Happy new year!. Lunar new year! (a month has gone by while I’ve been sitting on this post)
Here are some other 2019 VC predictions that I’ve enjoyed reading:
- Elad Gil’s thoughts on startup opportunity areas
- Nicole Quinn thoughts on startup opportunity areas
- Southeast Asian VC predictions
- Semil Shah’s macro predictions
- Fred Wilson’s macro predictions
Here are some things that I think will be big in 2019:
1) Furthering vocational education
I think traditionally, a lot of investors have been shy to invest in education. In US, let’s be honest — we don’t really care about education! Here’s a good post that my friend Avichal Garg wrote on the education landscape several years ago which I think still applies today in the US.
But the tide is changing a bit. Specifically, what we’re seeing in the US is massive student debt. And new college graduates are not able to get a job or a high paying job. For so many people in the US, if you are not majoring in a STEM subject, it probably does not make sense anymore to go to college. Period. The economics of college are just terrible.
So while we don’t care about education in the US, we do care about business and return on investment! And it does make sense now to provide education of “useful” topics for the workplace — for a job, for livelihood. This is why we see the rise of Lambda School which ties your livelihood outcomes to your cost of education. And there are many other schools that are cropping up such as Make School and Kenzie Academy (we are investors at Hustle Fund) that are trying to teach useful topics that you can actually use and are willing to pay for, because you can use those skills to make money.
I think we will see a lot of new businesses stemming off of this trend.
We’ll certainly see more schools — both in-person and online covering more topics. Everything from coding to digital marketing to sales to even entrepreneurship. But also vocational categories as well. Can you teach medical skills or plumbing skills using VR headsets remotely?
Additionally, I think there will be businesses stemming off of these. Lots of new ways to loan money to students. New ways to provide socialization and networking for remote students. New real estate opportunities for these students.
2) Improving commutes
Commutes are terrible! (and a big waste of time). This year, we will see a lot of businesses built around making your commute better. Commutes can get better in two ways: A) By actually reducing your door-to-door time and B) by making the experience while commuting better. We’ll see opportunities in both.
A) There will be new ways of commuting in less time.
This is really what the rise of Bird and Lime is all about. When it’s faster and cheaper to go from say SOMA to the Financial District of San Francisco by scooter vs car AND is accessible to everyone, people will do it. In contrast, not everyone can ride a bicycle or a skateboard (e.g. more expensive, need balance or skills – not accessible to all)
But scooters really only work in warm-ish places where there are bike lanes / wide enough roads. E.g. places where it snows / places that don’t have bike lanes won’t be great markets in the long run. So there’s an opportunity to come up with a mode of transportation and model that can withstand weather / lack of bike lanes. My guess is that we will just see further advancement of ridesharing combined with autonomous vehicles. An early version of this might be effectively new autonomous bus lines that just go up and down streets continuously. This is already starting to happen in some cities.
Photo credit: Giphy
B) As people drive less, they will have more time during their commute
This is a big opportunity for people to do more work, shop, and play more too. For example, we’ll likely continue to see growth in podcasts and tools for podcasts this year. Spotify made clear that they believe in this opportunity by announcing two acquisitions in podcasting this week.
But we might also see the emergence of new commuting activities. Such as new commerce models. In Asia, for example, lots of people shop while waiting for public transportation like this:
Photo credit: Tech In Asia
Perhaps we will see shopping happen in rideshares — this is already happening — some startups are going after this opportunity.
We may even see new fitness activities. Peloton allows you to exercise at home in a social way. Can you do this on the road? Can you take a stretch class in an Uber? Can you run from Zombies or have a coach yelling in your ear while you run to work?
A general trend we’ve been seeing over the years is the ability to entertain yourself in a retail location, and later this entertainment was brought into the home and then later yet, taken anywhere, especially while commuting. For example:
Before, you shopped at the mall -> Later you shopped on your Desktop browser at home -> Now shop on your mobile device while commuting
Before, you played video games at the mall -> Played video games on your Desktop -> Now play video games on your phone while commuting
Before, you watched shows at the theater -> Watched shows at home -> Now, you watch shows on your phone while commuting
Before, you went to the gym to workout -> Now, you work out at home -> Later, will you work out while commuting?
Maybe. I can’t predict the future, but I can tell you that people will have more time with their commutes.
3) Furthering entrepreneurship
When I grew up in the Silicon Valley in the 1990s, entrepreneurship was a ridiculous idea. You were a maverick if you were an entrepreneur. This is no longer the case. You’re pretty mainstream if you’re an entrepreneur today. Even outside of Silicon Valley, so many people have side businesses.
I think entrepreneurship as a category has gotten so big that it needs to be segmented. There are fast growth tech startups — these are the ones that VCs like to find and back. There are brick and mortar retail businesses. Like cafes and restaurants. And there’s a new emerging but fast growing category that I call the “micropreneur”. Micropreneurs are < 10 person companies that are supported largely by existing web platforms and online distribution. With just a handful of people, these founders can generate as much as $100k-$1m per employee because they can leverage a lot of existing infrastructure — online payments, website builders or online store platforms, and even easy-to-use “pseudo-developer tools” such as Zapier. Micropreneurs are fueled by the rise in platforms that help people get a business off the ground — such as Shopify or Webflow (we are investors at Hustle Fund) or Stripe or Udemy. Or even YouTube and Instagram! They are often bootstrapped and often start as side businesses that sometimes become full-time businesses. And unlike tech unicorns, there are tons and tons of them.
I think 2019 is the year where we see products, platforms, and content for the micropreneur.
- Entrepreneurship education platforms (could be schools / bootcamps / etc of sorts) especially in areas of customer acquisition
- Loans / financial solutions to provide non-VC funding for these businesses
- Unique platforms and tools that can make it easy to start a “scalable” micro business
- networking platforms and clubs (like a YPO for this segment)
In general, I believe that if you can help people make more money, that is the easiest sale, and microentrepreneurs are hungry to buy things that will fuel their businesses that are already doing well.
4) Crypto tools and crypto platforms
Although we’re in the bear markets with crypto, I am bullish on the long term use of cryptocurrency. Why? Fiat works fine in many places. But, I think what we are increasingly seeing is monopolistic behavior on the internet.
I applaud CEO of CloudFlare Matthew Prince for writing this post a couple of years ago about free speech on the internet. In this post, he talks about how CloudFlare came to the conclusion they should terminate The Daily Stormer as a client. It was a difficult decision, not because he agreed with the Daily Stormer’s ideology, but rather because he didn’t believe that internet companies should be policing the internet for people who hold opposing ideologies.
But this is happening. We’ve seen a lot of large internet companies terminate relationships with people they don’t agree with. As a response to that, I believe we’ll see new sites crop up to try to bring back a “free internet”. Payments are usually at the front of new waves of trends, so I suspect, we’ll see decentralized payment options pop up as a response to PayPal / Stripe / et al kicking people off their services. Technology tends to start off with illicit use cases (such as the VHS tape used for pornography) but then ends up becoming mainstream.
In order for people to pay each other with cryptocurrency, we need reliable and easy-to-use infrastructure that mainstream consumers can use. This includes digital wallets for storing cryptocurrency, easy-to-use exchanges for moving money from currencies to fiat, accounting solutions for cryptocurrency, etc. Entrepreneurs are currently building in all of these areas, and I’m bullish on innovation in all of these.
In this space – I think the winners will have to be incredible product designers who can build great user experiences.
5) Verticalization of B2B SaaS
In North America, B2B horizontal SaaS business ideas are largely saturated. Not 100%, of course, but for the most part, we have marketing software, sales software, HR software, customer service software, and communications software that largely works. Some of these tools may be clunky archaic experiences, but they are here to stay — at least for a while, in my opinion.
So I think the B2B SaaS opportunities that people will focus on are verticalized use cases. E.g. Marketo for XYZ industry. Software built around particular sales cycles and workflows for industries like real estate, construction, farming, retail, etc. We already see this happening, but I think there will be a lot more of these types of businesses built around verticals in 2019.
I could be completely wrong on any and all of these predictions! And, even if I’m right, outside of these 5 categories, there will be, of course, many more businesses built.
What startup opportunities do you think will be big in 2019?
Featured Photo credit: World Economic Forum
As always, a thought provoking and appreciated blog. Just yesterday our team talked about how we can engage “micropreneurs” (although we didn’t use that term – we will now!) who can use our platform to build a complete business and their own geospatial/location management and promotion solutions. We’re starting a campaign to give new micropreneur ideas every week. So on that point, we’d say you’re spot on in your prediction!
Thanks Tracy! We will see…! But very bullish on micropreneurs. (I made up that word – hah)
Regarding “2) Improving commutes”, there are a couple of different use cases for people traveling.
For instance, my needs for work commuting is different than my needs for running errands around town.
I think telecommuting could address part of the commute problem, though I’ve been working out of a WeWork location recently as part of a local incubator, and there are advantages being around others, even though I have a nice treadmill desk in my home office. And of course some jobs can’t be done telecommuting, so it’s a partial solution at best.
But I think autonomous vehicles will be very popular for people that don’t have to commute, but need to move around locally. And I think the largest segment for this are senior citizens, although they are also the ones that are the hardest to reach with current technology.
A friend of ours has a 93 year old mother that still drives to go to her local Y to work out, and then she has to shop and go to bingo. Great eyesight, but hard of hearing and unable to figure out anything beyond the volume control on the TV remote. If someone could figure how she could rely on an autonomous cab (or some other safe transportation) they will enable a HUGE shift in the transportation market.
Thanks Ron – 100% agree that there are additional extensions of the word “commute”. When I was running my product startup, we used Zoom.us to have a persistent connection with everyone on our remote team all day. I think there are a lot of tools that can make remote workers feel closer and also tools to help people focus. Focusmate is an interesting one along these lines.
I’m excited about the prospect of autonomous vehicles as well and that will change EVERYTHING. Unfortunately, I’m not bullish that they will be ready in 2019 for primetime. Some startups are rolling them out in controlled / limited environments this year so that will be a good start.
Your analysis of the vocational education market has no evidence to support investment. What kinds of returns are investors seeing? What is your analysis of the real-world issues associated with accreditation, credentialing, and financial aid? The analysis offered here is pure speculation. Clearly your readers have money to lose.
Thanks Chris — A couple of thoughts: 1) All 5 of these are predictions — so to be accurate, this whole post is speculation… 🙂 2) The key word here is “vocational”. What is vocational? Programs that have a direct lead-in to livelihood. Not 10 years from now. But basically 1 year from now. So, to be clear, K12 schools such as AltSchool are not vocational. But coding bootcamps are. They also don’t require accreditation, because the end occupation of becoming a programmer doesn’t require accreditation. A lot of the coding bootcamps, et al, have actually done phenomenally well but are pretty under the radar and most have not taken VC money. I think that these types of models can be extended to sales / marketing / design easily. But we will see!
Thank you for writing this, Elizabeth.
For the most part, I think you’re on target. I have to take issue with your first item though–because as much as I hate to say it, having come from a long line of teachers–education is dead.
Learning will certainly live on, but the process of formally educating people has been dying, and it’s ready to give up the ghost. There is not much room for the whole sales model of communicating knowledge in a world of experiential learning; people learn best by taking a best path approach to what they need to know; the “jack of all trades, master of none” principle ever more strongly applies.
What need have we for formal educational systems aside from to digest the tripe of traditional social conventions? What can’t we learn better by experience than by a classroom?
Marketing as we know it is dying, too. People need see nothing more than a “promoted” tag on Twitter/Facebook/etc. to ignore/block ads. Virtually everyone hates it–no less than they hate robocalls, which are fundamentally the same. It’s a race between inflated essence of spam marketing and customers who do their best to avoid it all. Who can forget the horrible mess CBS made with the audience watching the latest Elon Musk piece–Ray Liotta in a Chantix commercial ten or more times. Smokers making up what percentage of that crowd?
In five years, the majority percentage of marketing budgets will be associated with obtaining and manipulating customer data. Marketers better wise up about how they’re spending that $200B in the U.S. annually, because things are changing.
Investors would do well to learn from the flip side of this: to actively seek entrepreneurs who are capable of attracting big attention on tiny budgets.
You need look no further than the profile @NegativeCarbon to see one. The biggest shame of your above post is that it made no mention at all of climate change–and if you don’t think this is the year for investment in it, you’re gravely mistaken.
Thanks Brian – I agree with you that Americans don’t care about education. But the framing is actually less about education and more about livelihood. If you can learn something that will make you 10x more money next year (this is why all those coding bootcamps have done so well), then you’ll pay for it. You won’t pay for K-12 toys or lessons or content, though, because the payback on that purchase is unknown. That’s why “vocational” is the key word.
Re: climate change — agree with the problem. I guess my biggest question is who pays for this? How do you build a business around this? Unfortunately, I have no answers here.
I think the #1 opportunity will be around information. You have POTS screaming “FAKE NEWS” on a weekly basis, Facebook and Twitter shutting down hundreds of accounts delivering misinformation, CNN seems to be the anti-Trump network. Who to believe? Where is the balance? When I was in Singapore, I noticed Government signs telling people to check sources for information. But how do you know if a source is right or wrong? I think there is a huge opportunity for a company to come in and do something to help people decide if information is correct or not. Not sure what that looks like, but there is a need.
Agree 100% that this is a big problem today and will be a bigger problem tomorrow. What is scarier is that with new technologies that allow you to generate videos and images that are fake (but very real looking), it will be harder and harder to discern the truth. I guess my biggest question is who pays for a solution to this?
Fascinating predictions. Micropreneur struck a real chord.
In terms of the climate change arena, I have a rather deceptively simple concept: plant 85 million hectares of cannabis (industrial hemp) to absorb 400+ gigatons of CO2 from the atmosphere – annually. Carbon-negative homes & products, bio-plastics, fuel and energy ~ while capturing half a ton of CO2 in the soil (via root mass) for every ton grown on the farm. Hempcrete block building system from http://www.justbiofiber.com has been certified carbon negative, R-40, fireproof….. suitable for residential & commercial construction.
I predict the current cannabis “gold-rush” will yield some interesting results over the next five years from the farm to the factory.
Thanks Bruce – hah, that’s an interesting idea indeed!
I think you are pretty spot on with the areas of prediction. I do think that AI and SaaS in Healthcare specifically is also going to be a huge industry in the near future.
We have to find a way to use the trch advancements to provide improved access to care with remote monitoring while decreases costs.
Agree with you and thank you for reading!
Hi. You articles are very interesting and informative. You have provided links for sharing in facebook, twitter and pinterest. Why not include Linkedin? Just a suggestion.
That is a great suggestion! Thank you! It’s because the plugin that comes with this template doesn’t have it. Hah. I’ll look into it and will try to fix. Appreciate the suggestion!
100% agree – and that is a great idea — I think that if you are just offering ISAs standalone, it becomes a commoditized product, BUT combined with different vocational education + licenses, that’s interesting….