Big Idea 2016: The Unicorn Bubble Will Burst. Here's What Will Happen Next.
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Big Idea 2016: The Unicorn Bubble Will Burst. Here's What Will Happen Next.

In this series, professionals predict the ideas and trends that will shape 2016. Read the posts here, then write your own (use #BigIdeas2016 in your piece).

My Entrepreneur Journeys book "Billion Dollar Unicorns" came out in December 2014. Leading up to it and after, I have had the opportunity to interview over 50 Unicorn entrepreneurs, and another 20 or so potential Unicorns.

By now, I imagine that you have read plenty of coverage predicting the crash of 2016. Experts hastily point out that it will be nothing like the Dotcom crash when middle class savings got destroyed. No. This one will only piss away a few hundred billion dollars. The damage is well contained. 

If you aren't caught up with this thought process, here is some catch-up reading:

Now, there are some very good things that are about to happen as 2016 unfolds with less froth, more caution, deeper fear, greater uncertainty.

First, the unsustainable valuation without revenue crap will get weeded out. That probably constitutes a good 30% of the current Unicorns. They won't all necessarily die. Just their valuations will get rationalized. There will be layoffs. The insane talent war in tech will calm down. The media will report on these actively. 

The good ones, especially those who have been building with an eye on fundamentals, will continue to thrive. [Re: Billion Dollar Unicorns: Good, Bad and Ugly]

Let me point you to a few great ones that we've had as guests at our roundtables, and whom you may not have heard of yet:

Dan Cane is a serial entrepreneur, and he is building Modernizing Medicine methodically from Florida. I believe the company will sustain just fine, as would Bullhorn, led by Art Papas out of Boston, whose interview is below.

Also, Europe isn't as badly affected by Unicorn mania as the U.S., or for that matter the Indian e-Commerce segment. Alexander Zache is building Auctionata from Berlin with a sure hand.

Therese Tucker is a woman entrepreneur building a kick-ass enterprise software Unicorn from Southern California. I can't wait to see what she has up her sleeve.

And others. Many others. Once the weeding is over, the blooms will come into better focus.

Also, the pre-seed and seed-stage capital market is a bubble that is very likely to crash soon [Re: Why 70k+ Angel Financings is a Problem]. Entrepreneurs, instead of chasing investors, will return to chasing customers. A lot of nonsensical ideas that never should have been funded will die away. Fragmentation of talent will wane.

I remember the nuclear winter of the post-Dotcom bust in the early 2000s. 2016 won't be anything like that. Out of that brutal period emerged companies like Google, Salesforce.com, LinkedIn, Facebook, and a host of other powerful, innovative concepts and companies.

I can't wait to see what austerity, albeit nothing so severe, will bring in terms of innovation in 2016 and beyond.

Healthcare IT is a domain I am excited and bullish about. If it interests you, listen to Girish Navani, who runs a private, bootstrapped Unicorn called eClinicalWorks with over $300 million in *revenue* (not valuation). I am also very excited about HIT combined with Artificial Intelligence and the possibilities therein. 

I am bullish about Financial Technologies, Cyber Security, as vertical domains, and Artificial Intelligence as a horizontal. BioTech continues to move mountains.

But most of all, I am waiting for the breakthroughs that we're NOT talking about yet. The ideas that have NOT broken out yet. And the entrepreneurs whom we know nothing of yet.

To those, I raise my glass in utmost anticipation.

Ping Pong Internal Communication

CEO at Organizational Communication

8y

As the line between the personal and work spaces slowly fades away, I believe that one of the things we're about to see in 2016 is the spread of enterprise application for cell phones. It will start with small things but, eventually, will turn the phone into a work laptop with access to most of the things that the employees are interested in.

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Erik M.

In need of restructuring your accounts ? Getting some analysis and reporting done on your business ?

8y

Good start to the article, what's your take on how Unicorns come into being ?

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Jacques Kpodonu MD,FACC

NIH funded Cardiac Surgeon Scientist @Harvard Medical School

8y

great piece by Sramana Mitra

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Rutger van Zuidam

Co-founder Odyssey.org, Supervisory Board at DC Terra and Natuurmuseum Fryslân

8y

Nice! Watch Blockchain / Bitcoin start-ups for those ideas. = internet 1995. https://www.youtube.com/watch?v=YIVAluSL9SU

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