As I am going through 2021 tech predictions, I have to admit that most of this year's forecasts strike me as too obvious compared to previous years.
No 'out of the box' preciditions this year, for now...The topics that come up most often are:
Accelerated e-commerce adoption, digital health, video conferencing, voice-first products, contactless payments, climate change, online learning, decentralization, entertainment and media streaming, service bundling and B2C subscriptions, the creator economy, fintech infrastructure, silver tech, and of course remote work and digital nomads.
Sound familiar? This is because these topics have been 'hot' for some time. But, seriously... Either:
It is much harder than usual to predict what the next year will have in store.
The digital acceleration of 2020 was so significant that 2021 will be a period for digesting and doubling down on these trends (digital health, entertainment and media streaming, service bundling and B2C subscriptions), or
Some topics have still seen too little innovation (climate change, voice-first products).
Well, it is a mix of all three. So much has happened in the tech world recently, with many trends converging and coming of age, that the question begs itself: Is there room for much more? And the answer, of course, is yes.
Constantly adapting to change is my 2021 investing slogan, until the dust has settled a bit. This is also the reason why I am exceptionally open to new ideas this year. 2021 will be a year of expecting to return to 'normal', but with nobody knowing when this will be and what it will exactly look like.
We will continue to go after our areas of conviction (see here), but will also be more open than ever to innovative ideas that fall outside of those areas. Because one thing is more evident than ever this year: The true super forecaster will be the entrepreneur. Covid turned the world upside down, and the boldest founders out there will spot and go after the most exceptional opportunities created out of this chaos.
The magnitude of current tech trends. An example.Enter Covid-19. If any industry could use help from Wonder Woman, it is cinemas. Lockdowns and a dearth of new releases have reduced worldwide box-office takings by about 70% (!) in 2020.
One of the books I read over Christmas was The Ride Of A Lifetime of Bob Iger, Disney's former CEO. It is an excellent book for management and leadership lessons and explains what it means to make bold bets. But it also illustrates what it means to double down on large existing tech trends. Of course, Bob is not a startup founder, but he is an exceptional and bold visionary. Under his leadership, Disney's market cap grew from $25B to $140B. The company's current market cap is $177B, a growth trend based on one of Bob's last strokes of genius: Going all-in on streaming. One of his mantras is: 'Don't be in the business of playing it safe. Be in the business of creating possibilities for greatness.'
'On our August 2017 earnings call, exactly two years after a fateful call in which we'd watched our stock get clobbered as I spoke frankly about disruption, we shared our plans to launch two streaming services: one for ESPN in 2018, and one for Disney in 2019. This time the stock soared.'
Disney was now hastening the disruption of its own business, knowing well that the short term losses were going to be huge. Just taking shows off Netflix and consolidating them under Disney+ meant sacrificing hundreds of millions of dollars in licensing fees. A decision like that: to disrupt businesses that are fundamentally working but whose future is in question and intentionally taking on big losses and organizational disruption in the hope of generating long-term growth, requires a massive amount of courage and vision.
Making outsized bets on the small screen'In a presentation to investors at the end of last year, Disney announced a blitz of new content for its streaming service. By 2024 Disney will be spending a whopping $14-16B annually on content, nearly as much as the $17B that Netflix in 2020.' The share price leaped by almost 14% the day after its presentation, reaching an all-time high stock market value.
Disney now expects 230m-260m Disney+ subscribers by 2024! The service is on track to break even in 2024. Disney expects more than 300m subscribers by then, maybe enough to overtake Netflix, currently on 195m. The plans for Disney+ imply that by 2024 streaming will be the company’s single largest business by revenues... This is also proof that there is space for multiple large players in the streaming era.
The 2021 Opportunity #Long2021The accelerated 2020 trends will, of course, not reverse in 2021, although the slope of the adoption curves will flatten for some. It is our job this year, not only to detect the trends and products that will continue to accelerate, but to identify those founders with unique insights for the post-Covid era.
To all entrepreneurs out there, be bold. Startups have never been about the past. But now, more than ever, it is all about the future, and there is a lot we can do about it. Let's go!
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Below a pic of my NYE celebrations with some friends from Belgium. It was a fantastic feeling to hang out in person after a long time. I know it feels hard these days with lockdowns happening all over Europe, but just don't let it get to you. #Long2021
Life is awesome,
Yannick
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