What Is Going To Happen
Yesterday I wrote a post summing up what happened in 2014. In it I promised a post on what is going to happen. What I did not specify was how far forward I am going to look. It’s a lot easier to predict the future without a timeline on it. I think we all know, for example, we are going to have driverless cars. When that is going to be mainstream, however, is a pretty big question that I can’t answer.
But, because yesterday was about 2014, I am going to make this post about 2015. And so here is what is going to happen in 2015 according to me.
1/ The big companies that were started in the second half of the last decade, Uber, Airbnb, Dropbox, etc, will start going public. Investors will be glad to scoop up some of their shares. That will lead, in turn, to a wave of acquisitions by these newly minted goldmines.
2/ Xiaomi will spend some of the $1.1bn they just raised coming to the US. This will bring a strong player in the non-google android sector into the US market and legitimize a “third mobile OS” in the western world. The good news for developers is developing for non-google android is not much different than developing for google android.
3/ More asian penetration into the US market will come from the messenger sector as both Line and WeChat make strong moves to gain a share of the lucrative US messenger market.
4/ After a big year in 2014 with the Facebook acquisition of Oculus Rift, virtual reality will hit some headwinds. Oculus will struggle to ship their consumer version and competitive products will underwhelm. The virtual reality will eventually catch up to the virtual hype, but not in 2015.
5/ Another market where the reality will not live up to the hype is wearables. The Apple Watch will not be the homerun product that iPod, iPhone, and iPad have been. Not everyone will want to wear a computer on their wrist. Eventually, this market will be realized as the personal mesh/personal cloud, but the focus on wearables will be a bit of a headfake and take up a lot of time, energy, and money in 2015 with not a lot of results.
6/ Capital markets will be a mixed bag in 2015. Big tech names will continue to access capital easily (see 1/), but the combination of rising rates and depressed prices for oil will bring great stress to global capital markets and there will be a noticeable flight to safety around the world. Safety used to mean gold, US treasuries, and blue chip stocks. Now it means Google, Apple, Amazon, and Facebook.
7/ The Republicans and Democrats will start jockeying for position in silicon valley for the next presidential election and tech issues will loom large. Republicans will put forward their own answers on immigration and net neutrality (Title X) and the White House will meet them halfway. Both sides will claim victory, but the real winners will be the people.
8/ The horrible year that bitcoin had in 2014 will be a wakeup call for all stakeholders. Developers will turn their energy from creating the next bitcoin (all the alt stuff) to creating the stack on top of the bitcoin blockchain. Real decentralized applications will start to emerge as the platform matures and entrepreneurial energy is channeled in the right direction.
9/ the enterprise/saas sector will shine in 2015 with dozens of emerging important new companies taking advantage of the cloud and mobile to redefine what work and workflow looks like in the enterprise.
10/ cybersecurity budgets will explode in 2015 as every company, institution, and government attempts to avoid being Sony’d. VCs will pour money into this sector in the same way they poured money into the rental economy. and, yet, the hacks will continue because on the open internet there is no such thing as an impenetrable system.
11/ the health care sector will start to feel the pressure of real patient centered healthcare brought on by the trifecta of the smartphone becoming the EMR, patients treating patients (p2p medicine), and real market economies entering health care (people paying for their own healthcare). this is a megatrend that will take decades to fully play out but we will see the start of it in 2015.
Of course, many other things will happen this year. A lot of them will be things we could never see or predict. And this list is biased by what interests me and what we’ve invested in. It is, as someone said in the comments yesterday, “biased”. But then so is every single word ever written on this blog. As it should be.
Happy New Year everyone. Here’s to a great 2015.
You left out education, e- and traditional. That would be interesting too,
feels like old news to me. it isn’t, of course. but its been happening for a while now
Ok, that’s why …
Huh. I find myself agreeing with all of your points. Except the next ‘alt’ digital currency. That will happen, and it won’t be bitcoin.
always good to disagree about something!!
Happy NY Fred and thanks for a great year of spreading your knowledge!Was reading some interesting things about the ag tech space. Are you and your firm looking there?Did you leave out Drones for a reason? from last year in summary as they look to be going pretty mainstream.Some hype about this drone product.http://www.dji.com/product/…Going into 2015 I am feeling positive, for many reasons finally about Africa (the content I live in)These numbers especiallyhttp://www.internetlivestat…Showing that South Africa (country where I live) and Nigeria are looking MUCH better than a couple years back and plus there looks to be nice room to grow.This is also nicehttp://www.internetsociety….http://www.internetsociety….
i have kind of lost interest in drones
Why? There’s a new generation being developed that has learned from the first one.
I was just telling my wife the other night that as someone who has flown RC Helicopters since the 80’s (in one form or another but don’t consider myself an expert) that I would seem to be an ideal target to pick up one of those camera drones (as I also do a ton of photography).Here are the reasons that I haven’t bought one and most likely won’t.1) I like photography but there is to much out there now. It’s not special like it was for me back when I started and you only had 36 pictures per roll. So even though I still take a ton of pictures I have no need to shoot any with a drone. What will I do with them? Nobody is interested. So I’ll stick to what I do now with the cameras that I use now.2) The drones are to easy to fly. (What I told you when you got your Quadracopter iirc an AR Drone). No challenge means no fun. Like you don’t sled down a ski hill do you? No you ski and sometimes fall. That’s what flying was to me. High stakes, might crash and might need to rebuild. Which could take weeks (had to order parts) The challenge is where the fun came from. Ever have a metal frame on a helicopter sheer in two pieces because you forgot to balance the rotor blades? Metal split in two. I’ve had that happen. Very cool you learn something from it.But that’s me. I think there is tremendous opportunity in drones going forward. No question about that.
They probably won’t be huge in NYC. But they will be gigantic in Omaha. Farmers using drones with mobile tech that talks to sensors in fields.
In 2015 I will invent the definitive hangover cure because right now it’s an I need to scratch. Happy New Year Freddy boy and all of the AVC community
i like water, advil, and espresso, in that order
Best list of 2015, to date.
If you need a hangover cure you are drinking to much.
i agree with that. but people do that at times. last night being a prime example
Everything in moderation.. Including moderation.
Ever tried Brode (www.brode.co)? Never tried it myself but I figured you might’ve given that it is from your neck of the woods.
http://avc.com/2014/04/fun-…I recommend everything Fred does + a breakfast involving fried eggs and potatoes (and cheese if possible).
Drink beverages with less crap and additives and you will solve part of the problem.
Exactly…. and drinks with less sugars – skip beer and wine for the high quality hard stuff.
For wine its all about:-alcohol %-additives-SO2 added.
@awaldstein:disqus I heard that something called Congeners played a major role (Tannins, Acetlyl compounds etc) many associated with Red wines and Port etc – Any comment on the validity of that?
The term is not familiar to me although certainly red grapes have properties that do impact some people.Will ping some buddies on this.Thanks
Ok – wont stop me enjoying it though 🙂
These enterprising folks are apparently now running a NYC bus too: http://www.hangoverheaven.c…
Check out blowfish
Great way to start a new year. All interesting predictions – #5 particularly so ( and I agree ). I am looking forward to 7, 8, and 11!Happy New Year!
Happy New Year Fred. Any predictions on Latin America, specially after spending some time south recently?
i don’t have a good feel for that part of the world. sorry about that
Perhaps we should.
here is just one latin american gig on fiverr with 17% world domination – which means nothing really, just that the entrepreneurial spirit is global and connecting with that global spirit has become so much easier (fiverr really needs to get better at making this biz intel available, i wanted to see a map of gigs and maybe sort by gig with highest world domination but i couldn’t do that, i also can’t select a gig based on location but maybe they’ve done that on purpose)
@aminTorres:disqus you should try Wolfram Alpha for these things:
Happy 2015 everyone!We’re going to experience an Intelligence Renaissance where our biases and Neuroscience will inform our systems like never before because probability, percentages and 5-stars couldn’t do it for us :* http://youtu.be/3rgCW_WTHUAThe video is 5.55 minutes long and shows the system I’m building.
Payments is a good one. We could do with a lot of innovation in the space, for lower costs, more international, greater transparency, etc. But it’s a harder one that some others, since it involves a lot of regulatory clearances, etc.
happened, happening, nothing new other than possibly bitcoin on the horizon
Agreed on all counts, but let’s talk about #8, the Bitcoin thingy.Do you think that network effect for these decentralized apps is inside Bitcoin itself or dependent on each app anyways? So, is Bitcoin and its blockchain a neutral enabler or is it a shot in the arm? I know you’ll say Bitcoin is the network effect, but the question is WHY is Bitcoin the key thing and not a generalized blockchain technology stack.
because the compute power that runs the whole thing is the mining on the bitcoin blockchain and they are compensated in bitcoin for that
There are 2 cost factors: a) fixed cost (mining power), b) cost per transaction.The Bitcoin model today is biased for its dependence on Compute/mining power. But what if the support shifts to transactions costs and not solely mining power? What if the “cost of consensus” becomes lower than “cost of transactions”?Today, for Bitcoin a) is getting expensive and b) is ridiculously cheap. Is that sustainable in the long term?How these 2 costs play with each other is a key basis of the economic viability of the Bitcoin model, or any blockchain model for that matter.Imagine if the net of your VC fees (say 2%) were higher than the transaction fees you generate (what you return when you do your business). That would not fly.So, my questions are oriented towards the long term economic efficiency of the Bitcoin model. I don’t doubt there will be solutions to the current scalability-related economic challenges (maybe via sidechains or parallel chains), but I still believe that the inherent network effect that Bitcoin has currently gained is almost un-related to the potential success of the blockchain principles as a building block for decentralized applications.Whether they are tied to the Bitcoin currency itself or another cryptocurrency, the network effects and value of the apps themselves will determine their success.
good questions. i don’t have good answers. you may well be ahead of me on this stuff.
Full disclosure – I am not well versed on Bitcoin and the blockchain (mostly from what I’ve read about here), but I was wondering if the time has come to de-emphasize “BitCoin” and instead focus on “blockchain”. Bitcoin as a brand name has gotten hammered this past year (rightly or wrongly), so does it make sense to move away from that word, at least as it pertains to the fundamental technology? What if there was a company called “Blockchain” that was focused only on what that technology can do to disrupt the market?Just a thought as we start the new year.
Well, the field is cryptography and how it’s merging with software engineering. I’m not sure that changing naming would change anything. The market will unravel according to market forces and will be enabled by the underlying technological innovations.
Really this is happening beyond the bitcoin “brand”. If you look at relatively new projects such as the Insight server + Copay and btcd + btcwallet, they are separating the blockchain concept from the wallet usage. Even Bitcoin Core can be used that way.
I dunno about that. But I do think about Bitcoin’s future a lot, run scenarios through my head and talk to a variety people to try and avoid blind spots. I’m just wondering what the Nash equilibrium looks like eventually.
exactly -it’s a perpetual motion machine
Do you fear that there is a risk that bitcoin is so cool technologically that there is a complete hype bubble in the tech echo chamber here on its potential? I don’t claim to be the smartest on everything (some may disagree… lol) but I can understand fin tech, hardware, new energy technologies, social media, health care reform etc… and bitcoin, and more specifically how it and the blockchain, are going to impact anything. Just so baffled :/ Will have to read much more… I just feel this is mainly a cool technology that also is so anti-finance / big business / anti-government / quasi anarchistic that it lets the tech geeks blindly follow it like a religion?
Well….I don’t think I’m fearing bubble like issues with Bitcoin.I see a lot of the current Bitcoin related work as experimental and pushing the innovation envelope. Even if some of them fail, we all benefit from the lessons.Let it unravel. Don’t apply adult rules to a baby.
What indicators do you have to think that VR/Oculus will flop? Or is that a gut / pattern recognition based on new, somewhat overhyped tech?
I agree w/ Fred and see the Oculus as the Apple Newton.A great early idea whose untimely demise will fertilize the soil for thriving next generations of products, which are albeit sure to follow.
I second this question, appart from the early sale to fb that could be interpreted as an indicator, what are these?. There has been so much Industry support behind Oculus plus technical advances.While we talk about gaming platforms, game platforms is a sector still waiting for disruption to happen, with the current console format on course to merge with smartTV platforms in just a few years.
It’s not that it’s going to flop – its more that there is a lot of infrastructure to be built out app wise. And unlike smartphone apps, the 3rd party uses for oculus and other VR tools may involve creating accompanying hardware.
It will probably only need 3-5 well received games on year one to be a success — and major ones were already announced. Entertainment is quite a different dynamic than personal mobile devices app stores. Anything outside of gaming will be bonus.
At least you are honest about your biases, great discussion here. Happy new year.
Hi Fred, Just a quick question re the ‘lucrative US messenger market’. Where is the big revenue play here? As a WhatsApp/ Viber user -other than stickers I’m not seeing much serious monetisation at present. thanks Alan
they are a portal to ecommercewechat has a huge business in china doing thatit has not yet played out in the US but i think it will
Advertising dollars will go where the users are. There are already several adtech plays for mobile messaging platforms that are used. As Fred mentioned, its a great portal to ecommence and to other “actions”, such as watching a movie trailer.Mobile messaging platforms need to figure out a way to monetize their users and the market will become very lucrative in 2015.
advertising is going to have to get smarter. not necessarily targeted, big data stuff, but native and organic looking ads that match with the app they exist in.
U.S. citizens are worth more advertiser dollars wise.
Nice one, Fred! How about identity world? As a worker from IAM world… interested to know your thought… 🙂 [ a quick guess: IAM might play a significant role in #10 and #11 points? ]
i think we will start to see changes happening in the identity space in 2015 but i think its going to take a while to profoundly change it
Thank you Fred, and I will keep track to see how well you did. Quite agree on both wearables and VR that there is so much work to do, and so much yet to discover in order to bring important platforms forward. Both of these markets are still experimental but as you put it, they will get there though the form factors we see now are speculative. As one going to CES and viewing the near 1000 firms showing what they claim as IOT devices I also think this is another emerging trend that will take some time to fully emerge. In all these cases though this is the start of the race, time to take note and position. All the best and happy new year.
I do hope you’re right on #9 and #10, having bet my career on this several years ago :).happy new year to everyone at avc.
Fred, disagree on Facebook, 2015 is the beginning of the end for FB.It is looking more and more like America Online. It was hip, it was cool, now everyone is deserting it, especially the young.America Online had 20 million customers, it was about to conquer bthe world, even bought Time Warner.Facebook has billion customers and buying every other companies.Both companies kept their customers locked in confined spaces.FB is deja vu America Online.
yeah, but facebook has whatsapp and some other asssets that have bright futures
Facebook as a Berkshire Hathaway of the Internet?
that would make Zuck the Buffet of the Internet
he’d have to start driving buicks
Well he’s in an Acura TSX now, which has to be the Millennial equivalent.I’d argue that Facebook is building something way more cohesive than just a portfolio of Zuck’s Picks, and is nothing like the AOL of ~15 years ago. WhatsApp and Instagram are extremely complimentary to FB in that they’re essentially an additional share of attention and user data across new international and younger audiences, respectively.FB is also a very open platform that engages users across not only these (very successful) O&O sites and apps, but most sites and apps across the web via its Like button widgets, “Sign in with FB” integrations, and mobile app SDK.With LiveRail and Atlas, FB owns more of the digital marketing tech stack vertically, allowing them to keep control of that user data, and multiplying the value by enabling their clients to target with that data across other 3rd party apps.I think that the whole combination will be very successful in attracting an even greater share of brand advertising spend, which incidentally might be where Google is the most vulnerable… though it’s somewhat hard to narrow that down nowadays.
Telegram and other messaging apps are gaining steam. Sure Facebook is diversifying, but there will still be battles on every front. It will be interesting to see what kind of things they can do as they apply machine learning techniques to their vast collection of our data.
No one wins all the battles and you can not be good at everything. FB is trying to defy gravity, it is futile.
Depends if they can monetize the data…and the market moves so fast that by the time they integrate the advertising, the kids are already starting to move on. Twitter seems like an exception because of the loose tie culture of the network. Interest networks are hard to replicate vs. friend networks.
Fantastic point, the closed ecosystem will kill Facebook, they locked out everyone who may have good input or idea.Yes, Instagram and others may save the day for FB, but not for long.I do believe, Twitter is more viable in the long run, one because it is a new idea, multi directional conversation, which is genuine talk back and forth between people.This genuine, live talk on Twitter will have more value for advertisers in the long run than a closed system like FB.Also, on a human level, Twitter gives voice to the small guy. GO TWITTER
But Facebook owns them.And Oculus Rift as a company already pissed off a large portion of developer community – and there’s better technology out there I foresee doing better than Oculus purely from a technology standpoint.
My 15 year old smirked at me when i suggested we chat on Whatsapp – “no one uses Whatsapp Dad…” Kik seems to be the kids app of choice. And FB – nope, Instagram and Tumblr are the go tos. FWIW.
what confuses me is why is there so much focus on a demographic that can’t enter credit cards? when was the last time a 15 year old bought something because they saw it on one of their social medium? Does anyone ever buy anything on “social media”? If not then what is the point of advertising on it?
The youth demographic is critical to advertisers, brands and companies, such as FB, that depend on advertising as a primary revenue stream.While they don’t yet have credit cards, teenagers are often identified as early adopters so the desire to be “hip” or “cool” to them is critical for a brand to gain or maintain market share. Furthermore, because their personal preferences haven’t been crystallized yet, teens offer a target-rich environment for brands to gain traction. At what age does a person decide they prefer Pepsi or Coca Cola, Apple or Google? Ford or Honda? Odds are it is well before they hit their 20s.
You make a fair point. Get em early while they are young. But seems to me just another mistake for correlation for causation. I don’t see any evidence that suggests these kids will grow up to be horders of pepsi or cola or purchase a honda if they watch it since they are young. Even more problematic is measuring and finding if it actually works. Again, no real hard data, just what lot of people assume how advertisement works. If this was the case then why wait until they are 15? Why not target them with subliminal messages to purchase iPhones when they just begin to read at daycare?
“Does anyone ever buy anything on “social media”? If not then what is the point of advertising on it”People buy things all the time because of social but not necessarily on social. I think you need to take some time to understand how advertising works exactly. It does *NOT* always work in the same way a direct response campaign will work.Rather than attempting to persuade us (via our rational, analytical minds, ads prey on emotions. They work by creating positive associations between the product or service aka the seven deadly sins or other aspects such as love, happiness, safety etc. The more we are exposed to these associations the more favourably we feel towards these products or services. This ultimately makes us more likely to buy it.Furthermore, social platforms have an insane level of granularity where you can target all sorts of information such as specific age bands, location, schools attended, employers, whether someone is an expat or not ad nauseum.
That’s incredibly textbook like definition of advertising. What I really want to know is has these social advertising have led to more adoption for a brand? What evidence is there to suggest it does? When you advertise on google, the effect is obvious, you are searching for some information, along comes a highly relevant data to sell you.Let’s say that what you’ve described is all true, have you bought anything while spending time on facebook? Do you know anyone else that have? Compared to google where people do actively purchase based on an ad or click an ad with at least the intention of buying but like you say social media is so different and the results are can’t be quantified or measured.I find it highly skeptical of the continued viability of social media marketing, the past two years have been a horrible year for online advertisement. If ads in an popular online magazine are dwindling and forcing companies to shut down, how likely is the social advertising to be more effective? Especially when it’s impossible to quantify and measure the returns on investment?
Yes, I know people who have bought things on Facebook. They are customers of the clients I work on behalf of as an advertiser. This is easy to track if you use a conversion pixel when running a direct response campaign.However, the bulk of social platform activity (FB/TWTR) is about brand awareness. Like I mentioned above, social platforms are part of the journey, and all advertising works like inception. Brand awareness is huge you can be as skeptical as you like the biggest brands followed by the long-tail of small and mid sized advertisers continue to invest heavily in social. That isn’t going to end any time soon.You say online advertising has been horrible for the past two years? Based on what exactly, the industry continues to grow and grow and grow and grow. Do you know why this is? We’re buying more and more and more devices and the platforms are all finding unlimited amounts of inventory to serve ads to.I don’t dispute what you say about Google. It is king of the hill and search has very direct intent which is why the ARPU numbers are the highest on Google versus every other platform online.However, all advertising starts the purchase journey with making a customer aware of a product / service. A google campaign cannot be solely attributable to a purchase just because it is the last click. This is really not an accurate way of measuring a consumer purchase journey all of the time.Take this example of big city workers commute in London. They will perhaps, walk to the bus stop, then get the bus to the overground train station, they will take the train to the underground to the closest station then they will walk to work.The last thing they did was walk to work. Would you really say that the person walked to work? Of course not, the underground / overground did most of the heavy lifting in the journey. In the same way advertising works this way. People are bombarded with images, concept, even their favourite (insert popstar, celebrity, athlete etc) promoting the benefits of a product or service until the person buys. This is not a straight line journey, it is messy and unclear almost all the time. Heck, you have children pestering their parents as part of the consumer journey to buy something. Would you discount that as well?I will repeat all advertising works this way, it is all part of the consumer journey. I will agree with you that Google has more relevance since search has the strongest level of intent but just because someone doesn’t buy something because it isn’t so direct doesn’t mean it doesn’t work. Would you say the same about word of mouth? That is the most powerful form of advertising that drives action.See this recent link on FB advertising to see what I mean in more precise terms: http://www.insidefacebook.c…
Mouth to mouth is indeed the most powerful and effective method. However, is that what is happening through social media “brand awareness” campaigns? Has an empirical study been conducted by unbiased groups? That link you posted starts with “A recent Facebook-funded study …” , It loses any shred of neutrality.Internet advertisement revenues have fallen in the past few years. You can see the falling revenues of publishers who once relied on ad revenues and clicks. Advertisers are beginning to realize that it’s not as effective as they thought.Google & Facebook, all these companies have a huge incentive to obscure and hide the effectiveness of advertisements. Nelson ratings, tv stations all operate the same way, offering no way to quantify success.
Has a 15 year old very steered his parent spending ?
And Mark Zuckerberg is a much more aggressive and visionary leader than Bob Pittman and crew
It’s clear by now that Facebook can execute like it’s nobody’s business. I wouldn’t sell my stock yet (if I had some, that is).
more and more like myspace, not aol, if your asking me.
Not sure the data supports this:
What about the trend, the no of active usersProfit level, penetration level of young users, etc.There are a lot of red flags in terms of gaining new users and time spent also.I see FB as a Tavern that was the place to be and be seen, and now it is a good so so joint.The novelty is fading.See they are panicking already, buying all kind of apps and companies.
Indeed. Facebook’s Q3 growth was 2.5 times that of Twitter’s. That would be impressive enough given Facebook is much older but it’s also already almost five times as big. No way it should be out-pacing Twitter at this stage in the game, but it does quarter after quarter. In the last two years Facebook has added almost 60 million more users than Twitter has in total (343m v 284m).Anyone who thinks Facebook is in trouble is dead wrong. Facebook has won. It’s not going anywhere anytime soon. It’s a mature business, sure, and no longer “cool” perhaps, but who cares about that? Facebook isn’t AOL and it isn’t Myspace. It’s a different world now and Facebook is a very different business – and, critically, Zuck a very different leader (developer up with a real understanding of his own platform, which is hugely important). It’s here to stay. I think if anything it’ll only get bigger, and likely become an umbrella corporation/conglomerate, scooping up all the cool, new kids on the block to maintain relevancy while raking in Google-like profits in the background.I mean seriously, which of the current social platforms are any threat to Facebook? Instagram’s #1 for engagement and it’s owned by Facebook. Google+ is a massive failure. Snapchat is popular right now but has zero branding value so can’t make any money. Twitter is in real trouble (see below). Facebook killed Myspace but there’s no “Facebook” out there to even begin to hurt Facebook – and if there was we’d be seeing it by now. I think people want Facebook to fail, but that’s a very different thing to what is actually going on. Like puppies, Facebook isn’t just for Christmas. It’s a keeper.Twitter, on the other hand, could very well have topped out in 2014, both as a business (many heads must roll early on in 2015, including the CEO) but also as a platform for brands. I think there’s a very valid argument that 2015 is the beginning of the end for Twitter, certainly in its present form, unless they wholly accept it for what it is (a communications/breaking news tool, essentially the always-on telephone) and stop endlessly trying to make it something that it isn’t (a media business/shopping portal/music player/deep fat fryer etc etc). Twitter’s biggest problem has always been that the founders and people calling the shots don’t actually know – or want to accept – what Twitter is. And until they step to one side (or are forced out) they’re always going to be the biggest obstacle to its success, simply because they keep steering it the wrong way. I’ve been writing about Twitter for years and hope I’m wrong, but I think a year from now it will be in a very questionable place unless they can find a Sheryl Sandberg or someone similar to right the ship.
“Twitter’s biggest problem has always been that the founders and people calling the shots don’t actually know – or want to accept- what Twitter is.”I think they have internal issues, for sure, but more importantly “the street” doesn’t really know how to effectively evaluate the company. Way too much comparison to FB and their metrics IMO. Both social, but one’s inherently more mass.
“It’s a different world now and Facebook is a very different business”Yawn. heard that one before 15 years ago.”It’s too big to fail”Yeah. Short memory? 2008 ring a bell?
Google, Facebook, Amazon, Apple are like digital-life organs all the purpose-driven Messaging-Apps are like nervous-sytem component both are here to stay.
Network effects are powerful but new-disruptive business models are generally more powerful – in the sense that they’re unstoppable.
FB will remain commercially relevant as long as app discovery is a pain point for developers. It provides FB with the currency to buy leading companies. Thus no FB prediction is meaningful w/out reference to app discovery issue.
This is like predicting the end of TV in the 60s.
AOL was a plodding company that incredibly to this day I believe is still partially dependent on dial up rev, although Tim Armstrong seems to have righted the ship quite a bit. FB will continue to make acquisitions to stay ahead of the curve and add freshness to its portfolio. They’ll make mistakes along the way, but they have the rope to do so.
I am pretty sure aol sold their future dial up revenue or something like that
Looks like you’re just a tad misinformed about your own company, Tim. AOL still has 2.3M dial-up users.
Hasn’t it been the beginning of the end for Facebook for a few years..?Like Microsoft–doesn’t look like it’s going anywhere anytime soon.
20M and 1B are very different numbers.
Heard this too many times.Facebook has an amazing stake in our minds, it’s currently the most used technology for mind to mind communication.The moment computers are small enough so that we can have them within our brains (so long smartphones) Zuckerberg will be there as THE channel to connect human beings through the closest thing resembling telephathy.Facebook is far from going down, their messenger (which had an initial backslash, has now become for many a must have apps, between group conversations, voice messages, personal file sharing, and then Whatsapp, it’s here to stay for a long long time)
Driverless cars not happening.My bet is that driverless cars cannot be safe with cars driven by people on the road. Its an all or nothing play and drivers won’t give in.
i think we will see separate lanes emerge to solve that problem
On the drive back home from vacation I paid extra (<$2 on ez pass) to take the express lane on I-95…about 30 miles south of Wash, DC. Note: the non-express lanes had no toll. This is new road and new concept: paying for the fast lane.
They are testing that to see what the Internet of the future will look like…
This has existed in Miami for a few years now and actually sort of works.
Interesting. I guess money makes the difference.
Cars that have autopilot?
My guess is that they’ll get good enough and be allowed to operate autonomously (with a competent human in the vehicle but not in real-time control) on designated sections of highways within 10 years or so. Whether that means a relative handful of highways or something more mainstream I don’t know. But the general purpose robot car that can take the kids to soccer practice is way way off.
Jim H hanging out with you over the Hols?Separate lanes……good one.
May be driverless drones will be the answer. no need to build roads.
A separate lane for driverless cars is akin to ISPs providing preferred access to websites and services of choice. I assume the tech community wouldn’t stand for this and would mobilize behind a lane neutrality movement?
as long as they don’t charge for it, i am ok with it
1/ thanks; great list2/ happy new year3/ will ballooning valuations of startups continue in 2015?4/ if no to 3/, will it be cataclysmic?5/ in 2015, tweetstorm all the things6/ eots
1/ thanks2/ thanks3/ yes4/ NA5/ maybe6/ eots
I appreciate your sense of play-along-with-me humor more than you appreciate it.
not sure about that
it’s great to disagree. makes things more interesting!
Jim, the body isn’t even cold yet.
Hmm, a post where I disagree with a good chunk. My brief reactions: Apple Watch will start off slower than iPhone, but I think it will be very popular and Apple will start to exercise it’s lock-in even more. On messengers from Asia, I wonder if they rose in China b/c of a lack of access to social networks; we have them, so maybe less of a need? I’m also not sure the big private co’s will go public this year as they raised lots of capital Q4 2014.
it’s great to disagree. makes things more interesting!
Curious to see how much upside retail investors will continue to miss out on as the big late stage companies remain private
In general, my guess is that there are a lot of solutions in search of problems in both wearables and the somewhat related consumer IoT space. Not sure how it’s going to play out. Devices with a good financial payback (around power consumption for example) is one obvious area but gadgets for the sake of gadgets seems faddish at best. I’m certainly not sold on the Apple Watch–power consumption remains a problem with many of those gadgets; I’m really nearing my limits on how much gadget “care and feeding” I want to do.
Yeah, if I had money to throw in the toilet I’d definitely get one just for the heck of it, but for how it is right now, I wonder who’ll actually feel like charging his phone every night for more than a week in a row.Of course, in the future they’ll come up with better batteries, but this version I’d just use for a week after I get it and then switch back to an actual watch.
yes,,keep it up,,and +1 for you and me 2
I’m really nearing my limits on how much gadget “care and feeding” I want to do.But isn’t that the central evolving theme of the Apple Watch to reduce all that overhead by incrementally transitioning all our data-activity-feeds into a more intuitive and intimately transparent digital-nervous-system ?When I drive my car I’m not thinking car, the whole experience just feels like a natural extension of my willful eyes/hands/feet.Surly driving around in our newly-fitted digitally-abstracted-space will quickly head for that same ergonomically transparency outcome.That transparent-perceptual-ergonomic is the universally generic strange-attracter for all technologies seeking serious money.A year or two of slow growth is a small price for Apple to pay.
Perhaps someday we’ll see a transition from smartphone to some sort of connected mesh of wearables and IoT devices. But these predictions were about 2015 and for 2015–and the near-term at least–smart watches will mostly be an incremental device that needs to be charged daily. I’m willing to be convinced of the value of an Apple Watch but neither it nor any other wearable I’ve seen cries out anything other than “cool gadget that I might wear for a bit before I tire of it.”
Note the battery life on android alternatives have reached almost 2 days of light use
I might be a minority of one, but I’d switch to a mobile device with an e-ink disapy (like Mirasol) for the benefits of long battery life and visibility in full sunlight. I don’t really care about high frame rate video anyway.
Your not on your own!
2015 is when Apple plants their Apple-Seed-Watch and it is the planting process that is the key technical event.The iPhone did not even have any App development system the first year but still that first iPhone was a seminally disruptive mobile phone event. In contrast the Apple-Watch will arrives with an iPhone extension App development kit out of the gate.As for the battery problem Apple may have some surprises up their sleeve ?
great comments Semil. I am w you on both these thoughts/
thinking more and more companies will go private. P/E raised huge funds and public markets, along with govt scrutiny really expensive. Example, Molex.
Most consumers don’t even know that Apple announced a watch, and those that do are ambivalent about it. Yes, tech geeks like us will try it out, but I don’t think that any of the current offerings in the wearable space have the form factor right.My guess is they sell more Beats by Dre’ headphones than watches.
Apple didn’t launch the watch to consumers. It announced it to a tech audience so developers would build / extend apps for it – in advance of the actual launch. Naturally, there was some bleeding into the tech interested media – but there wasn’t much marketing / ad muscle put behind it.I don’t think it’s a stretch to assume that Apple – arguably the largest and richest company on earth – would invest significant marketing / media firepower into communicating watch benefits directly to consumers (when the product is available).
Developers follow the money. If Apple makes it worthwhile to dev apps for the watch, then they will. Otherwise, it’ll be a lot like the Glass experiment.
Unlike previous Apple products the watch is more geek focused, anecdotally very few non geeks are aware of it.Messengers provided social connections for non-techis. Sharing experiences without putting their profile/pictures on the web.
I’m not entirely sure about that. They haven’t showcased it at “geek” events. Instead, they displayed it at Colette’s in Paris, and had a Chinese model wear it in a cover shoot at Vogue. They may not have gotten the formula entirely right the first time around (when have they ever, even with the first iPod, iPhone, and iPad?), but they are making the right moves. They are the first to even try to target women with a watch.There likely will be a separate event for the Watch before it actually debuts. What we saw in September was mostly a “by the way” introduction at what was really the iPhone event.
yes they tried to make it non-geeky and marketed to women, but they still have a long way to go.
Perhaps not but they sure got the attention of several watch makers who are scrambling to come up with a competing product
I don’t think the watch is geek focussed at all ultimately. They needed to give developers long enough lead to get app extensions going. The true marketing (9 digit ad spend?) will be about fashion, personal expression and development (fitness). Apple’s money will ensure that consumer awareness will dwarf geek awareness (in raw numbers, not as a %) by the 2015 holiday cycle.
Yeah, that whole “consumer focused” thing has worked out terribly for them, ever since they dropped “Computer” from the company name.Smart of them to pivot and get back to stuff that 1% of the populace is passionate about, rather than 50%.
I love the IDEA of a smart watch, but most women care about what they wear and they just won’t win most women over until it’s both beautiful and functional. Or at least customisable
That’s why Apple watch will succeed. Exchange heart beats. Track fitness. Smaller size available. Solid Yellow gold and solid rose gold in addition to stainless steel silver and black plus same two colours in aluminium, bucket loads of Apple bands all easily exchangeable to match attire without tools, even swap links in and out without tools. No doubt many 3rd party bands will appear also. I always knew they wouldn’t release ‘a watch’ it would be a collection including mens and ladies sizes.
targeting Fashion/Luxury as they showcase it in Colette Paris and Vogue China . http://www.independent.co.u…
Yes I can see that they’re heading in the right direction… they’re still a little too ‘Swatch watch’ looking for my and my friends’ fussy tastes though…
Totally agree RE Apple Watch- think about all of the folks with a Fitbit, which barely does anything in comparison. It will be hugely popular just based on the initial functionality and wow factor, and like the iPhone, will open doors for 3rd parties to create all new use cases and businesses that we’ll soon wonder how we ever lived without.
The stock has 30 milllion 2015 sales baked into it price. That is a HUGE number. Samsung has only sold 8 million in total in the past 3 years. 30 million is more than what the iPhone and iPad did it first year. They will be lucky to sell 10 million. At this point it is a expensive accessory that should be a stand alone device at that price but needs to be tethered to an even more expensive device, the iPhone 6, to even fully function. Perhaps it’s second and third iteration will be a more dynamic standalone product, but right now considering it won’t even be out until the middle of this year at least and kid’s don’t even like to wear watches. This isn’t going to have the traction that expectations are suggesting.
Which stock? 30m watches doesn’t move the needle for Apple.Somewhat off-topic, my hope for a future feature Friday – ‘collapse thread’ in Disqus. Oy.
Ok. My point is they won’t even get to 30 million watch sales. They need another iPad, iPhone iPod growth catalyst and the watch isn’t it and they are still waiting for one since Jobs died. So far all they are doing is milking the iPhone with iterations.
The stock is up 40% in last year and still at an EBITDA/EV of 11…I would view the glass as half full and say they’ve done a good job of milking it LOL.They could have been more dynamic in some areas, but since Jobs died they have a pretty complete line from iPhone 6 to 6 Plus to iPad mini to iPad, and the payments thing could be big over time.
The stock was also down 40% the year before (technically started Oct. 2012). They hit another high on Nov. 25th 2014 of $119.75 and are getting close to bear territory again down 9% since.Payments is overrated and not a 2015 story. They are only available on iPhone 6 devices so even if they sold 70 million so far, Android has over 1 billion phones since 2011 with a NFC chip payment, so there is scale-ability issues. Not only from the standpoint of physical handsets but they are making 7 cents per $100 transactions so it will take years for that to “move the needle” as you say.Their complete line is what Jobs introduced to the company in 2007 and 2010. Sure they are “newer” versions but that’s why I call them iterations. iPad is dying. iPhone got a bump from finally going bigger. But they sold 50 million Christmas last year and 70 million apparently this year. What is more likely next year. 50 million again and 90 million or even flat. New users are harder to come by because of saturation. Users breaking contracts to get the new version will become muted. International growth is overrated.Lastly, the spent 50 billion on buybacks this year. That is 3 times more than IBM who was second place in buybacks. They can’t continue that to boost their stock.
Who cares about Samsung and Android devices for payments. They both suck. Apple is the one that will make it work and is way more secure.
There are 500 million iPhones in the wild. Only 70 million can do NFC payments if Apple hits their whisper number for the qtr. Your “who cares about Android” was missing the point. If they could use old iPhones then the scale could ramp up faster. THAT was my point bringing up Android having handsets with it since 2011. I never even mentioned Samsung. Apple can’t even keep their cloud secure. Easy on the Koolaid.
Steve Jobs passed in 2011. The iPad mini was introduced in 2012. The 6 plus was introduced in 2014. Steve Jobs argued against them. Maybe he would have gone for them eventually.Around the time of the original Samsung Galaxy S and S2, I was bearish because the iPhone 4 was an obviously inferior device. Didn’t work out that way. The brand is strong, and they mostly caught up. Overall, I would say you miss the forest for the trees, and some of your trees are actually mushrooms. It’s not a crazy expensive stock even if it doesn’t grow that fast, and not seeing this product cycle as the one that disappoints.
So a slightly smaller version of something (iPad mini) and a slightly larger version of something (iPhone) counts as innovation these days at Apple? They only followed what Android did first and Apple and Jobs mocked in the first place until they had to follow.My last iPhone was the iPhone 4. I loved that phone. I still have it as an retired phone now iPod. I think the passion for Apple has turned many reasonable people into religious zealots who can no longer “see the forest though the trees”.Microsoft was flat for the 2000’s even though they were still making money had over fist and had a dominate market advantage and great balance sheet. I am not saying Apple is Microsoft but their is this complacency from them and their consumers.Just because it isn’t crazy expensive doesn’t mean it won’t go lower and flat line in a trading range for some considerable amount of time.
The low valuation of AAPL seems to me to be an indictment of the stock market as a reflection of reality. What more could Apple reasonably do to connect their stock price to enterprise value? They have high profits and loyal customers, they have a large dividend and stock buybacks. They’ve had about as good a year as a company can have. And yet their market cap is lower now than it was in September 2012. Apparently nothing they’ve done since then has any value. And you’re quite right — it would not be at all surprising to see the stock tank, for no reason at all.
Nevertheless, Apple Pay accounted for 1.7% of mobile purchases in the US in October 2014, and 1% of total purchases at Whole Foods. Not every Android phone has NFC, and even with hundreds of millions that do, Google Wallet hasn’t caught on. I think what Apple got right was getting the banks to buy into it. NFC is much more prevalent outside the US. Likely we were the “guinea pigs” to see how well it works before they roll it out to other countries like the UK where NFC is more established.
Understood. But the topic here is 2015 and this isn’t a 2015 story for Apple or anybody else. It will take time, years really before it adds anything material to the balance sheet of a company Apple’s size. People who think Apple is going to snap their fingers and generate iPhone type revenue/profits from NFC payments this year is fooling themselves.
Since they are taking only 15bps from each transaction, or less than 1/10 what the card issuer is taking, I don’t think they are looking to generate iPhone-like revenue from Apple Pay.
All investors, certainly VCs, should be looking at growth stocks or growth projects more than a quarter, more than a year, down the road.IPhones took off relatively slowly their first two years; iPods even more so. We forget about Apple’s multiple products that took YEARS to be good enough, while Apple honed the hardware (MBAirs) and software (OSX)—the first versions were utter dogs.Apple is certainly capable of taking a direction that they realize is not succeeding (eg the cube or the 5C iPhones) but by and large you need a good reason to bet against their superb, intense product/concept management. I haven’t seen ANY reasons stated why the Apple Watch will be an exception to this pattern—only that it doesn’t stack up well when measured by 2014 standards, the exact same type of backward thinking that caused so many to misperceive how wildly successful their products might become.The forecast is actually rather banal. The Apple Watch will not be as exceptional as how we remember the iPhone and iPod were, because we forget how even those blockbusters came out of the gate relatively slowly. This too would be perfectly consistent with how fully-baked Cupertino’s past products are when they’re exposed to consumers and competitors.Apple Watch has all the appearances of fitting into the pattern of past Apple rollouts.
Then why are the estimates higher than any product launch they have ever had.
First of all estimates span a wide range, so I’m not sure they are higher but let’s assume they are… The reasons?1) More iTunes customers/accounts2) More Apple Stores3) More publicity4) More total ‘installed’ Apple customers5) Lower average selling price than iPad or U subsidized iphone
Yeah that seems consistent with all the numbers we’ve seen slung around.What is (correctly!) missing from your list is any mention of how an Apple Watch will grow exponentially with apps, the way the iPhone did, or with the many hardware improvements that Moore’s Law will provide, and how well other ecosystem build-outs (health, Things, payments, …) are (1) right-sized for wearables’ interface limits, (2) affordable, (3) convenient/fun/empowering and (4) capturable by Apple.I’m sure there are many millions of likely buyers per the reasons you cite. The more interesting issue (to me, to the industry, to the advancement of tech and consumer value) is how well the watch finds a role and a place on the consumer’s wrist.I don’t think the Watch will be a useless, embarrassing bauble the way some do, but if Apple just shoved it out there the way competitors have, they could burn their sterling brand in a heartbeat.
Apple has tons of growth available from people sick of dealing with Android.
Yes. Android has 85% global market share. Sounds really sick to meanwhile market share of iPhones is declining.
What share of global profits does Android have?
Ah, the 85% market share argument…Picture 100 coins in a bucket. 85 of them are pennies, 5 are nickels, and 10 are silver dollars.Guess which coins Android has? Hint: they have 85% of the coins in that bucket and all of those coins are darker (in color) than the others.
Their cash pile continues to grow even as AAPL provides a high dividend and large stock buybacks. They can obviously continue that indefinitely, as long as profits remain high. Considering the buybacks, the stock price didn’t really go up much last year. The stock market still values AAPL at a tiny multiple of their cash holdings, and ignores their continued rapid growth. They own the high end of every market they’re in, and make most of the profits in every market they’re in. By the end of this year they’ll have sold over a billion iOS devices, and their customers are remarkably loyal. I think it takes real effort to believe they’re not still on the way up.
You heard it here first, folks. Apple will sell under 30M watches.In 2014 they’ve sold 160M+ iPhones. Remembering that old iPhones have high resale value and aren’t just thrown away. In families I know previous iPhones models have replaced teens’ budget Androids.iPods used to be given as gifts. No one needs an iPod now the functionality is built in to all phones. But I can see Apple’s $349 wearable being a massive hit even as gifts.What Apple Watch will do is to legitimise the smartwatch, and cause more widespread adoption of other smartwatches too. iPad legitimised the Tablet, which had been around forever. I had a touchscreen multitasking phone back in 2002. I love my Pebble. But normal consumers aren’t going to buy a Pebble and they wouldn’t buy a smartphone in 2002.
“At this point it is a expensive accessory that should be a stand alone device at that price but needs to be tethered to an even more expensive device, the iPhone 6, to even fully function.”Incorrect. The Apple Watch will work with the iPhone 5, 5c and 5s in addition to the 6 and 6 Plus.
Everyone keeps missing the user experience that Apple has innovated with the Apple Watch. The core thinking behind the device is what will move the needle. And how we interact with the device. It will be revolutionary. I questioned it at first, until I looked deeper into what Apple announced and showed on their website. Then the light bulb went off. They did it again. Form factors, functionality and the underlying technology will always evolve. But the majority of (myopic) people out there fail to see the vision of what Apple sees. The naysayers and market are always short sighted. Because they have no vision until it’s staring then in the face with its simplicity and life enhancing experience. Only then will the Homer Simpson’s of the world get it. The enlightened ones will already be way down the road watching everyone stumbling to catch up.
Ummmm. It still needs to be tethered to an iPhone. That was my main stand alone point.
Only release 1 will need to be tethered.
Not for fitness tracking. Not for Bluetooth music playback at the gym. It has stand alone functions. Far more than Pebble.There is little point to a tiny ‘stand alone’ watch IMO. Do teens really watch to leave a smartphone at home and do Facebook, Snapchat, iMessage, Vine, Watch YouTube, on a watch? No. Do business people want to bang out email responses on their wrist? No.I’ve just replaced the navigation system in my car with an Alpine iLX-007 unit with Apple CarPlay. It’s such a better experience. I looked up a restaurant at home on my Mac, in Maps. Later, in the car, I tapped Maps, Directions, and the second top suggestion was the restaurant. I didn’t have to search again. Integration is the key. I don’t want a stand alone mobile phone on my wrist, two numbers, call diversion, two email clients, etc.Your home PC used to be the Central Point that the Palm Pilot and iPod synced with. Now it’s a pocketable smartphone with its cloud services.
It doesn’t have GPS built on so how is it suppose to track you. It uses the GPS of the phone.
The Apple watch has many stand alone functions that don’t need tethered. I am sure you will change what your point was yet again since you really don’t have a point.
Exactly. Extended family members in their teens are all on iPhone 5 series hardware (only one has a 5s)
Just out of curiosity, when was the last time Apple announced a device that pundits did expect big things from?I say Apple’s stock price has an unknown amount of watches factored in, but if I had to guess probably 0-10 million. Apple’s stock trades below S & P 500 valuation, despite growing faster, having mass cash, below market debt multiples, and products/services that hundreds of millions of the wealthiest people on the planet deem integral to their lives, businesses, entertainment and productivity.The 30 million watch figure being “baked in” as if Apple’s share price is being driven by it, borders on rediculous.
My fitbit requires charging once a week or so. I’m not plugging in yet another device every nice. Just practically speaking, I’ve run out of plugs next to my bed and it’s a tangle.
Line actually dominates most of E and SE Asia, and is Japanese, not Chinese. Facebook et al were available everywhere in Line’s market. But yes I wonder how messenger applications expect to break into saturated markets.I also wonder how lucrative the US messenger market really is?Companies often do a big raise before going public.
Re: messengers from Asia – only WeChat is Chinese, and in fact WeChat is the re-branded, internationalized name of the app. LINE is from Japan/Korea and KakaoTalk is Korean. Hike in India is much smaller by comparison but is gaining traction. And it’s worth mentioning that Rakuten (Japan) acquired Viber for $900M and clearly has global ambitions. So in summary, I don’t think the rise of Asian messaging apps has anything to do with not having access to FB or social networks but in fact represents a fundamental shift/evolution in the consumer behavior paradigm
yeah, i’m aware of the nationalities/geos of these, but still think it has to do with social network penetration. how do you see folks in the west giving up iMessage and Messenger for these?
The majority of U.S. doesn’t use iMessager.
How do you figure that? The majority of smart phones in the US are iPhone and iMessage is enabled by default, just be using ‘SMS’. Even with no iCloud setup, the mobile number is used for iMessage.
Whilst Apple’s share have gone up, they have never had more than 51%.Here is a link to what I am saying from a pro-Apple sitehttp://www.cultofmac.com/28…Many iPhones do not have useable data. Younger users use the app their friends use, security minded people do not use iMessage at all, then there is all the people who have been burned by it.
Apple’s share of the US smartphone market has been going up remarkably steadily. According to ComScore, 25% of all smartphone owners in Jan 2011, 30% in Jan 2012, 38% in Jan 2013, and 42% in Jan 2014. I’d guess their share of smartphone *sales* in the US is currently well over 50% (and almost all mobile phones sold in the US are now smartphones). Counting all iOS devices, the installed base is close to 1 billion, which makes iMessage a major messaging platform. And it’s really quite secure, with end to end encryption since very early on.
how are you
I am not wearing a watch. I have a phone that gives time.
@semilshah:disqus @fredwilson:disqus, where I disagree with the comparison of the Apple Watch to the iPhone/iPad in terms of success is the perspective of the market potential. The Apple Watch is competing more with the Swiss watch segment (both on price and craftsmanship) than the cheap < $100 segment. And that Swiss segment only sells roughly 29M watches per year. Yes, there is also the fitness wearable market (an even smaller market), but we’re not looking at a segment that necessarily will support volumes in the neighborhood we have grown accustomed for smartphones and tablets. I don’t think anyone expects that Apple Watch is intended to earn the same level of success as the iPhone. So similarly, no one should be disappointed that they don’t. Frankly with these numbers as perspective, if Apple sells 10M Watches (~33% share) it’s an unqualified success! Maybe over time the market potential increases (there are a whole lot more wrists out there), but it’s a 1st-world product only, and not even a mainstream one (I foresee a lower attach rate for the Watch to iPhone owners than the iPad has). Thoughts?
What I feel instead is this – Apple Watch will not catch on as much as the rest of the world – but there will be an increased Wearable trend which might focus on the Mobile Phone – Google Apps across the world – just a thought – with them hoping to capture the young demography !
Thoughts on continued bank disintermediation? How about in the context of #6?
I can’t wait for that to happen or to help that happen here in Canada. I feel it will be more difficult in Canada though because of our limited number of banks.
Serious respect for the specificity of this list.4/ feels almost like you have insider intel 😉 Does it just come from watching similar ‘world changing’ hardware get off to a false start over the years?
just a gut instincti mean, why did the founders sell? maybe they knew it was going to take a lot of time and money to make their vision work and they felt like doing it inside of FB was going to be easier????
Of course it would be easier, depending on what was promised. They potentially have “free” reach to all FB users – that’s invaluable. But is that a good signal or even worth using as a positive signal?
Ah, yes. And, I hear that FB and Zuck can be really seductive when it comes to wooing acquisition targets.
that’s a very good point. I was also disappointed and confused why they would sell so early on. FB buying it
I also have a certain skepticism for technologies that have arguably been “just around the corner” for forever. Doesn’t mean the stars won’t align someday but VR still feels like something with serious niche enthusiasm that isn’t ready to break out into the mainstream yet.
cybersecurity budgets will explode in 2015 as every company, institution, and government attempts to avoid being Sony’d. VCs will pour money into this sector in the same wayAgree in part. (And I’ve said similar things obviously). However the window of opportunity to sell these services is right after a major hack.  After that, as we know with “crumbling bridges” and “generator for my basement office in case Manhattan is flooded again”, the emotional need to ward off impending danger by taking action is reduced to the point where the average person doesn’t take any immediate action. Because they simply adjust to the threat. It becomes old news and it’s the threat that you put in the back of your mind.That said, and as I’ve said, it’s a great opportunity as it has been for many many years. Nothing new. Large companies fend off attacks all the time. You just don’t hear about them. It might be more visible now and there are more actors and tools but most companies (of the scale of Sony) already take this type of thing very seriously right now. And as far as smaller companies they aren’t as big and visible a target. When they do become targets then that will be the next big opportunity.So here is the question. If you are a startup in this area do you have the marketing budget and corporate sales staff to be able to follow up with a ton of prospects in the days or weeks after the next major hack? Do you have a war room and enough personnel to do what the alarm companies  have been doing for years? If you don’t you won’t get your share of this business. Alarm companies will listen to police reports and blanket a neighborhood with flyers telling residents about how a house in their development was burglarized resulting in a nice amount of new system installations.
Read an interesting article in the CT Law Tribune about this the other day: http://www.ctlawtribune.com… (registration wall)The key part:We lawyers are going to pay the cost as folks realize just how hard it is to do e-commerce right. Already, banks are restricting the right of lawyers to do closings because the Dodd-Frank Act requires banks to manage their vendors and make sure that they have proper controls in place. Instituting and complying with best practices can be very expensive.Every time client information leaks out (think Target and the other retailers who got hacked in the last few years), we now have to self-report to the Connecticut attorney general and will be expected to take remedial measures, such as credit monitoring, for years to come. The costs of that could bankrupt even the most robust firms.————–I think it’s only a matter of time before regulatory schemes and contractual terms start requiring other businesses to be more vigilant in this department.
That article is behind some kind of a wall. To anyone else interested you can get behind the wall by googling”We lawyers are going to pay the cost as folks realize just how hard it is to do e-commerce right. Already, banks are restricting the right of lawyers to do closings because the Dodd-Frank Act requires” and following the link.
I just skimmed the article. The guy who wrote that, for lack of a better way to put it, a moron.Nothing he says matters because he actually said this:Is it just me, or is all this Sony Pictures hacking stuff just deserts for an arrogant and stupid company that enabled an idiot director to make a spectacularly ill-considered movie about an assassination plot on Kim Jong-un, the head of North Korea?and this:First off, if the plot had involved killing our own president, you can imagine how quickly the U.S. Secret Service would have descended on Sony and how quickly the movie would have hit the Dumpster. A comedy about killing someone is not going to get anyone in trouble regardless of who the target is. Nor would a serious one either. It’s free speech and protected. It’s not a credible threat or a threat at all.Also I’m completly lost on his point that you mentioned: “We lawyers are going to pay the cost as folks realize just how hard it is to do e-commerce right.”Nothing at all about this situation means anything but more business for attorneys despite the way he backs up what he says by “Already, banks are restricting the right of lawyers to do closings because the Dodd-Frank Act requires…”
Being from where it is, the focus was on attorneys, but my presumption is that these regulatory schemes will also impact other businesses. I can also imagine an escalating negligence standard being developed that shifts more and more liability to companies that do not invest in hardening their systems. Also I would imagine that insurance companies have or will develop products for this market, and that the companies will develop guidelines and best practices for their clients to follow and business opportunity will exist there.
and more liability to companies that do not invest in hardening their systems. Also I would imagine that insurance companies have or will develop products for this marketI think it’s obvious that there is no magic bullet security defense. There is no extra device (like in airplanes with tracking) that hasn’t been purchased but the cost is known and would help greatly. All the low hanging fruit has been tried. And the simple truth is that people are a part of the system and anyone who works in security knows that if a system is to secure the value begins to retard greatly. So it’s a balance. And people screw up as well. You can’t legislate against that.Think about it this way. If you drove your car and wore a helmet on your head (lightweight) you would probably be safer than if you didn’t. However nobody (but race car drivers) wear helmets. And in fact most people don’t wear seatbelts in cabs, do they? So the tradeoffs in reducing risks in some cases outweigh the benefits. (At this point LE decides to mention the risk that some people take riding a bike or scooter in Manhattan. It’s all a tradeoff it’s not as simple as saying “do the right thing or do the safe thing”).With respect to insurance products agree. Pass or spread the buck which actually makes sense because by smeering the risk the thought is that not everyone will get hit so just recognize that and make it everyone’s problem realizing there isn’t a magic bullet and it’s just going to happen. So we all pay which I guess is the way it’s going to be.As far as “best practices” those are just “CYA’s” and that assumes they are followed. If they are mandatory you need enforcement and monitoring which costs money that somebody will have to pay. Besides anyone who has ever been audited by an insurance company for safety knows that in many cases it’s just theater anyway. Typical person doing the auditing isn’t exactly high capacity and quality. As a stereotype of course.
“(people paying for their own healthcare)”I like this, I like it more when we as a society are willing to help those people heal and get care so they can become a productive part of society or become even more productive.
One area that will be huge in next two years is health care, but I think the biggest trend is the beginning of the end for the decoupling health insurance from employment (as both liberal and conservative economists support – although with different end goals). Sleeper for the most important health care legislation is http://www.zanebenefits.com… . The republicans will push it because it is an unbelieveable pain in the ass for small business to deal with all the regs from irs and dol and changing rules. Will impact startups such as zenefits, and allow for tons of businesses to go after small business (2-99 employees) health insurance business and change a ton. Its new years and I am down here to celebrate my Buckeyes winning tonight vs Alabama so my thoughts are not well fleshed here.. but stay in touch if interested in how health insurance will evolve next 2-3 years. WIll be some exciting stuff 🙂 (not working directly in this space.. but so many opportunities. Love to chat with other entrepreneurs and experts in health insurance and reform space…willing to freely share insights)
The trend I’m seeing is more small businesses offering health insurance than before because of the tax benefits of doing so. Lots of friends working for smaller businesses (1-50 employees) getting health insurance for the first time from their employer this year.
In what form tho? THrough group health insurance, or through the company paying a monthly stipend? Like giving $400 a mont and you get your own plan. Having worked for the largest individual / small business health insurance broker (3000 agents nationwide) the trend has gone to reimbursement (although as I referenced some legislation and irs / dol rulings have limited a little bit. I know Anthem / Wellpoint has seen a massive shift, as well as a couple Midwest carriers aswell. But I am curious if some are offering traditional group too. What part of the country?
This is in CT and NY. They’re getting group health insurance for the first time.
ACA is picking up all costs of any policy where the treatment costs exceed 50k. What happens when this ends in 2 years?
The law is designed essentially for reinsurance after $50k (where a majority of the cost is spread over all plans on the marketplace). While the reinsurance goes away after 2016, two things may happen: 1) companies will increase plan costs slightly to account for this greater risk, and/or 2) reinsurance will re-emerge. Either private sector based like in most other insurance industries or congress will pass a law re-instating the former program which is going on right now. I don’t think this will derail the law. Here is a good article on the detailed elements of risk-sharing (the 3rs) http://www.commonwealthfund…
I’m not so convinced on the bitcoin point. Sure, no altcoin is going to take over on payments but I think full decentralized apps with built-in appcoins will have many advantages over VC funded projects sitting on top of bitcoin. Bitcoin or the blockchain are not the analog of TCP/IP because blockchain apps can serve as full stack apps. The amount of collaboration that can happen in the early stages of app development, when a project has a coin (fundraising tool) associated with it, is astounding. I think it will be much sloppier than the stack your friend has put together. My lame, sloppy diagram provided below… and, of course, I’m biased..
I’ve seen that graph this week somewhere, but can’t remember where it came from. Do you have the source please?Problem I see with that graph is that’s mixing apples and oranges and trying to link everything somehow. You need to separate the technology parts from the end-user experiences.I’m not sure it’s a black and white world between VC backed vs. crowdfunded. Crowdsales or pre-sales are a bit misleading, as it doesn’t represent success necessarily. It’s just an entry point, equivalent to angel or seed round. What happens after is more important, e.g. market adoption specifically.
Source: me. I created it a few weeks ago and posted it here before. Concur it oversimplifies and mixes apples and oranges. But the stack diagram provided by Fred really didn’t cut it for me.There needs to be some way to express this idea that the protocols are also apps. Besides being a protocol for money, bitcoin is also an app that users can use to send, store and receive money, without using anything else in the “stack”. There are currently several compelling projects in the works now that will be full decentralized, full-stack apps. I think a full decentralized exchange will be the motherlode.I do think there is a significant difference in potential between VC funded – and crowdfunded using an in-app coin. VC funded will never be fully decentralized because they need proprietary code/IP to drive revenue for shareholders. Whereas appcoin crowdfunded have the potential to be fully decentralized. The same phenomenon that makes bitcoin better than paypal will make appcoin apps better than proprietary VC-backed apps sitting on top of bitcoin. I think. Again, I’m biased.I do realize, of course, that VCs can and will just start investing in that direction if there seems to be promise and that’s sort of my whole point. I hope that starts to happen. In my eyes, the more this ecosystem uses fully decentralized, open-source tech the more resilient, flexible, scalable it will be.I’ll make some updates to that diagram based on your feedback.Thanks and Happy 2015!
ah…that’s where I saw it here. thanks. what is the source of your bias- I didn’t get that. have you seen my last 2 posts covering some of this:http://startupmanagement.or…http://startupmanagement.or…
My bias: I’m not an accredited investor so I squirrel away some coin in a few appcoin projects.I had not seen those posts… will give them a read later today!
Couldn’t agree more about wearables. Eventually i’ll be able to have an inter-operable me. We had a product with my failed startup called a ucaster. Still have the TM for it. That’s what it will be. My reputation, my health records, my preferences, my friends come with me but there are a lot of people who are going to try to stop that from ever becoming a reality.
Fred, if you haven’t – you should try the Generation 3 Oculus Rift. It might change your mind about VR in 2015.
Happy new year to you too, and thanks for sharing what you see
Re 11: I wonder how much health care would cost if there were no health insurance. I had an operation a few weeks ago where the surgery center (part-owned by the surgeon) charges $28k for a 4 hour stay, the surgeon charges $20k for a 45 min procedure, and the anesthesiologist charges TBD. I’d guess that, if there were no insurance (including government versions such as Medicare), some of this stuff would be offered at 1/10th the price or less.
What they charge and what they are willing to accept from insurance companies is night and day, and frankly quite startling. The imbalance is huge.
This is where a lot of the corruption lies. Check out the cost of an MRI of the head by buying it online (hint $385); then ask the same radiology clinic the price if “billed” to your insurance (hint $2,800++); then ask your insurance company the numbers for your coverage, the amount applied to deductible, the amount of discount they have “negotiated for you”, etc. It’s criminal and many of the hospitals and clinical service facilities are in direct billing collusion with insurance companies like Blue Cross/Shield, Anthem, etc. – against the needs of the consumer. Those who are not insured in a large group (employment group) especially get screwed with these corrupt and deceitful billing practices./rant
When you throw 3rd party money at an industry, its prices rise. Happened with education too.
Right, and in this case, there is more back-room collusion than in some industries. It happens in ed. as well, but I believe it’s more egregious in healthcare – but perhaps it’s just more visible to me there because I’ve had the opportunity to see so much of it directly in healthcare.
I’d guess the insurance negotiated price is about 30% of those figures, but it’s still inflated. Providers inflate to insurers, and insurers inflate to employers (or tax payers, in the case of the government insurers).
You will be proven wrong about apple watch. Apple watch will be a new way for communications, a new messenger. Can’t wait to buy one.
Fred how do you think lending changes this year? Will regulators and lower rates shift demand back to banks, or will speed trump cost for those in need?
Also Fred I think it’s very telling that you don’t even mention Twitter in your post.
i love Twitterhttp://avc.com/2014/12/ther…
Yeah, I know. And I read that post you’ve linked to. That’s my point – surprising Twitter didn’t seem worthy to be even mentioned in a post about 2015!
what am i going to say about that?”Twitter will have a great year and add another 60mm active users around the world”i don’t know how that is interesting
Fully agree on 8. Bitcoin is like TCP/IP: just the base protocol, able to transfer values between accounts like TCP/IP does with packets & hosts. What it needs now is HTTP, a higher layer of abstraction over it.
In sheer anticipation of fed moves in 2015, my concern is that many companies are gonna be skittish with discretionary spending, which means companies that are ad rev dependent–like FB and Google–will likely take a hit. With respect to Amazon, have they even figured out a formula for profitability? I really don’t look at any of the above companies as “safety” nets for investment vs. consumer staples and pharma, for example.
Amazon is playing a long term game by spending a majority of profits in R&D for delivery/process improvement as well as in refining/discovering new niche markets. A brilliant and unusual move. It diesn’t matter if they aren’t a blockbuster wunderkind company, what matters is their stealth in finding and owning niches before anyone else even understands they exist.
Appreciate your insight Susan, although I would say as a public company it really does matter if they’re not a “blockbuster, wunderkind company.” The notion of exploring niches in perpetuity w/out having a legit profit plan is disconcerting as an investor, even with solid revenue growth. At some point, the model has to work and the dog has to hunt.
I think Amazon is the last and greatest of the 1990’s internet-boom “give away a product at cost and make money on the stock price” companies. I like Amazon and buy a lot of stuff from them, but if they stop having the lowest prices (or near lowest), I’ll switch to a competitor in a minute.
Xioami will have major trademark and patient issues when it leaves China. The Apple watch will be huge but not until developers figure it out. Why? iPhone ownership is surging. SaaS is not a story, it has been norm for at least two years. As a software marketer I used to spend a lot of time justifying the cloud to fearful IT people. But that issue disappeared awhile ago. I think you have been vastly overestimating the importance of Bitcoin. No one outside of our bubble even knows what it is. One of the startups in my accelerator was a Bitcoin play and in their 150 customer discovery interviews exactly two people had ever heard of it. Needless to say, they pivoted. Happy 2015!
I agree with you on the Xioami issue – they are getting away with blatant copying in China. But once they venture to the US they’ll be hit hard by Apple (and possibly Samsung as well). The $1.1B raised might seem a lot to some people, but I’ll bet most of it is earmarked for buying up some defensive patent protection – and as Google knows, a billion doesn’t go far when you buy patents (Motorola).
Somewhat disagree on #2, Xioami outside of China is using Google Android.
I think we will see an accelerated rise in individual workers. Co-working is going to be huge, and the networks that can be built around it. I am bullish the dollar, still. I also think that oil decreasing in value has a net positive effect on growth. On 7, the nominees will not be the early front runners. I hope interest rates go to 4%. That would be a sign of two things, healthy growth, or on the downside runaway inflation. I think the stock market will have a drop around May that will scare everyone and allow the doomsday people some TV time. Not sure about wearables. I have seen applications for things like Google Glass for baggage handlers that look pretty cool. But, agree that wearable won’t be mainstream.
Interesting to see how little focus on social media apps prediction / social networks, I guess that on it’s own is a prediction. From the one who will go after seeing and meeting every person in the world thru Wonderloop this year. Still seeing that it’s the big companies game there could still be room for new things.
Wearables a headfake? Why carry (and drop, and lose) a phone when you can have a watch and/or glasses
I have lost far more glasses in my life than phones
Great list to start off the year! Hope everybody had a lovely New Year’s and that the hangovers won’t linger too long ;)Re: #2 — I’d really like to see Xiaomi expand into LATAM & Africa more so than in the US. Lots of opportunity, lower barrier to entry, but have to contend with cultural perception of Chinese products vs. those coming out of the western world. Joining forces with Samsung could accelerate this greatly.Re: #3 — In Asia, messaging is never far from e-commerce and if anything this is really what the dominant platforms here in the west should be borrowing. I like that Twitter has rolled out purchase cards. It would be a very powerful feature on Instagram too esp. for lifestyle & fashion brands. WeChat entering the market and providing that functionality could be a big disruptor.Re: #5 — I think we’ll see a re-focus on the wearable front from a consumer technology (which is not ready for prime-time and of dubious value) to more professional usage. Examples: Google Glass for surgeons, navigation info beamed into motorcycle helmet visors, biometric & telemetric trackers for professional athletes (like the Red Bull lab, smart jerseys), etc.
“media’?” “I guess so.” “It was an artifact of relatively low connectivity.” ― William Gibson, The Peripheral
Some good ones here, Fred. One I disagree with (somewhat) is your prediction on wearables. We are starting to see some very compelling use cases for wearables (particularly Glass) in the enterprise. I believe 2015 will be the year that the market wakes up to this trend. I do agree, though, that widespread consumer adoption of wearables is not likely to happen soon.
I hate to be that guy again, but it is the year where we will see the software development community embracing Microsoft programming languages and tools in Linux (the main cloud OS).I also think 2015 will be a good year for (the undervalued?) Reddit.
Point 11 about healthcare is spot on. I think we’ve got a long ways to go before EMR’s really open their APIs and give developers useful access to their stacks. But I sincerely hope that they get the ball rolling.
2. disagree on Xiaomi, 1B dollar doesn’t mean the Chinese will know how to develop good software or open up their market to foreign developers. IMHO the Chinese market will become more and more insular in the foreseeable future.5. agree on wearable: not there yet in 2015, pebble/another e-ink watch could get boost, Apple will need battery innovation to get wide adoption8. I think it could take a decade to realize even half the potential of bitcoin/blockchains, and it is linked with 10.: until security practices on its soil don’t notch up quite a bit, it will remain an experiment10. agree on cybersecurity+2015 will be defining year for mobile payments with ApplePay carving roads into the market+2015 will set the stage for disruption in the cable TV business in 2016+oil prices will spell trouble for Tesla which may have to focus a bit longer on high-end and perhaps on the European market where high taxes cushion pump prices+democratization of space for startups/universities will keep accelerating with micro-sats becoming ubiquitous and showing interesting usages+industry growth in containers and functional programming will keep increasing the value a single programmer can deliver as well as allow startups to roll out increasingly complex applications for equal investments+2015 will see high growth and demand in software science SaaS and talent (computer vision, machine learning, AI etc.)
Still waiting for the robot gardener that can mow and water the lawn when needed. Weed, cut the hedges, trim the trees, roses and other assorted plants. Make landscaping suggestions, implement them and maybe wave to the neighbor on occasion.
I’m still waiting for a host of robotic devices for both consumer and commercial applications. There are so many problems for which we are close to viable robotic solutions, from Healthcare applications to security to freight/delivery to everyday consumer needs like the gardener robot you mentioned. I think 2015 is going to be a big year year for robotics.
I agree. There are a lot of niche robotic startups for certain areas that haven’t yet broken out. I don’t know if 2015 will be the year, maybe 2016, but robotics is still trending up.
Cheap labor inhibits innovation related to automation. Japan, which has expensive labor due in part to its restrictive immigration policies, already has robots doing things like bathing the handicapped.
robotic lawnmowers are coming my friend.
Where do you see on demand logistics going? Personally I see it working better in the B2B space. More mass/ scale faster.
Really interesting post, thanks for sharing. Curious to see how the Asian markets rolling into the US (Xiaomi and msgrs) will look. What’s a good example of a similar company coming to America in recent history? Also love that Sony just became a verb 🙂
I don’t know how to say this nicely. But I hope and pray that Xiaomi and Asian Messengers fail flat on their face and Americans don’t just let China take over without a fight. They’re still communist!
Curious that there is no mention of connected devices outside of wearables. Why are connected devices not interesting and/or not on track to break out in 2015.On the bias comment. Do you feel more need to specialize on particular ecosystems like Bitcoin or Healthcare?Happy New Year and thanks to you and USV team for an increasingly open conversation about how you see the world.
Best post of the year! Best line — “Safety used to mean gold, US treasuries, and blue chip stocks. Now it means Google, Apple, Amazon, and Facebook”
The Kitchen Surfing genre blew up as well this past year.
Prediction 5: Love when you claim it! Respectfully disagree with your thesis on the Apple Watch. This product has the ability to overturn the old idea of a watch into something much more personal and meaningful. The watch combined with advances in Sensor technology will reshape the current boxed corner in discerning data intention through more personal bilateral communication.Prediction 11: Many of my friends in the healthcare sector confirm your thoughts on service and are preparing for change and technology driving these shifts. They do believe in wearable technology…
Agree with 8/ the most, can’t wait for the killer bitcoin app to finally arrive. Interested there isn’t more on Fintech, unless all the innovation will happen within bitcoin?
Rates will not rise, as they cannot.
Coincidentally, I’m invested in APPL, FB, AMZN, FEYE, GOOG, so I agree with your stock picks and cybersecurity take. I think that a lot of the private companies like Uber, Dropbox, Box, etc. will prove to be overvalued. I think that though Asia-originated apps like WeChat and Line and such may try to come to the U.S., but I think they will struggle to penetrate. Facebook and SMS are the only messaging apps I need. I think Bitcoin has more downside to see in 2015 before it has a chance of greater adoption. I don’t see why I would convert my strongly valued U.S. dollars into the speculative and volatile Bitcoin. My dollars are accepted everywhere that Bitcoin is, so why would I take the currency risk?
Love seeing 11/ healthcare on here. It’s been a long time coming, but we’re finally seeing the beginning of technology-led transformation in this backwards, bureaucratic, balkanized industry.In 2014, funding in digital health grew faster than software, and it’s not slowing down!http://www.slideshare.net/R…
I think we’ll see more companies trying to hack the information overload problem people experience online (gets worse every day). There is a need for more content curation than content creation, and there is a lot of potential there. Not sure current curation solutions I know are good enough. Read yesterday an awesome post by Peter Sweeney about it which I deeply recommend. Cheers.https://medium.com/@petersw…
I know your post is focused on 2015, but on the edge remember robotics. With sales bots getting started at Lowes on the West Coast, things will start to pick up.I’m most curious if they are getting anywhere with limiting error in the voice interface with the Pepper robot starting in Japan for Softbank.
I agree that real market economics entering healthcare will lead to significant changes, hopefully price and quality transparency sooner rather than later. I’m not so sure if i’m in favor of peer-2-peer healthcare preferring trained experts for something so important though maybe its meaning is not what I think?
If even half of this is true then I am even more excited about this year.This also has interesting implications for the U.S. employment market and the fields that are going to become even more competitive such as SaaS sales.So many things we are now experiencing (e.g., the mobile boom, emergence of LA tech, et al) I first heard at AVC or elsewhere from you…Happy New Year!
How sites get built / platforms is also an interesting space to watch in 2015. I’m not talking about the big custom sites, but the small and many.So far WordPress was a top choice, but site building platforms emerge as better and most importantly EASIER solutions for users. Using the SaaS approach, these companies are building great products on top of a strong userbase.
No mention of drones. Combined with smaller, wireless wifi cams, home security/IoT could get interesting.
Thanks Fred, love your posts and the feedback from the community, so much to learn! I think Xiaomi is more of an emerging markets play and agree with other comments that they’ll emerge in South America and Africa before the USA. The OnePlus is also meant to be a great handset and there are many more in various markets around Asia. This week I moved back to a Samsung after 10 months with a Redmi – the price point is attractive but the little differences got to me in the end. Given how central mobility is to our lives, if you can afford better, I think you’ll spend it. I think we’ll see monetisation beyond stickers in messaging apps emerge this year, and much more progress in developing payment models in markets w/out credit cards.
First off, happy new year!secondly, to your point that wearables and healthcare apps have been confused, do you think there will be a acceleration in healthcare apps as healthcare apps have to become better because of the downturns in wearables?Thirdly, a good chunk of this is reliant on better understandings of the nature of data – so I guess smart data
Hi Fred. I cannot agree more about wearables in 2015. The battery issue will kill Apple’s watch in 2015. I’m sure they’ll fix the problem with time because it is an existential problem and they’re screwed if they don’t, but not in 2015. Having to manually synch my Jawbone UP twice a day meant I stopped using it within a week. Tech only works if it makes your life easier. The Apple watch does not do enough yet to justify taking it off and charging it every night. If it ends up where many of us think it will in terms of health benefits, then fine. But that isn’t happening in 2015. Speaking of health tech, the most intriguing part of your post for me was the mention of p2p medicine. Can you expand on that in another post? Thanks. Been a fan of this blog for some time. Keep up the great work. Ed
Apple Watch could be a hit because:1) it’s extremely visible, vibrant and affordable luxury from the House of Apple.”, and2) it’s important because it’s personal and customizable, possibly even fashionable (unlike Google glass). and,3) lovers and kids might enjoy discretely communicating by love-tapping each other with Taptics feature or sending silly drawings that don’t require an app to open to view, and4) expanding Apple Pay (especially for smug show-offs like me), or gravitating into features to open secure doors or stadium/transit turnstiles.
Thoughtful set of themes/trends/predictions.I wonder if we’ll all be surprised by the lack of interest Asian companies have, in general, in expanding to the US. An alternate view is that while the US market is large it is going to be harder to penetrate and will take a lot of capital. Whereas new markets that are mobile first (like Africa, with >1B people, half on smartphones, and so on) already have the sort of base upon which to build with much less of a headwind.It isn’t like a lot of US companies have had a great deal of success in many Asian markets. Maybe they are looking at that experience closely.Just a thought.
love the term ‘p2p’. with so many clinical verticals now driven by universally accepted protocols, the idea of having to rely upon someone with 10 years of training to implement a protocol available on the internet makes less and less sense.
Xiaomi phones sold outside of China (Singapore, India, Indonesia) come with Google Play services, including Play Store and Maps. So it is safe to assume that if it ever comes to the US, it will also comes with Google Play services. So it will still be “Google Android”.
Plus it makes sense in China to have a non Google Android as Google services are not available, but in the rest of world what is the advantage to end users of an Android phone without Google services?
I’ve been trying to convince my friends to think about the personal mesh network for years but no one seems to get it. So glad to hear you mention it! Seems crazy to me that we require everything to fit in one unit (battery, radios, storage, display, interaction controls, etc). Earrings, watch, rings, necklaces, piezo-electric shoes for energy generation, belt, glasses, radio+storage+battery in briefcase/backpack/beltholster, etc etc. 😀
Completely disagree on Xiaomi. The company is not what most US observers think it is. Xiaomi sells phones to seed ecommerce business, not to make profits like Samsung, Apple, Huawei or Lenovo. It is difficult to translate this model to more mature Western markets.
I don’t fully understand your comment, “..to seed ecommerce business”? I own a Xiaomi Mi3. I’m not seeing the ecommerce linkage.
It’s not the phone, it’s how Xiaomi uses the phone to build engaged and trusting audience for the e-commerce business (already 3rd largest in China). See many examples here: https://medium.com/@mvakule…Also international versions of Mi phones are different from native Chinese ones.
I disagree with 2014 having been a ‘horrible year for Bitcoin’. It’s obviously been a horrible year for the bitcoin price, but startup activity, investments, maturing of products and merchant adoption have all been really strong. Besides the price, user growth has also been underwhelming, but the positive still far outweighs the negative IMO.
Xiaomi has used Google version of Android outside China so if they come to the US (big if) I think it will be with Google’ Android.
I don’t really see the drivers for the bitcoin “centralization” trend that you’re projecting. Can you expand a bit on why you expect to see this and who this is ultimately good for?EDIT: I did some additional reading on identity and blockchains, and also on pegged sidechains. I think I have a much better understanding of your prediction when factoring in those potential innovations. Highly recommended for people not already familiar.
Liquidity and mining concentration on the Bitcoin blockchain. Classic network effects at play
Happy New Year, Fred. Thanks for sharing all the insights this past year, and wish you a year of success ahead!
Wearables are just one step on the road to a position where we get truly integrated human/computer interface. Once we get that, knowledge will be dead because everyone will be wired to the web. Imagine being able to speak any language there is without first having to study it. This is where we’re heading folks. Imagine what this means for the education sector!
Bearishness on Wearables is a really interesting call. Often when there is a conversation where someone is wearing a smart watch or the glasses, they move to the centre of the conversation. Yet somehow those people don’t end up buying the things.Intel Capital execs said at their Summit that it is augmented reality and glasses which they are most bullish on, interestingly.http://www.globalcorporatev…The Intel Capital take was that virtual reality is too other-worldly for consumers for now, but the glasses and augmented reality can be really useful in the real world. The wearables guy said he was even more optimistic on the sector for next year, than he had been in 2013. Talking his own book, but he seemed pretty convincing at the time.
You’ve been wrong about Apple a lot in the past, but you get partial credit for this one. Apple Watch will not sell in the numbers of the other products at first, maybe, but it might be like the iPod, which was not an immediate hit. It took time for people to see the merits, but once they did….I’m saying this without any bias – I don’t own a smartphone of any kind, so the Apple Watch is no use to me at present.
Congratulations on making it to CNBC this morning! Shows the power that this blog carries.Even after they reviewed your predictions, they still referred to it during their CES preview. Amazing! One of the many reasons I start my day with AVC.com.
Interesting that you refer to non google android as the third OS. Don’t you think with Windows 10 coming that you could be missing a trick?
One prediction I feel very strong about, which is related to your previous post about YouTube becoming “a monster” in 2014, is that Facebook video is going to explode in 2015. Brands are going to realize quickly that fb is a much better place to put their branded video content (and spend their media budgets to promote their videos), than YouTube.The minute Google began to finally admit to itself that G+ was never going to succeed, they began putting all their energy into growing YouTube, but fb’s video platform is about to eat their lunch. Maybe not for tweens, but for everyone else, that’s where the media money will begin to flow.
It was hard to track after you listed asian penetration.
What is your outlook for the “work” market, i.e. services like eLance and oDesk that is moving the traditional idea of a job to an Internet market? This is also a field that I think is under explored.
Good point to raise this. I think these platforms are going to grow until pure play automation services become more prolific – e.g. Eureka.http://www.technologyreview…
Re #9 Enterprise/SaaS proliferation: Great to see mature market enterprise workflows being redefined with SaaS. According to Benioff, “90% of enterprise software is bought in just 7 countries.” Is 2015 a good time for enterprise SaaS players to invest in growth outside of the more obvious countries?
How confident are you in Xiaomi? It seems to me that they would have a very difficult time selling their products in the US unless they make radical changes to the design. Stated otherwise, they look like blatant copies of Apple products (much more so than the devices that Apple sued Samsung over). The CEO even dresses like Steve Jobs at presentations, and Apple’s Jony Ive explicitly accused the company of “theft” at a conference in October of last year. Samsung could afford the lawsuits, but will Xiaomi have the stomach to do battle with Apple?
Great list Fred! On Xiaomi, I think they are more likely to expand first to Southeast Asia and South Asia regions than US. The US market is simply too complicated, or “saturated” for many great Chinese companies, including Baidu.
Xiaomi could spend all 1.1 billion dollars it has raised and still won’t be enough to pay the legal fees for an army of lawyers that it needs to hire in order to clean up its behind before entering the U.S. market. Good luck with that prediction, Fred.
Here were my stock picks from yesterday for 2015:Short: Uber, Bitcoin until it hits $0, AIRBNB, netflix, Twitter, SnapchatLong: Oil, oil majors, Eastern Europe, FaceBook, Elevate app
Bitcoin’s “horrible” 2014 was mostly so for people who made up magical economics justifications for why its price could only rise. (Where Did I Hear That Before / It’s Different This Time.) The blockchain is, as it works out, pretty awful for high-speed / low-friction transactions, too.But as your pivot suggests, could be great for many other applications. I’ll be a bit more skeptical until promoters of magical thinking understand the flaws with their proposals, which would necessarily entail admission / apologies to those who were duped.
I can’t agree with #7. Congress doing something that benefits the people? Not anytime soon.
Semil Shah u see to be very popular…
like what do u do on here?xxx
kinda borin kinda not…
Here is my piece – Facebook will continue its transformation to be the world’s social telco. Anyone who is still thinking FB as the company it was in 2007 has it so wrong! While FB’s retail user base may find other & more engaging ways to connect and share with friends, Facebook has already embedded itself in the onboarding and authentication process of many, if not most, of these web and mobile apps. They will continue to use their loose change to buy emerging unicorns relevant to their vision of engagement and embedment.I have total respect and awe for how the company continues to transform itself.
Xiaomi will not come to the US unless they want to forfeit that billion to lawyers.
I won’t pretend to know what will happen with Apple Watch, but what I do know is that the conversations disparaging it sound like every other conversation for every other iDevice rolled out this decade.
nice … some generalizations and some specifics … nicely framed with the look back a couple of days ago … I can see my company in 9 so I guess I can sit back and let it happen … ya, only my wife thinks it’s that easy!
Xiaomi device already run on Android and the devices sold outside China have all Google apps including the Play store. So devs don’t need to do anything extra for xiaomi devices.
I personally think the apple watch will be a success because lots of young guys like me are looking for a reason to buy a watch.
I personally am surprised by the lack of mention of bioinformatics. I think 2015 is going to be a year where data analytics and recent innovation in deep learning and other algorithmic methodologies really hits the mainstream and starts getting applied to industries one by one – and the first sector I think is going to be healthcare. Remember seeing a demo of IBM’s latest Watson and was blown away. Data is going to continue its surge, in my opinion.
I see that as a subset of my 11/ item
Interesting, I see what you mean, especially when you say “people paying for their own healthcare”. Synthetic biology, DNA/RNA manipulation and other trends are going to start to really frame the way we think about healthcare as a society this year, not just in terms of paying for devices/technologies to cure us, but altering how we view a doctors visit 🙂
Market economies in health care are not only unrealistic, they are unethical and go against the Hippocratic Oath and lead to worse patient care and outcomes across the board. Now that people are more likely to keep a health diary in their smartphone, that will only become more and more obvious. U.S. Americans are by far the unhealhiest people in the world. For those of us who have more than one country on our résumés, hearing a U.S. American talk about market-driven care is like seeing a Swastika in modern Germany. It’s like when will you ever learn?I think the result of health-based smartphone apps will be better care and better food, because the average person will finally be able to see how poor their current health care and current food is. Across the board. I think we will see more community-based health care and community-based food production because they generate better quality outcomes and products and that is what people will seek out once they are literally grading their health care and food with their smartphones.In other words, seeking quality health care is not a matter of switching from one private provider to another, but rather switching from private health care to public health care.Also, how are you going to implement Personalized Medicine in a private market? Nobody can see a way. Personalized Medicine is where instead of paying $3 million for a lifetime of patching a person’s health problems as they appear, you instead pay $100,000 to sequence their genome and apply preventative therapies when they are a teenager and you prevent almost all of their future health problems before they ever happen. The community makes this investment because it will pay off many times over as that healthy person contributes 2x–10x the productivity throughout their lives. Countries that embrace Personalized Medicine will simply out-compete the miserable places that don’t. Their community-based health care investments will save so much more money than private health care investments ever make, and their better outcomes will drive up their economies across the board as well.
Good points, John.I’d put them a bit differently. In the US, the incremental dollar spent is often on heroic efforts to prolong the pulse of a fairly well-off, elderly person for another couple of days. Other places it’s more likely to have gone to basic, time-proven and mass-delivery-capable vaccines, appropriate antibiotics that produce decades of extended productive life.Despite our emphasis on care for the rich (individuals) that denies basic care to many, we have pretty good life expectancies, thanks to the huge per-capita expenditures on health.Benedict Evans has pointed out that many of our commonplace, taken-for-granted technologies (electric lights, refrigerators, indoor plumbing, AC, radios…) started in the 19th and 20th century as playthings of the rich, but thanks to both economic growth and maturation of the tech, have become much more broadly available.I think the ACA was a small step in rationalizing the quality of healthcare, and therefore the quality of life in the US. But that doesn’t negate the benefit from continued work on new medical/health tech that today, only a minority can dream of.
Absolutely agree w/predictions on information security and healthcare. Still hard to see (without access to metrics from companies like HealthTap) how the average user is reacting to on-demand services. Simpler UI/UX would greatly accelerate mass adoption.On Apple side, would be interesting to see why they priced the iWatch at that PP, rather than significantly lower to incent wider adoption.Re: Box and Dropbox, how do you think the IPOs will go?
After a month with a smartwatch, I have to agree : I don’t see it as something that everybody would want to wear. You could argue that it is due to Android Wear and that Apple will revolutionize this market but I doubt it. AW execution is pretty good overall, it is just that having your notification/small apps on your wrist in not that useful. It is small, you have few actions available and you need to use both arms to interact with the watch.
This discussion thread begs for a new way to capture and track it. Each prediction has generated its own very interesting discussion, but there is far too much “noise” to follow individual threads efficiently.
It is possible you are being too optimistic on (7) — ie the politicians making progress. They are my wearables. 🙂
If phonebook is the new social network, doesn’t switching between messaging apps become easier? Basically each messaging app is enabling a new communication experience. These apps can avoid chicken & egg problem by using SMS as the last resort.
Serving up the GOOD as usual — nice to have a consistent bartender, that stirs it up and others are inspired to join in so regularly. Another round, if you please!
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Love the predictions especially flight to safety. I’ll probably get a apple watch and the upcoming Apple GoPro killer camera controlled by the watch.Agree Apple Google and Amazon are disruptive companies and basically print money.11. Wow never thought of the health care field impact by apps. Totally agree.Beware of the bubble in private equity companies (Wall street journal or Barron’s article)
I believe enterprise & SaaS will really blossom in 2015 – mobile will be the key reason SaaS adoption in the enterprises will increase at a much faster rate than earlier! My two cents added to Fred’s priceless views 🙂
Thank you for the very interesting post, which we cite in one of our blog posts: “The beginning of the year is the perfect moment for looking ahead and speculating on the upcoming trends. …” ow.ly/HeWT8
I agree. Android has dropped the ball. That said, the world isn’t a monolith or a facsimile of the US. In Canada for instance, Apple is going to have a hard time getting traction. There are only 5 banks and they don’t like giving up control or revenue at ALL. Also, our interact system is just as good and accessible and available. All these payment options just lead to greater fragmentation. With interac, anywhere you go, you pull out you card Tap and done. Your don’t need a charged device. Turn on phone. Unlock. Open app. It is solving a problem that doesn’t exist and people are conservative here. Japan and Asia is a great opportunity. Europe is spotty when it comes to this. But Europe is a mess. German 5yr bond just went negative today. You are paying THEM to give them YOUR money.
Apparently banks in the UK are “falling over themselves” to sign on to Apple Pay. The UK banking market is similar to Canada’s in that they have a small number of large banks dominating the market.
TD Canada took on Apple Pay. But guess what. It was for their TD banks in the US. They have no plan to do so for the TD banks in Canada. I don’t think you appreciate how this Oligopoly works here. Australia is similar to Canada in many ways as well. Don’t confuse similar with the same.
I seem to recall that Xiaomi OS had a backdoor to Chinese govt? That could be a marketing problem. Nah….