Jordan Cooper's Blog: startups, venture capital, etc…

My Predictions for 2012

Posted on December 11, 2011. Filed under: Uncategorized |

Here are some totally uninformed predictions for 2012. This cold weather and xmas vibe in NYC has me thinking in terms of random annual delineations:

1)   Facebook’s IPO will represent the top tick of the tech/venture cycle.  (It won’t be a precipitous decline after, but that will be the peak of this cycle) The early bubble prognosticators who have attempted to “call the bust” were a healthy 12-18 months early.  I would be a seller between now and then OR make sure you have the revenue/financing to make it through the 24 months after, because things are going to be nice and illiquid (or semi-liquid…like flan…or something like that).

2)   Twitter will try to go public shortly after Facebook.  They will try to get out and enjoy the stupid public market’s inability to discern between 2 “social media companies.”  Shareholders in Twitter will get rich.  Public market buyers who go long and hold will take a bath.

3)   The big boys are going to have their day.  As the Series A crunch materializes…and believe me…it is materializing…a swath of seed funded companies that aren’t “slap you in the face breaking out” will have to work very hard to get their follow on capital.  Many won’t.  Large venture funds, who will no longer be distracted by the now past window for late stage growth checks in scaled assets (Airbnb, Linkedin, Gilt, etc…), will return to their roots in Series A investments.  Bottom heavy firms like Bessemer and Bain Capital Ventures, who have the resources to comb through the noise of seed funded companies looking for A rounds are well positioned to find the diamonds in the rough.  Those funds will make some spectacular bets at spectacular prices.

4)   Foursquare is going to have a bananas year.  As someone who watches the space closer than most, I can honestly say they make all the right moves.  The decision making and vision within that company is not to be underestimated.  The geo-enabled ad curve and SMB/Merchant tech adoption curves are aligning perfectly.  If I could buy stock at current market valuation in any single company on the web, I’d put my $ here.

5)   Oracle is going to buy 10Gen (MongoDB) for more than $400M

6)   Commerce 2.0 is going to fall out of favor.  Venture $ will continue to chase the early and steep revenue curves but as multiple years of data on the early innovators emerges, it will show flattening curves and margin challenges.  Those that were “first” by vertical will exit and exit well.  All the rest will mature into unexciting semi-scaled assets incapable of raising B and C round $ to sustain.  See “e-commerce” in Wikipedia for analog.

7)   Data is the new content.  Content is data.  Kenny once taught me that there is a cycle of opportunity that shifts between distribution and creation of content.  Once content is created, innovation in distribution is where you get rich.  Once distribution is fully built out and commoditized, content creation to fill the new pipes is where you get rich (the two curves go back and forth).  If Data is the new content, we’ve been in a phase of massive creation for the past few years…it’s time to build out distribution…The distribution layer in the data ecosystem is going to be an epic market.  API infrastructure, new authentication paradigms, and the tracking of data’s movement across environments are going to be hotbeds for early stage innovation and investment.

If you think my predictions suck, step up with your own in the comments…

 

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