It’s that time of year, a time to look ahead to the next year and wonder what it may bring. Earlier this week, I reflected on what I’ll remember from 2016. If this past year taught us anything, it’s that crafting precise predictions is a difficult, if not impossible, task. To that end, I view this annual post as more of a “Here’s what I’m expecting to happen that impacts my work in 2017” versus saying, outright, here are my predictions. (Re-reading my “Looking Ahead To 2016” post from last year, the part about VR was surprisingly prescient, yet not for the core reason I initially believed.)
I suspect 2017 will be like 2016, another year of things we couldn’t predict. I could tritely state, “we live in uncertain times.” But, right now, I don’t think it’s cliche or hyperbolic — we simply don’t know what will happen (normal uncertainty), but I believe that most observers are underestimating the amount of domestic and potentially international change that is floating in the air. That volatility in uncertainty will undoubtedly change how people plan or act, and that could have unforeseen ripple effects. To that effect, I’ve been thinking more about technologies, networks, products, and services which could thrive (or are already beginning to thrive, in a way) in a world of increasing uncertainty, and I’ve settled on this list, in no particular order:
Mainstream products and business processes become augmented with automation and artificial intelligence. I know the term “AI” is overused right now, but that doesn’t mean it won’t have an impact. A decade ago, Pandora’s algorithm would personalize radio stations for us, though we had to do some initial work. In today’s buzzword bingo, that could be labeled as AI by some, but what happens when our products at work will anticipate actions or act on our behalf, or when an assistant who has gotten to know me suggest topics to write about, or edits as I’m typing up a post like this, and more? There will be countless forms that fit nicely into world of increasing uncertainties, and this type of oversight and augmentation may help many users when making decisions or trying to optimize for the best solution. I suspect that we will see a significant uptick here in 2017.
The larger, incumbent VC firms have enough cash and leverage to weather uncertain markets. Many of these larger funds raised mega-funds across 2015-2016, many of them managing over one billion dollars in their latest vehicle. The investment period for those funds may grow longer, and these vehicles are set up in a way such that the LPs are contractually obligated to make their capital calls, even if a global financial crisis hits. That empowers these firms with a powerful line of credit if uncertainty rears its head and is indirectly good news for founders, too.
Startup exits will continue to flow from non-technology companies. Just as automakers and offline retailers opened their wallets to cut big M&A deals, I suspect that trend to deepen and intensify. We can expect technology to transform every industry over time, but in the immediate term, I try to think about industries which are under intense competitive pressures, perhaps even existential fear. That fear could motivate actions which make for a new kind of exit environment. I wrote a bit about this in my 2016 reflections post, which you can see here.
Digital currencies will be offered as part of a sophisticated investor’s portfolio. This goes beyond Bitcoin. With so much political uncertainty worldwide, coupled with advances in technologies like blockchain and others, the tokens/coins issues to help fund and maintain these products could generate huge returns for the early or helpful backers. People are already buying these tokens, of course, but I think it will go a step further and new types of hedge funds that have been created will allow for some indirect but high-beta exposure to a relatively new and obscure asset class. In an uncertain world, for creators and many citizens in less stable places worldwide, these new products present a vision for the future that excites many — while at the same time, it allows others to participate without permission by swapping currencies.
(Honorable Mention: Voice as a user interface. I suspect we will see much more and I need to write on it separately. I am not sure how it fits into the uncertainty theme above so maybe best for another post.)