Writing predictions is always/never fun, because you take a moon shot in advance and can always turn out to be wrong. That being said, I try never to predict things I don’t already know something about, and then I try to spread word about what’s coming to people who aren’t expert in what I’m predicting. For that reason, some of my predictions can appear out of the mainstream. What a surprise.

 

1) The success of Louis CK‘s unusual distribution strategy will once and for all change the publishing and entertainment industries. Right now, the publishers are wildly trying to control the distribution of content with legislation pending in Congress. Let’s assume it will fail, as there are petitions all over the internet to fight SOPA (otherwise known as the Stop Online Piracy Act HR3261) and its sister in the Senate. By the time you read this, the chips will probably have fallen one way or another on this particular attempt to screw up the internet by people who don’t understand it, but the legislation won’t matter, because of Louis CK.

 

Louis CK is a comic who had a hilarious show on HBO that later went to FX. He decided to produce a single ”

concert,” or whatever you call it when a comic stands up there and is funny in front of you, and distribute it himself over the internet. He offered it free, suggested a $5.00 donation, and made $750,000 profit after covering his $250,000 costs. He keeps all that profit. He shares it with no “label,” publishing company, network, or whatever. HE and WE are the network.

 

This will continue to happen. Once content goes from atoms to bits, “piracy” can’t be stopped, and neither can the worker (Louis CK) owning the means of production. Louis CK is now a publisher. There’s a train moving in a certain direction here, and  many lawyers and even creators think that standing in front of it and waving their arms in fear about the coming trains wreck will stop it. No way.

 

2) Just as Mark Zuckerberg and Eric Schmidt changed our views about social privacy, the number of data breaches this year will make people think twice about the privacy of health records. This year more than any other has been the year of electronic health records, and most of the small physician offices that installed them with ARRA (Stimulus) money are just figuring out how to use them. These providers have consultants, and some of these consultants are already privy to patient information, and bound by HIPPAA rules. But laptops get lost and stolen, physician staff turns over, and our records are not secure, no matter what anyone says. In fact, the only person who has real trouble getting access to medical records is the patient, who has to sign forms to receive his/her own data.

 

We are going to learn to live with our health information being “out there,” both intentionally and unintentionally.

If you are a patient with a serious or chronic condition, you may already have chosen to put it out there by joining a support group or a site like Diabetes Connect or Patients Like Me. You may also be monitoring your weight or blood pressure with a Withings scale and an iPhone app, wearing a Fitbit or a Jawbone. Slowly, we are learning to reap the benefits of sharing our health information and crowd sourcing our treatment plans.

 

 

3) The global startup movement will continue to accelerate, even though the funding for companies that need follow-on rounds will dry up. My friend Mark Suster from GRP Partners predicted that 2012 would be a “shitstorm” for startup companies seeking more money for expansion. There are several reasons for this. First, angels and VCs have funded too many of the same thing. Some of the clones will have to disappear. Second, VCs are having trouble raising funds because their institutional investors (pension funds, university endowments) are still reeling from losses in 2008 and have lost the taste for alternative investments. Nevertheless, there are now enough incubator/ accelerator programs in most cities to provide a richer ecosystem than we had five years ago, or even three. And since capital will come where there is a good deal, even states and countries without indigenous VC communities will get noticed.

 

4) Rapid fire technological change in health care  will taken place in advance of “Obamacare.” Obama’s health plan may not be ideal, but it has done something I have been waiting for. It has shaken up the industry and forced it to consider new business models and ways to deliver service. Both insurers and providers are facing about 32,000,000 formerly uninsured patients, coupled with the need to spend 80% of premiums collected on actual care. Look for (finally) the rise of technology in remote patient monitoring and wellness incentives. Look also for an increase in primary care docs, retail facilities that treat non-urgent illnesses, and fewer conversations with the actual doctor, who will become the medical director of her own practice. And employers are already beginning to penalize  us for some health conditions like high blood pressure or smoking, shifting a larger percentage  of our health insurance premiums to us. There’s an amazing amount of activity around using technology to produce behavior change. Let’s call this human engineering.

 

 

Well, it wasn’t GeeksonaPlane, but the past ten days have given me another lesson on the global startup culture. I spent three days in Paris at LeWeb, and then a week in London. And everywhere it is the same: smart, wonderful people with good ideas and Silicon Valley envy.

Anywhere outside Silicon Valley, for all intents and purposes, is Phoenix. By that I mean the people think they lack something only Silicon Valley can provide. They either want to be in Silicon Valley or they want Silicon Valley capital and mentorship in their city. Never mind that people are now leaving the Bay Area faster than they are moving in because of high housing costs, poor educational systems, diminished quality of life, and inability to compete with their more successful neighbors (few people in the Bay Area feel rich, satisfied, or happy)

.Fortunately, I am both part of and apart from the Bay Area ecosystem. I’ve invested and mentored there, even lived there part of the year, but always had Arizona as a reality check. And now I’ve got most of the rest of the world. I have even visited entrepreneurs in Uganda. But now I know that even London does not feel up to par with SIlicon Valley.

Silicon Valley capital isn’t stupid. If there’s a deal to be made in another city or country, it is already there on the ground. Just yesterday, stepping outside Marks & Spencer on Oxford Street, a glance at my Waze app told me Benchmark Capital had an office across the street. And the incubators already exist in London, despite the perception of a resource shortage. Tech Stars is in Cambridge, Tech Hub is on Old City Road, and there’s a Seedcamp, a Leancamp, a Digital Entrepreneurs Club, Ecademy, and an event every night.

In most of the places I’ve visited through GOAP, the same thing is true. From Santiago to Seoul, from Shanghai to Sao Paolo, there are startup outposts and events for entrepreneurs, who are already connected through social media and sharing best practices. For the past decade, VCs who understand these forces of globalization have been on planes chasing deal flow, while entrepreneurs have pined for the place the VCs fly from.

So what’s missing in these cities that causes the entrepreneurs to feel so inferior? At first I thought it was training or mentorship, but now I am coming to the conclusion it’s a feeling of community.Every city needs more collaboration, someone to pull the pieces together. And someone to stay involved for the long term, because there is no such thing as an overnight success. Companies may need to be mentored and supported for five or ten years.

Look at Twitter. Not out of the woods yet and almost six years old.

The biggest problem I see outside Silicon Valley is continuity– the existence of a group of local entrepreneurs who make it themselves and then turn around and reinvest in the younger people coming up. The best example of this is TIE, which began as a way for Indian entrepreneurs who profited from the diaspora to mentor and give back to people back home. About ten years ago, TIE was the way a graduate of IIT found a job in the US, and a way Indian entrepreneurs found funding. It was, and probably still is, an ecosystem.

No Silicon Valley luminary who flies in for a Lean/Seed/bar Camp can ever have the impact of an ongoing entrepreneurial community that collaborates and encourages its own. In Arizona, everyone bemoans the lack of local founders who have experience with large exits. They think the state doesn’t have them.

It does, but after their liquidity events they retreat on to the golf course. They don’t stay engaged. They aren’t trained to give back like Silicon Valley guys do.

I propose a global series of screenings of a documentary I saw last month called “Something Ventured.” It is about the entrepreneurs and VCs who invested before Silicon Valley had acquired its mythic sheen, when it was fruit orchards. Back then, the capital was in New York, and had to be persuaded to take chances on young entrepreneurs.

That’s how it is now in London, Phoenix, Shanghai, or Sao Paolo. In fifty years, one of those places will have the luster Silicon Valley enjoys now. Successful people in every city need to be shown how much satisfaction there is in mentoring and financing their successors. And in the meantime, be advised: a very small number of startups get funding even in the Bay Area. And 90% of startups still fail. Let’s not use the wrong metric to measure success: for every Mark Zuckerberg there are thousands of failures. But that’s okay as long as we don’t condemn them. Perhaps the next time, having learned, they will succeed.

Remember, everywhere but New York and California, entrepreneurial communities are still in the first generation. In fifty years, who knows where the grass will be greener.