December 27, 2012
This time last year, Pinterest wasn’t yet a household name. Techies were walking around with their new iPhone 4S’s. Facebook wasn’t public yet. And crowdfunding was still synonymous with Kickstarter.
A lot has changed since then, as you would expect. Technology is continually weasling its way into our lives, at the same time that it’s morphing and bending to be more unobtrusive. Here are some of the standout trends from 2012.
Smaller Social Networks
At some point, you’ve probably stared at your Facebook newsfeed and realized, “I don’t even know these people. Why am I reading about their dinner plans?” You’ve probably seen friends go on defriending sprees, or maybe done so yourself. It seems the trend in social networking is toward smaller, more intimate social networks – Path being the prime example. The app, which limits you to 150 friends, relaunched at the end of last year and has grown to 5 million users since. Other sites are building social networks for family and close friends, like FamilyLeaf, Cloudee, Perch, and Kincast.
In our tech-saturated world, it’s hard to slow down and actually live in the moment. So startups are inventing tools that will at least let us preserve and share a moment after the fact. Glymps is a photo app that takes five seconds of video before every photo, so you can see your friends jostling in position and putting on their smiles, or a firework shooting up into the air before exploding. Snapchat lets you take a video and “share a moment with friends,” who can see it for up to 10 seconds before it disappears. And Memoto raised $550,000 on Kickstarter for a device that clips onto your shirt and takes photos every 30 seconds, which are automatically organized into memories.
This year, we saw upgrades in a variety of gadgets, from Apple’s iPhone 5 and iPad Mini to Samsung’s Galaxy Note II and Galaxy S III phone. But we were also hit with a bunch of unexpected surprises. Microsoft debuted the Surface in October, a colorful tablet/laptop hybrid that got a lot of people talking. Google announced its futuristic Project Glass, giving a sneak peek at the way we might interact with technology in the future – seamlessly, with eye movements, unencumbered by a smartphone. Unfortunately, that one won’t be available for quite a while.
The social good space got a boost in 2012 with the launch of the Impact Engine accelerator in Chicago and the Fledge incubator in Seattle. 1:FaceWatch raised over $350,000 on Indiegogo, making watches color-coded to your favorite charity. All these organizations are trying to prove that for-profit companies can still have a big impact on society and the environment.
This year, we also started teaching kids tech with a passion. Girls Who Code brought programming education to high schools girls in New York City, and they’ll be expanding to other cities in 2013. A bunch of successful crowdfunding projects want to teach tech to kids, some with toys (like ATOMS and Goldie Blox) and some with classes (like Pixel Academy). It’s part of a growing worry that we don’t have enough technical talent to build the future. “We’re not going to be able to solve [big] problems as a society with the number of people that are going into engineering now,” says founder Michael Rosenblatt of ATOMS.
Services for startups also skyrocketed, hoping to attract the newest wave of hopeful entrepreneurs. The Lean Startup Machine took its learnings and turned them into a validation board to help startups stay lean. Clarity now has 7,500 mentors just a phone call away for entrepreneurs, after launching in the summer and raising $1.6 million in funding. And StartupPlays launched in June with short classes taught by startup experts.
Curation and Discovery
Lazy shoppers rejoice; the trend this year is to cut down on browsing time. With tons and tons and tons and tons of products available online, a batch of smart sites are now curating the best ones for different styles and tastes. These include design hub Fab (which raised $105 million in funding in July), Uncovet for fashion, and Of a Kind for accessories. Subscription boxes like PaleoPax, Umba Box, and KLUTCHclub are also moving toward curation, opening up stores in addition to their monthly box sales. And this year’s upstart social network, Pinterest – which grew almost 380,000 percent in 2012 – makes a great tool for curating recipes, clothes, movies, you name it.
The sharing economy is helping us cut down on clutter, as people choose to share rather than own things. We can get rooms to rent on Airbnb, one of the earliest “collaborative consumption” sites, which booked 5 million nights in the first half of 2012. We can reserve cars on Zipcar, Car2Go, and Getaround, which spent 2012 expanding their reach into new cities. And yerdle launched on Black Friday to encourage us to share things with our friends, rather than buy, buy, buy. In fact, the sharing movement has started to organize, with advocates like OuiShare and The People Who Share declaring November 14, 2012, to be Global Sharing Day.
The JOBS Act passed in April, and the startup industry is holding its collective breath to see how the new crowdfunding laws will play out. Under the new rules, startups can raise up to $1 million per year from non-accredited investors, people like you and me, with certain limitations on contributions. The goal is to unleash new sources of funding for startups who may be struggling to get their ideas off the ground. The Securities and Exchange Commission is required to release its specific rules by the end of 2012, but many expect it to miss that deadline.
The swift passage of crowdfunding owes some credit to sites like Kickstarter and Indiegogo, where creators can crowdfund projects in exchange for small rewards (instead of equity). The biggest project in Kickstarter history, the $10.2 million Pebble smart watch, was funded in 2012 (although it probably won’t ship this year). In fact, all of Kickstarter’s top ten projects raised their money in 2012. That brought the site’s 2012 pledges to over $173 million as of September, up from $99 million in 2011.
Social Network Scandals
Series A Crunch
With the flood of seed money available to startups, from angel investors and accelerators, many entrepreneurs will walk away empty-handed next year when they go to raise venture funding. This is what’s widely being labeled as the “Series A crunch”: an increase in seed funding and constant (or decreased) venture capital funding. According to the latest report by CB Insights, over 1,000 startups with seed funding won’t be able to raise follow-on funding, representing $1 billion in fruitless investment. But this is the way the economy works. “This is nothing new. Seed investments are the riskiest bets an investor can make and the reality is most will not return money,” CB said.
What will next year bring? Stay tuned for our 2013 predictions.
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