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Here's What Five Venture Capitalists Are Predicting For 2017


Here's what five venture capitalists are predicting for 2017
GeekWire

With 2016 now in the rear-view mirror, it’s time to take a quick moment to forecast what might be looming on the horizon in the near year.

Who better to ask than a group of venture capitalists, the money managers who are paid big bucks to see around corners and determine what technologies will impact our lives going forward. The new year certainly brings a set of challenges and opportunities, and this much is clear: No one really knows what will happen.


As venture capitalist Loretta Little says: “what a year 2017 will be to predict anything!”

Even so, we quizzed five Seattle area venture capitalists to get their take on what they think will transpire in 2017.

Optimistic by their nature, all of the venture capitalists believe the Nasdaq will continue to surge, with one predicting a 25 percent uptick. They also see a steady stream of initial public offerings. In terms of hot sectors, they are bullish about cloud computing, artificial intelligence and personalized genomics, while many think the technologies behind autonomous vehicles are a bit overhyped. Here’s more from our five VCs:

Bill Bryant, partner at DFJ

Number of IPOs in Washington state in 2017 (candidates): Three (Avalara, Avvo and a biotech whose name I don’t know). I can’t formally comment on Redfin’s plans as DFJ is an investor but would imagine that Redfin will look closely at its options as the year progresses

Number of new investments your firm plans to make in 2017: 8-10 new investments (1-3 of which will be in Seattle)

Google’s stock close on 12/31/17 ($771.82 now): $845

Microsoft’s stock close on 12/31/17 ($62.14 now): $88.88
Amazon’s stock close on 12/31/17 ($749.87 now): $845

Apple stock close on 12/31/17: ($115.82 now): $88.88
Nasdaq final close on 12/31/17 (5,383 now): 5,924

What will be the hottest technology of 2017: CRISPR, voice everywhere, personalized genomics and every smarter robots.

What will be the most overhyped technology of 2017: Machine learning/machine intelligence – not because its unimportant but because it (has) become basic tablestakes.

What business area are you most excited to spend time on in 2017: I continue to believe we are very early on in the full transition of the enterprise to the cloud. Also, opportunities related to globalization (next billion coming online and entering the world economy), retraining and re-skilling initiatives aimed at those being displaced by automation, and the impact of renewable energy now being cheaper than fossil fuels.

Advice to startups for 2017:We’ve had a remarkably forgiving five to seven year run where so many ideas seemed to work, at least for a time. The next five years will require more fortitude, a focus on ‘hard tech’ and solving deeply rooted societal problems.

We’ve had a remarkably forgiving five to seven year run where so many ideas seemed to work, at least for a time. The next five years will require more fortitude, a focus on hard tech and solving deeply rooted societal problems.

Other bold predictions for 2017 in tech, politics, sports or anything else: Facebook will find a way to buy, or bury, Snapchat. Microsoft will buy either SAP or Salesforce to consolidate its position in the enterprise. Bezos will purchase Twitter and consolidate it with the Washington Post. This will be an up or out year for VR/AR where it will start to generate a market and live up to early expectations – or not. The Bay Area will see a marked (10%+) decline in startup activity relative to locations like Seattle, Portland, Austin, Boulder and LA due to the cost of real estate and housing – startups and their employees will be priced out of the geography. The NBA will announce a return to Seattle.

Tim Porter, partner at Madrona Venture Group

Number of IPOs in Washington state in 2017: 2

Madrona Managing Director Tim Porter.
Number of new investments your firm plans to make in 2017: 10-14, consistent with our pace of the last several years. We continue to see many compelling opportunities and exciting new Pacific Northwest companies being formed, and so we plan to continue an aggressive investment pace.

Google’s stock close on 12/31/17 ($771.82 now): $875

Microsoft’s stock close on 12/31/17 ($62.14 now): $67.50
Amazon’s stock close on 12/31/17 ($748.87 now): $914

Apple stock close on 12/31/17: ($115.82 now): $115

Nasdaq final close on 12/31/17 (5,383 now): 5,825

What will be the hottest technology of 2017: AI and machine learning will continue to be the hottest and most important technological wave, infusing most/all sectors of technology, as all applications become “intelligent applications” over time.

AI and machine learning will continue to be the hottest and most important technological wave.

What will be the most overhyped technology of 2017: Autonomous Cars. I think we are moving down the path towards truly autonomous self-driving cars faster than most anticipated just a few years ago, and we will definitely get there. We will see continued incremental innovation and capabilities demonstrated in 2017. However, we will also see players run into the reality of the many challenges around this technology. I and Madrona are long-term very bullish in this field, but the hype feels like it’s at a fever pitch versus what the industry can actually deliver this coming year.

What business area are you most excited to spend time on in 2017: I am extremely excited about enterprises continued move to cloud native computing, updating their architectures to a combination of cloud, containers and microservices. Within this, I think you will see the popularity of Kubernetes continue to increase (one of our drivers behind investing in Heptio).

Advice to startups for 2017: Be scrappy with cash, maniacally focus on your customers and prospects, raise money on reasonable terms when you have the opportunity to do so, be very detail-oriented measuring and understanding your unit economics, and then be aggressive scaling when you see favorable and repeatable unit economics for acquiring and retaining customers.

Other bold predictions for 2017 in tech, politics, sports or anything else: Private company M&A will increase. Mariners will make the World Series.

Loretta Little, managing director at WRF Capital*

Number of IPOs in Washington state in 2017: 2-3? Still probably low because there is a lot of private equity out there for solid companies. Perhaps Redfin and Adaptive Biotechnologies.

Loretta Little
Number of new investments your firm plans to make in 2017: Our investments are based on a fiscal year (July to June). We have made two new investments since July 2016. I expect, in calendar year 2017, we will make 2-4 more.

Google’s stock close on 12/31/17 ($771.82 now): $850

Microsoft’s stock close on 12/31/17 ($62.14 now): $70

Amazon’s stock close on 12/31/17 ($749.87 now): $850
Apple stock close on 12/31/17 ($115.82 now): $130

Nasdaq final close on 12/31/17 (5,383 now): Who would have predicted the market increases amid all the uncertainty? Will that change? 5,600.

What will be the hottest technology of 2017: Tech: virtual assistants & natural language processing. Biotech: CRISPR/Cas gene editing system

What will be the most overhyped technology of 2017: Tech-autonomous vehicles; Bio – I’m not going to pick a specific technology. What makes me crazy in the life sciences arena is when scientists publish a paper or report data at a conference and it gets hyped by others so members of the general public believe there is an actual product. This leads to unrealistic expectations and sometimes a distrust of science.

What business area are you most excited to spend time on in 2017: No specific area. I invest in early stage companies, so I am generally an optimist and try to track across the healthcare spectrum.

Advice to startups for 2017: Be able to concisely describe your business, your value proposition and your goals. Stay flexible and continually revisit your assumptions. Ask for input from a myriad of sources. You don’t need to agree, but you should always be listening.

Other bold predictions for 2017 in tech, politics, sports or anything else: These aren’t bold — I think they are pretty realistic — more vegetables, more VR, Viaduct vagaries and vocal voters.

*Loretta wanted to offer this caveat: “My focus is on life science/healthcare companies so my predictions on tech companies are based on general observation versus in depth industry knowledge. I noticed you didn’t ask about Seattle Genetics, Amgen or Cerner.”

Bill McAleer, partner at Voyager Capital

Number of IPOs in Washington state in 2017 (candidates): Two: Avalara, Payscale or Offerup

Bill McAleer
Number of new investments your firm plans to make in 2017: 4

Google’s stock close on 12/31/17 ($771.82 now): $825

Microsoft’s stock close on 12/31/17 ($62.14 now): $74

Amazon’s stock close on 12/31/17 ($749.87 now): $942

Apple stock close on 12/31/17 ($115.82 now): $126

Nasdaq final close on 12/31/17 (5,383 now): 5,680

What will be the hottest technology of 2017: Smart home applications; Text and chatbots emerge as a new channel for businesses to interact with customers

What will be the most overhyped technology of 2017: Self-driving cars; also VR (virtual reality) as widespread adoption (once again )will be slow.

What business area are you most excited to spend time on in 2017: Advanced analytics, AI and machine learning applications that optimize business processes and/or customer interactions;

Advice to startups for 2017: Go solve real customer problems, not a perceived market opportunity; once you have a customer, make them happy and find ways to offer them more. If you have to raise capital, do it early in 2017 before the cost and availability of capital is more constrained. And don’t judge success by how much money you have raised, the most effective form of funding is revenue from satisfied customers and partners.

If you have to raise capital, do it early in 2017 before the cost and availability of capital is more constrained.

Other bold predictions for 2017 in tech, politics, sports or anything else:

-Venture funding will get tighter and valuations will moderate; several unicorns will have financial issues buy the end of the year

-Interest rates will rise by 200 basis points and appreciation in the housing market will slow.

-F5 and Twitter get acquired.

-Rise of populism continues in Europe, threatening the EU.

-Seattle will settle on an arena option for basketball/hockey, with Chris Hansen leading the way to a deal.

-Seattle Rep musical, Come From Away, is a smash hit on Broadway.

-Seattle continues to thrive as a major U.S. tech hub

Molly Otter, chief investment officer at Lighter Capital

Number of IPOs in Washington state in 2017: 4

Molly Otter
Number of new investments your firm plans to make in 2017: Another record year for Lighter Capital. We will double our deals again and do 200 in 2017.

Google’s stock close on 12/31/17 ($771.82 now): $1,000

Microsoft’s stock close on 12/31/17 ($62.14 now): $95
Amazon’s stock close on 12/31/17 ($749.87 now): $1,200

Apple stock close on 12/31/17 ($115.82 now): $100

Nasdaq final close on 12/31/17 (5,383 now): 6,773

What will be the hottest technology of 2017: Techno-clothing like Seattle’s own Buki-Brand will become part of day-to-day wear.

What will be the most overhyped technology of 2017: Virtual reality. I think we are going to find out who the winners and losers are in the VR space in 2017, with a lot of VR companies running out of steam/money.

What business area are you most excited to spend time on in 2017: Continued use of big data to help reduce our cost of capital to our customers

Advice to startups for 2017: Have a plan for getting to break even (you don’t have to be on it but at least know how you would execute it)

Other bold predictions for 2017 in tech, politics, sports or anything else: Patriots win the Super Bowl (again)!

Source: http://ift.tt/2iXWpjL

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