What makes the year 2022 different from any other time in history is that today we have several big waves (trillion dollars) at the same time.
For startup founders, now is an extraordinary time. Pick a wave and ride it.
For most of my career in Silicon Valley there was a wave of opportunities every time.
First there was the semiconductor wave, then the personal computer wave, then the Internet, and then the mobile/social wave. Each of them lasted between 10 and 15 years and gave rise to many successful companies that became successful IPOs. And then we move on to the next wave.
What makes the year 2022 different from any other time in history is that today we have several big waves (trillion dollars) at the same time. I have never seen so many market opportunities for entrepreneurs and innovators.
We’re only halfway through the first month of the new year, but here’s a quick rundown of the biggest waves for 2022:
Web3 is the big wave that everyone is talking about. As Chris Dixon of a16z has written, the “ages of the web” can be roughly described as follows: web1 (1990-2005) was about community-governed decentralized protocols. web2 (2005-2020) was about centralized services run by large corporations (Google, Facebook, Amazon).
Web3 purportedly “combines the decentralized, community-governed spirit of Web1 with the advanced, modern functionality of Web2.”
Crypto people believe that web3 will be dedicated to earning and spending tokens; privacy folks believe that web3 will break the data stranglehold Google and Facebook have on us; maker economy folks think web3 will be Etsy heaven; and gamers believe that web3 will be MMO nirvana.
My opinion is that most of the hype about web3 is really a backlash against today’s tech giants: people hate Facebook and believe that web3 will deliver a more egalitarian new world order. I am skeptical. But in the meantime, if you want a really nerdy dive into web3 and distributed applications, I recommend this Moxie article.
The holy grail in enterprise software has always been to finally get to the point where enterprise software was so good that non-techies could create custom software applications.
There are some pretty good examples of this being a reality today, including Zapier (my favorite). Even Shopify can be considered a low-code platform (it wasn’t long ago that running an eCommerce store required a coding team; today, it doesn’t). The opportunities here are enormous, because all sectors want it.
If I were founding a startup today, this is an area I would take a serious look at.
Personal mobility (I don’t have my flying car yet)
Right now, all eyes are on Tesla and the rest of the auto industry is trying to catch up. Tesla’s market capitalization is insane (greater than the entire rest of the US auto market) and by all indications, Apple will be announcing something soon.
The fact that Porsche has sold more of its new electric vehicle in 2021 than the 911 is a good indicator of where consumer demand is.
Cars have gone from being complex machines with simple software to simple machines with complex software, and there are all kinds of business opportunities there.
I’m glad I’m not a legacy car company – I’d rather have a startup developing plug-in software for the next generation of electric vehicles.
Meanwhile, true autonomous driving seems more likely to become commonplace in commercial applications, not consumer ones (check out this autonomous tractor from John Deere).
Media and journalism
Earlier this month, The Athletic was bought for $550 million by the NYT. This seems to be a hopeful sign for the journalistic community. Quality journalism has suffered during the web age (clickbait! clickbait! clickbait!), and last year’s hype for Substack doesn’t seem to have sustained.
The Athletic launched 6 years ago in San Francisco as a subscription (no ads) publication that hired real journalists and delivered high-quality writing to those willing to pay for it.
Despite all the skeptics who said it was never going to work, they raised $139 million in five rounds and have a reasonably good start. The Information (also in SF) uses the same model with a more niche market and is apparently doing very well.
I am a fan of high-quality, long-form journalism, so I hope that 2022 brings new economic opportunities for quality journalism everywhere.
I am a crypto skeptic. I am very happy with my dollar. But the volume of venture capital money flowing into this sector right now is staggering.
It is clear that people much smarter than me see enormous opportunities in the future. In 2022, some of these crypto startups will have to start monetizing at levels that suggest they can live up to their sky-high valuations. Maybe.
Meanwhile, it is abundantly clear that the underlying technologies of the cryptocurrency world (Blockchain, NFT, smart contracts, distributed authority) have many real-world applications, from supply chain traceability to event ticket sales. For me, this is more imminent and more interesting.
When Airbnb launched, the big risk was whether people would feel comfortable sharing their homes. When Uber launched, the big risk was whether people would get into strangers’ cars. Both companies worked hard to develop trust mechanisms to overcome these objections and now we don’t think twice about taking an Uber to our Airbnb.
I think we will start to see new startups that take asset sharing to other use cases. Turo seems to be doing well as “Airbnb for car rentals” and now that the sharing model has been established I think we will see it appear in many other verticals in 2022.
Trying to predict social networks is a fool’s errand (especially at my age).
In 2021 we saw Clubhouse go from grossing $110 million as “the next big thing” to being a forgotten spot. The lesson with Clubhouse (I think) is that it’s much easier for existing social media platforms to add audio features than it is for a new entrant to develop the user scale needed to compete.
Many people will tell you today that the future of social media is the “metaverse”, but it is not very clear what exactly that is.
Remember that a few years ago marketers referred to the Internet as “Cyberspace”? That’s the way the Metaverse is used today – it’s just a fancy word for the future of the internet that includes audio, visual, AR, VR, and more. As for the specifics of what social media will look like in five years…. I do not know. ¯_(ツ)_/¯
One thing that is absolutely certain is that there has never been a better time to be a sole proprietorship. You can earn money driving for Uber, or renting your car on Turo, freelancing on Fiverr, or being a TikTok star.
Today I run a small business and my marketing department is HubSpot, my accounting department is Quickbooks, my programming assistant is Calendly, my photographer is Unsplash, and my webmaster is WP Engine. The microentrepreneur is one of the most outstanding trends of the 21st century, and there will be more and more opportunities to be one and/or to create tools for them.
All aspects of the capital markets are changing dramatically. Much of my personal money is managed by robots at Wealthfront and Betterment. I can invest in startups on Republic and I can lend money on Prosper and get a good return.
Traditional banks and other financial services companies are being disrupted around the world – it’s one of the most significant trends in economic history.
And, since I’m writing this post for entrepreneurs and innovators, it’s worth noting that early-stage startup funding is exploding right now. There is more money available for early-stage startups than at any other time in history, with more sources and structures than ever before.
There are plenty of other trends in 2022, of course; These are just a few that I’m paying attention to. Right now it’s crazy. It’s a great time to be alive, especially for entrepreneurs and innovators. Here’s to a great year for all of us.