I'm going to go out on a limb here and say that the doom-and-gloomers have a very narrow view of that startup landscape, and only really see consumer companies.
The real trend of 2013, IMO, is that the consumer space is dead, as far as new startups are concerned. Supporting evidence is the "series A crunch", the reaction to the Facebook IPO, and Chris Dixon's "10 million is the new 1 million" article.
However, startups in other spaces, notably B2B and "enterprise" (the new sexy as of very recently, and my prediction for the number one trend of 2013) should be fine. If your startup makes money and has customers, you'll have no problem raising money (and less problems going it alone).
[Supporting evidence: basically my own (limited) experience from fundraising over the last few months]
I don't think consumer space is dead. I think the mentality of "get users now, get money later" is dead. It was always a flawed philosophy. There's no guarantee that if you build a network of people, those people will actually want to pay you. (Case in point: Facebook.)
So I'm agreeing with your last point: "If your startup makes money and has customers, you'll have no problem raising money."
Agreed. People often use the term "consumer space" as if it only means some free app or product being given away for free ad infinitem... Dropbox, Airbnb, Uber, Kickstarter are all consumer services that all had huge years in 2012.
Dropbox is a particularly interesting example because it has a B2B counterpart in Box. Dropbox however is 2 years younger and about worth about 8x more. Consumer is certainly not dead. Free consumer maybe, but even then, Snapchat just showed us that VCs still have an appetite for free apps that skyrocket in user growth. (and appetite is an understatement.)
If only. I think that the business model of grow first then make money will still be vastly more popular than it has a right to be over the next few years and likely beyond. Though hopefully some of the sheen has been taken off of it.
The problem is that sometimes the strategy works, and sometimes when it pays off it pays off big. Amazon being the best example. And there will likely always be a continuous string of the strategy working, in a big way, for the foreseeable future. And that will create a much larger group of gamblers who think they can bet on the same strategy even when the business fundamentals show they have almost no chance of pulling it off.
Facebook is a weird example in this case because in some regards their business model was justified. They managed to create a multi-billion dollar, worldwide business in a short span. There's every reason to believe that they can sustain billion dollar per year profits for many years. However, they managed to sell their IPO on the premise of being a company that's almost 100x bigger than they are now, which is a bit of a ridiculous idea. Even if they gobbled up most of the worldwide ad budget it wouldn't justify their IPO valuation. Yet enough suckers bought into the idea that the company made a lot of money from the IPO and the stock price has even managed to rebound from its low this year, although to be honest I don't think that reflects a rational evaluation of the company.
As far as businesses targeting customers directly, I think that continues to be a big thing and is if anything only growing in popularity. For every instagram or facebook which tries to court hundreds of millions of users with free services there are a huge number of smaller companies who are selling services directly to customers at a profit. The rise of indie game studios and crowd sourced projects is an excellent example of this in action.
> Our phones are becoming our remote controls for life.
I feel really freaking old for a 21 year old. I got an Iphone 3gs back in 2009 before going into college. I should have been the target market for most of the tech revolution, right? I only used the thing to watch youtube, read pdfs, browse websites (never write anything), and take really ugly photos and video. I rarely made calls with it and canceled text messages entirely in 3 months. The battery died this summer, and I just got a tracfone just so I can call my grandparents because almost all my vocal communication is done via skype, jabber, or mumble. Maybe most importantly? I not only never paid for an app, I downloaded a total of like 5 in 3 years.
I have a Transformer tablet though, which I still wouldn't call the center of my tech environment, I just use it to read articles, books, and watch video. I don't even do the picture taking with it because its a giant book and it is so obtuse to photograph with it. The high DPI screen makes reading wonderful on it though, which is the main reason I have it. I did get the Transformer + keyboard dock so I had the ability to write when needed.
I don't think I'll ever get a 4 - 6" smartphone again. Anywhere I go I'll just throw my tablet in a backpack and bring it with me if need be, or just carry it. You won't shrink the screen any more and I just prefer the 10" form factor.
I still carry about my dumb phone just because we still live in the stone ages of ubiqutious internet. I don't want to pay $50+ a month for data just to have internet on the go. I already pay way too much to run a DSL signal to my home router.
I dunno, I just feel like the smartphone market is saturated. Modern computers have a very finite limit of influence over the world since they can only impact it through vibrating air, itself, or through emitting electromagnetic radiation in various forms. And I already have all the audiovisual stimulation that I want already, so I won't be adding any more. An RSS feed of all my choice webnews and the front page of reddit and HN for laughs is all the digital media consumption I really need anymore.
Paying 50$ a month for unlimited 3G is just outrageous. Here in Finland you get half a mb a second starting at 5€ a month. The fastest plans go at 15-20€ a month or something like that.
How does Finland treat wireless spectrum? The problem in the US is that the vast majority is partitioned to the military, old tv and radio bands, and as a result only a few specific ranges are available for.. purchase. And then AT&T and Verizon own all the viable long range wireless spectrum, so they take advantage of the duopoly and just keep jacking up prices with no chance at competition.
Agreed: here in Australia I get by on $5/ month on prepaid. The 500MB data credit rolls over & I can't use it fast enough - I now have 3.5GB accumulated.
It's a good idea to research cellphone plans, you can probably find something very affordable that suits your usage.
Decent list of observations on startup landscape. If you are interested and haven't had an opportunity to read, Mary Meeker's Internet trends (http://kpcb.com/insights/2012-internet-trends) report provides a much more comprehensive view on the subject.
I didnt see 3D Printing on that list? Though the cost of home 3D printers probably wont drop to 500 or less, so maybe 3D printers isn't 2013 but 2014/2015?
printing up any physical object like a belt, shoe, toys, iphone covers/cases... whatever you think of and can design using 3D printing software it can be printed/created.
It's the next huge thing that will change the world and economies. I don't feel it's a positive for our struggling world economies though. Why buy that physical good you desire thru a store (online or offline) when you and everyone else will be able print it up at home?
It'll be interesting to see how our interaction with our phones will change once data transfer rates of 1GB/s are common. Sensors will play an increasingly important role, and who knows... probably many new innovations will be funded through the rising crowdfunding eco-system.
I had unlimited 3g data in 2007 for $30. Today, to get something similar, it would cost $70. We're going backwards, not forwards, in terms of wireless data. There needs to be some fundamental reforms to break up the AT&T and Verizon duopoly and to open up a significant amount more wireless spectrum for data transmission.
Two weeks ago we encountered a need for a hosted "launch rock style" landing page that would function like kickstarter, to fund and grow our customer base in the same fashion as lockitron. We built Tractio.co to solve the need for a crowd funding landing page without technical chops, and helping to foster the growth of companies and services that need help raising funds, and want full control. We are looking for beta testers still.
Trends be warned. The worst thing about a trend is that they create overpopulation of products/businesses in a small space, causing distraction and undue competition to serious businesses from "can do it for free and leave it" day hacks.
Couldn't agree more. The decline in funding shows that investors start seeing that start-ups that don't plan to make money from the start won't get free lunches anymore. My view is that enterprised-focused start-up will make a big come back in 2013.
I've heard this over and over, but the reason it won't become a "trend" in terms of people around the nation talking about it, or even people in tech-early-adopter capitols like SF and NYC, is that founders might try to pattern match what's getting funded (terrible idea and motivation to build a product), but people really just don't care about enterprise/b2b startups (press, startup people, casual americans reading 'Wired' and discussing startups/apps at the dinner table). So even if it's taking off underground, it will only take a few more SnapChat* series-a announcements to shake people back to meteoric growth, no sales-cycle, brand building type of companies.
*Everyone was writing articles about them this week - and with good reason. Startup people (founders, employees, press, wannabes, VCs, angels) love reading that kind of shit and talking about things like 'Will Facebook's X kill Company Y?', etc... If it was a b2b company, it wouldn't have gotten any attention. Not 'just a little attention', but like, none. On top of the great things the consumer sector provides (customers, no sales cycles, meteoric growth, easier to build, etc), this reason above is one of the biggest reasons enterprise will never be a real "trend".
We shouldn't look to WSJ for insight on startups. The trends are already passed by the time they're aware of them, which is why the article feels like it's talking about 2012 instead of 2013.
The big difference is that the services are also delivered by phone. With Lyft, Uber, Exec, etc etc, the people providing the services are not employees of the startup but independent contractors using the app to get referred to customers. Instead of going into work, having some guy tell them who their customer is and taking a cut, they have the app tell them who their customer is and take a smaller cut.
So the benefit is really to the service provider?
However this relies on changing user behaviour, so I guess service providers using such services will be all able to charge lower prices?
The real trend of 2013, IMO, is that the consumer space is dead, as far as new startups are concerned. Supporting evidence is the "series A crunch", the reaction to the Facebook IPO, and Chris Dixon's "10 million is the new 1 million" article.
However, startups in other spaces, notably B2B and "enterprise" (the new sexy as of very recently, and my prediction for the number one trend of 2013) should be fine. If your startup makes money and has customers, you'll have no problem raising money (and less problems going it alone).
[Supporting evidence: basically my own (limited) experience from fundraising over the last few months]