As venture capital investors, we make a career of trying to predict how new tech trends and markets will unfold. We’re lucky to hear different entrepreneurs’ visions of the world they’re creating every day, and it’s easy for us to get carried up in the excitement of what tomorrow can have in store. As such, every year during this time, we like to take a step back, reflect on everything we’ve seen over the past year, and ask ourselves where we think the world is going.
Last year we put together 7 predictions and trends that we expected to play out in 2019. We were optimistic about everything from seeing new companies investing in solutions to fight climate change (which we’ve started to see play out in the headlines) to a resurgence of space exploration (which we spent time documenting here). Other predictions that we thought would happen, like a year of quiet progress for autonomous vehicles, slow developments in quantum computing, and an increasing scrutiny of companies’ data policies, we believe are still unfolding over a multi-year timeline and will likely continue into 2020 and beyond. And while there was at least one prediction that didn’t pan out (we haven’t seen regulatory action against one of the large tech companies yet), we expect this rhetoric will only continue to heat up heading into an election year.
This year we changed it up a bit. Instead of asking ourselves for trends and predictions for 2020, we identified 8 themes we’re excited about exploring this year that we believe will unlock new opportunities for investment.
1. The Next Generation of Intentional Eating – Marc Weill
Health and diet has clearly become an important trend in the last few years, reaching a fever pitch with Beyond Meat’s IPO in May last year. I believe we’ve only started to scratch the surface of what’s possible with intentional eating and sustainable food, and we’re excited to dive deeper in this space in 2020. In just the last year, we’ve seen companies innovating around different aspects of this trend: diet-based grocery stores (Thrive Market), plant-based meal programs (Sakara), healthy delivery options (Territory), and more. I expect this theme will only grow with the confluence of three other trends: millennials and Gen Z are champions of the environment and sustainability, we’re starting to build a better understanding of the microbiome and its relationship to health, and food and preventative habits may become a better first line of defense against skyrocketing healthcare costs.
2. The Fight Against Disinformation – Dan Abelon
The ability to create deep fakes and distorted videos is far outpacing the ability to detect them. Just see this altered video of Nancy Pelosi that spread virally last year as evidence. With an enormous amount of pressure already on the tech platforms to prevent misinformation in the upcoming election and the clampdown and oversight of political advertisements, I’d imagine that deep fakes and distorted videos will take center stage given their ability to spread widely through these same platforms. Hopefully more progress will be made on solutions that address these problems, and I’m optimistic this could be a good use case for applying AI to help protect both consumers and government alike.
3. A Once in a Generation Shift to Remote Work – Villi Iltchev
Just a few years ago the traditional mantra of “everybody under one roof” dominated the conventional wisdom for how companies should be built. The physical, financial, and talent constraints of Silicon Valley and other major tech hubs forced startups to innovate and seek scalability and talent outside their home market. At the same time, global broadband deployment and the emergence of next-gen collaboration tools like Zoom, Slack, Google docs, and many others, has made it possible for teams to collaborate effectively without the need of a physical office. A new generation of startups like GitLab,1 InVision, Zapier, and Automattic pushed the remote work boundaries to the extreme, creating completely virtual enterprises with thousands of remote employees around the world. Others like HashiCorp and Stripe view remote work as another tool to continue to scale their workforce. The rise of remote work will have extensive implications on how we build companies and global labor markets. I believe this is a massive global shift that will play out over decades, and we’ll continue to watch this trend and seek opportunities to invest in startups that help facilitate and accelerate the adoption of remote work.
4. The Increasing Importance of Climate & Disaster Preparedness – Colin Beirne
The world is getting weirder in a lot of ways, and one of the most unfortunate ways is the changing climate and the disasters it causes. Town-destroying fires in California and Australia. Dangerous prolonged heat waves in Europe. Enormous typhoons and floods in Southeast Asia. Citizens, companies, and governments are all underprepared for the impacts of severe weather. There are companies working on helping to prepare for, avoid, minimize and mitigate these impacts, but we suspect one or more companies in this space (existing or brand new) will gain prominence this year.
5. A New Class of Security Companies for the Multi-Cloud World – Andy Kangpan
It is no secret that cloud computing has transformed the way organizations build and scale their businesses. While there are many known security implications of cloud adoption within enterprises, a few notable new challenges have recently emerged with (i) the wide dispersion of sensitive data, (ii) the breakdown of ‘monolithic’ applications into microservices and serverless functions, and (iii) the adoption of hybrid cloud infrastructure. All of these trends have resulted in a maze of complexity and vulnerabilities within corporate IT environments (and an accompanying rise in cloud-based breaches), which is creating a new sense of urgency for vendor-agnostic solutions that help enterprises deal with everything from access management to misconfigurations.
6. The Rise of Privacy-Focused Marketing – Kyra Durko
Big companies have been built off of cookies and social media retargeting, with business models that tailor advertisements to your hyper personalized data and follow you around the web. With Google, Facebook, and the large tech platforms becoming more sensitive to privacy, we believe there may be an opportunity for a new wave of marketing companies that position themselves on more generic data and networks, giving consumers more control over their data and ability to opt-in to what they’re seeing. I wouldn’t be surprised to see the emergence of more ad networks focused on specific publications or a return to less precise, more widely targeted advertisements.
7. A New Wave of Opportunities for “ML Ops” Startups – Frances Schwiep
Machine learning operations (ML Ops) focuses not on data or models themselves, but rather on managing the delivery pipeline, allowing companies to deploy models into production faster and alert customers to issues in data drift and the like (i.e. QA in the context of ML). As the discipline of ML matures (especially thanks to early players like DataRobot, H20, Domino, etc.) and expands and moves from academia to applied business and product solutions, there will be a shift in ML workflow “ownership” from academic data scientists to developers. Developers, who are accustomed to working off standards such as continuous integration (CI) and continuous development (CD) pipelines, will put pressure on organizations to create similar frameworks for ML Ops. For example, developers & data engineers need more standardized ways to assess why models fail to converge or give sensible results, handle version control and governance, debug and deal with input and output sanitization, easily deploy models/ code into production without disruption, and test and monitor other various aspects of the production pipeline. This evolution and need to further support the continuous delivery pipeline for ML paves the way for a whole new set of ML Ops tools.
8. Delighting Customers Using Intelligent Applications – Erhan Soyer-Osman
Consumers have in recent years adopted a new view of brand quality that goes beyond tangible product features and increasingly includes the entire customer journey. As offerings continue to shift from guided and in-person to online and self-service, a customer’s view of brand is increasingly wrapped up in the kind of end-to-end customer support they might receive. Businesses who still view customer support solely as a cost center will lose to those who understand that positive customer experiences drive efficiencies in customer acquisition and retention. The challenge of keeping costs low while meeting customer expectations for real-time, convenient, and efficient interactions, will see companies turn to intelligent automation to effectively scale any solutions they might consider. As companies begin to deploy incremental automation within existing workflows, we expect applications to exponentially learn, improve quality, and over time, become trusted by businesses as the primary mechanism for providing a high degree of customer satisfaction.
If you’re working on any of the above (or have other ideas of what we should be looking at in 2020), we’d love to hear from you. Reach out here or ping us on Twitter at @TwoSigmaVC.