From cloud wars to the certainty that there will be hacks, from health care to FinTech sector, venture capitalists believe that 2015 will be a year of tumult and triumph for the startup world.
FinTech, payments & Bitcoin
The technology entrepreneur Vivek Wadhwa, listed the “5 waves of technology disruption that are just getting started” . Among others, he sees the 2015 as the year of the reinvention of finance. “We are already witnessing a controversy over Bitcoin.”- he explains — “Many technology and retail companies are supporting it. Crowdfunding is shaking up the venture-capital industry and making it less relevant because it provides start-ups with an alternative for raising seed capital. We will soon be able to crowdfund loans for houses, cars, and other goods. With cardless transactions for purchasing goods, we won’t need the types of physical banks and financial institutions that we presently have. Banks in the United States seem to be complacent because they have laws protecting them from competition. But our laws don’t apply in other countries. We will see innovations happening abroad which disrupt industries in the United States.”
“Is this the year that the Bitcoin blockchain starts producing real consumer products?” — Benedict Evans, Andreessen Horowitz venture capitalist, asked in one of the 20 questions for 2015.
“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”, as Fred Wilson states in “What is going to happen”. “Real decentralized applications will start to emerge as the platform matures and entrepreneurial energy is channeled in the right direction.”
Actually, as explained by HBR Blog Post “The Tech Trends You Can’t Ignore in 2015", the block chain is the transaction database that’s shared by everyone participating in bitcoin’s digital system. It’s how the cryptocurrency promises complete anonymity while using a crowd-regulated public ledger system. Think of the block chain as a sort of distributed consensus system, where no one person controls all the data. Even if Bitcoin itself never really gains traction, block chain technology has enormous promise. For instance, some people argue that a block chain system would have prevented the massive credit card breach at Target. A new company, Blockstream, plans to turn the block chain into a universal platform that can be used for anything requiring signatures or authentication. It would let people participate in “trustless” transactions, where buyers and sellers work with an intermediary like an escrow manager, a trustee, or other middlemen.
And what about payments? Tony Tijan, Chief Executive and Managing Director, Cue Ball Group states that despite heightened focus, increased investment dollars and strong media buzz around a revolution in the payments space, there has been relatively little tangible change in the way we pay for things. NFC payment hasn’t taken off despite the introduction of Apple Pay, POS integrations are incredibly fragmented and interchange fees are being driven toward zero. Let’s wait.
As Forbes states, the big data and analytics market will reach $125 billion worldwide in 2015, according to IDC. Security will become the killer app for big data analytics: combining machine learning, text mining and ontology modeling to provide holistic and integrated security threat prediction, detection, and deterrence and prevention programs, Big data analytics tools will be the first line of defense.
“Cybersecurity budgets will explode in 2015 as every company, institution, and government attempts to avoid being Sony’d” — Fred Wilson
Security is a key question also according to Steve Herrod, Managing Director, General Catalyst Partners. As we move into 2015, security breaches will continue to happen as companies work to patch holes in current software and networks. Trying to stay one step ahead of hackers with the latest software or security features isn’t going to be enough; companies will need to work together in order to combat and fight them off.
“There was much excitement around wearable technology, but practical usage isn’t quite there so adoption has been low” — HBR confirms. While there were some notable product releases, wide-spread adoption and everyday use is still not at hand. As Wilson wrote: “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.”
For that to happen, creators need to figure out use cases and applications that genuinely simplify everyday tasks, rather than complicate them.
2015 will feature greater entrepreneurial enablement.
“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).” — Fred Wilson
Harvard Business Review in “The Tech Trends You Can’t Ignore in 2015" underlines that Apple recently announced Healthkit, its platform for health information. It wants to store data from the wearable sensors that will soon be monitoring our blood pressure, blood oxygenation, heart rhythms, temperature, activity levels, and other symptoms. Google, Microsoft, and Samsung will surely not be left behind and will all compete to provide the best health-data platforms. With these data, they will be able to warn us when we are about to get sick. AI-based physicians will advise us on what we need to do to get healthy.
Medical-test data, especially in fields such as oncology, is often so complex that human doctors cannot understand it. This will become even more difficult when they have genomics data to correlate. Over the last 15 years, the cost of human genome sequencing has dropped from the billions to about a thousand dollars. At the rate at which prices are dropping, the cost of sequencing will be close to zero in a few years and we will all have our genomes sequenced. When you combine these data with the medical-sensor data that the tech companies are collecting on their cloud platforms, we will have a medical revolution. We won’t need doctors for day-to-day medical advice any more. Robotic surgeons will also do the most sophisticated surgeries. We’re going to disrupt the entire health-care system.
As argued by The Next Web, 2015 will bring about big changes to e-commerce technology. It defines 3 key trends:
- interest in small shops powered by online giants like Flipkart, Amazon Seller Central, Shopify and AliExpress is increasing.
- US giants will lose their grip on the global online retail industry: non-US companies as Ikea, MercadoLibre, Sahibinden, Olx and Flipkart, they’re showing more rapid growth than the incumbent American giants at the top.
- E-commerce becomes more social: social e-commerce is nothing new, but it’s most certainly starting to click with consumers.
“The traditional retail infrastructure and supply chain logistics as we know it is being disrupted by companies creating new technology platforms and data-enabled distribution systems that have predictive analytics, better customer profiling, deeper consumer engagement, blended online and offline data, and more agile supply chains.”- said Katherine Barr, Partner, MDV. “The supply-chain has been fragmented and inefficient for years, particularity with the delivery of heavyweight goods to the consumer, which until now have been expensive and complex. E-commerce platforms are being transformed for the consumer and the manufacturer by leveraging powerful analytics and forecasting tools helping to alleviate “last mile” (i.e. from warehouse to consumer) problem that is the key logistics issue — where most of the cost, complexity and fragmentation lies, especially with the delivery of heavyweight items.”
Neil Sequiera, Managing Director, General Catalyst Partners added: “First it was Circuit City, then Radio Shack, followed by Best Buy. There is still a place for Walmart and grocery stores but not vertical players in alternative commerce. That is were the web and mobile win. With companies like The Honest Company, there will be a rise of vertical commerce with a unique connection to the customer directly.”
“IoT analytics will be hot, with a five-year CAGR of 30%” — Forbes
Gil Press, Forbes contributor, wrote “6 Predictions For The $125 Billion Big Data Analytics Market in 2015". He affirm that the Internet of Things will be the next critical focus for data/analytics services. While the IoT trend has focused on the data generation and production (sensors) side of the equation, the “Analytics” of Things is a particular form of big data analytics that often involves anomaly detection and “bringing the data to the analytics.”
Adoption of technology to continuously analyze streams of events will accelerate in 2015 — it’s all about speed and small units of data. IoT back end as a service (BaaS) will emerge, as players — including Amazon, IBM , and Microsoft — continue to stitch together a wider variety of platform as a service (PaaS) services, including stream processing, data triggers, indexing and synchronization, and notifications, into more tightly integrated offerings directly marketed to the growing community of IoT developers.
“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.” — Fred Wilson
Vivek Wadhwa on The Whashington Post, states that “Robotics and 3-D printing have made it cheaper to manufacture in the United States and Europe than in China. Robots such as Baxter, from Rethink Robotics, and UR10, from Universal Robots, have arms; screens which show you their emotions; and sensors that detect what is happening around them. The cost of operating these is less than the cost of human labor. We can now have robots working 24×7 and doing some of the work of humans. Over time, these robots will become ever more sophisticated and do most human jobs. The manufacturing industry is surely going to be disrupted in a very big way. This is good news for America, Europe, and parts of Asia, because it will become a local industry. But this will be bad for the Chinese economy — which is largely dependent on manufacturing jobs.”
In the next decade, robots will likely go on strike, because we won’t need them anymore. They will be replaced by 3D printers. Within 15 to 20 years, we will even be able to 3D print electronics. Imagine being able to design your own iPhone and print it at home. This is what will become possible.
As HBR Blog talks over, Artificially intelligent computers are now capable of deep learning using neural networks, which you can think of as brain-inspired systems capable of translating pixels into English. Toward the end of 2014, Google researchers unveiled a new project that uses neural networks and deep learning to identify multiple elements of a scene without human assistance (we spoke about A.I. also here). Its software “learned” how to think by processing vast quantities of data. For example, deep learning will eventually allow robots to recognize objects they haven’t seen before and navigate to new locations on their own. Deep learning intersects with numerous fields, and it will soon aid in manufacturing, medicine, retail, utilities, and beyond.
“Virtual reality will hit some headwinds. Oculus will struggle to ship their consumer version and competitive products will underwhelm.” — Fred Wilson
Tech & Capital Market
The New York-based venture capitalist Fred Wilson, some weeks ago published on his blog “What is going to happen”, a summary of previsions about the next tech trends. He made a list of 11 bullet point, among these we can find 3 interesting insights:
- 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.
- 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.
- 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.