Macro trends that underlie massive successes

Some of the biggest successes in today’s Internet and information economy were created by powerful underlying macro trends that allowed the disruption of status quo.

Exploding amounts of online information in the mid-nineties gave rise to the likes of Yahoo and Google, which provided a way to organize the clutter and mechanisms to search through it. An inflection point in broadband penetration, coupled with the rapid advance in compression and streaming technologies enabled the spectacular rise of YouTube and now its plentiful successors. Prevalence of broadband, coupled with falling call termination prices and improving UI technology were the force that helped Skype bubble up to the top. Each of the 20 biggest successes of the last 10 years can be mapped to underlying structural shift(s), that someone rapidly capitalized upon.

Obviously all this looks so clear in hindsight. How can we use this information to predict the major opportunities over the next few years? A look at some key trends that are currently near or at their inflection point can provide a clue. Here are some ongoing large-scale structural changes in the media/mobile/internet sectors that will likely give rise to the behemoths of tomorrow:

• Advertising Shift: The massive shift that is currently underway in the $250 Billion advertising industry (that’s in the US alone) from traditional modes to online and interactive advertising is perhaps one of the most significant structural changes currently going on, and opens tremendous opportunities for innovation that can and should be capitalized upon. The fact that this trend perhaps has the most direct relation to monetization makes it even more interesting
• Digital Media: The rapid adoption of digital media is currently transforming an entire industry. Opportunities will continue to get created around creating, managing, monetizing, hosting, searching, improvising, merging and providing access to digital media.
• Wireless Data and Multimedia Penetration: The ubiquity of the cell phone, and the ongoing rapid uptake of data plans and multimedia devices is finally providing an additional platform that could be comparable to the Internet in the magnitude of opportunity it provides.
• Universalization of Gaming: Gaming, which was hitherto a pass-time of a miniscule, committed set of people (youngsters and geeks), is undergoing rapid expansion of scope, providing another brand new platform and ecosystem for building opon.
• Everyone is Social Networked: Social networking is no longer a new trend, but the ubiquity and wide adoption of social networks is. Emergence of facebook as a platform is only the tip of a much larger structural shift. The disruption that social networking platforms could fuel will be of a magnitude comparable to the change that the emergence of internet brought to the brick-and-mortar economy.
• Prevalence of Digital Signage: The cheap availability and quickly arising ubiquity of LCD screens and digital signage used for advertising, retail displays and dynamic information screens provides yet another platform that is already starting to engender significant innovation and its subsequent monetization.

This list could go on and on…we live in exciting times!

Initiatives that leverage some combination of these trends will be aided by significant tail winds over the next few years. Over the next few posts, I’ll start to delve deeper into each of these trends and their implications, and use these as a framework to help identify specific opportunities.