The World's Crystal Ball - A look into the future

 A GLIMPSE INTO WHAT THE FUTURE HOLDS FOR US. 
 

In 1998, Kodak had 170,000 employees and sold 85% of all photo paper worldwide.

Within just a few years, their business model disappeared and they went bankrupt.

What happened to Kodak will happen in a lot of industries in the next 10 year - and most people don't see it coming. Did you think in 1998 that 3 years later you would never take pictures on paper film again? Yet digital cameras were invented in 1975. The first ones only had 10,000 pixels, but followed Moore's law. So as with all exponential technologies, it was a disappointment for a long time, before it became way superior and got mainstream in only a few short years. It will now happen with Artificial Intelligence, health, autonomous and electric cars, education, 3D printing, agriculture and jobs. Welcome to the 4th Industrial Revolution. Welcome to the Exponential Age.

Software will disrupt most traditional industries in the next 5-10 years.

Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the world. Airbnb is now the biggest hotel company in the world, although they don't own any properties.

Artificial Intelligence: Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected. In the US, young lawyers already don't get jobs. Because of IBM Watson, you can get legal advice (so far for more or less basic stuff) within seconds, with 90% accuracy compared with 70% accuracy when done by humans. So if you study law, stop immediately. There will be 90% less lawyers in the future, only specialists will remain.

Watson already helps nurses diagnosing cancer, 4 time more accurate than human nurses. Facebook now has a pattern recognition software that can recognize faces better than humans. In 2030, computers will become more intelligent than humans.

Autonomous cars: In 2018 the first self driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don't want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. You will not need to park it, you only pay for the driven distance and can be productive while driving. Our kids will never get a driver's licence and will never own a car. It will change the cities, because we will need 90-95% less cars for that. We can transform former parking space into parks. 1,2 million people die each year in car accidents worldwide. We now have one accident every 100,000km, with autonomous driving that will drop to one accident in 10 million km. That will save a million lives each year.

Most car companies might become bankrupt. Traditional car companies try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google) will do the revolutionary approach and build a computer on wheels. I spoke to a lot of engineers from Volkswagen and Audi; they are completely terrified of Tesla.

Insurance companies will have massive trouble because without accidents, the insurance will become 100x cheaper. Their car insurance business model will disappear.

Real estate will change. Because if you can work while you commute, people will move further away to live in a more beautiful neighborhood.

Electric cars will become mainstream until 2020. Cities will be less noisy because all cars will run on electric. Electricity will become incredibly cheap and clean: Solar production has been on an exponential curve for 30 years, but you can only now see the impact. Last year, more solar energy was installed worldwide than fossil. The price for solar will drop so much that all coal companies will be out of business by 2025.

With cheap electricity comes cheap and abundant water. Desalination now only needs 2kWh per cubic meter. We don't have scarce water in most places, we only have scarce drinking water. Imagine what will be possible if anyone can have as much clean water as he wants, for nearly no cost.

Health: The Tricorder X price will be announced this year. There will be companies who will build a medical device (called the "Tricorder" from Star Trek) that works with you phone, which takes your retina scan, you blood sample and you breath into it. It then analyses 54 biomarkers that will identify nearly any disease. It will be cheap, so in a few years everyone on this planet will have access to world class medicine, nearly for free.

3D printing: The price of the cheapest 3D printer came down from 18,000$ to 400$ within 10 years. In the same time, it became 100 times faster. All major shoe companies started 3D printing shoes. Spare airplane parts are already 3D printed in remote airports. The space station now has a printer that eliminates the need for the large amount of spare parts they used to have in the past.

At the end of this year, new smart phones will have 3D scanning possibilities. You can then 3D scan your feet and print your perfect shoe at home. In China, they already 3D printed a complete 6-storey office building. By 2027, 10% of everything that's being produced will be 3D printed.

Business opportunities: If you think of a niche you want to go in, ask yourself: "in the future, do you think we will have that?" and if the answer is yes, how can you make that happen sooner? If it doesn't work with your phone, forget the idea. And any idea designed for success in the 20th century is doomed in to failure in the 21st century.

Work: 70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a small time.

Agriculture: There will be a 100$ agricultural robot in the future. Farmers in 3rd world countries can then become managers of their field instead of working all days on heir fields. Aeroponics will need much less water. The first petri dish produced veal is now available and will be cheaper than cow produced veal in 2018. Right now, 30% of all agricultural surfaces is used for cows. Imagine if we don't need that space anymore. There are several startups who will bring insect protein to the market shortly. It contains more protein than meat. It will be labeled as "alternative protein source" (because most people still reject the idea of eating insects).

There is an app called "moodies" which can already tell in which mood you are. Until 2020 there will be apps that can tell by your facial expressions if you are lying. Imagine a political debate where it's being displayed when they are telling the truth and when not.

Bitcoin will become mainstream this year and might even become the default reserve currency.

Longevity: Right now, the average life span increases by 3 months per year. Four years ago, the life span used to be 79 years, now it's 80 years. The increase itself is increasing and by 2036, there will be more that one year increase per year. So we all might live for a long long time, probably way more than 100.

Education: The cheapest smart phones are already at 10$ in Africa and Asia. Until 2020, 70% of all humans will own a smart phone. That means, everyone has the same access to world class education. Every child can use Khan academy for everything a child learns at school in First World countries. We have already released our software in Indonesia and will release it in Arabic, Suaheli and Chinese this Summer, because I see an enormous potential. We will give the English app for free, so that children in Africa can become fluent in English within half a year.

Why An Equity Crowdfunding Site Could Become The Largest Marketplace In The World

Ryan Caldbeck,

What do Airbnb, Etsy, OpenTable, Uber, and Kickstarter have in common? Well, to begin with, each of them are relatively young. Each of them also followed  the heavyweights Amazon and Ebay, and each of them share something else in common:

Their success stems from the simple fact that each one removed friction in a market by aggregating supply and demand in a user-friendly way. And there is something else: Each of these platforms have reaped the massive benefits of network effects—that is, as more people use the platforms, more people want to be on the platforms. All of this leads to improved quality of goods/services, which in turn leads to dominance. Competitors are left behind, whether online (Kickstarter, for example, was not the first crowdfunding site.), or offline.

While these now well-known marketplaces have already gained significant scale, I believe that the equity crowdfunding marketplace that ultimately comes out on top could be even larger than many of the great marketplaces of today. To understand why, it’s useful to look at an example.  Lets take some stats we have from CircleUp, an equity crowdfunding site, and OpenTable, the world’s leading online reservations marketplace.  According to OpenTable’s 2012 SEC filings, the Company seated approximately 120 million diners in 2012, driven through its own platform, through affiliates (i.e., Yelp) or directly through the restaurant (i.e., on the restaurant’s site using OpenTable). If you divide OpenTable’s $91 million in reservation revenue by its 120 million consumers, that comes out to $0.76 per consumer. Not bad for many internet businesses.

Now let’s look at equity crowdfunding. I’ll use CircleUp as an example, and I welcome others in the comments section below.  On our platform, investors can invest anywhere from thousands to hundreds of thousands of dollars per investment (the minimum investment is determined by the entrepreneur on a deal by deal basis). Additionally, across the 21 companies that we have helped raise more then $21 million for, we have seen a large portion of capital come from “repeat investors”—that is, those who have made multiple investments on the platform.  Our average investment depends on the deal but is typically five figures—for this post lets assume $10,000.  If the average investor only invests $10,000 per year on CircleUp (note this is not the actual average, just a hypothetical), it would be worth somewhere between $500 and $1,000 in revenue to CircleUp (our fee structure is based on the size of the raise). Given the repeat investment rate, investors are often worth several thousands dollars per year to CircleUp.

There are currently 8.6 million households that qualify as accredited investors, but only a few hundred thousand that today consider themselves angel investors.  And the amount invested into private companies ($50 Billion in the form of equity) hasn’t changed in a decade. Why isn’t it growing? How could it, given that there has been no innovation (until the JOBS Act and equity crowdfunding) for 80 years? Before platforms like CircleUp existed, investors would have to spend time sourcing quality deal flow, which can (and often is) a full time job in itself. If you believe these marketplaces have the chance to supplement other parts of private investing (more broadly- Reg D investments), then it is important to note that the entire Reg D market is $1.3 trillion. While our sample size is still small and equity crowdfunding is in the first inning of what we hope is a long game, when I look at the average size per transaction on CircleUp + the “repeat purchase” rate + the total amount of investable capital, the total market potential for equity crowdfunding is many times that of any online marketplace out there today.

Now here is why I’m wrong. By a lot of measures, equity crowdfunding may have the dynamics of great marketplaces.  It is attacking a huge market that has massive inefficiencies.  In the case of consumer and retail, CircleUp’s focus, there are 700,000 consumer and retail companies with $1M-10M in revenue- almost all of which will need to raise equity to grow at some point.  By most accounts, the average company takes 12 months to raise money offline, as compared to 2-3 months on CircleUp.  There are also huge reasons an online marketplace will make private investing, and fundraising, a much better experience than the status quo: less travel, more efficient deal screening and investor screening, increased transparency and data, etc. Naturally, these advantages should  expand the size of the current market even more.

All of this is great. Unfortunately,  equity crowdfunding won’t capture that trillion dollar market that’s out there. Why? First, because equity crowdfunding is not a better experience for all forms of Reg D offerings.  That $1.3T market mentioned above? $1.1T are pooled investment vehicles. Sure, many of them will be replaced by online investing platforms, but many actually do add value and won’t be cut out.  Equity crowdfunding will blossom when the market is broken, but that’s not the case for all private investing.  For tech investing, as an example, it’s simply not broken.  Any decent tech entrepreneur can raise money on Sand Hill Road.  In consumer and retail, CircleUp’s focus, the status quo is broken- which is why we are growing so rapidly (The number of investors on CircleUp making investments—compared to the total number during the previous 15 months of our existence—grew by 75% in just the last 90 days).

The second reason I’m wrong, and why equity crowdfunding won’t be the largest, is because of frequency of investment.  The purchase cycle in private investing for most investors is infrequent. Successful angels typically make 7-10 investments, but that can occur over several years.  So while each individual investment is worth hundreds, or thousands, of dollars to an equity crowdfunding site in revenue, that investor may only invest a few times a year. That’s fine from a revenue standpoint, but it makes it more difficult to build word-of-mouth customer growth.

I’m not sure if I’m right or wrong.  There are quality arguments on both sides. I do firmly believe, however, that equity crowdfunding will massively disrupt the existing broken markets.  And that should be a great thing for the investors and entrepreneurs who use the platforms in those markets.