What Happened In 2015
Last year in my What Just Happened post, I said:
the social media phase of the Internet ended
I think we can go further than that now and say that sometime in the past year or two the consumer internet/social/mobile gold rush ended.
Look at the top 25 apps in the US:
The top 6 mobile apps and 8 of the top 9 are owned by Facebook and Google. 10 of the top 12 mobile apps are owned by Apple, Facebook, and Google.
There isn’t a single “startup” on that list and the youngest company on that list is Snapchat which is now over four years old.
We are now well into a consolidation phase where the strong are getting stronger and it is harder than ever to build a large consumer user base. It is reminiscent of the late 80s/early 90s after Windows emerged as the dominant desktop environment and Microsoft started to use that dominant market position to move up the stack and take share in all of the important application categories. Apple and Google are doing that now in mobile, along with Facebook which figured out how to be as critical on your phone as your operating system.
I am certain that something will come along, like the Internet did in the mid 90s, to bust up this oligopoly (which is way better than a monopoly). But it is not yet clear what that thing is.
2015 saw some of the candidates for the next big thing underwhelm. VR is having a hard time getting out of the gates. Wearables and IoT have yet to go mainstream. Bitcoin and the Blockchain have yet to give us a killer app. AI/machine learning has great potential but also gives incumbents with large data sets (Facebook and Google) scale advantages over newcomers.
The most exciting things that have happened in tech in 2015 are happening in verticals like transportation, hospitality, education, healthcare, and maybe more than anything else, finance, where the lessons and playbooks of the consumer gold rush are being used with great effectiveness to disrupt incumbents and shake up industries.
The same is true of the enterprise which also had a great year in 2015. Slack, and Dropbox before it, shows how powerful a consumerish approach to the enterprise can be. But there aren’t many broad horizontal plays in the enterprise and verticals seems to be where most of the action was in 2015.
I’m hopeful that 2015 will also go down as the year we buried the Unicorn. The whole notion that getting a billion dollar price tag on your company was something necessary to matter, to be able to recruit, to be able to get press, etc, etc, is worshiping a false god. And we all know what happens to those who do that.
As I look back over 2014 and 2015, I feel like these two years were an inflection point, where the underlying fundamentals of opportunity in tech slowed down but the capital rushing to get invested in tech did not. That resulted in the Unicorn phase, which if it indeed is over, will be followed by an unwinding phase where the capital flows will need to line up more tightly to the opportunity curve.
I’m now moving into “What Will Happen” which is for tomorrow, so I will end this post now by saying goodbye to 2015 and hopefully to much of the nonsense that came with it.
I did not touch on the many important things that happened outside of tech in 2015, like the rise of terrorism in the western world, and the reaction of the body politic to it, particularly here in the US with the 2016 Presidential campaign getting into full swing. That certainly touches the world of tech and will touch it even more in the future. Again, something to talk about tomorrow.
I wish everyone a happy and healthy new year and we will talk about the future, not the past, tomorrow.
Same to you Fred and to all my friends in this community!
like the water piped to my house, like the electricity, these big players are on the way to becoming invisible utilities ..
how powerful a consumerish approach to the enterprise can beI am wondering if by this you mean to get the employees on board at a company first in order to draw in the enterprise shortcutting the traditional SAAS sell cycle.
exactly, along with making a product that feels like a consumer app
Yup–sales at a strategic level hasn’t changed that much in the enterprise. How we market sure has.
Fred, thank you for writing everyday – reading your posts and community comments have been a great experience. All the best for 2016.
So where do you see the on demand economy going in 2016?
I’m hopeful that 2015 will also go down as the year we buried the Unicorn.Well the saying for the press and the bloggers could be “as long as the bone is next to me”. People will talk about “unicorns” because it’s money. And along with sex and crime that is always interesting to readers and helps get pageviews and sells advertising.. Did you know that money also makes a man more attractive? Of course you know that.Anyway unlikely to stop being mentioned because it’s a branding similar to the Ivy League.  Or winning the super bowl or getting an olympic medal or an academy award. For example the three powers in the Ivy League are Harvard Yale and Princeton but you also have Brown and Dartmouth but who would choose those schools over Stanford?
I’m not even sure why the use of unicorn or not is relevant ?
Happy New Year. I think 2016 is going to offer a lot of volatility. Political volatility, stock volatility, world politic volatility. It most certainly will affect startups. Especially the stock one. 2015 is going to finish in the red, despite easy money etc. Puerto Rico defaults on Jan 4. Worth watching.
I actually remember when the hype on those PR bonds was so high in the WSJ that I not only considered buying them but after I didn’t (and before there was trouble) was kicking myself for not buying them.(Great cuban restaurant in Puerto Rico Metropol right next to where there are cock fights (across from the Ritz Carlton. )
Ha, I’ve eaten at Metropol. Seems like our gov’t doesn’t give a shit about PR.
.PR is a disaster. We should make them a state in revenge for their lousy mismanagement.JLMwww.themusingsofthebigredca…
Then it would be Illinois or New Jersey
.It is already, no?I predict that Illinois will be living under a bridge in Austin this time next year. Our bridges are very nice.JLMwww.themusingsofthebigredca…
Illinois is broke. Chicago is broke. Check out wirepoints.com to read the unbiased details. Public pensions are out of control. I don’t think they are alone-NY, NJ, Cal, KY all have huge public pension issues
Not sure what your property tax is in IL (vs NJ) however I am seeing that your income tax rate is 3.75% which is well below what it is in NJ. And NJ property tax is ridiculous.
.TX has no personal income tax.JLMwww.themusingsofthebigredca…
Suppose you bought a 700k house in a decent Chicago neighborhood with good public schools. Rare, and most homes in that neighborhood would go for more than that. Taxes on that house would be $12,000+ before the recent $300M property tax increase that will have to more than triple to cover ongoing deficits in public pension funding. Suburban homes routinely see tax bills of $8000 plus. In a very ritzy home, I know of a tax bill that is $60k. In the south suburbs, which are largely middle class and African American, the average tax bill is over 5% of the homes value. Sales taxes in Cook Cty are 10.25%. Gas taxes are high. A gallon of gas is still well over $3.
.Your papers are waiting at the Tx-Okla border, Jeff. I have vouched for you.JLMwww.themusingsofthebigredca…
Ha. Maybe this winter. My kids live in the city, so we like to be close to them. Had fun playing shuffleboard at the CAA last night.
So in NJ for a suburban home 12k gets you a house worth roughly 400k. I have some offices that I bought where I pay $7500 in taxes and they cost roughly $200k. I have one that cost $128k and the tax is $6000 (but hey I am a good negotiator so I guess I need to work on an appeal for that one..)
Can you recommend any articles that explain the huge public pension issues, how they became an albatross and how different municipalities are dealing with these financial issues? I was back home in Scranton PA over the holidays and the city is broke, almost declared bankruptcy in 2012, and firefighter and police pensions are a major budgetary issue that’s driving the city’s deficit. I’m interested to know how other cities are dealing with this issue.
Scrolling through Wirepoints.com will give you a host of articles, and also IllinoisPolicy.org. They both have been on top of the issue far before the mainstream even heard about it. There are so many issues that get tied back to political corruption. For example, Speaker of the House Madigan makes money by being a part of a law firm that does property tax appeals. So does Alderman Ed Burke. Burke’s wife is a judge. Madigan’s daughter is Atty Gen. Madigan also makes money by getting a cut of the actuaries who audit pensions. The actuaries inflate the returns, and deflate the actual liabilities leading to false representations of the fiscal state of the pension.
Thanks – much appreciated. In northeastern Pennsylvania (NEPA) they call this NEPAtism and from what I’ve heard is also a big issue when it comes to establishing an efficient and effective city government. I would like to see local residents of these cities demand transparency through a program such as http://opengov.com
Software can help too. Gov Bruce Rauner has bought and installed a lot of software to replace workers and automate govt. StreamlinkSoftware.com has saved governments millions of dollars via transparency.
Try a search of “public pension” at http://benefitslink.com/loc… (other good keywords: underfunding, unfunded, municipal, government)
Gotta feel bad for that mayor of yours. He had all these big future political dreams when he left the white house that are now being shattered because of the nature of police work in your city (I am a police supporter to be clear).
http://www.chicagotribune.c… This might alter your opinion of the police. Yes, there are some bad apples and some things have to change. But on the whole, Chicago police are pretty good. It’s politically convenient to blame them.
This might alter your opinion of the police.I don’t need my opinion of the police altered I already support the police. The idea, that for the amount of incidents happening, there is some kind of systemic problem to me is ridiculous. It’s an example of the world and the media and idiots wanting 100% perfection in a way that is never going to happen and not only that we don’t want it to happen. And having all of this tried in public with knee jerk reactions is the worst of the worst. Same with our military needing to not have any civilian deaths in order to achieve military goals that are for everyone’s betterment.This is all as a result of the “everyone gets a vote” as a result of social media. Back in the olden days things would have to rise to a much higher level before it got whipped up into a frenzy. Now the BLM protester will march for any fucking thing that happens.
This speaks to the unexpected long term benefits of media bias: http://www.blog.speculist.c…
Same thing in Seattle, where they too had a DOJ investigation that led to changes that fundamentally has emasculated the city’s police force. Cops there can no longer adequately do their job, all because of a few rotten eggs. That said, I have no idea what it’s like to be a black man in America. It’s hardly a level playing field. The OJ saga and the response by the African-American community enlightened me immeasurably about that. It’s all pretty complicated, but it does seem as if Rahm is in over his head.
with the 2016 Presidential campaignMy prediction (with 75% certainty) is that Trump could choose a female running mate (and it won’t be Carly but someone we have never heard of). Could even be a black or hispanic female.
.The best choice would be Condoleeza Rice but I wonder if she would do it. The GOPe would come with her. Even the Colin Powell wing of the Democratic Party.A black woman, former Sec of State (which would be a powerful foil to Hillary) and NSA adviser.Smart as a whip. Member of Augusta National. Classic pianist.Ready to be President in a heartbeat.If this happens, I go to work for Trump.Hey, it could happen.JLMwww.themusingsoftthebigredc…
Condi is to tied to Bush. What is the advantage of those negatives to what Trump needs? (To suck up to hispanics and minorities only serves one master). An advantage of Condi of course is no skeletons. Anyone else (that is not a politician) is unvetted and could have baggage (even a Zoe Baird problem).Agree with the positives of her of course.
.Look, Trump is the ultimate pragmatist. Have to pay a bribe to the GOPe, he just wants to negotiate a good deal.The addition of Condi (Bush baggage, et al) would legitimize him in a way that no other VP could.I hope he does pick her.I may need a good word from you for Sec of Offense?Happy New Year and thanks for a year of insights and wisdom.JLMwww.themusingsofthebigredca…
People have been making fun of the way Trump appears for years (as well as his bragging) however they inevitably get mad at him for things he says about other people (men and women or mexicans).Separately although he has said things about women saying things is not the same as “treats women poorly”. All men make jokes about women (as women make jokes about men) just not typically in public and not while running for President. The fact that he is divorced a few times does not matter from what I can tell all of his exes speak very highly of him. That is definitely not typical for ex spouses even in popular culture.Also he is in business he is not greedy. By that metric what makes Trump greedy and Fred “not greedy” exactly. The catholic church is greedy as are synagogues as well.”Looks gross” – proves the first paragraph.
It’s a joke, bruh.Although why you feel the need to defend that dude is beyond me.
Because to me it’s fine to not be politically correct and say what you feel and not worry about what the crowd thinks.It bothers you that I “defend” him because the things that he says disgust you I am guessing. So you can’t get beyond that and consider what he might be able to actually do vs. the other candidates for the good of everyone in this country.  Of course you are probably (if not you others) willing to accept Bill Clinton and what he did with women or JFK (with women) because they are great in some other way (and did it after getting elected).The reason that Trump is the way he is is that in the end he is actually a small businessman and not some “tool” that works for a large corporation who has spent his entire life watching every word that he says. Or a politician that has to serve a thousand masters and is afraid of losing his job and having to get a real job.Lastly Trump says many things that he knows he won’t be able to actually do.And some of the things that he says that everyone insists are not constitutional actually, surprise, are:http://www.nytimes.com/2015… How long have you been watching Trump for? I’ve tracked him since the late 70’s. Most people only see him for the last 10 years and have formed their opinion fairly recently.
I certainly wouldn’t want to argue with a Trump Scholar.
Subtle put down (totally expected) with a sprinkle of humor.
Maybe “Scholar” came across snarky. But seriously, if you’ve tracked him for decades, wouldn’t you kind of consider yourself a Trump scholar? That’s a big investment of time and mindshare.Definitely guilty of trying to add some levity.I’m simply not nearly as interested in Trump as it would seem you are, so I won’t make a good sparring partner in this instance.I couldn’t care less how recently he became a bigot. He has used his platform this year to assert loudly and clearly how unashamedly bigoted he his. Message received.
Thanks for sharing all of your excellent commentaries and musings over the past year. I do not comment often, but I enjoyed it all. May your 2016 be an excellent and joyous one!
“… capital flows will need to line up more tightly to the opportunity curve.”That’s a loaded statement. Would you agree that private (led by investment bankers) and corporate equity investments are to blame for the mis-alignment we saw in 2015? And what will make them unwind their medling?
Like high school english this can be whatever you want it to mean. Truth is only going to happen (what I think it means of course) if people perceive that others are doing something and then follow that lead. If your competition is gambling then most competitors will then gamble.
Always erudite, but also becoming super elequent in your old age.
I would call it to opaquely eloquent (for my brain).
practice makes you better
So happy for the patient entrepreneurs who have a passion for their verticals and good angles of attack. Not as sexy but a lot of big new brands. Especially finance.
Happy new year to you and Joanne
Same to you and Ellen
Great post, Fred.Happy New Year everyone. On the way to see the Big Short
2016 might be a good year to figure out how to do that!
Just watched it. Its a good one.
I watched it the other day, very well done.
Low commodity prices don’t seem to be trickling down to consumer level
.In general true but gas at $1.57/gal is a recent development. Keep your eye on oil. It is the big tax cut we are all going to get next year.JLMwww.themusingsofthebigredca…
Good point (I haven’t been to a gas station in two years)
For sure helps the living from paycheck to paycheck crowd who have “more dollars in their pocket” to spend.
Happy New Year to Fred and the AVC community!
.Great discussion and exposition of the consolidation of tech into the “big boys” which had to and has happened. The big boys are now as important an exit strategy as the IPO market — more reliable, perhaps.JLMwww.themusingsofthebigredca…
Happy New Year to AVC crew. It’s Grappa Prosecco Brotto for us tonight and roast duck (because “duck” is 鸭 which has connotations of unity, togetherness and A grades so families eat duck to augur this in).There’s lots of innovation and opportunities to look forward to in 2016 because this happened in AI in 2015.
Was just telling a young 20’s startup founder yesterday that the idea of “one funding round leads to another” is not (and never was) a business model. He seemed stunned when I told him that investors in early rounds are increasingly going to want to know – exactly – what his road map is to profitability, not the next round.
.Yo, Grinch. Who pissed on your yule log?Truth is a tough mistress.JLMwww.themusingsofthebigredca…
I think “pee’d” is the correct term.
.In life there are three types of people –The ones who can start a fire.The ones who can maintain a fire.The ones who take great pleasure in pissing on your fire.The key to life is avoiding the third bunch.Happy New Year, friend.JLMwww.themusingsofthebigredca…
Maybe the truth will change in the future? who says it is set in stone that founders can’t cashout before VCs?
the securities markets are based on the premise of buying / building low and selling high. I know it feels nice to categorize all of tech as “building a business” but let’s sprinkle a little reality on a lot hoe a lot of $$ was made in tech.
I’m thinking we are the same age 50ish. I had a conversation with a young founder the other day and said that until you were profitable you don’t really have control of your company.He looked at me proudly and said: “I own 60% of my company, I’m in total control.”I said great are the other 40% common shareholders like you?? or did you sign a two inch thick book with terms to protect them for their 40% share??? Ummm…Think if you need to raise money there is a possibility the terms will be you need a new CEO, and many of your common shares will get crammed down??”Well I wouldn’t raise money under those terms”. Ok, if you are profitable you are right but if you aren’t profitable and the alternative is to raise money or die which are you going to choose?
48, so, close :)I don’t want to fall into the “young punks” cliche’ here, however….When I was in my teens I was the smartest kid alive. Then in my 20’s, the smartest young man alive. And so on. It took me until my late 30’s to realize how much I didn’t know. That was a good thing because it made me talk less, and listen more.Some of today’s young start-up founders are handicapped just because of that, they are young. They have an idea of how things work, but no real practical experience to support the way they think.So I just try to listen to them compassionately and give them the best advice I can, knowing very well that in my 20’s, nobody could have told me anything.-B
Happy New Year, Fred and all of the A VC clan.I’m currently in Thailand where the New Year arrives in about 20 minutes. I’ll probably be in bed before that. ;)Cheers!
.Fred & AVC community –Happy New Year. Thank you for a year of wisdom, pleasant banter, intelligent discussion, and fellowship. Tonight I will toast y’all and drink your share of the champagne.I hope that 2016 is good to us and good for us. I pray that the world halts the ankle deep blood flow and returns to some sense of peace. I’ll be pulling for good in the good v evil matchups and hope we end up with a “good” President. It will be a welcome change. [Haha, you didn’t think I’d gone that sappy on y’all, did you?]I apologize for all that I have offended and hope that I have offended all of y’all at least once. Anybody who was left out, ping me and I’ll give you a bespoke insult. Then again, it is never progressive to discuss things with folks who agree with you, is it?Fred, thanks for grinding it out — 365 days in a row. That is an impressive performance. As I say, “Inspiration is for amateurs, the pros grind it out.” You are a blogging stud.God bless us all.JLMwww.themusingsofthebigredca…
Ah, JLM … here’s to you for much of that wisdom, pleasant banter, intelligent discussion and fellowship …And knocking all of us into shape mentally, in great ways!
Happy New Year JLM. Really enjoyed your AVC commentary during 2015…and the Austin recommendations you provided me earlier this year. I thought of your ‘ISIS are a bunch of shitheads’ comment post Paris attacks when I listened to this Planet Money Auditing ISIS podcast. Check it out https://itunes.apple.com/us…
Great comment as usual. I’m in Texas for the New Year as well. I thought maybe with the oil situation Houston would be slow. The Woodlands prove me wrong. Love Cajun, BBQ, and Mexican, there are several of each. Yes not as good as Lockhart, or Salt Lick or Franklin’s, but damn good just the same.
.Drive on down to the original Carraba’s in Houston for a great Italian meal. Stay well.JLMwww.themusingsofthebigredca…
Can anyone explain the difference between Cajun and Creole food? I did look up in Google / Wikipedia, but interested to hear what people here think it is.Had a really tasty dish at a party/concert once, and when I asked the chef what it was, they said either Cajun or Creole (I forget which).This was in Pune BTW, at a garden where they hold rock / jazz / etc. concerts (the food is really an aside, but good), so I think the dish was genuine or close.(Otherwise there are a lot of shit imitations out here – I could write a long article or a book about the crappiness and ridiculousness of it all). You do get good western and other foreign food in some places, of course.
.The only place in the word to compare cajun v creole is in Louisiana.Cajun food is country food. Creole food is city food.Cajun food gots no tomatoes, cher. Creole food has tomatoes. Big difference about the tomatoes. Tomatoes.You can have two dishes (gumbo, jambalaya) which can have either a cajun or a creole flavor and both be authentic and genuine. A roux is made with either butter and flour (creole) or oil and flour (cajun).These are subtle differences until you develop a taste by trying them side by side — then the difference is huge.The holy trinity of cajun chow is onion, celery, peppers while the creole equivalent is onion, celery, carrots. Remember also the tomatoes.Cajun favorites might include their sausages — boudin, tasso, andouille. Generally, they are a little spicier than their creole cousins.The Cajuns are from Arcadia and got the swamps. The Creoles are from France and Spain and got New Orleans but you have to add in the black influence from slavery and the freed slaves into the creole culture to bring it to the present.You can’t go wrong with either.Let’s go get some crawfish etouffee, cher? Cajun or creole? You decide.Lassez les bons temps rouler, cher!JLMwww.themusingsofthebigredca…
This would be the perfect response. There is nothing like a fresh blackened whitefish with crawfish etoufee on top. Notice they don’t say which fish, they say whatever is fresh: http://www.schillecis.com/m…
Ah, you failed to mention the hush puppies! I was born in Florida, and sometimes we went to a seafood place, and I pigged out on their hush puppies! Also at a seafood place in DC, we used to go for baskets of hush puppies and fried scallops with cole slaw, french fries, and beer!I worked out an okay hush puppy recipe — corn meal, onion, IIRC, egg and milk, deep fried, with soft butter. If you have to add the calories, then you can’t afford it!Then take some pieces of frozen cod, individually wrapped in plastic, toss in a dish pan of water to thaw. Take a jar of Tone’s Cajun seasoning, mix half and half with flour, and coat the fish pieces while their are still damp from the thawing. Fry in a layer of olive oil about 4 minutes on a side.Ah, maybe that’s blackened fish! Then add hush puppies and coleslaw.For the slaw, just finely shred green cabbage and add bottled Ranch dressing.Darn, yesterday the store had some good looking Romaine lettuce! Only one thing to do! Crushed garlic, crushed some more with some canned anchovies and their oil, add 1/3 C red wine vinegar, add a lot of Dijon mustard and some Worcestershire sauce, add 1 C olive oil, boil an egg to sterilize its outside and break the otherwise raw egg into the mixture, whip, taste for S&P, get the Romaine washed and crisp, in a big bowl, tear up the Romaine, toss with the dressing, add some croutons from somewhere (make own if can get some good French bread), add Parmesan, and chow down! That’s the salad course, although a relatively heavy one. Right, that’s called a Caesar salad, although have to doubt that he ever ate one!Then on to the fish and hush puppies! No wine — just beer! Ah, I need to go grocery shopping — first the typing!
Well written as usualJLM…sometime I’ll have to tell you a story about frogs…a bunch of ’em.
Added New Orleans and Louisiana on my “Must-visit list.”
.The Big Easy and Northern Louisiana — two different worlds. Some serious sinning available in Nawlins.JLMwww.themusingsofthebigredca…
Yes, wish good shrimp were not so darned expensive! At one time, Dad took a lantern, a net, some bait, and some beer, drove to the harbor, lit the lantern, tossed in the bait, drank some beer, tossed in the net, pulled it up, dumped the shrimp into the wash tub, a few times, and returned home with a washtub full of shrimp. One of the good old times no longer left to enjoy! Now really good US shrimp are rich man’s food. Same change happened to lobster!Yes, onions, carrots, and celery. Once my wife was visiting one of her sisters, and I had to cook for myself. So, I got out Julia Child and saw a way to use that French trinity, very finely cut, i.e., for large surface area, mirpoix, right, and some fresh chicken breasts, yes, with some butter, to in effect poach the chicken. It was darned good!That trinity is called the aromatics. IIRC Escoffier also included green beans.Also can use that trinity in white stocks — fish, chicken.For the fish stock, add some bay leaf and thyme, decently good French white wine from Macon, right, Chardonnay, a little S&P, and poach some fresh scallops. Then strain and reduce the poaching liquid, simmering, add to a blond roux of flour and butter, whip, add milk, whip, add egg yolks and whipping cream, whip, add soft butter, add lemon juice, maybe add a little salt, combine with the scallops, and eat up with more of the wine, or for the high end guys, some Montrachet, not far from Macon!Ah, for dinner tonight, some of my Italian style tomato sauce, some ravioli, some mozzarella between layers of the ravioli, topped with my sauce, warmed, topped with some freshly grated, good Pecorino Romano, and chow down! I have some quite decent Chianti in the basement but didn’t celebrate and, instead, have some typing to do (and order a 10/100/1000 Mbps full duplex PCA NIC from Amazon — right, about $10).Sauce: In some olive oil, cook down yellow globe onions, add garlic (where can I get some of the real stuff?), add some tomato paste and drinkable, dry, red wine, add black pepper, lots of the usual suspects — parsley, oregano, and basil, add canned, peeled tomatoes, cut up, add some crushed tomatoes, get about 7 quarts, simmer a while, refrigerate, and use for whatever until it runs out, which it now about has.
ThanksThe dish I ate at that concert, had shrimp / prawns. Guess it could be CajunI’d say do both, Cajun for lunch, Creole for dinner. Only right way. Life is a journey …
Rouler on, mon ami! Merci beaucoup! Salut!
From grinding comes inspiration. But of course you know that Jeff. Happy new year
True that the Troika’s oligopoly (Facebook, Apple, Google) is alarming for the future of Web, considering all 3 of them moved into mobile too.What might break this trigopoly is something entirely new, maybe the Decentralized Web. Its fundamentals run against their center-based operations, so they will ignore it until it creeps up on them.
It always surprises me how Amazon isn’t mentioned alongside Apple, Google & FB.See Bill Gurley’s views:* http://www.techinsider.io/a…See Eric Schmidt on Amazon as Google’s biggest threat in search:* http://searchengineland.com…See Werner Vogels, CTO of Amazon’s views:* http://www.businessinsider….* http://bloomreach.com/2015/…* http://venturebeat.com/2015…
True. They keep growing.
Besoz returned +120% to shareholders in 2015 which is second only to Reed Hastings’ +137%:* http://www.businessinsider….AWS now offers SDKs for IoT so it will be interesting to see how Blockchain (with MS Azure) + IoT compares.
I’m betting it’s NOT a Blockchain-Bitcoin startup that’ll bust up this oligopoly or create new economic and technology models.Structurally (form factor) and in terms of data differentiation, their moats and potential aren’t sufficient enough to set them apart from existing platforms, models and code.(1.) Bitcoin stars are struggling to raise and aren’t considered compelling:* http://www.nytimes.com/2015…(2.) The consumer productization of B-B also isn’t a compelling story yet.
RE: – “rise of terrorism in the western world”Fred – I know your family has ties to the military in this country…..I am not sure if I would agree that there has been a rise in Terrorism in the western world.Jon Stewart would argue there are many more people innocently die in this country from guns vs terrorism….I think the Right is really hyping the terrorism card…if you were associated w/ the Terrorist – you would feel great listening to the republican debates – the terrorist have become larger than life – you would think we are taking / waging war against a well organised army of a country….For much of my life there seem to have been terrorist attacks across Western Europe.
I am not sure if I would agree that there has been a rise in Terrorism in the western world.Desire for 100% perfections meets “never let a good crisis go to waste”.There very well may be an increase but the issue is “does the increase actually even matter and should it change management”?
We can all sit in our homes with the door locked tight – or we can go out and live our lives as usual – I choose option B and will live with any consequences.
Hi Fred,Your posts the past couple of days have solidified my inclination to switch gears to the technological needs of the healthcare industry, despite launching a marketing app earlier this year (to little fanfare and traction). As the business and marketing arm of mine and my wife’s medical practice, I’ve intimately come to understand the challenges and needs of practice management and marketing and how antiquated and splintered the system is right now.Would love to discuss some ideas in the new year.Cheers!John
There’s the fact IMOHO that we’re already in a good place technologically in the consumer market.I’m happy with my one-year old iPhone and two year-old iPad.I don’t need more apps, personally.It’s part of a life balancing act for me to make sure I take periodic breaks from the over-connectivity that my phone enables.I can think back to the nineties when I once paid $220 for a relatively short phone call to Russia; when I would have had to pay over $100 a year to subscribe to a newsletter instead of simply being to read Fred’s blog for free, etc., etc., to ad infinitum…Just as with a gourmet all-you-can-eat buffet, consumers have eaten too much technology as of late, and may need some time to digest. They’ll get ungry again in due time.Happy New Year every one.
I agree with most of comScore’s assessment, except their ordering. If you grab the apps they mention and compare the group’s market share of downloads, you see Facebook Messenger at the top followed closely by Youtube, Instagram, and THEN Facebook. Even with showing “Unique Visitors”, I doubt the Facebook app is beating the Messenger app.I completely agree with Fred’s overall assessment of the market. The app store has been saturated with the big players when it comes to Applications. However, it is a completely different set of big players when it comes to Games and that market is fairly volatile at the moment with companies like Ketchapp averaging a new game released every 2 weeks.Note: I am the Lead Data Scientist at https://apptopia.com
Agree in what sense? Do you see agree on the verticals?
I’m sorry, but I’m not sure exactly what you’re asking. The apps they chose are the biggest players in the application space. If you quickly plot ComScore data vs. ours (Unique visitors vs. Market Share), it generally agrees. They seem to be under predicting for some of the apps, although I don’t see an obvious pattern.
Sorry, typo. You said you agree with Freds assessment. He said a few things in the post.
I see, now. Fred made a note that Google, Facebook, and Apple are ruling the Applications market. However, they don’t have any foothold in the mobile games market and that is represented by a completely different bunch of folks.
Does an app have to make the top 25 to be a successful VC investment? The power law distribution may not be there, but does that mean it’s bad to be in VC?
I’m reading McCullough’s biography on “The Wright Brothers.” Good read w/ great insight into the power of inquisitiveness, perseverance and the entrepreneurial spirit. Fascinating how far aviation has come in a relatively short number of years. In an era where driverless cars are so topical, I’m curious if pilotless air travel will ever become a consideration? I don’t think so, but one can make a reasonable (and not entirely defensible) argument for it– There would be obv reductions in labor costs, while modern-day crashes, more often than not, are attributed to pilot error than mechanical failure. The Wright Bros were an aviation start-up, but while they pursued their dreams their downside was covered by owning and operating a successful bicycle enterprise–Wright Brothers Cycle. It’s okay to shoot for the stars, as long as one manages, or at least is cognizant of, downside risk. Not sure many or enough peeps think along those lines today. I’m afraid ’16 could be a serious reality check for quite a few. Happy New Year all!
Planes are close to that right now. But here is the issue, when something goes wrong, it’s always the pilots error. Having been a driver, boat captain, and airplane pilot, I can tell you each is a square harder than the other. Flying is at least 4 times harder than driving.
Thanks, I’m going to add that book to my list.
This post reminds me of when I used to look at comScore web site rankings, seeing if I could find insights or patterns about what is ‘happening.”Happening’ strikes me as a different part of The Tail, because as you point out about the ‘youngest’ of the Top 25 (Snapchat), that app is now four years old.So if it takes years to be Top 25 (and that makes sense), the definition of ‘happening’ in 2014 and 2015 would be captured via year-over-year growth in apps’ rankings, and this growth is not happening amongst the Top 25.Recent writing about ‘Contextual Runtimes’ points to what may be happening, and those happenings are unlikely to surface via comScore Mobile Metrix rankings.MixRank may have a better lens.And a much longer tail to sift.Something’s happening.
Social networks are the new mass media. FB is allowing people to buy media on a GRP model which will completely change the game for paid advertising and we now have multiple generations who have been brought up with the network which is going to bring with it its own dynamic. And analog will become the next revolution in digital. I’m feeling tired but still inspired.Happy new year everyone!
Exactly. It’s more media than social. Maybe in 2016, the social will be back again: connecting, significant, meaningful. Happy new year!
On the VR/AR front… has anyone heard anything about Magic Leap? They talk about some revolutionary tech, occasionally shop the cool movie, but it’s been 2 or 3 years and… nada. My cynical gut says “nice tech, but for some reason not productizable” but as Mulder says “I want to believe.”
Very enlightening post Fred.My prediction for 2016 is there will be signs of broad horizontal plays in the enterprise. It will happen at the edge of enterprise networks, not within the enterprise.Happy New Year!
Happy New Year! Looking forward to 2016.
Rate of ProgressIn the most advanced countries, take the progress of the past 200 years. So, that is just 20 decades. So, each step of progress has to be allocated to some one decade, and there were so many significant steps that at least one decade has to have some huge amount of progress and the average progress per decade is also astounding.Or, commonly we over estimate what can be done in one year but underestimate what can be done in 10 years.Lesson: If the next 10 years are anything like the last 200, then we should see some biggies, some of which should make a lot of money.Not ClearFor I am certain that something will come along, like the Internet did in the mid 90s, to bust up this oligopoly (which is way better than a monopoly). But it is not yet clear what that thing is. Right. So, we have aLesson: Themes don’t work very well.E.g., there was early Yahoo. So, presto, bingo, say that there is a theme, portals.Well, a part of a successful company for a while but otherwise not a successful theme.E.g., there was Google. So, presto, bingo, say that there is a theme, search.Well, a successful company but otherwise not a successful theme. The truth is that it is entirely possible to compete with Google search: As far as I can tell, Bing works fine, and for looking for information on Windows software, better. Supposedly there are good search engines also in China and Russia. So, search may not be much of a theme, but it’s been easy enough to copy Google.So, Google seems to have a relatively low barrier to entry. E.g., roughly there is a risk that someone could walk out of Google with a full 2.5″ 14 TB SSD with a huge fraction of the most popular searches and for each the first 50 results.E.g., there was Facebook. So, presto, bingo, say that there is a theme, social.Well, a successful company but otherwise, as a theme, not successful enough for more successes as big as Facebook.So, instead of themes or themes that make the future “clear”, need to recognize that the big successes come one at a time at a rate of about one each decade. Or “eagles don’t flock”. Or, it was tough enough to do one of those top 20 or so successes — seeing a theme that makes future successes “clear” is too difficult.Not a theme; instead just a good, particular case. Or the good cases aren’t part of themes but create what others call themes.For investing, instead of themes, likely better just to use the simple approach based on — a few founders, a product/service with traction significant and growing rapidly, for a huge market, with each founder short on cash and with a pregnant wife.Much better still, of course, is to have a solid plan — e.g., as for Fourier theory below.AI and MLOnce a colleague in computer science and AI chastised me for being offended at even just the terminology. Right: We should be offended: The terminology, neural networks, artificial intelligence, machine learning, deep learning, looks deliberately selected to imply that somehow the computer would have capabilities comparable with a human.That implication is some mix of ignorance, arrogance, hype, and fraud.Instead, AI and ML are just software, maybe occasionally somewhat useful software.A biggie problem in AI and ML is that there is little or no, too little, solid logical foundation.E.g., when the fast Fourier transform was discovered, right away a lot of people saw what could be done in the oil patch — get really good 3D maps of the underground layers. And they did. And it worked great.There was a solid rational, logical, mathematical foundation and no real question that a Fourier analysis would work great.E.g., soon enough in the oil refining business, they noticed that can make a lot of products out of the oil, and day by day the prices of those products change. And for the input crude oil, it is different, maybe even day by day. So, on a given day, considering the inputs, outputs, and prices, what to do with the refinery? It’s a cute problem in the applied math of optimization, and no one near Houston would be dumb enough to run a refinery without it.There was a solid rational, logical, mathematical foundation and no real question that optimization would work great.Lesson: It’s really good to have a solid rational, logical, mathematical foundation, and essentially AI and ML don’t have that — instead, we’re talking intuitive heuristics. For an important problem, once get a good solution, intuitive heuristics look really silly.For Google, Facebook, having big data, gee, they can do cross tabulations and draw graphs. Gee — empirical, first-cut, exploratory data analysis where come up with many definite maybes. I’m semi-, pseudo-, quasi-impressed.Lesson: For the crucial core of the work, get a solid, logical, rational, maybe mathematical foundation, reduce the empirical guessing, and get more alpha and less beta! From history of the past 50, 100 years, that’s by a wide margin the best general pattern there is.We don’t want a faster horse; we want a fast car. We don’t want a better Titanic; we want a Boeing 707. We don’t want more reliable vacuum tubes; we want transistors. We don’t want 0.85 Mach; we want 6.0 Mach. We don’t want Betamax or VCR; we want Blu-ray and, then, Netflix. We don’t want better maps or Loran; we want GPS. We don’t want better photographic film; we want CCDs.E.g., we don’t want Jim Cramer; we want James Simons.So, here is a test question:In a normed vector space V over the set R of real numbers, if A is a subset of V, is Span(A) closed in the topology generated by the norm? Proof or counterexample.Same if A is finite? Proof or counterexample.BTW — I’ve got solutions!
Interesting point about the shift to oligopoly in broad consumer tech as opposed to monopoly. In certain verticals obviously monopolies are being established but I guess we can think of these as niche markets. In the broader sense, those startups are yet to cut into the large players revenue. We think of the four horsemen – AAPL, AMZN, GOOG, FB – and who can possible enter the realm to be the fifth. With growth in mind, Uber appears to be the next. Private valuation somewhere in the ~$60B range. When they go public at $100-$200B they’ll start to establish themselves as that fifth dominant player.Also interestingly, no mention of cloud computing and how that landscaping has shifted dramatically and at a blistering pace. If we take just compute itself, Amazon eyeing $7B revenue for AWS in 2015. They are by far the dominant player and continue to grow, but we have to remember they’ve had an 8 year head start. Google now entering the space, really starting to show why they are a technical leader. With Diane Greene at the helm their cloud compute business will no doubt start to pick up but still only doing marginal revenue by AWS standards. Others are trying to enter this space as well, Oracle, recently announcing a public cloud, no doubt focused at enterprise customers. If rackspace was any indication, this higher priced, sub par product, probably wont do well with the masses but the enterprise companies who want to enter the cloud space will throw their money at it.Continuing on in cloud but a level up. We started to see this shift towards Docker, a platform independent runtime for software. Containers while once only used by companies like Google are now becoming more mainstream. It’s always about the barrier to entry and docker figured out how to lower it. Docker and container adoption grew massively in 2015 but its still all in its infancy. The current users are early adopters, startups and individual devs. While enterprises are considering it, it’s mostly vendors pivoting their product offerings to stay relevant. In this category, the number of players showing up every month is ridiculous. The rate of change is hard to keep up with. No doubt over the next year we’ll start to see some consolidation and groups form around the most dominant technologies. Docker, Kubernetes, Mesos.The next trend on the software side is microservices. A buzzword that’s been kicking about for a few years with only a handful of players with actual experience. Google, Netflix, Twitter, Facebook, Uber, Hailo. Netflix have had the biggest contribution here in the open source world but hell being early is as good as being late. Others will emerge with offerings focused around ease of use and helping these on-demand startups scale to handle new levels of traffic.Exciting times ahead.
I subscribed. 🙂
I can only think that the next big thing has to be ubiquity with purpose.All the networks; all the apps; everything digital; exposes itself at the interface level. Content IS king but frankly, somebody else already has it. (but probably what one has is only marginally better than what another has – is google’s geo database more complete than openstreetmap or do they just give you more and more effective tools?)The next big thing will recognize that content value is in the eye of the beholder. It will not offer proprietary content. It will just do a better job of fetching the stuff you want (and credit those that provide it)Sounds a bit like google but with three differences – the linguistic models will be either broader or more specific (based on the implementation) and the revenue models will share more $ with thought/industry leaders and charge the content providers (why doesn’t facebook pay for referrals?). A sponsorship model.It will be unbiased to the extent that it shows EVERYTHING you’re interested in. (sure it may highlight – but it can never exclude) Its doable.
what about bitcoin apps ?
“The most exciting things that have happened in tech in 2015 are happening in verticals like transportation, hospitality, education, healthcare, and maybe more than anything else, finance, where the lessons and playbooks of the consumer gold rush are being used with great effectiveness to disrupt incumbents and shake up industries.”Exactly, one example is the innovation through new business models (e.g, full-stack approach) that find a somewhat perfect fit in sclerotic industries such as Healthcare, Education or transportation.
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I agree. When you think about the changes in the last 25 years it is amazing, but once you have everything you look back at the other things.https://www.youtube.com/wat…
we’re seriously lagging isThings suck for the underclass in this country. Way more important (for everyone) than space or even self driving cars or flightaware. To many babies born in to baby daddy families. I have two kids (and two step kids) and can pay for them. These people (and I did say “these people”) can’t.Yesterday I had to pickup my wife at the airport and used flightaware to know exactly the track of the airplane and when it would arrive and that it took off. That was great but in the end it’s not super important compared to some of the other screwy things that happen in the world with poor people. And I don’t meaning “starving in Africa poor people” I mean babies born into crack families or nice people living in communities with crime and drugs with no way out. And some of them are nice people but they unfortunately aren’t that smart. Note I said “some” I didn’t say “all”.Then there is the drug problem. I don’t mean all of that pot that AVC’s think they should be able to smoke. I mean drugs that the government was all worried about in the 70’s that they were right about being worried about. Pot smoking is fine I guess (for anyone who wants it) kind of mellows people out and lets them live a life with less material goods and comfort is my take. Never tried it I am sure it’s great. However keep in mind that if the pot you are buying is illegal it is driving a great deal of crime both in our country and in the pot producing countries.
I will drink to that
Happy New Year, Charlie! It’s a great time to be alive.
Handmade is an important add I might add!
Tech people moving into non tech businesses is very interesting. And lends really interesting perspective.I’m glad you’ve hung around. Happy New Year, Charlie!
He’s unhappy and thinks that way because he suffer from depression and is a fucked up comedian. What you need to be to be a good comedian. There are plenty of people that are happy (JLM for example).
But he is funny.
.JLM is a twisted fuck headed out to do some serious damage to an Italian restaurant, drink waaaaaaaaaaaaaaaay too much, and watch the fireworks.He does have the enormous benefit of being a simpleton. A simpleton lacking complexity to such a degree as to be suspected of being worm-brained.And, therein may lie the secret of happiness. Simplicity.My last comment for 2015. Happy New Year to all you other twisted folk. Revel in it.JLMwww.themusingsofthebigredca…
Nothing good about pot.
I have this suspicion that Louis CK is only nominally happier than he was in the phase where he was living out of cars (or whatever his equivalent to that was). So I sense it’s his own reflection of how he thought he would be happy once he achieve success but now that he is a known entity and famous at the core he is more comfortable but he is not that much more happy. Just a guess.  You know the buildup to sex is often better than the sex itself. If that wasn’t the case men wouldn’t be so into online porn.
The good thing about pot is that it mellows people out and provides a class of people that are willing to work at and accept lower paying jobs so that is good. That’s my theory anyway.
That’s a huge tax on society
For a lot of people (and note, I said “a lot of people”), pot opens up the creative side of the mind and improves the quality of life in a way that has nothing to do with being poor or rich.
You seem to be bragging about the fact that you have been “in a real street fight”?A lot of guys ask me if I know how to use a key fab to start their car(i’m a valet guy) and I tell them I know how to build it..So if you can build a key fob then why are you parking cars for what I would assume is minimum wage? Would seem that if you can do that you can do many things and wouldn’t have to earn money that way. So why is that?
Oh Kirsten, how marvelous you are! Happy New Year!
Yep I have heard that and it makes sense.