG.THAT LIKE BE 50% GRIMLOCK.
I think things will be supercharged when micropayments become faster and easier.i could buy you a beer right now.people could give me cash tips for my amazing(i wish) blogi could give that guy who made that funny as hell comment on youtube 10 bucksmicropayments will really grease the tracks and increase the velocity of moneyjust like words and pictures are communicated easier and faster…What do you think of this arena?
The common core of these crosscurrents is frictionless connections – be that with companions, comment, content or commerce. Universal necessity regardless of national identity. More interesting, be it in mobile, social, search or cloud, almost without exception, the application layer is powered by exceptional US companies. Inevitably an American century?
An exciting time to alive/creating in Austin Tx: We wouldn’t have it any other way.AUS POW
Pike freakin’ Powers, welcome to AVC. Google this guy because he is almost singlehandedly responsible for making Austin a high tech hub going back to the early 1980s. I will give you a hello the next time we run into each other. Welcome.
I’m undecided whether this is a cause or effect of the things you mention, but another megatrend facilitating growth is TRUST in the internet. People are comfortable spending their entire lives connected, consuming their media, buying products, etc. This is what has allowed for a critical mass of users and a democratization of nearly everything.That is why it is so important to set up infrastructure and standard practices that ensure reliability of service and comfort in secure information exchange.
+1 on TRUSTI suspect the US consumer’s trust “radar” is more discerning, even cynical. And this “megatrend” is growing not receding.
FOR KIDS, INTERNET NOT REQUIRE TRUST. IT HOW THINGS ALWAYS BEEN.BY KIDS, ME MEAN 20 YEAR OLDS.
Agreed can anyone name a company that has been funded exuberantly before traction and it’s been a hit? Like Joost, Color or pets.com? Only one I can think of is Hulu but I’m not too sure about their financials (why go subscription if advertisement is doing so well?)
“But as my friend Tom Evslin says, “nothing great has ever been built without irrational exuberance.” “I both agree and disagree with that statement. I like it, because as an entrepreneur you have to believe in what you do, even when others may not agree. But an irrational belief in the face of overwhelming evidence should only go so far as when compared to the past history of the entrepreneur and his commitment to execution, and together must weigh in on whether that exuberance is indeed irrational and whether further commitment is foolhardy.
Sure… can anyone say “Mosquito Coast”?
“nothing great has ever been DESTROYED without irrational exuberance”I dont know if that is true or makes sense but it came to mind…..As far as “irrational exuberance” goes…..who ever said we were rational tobegin with…just think about love!
Twitter is to mobile what SuperCalc/Lotus 1-2-3 was to the PC.Watch this space…
I agree more with you than you do with yourself.The entire VisiCalc/Lotus 1-2-3/Excel >>> bundled MS Office suite is one of the most illuminating and predictive sagas in American technology history.I predict that Google and others will eventually provide us w/ a continuum of services and products which will ultimately fill the entire technology spectrum of our lives.The theme is CONVERGENCE.
What do you think is the cause of this convergence? Is it because it’s cheaper for companies like Google and Facebook to develop additional products and services due to economies of scale? Because I don’t think that’s enough to sustain a company forever. In fact, I think that is dangerous logic and that there is a pattern of tech companies over-expanding and then eventually being disrupted by smaller, more innovative companies.
I think it is just the reality of the possible becoming the possible reality.Look at computers, smart phones, GPS, web access, digital cameras, PDAs, Bluetooth, cloud based software, tablets, Skype — every new gadget stands on the shoulders of the prior generation of gadgets and what was unthinkable is now just free.I suspect in about 3 years every gadget will have everything.
I’m going to add Real Time as a trend that unites all of these. Until now there has always been a lag, both artificial and real in information access and delivery. This lag is gone and the recent political events in the middle east show how important this is. Dictatorships, stock traders, politicians, etc., have always had an advantage based on early access to and control of information. This also explains the frothy investing environment you allude to: Premier investors once had early access to the best deals while entrepreneurs struggled for the opportunity to tell their stories. Today the stories are real time and the investors must hustle to get the deals early.This is a major subject.
+1 on Real Time as a megatrend. It differentiates Twitter from Google. But since real time communication is inherently harder to vouch for, validate, etc.Real Time + Trust is the really exciting combination.
Perhaps the biggest megatrend is that “local” is now global — well almost global.There is no longer the hurdle of local knowledge as the real estate is no longer physical dirt, it is real estate on the Internet.We have become a race whose bodies live in our local geography and whose minds are able to wonder the world at will.This blog is a perfect example of the global nature of our collective neighborhoods. And that is huge.Recent events in Pakistan make a very odd point — OBL was “outed” in great part because he did NOT have an Internet connection. Huh?As that savant Charlie Crystle opines: “This Internet stuff could be huge!”
Well put. Nice to see someone looking at same horizon 😉
as usual, though, I borrowed that line. (this internet thing’s gonna be big)
I’m a little surprised that Local/Location is not on the Megatrends list.With all the companies getting into the local couponing game and Foursquare/Foodspotting type services becoming more relevant than ever, I would have thought Local would be on the list along with Global.
Its part of mobile and part of social. The golden triangle; social, local,mobile
You were smiling as you typed that.
Exuberance is a better word than froth to describe what’s going on.
Exuberance, Not Froth http://goo.gl/fb/8sVBv
I predict that Google & others will finally provide us w/ a continuum of services & products which will ultimately fill the whole expertise spectrum of our lives.Auto Auction
Curious why you didn’t include gamification in your list. Social and Global trends are introducing more “who” into products and businesses. Mobile and Cloud introduce more / expand “where”. As the gamification trend continues to evolve and permeate, it influences “why” I engage, consume, return.
I see it as a tactic not a megatrend
I remember the first time I heard you mention Tom Evslin (2009), as your blog guide on open spectrum (CTO of Vermont)? It’s time I caught up with what Tom’s been working on recently.Saw these on his about page-> 8 bits floating about. in hex that’s, 8*16 and 9*16+9
Thanks for remembering the motto of my blog.The last great round of irrational exuberance resulted in overbuilding Internet infrastructure which brought comm costs down by orders of magnitude and brought communications even into the domain of dictators.This enabled both very real revolutions and the social media “revolution” (pale only in comparison). Also enabled Google and the massive use of video online. Way before that there were several waves of irrational exuberance for railroads which brought on overbuilding which lowered transportation prices by orders of magnitude which changed where people lived and worked and further enabled the industrial revolution.So the investing question (always easy to answer with hindsight, perhaps impossible prospectively) is what is being enabled by today’s irrational exuberance? What prices or barriers will crash and what will those crashes enable? I don’t know the answer but am thinking about it a lot – as I know USV is.My origianl post on irrational exuberance is at http://blog.tomevslin.com/2…
If irrational exuberance is contagious, then it can be tracked and studied. What can be (profitably) tracked will be, but of course it will change the very thing it seeks to measure, as per the observer effect
IF INFRASTRUCTURE OF TOMORROW PHOTO SHARING AND DAILY DEAL APPS, FUTURE IN GOOD SHAPE.
The Law of Accelerating Returns applies to railroads if you place in order of running, horse, chariot, stage coach, train, auto, plane, rocket…with all the accelerations within.At this time, we can look at bigger things thought to change per generation(s) happening within decades (actually less).What is great is the number of innovations that can take place within each of these disruptions… and over the next couple, people will reconsider seeing what is thought of as big today being the ‘big’ two years from now.
great comment Tom. amazing how the tech revolution is seeding revolution ona broader scale
I think the one thing we forget is all of these are enablers for the real world.It is amazing that I can land in Phoenix with my 80 year old Dad, and he says he wants to drop his stuff off and change at the hotel we ordered over the internet, in the car I booked on the flight, and wants to eat fish and chips. My phone gives me turn by turn to the hotel and when I speak into it gives me a great place for lunch.Remember this. The real value add is the $100+ million dollar plane going across the country, the rental company that gives me my usual Camary, the hotel which upgrades my Dad onto the top floor instead of me, and the restaurant that delivers the great meal. All of which are much tougher than getting diquis to show my typing which they broke with their new feature today.Edited because disquis new feature cuts off typing once you click on the annoying box I don’t want….and now had to re-edit.
YES YES YES there is a real world out there and it still only has 24 hours in a day and 7 days in a week. time is precious. especially time spent with Dad.
as we are getting pretty close to the end of 2012, we are at the brink of a new cycle. the only trend that matters is the global political situation and the global sovereign debt crisis. ignore it at your own risk.
I am not a big fan of “megatrends” because unsustainable trends, (growing faster than ever) usually are (unsustainable).Not to mention problems predicting the future.Wasn’t Obama and the Democrats (permanent majority due to demographics) a megatrend a year ago?I believe more in regression to the mean.
Obama was a perfect storm. The storm has passed. He now has a record and it is not a very good one.Everything ultimately regresses to the mean.The problem is the temporal frame of reference.Where once upon a time we had 25 years of experience, now we have one year of experience 25 times and the mean is moving on.Can you imagine any part of a conversation held 3 years ago being even remotely relevant to one occurring today?
The previous administration was packed with vets with lots of experience in and out of government but they consistently made bad decisions.Being inexperienced does not preclude making good decisions as many start ups demonstrate all the time.
These trends are the background music to the political/economic events of North Africa and the Middle East of this year.Participants are mobile and connected to the Net.The first thing these governments try to do is shut off the Net.
I think that content on demand is another megatrend.
Fred – Thanks for mentioning @tomevslin in your post and your comments this morning. Besides the fact that he was/is spot on (no surprise) it made me nostalgic for the five+ years I spent on the team representing Tom, Mary and Ed Jordan’s company, ITXC. SNARCs, CRANs, and all!-Anthony Pergola
I would add to this list data. These megatrends are generating unprecedented data that is being crunched in real time to create smarter, more predictive decisions. I see this an integral part of every new consumer product/service and a key enabler of every business capability.
Big Data. Absolutely a megatrend that belongs on the list. It is early but it is happening and is interrelated especially with Cloud.Took a while reading through this excellent discussion to see the first suggestion. Well put @KevinDrost:disqus .
Did some “crosscurrent” research after hearing Ron Conway’s megatrend list. After seeing AVC’s, I figured I’d post.http://slidesha.re/iCcrwW
My personal investment in Global megatrend – I own GeographyIsHistory.com domain name.
One more thing I’d add that contributes to these crossroads of megatrends: Touch Computing as it facilitates people interacting with all that content.
I was just in a radio interview with Shadoe Stevens last Sunday afternoon and mentioned this inflection in time. It is amazing because most people coming on the radio to prognosticate about the future still have a lot of doom and gloom on their minds.I think we have a lot of pent-up enthusiasm because the downturn in the economy was so great and so substantial, it is as if people are afraid to get excited about any sectors. But here value is being constantly created and it just isn’t widely propagated yet.This is an exciting time and in my opinion the potential is bigger than the original boom. I will take being in the midst of irrational exuberance ANY DAY over the lonely years of silence… with investors not taking on new deals… entrepreneurs not stepping out with ideas… you could almost hear crickets chirping. It is nice to see activity happening again.
hey fred, just thought of an idea for blog comments. instead of listing them all they could be “played” back to you in chronological order. you could control it by clicking a link to show the next one. it’s kind of hard to follow the comments when they’re nested. @21b2cfcea4d6bb2d6a2699a4b75cbfba:disqus
awesome and exciting times . you have taught us well.
FRED!!!What about micropayments??When can I give a 5 dollars to a someone because I really liked their youtube comment?Post something on micropayments….Who will dominate?
Love your blog Fred and agree with your post. It’s exciting and challenging. It will be interesting to see a couple of things within these mega trends.1. What new business models may come to light? There are only a couple business models that are working right now; advertising, premium content, membership, usage. Will there be some new models or will some models shift as these trends fold in together.2. Global also means global competition. We rarely see technology origintate from outside the US other than from the development pool we tap. Sooner or later new tech will be coming from the same pools of outside labor to create new competition. Will this create new investment risks for the vcs?3. We’ve only just begun. New tech is finally being built on mature object models so the level of functionality is skyrocketing. What were major products like CRM are now free bolt ons that can dramatically change service and utility paradigms. I can’t wait for the new breed of applications!It is indeed exciting and challenging. I’m looking forward to your next posts and reading your old ones since I’m new here.
Irrational exuberance? Yes please, I’ll take two.
Hi Fred, I discovered your blog on my droid x and that’s how I still read it today.
Our biggest challenge as startup entrepreneurs is to think “global” and “local at the same time. And not to forget: to *ACT* coherently to that approach.
Been in China the last week, and I can tell you that it is incredible how few people have smart phones. Still the majority of use is comprised of just regular phones, large potential for wireless growth, and significantly cheaper than a computer.
Are there any public companies that will benefit form these Megatrends? Or are the public markets going to experience these trends in the next 6-24 months when private companies like Facebook/Twitter (Social/Global) go public?In mobile, I you can bet on Google & Apple in the public markets. But in the other trends, Social ? Cloud? Global? What are companies/markets leading the trend?
I love this title “Disqus Laughs At Facebook Comments, Releases Impressive Stats” from @blpro:twitter http://www.bloggingpro.com/…
I would think of social as two very different megatrends. The movement toward real identities and real friendships allows developers to add tremendous amount of value to users by telling them what their friends recommend. On the other hand, social media has completely changed the way how startups do marketing. I think they each deserve their own megatrend.
Fred, don’t forget about the “real-time” trend — another trend that applies to Twitter. Real-time introduces all kinds of interesting engineering challenges, which become more complex when combined with the other trends you identified when deployed at scale. Real-time and global, for example — or real-time and social. These are not trivial problems to solve.There are other related offshoots like data visualization, which I think is a trend that has yet to really take off until other more foundational technologies become more mature and widespread.
I would love you to talk about Microsoft going into the stock brokerage business. Google Microsoft and Saxo Bank. Could Google be next, and facebook be next. Microsoft doesn’t know much I would assume about the brokerage business but they know everything about technology. To me this is a mega trend shift from your Schwab discounter to Msft and Saxo Bank. Tom Dorsey
I think things will be supercharged when micropayments become faster and easier.Office Furniture
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I realized that as soon as I wrote it…
All that you list is true. No matter which side of the economic curve there will be winners/losers.Me? My mission is to enable a better world and to do that, I had to look at the only logical way to do so, no matter the fact everyone wants the easy million not caring if they do something that builds equity based on true value.For instance, I could do a version of this (Fred’s) post using Disciplines vs. Megatrends-BiotechNanotechRoboticsAI/AGILongevity- and how they are and will cross pathways truly accelerating returns of true human value.The majority of readers do not want to look at that, so at least Fred is placing things into perspective for those in design/dev/investment and how they need to maybe tweak the plan a little.
Good points Paul. Start Ups and Angels have become trendy but it’s not necessarily a bad thing. Most Angels can afford the loss and most founders can afford to take the risk. What’s the worse that could happen? Angels lose a couple of those 15k-30k investments and founders go back to work. Everyone would have had a great experience.
+1 and here’s to creating great value instead of spinning wheels.
Perhaps both you and Fred are right and there is a linkage between the two views.The guy who made the $1MM selling his car washes — his kid went to Stanford and wanted no part of the car wash business.And Dad knows that Sonny is whip smart. Sonny is telling Dad — the future is technology.So Dad and his country club buddies may not understand it but they were pretty damn clever to build the business in the first place.One of the greatest business opportunities in America today is to take pedestrian and mundane businesses — old economy businesses — and harness technology and social media to transform them into streamlined, efficient “new” economy businesses thereby USING the new technology rather than creating technology.These are predictable businesses in which the only resultant changes are an explosion of customers and a dramatic improvement in margins.
ECONOMIC IMBALANCE AND BAD POLICY ALSO LEAVE LOTS OF IMAGINARY MONEY IN POCKETS OF RICH. THEM HAVE TO LAUNDER IT SOMEWHERE.STARTUPS ONLY NON-COLLAPSED PLACE LEFT TO STASH IT.
Absolutely agree with this, and have suffered from thebattle, though thankfully my family is still in tact. But to respond to yourearlier post, their will always be sheep and goats. And I don’t think you canthrow them all out together (which may not be what you’re saying). You justhave to dig to get to what’s viable, and when you find something that is, youinvest in it, or execute on it. Their are some brilliant people with greatmotives out there, who would not have they opportunities they do if it weren’tfor the existing climate that Fred’s talking about. Glass half full I guess,but there’s some viability in the frothiness—and if it happens to be Guinness,well…
Could not agree more. When things fail the “Oh well, everybody had a great experience” is as far from the truth as possible, at least from what I’ve seen. Angels feel betrayed, employees are disillusioned and in fear, customers feel screwed (and if they are businesses employees are fearing for their jobs), and founders are crushed.
You have cataloged the reasons why entrepreneurs — successful entrepreneurs — are such a rare breed of cat.
I think there is a huge opportunity similar to what Austin Ventures has done w/ Home Away.They had a pretty good entrepreneur in residence who knew the technology of a big web based “sales space”, they picked an industry which was hugely fragmented, they slapped it with a checkbook and then they engaged in the most ordinary growth opportunity — a consolidation. A classic rollup.Even more importantly, they essentially have no inventory as the home owners own the inventory of product.Once they had control of the data — which told them what the inventory was really worth and remember they had no cost to hold the inventory of product — they could value their acquisitions.They also had no competition of any kind.Property rental is probably as “old school” as you could get. As fragmented an industry as possible.
The whole point is that great talent doesn’t want to dig into these companies.That’s what makes it profitable.
Some of our best portfolio companies never get any TC ink
Pure Gold”they picked an industry which was hugely fragmented and slapped it with a checkbook” – sometimes things *are* that simple
+1 Classic Quote
Until an organic peer to peer model takes over and crushes the roll up
I am out of “reply” increments. I do not get Fred’s comment below. Please elaborate. Thanks.
RE: @fredwilson:disqusNO INVENTORY GOOD.NO STAFF BETTER.THAT WHY P2P WIN.
True. I think the point is where something is perceived as “sexy” their is a lot of competition. Competition that is well funded, well staffed, and is charging hard as hell.When you can be the only one that is well funded, well staffed and is charging hard as hell in a sleepy industry, its a hell of a lot easier to make money.Which eventually is why “the sideshows will get wiped out out hard” At the end of the day you have to bring in more beans than you spend. Investor beans don’t add to your pile. They are just there temporarily until they get taken away with lots of interest.
I think with the new @ feature you can ‘ping’ him directly in a comment by typing @fredwilson – he should then get an email notification.—-I think he’s saying P2P is where it’s at and a marketplace ‘of the people, by the people, for the people’ would woop well-funded big co’s ass.Viva la revolucion!
Charlie, I needed to experiment on s-o-m-e-b-o-d-y. You came to mind. 🙂