How will the next decade be different from the last one?
Startups reporter Eric Newcomer posed this question to some of the most connected and influential people in the technology world. Here are their answers.
Sam Altman, president of Y Combinator in Silicon Valley: “For most of the past 10 years, the fed funds rate has been ~0%. None of us have any experience to draw on for what this means long-term.”
Cheng Wei, CEO of Didi Chuxing in Beijing: “In November 2012, Didi surpassed 1,000 rides per day for the first time. Less than four years later, on October 1 (the first day of China’s national holiday), our drivers completed 22 million rides, demonstrating the massive adoption of internet-based services and shift to China’s new consumption and services-driven economy. On a daily basis, Didi serves 2x as many passengers as the entire rail system in China.”
Demography is destiny.
Bill McGlashan, managing partner at TPG Growth in San Francisco: “People are about to be born who will live until they are 150 years old with a reasonable quality of life — shifting the way we think about staying healthy, wealthy and entertained. Demography is destiny.”
Jenny Lee, partner at GGV Capital in Shanghai: “Chinese factories currently only use 26 robots per 10,000 workers (compared to over 300 robots per 10,000 workers in Japan). For China to continue to manufacture over 75% of global smart phones and 80% laptops over the next 10 years when its labor force is shrinking, it has to automate, not just in factories but also at service establishments like hotels, restaurants and home. Jobs will be replaced and perhaps at a much faster pace than the population shrinks, creating more social and political instability in China. With global economies so intricately connected, an unstable Chinese economy will not bode well for other economies.”
Rich Wong, partner at Accel in Silicon Valley: “$6.5 billion in just the last 18 months. That’s how much five non-tech companies — GM, Richie Bros, Under Armour, Unilever, and Wal-Mart — invested into Cruise, IronPlanet, MyFitnessPal, Dollar Shave Club and Jet.com, respectively. It’s a pretty clear sign that companies in all sorts of industries are willing to invest heavily in technology to drive growth over the next 10 years.”
Doug Leone, partner at Sequoia in Silicon Valley: “Now that we are all interconnected, companies can become global players much faster. This will make the U.S. incumbents far more vulnerable to competition than ever before. Alibaba and Tencent, whose combined market cap is more than half a trillion dollars, are already aggressively expanding into Southeast Asia. In the next decade, a Chinese company will become a dominant force globally.”
Today a car is one of the most expensive assets American families buy, yet it remains unused 96% of the time.
Ed Baker, vice president of product and growth at Uber in San Francisco: “15 percent of American adults have used a ride-sharing service like Uber, according to the Pew Research Center. Most people, especially those reading this newsletter, will be surprised to learn that number is so low. But it shows that ride-sharing has a long growth runway in front of it. Today a car is one of the most expensive assets American families buy, yet it remains unused 96% of the time. As ride-sharing grows, people will become increasingly comfortable giving up their car.”
Andy Stern, author of Raising the Floor and former president of the Service Employees International Union in Washington: “According to the Bureau of Labor Statistics, there are approximately 1.7 million heavy truck and tractor trailer drivers and 1.33 million delivery drivers in the United States, and according to the American Trucking Association, the drivers are supported by about 5 million more workers in parts, repairs, hotels, rest stops, etc. It is the largest job sector in 29 states, according to NPR. Their future is at risk from driverless trucks.”
Leah Busque, executive chairwoman and co-founder of TaskRabbit in San Francisco: “Today, 34% of the U.S. workforce is made up of freelancer workers. The future of work is changing and new technologies are being leveraged to support this new and flexible workforce.”
The returns of most VCs will be decimated.
Chamath Palihapitiya, founder of Social Capital in Silicon Valley: “Over the next 10 years, the returns of most VCs will be decimated. The cost of capital will continue to decrease such that startups will retain more ownership and traditional VCs will own less of the companies they invest in. In our own portfolio, we’ve seen inflation of ~50% over 5 years. Where we used to invest $6M for ~2x%, we now invest $8–12M for the same ownership. In other words, entrepreneurs can raise more money by selling less of their company.”
Scott Nolan, partner at Founders Fund in Silicon Valley: “This summer, Bill Gross pointed out that global bond yields are now at their lowest levels in 500 years. Simultaneously, many countries are turning inward from globalization and the IMF is calling the world economy ‘ever-slowing and increasingly fragile.’ As we approach 10 years of diminishing returns to worldwide financial stimulus efforts, it’s clear that maintaining global growth and interconnectedness over the next decade will require productivity growth via real innovation. Not only are the next wave of breakthrough technologies like autonomous vehicles, advanced energy and genetic engineering exciting, but their success is literally necessary in maintaining a world we want to live in.”