Interesting Tech Markets for 2019

http://blog.eladgil.com/2019/01/interesting-markets-2019-edition.html

by eladgil • 8 years ago

156 93 8 years ago

blog.eladgil.com

jsherwani• 8 years ago

Fascinating read. I never thought of Devsumer as a category until now. It explains the recent spike in interest in this space:

* Slack acquired Missions

* Trello acquired Butler

* GitHub launched Actions

* Zapier’s success ($35m ARR)

* The ridiculous numbers of Zapier clones out there

lwb• 8 years ago

Not to mention Apple's Shortcuts -- haven't used it but it seems to be in the same vein

strgrd• 8 years ago

"I am still quite bullish that a basked of cryptocurrencies will be worth in the trillions within the next 10 years. The primary short term driver for crypto value with be the generational replacement of gold as a store-of-value for a specific subset of the population. The longer term drivers of crypto value will be new forms of programable money and on-chain securities."

What subset of the population is going to replace gold with crypto? Because it won't be the entire generation burned by ICO scams and bullish investment into whitepapers they don't understand.

eladgil5• 8 years ago

Thanks for the comment - My hypothesis is that people growing up today in their 20s and 30s who would have normally bought gold in their 40s and 50s will buy crypto instead. So it will be a generational shift versus a replacement for existing older gold holders. (Could be wrong of course).

zechs• 8 years ago

Isn't that a big shift to expect given gold's track record as a store of value going back to almost the beginning of recorded history?

mattnewton2• 8 years ago

I don’t buy it - gold has a natural floor, for one thing. I can sell it to make pretty earrings or fancy computer cables. The risk of it losing all its value is basically the risk that we will move to a post-scarcity Star Trek style society with matter replicators. Crypto.. not so much.

ThomPete• 8 years ago

The coming generations who will need a store of value for digital assets which they value much more than older generations do.

Those who grow up today who don't get burned by ICO scams but will get to know it as a natural thing, just like the internet was for the millinials.

helen___keller2• 8 years ago

Also given the failures of crypto so far I don't see any evidence that a programmable money/securities revolution would come from crypto. I would bet that a conventional tech company (think a PayPal/Robinhood hybrid) could do it much better.

Red_Pill_Phil• 8 years ago

The whole point of crypto is that its not centralized. Your argument has little merit.

csomar2• 8 years ago

10 years is enough for a newer generation to rise and make money. Those in the 15-25 right are quite adapt with Crypto. They'll be the next investors. Granted, if they are wise they won't put all of their liquid there. But if the 30-60 of the current world put a little in crypto; its' market value will fly out of the sky.

ivalm2• 8 years ago

But why would they put money into crypto? There is some reason to use crypto as a currency (anonymous transactions), but there is no particular reason to use it as a store of value (hard to comply with anti-money-laundering regulation, hard to protect from fraud, hard to pass through audit, etc)

nostrademons4• 8 years ago

There's been this pattern within crypto where each new bubble brings in new people, while the people burned in the last bubble leave in disgust and long-time hodlers from 2 bubbles ago cash out their winnings and do other things with their lives. Many of the most active developers and evangelists from 2011-2013 are doing other stuff now, and the ones that haven't are engaging in juvenile pissing matches with their millions (cf. Roger Ver and Craig Wright). Many of the folks burned by Mt. Gox left in disgust in 2014. Many of the current big exchanges (eg. CoinBase) were founded by people who got in after the 2011 bubble. Ethereum was founded by folks who got in after the 2013 bubble, and were initially skeptical of this whole cryptocurrency things. There's probably a wave of new cryptocurrency startups being founded in garages & dorm rooms right now by people who were too young to really participate in the 2013 or 2017 bubbles but don't want to miss out on the next one. The folks who got burned by ICOs are mostly already gone, or they're sitting around being bitter and predicting Bitcoin = $0.

It's not all that different from the dot-com boom; I (mostly) missed out on the bubble from 1995-2000 since I was in high school at the time, but kept studying computers & web technologies in college and caught the mass adoption wave afterwards. I had a number of classmates and coworkers (at internships), slightly older than me, who rode the dot-com bubble right into the ground, losing both their jobs and their life savings. Many of them left tech altogether and became economists or traveled abroad or bounced around between temp work. They basically swore off investing in tech stocks, but one of the folks I'm thinking of thought she'd make a pretty penny by buying 3 houses and investing in hedge funds in 2007.

It's human nature to believe that bad things that happened to other people aren't going to happen to you, and as a species we're remarkably bad at learning from other people's experience. The set of folks actually burned by ICOs is a relatively small subset of "all people" though - IIRC at the peak of the bubble there were only about 10M Bitcoin investors in the U.S. and only a small percentage of them actually invested in ICOs. That's like 3% of the population, still very much in early-adopter territory.

danmaz74• 8 years ago

Web technologies created immense practical usage value right from the start. The fact that cryptocurrencies will do the same is very, very debatable. For now, the only valuable use case I know of is for illegal activities (ransomware, tax evasion, buying illegal stuff). Which is a sizeable market, but not one which is going to see mass adoption.

southerndrift• 8 years ago

Some days ago:

We can confirm that there was a successful 51% attack on Ethereum Classic [1]

[1] https://news.ycombinator.com/item?id=18849961

The value of crypto currencies is strongly linked to the available processing power that can be rented for a short amount of time. An attack must never be profitable. So the value of cryptocurrencies cannot grow arbitrarily. Just Bitcoin is quite secure because you cannot easily rent the specialized hardware.

pxlpshr• 8 years ago

I don't even know that many people who "store value in gold". The ones that do are usually also the people screaming that the sky is falling, at which point I favor guns, ammunition, and food & water.

aaavl2821• 8 years ago

Biopharma: neuroinflammation, next-gen genetically engineered microbe / cell / gene therapies, gene therapy and cell therapy for neuro and autoimmune disease, small molecules targeting genetically defined neuro, cardiovascular and autoimmune disease, chemogenetics, programming languages for specific parts of the bio stack

$17B invested in bio startups in 2018, very little of it by traditional tech VCs

One $11B exit < 5 years from series a (Juno), one $9B exit ~4 years from series a (avexis), one $8b mkt cap ipo, one $8b exit from ~5 year old company to start 2019 (loxo), multiple smaller billion+ exits, ~50 vc backed IPOs

Several innovative companies launching their first drugs soon, potential to become standalone commercial companies: sage, agios, alnylam, Ionis / akcea, bluebird, ultragenyx, gw pharma

eladgil5• 8 years ago

Good point in terms of mentioning biopharma. I stayed tech focused in this blog post but lots going on in bio.

_sword• 8 years ago

Much of this seems to be outdated, like someone at the end of 2016 looking towards 2017 trends. Devsumer makes sense still. Devops more generally is probably a better market to highlight especially as organizations try and tackle security concerns with cloud deployment models.

eladgil5• 8 years ago

I agree there may be some hindsight bias. At the beginning of this blog post I call it out as well:

"Sometimes this creates a very backwards looking view, as the most obvious signals are in companies that have been working well for a few years and the trend is really over."

I do think DevOps is an exciting market with a lot going on. (I am an investor in GitLab, PagerDuty, and other related companies)...

fhood• 8 years ago

"5 core markets (Devsumer, Real Estate, AI hardware, Transportation and Logistics, Crypto) and 2 emerging ones (Legal, Defense)"

Devsumer? For sure. Simplifying dev work seems like an area with pretty much eternal growth potential. But I find it hard to get excited about many of the others.

Interacting with the government (defense) still seems to take buckets of money, and there are already large companies that do software in that space, even if their names don't come up much.

It will be a while before people look a crypto as anything other than a sick joke I suspect.

I kinda thought that the software+real-estate process had a whole lot of established players, but I could easily just be ignorant of some of the growth areas.

alexgmcm• 8 years ago

I kinda thought that the software+real-estate process had a whole lot of established players, but I could easily just be ignorant of some of the growth areas.

In my city in Spain letting agents still charge 10% of the annual rent as a fee when they do little more than print out a pre-written contract and hand you the keys.

Apparently it is common in Italy too.

This seems like an area ripe for disruption.

oh_sigh• 8 years ago

That's how it works in NYC as well.

thatoneuser• 8 years ago

In the US real estate agents do similar. You pay them many thousands of dollars to parade people through the home and pressure you to compromise on your listing price so they can close easier. In my experience, the agents usually can’t answer any basic questions about the home anyway.

I’ve believed this industry has some tech coming it’s way for a while now. Would have loved to jumped on it early but it’s also one of those industries where you’d need an established “in” to make headway (i assume).

mrfusion• 8 years ago

There are actually four kinds of business; tourism, food service, railroads, and sales. (And hospitals/manufacturing and air travel)

Source: https://m.youtube.com/watch?v=9qhk8ysJSwI

Beefin• 8 years ago

Ctrl + F "Healthcare" .. Hmm.

Looks like your 2015 "top markets" post the top one was "Genomics", what happened? Did it sizzle? Is it no longer a top contender prospect?

eladgil5• 8 years ago

For 2015 I listed out: "Gold markets" -Big data (with emphasis on things like Cloudera (~$3B co), Mesosphere) -SaaS with an emphasis on APIs and Dev Tools -Genomics

And then a set of markets I thought would be smaller or binary. Full post here: http://blog.eladgil.com/2015/01/hot-markets-for-2015.html

For genomics in particular, Illumina is now a $40 billion company while Exact Sciences ($9B), Invitae ($1 billion), 23andMe (a few billion) and Ancestry (a few billion) are all in the market too.

beauzero• 8 years ago

...on the real estate side take a look at CoStar. Little known, commercial real estate company, 12B+ and has a monopoly. Very smart people and they don't get much turn over. They will make smart acquisitions.

daheza• 8 years ago

Used to work here, and yea they definitely know they are a monopoly. Acquiring apartments.com with all their commercial real estate data was really smart. Their tech department was too corporate for me though.

gcb02• 8 years ago

are you trying to liquidate your position? their stock skyrocket to over $400 for no aparent reason based on their revenue, and is on a free fall since august.

hackathonguy• 8 years ago

I'd love to hear more about perceived opportunities in legal tech. For some reason, the legal industry seems very averse to change, but I'm sure that's not always going to be the case. (Lawyer here).

ideashower• 8 years ago

I'd love to hear more about the legal tech space in general.

lordnacho2• 8 years ago

Partner in a law firm told me they were starting to test various techs to search through legal documents.

You can imagine NLP being quite useful in sifting through piles of old cases, a step beyond simple text search.

ollerac• 8 years ago

I think this has a lot to do with perceived value and complexity from the side of the developer.

For me: I don't know the first thing about law and the perceived value of building something in that space is low compared with, for example, healthcare, where I feel like a lot of people can more easily see the benefits on real people.

I think if you can clearly define the areas where either the perceived value (for the developer) is really high or the perceived complexity is relatively low, that's where you'll see the next developments in this space.

I'd be curious to know where you think these areas are.

xxpor• 8 years ago

First job of legal tech: convince the Judicial Conference to make PACER free and not terrible.

kjhughes• 8 years ago

Hopefully this pending legislation will pass:

H.R.6714 - Electronic Court Records Reform Act of 2018

https://www.congress.gov/bill/115th-congress/house-bill/6714

pierre• 8 years ago

For me the most interresting development is the rise of Law as Code. Lot of things happening in computational law/contract.

ABCLAW2• 8 years ago

I've consulted for companies trying to get a good go to market plan for the legal sector.

The sector is bonkers and the incentives are terrible. Most tech adoption is in the low-margin high-volume sectors, where 'good enough' products are dominant. Superior execution in this segment could lead to big wins. In the low-volume high-margin sector, many firms have proprietary workflows/inhouse staff dealing with their KM needs.

That said, there's a few cute 'novel' approaches in new generation TAR and AI assisted [Insert mass document type sorting/classifying/digesting]. Beyond that I think the big developments aren't going to be in the area of 'can technology do something fundamentally new'. They'll be enabling tools to allow new business models. Think 'data-science consulting, reporting and expert witness testimony for legal discovery databases'.

I also think that overall, professional development tools are underdeveloped, but young lawyers are undercapitalized and the core value bottleneck in low-volume work is the client intake pipeline, not getting good people to do the work.

Edit: Added a missing word.

joddystreet• 8 years ago

The legal industry is not averse to change, the challenges are

1. Law is highly interpretable, it can't be just 1/0. Facts are 1/0, but not the law 2. Law firms tend to be small in size, generally <200, Lawyers are inclined to start their own practice ASAP. That limits the software provider's capability to charge more or upsell. Also, the law firms can't afford to buy a lot of software. 3. The distrust among people in the legal industry is just baffling

There are a few more challenges, but am able to recollect only a few.

(am a software engineer and my brother is a lawyer. we keep trying to build solutions for law firms)

dustingetz• 8 years ago

"taking a SQL database or excel spreadsheet and turning it into an app platform"

A key insight here is that SQL is too complicated for this to ever work, and also the trend towards functional programming (React.js, Scala etc) – see http://www.hyperfiddle.net/ for what you get when you replace SQL with a simpler database! (We're seeking investment)

40acres• 8 years ago

The one trend I'm sensing is that difficult human/technology problems that were once thought of as 'solved' are now becoming hard again. Think of microprocessors as a model, for years Moore's law was running smoothly and you could set you watch on upgrading your PC at least once every 3 years.

The rate of improvement is slowing down as it becomes more capital intensive to advance chips, all the while the demand for performant chips is increasing. We will need another transistor level breakthrough to fuel the next 25 years of microprocessor based improvement.

You can see this trend also with energy on a longer timescale: oil and coal is the fuel that propelled the industrial revolution and human advancement for the past 150 years. Climate change demands that new forms of energy take the forefront: innovations in nuclear power and electricity transportation and storage are needed.

If I were in an investor with a ton of cash I would look to past and explore innovations and ideas around the industrial revolution and try to apply those models to the next 50 years. I really do think we are approaching a similar point in human history where there will need to be a large set of fundamentally new discoveries to continue pushing us forward.

As an aside, I think "devsumer" is also a great area. Maybe I'm in a bubble, but I can't think of a labor force that is producing as much global value (in agreed upon terms) as software developers, creating tools for this labor force is going to continue to be big business.

jp555• 8 years ago

Technological progress has always been a series of overlapping S-curves. We all think it’s new when we notice the pattern, but it’s been going on forever.

The pace of aviation tech progress in the early half of the 20th century had most believing everyone would be flying hypersonic by now, but then the tech flattened out as it approved its asymptote.

tehjoker2• 8 years ago

Ah defense. It's just common sense that we should pour money into the military. We're just out to make money, there's definitely not an entire political viewpoint entangled in this "market opportunity". Those crazy radicals that are against killing pointlessly for imperial gains don't understand the real world. In the real world, we need the military to make the world safe for capital. WW1 was a smashing success, as were Vietnam, Afghanistan, and Iraq, and all extremely clearly benefited the working class and made zero money for industrialists. If anything, these wars were entirely unselfish in nature. Wouldn't Saddam still have WND if not for the pride and strength of our armed services and the weapons manufacturers, energy industry, and other geopolitical factors?

Fwiw, they're probably right. Maybe we will see more startups enter into this ripe "opportunity" to open the gates of hell and unleash the forces of greed and meyham.

rndmize2• 8 years ago

Use of force is a separate problem from the development of weapons. I don't really have a problem with startups doing weapons development - someone is going to do it, and I have a hard time seeing how the world would be better if China or Russia took the lead on this.

tehjoker2• 8 years ago

I would point out that if the US is already spending more money on arms than the next several countries combined, I don't think this is the relevant issue. If another power was strong enough to threaten our defenses, that would be one thing but clearly there is something much bigger going on (I would say it is the US empire, at least according to a senior official in the Bush administration: https://en.m.wikipedia.org/wiki/Reality-based_community). I hesitate to make this argument because I think they should be abolished, but if we have nukes, why do we need new "defensive" weapons? The only reason is to be able to control events in other parts of the world to the benefit of the people that start the wars.

This perspective would imply that we should not be encouraging our citizens to devote their energies to devising ways to kill (i.e. form startups around "defense").

r00fus• 8 years ago

someone is going to do it

You could use that excuse for almost anything morally repugnant.

dgudkov3• 8 years ago

the forces of greed

Of course. Greed drives only those fishy defense corporations. Any other for-profit organization is driven purely by desire to change the world for the better. Like Facebook, you know...

You can do defense right, you can do it wrong. But you can't do it at all. Like it or not.

themacguffinman• 8 years ago

I think you meant to say "but you can't not do it at all".

avip• 8 years ago

Nothing in history had prevented more bloodshed than restricted use of force [citation needed?]. In contrast, entities that refuse to use methods of violence (UN, I'm looking at you), consistently fail in peacemaking.

kazen442• 8 years ago

how would the UN use violence? it's not what the UN is for? the UN is basically a meeting room for world leaders to do diplomacy, otherwise we would end up with far more not needed conflict thanks to the severing of diplomatic relations. (just look at how world war 1 originally started for example).

tim333• 8 years ago

There has been a pretty marked decline in violence and war since the UN was formed in 1945 https://medium.com/future-crunch/the-decline-of-war-8760f9a5...

Not all its fault perhaps but the general approach seems to be doing ok

clairity• 8 years ago

your criticism is warranted, but remember that defense also contributed positively to the US economy through the 20th century until 1970 or so (stanford rose to prominence because of defense, for example). just as with the wider economy, greed then took over and wars became tools to fuel personal wealth, not the greater good.

the military works fine as a jobs and training program (for defensive readiness), but we don't need more, and more expensive, weapons. we can already destroy the world a thousand times over.

sdinsn2• 8 years ago

That's a pretty narrow view you've got there. Hell, there are plenty of non-profit defense companies too.

lordnacho2• 8 years ago

I'm not sure about that "Devsumer" section. IFTTT / Zapier and those are not replacing Accenture as far as I can tell.

The thing that makes Accenture a viable business is they can sell large projects to large entities. Things that people generally do not reckon they can fix on their own, like government health websites. There's no way to knit that together with just some common APIs. Yes, ironically Accenture can't either, but the point is they make money on convincing people they can.

The thing about people getting more dev-savvy I don't buy either. Yes, people can glue a few bits together now, but most people still suck at anything beyond simple automation. If you want evidence of this, look at Excel based jobs. Pretty much all of them can be automated in Excel itself, and every time someone tries it, they create an awful mess.

So yeah we'll now have a world of little Rube Goldberg machines of everyone's making, but I don't see them replacing any kind of large scale project. They can't really do it technically, and they don't seem like they will replace the incumbent salespeople either.

robla• 8 years ago

It seems to me that tools for creating large scale projects is a big opportunity. Not everyone who creates a "little Rube Goldberg machine" is a hopeless idiot who is pleased with their creation. Some of them will aspire to create bigger, better machines, and will prefer to spend their time trying to build them instead of setting up a meeting with an incumbent salesperson.

banachtarski• 8 years ago

Agreed on some of it. Crypto though is the glaring aspect I disagree with completely (cue people likening it to the internet and the dot com boom instead of tulips with a serial number).

gcb02• 8 years ago

lol. every generation will redo "forms as software". airtable is a $1bi bet that people will finally be pleased with Clipper'86 auto-form desiger (or whatever that thing was called). Hint: nope.

rhacker• 8 years ago

AI + Defense technology companies will EXPLODE in the coming years. In the next 10 years I'm sure we'll be seeing police and military application of un-man-controlled, (like toy style) drones that simply, find out who is around where and what time. These things don't really even need any actionable targets, just general surveillance. They will get around the law by stating they are just capturing metadata - name, location, time, etc..

Drone tech will improve drastically too, bolstering the consumer space with standardized batteries and self-battery replacement towers.

Not saying this is a good thing, but saying it will happen.

rs86• 8 years ago

This is ridiculously full of unfounded statements, naivety and unsound reasoning

jacknews• 8 years ago

IMHO, Missing from the list is software defined networking and telco "digital transformation" in general. ISPs etc are gradually moving to an automated self-serve world.

Interesting Tech Markets for 2019

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