Four predictions for 2015

By boris, December 01, 2014

The end of every year brings a proliferation of prediction lists. As we end an incredibly active 2014 in the tech/investment world, I am adding my own thoughts on what might be coming in 2015.

A killer app for Bitcoin emerges

We’ve seen Bitcoin adoption by major retailers like Overstock.com and Dell, but there’s still too much volatility and regulatory uncertainty for Bitcoin to be used as a mainstream currency in North America anytime soon.

I have long believed that Bitcoin is a beautiful and powerful technology, with great developer adoption – but where are the apps that solve real problems? We shouldn’t look for much traction with the current use case (payments in North America), as most consumers in North America don’t view the current payment system as broken and in need of a fix. Instead, look for a killer Bitcoin app to emerge elsewhere, like in international money transfers or remittances.

Enterprise apps, driven by mobile and big data

There are always a ton of new enterprise apps ever year, each hoping to be ‘the next big thing’ that changes the way we work. The common theme has been making apps more accessible (i.e. mobile) and smarter (i.e. machine learning and big data). Good examples are Slack for the first category and RelateIQ for the second. Expect both of these trends to take off in a big way in 2015.

Virtual Reality moves beyond gaming

The game industry has been the first to really embrace the potential of VR; that’s why Oculus first launched its public prototype of Rift at a gaming convention. However, VR is an incredibly exciting area that can reach far beyond gaming. This Ars Technica article describes a few examples from trauma treatment and classroom learning to marketing and film. In 2015, we will see the first major applications of VR outside the game industry.

The “winner takes it all” dynamic accelerates

This past year has brought accelerated funding rounds for emerging category leaders. As summarized in this TechCrunch article, …”the biggest winners win by staggering amounts compared to their competitors. What used to be perceived as a 5x or 10x gap in valuation between the winner and a runner-up is now more widely seen as between 100x or even possibly 1000x.”

In a start-up environment that’s noisier than ever, break-out companies have an increasingly easy job of raising tons of money at high valuations while the second and third runs in a category often struggle. This dynamic has just started to emerge and will accelerate through 2015.

Those are some of the key areas we’ll be watching next year. What about you? Which technologies, trends, and areas do you think will break out in 2015?

  • re: Bitcoin and remittances – keep an eye on Beam (http://beamremit.com).

    They’re a Bitcoin-powered remittance service to Africa, and the only Bitcoin remittance company that integrates with mobile money payout options in two African countries.

    Their system powers the Bitcoin Against Ebola campaign (http://bitcoinagainstebola.org), which has raised over USD 4,500 to help local charities deliver food to quarantined families, and purchase the critical medical equipment needed to combat Ebola.

    The Bitcoin donations are converted into local Sierra Leonean currency, and instantly deposited into the mobile money accounts of the partner charities. Thanks to Bitcoin, it’s 6 times cheaper to send donations with Bitcoin Against Ebola than with traditional money transfer systems.

    (Full disclosure: I work at the Accra-based startup incubator where the Beam team is based, and frequently work directly with them.)

  • bwertz

    Thanks for both of those – targeting countries with very high fees for traditional money transfers & offering a mobile payout option makes a lot of sense.

  • stefano zorzi

    Hi Boris,

    I have been thinking about the “winner takes all” dynamic a lot recently and agree with you that all signal point to an increasing trend. What I am asking myself though is whether this is more about the absolute size of the winner or if it is really a “1 wins – all other lose” type of situation we are heading towards. Are we really moving to a stage where most industries will be dominated by a handful of ultra capitalised players? If this is the case it’s easier to imagine where will the majority of these companies coming from (or at least where will their investors). I find quite disturbing to think of a world with such a concentration of power.
    Beside that, what will this mean for entrepreneurs and (smaller) investors? Are we increasing the “lottery ticket” dynamic of starting a company? Interesting times indeed..

  • bwertz

    I think it depends very much on the network effects at play – consumer apps usually can have more of them, enterprise apps less – so there will be very different dynamic depending on the market / vertical. But in a more and more globalized & connected world where word of mouth travels fast and increasing network effects are at play, the winner takes (almost) all dynamic is naturally accelerating.

  • stefano zorzi

    I agree to that and do you see any impact on your behaviour as investor? On one side you could say that incentives even more a multiple bets approach, in the hope of one winner emerging where pro rata can be exercised. But what about entrepreneurs? Will it make entrepreneurship more risky (less likely to pay back) but potentially more rewarding (in few and far apart cases)? The implications are really many..

  • bwertz

    The power law has always applied to venture capital and will probably do more so in the future – so you need to focus on investing in companies that could potentially be in a winner takes it all position down the road. And same dynamic for entrepreneurs – higher possible payout, potentially lower probability though. Unless you subscribe to the notion that more billion $ companies are getting created than ever before.

  • Alexander Norman

    I tend to agree on points 2 (enterprise apps will be more mobile focused in particular) and 3 (I believe we will see VR adopted by ecommerce companies soon maybe note 2015). Four scares me, it momentum can be used to raise money at outsized valuations and crush competition it will result in companies swinging for large early revenue gains and not focus on building sustainable businesses. I also believe the wearables market is going to change as companies start building devices that take advantage of unique function/form/capabilities of wearables.

  • bwertz

    Good point re wearables

  • JD

    Not only high fees, but international remitances from/to countries that also use USD as currency. Liquidity and access

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  • For 2015, I see Augmented Realty making more inroads into UX scheme of things. As a result, the whole internet of things will see a paradigm shift, and we shall see AR agencies mushrooming up!

  • Will wearables begin to include actuators as well as sensors? The current crop of wearables are rather dull. I expect to see changes in 2015 though. It will also be interesting to see if there is any convergence between wearable technology and advances in technical fabrics.

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