Four Sectors that Will Flourish

After a tumultuous 2020, we are all ready to start a more typical year. However, we expect that 2021 will be a transition year as companies and investors adjust to changes in the economy, social activity, and new work practices.

Like many observers, we expect a rush to travel, leisure, dining, and entertainment activities due to massive pent-up demand. This by itself is likely to show stress points for some industries and the need for new platforms for bookings, ordering, and logistics.

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But at the same time, we expect visionary entrepreneurs to focus on the long-term market pain points and…


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In March of 2020, the world changed. The COVID-19 pandemic brought countries and their health care systems to their knees, caused a massive global economic recession, and whiplashed many social and economic norms. In doing so, the pandemic also caused many new norms to be adopted, though reluctantly. Some of these new norms will be short-lived while others will endure.

But beyond these immediate changes in social behavior, we see two major shifts in the global economic and social patterns that will last for decades: the acceleration of migration from atom to bits, and an escalation of social and environmental…


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To our Portfolio Companies, and Think + Community:

As you gather your resources and revise your strategy for the new world order, we recommend that you consider these three steps in your evaluation:

1. Manage cash flow. We don’t believe in V shape recovery for the economy, even if the stock market rebounds in that form. Funding in the VC area will further decline as we go through the next 12 months. You should assume it will be very difficult to raise money for the next 18–24 months.

The sooner and the deeper you cut your expenses, the healthier and…


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Business practices that are based on ethics and integrity are important not just for a company’s reputation but also for its ultimate success. The same is true for VCs who invest in these companies. In fact, there is a lot that the investors can do to make sure a company pursues a strategy based on high integrity and ethical values.

This is not just good citizenship but also good investment strategy. As we have seen in the past few years from examples of Zenefits, Uber, and a number of other companies, when growth at any cost is held as the…


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Earlier this week, The Wall Street Journal reported that the economists now see the probability of a recession in the next 12 months close to 34%, the highest in the past five year.

Whether we will get a recession or not in the next year, most startups are ill-prepared to deal with an economic downturn as we continue the longest economic expansion in U.S. history.

We don’t expect the next recession to be of the severity of the 2008 Global Recession or the dot com implosion. However, the startups need to be prepared as any recession could cause significant disruption…


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The classic market that is ‘ripe for disruption’ is usually one that is very large, highly inefficient, has few agile competitors, high margin potential, and low capital requirements. Think of transportation and how Uber was able to exploit and disrupt this inefficient market. Of course, Uber had extremely high expenses to accommodate its market share gain strategy, but its cap ex was very low.

Compared with these ideal markets, there are many markets that seem to be saturated, highly competitive and unattractive because of low/uncertain economics.

However, many of these otherwise stale markets offer great opportunities for innovation, partly because…


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IMHO, the best consumer electronic product of 2018 didn’t come from Amazon, Google, Samsung, or a hot new startup. It was introduced by a company that has not sold any hardware before: Facebook. With the retro name of Portal, this amazing product captured that inflection point where technology transforms the function of a known device so broadly that it creates a completely new experience.

This amazing product captured that inflection point where technology transforms the function of a known device so broadly that it creates a completely new experience.

While current video conference at its best is sitting in front…


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Perhaps the most notable aspect of this year’s CES was the lack of aisle after aisle of me-too products on the latest technologies. Promisingly, some core technologies like wearables, digital health and home automation, seem to be maturing (in a positive way). We could see more useful applications on display and fewer vendors, as well as broader integration with major platforms like Amazon, Google, and Apple.

With these technologies now past their euphoria stage, as investors, it’s time for us to focus on areas that are getting traction and have potential market fit. …


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Snapchat has become a darling of teens and yet its parent Company Snap is facing skepticism from investors ahead of its planned IPO this week. The investors certainly have plenty of reasons to be ambivalent including the slowing user growth rates, competition, lack of voting rights, and of course the most important one, the valuation. However, I believe that Snap has a credible case to be a $80 b company, for the following reasons:

1. Snap has created an innovative content delivery model (Stories) that is efficient and fun to use for consumers while exceedingly well-suited for sponsored ads

2…


(and who should acquire it)

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Amid all the news about Twitter’s potential sale as well as its still struggling performance, it is wise to look at the value proposition that Twitter provides and see if this platform has a place in our lives, and if so, who can best leverage it (hint: it is not Salesforce). I contend that there is a potential path to make Twitter relevant again, and that makes it a great acquisition for two companies.

Twitter began with a disruptive solution: how to communicate in the shortest possible form and easily share news and information with…

Safa Rashtchy

Chief Thinker, Think+ (thinkplus.vc)

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