A SXSW in transition

This was a SXSW in transition. Tech, once the nation’s economic saving grace, is now seeing a “bubble of bubbles” deflating in response to overwhelming speculation and unbridled ambition. Uber faces an existential question of the role it plays in bettering its contractor-employees’ lives. Facebook overstepped its boundaries in the emerging market of India by forcing its Aol-like vision of what the Internet should and should not look like, and how it should function. From GM and Lyft to the Faraday Future, the car-as-device movement of 2016 remains speculative, rather than tangible.

The tech industry, perhaps humbled, trudges onward through 2016. SXSW celebrated a surfeit of VR headsets. A few seed-stage technologies worked out the kinks with accident-prone public betas. And Austin’s Torchy’s Tacos got its Obama moment.

No central app emerged this year, despite early interest in Anchor, Chalk and Peach.

No single product won SXSW. Chalk and Peach offered a doodled and gif-ified world where we could transform boredom physical and digital realities into content, not just the face swap and rainbow barf frivolity of Snapchat. It perhaps reflects the notion that tech and media doesn’t know where it wants to go next. Security, where encryption and personal privacy have now taken precedent, remains at the center of conversation across and within long-held Apple iOS and Android devices. The connected vehicle, which has established itself as the device and media platform of the next decade, has yet to mature.

Amid the soul searching, SXSW 2016 was as much about retreat as engage. Where the fast of the festival met the slow of the need for disconnect, transcendental meditation and apps like Headspace took a starring role.

Integrating disparate ideas, experiences and adaptive learning, IBM Watson’s house might have cemented its offering as the infrastructure of the future, pitching a veritable funhouse of activity that took social profiles, personalities and drink preferences into consideration at the door. For a unit previously struggled to communicate the transformative power and “cool” of machine learning, the IBM Watson Cognitive Studio finally transitioned the technology to the masses. Look for its tech stack to creep further into nontraditional sectors and partners [see: UnderArmour and IBM Watson delivering personalized, real-time training recommendations from the crowd].

With the maturation of audio, podcasts have unleashed audio as the format to watch in 2016.

The media opportunities in the future of audio are tremendous but untapped. Podcasters took over SXSW as micro-celebrities, and even amateur audiophiles made their own stories on the ground in Austin – even Dropbox tried to capture the podcast halo. Where last year was speculation, 2016 was about dealmaking and the identification of what, if anything, the explosion of the podcast means for the future of media and how we embrace freedom of the earbuds. We’ll see many more podcasts in the vein of what GE launched with its hit The Message, and audio startups like Gimlet Media maturing and expanding in further funding rounds. It is only a matter of time until a major corporate player emerges.

The tech industry has advanced far beyond hardware and software, and incubators far past VC and PE. Influencers were attempting to unpack what that meant.

For VCs, there was a palpable bit of soul-searching this year, and rightly so. Many founders have set their sights on further optimizing the human body. Nootrobox founders exhibited Go Cube, another body hack in the vein of Soylent, at a16z’s annual showcase, alongside a host of founders overcoming the boundaries of clothing, fitness and individual potential using technology. Another a16z toy, Halo Neuroscience, showed off a brain training tool for athletes with a colorful pop-up, and Rothenberg Ventures took its own AR and VR investments for a walk.

McDonald’s, Visa, Coca-Cola and other traditional Fortune 500s again attempted to capture the special sauce of the venture space, hosting startup competitions that make the internal venture fund look a great deal like the internal creative agency of 5 years ago.

From Hamilton obsessiveness to the presence of not one but two Obamas in Austin, this is an important year for the American sensibility – and the exporting of what tech can be.

As a city at the crossroads of many of the challenges playing out across technology, society and civic engagement, it would be natural for Austin to reflect the intensity of the electoral season. In the headwind of one of the most entertaining, shocking and enlightening election cycles in modern history, this year had the heavy sense of importance. The electoral and political volatility had infected the goings-on in Austin, and rightly so.

Obama’s appearance on day one reignited the conversation around the role of hackers and innovators in government – and made clear the president is cementing a legacy by broadening participation in government. SXSW attendees will hopefully heed his call.

Within the staged conversations and off-the-record, serendipitous debates, Trumpism was explicit Among these, a sort-of post-capitalist sentiment emerged, perhaps in the clearest manner yet outside the techno-libertarian confines of Silicon Valley. This conversation was not squarely anti-capitalist but took shape as a more cohesive demand for new systems s of thinking. Venture capitalists, thought leaders argued, solely want to flip startups for IPO and profit, and companies themselves no longer do good for themselves, their employees or the customers they covet. The futurist Douglas Rushkoff, for example, called for a wholesale reimagining of a system of commerce and value that focused on recycling value into a system, rather than draining it of capital. The festival itself struggled to find its role in these heady conversation. Yet even when given the opportunity to play a leading role in tackling Gamergate and online harassment, SXSW organizers’ efforts failed to attract senior executives and even engaged participants. The social good expression of SXSW featured many of the same players talking to one another, not opening a much-needed dialogue with the rest of the festival. Perhaps next year.

As speculation cools in Silicon Valley, global centers that formerly avoided devoting tightly-held resources to build presences at SXSW have now doubled down on the festival. Downtown Austin was speckled with German houses, DC cabanas and British collaboratives abuzz with various wurst-a-thons, hack events and VR exhibitions of their own. In the past, these cities and states were seeking a little bit of the tech magic. Now they prove they have a bit of the same startup, hardware and software juju to infuse a bit of themselves into the festival .

A retreat from traditional hardware, and an embrace of AR’s potential for business.

The SXSW of 2016 showed a cleaving of the worlds of hardware and software. Google’s upcoming sale of its robotics division Boston Dynamics made clear the business model for robotics will take time to emerge, while festival-goers spent valuable time in lines upon lines for Samsung’s VR experience. The conversation buzzed around HTC’s Vive – its front-facing camera will help assuage aficionados’ fears that their walls and pets might prove the ultimate barriers to a true immersive VR experience.

In the long run, VR looks to be as powerful as mobile, as translatable and personal as digital, and potentially transformative for all major sectors — imagine HR interviews in AR — with the greatest ideas yet to come. And while Facebook, Twitter and Snapchat celebrate fast, VR and AR demand slow: real-time experiences, immersive worlds and transformative interactions. As VR matures, and the AR experiences it enables, SXSW and other ideas festivals will have to unpack what this means for the empathy economy.

In short

While we await truly autonomous cars and truly immersive VR, the technology and innovation communities continue to shift within the realities of commerce and culture. That dose of reality and serenity might very well further root the world’s most ambitious entrepreneurs and innovators in solving immediate, personal-scale challenges for the citizen-consumer.