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Startup Whisperer 2010 Prediction Results

Its that time to reflect on the past year and to think about the future.  Last year I posted some predictions for 2010.  I did a self assessment listed below in this post.  Please comment if you disagree with my self-grade.  I use a very folksy rating system of: “nailed it”, “borderline”", and “whiffed it.”. 
Here we go:

Prediction:  Apple will have another hit with the Apple Tablet (iTablet) – get ready for the cage match between the iTablet and the Amazon Kindle.  The Applet Tablet wont be a revolution and certainly wont have the same type of unit distribution as the iPhone or the iTouch.  The last bit of estimates that I saw for the Kindle was close to 500,000 new Kindles in 2009 and most likely accelerating to a couple of million in 2010.  That's not like the 40+ million iphone and itouch units that have shipped but the tablet is going to be a strategic product for the Apple.
Result:  Apple sold 2 million units after the first 60 days. Apple bucked the trend of failed tablet efforts of the past and has kicked off a new and growing segment that will most likely impact the netbook market.
Grade:  "Nailed it"

Prediction: Augmented reality is the big trend in smartphones – yes, its cool to see the overlays on our screens during football games but imagine having rich data overlayed with you (wherever you are). 
Result:  There were certainly a lot of cool applications like Yelp's Monacle, Layar, and many others.  Was this a title wave.  Not really.
Grade:  "Borderline"

Prediction: Location-based services is the new land rush – we have all been waiting for sexy applications that serve up highly relevant information.   There are a lot of startups doing cool things like FourSquare but the large players are going to have the scale advantage.  Twitter is already all over the location trend and with their acquisition of Mixer Labs (the team behind GeoAPI) they are certainly the first legitimate player with scale.  Facebook and Google will come out swinging hard in 2010 though.  Facebook has been slow and methodical due to their previous missteps related to privacy issues (aka Beacon).  But, when they release their location offering they will be a formidable location-aware platform.
Result:  Gowalla and Foursqare made a lot of traction in 2010.  Foursquare has well over 4m users and Gowalla has 1M users. Of course, Facebook jumped into the fray onto this trend in August with Facebook Places.  Can the independents stay independent in 2011?
Grade:  "Nailed it"

Prediction:  Show me the money – I whiffed my prediction last year around M&A activity in 2009.  M&A activity was down a whopping 56% YoY from 2008 to 2009.  Next year will definitely have an increase from 2009 levels but not 2008 levels.  Venture activity will be up to 2008 levels. 
Result:  Ernst & Young (E&Y)'s Transaction Advisory Services (TAS) finds that global merger-and-acquisition (M&A) deal volume increased 3% 2010 YTD to $1.9 trillion in value. Heck, given the economic uncertainty and a slow recovery, this ain't that bad.  To put it in perspective deal values remain below historical highs of  $4.7 trillion in 2007.
Grade:  "Nailed it" (although clearly an easy one to nail)

Predictions: Google will significantly ramp up enterprise efforts – they are coming at Microsoft with everything that they have and in 2009 they publicly talked about enterprise as a strategic growth area.  They have been doing all of the right kind of enterprisy things like integrating with enterprise class
clouds like Salesforce and providing SLAs.
Result:  In late Q3 2010, Google announced that they had signed the three-millionth business to its enterprise Apps package.  Google claims to have 30 million people within businesses, schools and other organisations now use Google Apps. Market penetration of Google to Microsoft suite of messaging and collaboration tools that provides a cloud-based rival to the likes of Microsoft Office.  Gartner Research recently reported that Google's Gmail has less than 1% of the enterprise email market. It is hard ot unseat deep-seated investment but no one can doubt that Google has not ramped up the investment.

Grade:  "Borderline"

Prediction:  Social games go to the Web – I am doing a lot of work in the social gaming arena.  The social gaming category is white hot with the top 3 players (Zynga, Playfish, and Playdom) generating over $400M in 2009 revenues.  In addition, there was one big acquisition of Playfish by EA for $400M.  2010 is when the social gaming category grows up.  The key social players will realize that they have to diversify out of Facebook and build direct-to-consumer experiences that leverage their strengths on the social platforms.  Zynga is already doing this with  You've got to be nervous about building a business on someone else's platform (Facebook).  Take it from me (running, its powerful to be able to have your own platform that you own.
Result:  Certainly the Facebook social gaming space continues to take off.  We saw Playdom get acquired in July 2010 by Disney.  But, we haven't see a lot of successful off Facebook social game distribution plays.There have been lots of tests with the likes of Zynga and Microsoft but nothing that has replaced their overall traffic on the Facebook platform.
Grade:  "Borderline"

Prediction:  The new guys grow-up – Twitter and Facebook will more aggressively roll-out monetization in their platforms.  Something tells me that when you see so many companies making money on your platform (in the case of social gaming, dangerously close to Facebook's revenues), you'll want to start to collect taxes as well as extracting revenue.  This will be done judiciously and methodically in order to not risk traffic growth. Zyngafacebook

Result:  Facebook certainly followed suit this year.  As evidenced by the top application Facebook
developers like Zynga adopting Facebook Credits. Facebook Credits is definitely the payment method that Facebook is dictating in the marketplace.  Twitter did ad some monetization capability like Promoted Tweets
Grade:  "Nailed It"

Prediction:  Seattle startup acquisitions – last year, I predicted 4 Seattle companies to be acquired last
year.  One was acquired (Urban Spoon was acquired by IAC).  In 2010, I am putting my chips on BuddyTV and  Picnik.  Of course, Mpire should be acquired but I am obviously conflicted on that call.
Result:  Well, I have been 1 for 4 for a couple of years now.  This year Picnik was acquired by Google
in May of 2010. In 2009 I predicted that UrbanSpoon would be purchased.
Grade: "Borderline"

4 "nailed its" and "4 borderlines."  Not too bad.  Here’s to a more prosperous 2011.


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