This blog was written by the XSeed Capital Team: Robert Siegel – Partner, Jeff Thermond – Venture Partner and Mike Hoefflinger – Executive in Residence.
Happy New Year from the XSeed Capital Team! Here’s what the team had to say when asked what the most under- & over- reported stories of 2017 were and their thoughts on predictions for 2018 news headlines.
Top Under-Reported News of 2017
The Combinatorial Existential Threat to the United States’ Economy
by Robert Siegel, Partner
The United States’ engine of economic growth has historically been driven by the ability to attract the best and brightest individuals of other countries to come to the US, where these people were able to enjoy some or all of:
1) A world class education at universities for themselves and in public schools for their children;
2) A high quality of life (cleanliness, safety, etc.);
3) Economic opportunity which could lead to wealth creation; and
4) Political freedom to legally influence government policy if an individual became a United States citizen.
Recent sentiment regarding protecting and enforcing the United States’ borders is impacting not only our desire to limit (undesired) illegal immigration, but a variety of factors are now preventing us from attracting (desired) legal immigration of other countries’ entrepreneurial and intellectual talent:
A) The inability to get a legal visa through an increasingly opaque and random process;
B) The existence of external entrepreneurial opportunities in other parts of the world as these areas catch up to the United States and provide government and private sector incentives to foster growth,
C) An increasingly hostile and fragmented dialog in the media, along with the successful narratives that constantly reinforce people’s differences vs. similarities to other groups, which contributes to making the United States a less accommodating place to live one’s life relative to other attractive alternatives; and
D) An education system that is failing to evolve first in the K-12 arena, and second at the university level with the high cost and enforced intellectual conformity of political perspectives, which has led the populace to question the value of a college degree.
This may be the ultimate existential threat to the United States’ global economic engine and influence – enabling other countries to attract and reap the benefits of talent and leadership, and the contemporaneous failure of our education system, which is leaving the US with an under-qualified labor force for the future.
Machines will never run everything – humans have to design, build, operate, fix and maintain the economic engine of the nation. That is done by attracting top talent and having a broadly educated work force of both management leaders and capable workers.
The United States is failing at both.
We’re in the Lull Between S-Curves
by Mike Hoefflinger, Executive in Residence
There’s been little talk about how we’re in the most interesting period in the technology cycle. Something we haven’t seen since Aniston was married to Pitt, Cruise was jumping on Winfrey’s couch and our Housewives were Desperate instead of Real.
We are near the top of one technology S-curve, in this case mobile, and trundling along the bottom of the next – and the likes of augmented reality, assistants and autonomous transportation are vying for the title of the next technology wave. We are in a transition during which decks are reshuffled, platforms begin to burn and rise, and market share is won and lost – first slowly and then all at once (here’s looking at you, Apple and Nokia). The current technology S-curve may have its inflection point in 2020.
In the January 2007 iPhone launch keynote that became the starting gun of the inflection of the last S-curve, Steve Jobs said he had been waiting for the moment for 2 ½ years. That means 2017 might have been just like 2004: on the surface not particularly notable, but as we now know, tectonic in its impact on the future.
Over-Reporting in 2017
The Russia Narrative
by Jeff Thermond, Venture Partner
The Russians determined decisively the outcome of the US 2016 presidential election is the claim. They certainly tried, but there is no evidence that they determined the winner. The journalists in “resistance mode” will not stop talking about this because the counter narrative that they managed to lose an election on their own against a ‘dream opponent’ is just too awful to contemplate.
2018 News Headline Predictions
Implosion of America’s Two Political Parties
by Robert Siegel, Partner
I believe in two things: 1) The goodness of Americans and those who live in our country, and 2) The idea that American optimism is activated through the broader populace’s desire to make things better and that individuals believe that they can affect positive change.
The extreme politics of identity and class warfare on the left, along with intellectual ignorance and unviable economic policies of low taxes and egregious spending of the right, will lead to the collapse of the Republican and Democratic parties – either figuratively or literally. We will either see massive realignment of what it means to be a Republican or a Democrat, or we will see the rise of at least one, if not two, major new political parties at the national level.
Hard Brexit Leads to Recession
by Jeff Thermond, Venture Partner
The U.K. is set to leave the E.U. with one the of the hardest Brexit outcome possible. No deal on services which account for 70% of British exports. Very messy border with Northern Ireland. Huge exit bill. This drags the UK and then Europe into a recession with US following in 2019.
The AR Duck Makes Waves
by Mike Hoefflinger, Executive in Residence
One of the biggest candidates for the next S-curve of consumer attention is augmented reality, (AR), the asymptote of the “he who controls the screen controls the future” progression from TV to PC to smartphones and soon to glasses. Having cyberspace and meatspace combined for us and putting our information in our world, makes old things simpler and new things possible -the hallmark of inflection points.
With Goliaths that have never been more paranoid trying to protect their touchpoint with consumers (e.g. Apple, Microsoft, Facebook, Samsung, Amazon, and Google) – AR in 2018 will go from the proverbial duck (serene above the water but paddling feverishly below it) – to really making waves with increasingly public leaks as the race to enable late 2019 headset launches reaches a fever pitch.
And while it’s possible that an upstart David will emerge in hardware, the more likely area to watch for disruptive newcomers will be in services built on top of fledgling platforms like Apple’s ARKit and Google’s ARCore. They are the “how-did-we-live-without-it” ideas that will be to AR what the likes of Facebook, WhatsApp and WeChat were to our phones.