The Next Big Thing(s) for 2012 and Beyond? “Hypernet” meets “Hyperweb”
In the past several weeks we’ve seen dozens of posts from highly respected techies and VCs offering their predictions for what will be hot in 2012. Over the next few posts we will offer quick rundown of the ones that seem particularly prescient to us.
Here’s the first- “Technology Waves and the Hypernet” is a post in a new blog by two prominent SilVal VC’s that sticks its neck out pretty far. The blog is dedicated to the hunch that the world is about to enter a new wave of opportunity at the intersection of 1) ubiquitously-accessible-internet and 2) the ability to connect ‘things’ to the web inexpensively. This post first establishes a thesis that major tech phenomenons occur in waves that tend to last up to a decade that seem to follow a similar pattern:
We have observed that these waves tend to follow a pattern. They start with infrastructure. Advances in infrastructure are the preliminary forces that enable a large wave to gather. As the wave begins to gather, enabling technologies and platforms create the basis for new types of applications that cause a gathering wave to achieve massive penetration and customer adoption. Eventually, these waves crest and subside, making way for the next gathering wave to take shape.
It goes on to argue that now is not the time for startups or investors to consider entering the social networking space as that wave of opportunity is closing.
Today, we believe that it is too late to start a meaningful company in the social networking wave. When the cycle started to move from enablers to applications, it was a very good time for two reasons. First, it was late enough that companies could make a bet on a few platforms that had achieved scale and were likely to achieve much greater scale. But, it was also early enough that the map of the world had yet to be drawn for apps. This meant that companies could acquire users for much less money and monetize them better because there was less competition. These companies also had the opportunity to build network effects among their users and create sizable entry barriers, particularly in terms of scale and distribution strength.
The social networking application space is now very crowded. The wave is about to crest.
Social networking will matter for sure. But entrepreneurs from this point on should look at it as a “feature” rather than the next great startup opportunity.
BTW– That last idea suggesting social networking be considered as a feature is directly in line with our advise here (see step 5)
Finally, this post articulates the vision its authors have for the next wave of opportunities they believe will begin to appear in 2012. We think they are on to something and are excited to watch it unfold and perhaps take part.
One of the reasons I am so excited about this point in time is that, in the last few years, the new infrastructure has been put into place for a major new wave. Roger and I think the new infrastructure combines the web plus cellular plus WiFi (which we call the Hypernet), combined with potential new user experiences that involve billions of nodes and millions of clouds (which we call the Hyperweb). We believe that these are the prime forces of a massive new gathering wave. In the next few years, a handful of entrepreneurs will begin to build the enabling platforms that define some of the great technology companies of tomorrow. We also believe that this wave will be much larger than the social networking wave because it has a larger hardware component to it. Generally speaking, when a wave has hardware components to it as well, there is an even larger ripple effect and the value multipliers are even stronger.