I’ve just left the Slush festival, Europe’s largest gathering of entrepreneurs, innovators, and venture capitalists. It’s a huge and vibrant event – and a pretty good place to get the pulse on the current tech scene and the vectors that will shape 2019.
Here are my quick takes:
It’s a good time to be a Viking (have some glögg!).
The Nordic countries have now produced three tech startups worth in excess of $10 Billion — Skype, Supercell, and Spotify. The ecosystem spawned by these in the past couple years has been enormous, and the Spotify IPO this year created a whole slew of new tech millionaires who are now active investors and innovators. Transferwise now has a valuation of $1.6 Billion, and the Billion Dollar Club has spread from the Nordics down across the rest of the continent, as in the past year 17 new companies in Europe past the $1 Billion threshold. Three of the world’s top ten tech IPO’s this year were in Europe, and meanwhile European venture investors pumped $23 Billion into new startups in 2018, most of them in Northern Europe, which now has more “unicorns” per capital than anywhere else in the world. The glögg is flowing freely here.
Fintech is not just for Finland.
Europe continues to lead the world in financial services technology. Pure digital banks such as N26 and Revolut have experienced huge growth (the younger generation wants to everything on their mobile and has no desire to ever go onto a bank branche), and Slush was filled with Fintech startups of all stripes. Traditional banks are increasingly being pushed to legacy status and some are teetering on irrelevance. Meanwhile, cash itself is disappearing: Sweden will be the first country to go all cashless –– last year cash represented only 1% of all transactions in the country –– and several other Northern European countries are not far behind. Transferwise has launched its new “borderless account” that is catching on quickly. Fintech is changing the whole financial services landscape in Europe, while the US continues to lag several years behind.
Stitchers > Coders
Coders have ruled the roost for the past decade. Practically every conference I’ve attended has been filled with people whining about the lack of coders. Meanwhile, code academies have sprung-up everywhere to create more coders, and cross-border talent poaching has driven the way software development shops operate. But I think we’re entering a new era now, as creating powerful software applications is less about writing new code and more about stitching together the incredibly-powerful code libraries and services that now exist. A gifted Stack Stitcher (I just coined that new term) can create powerful applications that involve deep technology such as AI, machine learning, voice, and image recognition, by stitching together powerful services from AWS, Google Cloud, Azure, and more. This dramatically improves time-to-market and reduces the coding team required. I believe this will result in a step-change (downward) in the demand for coders on the application side. The entire software development paradigm will change, I think, from one domain expert and a team of coders to a team of deep domain experts and a few brilliant Stack Stitchers. We will be entering a whole new paradigm in application development ahead, I believe.
GDPR: Train wreck or Happy Hour?
The General Data Protection Regulation took effect a few months ago (May 2018), creating new pan-European laws on data privacy. Startups complained about having to deal with an added layer of compliance, and consumers complained about having to click that stupid “Yes, I accept cookies” dialog box on every single damn website. But regulation aside, the macro trend here is that consumers overwhelmingly care about data privacy today. The GDPR is the kind of blunt-force solution that only bureaucrats can love, but it’s a reflection of consumer preference that is here to stay. Meanwhile PSD2 harmonized payment regulations across Europe, continuing to drive Fintech across Europe.
At Slush this year I was struck by the absence of any booths or presentations about mobile applications (5 years ago it was all about mobile applications). The mobile revolution is now complete as the consumer expectation today is just simply that everything is mobile. There’s nothing to discuss anymore. Case closed.
Big Data is dead. Thankfully.
One of the worst buzzword trends in recent years was “Big Data”, and so I’m pleased to report that it has died an ignoble death. The notion was that somehow collecting humongous datasets was necessary for every business (and that vendors would sell you all sorts of hardware and software to store your Big Data). Today there is the realization that meaningful insights are what matter to any business, and just having bigger datasets doesn’t necessarily deliver bigger insights (the average high school statistics student could have told you this). Today new startups like Enigma are delivering insights-as-a-service, by mining public data sets to augment your private datasets, surfacing relevant signals and insights. It’s about improving insights, not collecting more data. RIP Big Data.
The Enterprise is struggling to keep up with consumer tech.
Ten years ago most leading-edge technology was in the enterprise. Today, it’s on the consumer side, and the enterprise is suddenly struggling to catch up. Slack, of course, is one of the best examples of a new startup while brought a consumer-quality software product to the enterprise, disrupting the traditional enterprise vendors (I just hope that Outlook dies an ugly death soon). In chatting with Slack co-founder Cal Henderson at Slush, he pointed out to me that 10 years ago most large enterprises were standardized around 1–2 software vendors (Oracle, SAP, Microsoft) who provided all the different applications required. Today, the average F500 enterprise has over 4,000 software vendors (such as Slack), each providing individual point-solutions which deliver 100x the user satisfaction of crappy legacy enterprise software.
Human-Centered Interfaces (what a concept!).
As I’ve written previously, the past 30 years have been about us learning to work with computers, and the next 30 will be about computers learning to work with us. We’ve gone from the early command-line interfaces to the “point and click” revolution, to touch screens, and now voice. The next generation of computer applications allow humans to interface in any way that they want — voice, typing, touching, seeing, clicking, you know, like humans do. I talked at Slush with the CEO of Nanoscent, a startup that is giving computers the ability to smell, with all kinds of use cases for agriculture, industry, hazardous waste management, and more. By giving computers the full-spectrum of human senses, they become much more useful to us with regard to the way we work with them and they way they work for us.
Slush was a great event this year. The Europe tech scene is on fire right now. Through the first 30 years of IT, Europe was long on research and short of entrepreneurial commercialization. The tide has turned now, and I think 2019 will Europe’s biggest year ever in digital innovation. It’s gonna be fun.