Tech Innovations That Are Creating New Opportunity

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There is a common expression in tech entrepreneurship – do things that weren’t possible 3 years ago.   The reason for this is the accelerated innovation and thus the accelerated commodization of technology.  A product might go from ground-breaking and unique to absolutely commodity in 10 years or less.  If you accept that, then you must assume competition starts spiking by around year 5 and your ability to to build a bran and break through the noise, will be diminished thereafter.  You also will have less than half the window remaining to capitalize on your investment.  So if you get started around year 3, then you’ve at least got momentum and have built a brand before peak competition is reached.

So that said, what are a few innovations that we could possibly leverage that only only 3 years old, as of this writing.

1. Cheap bandwidth – It use to be that hosting accounts metered your account and limited you to 100s of megabits per month.  Now you can get unmetered pipes (as much as 100 mbps) for a mere $100 per month. Imagine how that might pave the way for streaming and online storage.

2. The Cloud – Everyone knows about the cloud and how this is changing business models such as software which is changing to a software as a service model (SaaS), in which you pay for the service per month, instead of buying it up-front.  Remote sharing of data is now easier than ever too.  What impact might this have?  Remote location, remote collaboration, and better use of corporate capital/cashflow come to mind.

3. Smart phones – Perhaps the single biggest impact of the smart phone revolution has been the GEO-intelligent ‘apps’.  Now you can find anything, anywhere, anytime – relative to where you are.  Imagine the future impact of this upon advertising and device intelligence.

4. Social graph – Facebook as proposed an open social graph which is perhaps the first and most ambitious application of the semantic web. Their goal is to tie together all of your interactions, comments, locations etc, into one single usable data stream.  This is both scary and full of possibility; especially when combining it with GeoIP smart phones.

5. SaaS Business Model – I mentioned this one above but ‘cloud computing’ has given rise to an entirely new software licensing model in which the use pays per month rather than an up-front fee.  This is innovative from a financing perspective when you consider how cash-strapped many startups and small businesses are.  But more interestingly, many SaaS companies are beginning to position themselves as hybrid *services* companies that automate a service for their customers; not simply virtual product vendors. That’s a major philosophy change in what software businesses are, and a huge benefit for small business.  This is likely the beginning of the adoption of  automation tools by small businesses en masse.

6. Tech Startup Incubators (Y Combinator) – Mark Schuster made an interesting point recently about how massively much less capital is now required for a startup and how this is driving the exponential rise in small business startups. We went from millions of required capital (hardware, software) in the late 1990s, to $10,000s, or even $5,000 in some cases now.  That is the lowest cost in history to start a small business, which is good seeing how high unemployment currently is!   It will be interesting to see how those two converging trends shape the future.  But layer on top of that all of these startup incubators now such as YCombinator, TechStars, The Foundry, Founders Institute, etc – and it is enabling young entrepreneurs to get access to capital and mentorship like never before!  Actually, for me considering startup of a small business, I find this to be a real concern frankly; an explosion of competition!

7. Information Overload – Google has succeeded in indexing billions of records and making them easily accessible to the masses.  Search engines are not new, but having ready access to all this data any time and from anywhere (smart phones) and taken for granted even by high schoolers now, should surely have some near-term future impact. I personally believe that this commoditization and saturation of data is what will drive the coming Semantic Web movement.  When documents are properly and semantically tagged, we will enable software and appliances to consume the data automatically and this will automate much of our lives.  So this secondary effect of search and information innovation I think will give way to yet an even bigger *applied* impact.

8. AdSense is Saturated – I hear there are over 400,000 websites joining the Google AdSense network every month now.  And that gave way to the explosion of ‘junk’ content and networks that creative junk content on massive scale, that Google has recently been trying to defeat with its Panda update (aka “Farmer”).  I think this business model of creating massive content to generate ad revenue is at a near-term end. But that creates a vacuum – what is it?  All those site owners will be looking for a solution.

9. Interest in Optimization (CRO/LPO) – Starting in 2006 it seemed like webmasters all woke up to the power of SEO at the same time.  A huge new consulting niche was born overnight.  In 2002 an explosion of PPC advertising was born and it took 3-4 years thereafter, for ad cost to catch up with their value.  Now we’re in a mature market for both of these ‘easy money’ search advertising options.  The free organic traffic people are now binging on Social media as a sort of SEO 2.0, and meanwhile PPC is finally discovering landing page and conversion optimization by which they can dramatically increase their ROI by improving how their site intakes visitors, creating a sort of Renaissance for them too.  The consulting world seems ripe for both Social and Conversion Optimization at the moment.

As I look around, I see plenty of changes and opportunities but ironically I am a bit underwhelmed by the opportunity.  I feel like we are in the remnant phase of some pretty massive innovation from 5 or 6 years ago. What I’m seeing now are mostly secondary effects of innovation that first occurred a few years ago. I recall there was a lull in innovation that seemed to occur in 2000-2003 and it feels similar to then, to me.  I wonder if this is a natural cycle and we’re in the lull just before the next major innovation opportunity?  Mark Schuster recently suggested we’re on the precipice of the Internet television revolution for example.  Now THAT could be interesting.