We know many of the challenges of creating innovation in today’s companies. But what is rarely paid attention to is what new start-ups are focused on – many of these new innovations will emerge and transform how we live, work and play – and change the playing field for existing companies and industries. Through scanning some of the leading venture capital (VC) firms’ portfolios, some interesting themes emerge.
For example, cloud-based enterprises are a clear winner for funding – not much of a surprise. From data optimization and storage, like Avere or Attic Labs, to cloud marketing and sales like Bloomreach or ClearSlide, to a time-machine for a company’s cloud infrastructure, Rubrik, the extent of new cloud-based companies is probably over twenty-five percent of VC activity. And, with more integration in cloud and enterprise applications, more and more predictive analytics and artificial intelligence (AI), such as TellApart for customer analytics, are being woven in for many of these new companies.
A related space is network security and cybersecurity. As security breaches like Equifax (143M at risk) unfortunately continue, security will likely be a constant theme for years. Companies like Awake, Lookout, and Arctic Wolf, have different security solutions.
Two of the fastest growing areas are mobile and personalized video. Affirmed, for example, is all about adding more intelligence to mobile data networks. Mobile user experiences at scale is what Mist is all about. HouseParty is a new group video chat company and Musical.ly (which I love) is all about creating new short videos with your favorite music. Eyeview, a personalized advertising technology, is helping to place video advertising more seamlessly.
An interesting space is “streamlining” many functions and tasks, such as financial services, customer service, even restaurant management. Affirm is a new financial services that is touting a new way of getting credit, right at the online point of sale. Companies like Blend (U.S.), Red Carpet and Fast Fox (India) are re-thinking the mortgage and real estate sector. Gladly touts its new ways to improve customer service (dearly needed), while Upserve is a tech tool for restaurant owners to better manage their operations. Streamlining is likely a long-term trend growth trend.
Two companies that caught my eye are in the talent management area. It’s one thing for LinkedIn to be a leader in the job and recruitment space, but it is quite another to have new software capabilities, like Reflektive, to help manage talent development internally. Bounty Jobs took a different direction in connecting employers with multiple job vendors to find the right candidates.
For retailing, a focus is on more personalized shopping. Like Amazon Prime sending you latest updates on your saved list, a new company, Personetics, enables banks to better analyze customer banking needs – and offer personalized solutions, even for retail. Other companies, like StitchFix and Dote, are becoming one-stop shopping channels with multiple retailers.
And, as video and more social interactivity continues to grow, more “experiential” experiences are emerging. Think of Facebook on speed, but also more sensory-based. Bema, for example, is an app that allows users to capture real moments around them – friends or even strangers – and send genuine reactions to your social networks. Medium brings together different ways to tell stories – from text, video, audio – across topics. Whisper takes this a step further: an anonymous social networking service to allow shared experiences, thoughts, feelings, even claiming emotional content. As more immersive experiences only grow online, it’s like an extension of the gaming world, where over 500 million users globally spend over 8 hours a day online!
These are just a few examples of what a few VCs are funding – and, given the challenges of new start-ups, 90% plus of these, sadly, will not succeed. But there are some insights:
- As more cloud development and sophistication continues writ large, more interesting applications, software development and predictive/AI options will unfold. But, with all the focus on the cloud, what is often missed: what happens if the cloud goes down?
- Integration of not only functions and tasks, but more integration of all kinds of databases will continue. Think of state and federal databases….then, think of all personal data (a bit scary).
- Combined video, text, audio – even virtual reality (VR) and augmented reality (AR) will be a next wave. With Apple just releasing its latest iPhone (X), it is curious that no VC funded VR/AR company showed up.
Finally, as an executive or manager in an existing company, there are some important strategy questions. Where are you with these themes or key innovation trends impacting you? Will it be easier to develop your own internal capabilities or are you already exploring partnerships with new start-ups? What are your competitors doing? Could scenario planning — thinking and exploring alternative futures — increase innovation within your firm? Raising the importance of innovation will allow increased opportunities – and minimize risks — across an entire enterprise.