Reviewing “18 Geeky Predictions for 2016’”— Spoiler Alert: Many epic fails!

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Point Nine Land

7 min readJan 17, 2017

2016 year was my first try at being an oracle. As a great example of overconfidence bias, I focused on geeky stuff hoping that I would fail less, because I understand those topics better. Today, I’ve been reviewing this list and … what a failure! I need to eat some humble pie ;)

Before getting into the full list, there’s a couple of lessons I should learn as an early stage investor:

It’s very hard to predict adoption of new technologies — even in cases of B2B where ROI might obvious. I should keep reminding myself that timing plays a key role!
Some new technologies get adoption in niche cases and it’s hard to understand the drivers of their growth. But if I wait until I understand them well, then I might be too late :)

Now, let’s go through my 2016 predictions:

#1 Security

Even the best can be a victim of ransomware, don’t hide it ;-)

[💀 fail] A large company will get bankrupt due to a major security breach.

This year we saw the Panama Papers and other data breaches in corporations — like Yahoo, LinkedIn, mail.ru — and government agencies — NSA, FBI, IRS, etc. We also saw that personal encryption doesn’t matter. So far, it seems that no company will go bankrupt for those reasons :)

[💀 fail] Most of us will “have a friend” who paid for ransom-ware.

Even if 50% of organisations suffer it and 1bn+ is paid out because of ransomware, this year, luckily, nobody I know suffered it.
Do you know anybody?

[🤐 dunno] Mass-scale security attacks targeting SMBs will be the new norm — they are easier and more profitable.

This is a very non-transparent issue, because (a) many companies might not realise that they have been hacked and (b) the ones who did, might not want to disclose it. Some surveys (1, 2) point that 75% of SMBs faced security attacks this year.
Anecdotally, sqreen.io from our portfolio who helps developers secure their products, sees similar results.

[😮 missed] Security attacks might cause deaths.

@apptifred pointed that this year can be the first when “hacking will start killing people”. I hope this is not already the case, actually, that already happened in 2015. Data breaches and ransomware attacks have been targeting healthcare organisations this year, and that’s really scary .

#2 Bitcoin

[🤐 dunno?] A bank will launch an altcoin. It will flop because they underestimated how hard it is to build network effects.

Well, as far as we can tell, none of the banks managed to launch anything…so it’s not a complete failure ;-)

Joking aside, in terms of private blockchain applications in production, I only found some references to the Korea Startup Market, but I couldn’t find anything else. Any pointers?

[🤓 correct] We still won’t be able to explain the drivers for the volatility in the bitcoin price and the growth in the number of transactions —[💀 fail] but everybody will have a thesis for it …

Some explanations for the potential of bitcoin…

We still don’t know what’s the driver for the growth in value of bitcoin — almost twice this year — , but apparently, nobody really cares anymore :)

Some ideas: Speculation? Money laundering? Escaping capital controls? China — apparently, 98% of recent transactions have to do with China…? Blockchain? Altcoins? Ransomware?
Do you have an opinion? Please share it :)

[🤐 dunno?] A winner use case for bitcoin could emerge. [💀 fail] My bet is on enterprises’ and SMBs’ using bitcoin-powered services for international payments.

As mentioned, the winner use cases are still to be seen. Fraudulent transactions is probably one of the most common uses cases — use chainalysis if you are afraid of that! But I bet there are many legit ones that are still emerging with good traction — like bitbond lending.

On the cross-border payments, we have seen many startups, but they go more often after transferwise than SMBs.

[😮 missed] The surge of altcoins and ICOs as an alternative way to finance innovation.

It remains to be seen the middle/long-term implications. My guess is that we will see many disasters in this market before there are any real long-term success stories.

[😮 missed] Blockchain-mania

That, I’m very bullish about… Keep posted! I will write about that soon :)

#3 APIs

[🤓 correct] If it wasn’t already the case, every new development will be API-first.

Would 2017 be the year of “serverless-first”? :)

[💀 fail?] We will see the first machine-to-machine API use cases. Another bet on IoT related stuff.

Many things need to change for M2M APIs, but in 2016 we have seen how machines have been used for DDoS attacks that took down Twitter, Spotify, GitHub,etc.

[🤐 too early to tell?] Open source as a business model will be slowly, but surely, be taken over by APIs using SaaS as a business model.

Open source has healthy adoption, but looking at the size of the exits and funding rounds of many dev tools and infrastructure startups this year — hortonworks, twilio, ansible, databricks, stripe — we see that SaaS dev tools are able to build larger companies. My bet is that this trend will continue.

#4 Dev tools

[🤐 too early to tell?] Atlassian will get unbundled — Slack <> Hipchat, Github <> Bitbucket, Jira <> ?, Confluence <> ? … — but don’t short them on the markets, just yet. ;-)

Well, shorting them you would had made some nice money ;-)

But apart from that, Slack not only unbundled them, but also created one of the fastest growing startups. Gitlab and many others are also going after bitbucket, jira, etc… and yesterday Atlassian bought trello (a defensive move?)

[🤐 too early to tell?] Slack’s ecosystem will give birth to a future unicorn.

I’m still very bullish about this opportunity — ping me if you’re into it!
As others already pointed, Slack is doing a great job creating a real platform and they are putting their money into it!

[🤓 correct] Docker will build or buy everything within its ecosystem — they don’t take prisoners!

This year, Docker “only” made 3 acquisitions — infinit for storage; conductant for orchestration; unikernel for OS. But they are merging the tooling into their core offering leaving less and less space for independent tools around their ecosystem.

#5 Big data, ML, AI

Every cool new tech is like teenage sex …

[🤓 correct] Big data will be commoditised. If you’re a CTO, your colleagues won’t think you’re crazy to use a 3rd party API for database management and analytics.

AWS’ Redshift is known for being its fastest growing service ever.

Across our portfolio we also see most companies going for DBaaS by default.

[🤓 correct] Machine learning will be part of every pitch we will see.
[🤓 correct] Most of the time, the value provided by ML will be limited.

Machine Learning (or even AI) is mentioned in many of the pitches we receive today. Unfortunately, in a lot of the cases, there’s little understanding of how hard it’s to build something that provides business value … (I will dig more into that in a further post). But, yes, we can say that 2016 was the year of the hype for ML.

[🤓 correct] We won’t see AI becoming mainstream. The hype around it will come down to “disillusionment phase”, which means we will see the first successful cases emerging.

Thanks to deep learning this year we have seen an amazing progress in complex problem solving, image recognition and natural language processing.

Still far from AI becoming mainstream, but impressive progress!

#6 Hardware, IoT, Drones

[💀 epic fail!] We will have more smart/connected devices at work

This is not happening (yet?). Wearables aren’t doing great either…

[💀 epic fail!]… We won’t have more of them at home

… But this is happening now: Zuckerberg is building his own system and Amazon’s echo is sold out.

[💀 fail] We will see drones being adopted very fast in some industries.

Drones’ specs are improving quickly, but outside of media, what we are seeing through startups is that most other industries are still testing the value that drones can provide to their business. It also seems that the drone manufacturing business is not an easy one…

Well, for my first shot at being an oracle, I got less than a third of the predictions right… Luckily, as Fred Wilson mentions in his 2017 predictions’ post, VCs don’t need to be right so often — which is a good excuse for myself being wrong so often 😎