There was an article published at the end of December that I thought those in interested in the venture capital trends for 2010 might want to read. The article appeared on the VentureBeat site and was written by two partners at Grotech Ventures. It caught my eye as it discussed where money might be flowing in 2010.
A quick summary of the article:
- Social Media. The authors say that social media will be a hot sector. While there are still many questions about how to monetize the conversational and real-time nature of social media, the authors expects social media to move towards profitability in 2010.
- Cloud Computing. The authors expect money to continue to flow to the cloud in 2010. The financial value of cost savings, infrastructure savings and productivity enhancement will drive continued investment.
- Prosumer Technologies. The authors say this space will fizzle in 2010 and we will see a re-separation of consumer and professional devices, having a trickle-down effect on the ecosystems of startup companies developing for the iPhone, Droid, and other platforms. It’s interesting to read this view as Deloitte recently came out with their 2010 Technology Predictions (Deloitte: Seven Technology Predictions for 2010), and one of those predictions was that the Prosumer trend will continue to be hot and cause disruption for IT departments.
- Freemium Model. The authors say that start-ups should understand that the gap between free and paying customers is widening. As customer attention spans shorten, their brand loyalty diminishes as well. Users tend to move move on to the next trendy, free offering. This will put pressure on providers to innovate at an incredibly rapid pace in order to keep pace with market demand. For more on the freemium business model, see Wikipedia’s article on Freemium.
Check out the full article at VentureBeat “Venture Capital 2010: Hot (and cold) sectors to watch”.