2019 ChocoVC Predictions

/ Chris Collins / 12.24.2018 /

Welcome to my first annual installment of the ChocoVC predictions. I’ve bucketed them into industries and technologies that have been on my mind recently.

As an aside, I’m writing this during my layover in Miami on my way to spend two weeks with my family in Bolivia. Wishing everyone a Merry Christmas / Happy Holidays and I hope you get to spend it with your loved ones.

Now, without further ado, see below for my thoughts on what the new year (and beyond) may bring:

Blockchain

Startup-building best practices will be embraced (finally!)

There will be a return to first principles that mark the cornerstones of entrepreneurship and investors will be more discerning than ever (ie., show me market validation!). As more entrepreneurs from various backgrounds and skillsets enter the Web3 ecosystem, there will be a renewed focus on deep market pain points and leveraging of tight build-measure-learn loops.

There will be a breakout stablecoin

This one is not too far-fetched, but out of the twenty or so stablecoins in market or in various stages of development, I expect one or two of them to gobble up market share for this use case. My bet is on projects that either have been engaging regulatory authorities from their beginning, such as USDC, or existing companies with superior distribution, like Facebook.

A large exchange will offer staking-as-a-service

2018 saw a number of staking service providers come to the forefront, such as Figment Network, Chorus One, and CoinFund. As it just so happens, big exchanges are in prime position to be able to offer these services at a much bigger scale from day one. I expect at least one major exchange (I see you, Coinbase) to launch this offering.

The next breakout Dapp will launch 

This time, it will have metrics that are comparable to impressive classic tech startup milestones. It will likely be a service operating more toward the centralized end of the spectrum (also, I will just call these applications from now on because that’s what they are at the end of the day).

Security tokens will proliferate

I’d be remiss to not mention the rise of security tokens, an area which has seen significant startup activity in 2018. Expect more real estate offerings like the one Harbor announced last month as well as increased activity from other platforms such as Polymath and Tzero.

Mobility

Infrastructure for new modes of travel will be in high demand

Cities have been struggling to cope with maintaining order but also allowing their residents to access better transportation services. With the rise of bikes and scooters in the urban environment, they will need plenty of help adjusting, whether that be via designated parking areas at each street corner for scooters or public-private partnerships that help to design bike/scooter specific lanes. Slowly but surely, city streets will start to get reclaimed from automobiles.

New mobility form factors allowing for increased portability

Speaking of new modes of transportation, the next wave of innovation to go mainstream will be modes of transportation that consumers can easily store safely wherever they go. One Wheel is an early attempt.

Income-producing mobility assets

People will have greater ability to use their mobility assets to generate additional income. Bird Platform is already making a push here but I expect platforms to emerge that facilitate this for people across the mobility spectrum.

Food

Healthy snacks continue to proliferate

Although the field is crowded already, incumbents that rely on carbs, high fructose corn syrup, and/or sugar to put taste first still have a long way to fall in market share, and continue to fall they will. The ingredients section of each product will be scrutinized more than ever before, and RX Bar will be the first to tell you the opportunity that presents.

Easy health-focused shopping

Speaking of ingredient labels getting scrutinized, someone will launch a service that translates all of the gibberish on labels to plain English in a seamless manner, to help consumers clearly consider what they want to be putting into their bodies. There are a number of label scanning apps out there today, but none of them are hitting the mark when it comes to ease of use. Someone will fix this.

Community-first approaches to healthy dieting

Those attempting to transition to a healthier diet face behavioral challenges of sticking to a regimen, especially if no one is watching over them. Also, it can be tough to eat healthy when you go out with friends – you don’t want to be the only one ordering a healthy salad when everyone else got a burger right!? The power of community is under-leveraged when it comes to helping people reach dietary goals. Startups will emerge that address consumers’ needs of constant support and accountability that comes with a community. After all, diets are supposed to be lifelong pursuits, not just a 4 week trial.

Recession-Proof Businesses

Challengers will launch to compete with Dollar Tree

Given the recent increasing concern that we are getting closer to the next recession, public equity analysts have increased their focus on “recession proof” stocks such as Dollar Tree and Walmart. Although startups face an incredible challenge in regard to distribution here, I expect increased efforts to leverage technology to better serve middle- and low-income individuals.

“Better than free” business models will emerge

What’s better than cheap products, free? Try better than free. Early attempts to introduce this business model includes Steemit, which rewards users for creating and curating content. I expect more attempts to implement this in various use cases. When the unemployment rate goes up again, these types of businesses have the opportunity to capture significant mindshare and ultimately, market share.

Consumer behaviors will change out of necessity 

Uber and Airbnb represent tech darlings that benefited from perfect timing (launching in the depths of the Great Recession) which boosted their ability to change consumer behaviors. We will see similar conditions that will give rise to new market opportunities for startups to provide additional income-generating avenues for consumers.

Media

The rise of browsers that automatically flags dubious content

Fake news is a massive, well known challenge for society. There is a prime opportunity for a service to emerge that takes an independent approach to separating opinion from fact, and delivering content in an easy to use manner. This could be via a browser with built-in filters – if there was a time to challenge Google Chrome, doing so when trust in Big Tech is at an all-time low is seems opportune.

Interactive media will proliferate

HQ was just the tip of the iceberg. New media startups will launch with business models and focuses that are more profound than trivia. Short-form regular content that allows consumers to participate and feel like they are part of a community will have various niches to focus on as social networks start to become more movement-based.

Social media transformation will begin

After the various revelations of misuse of consumer data, the regulatory hammer will finally come down. Whether new policies will be effective in helping the consumer is another discussion. However, it’s clear that social media as it exists today is not sustainable and I’m very interested to see the courageous startups with new business models that attempt to break through the (until-now) impenetrable network effects that today’s major players enjoy.

Real Estate

Community-focused co-working accelerates

With this rise of co-working spaces focused around convenience and community building, such as The Wing and The Riveter, I expect to see a continuation of co-working companies that focus increasingly on catering to untapped communities across the entire spectrum of demographic diversity.

Co-living reinvented

Co-living remains a relatively untapped opportunity in my opinion. While there a various startups focusing on this, I don’t believe any company has been a breakout. The key to excelling here is building a small community where residents can build deep relationships, instead of creating 100+ resident locations. We will start to see co-living approaches that emphasize small groups, apply property management to existing homes to enable an asset-light approach with increased scalability.

2020 and Beyond

Why stop with only 2019 predictions?? This section contains a potpourri of ideas that came to mind, but in my opinion will take 2-5 years to play out.

Fedcoin will launch

Countries under sanctions, such as Venezuela and Iran, have either already issued their own governtment-backed cryptocurrency or are debating doing so in the future. However, this phenomenon will also spread to developed markets. There have been rumblings that the US is researching what this could look like – after all a “Fedcoin” would make it easier to conduct monetary policy and allow it greater visibility into how citizens are spending their money. A development like this would likely cause controversy, but I believe it is a matter of time before it happens.

A new smart contract platform will supplant Ethereum

Considering how many talented developers are working to improve on Ethereum’s limitations and the network’s massive head start in the smart contract platform race, one would not be blamed for betting on them. However, I expect the network to continue to face challenges and delays as it works toward Ethereum 2.0. This will open a window for the new platforms (such as Dfinity and Algorand) to challenge for developer mindshare.

The evolution of the influencer

As the battle for human attention proliferates, platforms will emerge that allow anyone to seamlessly broadcast to the world and get compensated for doing so. Think Steemit or Patreon 2.0, which will benefit from seamless micropayments enabled by blockchain as well as consumer-facing infrastructure that abstracts away any semblance of blockchain.

Plant-based food will become the default

Companies will continue to refine how plant-based food is created to the point that consumers won’t notice the difference in texture or taste compared to traditional options. Once this point is hit, older meat-based industries will see a quick demise.

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