With 2017 in the books lets take a look at some of the most exciting areas of technology in 2018 and make a few forecasts along the way.
1 – Cryptocurrencies – How can you write a forecast without mentioning cryptocurrencies? Still tons of uncertainty around who will be the winners and losers in this space long-term. With so many technical and cost-related challenges, it is hard to see how Bitcoin could end up being the winner in the long run. Too many other currencies have chipped away at its weak spots. Those who lived through the dot com bubble will understand that it is still too early to tell who will be the big winners. I will go out on a limb, though, and say that it is unlikely that Bitcoin will end up being the most influential and powerful currency down the road. So who wins? Perhaps it will be an existing currency, a fork will occur, or something someone is developing right now will emerge. If you think this is unlikely, go back and look at some of the companies and tech that were touted in the early 2000s. Many of these companies imploded, were sold off, or trade at a fraction of the market cap they had in 1999 and have never had the influence people thought they would. Just look at what happened to Beenz, govWorks, Pets.com, Webvan, eToys, Flooz, DrKoop, Kozmo, CMGI (alone was once worth $41b in 1999), etc. You can argue that cryptocurrencies aren’t dot com companies, but there are definitely some similarities. History doesn’t always repeat, but it often rhymes.
2 – Blockchain – With so many potential usages being explored we are definitely living in exciting times. Some of the initial use cases have ranged from tracking tuna, loyalty points, assets, banking, music, identity management, news worthiness, security, legal agreements, supply chain verification, fundraising and we could go on. No matter where you turn every industry and segment should brace for some sort of impact from blockchain technologies. Some of the early leaders in helping companies research and deploy blockchain test beds have been IBM, Microsoft and Accenture. What interests me the most though, are companies such as Chain, Nucypher, Codelegit, Factom, Blockstack, Zeppelin, InsureX, ChainThat, Gladius, Vault One, Salt, Steem, dharma, FileCoin, golem, Oken Innovations, origintrail, and Chronicled just to name a few that are developing products for many of the aforementioned use cases. It is likely that Blockchain will be the most disruptive and important technology for the next 20 years.
3 -Tech Under Fire – Facebook could be a poster child for many reasons. They are the new Microsoft circa 2000 – nothing new here – they just copy anything Twitter or SNAP iterates on. Expect more of the same as they use their size to dominate. They are also reeling from a number of problems, from fake news and dealing with partners to the even bigger issue that much of social media wastes time and manipulates people into usage. Predictions of Facebook’s fall, though, are likely to be wrong or premature, as it is hard to unravel in the short-term when the majority of your user base is addicted.
4 -IPOs – With 200 or so unicorns (venture backed companies currently valued in the private markets at $1b+) sitting in the private markets, will IPOs finally get cooking? While I do expect activity to pick up in the short-term, the current economic expansion is really long in the tooth. Another major headwind these companies face is that late-round shareholders (typically Series D & E) have rights that can cause companies to stay private longer than they might want. Some of these rights could trigger severe financial penalties by IPOing below a specified price.
5 – Lyft – Should continue to grow market share as they focus on North America, while Uber continues to stumble. Last year I predicted that Lyft would be purchased and suggested Google might do it. I was wrong, but Google did end up investing in the company and it appears Lyft is now headed to an IPO. This is a huge turnaround, especially since Uber and others thought the company wouldn’t make it just a couple of years ago. Market share was 21% in early 2017 but could now be over 30% nationwide. The momentum makes it likely that Lyft finishes 2018 with a 40%+ market share in the US.
6 – AI – The race is clearly on. Not just startups but even traditional cloud providers have found this to be a new battlefront. Google is clearly the leader here, and we have all been helping train it. In addition, to strategic investments over the years such as purchasing DeepMind, the company has indicated that they will invest over $1B on AI in 2018. Google put AI to good use and had some fun in late 2017 when they unveiled a new AI-driven cookie recipe. They are aggressively and cleverly looking for ways to embrace this technology. Microsoft though is coming on strong and Amazon clearly is feeling the heat to try and catch up. Amazon hasn’t been a big buyer of tech companies but this arms race may force them to the table.
7 -M&A – High valuations have already put many private equity funds on the sidelines. Tax reform will likely help pick up the slack in the short-term as it will free up money for strategic acquisitions. Many public companies are already sitting on war chests of cash, public market valuations are high, and a large number of private enterprise companies are looking for liquidity. Watch for Walmart to continue to buy at a rapid pace in their battle to fend off Amazon. Other big buyers are likely to be Microsoft, IBM, Intel, Nvidia, Dell, Google, Apple and McAfee. Finally, don’t sleep on the telecom sector which has been consolidating companies at an incredible pace as I expect this to continue as they search for ways to grow and gain efficiencies.
8 -Autonomous Vehicles – Have made a ton of progress with autopilot-type features, but Level 4 and 5 autonomy still seem a ways off. The last 3% or so of the problem is the hardest to solve. Just as we saw with voice, it may take longer for an everyday use product to come to market than people currently think. It is one thing to drive a car autonomously in a fairly controlled environment, but another to deal with animals, bikes, babies, drunks, ethics, etc. Some experts have also insisted that to have fully autonomous cars, we would need smart cities to provide guidance, and that just isn’t in place at this time. When will everything be in place to have autonomous cars running throughout the US and in all cities? Definitely longer than some of the rosy predictions being made for the early 2020s. I am still very excited about this sector overall and adjacent verticals such as Sea Machines which is developing and has already developed autonomous control systems to improve vessel safety and efficiency.
9 – Electric Cars – Electric cars have been slow to gain much market share, but the majority of car makers are betting hard that this is about to change. Tesla has been hampered by manufacturing delays on the Model 3, but the pre-order activity and interest is undeniable. Just look at the number of domestic and foreign car companies now readying new EV models that will be available by 2020. Expect numerous announcements on new EV car models from manufacturers in 2018 and demand to begin to soar in the near future.
10 – Biomimicry – Has already been used for some time, leading to inventions such as Velcro and even inspiring car design thanks to studying burrs and the boxfish. As businesses try to find new ways to innovate and compete, biomimicry looks to be an area where we should see even greater acceleration. Look for companies to invest time to more deeply understand the opportunities and allocate research dollars to support these efforts. If you want to learn more I suggest reading The Shark’s Paintbrush by Jay Harman.
What tech trend are you most excited about? What crypto currency do you see having the most relevancy in 2018? What Blockchain technology or use case are you most interested in?
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