Red Herring Global 100 - The Key Takeways

Red Herring recognizes technology industry startups and leaders of private ventures from around the globe. Their November 2015 Global 100 event offered not only exposure to other thought leaders and their companies, but also a robust list of speakers and thoughts on the world of technology. I was fortunate to be able to take part in the event and one of the key themes this November in LA was the overall state of technology.

In the Internet of Services Technology is the Economy 

The technology sector businesses revolve around the manufacturing of electronics, creation of software, computers or products and services relating to information technology. Technology today reaches, however, beyond the general definition as it becomes an underlying enabler, competitive advantage and linchpin to value creation in everything from commercial real estate to logistics. The revenue of technology reach is not reflected in the valuation of the sector as technology itself transcends the numbers and becomes, in essence, the economy itself. 

 “The revenue of technology reach is not reflected in the valuation of the sector as technology itself transcends the numbers and becomes, in essence, the economy itself.”

The public market valuation of the sector has remained flat over the past ten years even as the value generated by technology has grown tremendously over the same time period. That value is often attributed to other sectors of the economy. Public markets, therefore, through public offerings, cannot support the necessary fuel for the number of opportunities and ideas being generated by entrepreneurs around the globe. Private funding, whether venture, angel or other forms of capital investment, need to pick up the slack. This type of funding is not linear in availability, but often cyclical in its spending, so seeking and obtaining funding is critical to startups or acceleration of ongoing business.

The Most Powerful Aspect of Technology Is Disruption

Even as technology supports growth, efficiency, and cost reduction in other industries, the most powerful aspect of technology is disruption. The top five industry sectors to watch, according to VentureBeat, include...

1. manufacturing
2. finance
3. health care
4. energy
5. communications.

Category Outsiders Often Embrace Dispruptive Technology First

Disruptive innovation is generally created by the outsiders of the sector, for which technology is poised and although risk is usually higher, the cost of technology, experimentation and market entry is becoming lower every day. These disruptive changes impact the market itself. Disruptive innovation impacts a sector, according to Clayton M. Christensen, in the business model itself.

In addition to cost and revenue impacts, changes in key business activities, customer relationships, channels, resources and even the core value proposition can shift the way a market behaves and the way buyers buy.

Platform Companies Poised to Automate, Enhance & Enrich Customer Experiences

An ongoing discussion of the Internet of Things, its infancy and prerequisites for growth, did not pervade the event, but there were a few companies trying to solve short term problems of managing and connecting devices.

M2M protocols and standardization seem to be necessary for future value creation. Many platform companies are positioned to take advantage of the new services that can be created once the true connectivity of devices, sensors and underlying rules can be used to automate, enhance and enrich customer experiences, and provide benefits to businesses. 

The Ultimate Startup Investment? Think Airbnb and Uber.

So what is the ultimate start-up investment? A panel talked about companies that own the customer experience but aren’t asset heavy. Think about Airbnb and Uber. They have created new versions of standard marketplaces that don’t require ownership of real estate or cars respectively. As the Rock as Dwayne Johnson advises football players in Ballers, “never invest in depreciable assets.” We like to think of these types of companies in a different perspective, services.

The service economy decries ownership and shifts to access. Let those who specialize in managing physical assets, manage them and look towards ways to provide access to consumers for what they need or want, for business or pleasure. This is even a generational trend, as younger generations prefer access, such as Zipcar, to owning a car, or sharing a hedge trimmer that would normally spend a good amount of its life hanging on a garage wall.

Think XaaS, everything as a service, and think beyond technology alone.

Catch the key topics! Listen to VP Sales USA Franz Reuchlein's podcast on the Red Herring event and his personal insights and key takeaways. It's a part of our podcast series, The Internet of Things & Services.