January 9, 2019
PUBLISHED BY Bryan Stolle
For better or worse, it’s popular to ask venture investors what they see happening in the new year. Alas, I am no exception, so I’ve put my predictions (which will be as accurate as entrepreneurs’ five year financial forecasts) here, instead of doing a dozen various interviews. Feel free to rip away, although your own predictions are the most welcome. Without further ado:
- Brands Get Personal – Brands will really step up direct-to-consumer. Almost a decade ago, a senior exec at a major Consumer Packaged Goods (CPG) company expressed to me their frustration and concern (bordering on fear) of Walmart, as the retail giant then accounted for over 50% of all the CPG company’s volume. Today, erase Walmart, replace with Amazon, and multiply the fear. Brands are seeing a bleak future as captive contract manufacturers unless they get directly connected to the consumer. More and more are seeking to act while they still have meaningful brand equity and leverage. Unilever buying Dollar Shave Club for such a high number makes sense in this light.
- Banks Fight Back – Traditional Financial Institutions (FIs) step up their digital online game in a big way. It’s not lost on any of the big money center banks what is happening in Fintech. Whether it’s the negative ratings and very low trust they have with ever more important customer segments, or how so many FinTech companies have radically changed the business models across critical financial service offerings, banks are feeling the heat. Big FIs have been dabbling in the M&A pool for the last couple of years, but some major acquisitions at premium prices won’t be a surprise in 2019.
- Millennials Go Anti-social – Millennials will continue to ramp down traditional social media usage. I continue to run into more and more Mills and Gen Zs who have literally uninstalled major social media apps from their phones, temporarily or permanently. That’s checking out in a measurable way! Motivations vary, but the inability to focus, lack of value-added content, “not adding to living my best life”, are cited often. Don’t be surprised if this trend gets enough momentum to start showing up in the numbers this year.
- Attack of the Drones – Barring a radical change in regulations, availability, etc., 2019 is set up to be the year drones get a bad name. Not a pleasant thought, but all the pieces and conditions are in place for a major disruptive event (planned and calculated) that results in significant injury, loss of life and/or destruction of property using commercially available autonomous or semi-autonomous drone technology. Anti-drone technologies become an even more popular investment category.
- Technology Hits the Social Change Wall – The gap between pace of innovation and governments’ ability to regulate the negative social consequences will continue to widen. A major politically-impactful event will occur that puts politicians and governments on notice in an inescapable way that there needs to be some serious thought given to the gap. The Arab Spring, Russian meddling via social networks in US elections, massive data breaches – they are the warm-up acts. High probability of a catalytic event in the next year or so. Of course, pols will over-react as usual and create a whole other set of issues and unintended consequences.
- Shakespeare Revisited – Over-regulation or misguided regulation in the UK will cause the collapse of regulated sub-prime consumer credit for the under/unbanked. It will create a “renaissance” in off-the-books unregulated lending, just as it did back in Shakespeare’s time. Beware shark infested waters! US regulators will likely take a “wait-and-see” approach to see the results of various policies and regulations in the UK. There are real issues and misbehavior in the sub-prime consumer market, Payday loans and otherwise, but that population segment still needs access to credit, even if the loss-rates make it expensive. Killing the legitimate regulated suppliers certainly isn’t the answer.
- The Elder Care Tsunami Is Approaching – The US and other developed countries are not prepared for the depth and breadth of the Elder Care crisis coming our way. Forget the healthcare aspects. Families and governments at all levels are ill-equipped and understaffed for the financial carnage and loss that cognitively challenged elders are being subjected to by both legitimate and illegitimate companies and individuals preying on their vulnerability. From caregivers and home services providers making careers taking advantage of this demographic, to car warranty companies selling three or four policies for the same vehicle, to the shopping channels and “miracle cure” subscription supplemental providers, whole industries are aligned to transfer the Boomer’s wealth to themselves, leaving families and government to pick up the tab when these people become destitute.
Read the original article on Forbes here.