10 Predictions for the Tech Industry in 2020 – AlleyWatch

It’s that time of year again! Annual tech, startup and funding predictions for the coming year.

However, before we look ahead, let’s first take a look back at the 2019 predictions. I must say that unlike a few other years I seem to have nailed the 2019 picks, but have a look and let me know if you agree!

Now the reason why you are here — what lies ahead in 2020? Without further ado here are some shots in the dark that needed to be etched in digital stone – on the internet – forever.

The Podcast boom continues and begins to cannibalize other forms of media. The larger music providers Apple and Spotify continue to support creators and new shows but like the app ecosystem, many will come and go. New products and features built by third parties to support the podcast rush will continue to 2020 and Spotify will continue its M&A mega push, that is until they get acquired next year.

Amazon will experience its first stumbles. It still gets to 10 percent of overall ad spend but look to see some negative headlines on Amazon in 2020.  Through a data breach, poor performance in its ad business, consumer frustration, Amazon hits turbulence but of course, will survive and be just fine.

With the continued rise of streaming content; Disney, Netflix, Hulu and even Snap busting out quality originals; and YouTube TV being fairly priced, the only thing keeping the cable operators relevant are live sports and that’s being taken over now as well. Too many options available and chords will be getting cut while cable companies take a massive hit. Consumers will benefit through less price bundling creating better price options. Consumers always win in the end.

CBD surpasses Cannabis as far as market share, distribution, consumer demand, and regulation. While most people have been jumping on the cannabis bandwagon there are still many questions to be answered. CBD, on the other hand, becomes the consumers’ choice for relaxation, sleep and workout recovery. CBD products will evolve from direct to consumer to mass-market retail.

Like it or not, legalized sports gambling makes its way into the majority of U.S. states, as any remaining stigma quickly disappears, and governments cannot pass-up on the incremental taxpayer revenue it offers. New services and apps and security services will make it easier and faster to use. Gambling becomes a topic of conversation on the mainstream. It would be good to see a business emerge that helps teach and educate new gamblers the risks and controls their action through capping wagers.

SaaS platforms will reinvigorate productivity growth and maybe (maybe) start to help shrink the income gap. Years into the digital age, many long-standing and still highly relevant “old economy” industries (commercial aviation, construction, food service, etc.) are still suffering from stagnant productivity growth and shrinking margins. Potentially sitting on mountains of game-changing data that they can’t use because they don’t have a way of efficiently and intelligently organizing and distributing it. Software to the rescue (and late adopters, be warned).

The early-stage funding gap will return. Five or six years ago traditional VCs had gotten so big that institutional money in Seed rounds became increasingly scarce and eventually the gap was filled by a wave of new smaller early-stage funds (remember all those “Here Come the Micro-VCs” headlines circa 2015?).  Now that group has matured, with the underperformers dying out and the outperformers getting bigger and bigger, just as their predecessors did (a Twainian example of history rhyming). So, dust off your 2014-era “funding gap” content, because the comeback is imminent.

AI moves from consumer gimmicks, talking speakers and type-ahead features to becoming more helpful in every task. AI bias in algorithm models will become a bigger topic and concern, while Healthcare, Manufacturing, and Government will embrace AI like never before in 2020. We hope from an investment perspective AI is a feature — a core competency of one’s business in which certain domain expertise exists. AI is not a company or a stand-alone buzzword like Blockchain and Crypto 2019, which became overhyped and undervalued very quick by public perception.

I mentioned in my 2018 predictions that DTC would explode, and it has, but in 2020 we will see increased interest from brands new and old speaking with consumers directly, not only in your social feeds like Instagram but with using influencers that become the ambassadors for these brands. Influencers push DTC forward. In addition, DTC brands look to buy ad-tech stacks to help support their business growth while ad-tech companies go out of business as the middle man simply is a thing of the past.

Both from a start-up perspective and investing thesis, companies start building for the future for people, humanity, environment and mental health dominate funding, growth, talent and the conversation. People generally have had enough and finally, start to do what they can for the planet and what is right. It may sound hard to quantify it now but it’s coming and it’s a good thing for all.

Best wishes in 2020!

Source: https://www.alleywatch.com/2020/01/predictions-tech-startup-industry-2020/


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