Foresight is 2020

Venture capital predictions for the coming decade

Scott Lenet
Jan 6 · 9 min read
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Image: Shutterstock

In December and January, it’s fashionable for pundits to make predictions for the coming year; as a venture investor, I feel pressure to look further out. Venture capital provides a unique perspective on the future, because the plans of early stage startups illustrate a roadmap for how technology trends and markets might unfold. The earliest stage companies can lag the market by five to seven years or more, giving potential glimpses of what may happen down the road.

Given my “perch” as a VC and the fact that we are entering a decade some are hoping will resemble the roaring 20s of the last century, I thought I would share my own personal (and obviously very subjective) innovation forecast for the next ten years:

There will be more customization of everything

I recently met with an entrepreneur working on a technology to help consumers select TV shows based on mood instead of genre. She told me a fascinating story of the market research she conducted with Millennials, who described themselves as overwhelmed by the options on Netflix. She said these consumers asked for linear-style programming that just plays when they turn on the TV! As choices continue to expand, investors will find opportunities throughout the entire decade to fund startups that personalize and simplify everything from our media consumption, to our food, schedules, communications, dating choices, healthcare, and more. Ultimately, consumers will demand everything be tailored, and then delivered in “one click” or less. In many ways, the “mass customization” concept of the 1980s will finally arrive.

Our infatuation with data science waxes… then wanes

My venture capital career spans three decades and I’ve met many startups hoping to transition from product company to data company — few successfully make the leap. Barriers include establishing trust, reaching a critical mass of data, and identifying predictive data that has clear economic value for customers.

VCs will score some hits with data science startups but will lose more money than they make. By the middle of the decade, investors will begin to shy away from these deals after recognizing that tech giants and other large corporations are better positioned to collect, analyze, and use large data sets. Machine learning algorithms will begin to commoditize, especially for analyzing consumer behavior. As an aside, data science degrees coveted today will become much less valuable by the end of the decade when computers clearly surpass human data analysis skills.

Generational conflict at the mall

Gen Z, on the other hand, will still be young and unencumbered during the 20s. As a result, this generation will flex its muscle to do something about climate change, demanding more social responsibility from their brands of choice.

Baby Boomers will spend lots and lots of money, composing the most lucrative target for products and services. They will emulate their grandchildren in Gens Y and Z by emphasizing experiences, while simultaneously maintaining their stereotypical materialism.

While e-commerce will continue to grow, it will become apparent that the deaths of offline retail and malls have been greatly exaggerated. Retailers will adapt with omni-channel strategies that blend the best of offline and online approaches, catering to the preferences and needs of these demographic segments. Some brands of the past will die, but new brands will take their place. All of this activity will provide ample opportunity for consumer sector investors.

(My own generation — Gen X — will continue to work hard and complain about everyone else)

Unfortunately, healthcare will get even more expensive

Venture capitalist Lisa Suennen notes:

“We have been successful in improving access and even quality and personalization of care in some areas, but healthcare startups have demonstrated a marked lack of rigor with respect to proving economic ROI. This is compounded by the rapid aging of the population, the constant flow of new and expensive drugs, the increasing cost of hospital-based services, and the underlying mismatch of financial incentives in our healthcare system that drives cost up. As a result, it has proven extremely challenging to convert the extensive venture investments made in healthcare into real cost-reduction for the system as a whole.”

In the interim, investors will continue to fund every category of healthcare. The greatest allocation growth will be in digital health diagnostics and therapeutics, in an attempt to minimize costs and maximize the delivery of health benefits outside the clinic. Healthcare will be a bonanza private investment market in the 2020s, and even bigger in the 2030s.

We will eat more plant-based foods

The sixth sense is real

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3D printing will expand its foothold in industrial applications

News will never be the same… or will it?

Social media services themselves will come and go, occupying a limited role as sources of truth and attracting minimal attention from venture capitalists. The category will ultimately be seen as a fad of the 2010s. Twitter will survive, subject to regulation as a public utility.

Investors say “no” to politics, “yes” to religion

On the other hand, religion is an overlooked, gargantuan market whose fragmented entrants have made limited progress in the digital transformations that have already modernized so many other industries. VCs have typically avoided this sector, too; as many investors and entrepreneurs are themselves not religious. Yet religion offers ardent end-consumers, extraordinary insulation from regulatory challenges, and limited venture-funded competition. We will see multiple billion dollar religion startups by the middle of the decade.

“Shields up!”

The future of work will start to reveal itself

More corporate venture capital

Some of these predictions may seem obvious and others outlandish. I would love to hear your predictions for the next decade. Please find me on Twitter at the link below and let’s debate the future.

This article originally appeared on Forbes.

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Scott Lenet is President of Touchdown Ventures, a Registered Investment Adviser that provides “Venture Capital as a Service” to help corporations launch and manage their investment programs.

Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by Touchdown or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.

Risky Business

Thoughts on corporate VC from the team at Touchdown…

Scott Lenet

Written by

Venture capitalist founder of Touchdown Ventures & DFJ Frontier, USC & UCLA adjunct professor, father of twins, Philly sports Phan, Forbes contributor

Risky Business

Thoughts on corporate VC from the team at Touchdown Ventures, the leading provider of managed venture capital for corporations.

Scott Lenet

Written by

Venture capitalist founder of Touchdown Ventures & DFJ Frontier, USC & UCLA adjunct professor, father of twins, Philly sports Phan, Forbes contributor

Risky Business

Thoughts on corporate VC from the team at Touchdown Ventures, the leading provider of managed venture capital for corporations.

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