Tomasz Tunguz - Five Predictions for 2023
Tomasz TunguzVenture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Five Predictions for 2023
Every year I make a list of predictions & score last year’s predictions. Here are my predictions for 2023.
In short, 2023 will be the first year of a new-normal era. The go-go days of 2021 & the pandemonium of 2022 ebb, leaving a year of sobriety at low tide: longer diligence processes, fewer rounds, lower entry & exit valuations. Scoring last year’s predictions: Web3 consumer products go fully mainstream with more than 35% of Americans, about 100m people, engaging with them by 2023. Not even close on this one. There are more than 100m web3 accounts on centralized crypto exchanges but the scandals that plagued web3 this year stifled consumer interest in web3. Data companies continue to achieve astronomical growth. Accurate. Data companies in the public markets continue to trade at premium multiples & record the fastest growth rates. In the private markets, data & machine learning companies continue to raise capital despite the macro-slowdown. GPT-3 and BERT infuse software massively reducing repetitive work and unlocking huge productivity gains. Perhaps the trend of the year, generative machine learning models like ChatGPT, Dall-E & others have invigorated software founders & incumbents alike - both of which are re-imaging SaaS with ML as an essential product component. The ML stack folds into the classic data stack. Zero. I believe this will happen the battle between cloud data warehouses & data lakes intensifies, so I’ll hold out hope despite the lack of any material advance in 2022. The spirit of Silicon Valley continues a spread outward. Correct. Covid accelerated distributed work, which is now a norm. Startup company formation & funding thrives outside the Bay Area. 3 of 5 isn’t terrible. I would have thought the web3 prediction would have come closer to reaching fruition, increasing my score. But 2022 was unpredictable in many ways. War, inflation, Messi’s first World Cup. The year of sobriety before us provides a potent substrate for startup formation. Boom cycles begin this way. Tougher markets demand better product-market fit from startups leveraging the new technology of the era. This foundation leads to more halcyon days when the promise of technology is realized & the market rewards both customers & founders. |
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