We’ve all heard the general warning ringing in entrepreneurs’ ears. 9 out of 10 startups fail, and yet many continue to unheedingly brave choppy waters to realize the dream of startup utopia and some fortunate garage techies have even gone on to become giants in a fraction of time it took their larger, older competitor behemoths. We’ve seen the phenomenal growth spurt of tech companies like Google, Facebook, Twitter, Instagram, Airbnb, Uber and Paypal, just to name a few.
Brace yourselves as we’re going to see a great deal more of disruption in some of the following investment sweet-spots:
1. FinTech Is The New Golden Boy
Investments into FinTech startups quadrupled in 2013, leapfrogging from just over $3 billion to over $12 billion in 2014. Once upon a time, Thomas Watson of IBM predicted that our world would never need more than 5 computers, at once.
Riding on the tsunami of technology, FinTech may upend all our expectations of how money will be handled in the next generation, when society goes cashless and tasks once carried out with physical money, desktops, and human interaction become one-touch transactions handled swiftly and completely over digital interfaces.
If you look at how pervasive financial services are in every sphere of our lives, you’d see the opportunity for disruption is tremendous! Observe the rise of Estonia-based TransferWise and how they’re disrupting the global finance market by bypassing heavy bank fees with low cost peer-to-peer money transfers.
Traditional revenue streams banks and middle-men brokers have enjoyed monopolistic control over will face direct challenges and the threat of obsolense if they don’t adapt fast enough—as more FinTech entrepreneurs start questioning old and inefficient ways of doing things and investors flock into the space with backing.
2. Data Is Sexy
With easy access to analytics, intuitive decisions can now be strategically made based on logic, not just gut-feel. Today, apps and softwares that can generate actionable insights by mining terabytes of user data are gaining widespread adoption.
The oil of today, data equals better foot traffic, bigger sales numbers, and overall increased operational efficiency. More and more developers and entrepreneurs are seeing the potential of business intelligence, and attracting investors with the magnet of a significant and meaningful new revenue channel.
With shared APIs and business data made available to relevant business partners, useful marketing insights can now be drawn upon to develop new user acquisition strategies and innovate further. Any wonder why so many geeks found Star Trek’s super-logical mastermind Data hot? If Data isn’t sexy, what is?
3. Mobile-Ordering Or Booking Apps Are More Than Just Fads
From restaurants to shopping malls, personal errands and even flower gifting, mobile ordering apps are becoming a key transaction channel for fast and efficient service providers. Every other quick-service restaurant (QSR) these days are testing some type of mobile ordering capability right now.
Look at Starbucks, who recently launched its own mobile order-ahead feature and is now reportedly being used heavily among its loyal coffee fans. Taco Bell’s average order values are 20% higher in its mobile-order-ahead app than in its stores. Locally, home-grown mobile-booking app heroes like KFit, BeMalas, BloomThis, GrabCar, TableApp, OffPeak and EatCakeToday are making pre-ordering everything from yoga facilities to tempting chocolate salted caramel cakes easy, and helping users save time, petrol and money.
They’re also maximizing the benefits of mobile ordering by incentivizing customer usage through loyalty programs and perks. Honestly, why run around looking for that melt-in-your-mouth dessert on a hot day for a special occasion when you can resort to EatCakeToday? Makes you just want to order a cake today itself and get it on your doorstep moist and un-melted within 4 hours, max!
4. Banks Want Change
Desperation for change is a good thing. Stay hungry, Jobs once said. Don’t be a fool sitting on the comfy, drowsy lap of inaction. Traditional financial institutions are responding to the change around them by refraining from beating the crowd, and joining them instead! Be partners, not competitors.
According to BI Intelligence, more and more banks are partnering with agile FinTech startups who can focus their efforts on building great user experiences (their passion and forte) while banks work on overcoming the friction of heavy processes and having to go through level-upon-level of approvals within a strict legacy system. It’s a win-win situation. MOUs let banks try out the market first before buying into a product, rather than building it in-house themselves.
Entrepreneurs get to pilot test their innovations, scale and leverage on the bank’s massive established captive audience. In Malaysia, RHB Bank has partnered with TableApp to enable mobile payment transactions and more developments of the like are in the pipeline.
In the alternative lending industry, major banks like ING and JPMorgan Chase have partnered with digital-based alternative lenders like Kabbage and OnDeck in order to better fund small businesses. Institutional accelerators and funding programs are mushrooming, because banks know it’s faster to leverage on what’s out there than stay introverted.
5. Blockchain Is The Future
According to BI Intelligence, in 2016 banks will rally around a unified solution for implementing a global blockchain for managing inter-bank transitions. Blockchain technology is the same concept Bitcoin was built upon, with the potential to eliminate the need for intermediaries in financial transactions and reduce costs associated with those transactions.
Simply put, Blockchain (like Bitcoin) records every single transaction made on the network in a public record for all to see. Not all banks have fully endorsed blockchain, as expected, but most are seeing the value-driven side of things, and we’ll witness this manifesting in gradual time-lined implementation phases over the coming years, very likely.
Setting the stage for this development: Thirty global banks have said yes and amen to blockchain startup R3CEV to work on developing an open source, globally distributed ledger. Bring on the future!
6. Equity Crowdfunding (ECF) Is Big
Well, it’s BIG at least in the UK where ECF has found maturity at just 6 years of age! Check out the amazing facts and figures in our previous article. In Malaysia 6 operators were licensed to enable equity crowdfunding platform operations towards the end of last year, and we’ve recently launched the first deal. For it to pick up speed over in the ASEAN region, ECF needs to see lots more support coming from investors and corporations (both private and Government).
Regulations are key, but more so is support in the form of actual funding for dynamic startups and SMEs, the vital economic wheel of our nation. Some of the most exciting developments in ECF have occurred over the past weeks, including app-only bank Mondo having raised £1 million in under two minutes, days after investor demand for the bank crashed crowdfunding website Crowdcube.
Closer to home, Singapore’s UOB recently invested 10 million dollars into Israeli startup OurCrowd, where startups can raise capital from a large number of investors in exchange for equity in their companies. The bank aims to help startups in the region connect their ideas with smart money across the world, reinforcing our above mentioned statement that ‘banks want CHANGE’ and they’re forming strategic alliances with FinTech companies to consolidate strengths.
7. Transparency Is Trendy
In a transparent world where prices are declared openly and margins are lowered, the Internet has helped create a level-playing field for all. There’s great power in comparison shopping and proven models to back that, like comparison travel booking tools Skyscanner and Booking.com, to name a few.
Even Google searches for consumer goods has changed the dynamics of the price wars, making comparison tools increasingly in-demand by today’s discerning generation. Easy online access to lowest prices have put immense pressure on businesses far and wide, forcing manufacturers and resellers to be competitive in their offerings. With shrinking margins come airbus-loads of happy customers and not-so-happy big businesses languishing in their former glory.
We’re proud to add that CurrenSeek, our very first listed deal and ASEAN’s first equity crowd funding startup offer helps travelers find and compare currency exchange rates. By showing on-ground street rates, the app empowers travel-savvy users to get the most bang for their hard-earned buck by avoiding any extra and hidden costs associated with using credit cards and ATMs. We think that highly trendy and applicable in a trillion dollar global travel market!
8. Consumer Is King
Online platforms, social media and e-commerce marketplaces have given power back to the people. Take for example demand and supply platforms like eBay, PayPal, Uber and Airbnb, which are giving consumers the ability to create opportunities for everybody and greater means of living.
Today, businesses are paying bloggers, vloggers and reviewers big bucks to ride on their organically-grown audience base. Getting ‘content’ out on your company online is of extreme importance as that’s how consumers find you FIRST these days. And just as you want to leave positive search-friendly footprints of your business behind, ‘negative’ reviews/comments could be just as viral if your business does not concentrate on providing real value. Greed stinks, and it stinks even farther on the Internet!
Consumers are hungry bloodhounds where ‘greed’ is concerned, as evidenced by Twitter’s sheer ability to topple over even Governments. This paradigm shift from greed-based capitalism to community-based activism is going to grow, rewarding those who are innovating with the times and are actually solving real human problems for the better of all. Wikipedia dug the graveyard for expensive encyclopedia subscriptions; Google signaled the end of dictionary tomes and Yellow Pages; and Yelp changed how people enjoyed their next meal. Consumer is KING. So bow thy head and stay humbly relevant.
9. IoT Is The New Economy
Acronym for the internet of things, IoT is an unstoppable force that’s gaining momentum. General Motors aren’t just producing cars anymore, they’re trailblazing the way with ‘connected cars.’ Cutting edge user experiences that allow your ride to become a WiFi hotspot for Internet access, music and video streaming; and moving stores for download and usage of in-car apps like Glympse which lets drivers share real-time movement with friends and other handy apps that can tune you in on how your vehicle is performing and where it’s at, health-wise!
Analysts predict that 20 billion to 30 billion “things” will be connected to the Internet by 2020. Hence more and more businesses across various industries from healthcare, manufacturing, engineering, security and more are quick to latch on to the need for incorporating IoT into their business plans.
Where once, it was unheard of for a company not to own its own website, IoT is poised to grow in time to become an even larger-scale revolution than the Internet ever was, as physical and digital worlds converge.
We hope this article enlightened you and if you have any more startup trends to share that you think we’ve missed out on, please don’t hesitate to comment. We’re all ears where startups are concerned!