Disruption comes in many forms. Using new data in new ways is one of them.
But what of data about founders themselves?
In an interesting twist, Y Combinator – the U.S.’s top startup accelerator – has developed an intriguing set of data from the tens of thousands of applications it’s received from founders since 2008.
Predicting trends is tricky. (After all, if we knew what the future looked like, investing in the present would be a cinch, right?)
Facebook versus MySpace? It seems clear now, but it wasn’t 10 years ago.
Yahoo’s demise? Who could have seen this coming a decade ago?
Or eBay’s current search for new growth (following its split from PayPal last year)? That wasn’t on anybody’s crystal ball back in the day.
Which makes this chart so interesting…
Y Combinator applicants were asked who they saw as their main competitors. Over time, MySpace shows the steepest fall. But its decline was happening at the same time founders were increasingly dismissing it. In other words, not that predictive.
But the increasing number of founders who no longer felt threatened by eBay and Yahoo as early as 2008? That’s impressively predictive.
It’s possible Y Combinator has stumbled onto its own crystal ball here.
It makes sense…
Founders are passionate about their fields. They are the developers and discoverers of new technology. They like to solve problems. And they’re attuned to what established companies do well and not so well.
So let’s look at three industries and see what founders – taken collectively – are seeing and predicting…
First up is artificial intelligence. The chart below captures the various terms connoting AI. The colored lines all represent the same idea of artificial intelligence. They should not be viewed as one versus the other.
This chart pretty much confirms what I said last week…
“The next generation of startups – numbering in the thousands – will incorporate machine learning [and AI] into their products and services.”
I really don’t see this sharp incline flattening any time soon.
Our next chart looks at virtual and augmented reality.
(In case you’re unfamiliar, virtual reality creates a totally artificial environment. Augmented reality uses the existing environment and overlays new information on top of it.)
In 2010, startups were more fascinated with the possibilities of augmented reality than virtual reality. But starting in 2013, VR technology began capturing the imagination of founders. By 2015, VR had surpassed AR and, since then, interest has taken off.
We should be seeing a great deal more technological innovation in the VR segment than in AR.
Again, not that surprising to us. Last month, I sent a private memo to my Startup Investor members, telling them “the wait is over.”
Virtual reality is here. It’s going to make a big difference in our lives. 2016 will go down in history as the year that marked the beginning of commercialized VR technology. Much like mobile tech, VR tech should spawn a new generation of excitingand sustainable companies.
In light of the above chart, I’m sticking to my guns.
Our last chart from Y Combinator is on Slack…
Startup founders clearly see Slack as a difference maker. The platform integrates a chat system with tools for committing code, making payments, monitoring backups and more.
It has attracted hundreds of apps from other developers and startups. I first mentioned Slack’s “remarkable story” back in January 2015. Its ascent since then has been nothing short of astounding.
Slack may never reach the heights of Google and Facebook, but it’s on its way to creating a mini-universe of startups serving its own ecosystem.
Collective Conviction as a Predictive Tool
Equity crowdfunding is just five days away. In less than a week, you’ll have founders pitching you on their versions of the future.
You’ll experience their conviction firsthand. It’s almost intoxicating. You’ll have to be careful to keep your emotional distance.
Thing is, not all founders get the future right. Or get technology trends right. But collectively, it may be a different story.
Collectively, their conviction seems to ring truer. Founders’ increasing focus on artificial intelligence, VR and Slack apps doesn’t come as a huge surprise. It’s more a confirmation of trends we’ve already noticed (and discussed with you).
If anything, it shows that these three areas are coming on even stronger than expected.
Y Combinator has captured other rising trends you should check out. You can read the entire presentation right here for more insight on what the future may hold.
Invest early and well,
Founder, Early Investing