What’s Next in Tech – Macro Drivers

A few years ago I had the good fortune of getting to build and help lead an Advanced Technology Lab for a large consumer goods company. During that time I created something called the ‘Future Opportunity Framework’. The goal of the framework was to give the company the ability to “peak around corners” when it came to the future of technology… to create a practical toolkit to drive prioritized investments and action.

There were four main sections of content:

1. Macro Drivers – these were the big factors that were fundamental in helping to understand where things were headed. I’m going to share a handful of them in this post.
2. Models of Change – more of a sidebar, actually. Just an outline of the 6 major types of change (e.g. Linear, Asymptotic, Cyclic, etc.).
3. Technology Insights – this was the bulk of the content, a little more than 2 dozen insights that could be used as input into the process for ideation
4. Framework Process – a simple process of What, So What, Now What that could be used to leverage the content above to generate hypotheses, identify opportunities, and determine next next steps.

I’ll be sharing the models of change and some of the Technology Insights in future posts, but wanted to get some of the macro drivers out in order to reference them later. None of these should really be much of a surprise, these were some of the big things that were going on in the world that helped explain some of the changes we were seeing.

Here are 6 of the original 9 macro drivers from early 2015…  again, these should all be fairly obvious…

Increasing Number of Software Libraries & Open Source Projects

Everything is now an API. From accepting payments (Stripe) to incorporating Machine Intelligence (Mahout, DeepLearning4J, etc), developers can find software libraries & open source projects for just about anything. This isn’t just the surface stuff either, we’re seeing an explosion in the availability of software infrastructure & management code availability as well. A great example is when Netflix open sourced their Simian Army, an API to improve availability & reliability of the Netflix Service. Netflix is not alone in this, Leading tech companies are all donating leading edge software libraries to the open source community, including Google, Facebook, Twitter, and even Walmart Labs.

Decreasing Cost to Build & Launch

There are two main parts to this driver. First, as mentioned above, the very practical implication of the increasing availability of quality software libraries means that building a product has never been cheaper (or faster). Second, we’re seeing tremendous growth in cloud environments, like AWS (Amazon Web Services). Any developer in the world can now provision a load-balanced, highly available, fault tolerant, n-tier server environment with a few mouse clicks and only pay for the actual usage.

Shifting Needs & Sources of funding

This is a potential disruption disruption to Silicon Valley. Given 1 & 2 above, tech companies need less funding to get started. Startups no longer need to go to a VC and give away a boatload of equity when the company is pre-revenue or still in seed stage. It’s pretty easy and cheap to get pretty far, whereas the past required funding by a VC just to build out the basic concept of an idea. The other major part of this is the tremendous growth of Crowdfunding sites, like Kickstarter and Indiegogo: got an idea for a product? Post it on a crowdfunding site and let the community fund the idea to start. Although not every project on crowdfunding sites gets funded, and not all the projects are worthwhile, we have seen some major success stories – like Pebble and Oculus – that are providing evidence of the power of these platforms to rewrite the role of venture funding.

Increasing Interest & Investment in Machine Intelligence

It seems everyone is doing something with AI lately. Watson winning on Jeopardy, Facebook opened an AI Lab, Baidu opening an AI Lab (and hiring very senior talent away from Google), Google investing in AI companies at a rapid pace to build out its capabilities. Everyday it seems there is a new advancement made, software library released, or news story about it.

Maturing Hardware Possibilities & Capabilities

For years the only hardware on the market came from large, well established players because building hardware is hard, and expensive. That is really starting to change, rapidly. There are two main reasons this is happening: first, crowdfunding sites are enabling people to sell products to people before they’re even built, offsetting the cost component. The second is the rise of manufacturing capabilities, everything from low cost options in China to specialized firms that will help bring a hardware vision to life by providing experience & expertise to novice hardware companies. One great example of this is the home automation company Smart Things, which recently sold to Samsung, they started on Kickstarter and raised the funds to build out their hardware platform.

Increasing Technology Adoption

This might seem incongruent with the rest of the list, as the other items are focused more on the nuts & bolts of tech, whereas this one is more of a consumer lens. Why this matters is that people are adopting tech to handle more and more parts of their lives. It started with the web, now we’re all carrying really powerful smartphones and rely on them more and more. There is an increasing comfort people have using tech. This is a virtuous cycle that leads more people to start building tech products because the audience is growing and it is becoming cheaper & easier to do so.

What do you think? Any that you’d disagree with?