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With Meridian, Sovrn Levels the Playing Field For Publishers

By - March 08, 2015

meridian-logo-invA long, strange, and ultimately rewarding trip, that’s what many involved in the past ten years at Federated Media, Lijit, and now sovrn Holdings might say. One year ago, give or take, we sold FM’s assets to LIN Media, and created sovrn Holdings, a programmatic data business focused on one mission: to foster an ecosystem where independent and influential publishers can thrive.

Sovrn has had an extraordinary year. It’s led the way in the fight against fraud, and has one of the cleanest networks in the industry. It’s a profitable, fast-growing business, and it’s more than quadrupled its network CPM – an amazing feat that is a testament to both eliminating fraud, as well as focusing on data science – understanding the reams of data the network throws off each day, and putting it to work for its 20,000+ publishers. And it’s that focus on data science that has led to sovrn’s latest crowning achievement: The launch of meridian, sovrn’s completely rethought publisher platform.

Meridian is a cooperative data-driven platform. So what does that mean? Publishers integrate with meridian – mainly because of its advertising platform – and when they do, they share their collective audience, advertising, and other data.  Because sovrn has massive scale, we can share back information to publishers that no other platform offers – and we can do it for free.

So that’s what we’re doing. Meridian is a rich insights platform, featuring information about audience segments that was previously the domain of ad buyers alone. I’m excited about this for many reasons, but the main one comes down to this: For too long smaller publishers operated in the dark: They didn’t know who was buying their inventory, for how much, or how they stacked up against similar inventory across the Internet. Meridian is changing that. Over the coming months, sovrn will build more and more information sharing into the platform, all with the same goal: To level the playing field so that buyer and seller are on equal footing.

I’m super proud to be Chair of sovrn Holdings, and proud of CEO Walter Knapp and his entire team today. Congratulations, sovrn, on a major milestone, and here’s to many many more!

A few screen shots of meridian follow.

The main dashboard:

meridian-screenies-of

The comparative stats:

Category Comparison meridian

And the audience tab:

Audience Tab meridian

 

 

  • Content Marquee

Maybe The Best Way To Change the World Is To Start a Company

By - February 26, 2015

bethechange

 

(imageThis piece from Smithsonian caught my eye today – Young People Mistrust Government So Much They Aren’t Running for Office. It covers a Rutgers professor who studies millennial attitudes towards politics, and concludes that the much-scrutinized generation abhors politics – logging a ten point decrease in sentiment toward government in just the past decade or so.

But I have a different take on why our recent college and high school graduates aren’t opting for politics, and it has to do with a far more positive reason: This is the first generation to come of age in an era where “entrepreneur” is not only a viable career option, it’s actually a compelling one.

I’ve never had a real job I didn’t make myself – back when I was starting out some 25+ years ago, the only path that seemed to make sense for me was joining a startup (job #1), or making one myself (jobs #2-7). I started out well before the Internet, and before the 1990s boom which brought the idea of a college-dropout CEO to the fore of our cultural conscience. Sure, we had Bill Gates, but he was a complete outlier, not a demarcation of a trend, as Zuckerberg became during the Web 2 era.

Back in the early 1990s, my friends and family struggled to understand what it was I was doing with my life. It was as if I had some kind of undiagnosed disease – I was addicted to risk, and clearly allergic to “real work.”

But think of the options a smart kid has coming out of college these days. Not only has company creation become mainstream and entirely acceptable, we’ve built scores of institutions that teach and enable company creation – from Babson to Slack to Y Combinator. I recently met with Sam Altman, CEO of YC, who told me his company receives more applications to his program each year than Stanford does. How many apps does Stanford get? About 40,000!

Cynicism aside, the main reason anyone wants to get into politics is to make positive change in the world. And I believe thoughtful young people are taking a hard look at our major change-making institutions – government, religion, education, and corporations – and they’re deciding that the best way to have an impact is to start a company (or join one). And more and more, those companies are focused on creating positive change in the world. To which I can only say: Right on!

Your Network Transcends Time – Care For It

By - February 12, 2015

Every year around this year I fly to Arizona and attend the IAB Annual Meeting, a confab of 1000+ executives  in the interactive media business. Yes, it’s a rubber-chicken boondoggle – what ballroom-based warm-climated event in February isn’t? – but I go because I get to catch up with dozens of colleagues and friends, and I usually connect to a handful of interesting new folks as well. I hate the travel and despise most hotel rooms, but on balance, well – I keep going. (And yes, I think the NewCo model is even more productive, but more on that in another post).

I find the best connections happen over dinner or drinks – perhaps that’s my own convivial nature, but I sense I’m not alone. So I want to tell you a story of a chance meeting at a bar, because it evokes a larger lesson in business:  you’re only as good as your relationships – and those relationships often exist outside traditional boundaries of time and space.

If you’re scratching your head, stay with me. I hope to clarify.

Monday night I was at the bar, chatting with old friends in the industry. The room was filled with happy half-tipsy industry types, the pleasant din of convivial glad-handing was well underway.  At one point I looked to my right and saw a young man who caught my eye and lit up with recognition. “John, my man, how are you?!” he proclaimed, extending his hand for an enthusiastic shake.

Now here’s where I need to admit something. I’ve been in this industry for nearly 30 years, and for 20 of them I’ve been relatively well known in this small circle of digital publishing – I was on the Board of the IAB for six years, and I’ve graced the stage of the annual meeting several times. The net of it is this: At places like the IAB, a lot more folks remember my name than I do theirs. It doesn’t help that I suck at remembering names to begin with, and it’s only gotten worse as I’ve careened toward middle age and beyond. (I’m not alone in this, I just love this TED talk from David Hornik – I’m not dyslexic, but I sure feel that way when it comes to names).

All of which is a long way of saying I didn’t have the faintest idea whose hand I was at present shaking. He looked familiar – maddeningly so – but I could not remember the connection. I am afraid this happens to me far more than I’d like to admit.

Usually when presented with this dilemma, I employ a strategy of conversing my way to enlightenment – hoping for a high order bit that might remind me of our connection. Alas, the man was enveloped in his own bubble of conversation, and after his friendly overture, he returned to his group. I doubt he knew I was struggling to recall his name – I’ll admit, sheepishly, that I displayed recognition as I returned his warm greeting.

Now, I could have written that exchange off, not given it another thought. But these things vex me – I hate not knowing who’s reached out to me with obvious awareness and good intent. It tugged at me the rest of the evening, until hours later, at dinner, it dawned on me who the fellow was. Turns out, he’s a quite successful investor and entrepreneur, but it had been a few years since I’d seen him in the flesh, and I just didn’t make the connection in the moment.

I was pleased with my recall, even if it was late. It closed an otherwise unfulfilled loop – I hate potential lapses in relationships, even if the other party had no idea I had failed to remember their name.

The next day provided a perfect example of why this matters. While waiting for my flight at the Phoenix airport I took a call from an old college friend, a man who has built a great career in banking and venture capital. He wanted to talk about a particular firm – a very well respected company with which he had potential business. And by now you can probably figure out whose company that was – it was the company where my mystery man worked.

“Ah, I just saw him last night,” I could truthfully tell my friend on the phone. “He’s a great guy, and his firm is top rate. I’d be happy to provide an introduction if you’d like.”

I have no idea if my two colleagues will end up doing business together, but that’s not the point. In business, the network is always on – even across the axis of time. The night before, I had no idea I’d be presented with a chance to introduce two great people. But if I hadn’t taken the time to close that open relationship loop, I’d have lost the chance to provide a truly warm introduction – one that might have strengthen the fabric of not only my own network, but of theirs as well. And that’d have been a shame.

Tend to your network, and do your best to return the favor of a warm greeting. You never know when it might come back to you.

Remember the Internet When Considering The Things

By - February 06, 2015

iot-tectonics-center-electric

Last month I sat down with my old pal Jay Adelson (Digg, Revision 3, Equinix, SimpleGeo) who together with his partner Andy Smith is raising a new fund focused on the Internet of Things. Our goal was to get caught up – I’d tell him about my plans for NewCo, and they’d update me on Center Electric, the fund’s new name.

Along the way Jay shared with me this graphic, which I thought worthy of sharing here. What I like about it is how Jay and Andy think about the Internet of Things holistically – most of us focus only on the things, but take the Internet for granted. But it’s worth remembering that objects only become magical when they are connected in some way, and data flows to and from them meaningfully.

More than 50 billion “things” will be connected in some way to the Internet over the next decade, and all of those things will require a massive re-thinking of infrastructure, services, UX/UI, and inter-connectivity. That’s one humongous opportunity – but only if you think systemically. My post on the role adtech will play in this ecosystem is one such attempt, I am sure there are (and will be) many more.

In the meantime, I’ll be watching the investments made by firms like Center Electric. It’s a promising thesis.

Metromile: A FitBit for Your Car

By - January 26, 2015
MetroMile staff

The Metromile staff in front of their SF HQ (Preston is in the red shirt in the back right).

Ever since writing Living Systems and The Information First Company last Fall, I’ve been citing Earnest, the financial services startup, as a poster child for what I mean by an “information-first” company. But earlier this month I met with another perfect exemplar: Metromile, a company that is already upending industrial-age assumptions about what “insurance” should be.**

I’m fascinated by the idea of “potential information” – flows of information that are locked away and unused. Potential information flows live in the imagination of every NewCo – once tapped, they create all manner of new potential value. Metromile is a stellar example of a company that has found a vector into a treasure trove of potential information – the automobile – and is busy turning that information into a new kind of customer experience, one that has the potential to completely retool the utility and value of the insurance business.

But I get ahead of myself. Let’s back up, and start at the beginning. Metromile began as the brainchild of David Friedberg, co-founder and CEO of yet another information-first insurance breakout, Climate Corp. Climate opened up reams of new information flows for the farming industry, and along the way was acquired by agribusiness giant Monsanto for more than $1 billion. Friedberg realized that the lessons of Climate were applicable to consumer insurance, and Metromile was born.

I met with Metromile CEO Dan Preston in his crowded and humming San Francisco headquarters (pictured above). I had heard about Metromile, but my knowledge was limited to their headline: car insurance you pay for by the mile. But I figured the company was up to more than just a cheaper insurance product. On that hunch my chat with Preston did not disappoint.

Metromile does have a deceptively simple premise: those who drive a lot tend to have more accidents, those who drive less, fewer. Simple, no? But it turns out, the way insurance products currently work spreads the risk of those high mileage drivers across the entire pool of the insured. Put another way, if you drive less than 10,000 miles a year, most likely your insurance premiums are higher than they need to be. That’s because insurance companies average out the costs across their entire base of customers, forcing the less risky drivers to cover the costs of those who drive more.

Metronome

The Metronome – Metromile’s vector into a goldmine of potential information flows.

Metromile is the only insurance product on the market that charges by the mile on a retroactive basis – it tracks your miles driven, then calculates your monthly premium in arrears. To do so, it needs access to your vehicle’s diagnostic port – the same access point used by mechanics when they service modern cars (every car since 1996 has such a port).  When you sign up, Metromile sends you a “Metronome” – the same kind of device made famous by Progressive Insurance’s Snapshot, which uses them for data-driven discount products.

If you drive less than 10,000 miles a year, and live in a city environment, chances are you’ll save a lot of money using Metromile. But saving money is just the start of the company’s ambitions. After all, once the Metronome is installed, Metromile begins to collect data about your car and your driving habits. And any good information-first entrepreneur knows that the true value of an enterprise lies in mapping potential information flows. And that little Metronome is a hidden goldmine of such data.

Preston and his team doesn’t see Metromile as just an insurance company. Instead, Metromile is “your friend and ally in owning a car.” An ally with sophisticated data science and a friendly app that delivers much more than monthly savings. From the company’s website:

We aim to make the urban experience of having a car as simple as it can be, by taking our deep understanding of data and transforming it into information and services that make having a car less expensive, more convenient, and simply smarter….With the Metronome in place, the free Metromile app functions as your personal driving dashboard. Use it to track and optimize your gas usage and trips, monitor the health of your car, and locate your car if it’s missing. You can even use it to get automated street sweeping alerts.

And there’s the difference between Metromile and the rest of the insurance business – Metromile sees itself as a services company in the business of helping drivers make more informed choices about their cars. It starts with insurance, but it quickly becomes the voice of your car. Metromile’s app opens a window into the previously opaque world of automotive data and helps you understand all manner of things about your car – if it’s close to breaking down, for example, or if you’re using it in ways that might cause unwanted expenses down the road. When you think about it, Metromile is a fitbit for your car. And that’s pretty darn cool. One to watch, to be sure.

**Because I believe so much in the company, I am considering a small investment in MetroMile. Anytime I write about a company where I am or might be an investor, I will make a practice of noting it – so far, this hasn’t happened yet. As I point out on my disclosures page, I am a fairly active angel investor. 

Apple and Google: Middle School Mean Girls Having At It

By - January 20, 2015

THE-DRAMA-YEARS(image) I’m the father of three children, and two of them are girls. And while my first was a boy, and therefore “broke me in” with extraordinary acts of Running Headlong Into Fence Posts and Drinking Beer Stolen From Dad’s Fridge Yet Forgetting To Hide The Bottles, nothing, NOTHING, prepared me for Girls Behaving Badly To Each Other Whilst In Middle School.

Those of you with girls aged 11-14 know of what I speak: Middle school girls are just flat out BADASSES when it comes to unrepentant cruelty – and they are almost as good at forgetting, often within a day (or an hour) the rationale or cause of their petty behaviors. On one of my daughter’s wall is a note from a middle school friend. It says – and while I may paraphrase, I’m not making this up – “Hey Girl, I’m so glad we’re best friends, because I really hated you before but now we’re best friends right?!” And my daughter *pinned this* to her wall – her ACTUAL wall, in her bedroom!

Anyway, every so often girls in middle school end up squaring off – and the result is an embarrassment of small-minded but astonishingly machiavellian acts of cruelty. Little lies are let loose like sparks on a pile of hay, and soon a fire of social shunning rips through the school. Invitations are made, then retracted vigorously, and in public. Insults are veiled as compliments, and a girl’s emerging character strengths – a penchant for science perhaps, or a love of kittens for God’s sake – are expertly turned against her.

But this post isn’t really about middle school girls. Because we all know middle school girls – with love, patience, and copious wine (for the parents) – eventually grow up and out of such behavior.

Apple and Google? Not so much. And as an avid consumer of both these company’s products, I’m tired of it.

It’s the little things that pile up, the unnecessary lies and petty inconveniences. Like the fact that you need to install a javascript or browser extension to make Gmail the default mail application on your Mac. Because, you know, everyone knows how to do that. Or that you need a third party app (and a degree from General Assembly) to make music and movies purchased on Google Play work in iTunes, or vice versa. Or that Apple won’t let Google index apps in the iTunes store, because, you know, that Google mission of making the world’s information useful and accessible sounds suspicious, right?

Or – and yes, this is the one that pushed me to write this post – that you have to follow an utterly convoluted five-step process just to make group texting work between iPhones and Android users – only to learn it doesn’t really work every time, and in fact, if you’re expecting an important text from someone with an iPhone, well, you better just man up and buy a f*cking iPhone too, loser.

I’m not even scratching the surface of the bullpucky these two companies are putting us through to create “user lock-in” and discourage consumer choice. I mean, we gave up on the easy stuff, like, oh I don’t know, a universal power cord that can charge any phone. Because, you know, why have standards when you can take forty bucks from some poor loser every time he misplaces his charger? Or, if you wanted to change your default browser to Chrome, you had to root around in Safari to do so (Google has since gotten around this)? And don’t get me started on Apple Contacts and Calendar…and getting them into Google’s universe. Yeah, it’s supposed to work. And no, it really doesn’t, not so much, and not so well. I’m six months and thousands of dollars into trying to make that work. Um, Google – tell me please why there’s no Google Calendar app for iPhone? Is it because…you know, Apple’s not cool anymore? Gah.

I bet I’ve missed tons of examples, but given the state of diplomacy in the Apple and Google worlds, I’m not expecting a solution anytime soon. The two companies clearly don’t want to play nice – Apple’s DNA is to lock you into their pristine, walled garden user experience, and Google certainly isn’t eager to encourage Android users to interact with iOS. Apple has kicked Google out of the default position for mapping in iOS, and many expect search to be next. The walls are getting higher, and the middle school girl behavior is likely to get worse.

To Apple and Google, I say simply this: For the sake of folks who love both of your product lines: Grow up. Please!

App Stores Must Go

By - January 11, 2015

appstores2014 was the year the industry woke up to the power of mobile app installs, and the advertising platforms that drive them. Facebook’s impressive mobile revenue numbers – 66% of its Q3 2014 revenue and growing  – are a proxy for the mobile economy at large, and while the company doesn’t divulge what percentage of that revenue is app install advertising, estimates range from a third to a half – which means that Facebook made anywhere from $700 million to more than a billion dollars in one quarter on app install advertising. That’s potentially $4 billion+ a year of app installs, just on Facebook. Yow. That kind of growth is reminiscent of search revenues a decade ago.

But as I’ve written before, app installs are only the beginning of an ongoing marketing relationship that an app publisher must have with its consumer. It’s one thing to get your app installed, but quite another to get people to keep opening it, using it, and ultimately, doing things that create revenue for you. The next step after app install revenue is “app re-engagement,” and the battle to win this emerging category is already underway, with all the major platforms (Twitter, Yahoo, Google, Facebook) rolling out products, and a slew of startups vying for share (and M&A glory, I’d wager).

Over time, app install revenue is bound to wane, and app re-engagement revenue will wax, to the point where the latter is inevitably larger than the former. Neither will disappear entirely, of course, but as the mobile model matures, it’s likely they will take new form. But the following three steps will remain constant – they were true before apps (when we called Internet services “websites”), and they were true before the Internet itself:

  1. Get people to notice your product or service, and engage with it for the first time. 
  2. Get people to come back, and keep sampling your product or service. 
  3. Get people to regularly give you their money for your product or service.

We’ve now got a reliable model for #1: It’s the combination of the app store platform and app install advertising. #2 is coming along as well, as I mentioned above.

But what of #3? It’s one thing to get someone to give you a few bucks for your app, but how can you keep them giving you money (or doing things that make you money, like ordering on GrubHub)? If app makers are spending an unhealthy percentage of their capital on advertising, innovation in product will suffer, and we won’t get apps that people are willing to continually pay for. It strikes me, after any number of conversations I’ve had around the state of mobile, that mobile markets in the US will slowly but surely evolve toward the norms currently in place in Asia, where advertising is a minority of mobile revenues, and in-app commerce of all kinds is the standard. After all, that’s how it is for business in general – advertising is a small but significant percentage of overall revenues.

But for this to occur, our process of app discovery and engagement has to rationalize – it’s simply too expensive to build a loyal audience in mobile, and the top 1-2% of apps can afford to price the rest of the market out. This is the great failure – or cynical intention – of Apple and Google’s hobbled app store strategy. There simply should not be one app store per platform – they’re what Steve Jobs would call “orifices” – monopolistic constructs created to consolidate control. App stores stifle innovation – they are damage, and the Internet will eventually route around them. 2015 should be the year that becomes evident.

My other recent musings on mobile can be found here.  

The Three Golden Rules of Naming Something

By - January 06, 2015

10645727_s(image) I love being part of naming something. It’s probably the flat out most fun you can have legally with your clothes on – but for many folks, including entrepreneurs, it’s the source of endless consternation.

It doesn’t have to be. Here’s how I think about coming up with a name for something – a company, a new product, even a project you might be working on.

Rule #1: Don’t Overthink It. A name means nothing till those using it make it mean something.

So be willing to consider non obvious, even crazy names. Google? I mean, really, Google? And….Yahoo?! Alibaba? APPLE?

In other words, don’t overthink the literal meaning of a name too much – a brand is nothing more than a cup you fill with meaning later – a vessel to hold what your brand ultimately becomes. (That cup metaphor, by the way, I stole from somebody famous at some point over the past three decades, and I can’t find the original source. Any help?!)

Rule #2: Narrative. The best names have a story behind them that evokes the purpose and mission of the thing being named. Google was a riff on a mathematical term that was almost unimaginably large (a googol, or 10 with 100 zeroes after it).  Big enough to tell the story of Google, which aimed to swallow and rationalize the entirety of the Internet. We gave my current company the name NewCo because it tells the story of how people are always striving to create new approaches to company creation, to do new things with companies – and often they call those things “NewCos” until they come up with a proper name. Sovrn was given its name because we wanted to evoke the idea of sovereignty on the Internet – our publishers are sovereigns over their particular domain, and our tools help those publishers be in control of their own fate.  And so on…. A name is just a word till it means something, and stories are how we give things meaning.

Rule #3: Find your Entendre. It helps when a name has a clever wink or nod to another meaning, an inside joke that your core community can believe in (and evangelize). Wired had this – it worked as an imperative “Get Wired!” – and it worked as a badge for insiders – “I’m Wired, are you?!”  The Industry Standard had at its core a goal of providing rigorous, high quality journalism to an industry overwhelmed with mainstream hype – so the name evoked old school newspaper naming conventions. Federated Media was so named because it told the story of federating many quality web sites together so as to have the power of one large site (Rule #2), but it also shortened to “FM”, which evoked the album-driven rise of quality rock’n’roll stations of the 1970s – and as founder, I always thought of blogs as the rock’n’roll bands of the Internet.

I could go on and on, but honestly, I think if you run a brainstorming session with these three rules in mind, you’ll find your name pretty quickly. Maybe in a subsequent post I’ll outline how to run these kind of brainstorming sessions. I still do at least half a dozen of these each year for friends and colleagues, and it’s a total hoot. The latest is a new publication called “Tincture.” More on that soon!

Predictions 2015: Uber, Google, Apple, Beacons, Health, Nest, China, Adtech…

By - January 04, 2015

1-nostradamus2015. My eleventh year of making predictions. Seems everyone’s gotten onto this particular bus, and I’m now late to the party – I never get around to writing till the weekend – when I have open hours in front of me, and plenty of time to contemplate That Which May Come.

There are several keys to getting predictions right. First, you need to pay attention to long term secular trends – big changes that have been in the works for a while. Second, you need to call the timing – will those trends break into the mainstream this coming year? Last year, for example, I predicted that 2014 would be the year that the Internet would “adopt the planet as its cause.” I think I was right on the secular trend, but utterly wrong on the timing.

Third, you need to pay attention to patterns that have yet to emerge, but have a high probability of breaking out in the near term. A good example of this is my declaring that Twitter would become a major media platform three years ago.

So what might happen in 2015? The year to come feels clearer to me than 2014, which I labeled “A Difficult Year To See.” Plenty of interesting technology, Internet, and media trends seem poised to break out in 2015. Here’s my cut at them.

1. Uber will begin to consolidate its namesake position in the ” The Uber-ization of everything” trend. When we think of Uber, we think of black cars, of getting around from one place to another. But Uber has the brand permission to expand its brand to mean more than transportation. If you think of Uber as a company that takes a previously expensive, complicated, and inefficient process and leverages the Internet, mobile devices, the 1099 economy, and logistics to create a 10X better offering, there’s no reason the company won’t identify and pick off one or more similar markets in 2015. Uber is already making moves in delivery, a natural adjacency, but I imagine the company may either buy or build its way into markets that feel – at least initially – a bit further afield.

2. Related, Uber will be the center of a worldwide conversation about the impact of tech and business culture on the world. Put another way, Uber will replace Google, Facebook, and Apple as the centerpiece of a debate around the change wrought by the powerful tincture of technology and capitalism. This has already begun, of course, but 2015 will be when it comes to a dramatic head. I’m not quite sure how, but it’ll be obvious when it happens.

3. Google will face existential competition from Facebook due to Facebook’s Atlas offering, to the point where Google will find a way to connect its search and personal data to its Doubleclick asset. This will require changes to long-held pillars of its Privacy Policy – and thanks to legal complications from its search near-monoply, these changes will be tortured and painful. But in the faec of Facebook’s superior personalization capabilities, Google will have no choice. Google has long owned web advertising through its consolidation of a universal adtech stack. It’s the default platform for both publishers and advertisers, the 900-pound gorilla of ad serving, measurement, and delivery. But Facebook is attacking Google head on here with a rebuilt Atlas product that allows advertisers to target users of its ubiquitous service across the web. It will take time for Atlas to grow into meaningful market share, but advertisers love high quality personalization, and that’s what Facebook offers. Google’s in a difficult position here  – its privacy position was crafted for a world where there was no meaningful competition in web advertising. Now there is. The phrase to watch is this one: “We will not combine DoubleClick cookie information with personally identifiable information unless we have your opt-in consent.”

4. The Apple Watch will be seen as a success. I know, I know, I’m wandering into a morass here, as many others have already predicted that the watch will or will not work in 2015. But the use case, to me, is simply too strong to ignore, and I believe Apple will be first to prove it. I think Fred’s post was misunderstood, he didn’t say Apple’s watch won’t succeed, he just said it won’t be an iPod, iPhone, or iPad. And he’s right – no way will Apple sell as many units as those hits. We’re talking fashion here, and not everyone wants an Apple on their wrist. But I think we’re all ready to stop pulling out our phone every time we get a new text, email, or social media update. And for a significant number of folks, the Apple Watch will be how we change that behavior.

5. And Apple Pay will not. Apple Pay is slick, and it works, according to those I’ve talked with (I don’t use an iPhone, so I am certainly at a disadvantage here). But I’m basing this prediction on my sense of market need – does the market need a new way to pay? I’m not certain the current system – credit cards, cash – is so inefficient that it will motivate consumers to switch en masse this year, and for Apple Pay to be a success, I think that has to happen. I’m not saying the service won’t show good uptake and growth, it most likely will. But until there’s an orthogonal reason to use it that gives us all a much stronger value proposition, I don’t think Apple Pay will take over the world. In five years, I’d say the reverse will be true, but by then, we’ll have universal expenditure tracking and integration with a larger ecosystem of financial management tools, an ecosystem that is still underdeveloped and fractured at the moment.

6. But Beacons will re-emerge and take root. Remember iBeacons? They created quite a fuss when launched some 18 months ago, but since then, no one’s really paid them much nevermind. That will change in 2015 as ambient intelligence starts to be part of the fabric of everyday life. By year’s end, beacons will be a red hot market, and a platform for many a startup funding round.

7. Google’s Nest will build or buy a scaled home automation service business. Nest is a home automation business, but it’s also invested in rolling trucks to help its consumers install its growing suite of gadgets. Why stop there? The modern home is now a complicated mess of mismatched technology – there’s spotty wifi that works in one room but not another, dumb phone systems that don’t integrate with anything, and AV systems that break down more than they work. Shouldn’t someone 10X the home technology platform? Yes! And Nest is the brand with permission to do just that. It won’t hurt that by becoming the best home system integrator in the world, Nest will sell a shit-ton of its own devices.

8. A breakout healthcare startup will emerge in the consumer consciousness. Hard to say which one, as there are a ton of them, but the time is ripe for a startup to breakout that changes how we view our relationship to health data and services. One such startup will become the darling of the press and the exemplar of how healthcare services “should work.”

9. A breakout mobile startup will force us to rethink the mobile user interface. The time feels right for a new approach to mobile interfaces, and tons of startups are busy rethinking the space (see my posts on the subject here). I’m not predicting that the “chiclet-ized” approach to apps and OSes will break down in 2015, that’d be too much change to happen in one year. But as with healthcare above, a startup will break out that opens the industry’s eyes to new ways of interacting with our mobile devices. It’s about time.

10. At least one hotly-anticipated IPO will fizzle, leading many to declare that the “tech correction” has begun. Will it be Box, Dropbox, or Square? Spotify, Pinterest, or even Uber? I don’t know, but with so many deeply funded startups in the IPO zone, and our current tech boom entering its fifth year, the cycle is poised to pendulate. And yes, I just used “pendulate” for the first time in my writing life.

11. China will falter. This may be controversial, but again, using my keys of “secular trends, timing, and emerging trends,” it strikes me that China is due for a correction of its own. The US tech markets have a complicated and fractious relationship with China, and now that Alibaba is public and reportedly acquisitive, all manner of issues will be forced to the front burner. The Valley is anticipating a flood of Chinese tech competition and lucre in 2015, and I can’t imagine this comes without policy ramifications. Used to be, China regularly spied on US corporations, and we shrugged it off. No more. China is widely understood to have a brittle, centrally controlled, and deeply corrupt power structure. I expect this mix of illegal behavior (the spying and corruption) and easy money will cause powerful companies in the US to lobby Washington for relief, and I expect Washington will be willing to take action. One to watch, to be sure.

12. Adtech comes back. Adtech, a sector that took a beating this past year, will once again be seen as a strong, investable market. The sector has matured, and is no longer dominated by one-note business models dependent on a culture of fraud. This trend has already begun to play out with acquisitions in 2014 – LiveRamp, Datalogix, Blue Kai come to mind. With major players like Oracle, Salesforce, Facebook, Adobe, SAP, IBM and Google battling it out over marketing automation, it’ll be a very good year to be a differentiated adtech startup.

Well, there’s a dozen predictions for you, and I feel like I could do another twelve. But I think I’ll leave it there, and leave it to the fates to see how I did in one year’s time. Happy New Year everyone, and here’s to a great 2015!

 

Related:

Predictions 2014

2014: How I Did

Predictions 2013

2013: How I Did

Predictions 2012

2012: How I Did

 

My Predictions for 2014: How’d I Do?

By - December 31, 2014

2014Each year around this time I look back at the predictions I made 12 months ago, and I score myself with some combination of objectivity and defensiveness. And each year I do pretty well, batting somewhere between .500 and .750, depending on how you keep score.

This past year was different. First off, my predictions were unusually sparse. I started the year in a funk – I was depressed by our industry’s collective ignorance of climate change, and it showed in my writing. I called 2014 “A Difficult Year to See,” because my vision had been clouded by a deep anxiety over why tech hasn’t tackled what seemed to me to be the world’s most pressing problem.

One year later I find myself in a more patient stance. But given the goal of this post is to review how I did, and not how I feel today, let’s get to the score card.

1. 2014 is the year climate change goes from a political debate to a global force for unification and immediate action. It will be seen as the year the Internet adopted the planet as its cause.

Well, maybe not. I think I wrote from a place of “I wish this was the case” as opposed to “I think this actually will happen.” What I can say is this: Climate change is now a front burner issue for all thinking people on this planet, and that’s certainly a shift for the better. California, cradle of the tech industry, is in the middle of a severe, inescapable drought, one that weighs heavily on everyone working here. Sure, California has had cycles of drought in the past, but this one is different – in just three years, we’ve eclipsed draught data from as far back as 1,200 years, and as persistent as seven years in duration. Data like this starts to change how people think about their impact on the world.

But it takes time. Last year I hoped that “…the lessons of disruptors like Google, Twitter, and Amazon, as well as newer entrants like airbnb, Uber, and Dropbox, can be applied to solving larger problems than where to sleep, how to get a cab, or where and how our data are accessed. We need the best minds of our society focused on larger problems – but first, we need to collectively believe that problem is as large as it most likely is.”

Such a shift requires more than one year to happen. I’d judge myself harshly here – what I predicted simply did not happen. However, I do believe that 2014 was the beginning of it happening, and I reserve the right to come back to this post a few years from now, and claim that I called the beginning of a multi-year, secular shift toward “the Internet adopting the planet as its cause.” At least, I certainly hope I can.

Score: .000

2. Automakers adopt a “bring your own” approach to mobile integration.

Automobiles are in the “mobile experience” market, and until recently, it looked like they were going to try to keep their customers from bringing Apple, Google, and other tech brands directly into the driving environment. I noted that the auto industry changes painfully slowly, but 2014 would be the year things shifted to one where consumers began integrating their own smartphone environments directly into their driving experience. And while there is still a long way to go, it seems I was right.

Just this month, for example, Ford announced it was dropping its seven year partnership with Microsoft for a Blackberry’s ONX operating system. Seems like small news, till you look under the covers and see what it really means: using QNX allows Ford’s customers to easily integrate their iPhones or Android devices with their cars. Apple and Google seem to be taking a dual-pronged approach to the automobile – work with the industry to allow simple integrations between the phone and the car (contact lists, phone calls, some apps), while at the same time announcing far more ambitious plans to become the entire operating system for those cars in the future (for Apple, it’s CarPlay, for Google, it’s Android Auto).

Overall, I think I got this one largely right.

Score: .750

3. By year’s end, Twitter will be roundly criticized for doing basically what it did at the beginning of the year.

Twitter went public in November of 2013, and in my predictions two months later, I wrote: “The world loves a second act, and will demand one of Twitter now that the company is public…its moves in 2014 will likely be incremental. This is because the company has plenty of dry powder in the products and services it already has in its arsenal – it’ll roll out a full fledged exchange, a la FBX, it’ll roll out new versions of its core ad products (with a particular emphasis on video), it’ll create more media-like “events” across the service, it’ll continue its embrace of television and popular culture…in other words, it will consolidate the strengths it already has. And 12 months from now, everyone will be tweeting about how Twitter has run out of ideas. Sound familiar, Facebook?”

For the most part, this is pretty much what has happened. For Twitter, 2014 has been a year of piling on, in particular for Twitter CEO Dick Costolo, who was given a vote of no confidence in the Wall St. Journal this November.  And what has Costolo failed to do? Apparently, the same thing everyone else has failed to do over the past seven or so years: Define exactly what Twitter is supposed to be, even as the service kept growing and delighting the world. But let’s get real: in the four years Costolo has been CEO, Twitter has gone from zero to more than a billion in revenue – a feat that puts the company in the rarified air of Google, Facebook, Uber, and precious few others.

It strikes me that Costolo’s biggest error in judgement was to let Twitter go public in an environment where the stock was vastly over-valued. His stock debuted at $26, closed above $40,  and was pushed past $70 before it was retreated to its current price of $36 or so. Unfortunately, the market’s expectations of Twitter far outpaced the company’s true value, which was extraordinary to begin with. And so, one year later, Twitter is “roundly criticized for doing basically what it did at the beginning of this year” – struggle to define just what Twitter actually is, but at the same time, produce an invaluable service that has managed to grow revenues at a blistering pace. My own view boils down to this: Ignore Wall Street, and focus on Twitter’s plans in mobile services. More on that in my predictions post.

Score: 1000

4. Twitter and Apple will have their first big fight, most likely over an acquisition.

Well, I have no idea whether this one was true. It certainly didn’t break out into the mainstream news if it did happen. I mentioned that entertainment would most likely be where the two companies diverged, as I view that to be an area both want to play (most notably music and video). Apple certainly made its play there with Beats, but there’s not been any word of a “fraying relationship” between Twitter and Apple that I’m aware of. As far as I know, I whiffed on this one.

Score: .000

5. Google will see its search related revenues slow, but will start to extract more revenues from its Android base.

Yep. Search revenues have been slowing for years, but 2014 was the year everyone woke up to it. As the NYT reported this October: “The thing that worries investors, though, is that the company’s golden goose — its search engine — is showing signs of age.” Put another way, search revenues are not growing as quickly as they once were – Q3 grew 17% y/y, compared to Q2, which grew 25% on the same measure. But the piece also noted a strong uptick in Google’s Android-based Play store revenues – up 50% year on year. Combine that with Google’s focus on consolidating its control of the Android ecosystem, and I think I got this one pretty much right.

Score: 1000

6. Google Glass will win – but only because Google licenses the tech, and a third party will end up making the version everyone wants.

Whoa. What was I thinking? I was right in some details – in the post I suggested the price will go down by half, and sure, you can get used Glass for half price or better on eBay – but I whiffed again here. Not much happened with Google Glass this year, and no third party ended up making the version everyone else wanted. And I’m not sure anyone ever will.

Score: .000

7. Facebook will buy something really big. 

Um….yup. Twice. I suggested it might be Dropbox or Evernote, but Facebook went for WhatsApp and Oculus, among many others. I suggested that Facebook needed to admit it had “become a service folks use, but don’t live on anymore,” and that the company would continue to buy its way to its core user base, as it had with Instagram. I was right, but I picked the wrong horses.

Score: .750.

So looking at all my predictions, how did I average? Well, on seven attempts, I whiffed three times, nailed it twice, and hit .750 on two more. An average of .570, if you use “hits” as your base, but a less impressive .314 if you just add up the numbers and divide by 7.  I’ll let you decide which it was, and meantime, look forward to doing better next year. My Predictions 2015 post is coming, but most likely will wait till this weekend. Happy new year, everyone!