Technology Trends: 10 Areas of Innovation to Watch for 2012

One of the best things any investor can do is to pull back from the day to day of getting pitches and think about high level trends.  What areas are going to change?  What areas need to be disrupted?  What types of things might happen in 2012, as opposed to needing another 3-5 years to come to fruition.

The thing you need to be careful of, however, is only paying attention to big trends, because you never know when you're thinking big data and you miss the awesome direct sales jewelry company.

That aside, here are ten areas I think you'll see some interesting things happening in 2012...

(PS.. .there are various companies in this article I have or have had business involvements with.  Reader beware.)

Open Government

Election years tend to be good for technology diffusion.  2004 gave us widespread blogging and Meetups, and 2008 showed how the web could be a community organizing and fundraising tool.  We're entering another election year, and recent history has given us unprecedented access to information and interaction with our elected representatives.  Companies like Publicstuff and Votizen  that help us connect with our elected officials and local governments are going to get a lot of dollars and attention this year.

Calendaring

I've seen about a dozen companies in the last year trying to help me figure out what to do with my time and how to collaborate with my friends around events.  Most don't really seem to understand how mainstream people interact with each other, but some are getting closer and closer to something interesting.  Time is money and there are too many people wanting me to spend a lot of money on better ways for me to spend my time for their not to be better channels for this, because I still can't figure out what to do with myself this weekend.

Brooklyn

New York has quickly become one of the best places in the world to start a company, but if you look at demographics, Brooklyn is a unique area whose innovator and maker population outnumbers most other cities in the country.  It has the diversity and cheaper rent necessary for great creative potential and I think you're going to see a lot of development next year of Brooklyn as its own unique, but complimentary community of innovation.  It feels a lot like NYC as a whole did back in 2005--a handful of relatively disconnected folks, a few marquee companies and a whole lot of pent up interest in doing something impactful in the local community.

Android Backlash

I've never been an Apple fanboy.  I do have an iPad, but I've been seriously excited about the potential for Android for quite a while now.  There are a lot of things I love about my Android phone--like the easy integration into the rest of my Google life.  With the release of iCloud, that's less of an advantage now than it used to be.  Sure, some of the Android devices are beautiful, but if they become obsolete in a year from a software perspective in less than a year, this is going to be a serious problem.  Open and free seems nice until stuff stops working.  I've been experiencing a lot of crashing on my Galaxy S lately, and the number of running programs that I didn't turn on is getting ridiculous--slowing my memory to a crawl.  Apple simply would never allow this and the fact that I'm seriously considering dropping my Android phone even before my contract is up makes me think the little green robot's days are numbered unless Google takes some seriously bold action to fix this. 

Mobile Payment Disappointment

Square has done terrifically well, but it's largely based on the existing credit card system of payment we already have.  I take a piece of plastic out of my wallet, and I can pay for stuff.  Adding a phone to that mix as the person paying seeing unnecessarily complicated, especially given the battery life issue.  The idea that I might not be able to pay for something if my phone isn't charged is a nightmare--and until we get fuel cells or some other kind of guaranteed long life power, I don't see relying on my phone as a way to pay for stuff for a long time.  Credit cards "just work" and peer to peer transactions just aren't big enough to bootstrap a network.  What will Facebook do to things?  Wesabe taught us that social doesn't necessarily make managing finances online more appealing--and given Facebook's propensity to change privacy settings, I'm not sure a lot of people are going to want to manage their money on Facebook. 

What's the business model?

I think you'll see a lot of focus on companies like Tumblr, Twitter, Foursquare and Pinterest--services that haven't really established a business model yet to justify their sky high valuations.  They clearly have user interest, but these companies will have a limited window before later stage investors start demanding to see some proof that these companies can be sustainable over the long run at the kind of prices that were paid.  I don't think early stage companies need to prove a business upfront, but when you're valued at over a billion dollars, it would be nice to see how one could draw a line from A to B and figure out how to make the numbers work using reasonable assumptions.  I hope they can get there, because it would be a major boon to the rest of the market for them to justify their lofty valuations and hopefully the valuations of exits and IPOs.

Design

Hopefully this becomes the year that most of the startup teams you see have not only a business person and a tech person, but also a designer--and you start to see people looking for "design co-founders".  Well designed services can be built more and more easily using off the shelf technology and outsourced development--if you know what you're building and why right off the bat--at least to start off with anyway.  There are a lot of good ideas that are held back by clunky interfaces or the lack of understanding of how and why people want to interact with a lot of these services to begin with.  With an influx of talented designers into startup communities, I think you'll see better, more effective launches and more useful services.

Curation

"You can't have everything--where would you put it?"  Steven Wright would love the trend towards picking out interesting, cool, amazing stuff from the universe of options, and pretty soon we're going to see a lot of "Fab.com for X" type efforts.  Some of them will be extremely effective, I'm sure, but, like the Groupon wave, I'm sure there will be a lot of niche businesses.  Let's hope they don't get overfunded, because they could become halfway decent cashflow businesses if run well.  I'm waiting for the "Fab.com for cyclists". 

More Accessible Innovation Resources for All

The effort to build diverse innovation communities has, thus far, been built off of movements that cause debate about root causes and who is to blame, while pointing fingers--alienating many who would otherwise be sympathetic to the higher level goals.  We're negatively focused on the problems of specific stakeholders (not enough X...) versus a more general and more positive message that we can all get behind--inclusion and accessibility.  Words matter, and there isn't anyone out there who doesn't believe that creativity feeds off diversity of ideas, something we can all get behind.  We can also get behind making the innovation community and its resources more accessible and available to *all* people--because we're not just short on engineers from underrepresented groups.  We're seriously short on engineers period--and we are in serious danger of falling behind the rest of the world permanently in the race to innovate.  I think you're going to see a major shift towards getting youth across the board interested in math and science, on accessible learning on demand, and the positive encouragement of innovation.  It will be a movement that picks up steam across a very diverse set of communities.  We'll be doing more making sure *everyone* gets the opportunity to create innovative change versus just campaigning for people who look like ourselves in our own various constituent groups. 

The Year of the Pivot

Last year we saw the success of some high profile companies who had changed what they were working on.  This year, we'll see that in spades--because there are a ton of overfunded companies out there that aren't getting traction on their initial ideas that will need to figure something out before the money runs dry.  If I were in the conference business...   I think "How to pivot successfully with your last few hundred grand" would sellout in a heartbeat.

The Race is Long

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