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2018 will be full of significant, if not unparalleled, opportunities for startups that were virtually non-existent even a couple of years ago. Blockchain went from an obsession of a few libertarian crypto-nerds to overnight sensation, and voice powered devices such as Google Home and Alexa became the norm while they seemed like an unnecessary fad to consumers just a few years earlier.
"The underlying philosophy around blockchain holds tremendous potential and introduces new concepts around trust, authentication, data management and privacy"
Below are 5 of the biggest opportunities for startups and investors in 2018:
1. The rise of vertical services
Most software is written “horizontally,” and a number of these horizontal applications such as Salesforce have been resounding successes, but their impact on users leaves much to be desired. The needs of a political organization and a hospital are extremely divergent, yet all too often they’re using generic CRMs that don’t take into account their specific needs. This reality, which has till date been beneficial for the SaaS providers that seek to appeal to the widest audience, means there exists a significant gap in the market that startups and investors can exploit. Vertical services that meet the specific, divergent needs of businesses and organizations and include also best practices, benchmarking and tailored functionality, are already seeing an uptick in investment, and 2018 will only see the trend continue.
2. Blockchain creates the right philosophy but the wrong infrastructure
Blockchain technology was introduced to the world primarily as the infrastructure for crypto currency. There has been much discussion since as to the potential benefits and risks of adopting Blockchain on a wider scale. Though blockchain doesn’t have any major use cases just yet (except for currency) the underlying philosophy around blockchain holds tremendous potential and introduces new concepts around trust, authentication, data management and privacy.
The implementation, however, is still facing some major hurdles as performance, security, latency and other attributes don’t live-up to the standards the services industry would adopt. The next three to five years will see massive effort to improve the infrastructure and to turn blockchain into a mainstream infrastructure.
3. Data Mining Coming Up Short
Just as Blockchain is fueling a lot of hype, so too is Big Data. The technology is already being implemented nearly everywhere, with most enterprises today storing records of all sales to uncover trends and insights, but there hasn’t been a corresponding leap in productivity. Though enterprises have the data, there aren’t many actionable insights. It’s akin to the oil industry extracting crude oil and not being able to refine it – the value is there and the potential is enormous. Startups that help refine the insights collected into actionable information and those that solve the issue of how companies can begin to store and analyze visual data could become the Shells and Exxons of the digital age.
4. Semiconductor Comeback
The semiconductor industry is back from the dead, but instead of multi-core processors and clocking higher and higher speeds, AI and energy consumption are in the forefront, with investors ready to bet big. While CPUs were built to optimize floating point operations, and GPUs were built to optimize parallel processing, they both fall short of optimizing the different machine learning and AI algorithms that are going to rule our world in this next decade. Though semiconductors is an industry that has seen very little from startups in the past decade, it must now re-invent itself by investing in innovative startups and technologies that will enable it to support the massive demand for effective computing.
5. Voice is the New O/S
While IoT has still not been able to live up to many investors expectations in terms of new revenue streams, the fact is that our homes are increasingly connected and the smart home era has essentially arrived. With an ever-growing list of our home devices (lights, air conditioners, etc.) going online, the way that we interact with technology will change radically. Instead of typing commands or simply flipping switches, voice will be the new medium of interaction, no screen or keyboard necessary. The result is a sweet spot for startups in the language processing space, whose developments can have a monumental impact on a growing industry. As consumers, we’ll rely on voice technology for automatic summaries of conversations and to recall the relevant information in an instant. And with this type of daily use, the ability to direct consumers towards more relevant ads and monetize user behavior, or at least hook a consumer in to a particular connected ecosystem, will be massive.