Oh, The Places You’ll Go!

“You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose. You’re on your own. And you know what you know. And YOU are the one who’ll decide where to go…”

Dr. Seuss, Oh, The Places You’ll Go!

My son was born a month ago. It has been one of the most amazing experiences, nothing short of miraculous. One night while soothing him back to sleep, I reflected on how different a world he will face when he starts his family. The amount of innovation that has happened over the course of my lifetime is staggering. The cumulative nature of discovery, each invention building upon a growing base of knowledge, dictates that this innovation only continues to accelerate. From our seat in Silicon Valley, acceleration is readily apparent.

In the last 30 years, we’ve seen the mass adoption of personal computers, a global internet, and smartphones. Long the domain of only science fiction, technologies like 3d printing, virtual reality, connected devices, quantified self, consumer robotics, and self-driving cars are on the immediate horizon. A series of simultaneous parallel inventions served to create the modern information technology economy. Exponential growth of compute power (Moore’s law), storage capacity (Kryder’s law), and data transmission (Butters’ and Nielsen’s have driven unfathomable hardware advancement. The lasting effect of these inventions is still playing out.

Previous leaps in efficiency during the Industrial Revolution centered around augmenting physical processes and were limited by fuel and mechanical innovation. More so than anytime before, the technical innovation today serves to enable further innovation (whether explicitly with computer aided design, or implicitly changing how we learn). Information technology augments mental processes and allows the transformation of every facet of our world.

As a huge fan of science fiction I recognize I’m no Hari Seldon. Here are some thoughts about what the next 10 years may bring, looking at startups founded today.

Information Revolution

Information is being digitized, organized and made universally accessible. To quote the film Serenity, “You can’t stop the signal, Mal.” With the rise of connected devices and cheap sensors, data is increasing exponentially. Anything that can, will be quantified. Once quantified, it will be analyzed and understood. Put another way, every physical thing will become smart. Everything will be connected, measured and responsive.

The information revolution that is currently happening in this rapid digitization is what powers much of the modern innovation. As Google Research Director Peter Norvig says, the combination of rapidly increasing data and new methods to process this data means new and better models yielding increased information, relevance and personalization. Already, services are moving from comprehensiveness (10 links on a Google SERP) to curation. Limited form factors in mobile devices and information overload drive a paradox of choice. Services will take a point of view (with graceful degradation) like Google Now and push information without requiring a user to pull.

Privacy

The default in this data rich, connected world is subtly and importantly changing from default private (by virtue of the difficulty to share publicly) to default public. Youthful indiscretion will now be indexed and forever accessible.

The question of privacy immediately hit home for me. As a digital baby, my son has countless photos and videos. I’ve struggled with how much to share online.

Access

Connectedness will expand both horizontally (globally) and vertically (across use cases). Globally smartphone penetration is just at 29.5% and growth is still accelerating. From dial-up to broadband to mobile to the next generation of 5g access and fixed infrastructure, access expands for individual users.

The recent trend of consolidation in distribution notwithstanding, new technology, fiber, mesh networking, or future development in communication standards should lead to a continued increase in accessibility and speed.

Communication

With fast ubiquitous access, communication is instantaneous and constant. Through new mediums, the bar for content that is communicable has lowered while the friction to communicate has been removed.

Skype was international voice arbitrage, WhatsApp was international text messaging arbitrage, both backed by data pipes. Instagram utilizes cheap high quality camera sensors and allowed us to tap into visual communication. Snapchat’s ephemeral content lowers the bar, TapTalk removes all friction from the conversation.

Tremendous value is created by owning the next communication network due to the deep engagement and retention inherent. In the next 10 years, every permutation of communication medium will be explored.

These networks will remain fragmented. The barrier to recreate social graphs in the age of smartphones is de minimis. Each network can have a dedicated purpose. Snapchat for friends, phone and email for work, SMS and iMessage for instantaneous interaction and so on.

Media

It has never been easier to create and distribute media. Social media has built distribution networks with audiences in the billions. Content has become cheaper to create through advances in production technology and audience analysis seen on YouTube and Twitch with user generated content and on Netflix, Amazon, and Yahoo with the next generation of media models.

Consumption medium drives media creation. The rise of smartphones, tablets, and eventually VR platforms will shape the next generation of media. Content is increasingly personal and niche subjects can find mass markets.

Bundled subscriptions is the dominant business model. The rise of new distribution channels and windows outside of cable, movie theaters, book stores allow for ready a la carte consumption.

Commerce

Next generation, end to end, online marketplaces remove friction from transactions, bring together supply and demand efficiently, increasing utilization and volume. As an example, hotels typically observe 60 – 65% occupancy. Services like Hotel Tonight and AirBnb drive more efficient utilization and pricing improving both consumer experience and supplier profitability. Uber has transformed the taxi industry and will impact car ownership.

Improvements to the core commerce infrastructure via identity (mobile), fraud (chip and pin), decentralized transactions (cryptocurrency) further decrease transaction costs and enable new use cases.

When the transaction costs approach zero, ownership and renting assets start to look very similar over different time horizons. Renting starts to look like depreciation on a liquid asset with low transaction costs (neglecting ego).

The rise of on-demand marketplaces and managed services, enabled by aggregated predictable demand drive an economy of immediacy. with large fixed costs associated with locating in high value areas, on demand ecommerce should only accelerate the death of the mall, as Jeff Jordan argues.

Industry

Education

Universal digital access to information inevitably changes education. As the calculator eliminated the need for slide rules and logarithm tables, instant access to information will augment rote memorization changing what knowledge means. New digital models for learning like Khan Academy, Coursera, Udemy invert the lecture model. Teachers can engage, record, test and measure efficacy with services like Remind and ClassDojo.

Startups like Muse and Emotiv are creating consumer EEGs digitizing our brain behavior. This data will allow for better understand of learning techniques from direct observation of the brain.

Health

Quantified self will move from counting steps to actionable insight. Fitbit will move from tracking steps to understanding fitness, Withings from tracking weight to understanding health, Ovuline from tracking fertility to understanding female health. DNA sequencing costs have fallen at a greater than exponential rate. With uBiome, we’re already starting to better understand the complex ecosystem that is a human body. The world is moving from tracking the first order of data to deriving actionable insight.

Power

Power consumption is strongly correlated with wealth and is required to enable future digital technology innovation.

Improvements to battery technology (Aquion, Imprint Energy[http://www.imprintenergy.com/], Sakti, power transmission (uBeam), sustainable cost-effective climate friendly power (uPower, Helion) all will drive more efficient generation and consumption.

Nest thermostats can self-optimize usage, efficiency and performance. OPower has shown how simply measuring consumption can drive more efficient utilization. Edyn and startups like them apply similar technology across a plethora of new domains. Measurement drives and improves action.

The New

Robotics

A combination of cheap ubiquitous sensors generating vast amounts of data (as a side effect of the smartphone wave), a series of algorithmic innovations (computer vision speech recognition…) have enabled a robotic revolution. From industrial manufacturing with Baxter, consumer robots with Jibo, to defense technology with Boston Dynamics(owned by Google).

These technologies also serve to enable markets like consumer drones with Airware and 3d Robotics and next generation satellites Planet Labs or Skybox Imaging(owned by Google). The world is being digitized through drone cameramen and up to date map imagery.

Google’s Streetview product and a decade of computer vision research means new and better models for parsing video streams in real time to enable driving decisions. Google’s self-driving cars not only know where to go, but where to look for traffic signals. Along with startup Cruise and existing manufactures, cars will become intelligent (although regulation will slow adoption).

Human Computer Interaction

In the process of digitizing everything, computer input is undergoing a similar revolution. From the touchscreen now ever present on smartphones, to Xbox Kinect and motion capture, Siri / Nuance speech recognition, and beyond Leap Motion.

Conclusion

From Google’s self-driving cars, to Apple / Nuance’s Siri voice recognition system, to IBM’s Watson, a series of simultaneous parallel inventions served to create the modern information technology economy. The pace of innovation is increasing, revolutionizing classic information industries like communications, media, commerce, reaching into old stalwarts like education, healthcare, and even agriculture (like Climate Corp predicting the weather), and creating new fields like robotics and new ways for us to interact computers.

I only hope to help influence this future to build a better world for Luke.

You don’t need to predict the future. Just choose a future – a good future, a useful future – and make the kind of prediction that will alter human emotions and reactions in such a way that the future you predicted will be brought about. Better to make a good future than predict a bad one.

Isaac Asimov, Prelude to Foundation