Venture Bytes #21 – Over the Shoulder

Posted December 28, 2015

Over the Shoulder

A glance back is a good idea before plunging into the future. As we look forward to 2016 it is time for a terse stock take on the year that is fading into the past. We see 2015 as symbolically and really an important crossroads year. Vast monies flowed into early stage companies and public markets gagged on some late stage pre-IPO valuations. A host of new unicorns emerged, crossing the defining $1 billion valuation Rubicon. While some will need to retreat back across the river, many great businesses, and more than a few household brands, have emerged. We suspect that 2016 will be a much tougher year to be a startup than any of the last half dozen years. This fallow year will set the stage for great harvests to come. To the march of technology forward, and the weight of tech in our lives and spends, will continue to rise.

The great and true unicorns, and there are a good many, will emerge from a crowded field. The general return to earth will afford investors better entry points and allow the truly best to be seen as different and avoid being tarred with a broad brush. We expect there will be some real surprises as to the hottest and the left behind. We see real opportunity for mobile payments and banking coming. The great tech driven rationalization, complete with headcount reduction, is coming to the financial industry and 2016 promises to be a big year. Technology will stop being just what asset managers like to invest in and will become what replaces a portion of their dwindling and ill-loved rank. Likewise, we see med-tech emerging at the cross roads of wearables and big data.

There is ample and mounting evidence that 2016 will see the long awaited arrival of virtual reality and augmented reality to entertainment and enterprise. As Facebook, Oculus, Google, Magic Leap, Disney, Samsung and others begin to offer affordable platforms we expect a rush to increase content production. We know this is underway and that there is much more to come. The Cardboard experiment done with The New York Times was just a passing taste of what is to come. Rift headsets began arriving to developers around Christmas 2015. We expect that augmented and virtual reality will have a very large and less widely anticipated impact on the enterprise. As the rise of Slack has shown us, enterprise is no longer interested in waiting years for technology shack outs to embrace new and cost effective approaches. Augmented reality promises a revolution in the ability of unskilled labor to perform skilled task with step-by-step audio/visual guidance.

We are poised to have the data be real time updated, and have the basic algorithms to begin to make use of the wearable and IoT innovations of the last few years. Storage has become inexpensive and nearly seamless. Sensors have become very inexpensive and ubiquitous. Big data has become smart data and smart data has become more widely appreciated and new approaches and techniques are proliferating. We expect this vital area to emerge more into the light across 2016.

We expect 2016 to be a re-basing year where we see the power and scope of wearables, IoT, VR/AR to finally arrive. Pauses in growth usually allow sober assessment and meaningful integration and use development of technologies to occur. We expect a pause before another steep climb as we integrate new technologies and prepare for another rapid ascent.

Also featured in this edition is our news section containing articles from The Times of India, NVCA, and Fortune