I wanted to break down my thoughts on where I think our industry is going because I feel like with all the micro-sensationalism we can lose sight of the bigger picture stuff.
Looking at the facts, there’s less VC money available now than in the past few years, Robin Wauters at Tech Crunch gives a grim but solid overview. We’re in a technology slump, with many big name founders/innovators tied up in companies they bet big on a few years ago and few other standout players doing innovative things. The biggest excitement in the past year or two has been Twitter as a real time platform. While this is huge, it’s the only very major trend we’re seeing and there isn’t a new Google, Paypal, LinkedIn or Youtube these days besides, perhaps Facebook.
What does this mean? We’re going to see lots of smaller companies, getting more modest valuations, taking in less money (not necessarily through VCs), and selling for less. The average period from inception to exit may lengthen (I think it’s around 7 years right now), and the wins may be smaller.
Knowing this, what can we do to be in the best position when the upswing takes effect? The truth is there are many many more opportunities available now that weren’t when the industry was growing five/ten years ago. Whereas entrepreneurs were hand-picked, fostered and groomed by the few at the top, this training is now much easier to come by. The technology (hardware, etc) to start a company is much cheaper than it used to be, and we’re going to see lots of smaller, non-glamorous anti-web 2.0 companies sprout up.
Organizations like the Founder’s Institute are educating the next generation of entrepreneurs and providing them the tools, knowledge and contacts to build businesses. There’s also a huge opportunity for the industry to leverage our civil society, building communities around product and collective expertise (not just cupcakes) to help drive the next innovation. Let’s talk about how we got to where we are now, and hash out ideas for where we need to be [I actually wonder if this needs to be driven by one person rather than the collective, interested in opinion here.]*
Here are the main opportunities I see in the next few years:
- Government data is becoming available for the first time in history, what APIs are being developed and what innovations and learnings can we farm from them, package and use to make industry better?
- Twitter’s ready to wear real-time platform, is huge, growing and begging for products to be built on top of it
- iPhone’s platform is still in it’s infancy and there are plenty of opps for companies/apps/games to be let lose on it’s enormous distribution platform. Not many apps have tapped into the gyroscope or location services really well, we’ll see a lot more to come
- The development of better recommendation engines that capture implicit information about users to provide better customized services, targeting
- the merging of the digital, media and real worlds. Iphone apps, cross platform media, and real world events combined with live streaming technologies are going to produce some really cool products and experiences
- devices and media (Kindle, Crunchpad I’m looking at you). Huge opportunities for media to eliminate distribution costs, tailor content to customers and become cheaper.
I’d love to hear your thoughts, ideas and anything you think I’ve missed. What are the best companies out there right now? I posed this question on Twitter with intention to post the answers here, but Search.Twitter doesn’t allow historical searches more than a few days (fail) so sorry about that. All the more reason to weigh in here! Also, I’m still working on a fix for video comments, hoping to roll it out soon. That one’s for you, David Kadavy 
*I’d love to rally a group of people obsessed about product and technology to meet and hash out ideas. Let me know if you’re interested in something like this, I’m still thinking through the format, etc but if you’re interested in coming or contributing let me know.
7 Comments
I couldn’t agree more about this. I’ve said the same things mentioned here about the last 6 months. Great job Melody for the analysis. Always glad to know that other people are thinking the same way I am!
I agree with all of those in that list – there are so many opportunities out there its mindblowing. All it takes is a minor amount of creativity and some risk and anything is possible.
As an entrepreneur, I’m working on various concepts that include some of the ideas on the list, and essentially I’m testing the waters until something works.
What I see in the next wave of computing is a surge move to thin clients and cloud computing – with Amazon, MS and Google leading the way.
There is a huge need for artificially intelligent algorithms to become available that sort out the Internet’s mass of data according to what the user wants to see – and nothing the user doesn’t. Search engines and RSS are a good first step towards this, but they are only a baby step to the ultimate goal of realtime relevant content updates for everybody online.
I like like.com, they’re using Machine Vision techniques to recognize and recommend similar products. http://www.like.com/
I think the availability of government and medical data and changes in consumer behavior will be some of the biggest drivers. Money magazine predicts consumer spending and home ownership will be lower. Consumer saving, freelance employment, and government regulation will be higher. Average recession will last 1.5 years rather than 3 months. With change comes opportunity!
“How to Profit in the New Economy” http://tinyurl.com/m7d4a6
An opportunity that cross-cuts your ideas above is the growing demand to shift from isolated products/applications/services (iPAS’s? lame!) to enveloping experiences (ePAS’s? Even Lamer!). Location aware devices, real time platforms, augmented reality, and the availability of whole new genres of data make the value add of true ePAS’s a possibility… and consumers are slowly starting to realize they should settle for nothing less. Slowly.
So back to your question: what opportunities does that pose now or in the soon-to-be now, and what steps should we take to be ready for it?
Interesting…
Ha ha, yeah the acronyms needs work (hurry before O’Reilly coins it). The answer is different for everyone but it’s clear we all need to employ real-time into our sites/ideas.
I’m still an amateur so I feel slightly foolish weighing in here. But oh well.
My educated guess is that *major* work needs to be done in what fancy techs like to call the “semantic” web. I think Web 2.0 started out with that ideology but completely missed the mark by prioritising design and configuration. Which is not too bad I reckon. We pretty much had to get the technology side of technology right before we jump into making the Internet more meaningful. But as more and more API’s flourish it’ll be ever easier for websites to seamlessly share user data in order to create a more “unified” Internet.
The other area that I reckon needs a fair bit of work is News. As Murdoch and Co. tighten their belts there’ll be more and more opportunities for new media startups to get the raw news, digest it and present it to the end user. I think Twitter has already shown it can be done. Now somebody needs to go and make it happen.
I also agree with Michal’s AI point. Why is AI only limited to Japanese soccer playing robots? How about some more AI in internet applications… The possibilities are endless.
So there we go, my 2 cents.
@Sahil Glad you chimed in! I’m not good at moderating in a timely manner, I’ll try to get better. I like your points, I agree that we’re going to see exponential growth in integrations and the usefulness of Web sites, and that there are dire challenges in the online and traditional News industry.
In terms of AI, I’m still waiting for my own soccer playing robot. Maybe when Christmas rolls around.