With all of the recent talk of frothy private technology markets and bubbles, the mainstream media have largely neglected just how ubiquitous technology is today. We’re all walking around with supercomputers in our pockets with unlimited storage and advanced capabilities we never could have imagined when the bubble burst in 2000.
In just a few years, we’ve gone from fixed Internet consumption tethered to our desks to always-on consumption. As a result, every company is now a technology company to some degree. Technology is the connective tissue that enables customer acquisition, workplace productivity, communication and more. Don’t get me wrong; there is definitely some pricing froth. I talk about it here with regards to the IPO crunch.
At Metamorphic Ventures, we’re fundamentally category agnostic. Consequently, there are very few early-stage technology companies that wouldn’t fit our investment criteria given an impressive team, large market and innovative product.
At the same time, our street-level focus gives us unique insight into specific emerging markets, whether through consumer or enterprise demand. In fact, we built our advisory board around specific types of companies such as major web platforms, commerce, payments and media in order to best gauge the appetite of consumers and businesses
Through our unique perspective, we’ve identified a few industries that are emerging and have massive growth potential over the course of the coming months. These are wellness, health care, egaming and the “consumerfication” of the enterprise.
To anyone living in a big city, the rise of the health-conscious consumer should come as no surprise. There are yoga and cycling studios on every corner, Whole Foods markets in every neighborhood, and streets full of people wearing LuluLemon and Nike athletic clothing.
We’re already seeing start-ups emerge and scale in this space as there is enormous potential to disrupt existing business models and bring innovation to the field. Thrive Market, for example, is helping to bring healthy lifestyle products to the masses through a small yearly membership fee, which allows customers to purchase these traditionally costly products at a significant discount.
Hampton Creek is trying to democratize healthy food by indexing the world’s plants in order to revisit classics like mayo and cookies, ultimately making products better for both our health and environment.
ClassPass is another company that is growing very quickly, similarly capitalizing on wellness trends. ClassPass is a membership program that allows people to choose from a buffet of exercise classes at various gyms and studios. The innovation here is in the business model, allowing people to save money on individual fitness classes while preventing them from needing to join a gym full time.
Earlier this month, Tom Goodwin, SVP of Strategy and Innovation at Havas Media wrote, “In 2015 Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner creates no content, Alibaba, the most valuable retailer has no inventory and Airbnb the world’s largest accommodation provider, owns no real estate.” ClassPass is well on its way to becoming the world’s largest gym without owning a single piece of equipment.
Health care is also changing at a rapid pace. Telemedicine is taking off as consumers expect the same level of service and immediacy that they receive using companies such as Uber.
Companies such as Doctor on Demand and Talkspace are leveraging this trend to offer care instantly and on the go. In Talkspace’s case they offer anonymous psychological therapy for a fraction of its traditional cost, while Doctor on Demand allows patients to chat with a doctor about any issues they might be having in real time.
At the same time, there are also a few companies emerging that will disrupt the pharmacy space. Certain start-ups are beginning to offer prescription drug delivery so that the pharmacy lives in the cloud and people will no longer have to wait on long lines while carrying around slips of paper just to fill and pick up a prescription.
The immediacy and demand that we’ve come to expect due to the smartphone will soon be a reality in every type of health care-related situation you can imagine.
Similar to health care, the enterprise is also undergoing a large transformation because of the shift in consumer’s expectations. In the past, enterprise software was adopted top down with the IT department making decisions based on several meetings and demos at the highest levels of the company.
Today, this is rapidly changing. Slack has been in the news recently for its speedy rise to a $1 billion valuation. The bigger story, though, is just how fast Slack has managed to penetrate the enterprise. Because people aren’t carrying around archaic BlackBerrys anymore and increasingly use their own smartphone, employees can discover new software and apps with relative ease. They are then implementing these technologies within their smaller teams, which spreads throughout the company.
Slack is just one example here, but Box recently went public building software under the same premise. Microsoft is also taking note of this trend, acquiring Accompli, the easy-to-use email app and Sunrise, an equally easy-to-use calendar app.
I predict we’ll see a lot of consumer-friendly, business-to-business companies grow very quickly in the coming months as the ease-of-use and dissatisfaction with existing products allow them to spread through companies like a forest fire.
Another trend that has gone largely unnoticed by the mainstream public is the rise of egaming. This became clear to the technology world when Amazon acquired egame streaming platform Twitch for $1 billion. This in reality, is just the tip of the iceberg.
I personally spent time at IGN in the ’90s, so I know firsthand how big a market gaming is. However, it wasn’t until recently that egaming became popular as a spectator sport. Gamer PewDiePie, for example, has over 35 million YouTube subscribers. For comparison’s sake, Taylor Swift has around 13 million.
According to reports, there were 58 million esports enthusiasts in 2012. This number rose to 89 million in 2014 and is predicted to hit 145 million by 2017. Of all of these enthusiasts, 40 percent don’t play any of the games; they’re just spectators. While still much smaller figures than those of regular sports, it’s so new that it is entirely likely that over the course of the next decade, egaming finds the same sponsorship and revenue opportunities that regular sports have historically enjoyed.
There are several companies playing in this space that will facilitate this growth. Companies such as MobCrush offer egame streaming similar to Twitch for mobile games like Clash of Clans (which you may remember had the hilarious Super Bowl commercial with Liam Neeson).
Other companies are aiming to be fantasy sports platforms for egaming such as Vulcun, AlphaDraft and Kickback, allowing fans to make money through contests related to gaming competitions.
These are all real industries and businesses with paying customers and users. As pundits continue to give their opinions on later stage valuations being too high, technology has permeated all parts of our work and home life, creating new categories and offering better solutions than those that previously existed.
Almost all companies started today are technology companies, and the same goes for incumbents. So the question isn’t whether or not we’re in a bubble, but rather which existing companies and industries are in danger of being disrupted?