Quick thoughts on some tech sectors. 2015/2016.
December is a month of holiday parties and reconnecting with friends. When you live inside the tech bubble, it also feels like a time for everyone to dish out their opinion on random topics in tech. I do the same. Hey, what else am I supposed to talk about at a cocktail event when I neither drink nor follow sports very closely?
Below are some quick thoughts on various tech sectors that I am sure I must have shared with unsuspecting holiday party-goers this year :)
HAPPY 2016 everyone!
- Drones — Big players emerging and tough to be a new entrant as an OEM. Regulatory world has engaged commercial/consumer drone companies and I expect clarity in 2016. Industry specific drones are becoming the norm, esp for commercial uses, and tough to be a component vendor in the industry with significant price pressure.
- Autonomous cars — Billions of dollars already invested and unless you think you can raise at least hundreds of millions quickly, hard to see how a new entrant competes. These cars are here, parking for us, keeping lanes for us, soon taking turns for us, and before you know it, completely taking over. Int’g to think what companies might get created to occupy our time while we don’t drive.
- Home automation — There was hype a few years ago, then the valley of disillusionment, and now we are likely see a recovery over the next 24 months as practically every new device that rolls out starts to include a chip for communication. We won’t consider it a big deal when we are able to turn our lights on using our phone, or answer the door without having to walk to it.
- Wearable devices — wow on that FitBit IPO. I still don’t fully get it. Do people actually use their fitbits? I think the interface to connected health sucks — both for consumers and for the information to be utilized in some meaningful way. We need to get more out of devices we wear, they need to make me smarter, healthier, more informed about what is beneficial or not for my health. Some such devices are being developed, but hard to know if they crack the code.
- Virtual reality — I believe 2016 will be a big year for VR. Major platforms are set to finally release their devices to the world along with serious games and other apps that engage. While gaming will be big, its traditionally been a difficult sector for VCs. I expect increased focus on social VR, AR, and commercial/industrial uses of the platform.
- Computational imaging — 2015 was a big year for computational imaging. We have cameras that keep us connected to our homes, provide security alerts, allow us to shoot in 360 degrees, create streamable VR content, focus in post-processing, track faces/detect emotions, and auto-tag our photos/videos. As we see some of the depth sensing cameras embedded in mobile phones, the utility of such algorithmic/deep learning tools will spread across many apps.
- 3D Printing — The first phase is over, hype does not win any more. Time to build real technologies that are truly breakthrough and/or disrupt traditional manufacturing, and to enable average consumer to benefit from this industry more than they can with tchotchkes.
- Physical security — This is one industry that I believe does not get enough love from the tech sector — partly because it means dealing with governments, bureaucratic institutions, and big risks/liabilities. However 2015 should have made clear that we need technologies to fight terrorism, technologies that go above and beyond the realm of cyber. From bomb detection to tracking known suspects/potential terrorists on their movements. We need to utilize tools like computer vision, human-in-the-loop AI, deep learning, and crowdsourced security processes while maintaining privacy of individuals and refraining from any kind of racial profiling. Few companies doing very meaningful work in this space.
- HCIT — Tremendous opportunity to reduce costs, improve outcomes, and save lives, especially post ACA (Affordable Care Act). However, investors remain focused on identifying companies that can break through the ~$10M revenue ceiling and truly show scale. Healthcare customers are tired of hearing AI/deep learning buzzwords from companies that cannot truly deliver on the promise. Create value from day one, get access to data on the basis of that, and then derive learnings to create forward looking value for customers.
- Space/Satellites — Tech industry has done what incumbents could not even imagine. Startups are now operating the largest constellations of satellites in space, we are tracking poverty, human resettlement, refugee crisis, and oil tankers from space, and we have been able to return our rockets back to the landing spot successfully. What a year for the space. While we will continue to see int’g hardware opportunities in the sector, I think the real action is in proprietary data and analytics which are starting to prove their worth in several sectors.
- Robotics — Generally robots tend to fall into two categories: either they are toys, or they do real work. We saw some successes of the first kind, but not enough of the second. So we keep looking while technologies mature and get more integrated into other devices. A machine with hands is probably not going to be the breakout success the industry is looking for.
- Machine learning/Deep learning/AI — Is this a field of its own? I think it has gone past that and is now embedded into so many different sectors, from image tagging, medical x-rays/CT scans, and autonomous driving to big data analytics, financial, and healthcare data analytics. Beware of the hype though. Many of the interesting applications still use traditional computer vision and machine learning, and/or keeping a human in the loop to get tasks done accurately.
- Medtech — There is such amazing progress being made in this field, from medical robotics to medical devices and diagnostics etc. Cloud connectivity, big data infrastructure, and AI is making the force be strong with this one.
- Consumer apps — I don’t invest much in those sectors. But when it comes to e-commerce and services I am personally a huge fan of Uber, Doordash and Instacart. They have truly changed how I get stuff done. I really like subscription services (with easy cancellation policies) and would love such services for Uber, AirBnB, grocery delivery and home repair services etc.
- Computational sound — unfulfilled promise in 2015. I expected more from this space. Some int’g product launches in-ear buds, active sound adjustments/canceling etc, but I wouldn’t call any of it truly disruptive. I had expected we would see more experiments around the Apple Watch but that didn’t happen. Apparently people use their noses to go hands-free.
- AppleWatch — Somewhat a disappointment in 2015.
- Unicorns — Everybody wants a few in their portfolio, nobody wants to use the word publicly (except journalists), and God bless those who founded them. I want to see a few unicorn IPOs in 2016 so we can finally be done with this word and its silly derivatives.
- Twitter — This remains my favorite medium to connect with smart folks. I learn considerable much from it. I wish the product evolved more, and incorporated more ways to tackle interesting content…but as long as I am not forced to deal with the weird Moments tab, I continue to be a big fan. Of course this medium is only as important as the people on it, and as such my thank you to all those who engage frequently on it, from @pmarca and @semil to @hunterwalk, @stevesilberman, @mattocko, @smc90, @StartupLJackson, @DanielleMorrill, @SultanAlQassemi, and @historyinpics.
What else have I been talking quite a bit about on FB and Twitter?
- Syria refugee crisis
- ISIS and international terrorism
- Gun control
- Republican presidential candidates
- Police violence in America
- Middle East politics
- My wife Lama, and kids Ayla/Zaid
- Awesome people at Lux Capital