Technology: the great equaliser. It can empower so many players in an industry, from buyers and sellers to suppliers and competitors. It can cheapen infrastructure, and create new channels of distribution (think the internet and ecommerce). Technology has the power to change an industry’s structure, which can also lower its profitability (such as the internet and ecommerce), but it also has the ability to open up new markets across all industries. If we look at say a five to 15 year horizon, new or improved technologies will create market opportunities for startups to tap into across the board. As these markets grow, there will be a need for new products and services to fulfil new customer needs. In short, we will need more business ideas.
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Let’s take a look at three technologies that are already having an impact in developed economies, that are and will open up new market opportunities for startups from emerging economies.
We’re already seeing strong competition, and money, springing up in the 3D printing space. At first it was just MakerBot, before competitors entered the arena, like the FORM 1. Now a quick search on Kickstarter for “3D printer” shows up four active projects, of which three have achieved 144% of their funding or higher with days to spare. The demand is there, and not just in the consumer space. 3D printing applications are also prevalent in industrial and manufacturing sectors such as motor vehicles, medicine, and aerospace, as is evident in this TED talk by designer Bastian Schaefer about how 3D printing could shape the future of the jumbo jet.
According to research by Dr Wendy Kneissl on IDTechEx, the 3D printing market will be worth US$4-billion by 2025.
MakerBot Industries was acquired in June this year by Stratasys Inc. for a pretty impressive US$403-million (based on the share value of Statasys). MakerBot now operates as a Statasys subsidiary, and recently partnered with Microsoft.
As materials get cheaper — specifically the liquid resin used in many 3D printing applications — and as software is optimised and simplified, more complicated designs will be more easily available to either consumers or suppliers. 3D printing might not obliterate existing manufacturing techniques, but it will be integrated into them, creating huge opportunities for startups in those sectors too.
IBM VC Martin Kelly stated at the Grindstone launch day, via video conference, that overseas investors are not talking about mobile so much any more. It’s all about Big Data right now. Web browsers, social media and blogging platforms are aplenty, collecting vast amounts of data each and every second from geo-location to IP addresses, to favourite hobbies. This data has to be stored somewhere and, of course, used for
holistic advertising means.
How to get the most out of data, and how to target specific goals with actionable results will be important for companies in the future. As Michael Ossendrijver of DQ&A stated in his recent chat with Michelle Atagana, computers are going to take over. There is a massive opportunity for startups to get involved, if not with the storage of data (we’ll leave that to the Amazons and Googles of the world), then at least with the smart, actionable applications of that data. And hey, maybe it doesn’t all need to be advertising-driven right?
According to Goldman Sachs’ report The Search for Creative Destruction, the Big Data market was valued at US$11-billion in 2012, with a 32% compound annual growth rate projected for the next five years.
Gred Dunham, of Goldman Sachs breaks down the markets. The infrastructure market is worth US$3.1-billion at a 43% compound annual growth rate for the next five years; US$2-billion in software at 32% compound annual growth rate; and US$3.1-billion in services also at 32% compound annual growth rate.
Online streaming is the unavoidable evolution for entertainment consumption. The ease and convenience of steaming is too apparent for the consumers of content to ignore, so much so that they’ll often rather pirate a movie, TV show or song rather than pay for it legally, because pirating is 99.9% of the time the faster and easier option. It’s about the barriers between a consumer and the content they wish to enjoy.
What a lot of early players in the space have done is put regional locks on content, such as with Netflix or Hulu. However this barrier might have to be broken down too one day, or we’ll simply need more content providers (streaming platforms) in more regions around the world. Either way there is an opportunity for startups to operate in the space.
The convergence of home-entertainment technologies (TVs, sound systems etc), and the internet have made online streaming the future. Content producers, and content distributors need to realise this rather than fight it. Legally acquiring the rights to content, and setting up the necessary infrastructure (hosting, UX), is a challenge to streaming startups the world over. But as mobile and internet penetration increases across emerging market regions, there will be more ways to create and distribute the content people so desperately want.
Streaming is killing downloading too. According to the BBC, music streaming revenues were up 40% globally in 2012, with subscription-streaming services like Spotify worth just under 9-million pounds, in just the first three months of the year.
If you look at the trend of companies like Netflix creating their own shows like House of Cards, it’s probably only a matter of time before a service like iROKOtv starts its own show, or iROKING launches as a music label.