
Interesting Tech Markets for 2019 - eladgil
http://blog.eladgil.com/2019/01/interesting-markets-2019-edition.html
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aaavl2821
Biopharma: neuroinflammation, next-gen genetically engineered microbe / cell /
gene therapies, gene therapy and cell therapy for neuro and autoimmune
disease, small molecules targeting genetically defined neuro, cardiovascular
and autoimmune disease, chemogenetics, programming languages for specific
parts of the bio stack

$17B invested in bio startups in 2018, very little of it by traditional tech
VCs

One $11B exit < 5 years from series a (Juno), one $9B exit ~4 years from
series a (avexis), one $8b mkt cap ipo, one $8b exit from ~5 year old company
to start 2019 (loxo), multiple smaller billion+ exits, ~50 vc backed IPOs

Several innovative companies launching their first drugs soon, potential to
become standalone commercial companies: sage, agios, alnylam, Ionis / akcea,
bluebird, ultragenyx, gw pharma

~~~
eladgil
Good point in terms of mentioning biopharma. I stayed tech focused in this
blog post but lots going on in bio.

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40acres
The one trend I'm sensing is that difficult human/technology problems that
were once thought of as 'solved' are now becoming hard again. Think of
microprocessors as a model, for years Moore's law was running smoothly and you
could set you watch on upgrading your PC at least once every 3 years.

The rate of improvement is slowing down as it becomes more capital intensive
to advance chips, all the while the demand for performant chips is increasing.
We will need another transistor level breakthrough to fuel the next 25 years
of microprocessor based improvement.

You can see this trend also with energy on a longer timescale: oil and coal is
the fuel that propelled the industrial revolution and human advancement for
the past 150 years. Climate change demands that new forms of energy take the
forefront: innovations in nuclear power and electricity transportation and
storage are needed.

If I were in an investor with a ton of cash I would look to past and explore
innovations and ideas around the industrial revolution and try to apply those
models to the next 50 years. I really do think we are approaching a similar
point in human history where there will need to be a large set of
fundamentally new discoveries to continue pushing us forward.

As an aside, I think "devsumer" is also a great area. Maybe I'm in a bubble,
but I can't think of a labor force that is producing as much global value (in
agreed upon terms) as software developers, creating tools for this labor force
is going to continue to be big business.

~~~
jp555
Technological progress has always been a series of overlapping S-curves. We
all think it’s new when we notice the pattern, but it’s been going on forever.

The pace of aviation tech progress in the early half of the 20th century had
most believing everyone would be flying hypersonic by now, but then the tech
flattened out as it approved its asymptote.

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_sword
Much of this seems to be outdated, like someone at the end of 2016 looking
towards 2017 trends. Devsumer makes sense still. Devops more generally is
probably a better market to highlight especially as organizations try and
tackle security concerns with cloud deployment models.

~~~
eladgil
I agree there may be some hindsight bias. At the beginning of this blog post I
call it out as well:

"Sometimes this creates a very backwards looking view, as the most obvious
signals are in companies that have been working well for a few years and the
trend is really over."

I do think DevOps is an exciting market with a lot going on. (I am an investor
in GitLab, PagerDuty, and other related companies)...

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jsherwani
Fascinating read. I never thought of Devsumer as a category until now. It
explains the recent spike in interest in this space:

* Slack acquired Missions

* Trello acquired Butler

* GitHub launched Actions

* Zapier’s success ($35m ARR)

* The ridiculous numbers of Zapier clones out there

~~~
lwb
Not to mention Apple's Shortcuts -- haven't used it but it seems to be in the
same vein

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hackathonguy
I'd love to hear more about perceived opportunities in legal tech. For some
reason, the legal industry seems very averse to change, but I'm sure that's
not always going to be the case. (Lawyer here).

~~~
xxpor
First job of legal tech: convince the Judicial Conference to make PACER free
and not terrible.

~~~
kjhughes
Hopefully this pending legislation will pass:

H.R.6714 - Electronic Court Records Reform Act of 2018

[https://www.congress.gov/bill/115th-congress/house-
bill/6714](https://www.congress.gov/bill/115th-congress/house-bill/6714)

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strgrd
"I am still quite bullish that a basked of cryptocurrencies will be worth in
the trillions within the next 10 years. The primary short term driver for
crypto value with be the generational replacement of gold as a store-of-value
for a specific subset of the population. The longer term drivers of crypto
value will be new forms of programable money and on-chain securities."

What subset of the population is going to replace gold with crypto? Because it
won't be the entire generation burned by ICO scams and bullish investment into
whitepapers they don't understand.

~~~
eladgil
Thanks for the comment - My hypothesis is that people growing up today in
their 20s and 30s who would have normally bought gold in their 40s and 50s
will buy crypto instead. So it will be a generational shift versus a
replacement for existing older gold holders. (Could be wrong of course).

~~~
mattnewton
I don’t buy it - gold has a natural floor, for one thing. I can sell it to
make pretty earrings or fancy computer cables. The risk of it losing all its
value is basically the risk that we will move to a post-scarcity Star Trek
style society with matter replicators. Crypto.. not so much.

~~~
gfodor
Why does this floor influence your choice to purchase it over some other
commodity to store value (crypto or otherwise?) What do you think that floor
even is? (My working assumption right now is gold could lose 99.9% of its
value if it was priced based upon it's utility as a metal and not as a
culturally agreed upon store of capital.)

~~~
sf_rob
I would think that most people buy gold as a safe-haven investment, so in this
case its floor and/or non-correlation would be very important.

~~~
nostrademons
So your logic is that "people buy gold because other people believe it's a
safe investment"? That same logic applies to crypto - if people stop believing
that gold is a good investment and start believing that crypto is a good
investment, gold will cease to be a good investment and crypto will become a
good investment.

I think gfodor is asking something more along the lines with "What can you do
with gold that you cannot do with anything else you can buy?" There _are_
valid answers to that - gold is a catalyst in several chemical reactions that
won't work with any other metal, it's corrosion resistant, it's shiny, it's a
very good conductor that's quite malleable. But I'm with him in surmising that
if people only used gold for its metallurgical properties, absent any
historical sentimental attachment, the price would drop 99.9%. Gold is
actually quite abundant; 190kt have been mined so far [1], most of which is
either locked up in jewelry or being hoarded as an investment, so if people
ceased to believe it was valuable there'd be a very large oversupply for the
few real industrial uses.

[1] [https://www.gold.org/about-gold/gold-supply/gold-
mining/how-...](https://www.gold.org/about-gold/gold-supply/gold-mining/how-
much-gold)

~~~
mattnewton
That’s still far more uses than if people think a particular coin has lost its
value. When thinking about a store of value for loss-averse people, the
intrinsically useful, always-been-valuable mineral I can hold in my hand seems
like a psychological winner over numbers in a blockchain that require an
industrial society with the blockchain to keep churning. My take was that
people were speculating in bitcoin to get rich, not to weather government
collapse.

~~~
wbl
Iron is much more useful. It also requires more energy to extract.

~~~
kazen44
iron is far more abundant though.

~~~
nostrademons
The price of a commodity depends more on the energy, labor, and technology
required to extract it and consequent market power of the main producers than
on its abundance in the earth's crust. Otherwise strontium ($1000/kg, 360 ppm
in crust) would be a lot cheaper than tin ($16/kg, 2.2 ppm).

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tehjoker
Ah defense. It's just common sense that we should pour money into the
military. We're just out to make money, there's definitely not an entire
political viewpoint entangled in this "market opportunity". Those crazy
radicals that are against killing pointlessly for imperial gains don't
understand the real world. In the real world, we need the military to make the
world safe for capital. WW1 was a smashing success, as were Vietnam,
Afghanistan, and Iraq, and all extremely clearly benefited the working class
and made zero money for industrialists. If anything, these wars were entirely
unselfish in nature. Wouldn't Saddam still have WND if not for the pride and
strength of our armed services and the weapons manufacturers, energy industry,
and other geopolitical factors?

Fwiw, they're probably right. Maybe we will see more startups enter into this
ripe "opportunity" to open the gates of hell and unleash the forces of greed
and meyham.

~~~
rndmize
Use of force is a separate problem from the development of weapons. I don't
really have a problem with startups doing weapons development - someone is
going to do it, and I have a hard time seeing how the world would be better if
China or Russia took the lead on this.

~~~
r00fus
> someone is going to do it

You could use that excuse for almost anything morally repugnant.

~~~
ABCLAW
Sure, but when it comes to power, you can't wish away its existence.

Someone will have it.

So how do you best mitigate the bad effects it can have? Do you let an entity
which does not align with your interests have it? Or do you maintain it and
work to iteratively improve your exercise of it?

The effect of wishing away power instead of grappling with it and bending it
to justice is one of the central reason why many revolutions and movements
have failed.

~~~
andai
Non US Citizen here (haven't even visited yet), and pretty anti-military. But
out of available options, I would definitely prefer the USA have the military
upper hand.

I suppose that means, I could do my part to keep it that way, by investing in
US defense contractors. (Have been looking for investment opportunities.)
Something to think about.

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fhood
"5 core markets (Devsumer, Real Estate, AI hardware, Transportation and
Logistics, Crypto) and 2 emerging ones (Legal, Defense)"

Devsumer? For sure. Simplifying dev work seems like an area with pretty much
eternal growth potential. But I find it hard to get excited about many of the
others.

Interacting with the government (defense) still seems to take buckets of
money, and there are already large companies that do software in that space,
even if their names don't come up much.

It will be a while before people look a crypto as anything other than a sick
joke I suspect.

I kinda thought that the software+real-estate process had a whole lot of
established players, but I could easily just be ignorant of some of the growth
areas.

~~~
alexgmcm
>I kinda thought that the software+real-estate process had a whole lot of
established players, but I could easily just be ignorant of some of the growth
areas.

In my city in Spain letting agents still charge 10% of the annual rent as a
fee when they do little more than print out a pre-written contract and hand
you the keys.

Apparently it is common in Italy too.

This seems like an area ripe for disruption.

~~~
thatoneuser
In the US real estate agents do similar. You pay them many thousands of
dollars to parade people through the home and pressure you to compromise on
your listing price so they can close easier. In my experience, the agents
usually can’t answer any basic questions about the home anyway.

I’ve believed this industry has some tech coming it’s way for a while now.
Would have loved to jumped on it early but it’s also one of those industries
where you’d need an established “in” to make headway (i assume).

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dustingetz
"taking a SQL database or excel spreadsheet and turning it into an app
platform"

A key insight here is that SQL is too complicated for this to ever work, and
also the trend towards functional programming (React.js, Scala etc) – see
[http://www.hyperfiddle.net/](http://www.hyperfiddle.net/) for what you get
when you replace SQL with a simpler database! (We're seeking investment)

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lordnacho
I'm not sure about that "Devsumer" section. IFTTT / Zapier and those are not
replacing Accenture as far as I can tell.

The thing that makes Accenture a viable business is they can sell large
projects to large entities. Things that people generally do not reckon they
can fix on their own, like government health websites. There's no way to knit
that together with just some common APIs. Yes, ironically Accenture can't
either, but the point is they make money on convincing people they can.

The thing about people getting more dev-savvy I don't buy either. Yes, people
can glue a few bits together now, but most people still suck at anything
beyond simple automation. If you want evidence of this, look at Excel based
jobs. Pretty much all of them can be automated in Excel itself, and every time
someone tries it, they create an awful mess.

So yeah we'll now have a world of little Rube Goldberg machines of everyone's
making, but I don't see them replacing any kind of large scale project. They
can't really do it technically, and they don't seem like they will replace the
incumbent salespeople either.

~~~
robla
It seems to me that tools for creating large scale projects is a big
opportunity. Not everyone who creates a "little Rube Goldberg machine" is a
hopeless idiot who is pleased with their creation. Some of them will aspire to
create bigger, better machines, and will prefer to spend their time trying to
build them instead of setting up a meeting with an incumbent salesperson.

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rhacker
AI + Defense technology companies will EXPLODE in the coming years. In the
next 10 years I'm sure we'll be seeing police and military application of un-
man-controlled, (like toy style) drones that simply, find out who is around
where and what time. These things don't really even need any actionable
targets, just general surveillance. They will get around the law by stating
they are just capturing metadata - name, location, time, etc..

Drone tech will improve drastically too, bolstering the consumer space with
standardized batteries and self-battery replacement towers.

Not saying this is a good thing, but saying it will happen.

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gcb0
lol. every generation will redo "forms as software". airtable is a $1bi bet
that people will finally be pleased with Clipper'86 auto-form desiger (or
whatever that thing was called). Hint: nope.

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Beefin
Ctrl + F "Healthcare" .. Hmm.

Looks like your 2015 "top markets" post the top one was "Genomics", what
happened? Did it sizzle? Is it no longer a top contender prospect?

~~~
eladgil
For 2015 I listed out: "Gold markets" -Big data (with emphasis on things like
Cloudera (~$3B co), Mesosphere) -SaaS with an emphasis on APIs and Dev Tools
-Genomics

And then a set of markets I thought would be smaller or binary. Full post
here: [http://blog.eladgil.com/2015/01/hot-markets-
for-2015.html](http://blog.eladgil.com/2015/01/hot-markets-for-2015.html)

For genomics in particular, Illumina is now a $40 billion company while Exact
Sciences ($9B), Invitae ($1 billion), 23andMe (a few billion) and Ancestry (a
few billion) are all in the market too.

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beauzero
...on the real estate side take a look at CoStar. Little known, commercial
real estate company, 12B+ and has a monopoly. Very smart people and they don't
get much turn over. They will make smart acquisitions.

~~~
daheza
Used to work here, and yea they definitely know they are a monopoly. Acquiring
apartments.com with all their commercial real estate data was really smart.
Their tech department was too corporate for me though.

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banachtarski
Agreed on some of it. Crypto though is the glaring aspect I disagree with
completely (cue people likening it to the internet and the dot com boom
instead of tulips with a serial number).

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jacknews
IMHO, Missing from the list is software defined networking and telco "digital
transformation" in general. ISPs etc are gradually moving to an automated
self-serve world.

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rs86
This is ridiculously full of unfounded statements, naivety and unsound
reasoning

