Big Trends for 2019

For the last 2 years ARK Invest has put out an interesting look ahead for the year focused on what they see as the big technology trends. You can find the latest for 2019 here. Some points I found particularly interesting this year are:

  • This has been apparent for several years but barely talked about in the media, but the cost of lithium ion batteries is dropping rapidly, allowing a transformation in how we consume energy and our electrical grid systems. Due to this they forecast electric vehicles will be cheaper by early 2020s than any comparable internal combustion engine vehicle.

  • They might be cherry picking their data but they do make the case that bitcoin and crypto demand is accelerating in emerging markets with unstable currencies.

  • The rise of digital wallet apps in the US grabbing market share, just like they’ve long been dominant in China with WeChat. They specifically call out Venmo and Square as evolving into the center of a consumers financial life.

Joymode

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Overview

Joymode is a subscription rental experience startup. They rent products to their members that are used infrequently, mostly based around experiences or utility. For example, one of their “bundles” is for camping where they deliver all the equipment you need for camping for a weekend.  Another is for apartment cleaning where they provide vacuums and more specialized cleaning equipment most people don't own themselves.

The benefit to the consumer is these are highly curated short-term rentals so members don’t have to make permanent purchases of items they will use infrequently. Joymode does all the curation for the experience as well as does free delivery and pickup of bundles.

Joymode business model currently is its member’s pay an annual membership fee and then a rental fee for each bundle they use.

The team is based in Los Angeles, California.

Why I like Them

I like Joymode for a few reasons:

  • Subscription membership model makes customers sticky once they sign up, with heavy loyalty incentives to be a long-term member.

  • Joymode knows its Millennial customer base. They are solving a number of well-documented pain points for younger generations including low disposable income as well as the trend of valuing experiences over ownership. It also dovetails nicely into the fact that urban consumers tend to have smaller living spaces and won’t need to store any of these products.

  • Strong cost saving to the consumer as Joymode’s bundles are less than 10% of what it would cost to purchase the products.

  • Good unit economics with Joymode publicly disclosing ~50% margins on a per reservation basis.

  • Interesting potential growth avenues for the company, especially for Joymode to work with brands to promote their specific products into bundles with Joymode’s young consumer base.

  • Low customer acquisition costs as most customers are via word of mouth as the experiences are naturally viral due to word of mouth marketing.

Joymode has the opportunity to be the Costco of the 21st century to today’s younger generations.

Interesting Markets in 2019

Serial entrepreneur and investor Elad Gil put out an interesting post a few weeks ago with sectors he thought would see noticeable growth in 2019. I like that it is not the standard list oft repeated by technology journals and is based off a bottoms up view of deals he is seeing. You can see the original post here.

Of the 7 markets he lays out the Devsumer (where consumers start doing developer lite tasks on their own) is the one that jumped out at me as extremely unique and interesting thesis. I’m not so sure that we will see the majority of the population doing basic coding tasks and automation to help them in their day to day job/lives but its certainly a cool thought.

AI and Cybersecurity

The AI Now Institute recently released their annual review looking at AI and security. Their annual report for 2018 can be seen here. The main theme this year is that governments need to start regulating AI yesterday, especially the use of facial recognition technologies. The institute believes that the biggest near term risk is the use of AI in surveillance technologies and automated decision making, especially by the state on their people.

The report is a fascinating read on an area of AI most people haven’t thought about so take a look.

Some Predictions for 2019

With the end of the year 2018 it’s time for some 2019 predictions.

  • Crypto Goes into Hibernation - Crypto and blockchain technology more widely will undergo a winter with most investors and the mainstream forgetting about the technology. Developers will continue working on it and with the hype gone we will finally start seeing some very useful applications emerge. Ethereum is my bet for the big winner long term here since it seems to have the biggest traction with developers who will be free to experiment outside the public eye.

  • Amazon’s march to world domination continues - I’m still betting on Amazon wherever they go. Even if there is a stock market crash Amazon will emerge stronger than ever and will climb its way back to $1T+ market cap in the coming years. The prescient move to open a 2nd/3rd HQ right outside DC is Bezos playing the long game and looking to neutralize the only real threat he had, government regulation and an Amazon break up.

  • Augmented Reality (AR) - I think this year is when Apple will begin revealing more of its vision and what is been working on around AR. A setup year but one that will herald interesting things to come with AR. My guess is Apple will actually be leading the way into AR and mainstream adoption, not startups unfortunately.

  • Softbank and the Vision Fund - I doubt the recent Saudi Arabia issues will even really slow the Vision Fund down and we will continue to see large investments at jaw dropping valuations.

  • Self Driving Vehicles Rolling out to Consumers - Finally, consumers will have access to on demand self-driving vehicles with Waymo and others beginning live roll outs in select locations. This is the most exciting thing happening in 2019!

  • Tesla - As I write this things seem to be going extremely well with the company having reported a profit in the most recent quarter. However, I don’t think it will be smooth sailing in 2019 for the company, with large financial issues they’ve temporarily swept under the rug hitting them. If the stock market crashes, the cheap capital that has kept Tesla going will vanish leaving them in hot water again.

  • Facebook - Scandal after scandal has hit the company. My bold prediction is we see a large senior leadership exodus, with potentially Sheryl Sandberg moving on to become CEO of another company (Disney?).

Onward to 2019!