Top Consumer Tech Trends & Predictions for 2017
Below are the top categories of consumer tech startups in terms of Venture Capital funding in 2016 and my thoughts about each.
Do you agree or disagree? Share your comments below.
Consumer electronics: Cool but not sustainable
Building a consumer electronics company is cool because you’re selling a tangible product that consumers love to talk about and even crowdfund. If you are the first mover, there is a short window for great success. However, the reality is that hardware requires high R&D, are more susceptible to copy cats (e.g., hoverboard), and face low repeat buyers (e.g., GoPro). For these reasons, companies like GoPro and Fitbit didn’t sustain their early success. If you are looking for a quick buck, build a product like the Tile. But my long term bet is in B2B software for drones (e.g., Airware, Kespry).
Online videos: A new MTV needs to exist
Demand for online videos is exploding as more consumers cut their cable cord to save money. Advertisers are scrambling to find new ways to connect with these cord-cutters as more consumers use ad blockers to prevent traditional digital ads. These are huge macro trends that Shots Studios — where I lead growth — is trying to capitalize on. However, this type of business relies heavily on Hollywood relationships and requires upfront production capital.
Logistics: Robots (and their regulations) could disrupt delivery
When on-demand services like Instacart, Doordash, and Luxe first came out, I absolutely loved the convenience but knew the business model would be their biggest hurdle due to high labor cost in the U.S. If the convenience fee is too high, it limits consumer demand. If the convenience fee is too low, it limits labor supply. Hence, I’m not surprised to see more VC money going into logistics startups in LatAm/India/China (e.g., Rappi) where cheap labor makes the business model more viable. In the U.S., robots like these could disrupt logistics and delivery one day, but this will largely depend on local transportation laws.
Education: VR will have a huge impact
Online and mobile platforms such as Udemy and Coursera are empowering people to learn new employable skills such as coding in a much more affordable and accessible way. With robots replacing humans in many physical jobs such as making coffee, it’s becoming more important for humans to learn new employable skills fast. I believe that education is an area where VR will have the biggest impact. VR edtech startups such as Immersive VR Education can already provide a rich learning experience that will quicken and broaden a person’s capacity to learn.
Health & Wellness: No app can motivate you if you are not motivated
Millennials are more health conscious and are willing to pay for it. But can technology capitalize on this trend? Endeavour Partners’ research found that more than half of U.S. consumers who used an activity tracker such as Fitbit no longer use it (I’m one of them). According to Nir Eyal, an author on habit behavior, “fitness trackers that make people do things they hate doing, fail to change long-term behaviors.” In another word, technology can’t motivate a lazy person to go to the gym. I think technology’s key role will be in helping consumers find and book doctor appointments (e.g., One Medical, ZocDoc).
Automotive: Bring U.S. models to developing countries
In the U.S, all we hear about is the self-driving car. But for many in developing countries such as India and China, owning a car is still their priority. That’s why U.S. investors are pouring money into startups such as Zoomcar (Zipcar for India) and che300 (Carfax for China) in developing countries.
Marketplace: Forget Amazon, localized marketplace for mom and pop shops will dominate
Two types of online marketplaces that received lots of funding from VCs in 2016: those that connect local businesses and consumers (e.g., YourMechanic, Letgo) and those that connect employers with contractors and freelancers (e.g., Upwork). With Amazon’s domination and large retailer’s slow demise, I predict that mom and pop stores will shine again and localized online marketplaces will play a key role.
I would love to hear from you on whether you agree or disagree with my predictions. Share your thoughts below.