4 Key Trends That Will Shape Our Investing

Every six months Social Starts examines the social/mobile landscape to see what has changed, so we can adjust our investment approach to the current and emerging reality. Our latest review revealed the following trends:

SOCIAL HAS BECOME OXYGEN. From its origins, Social Starts has been about the Social Construct--the change in human behavior in response to the emergence of social/mobile technology. We were the first investors in Pinterest and have focused on social platforms ever since. Last year, we determined that the future of social platforms is 100% mobile, heavily Asian-influenced, and centered on either messaging or visually driven communities. Now, we see that those messaging and visual community elements have spread to become essentially universal. Every app has some aspect of them. Social community has become like oxygen; it is everywhere and essential for life. We are no longer looking to invest in social/mobile platforms; we now see community as a fundamental element in service of a greater idea.

CONSUMER AND WORK ARE CONFLATING. Consumer technology used to be one market, while enterprise technology--driven by IT--was a separate and distinct market. Increasingly, through mobile and the rise of millennial attitudes, that is no longer the case. Millennials don't see the bright line between their work and personal lives that preceding generations did. They are determined to use the tech they live by--which means Smartphones--in all they do. They are challenging the incumbency of IT by this attitude. In addition the rich analytics, gameplay, thumb swipes and other ideas developed for consumer use, Smartphone-inspired concepts are increasingly being put into practice for corporate use. We are seeing apps where you'd swear from the usage it was Tinder, but where the impact is on employee morale or recruiting or influencer marketing. Because of this trend, we are now focusing on work platforms as a core area of investment.

MEDIA IS BECOMING COMMERCE. Media audiences have moved en masse to Smartphones. More than 60% of most media audiences now center on phones; higher when the audience is Asian or young or both. While we see many bold attempts to serve this audience with advertising, we now believe that this is not the best way to monetize content in the future. Rather, we are seeing new companies where the audience behavior looks like media consumption, but the end result is commerce not advertising. When content, context and the potential for direct action are all present--as they are on Smartphones--the powerful play is selling the consumer what they want. Which is why we are getting ever more taken with mobile commerce.

DEVICES ARE JOINING THE CONVERSATION. The Internet of Things has gotten plenty of ink lately, but we think few fully understand its core impact. Today's tech revolution began with human-to-human conversation at a distance. It remains driven by the new ability to have emotionally resonant interactions among far-flung people, which could only take place close at hand in the past. When 50 billion devices join the net, the social revolution will move to its next phase. The new normal will be device to device communication on behalf of humans. People will only come into the typical conversation at the point of action or decision, and possibly not even then. The center of conversation on the worldwide network will change and that means its core character will change. This compels, today, a complete reworking of the software stack that supports the worldwide network. This retooling will be far more complex and thorough than the shift from desktop to mobile three years ago. We see foundational opportunities related to the IoT at every layer of the stack: sessions, security, interfaces. And we see programming undergoing a fundamental shift to ever smaller units of code and ever greater virtuality of software. We are all-in as investors on the emerging IoT software stack.

It is an exciting time to be alive. So much change! And a remarkable time to be an early stage investor. It will take 20 years for the millennials born after 1990 to be in charge of the world. Can you Imagine what that world will be like?