I think it would be fun to be a professional soothsayer. No need to shave. I could grow a long beard and wear comfortable cotton robes. Go barefoot all day, except when my duties required me to don footwear. Then I’d break out a well-worn pair of Birkenstocks. Dress for success! The pinnacle of my day would be when people ask for my sage predictions. “. . . I project the history of the future,” Walt Whitman eloquently wrote, before the term analytics sucked out all the joy.
If you’re curious about the future, try this: enter “predictions for 2014″, including quotes, into a search window. Want to guess how many results you’ll get? Pick a number. OK. Now, go much higher. Multiply that result by 1,000. Got your number? Good. Here’s the actual count: 46,900,000. How do you spin this? Awesome seems so understated.
Pouncing on the chance to feed business community’s voracious appetite for prediction, the Mid-Atlantic Venture Association (MAVA, as it’s known locally), presented its Crystal Ball Breakfast late last month. I attended this event, where MAVA brought together a panel of four expert soothsayers to offer their prescience for data analytics, cloud computing, health IT, and merger and acquisition exit strategies.
Here’s what they had to say:
Data Analytics/ Sid Banerjee, Clarabridge
Banerjee said that as organizations gain access to consumer information, sentiment analysis will become a huge opportunity for companies. Effective sentiment analysis will require that companies have a broad footprint for information collection. That means an organization must collect structured and unstructured data from a variety of sources, including social media platforms, internal customer service records, recorded phone calls, public databases, and CRM systems. But he pointed out that many companies still hoard insights, protecting them within the analytics cube farm. Industry leading companies will instead figure out how to disseminate insights to front-line employees.
Cloud IT/ Jason Booma, Columbia Capital
Booma sees a future where cloud applications will become much more sophisticated—not by piling on features and complexity, but through the simplification of applications. He also sees two divergent trends: the emergence of more cloud-based platforms, and the disintermediation—or specialization—of cloud services. In addition, software that connects these specialized services, called API’s (Application Program Interfaces), will play a central role in enabling specialization. Playing on the term SaaS (Software as a Service), Booma foresees a new permutation, AaaS (API’s as a Service).
Health IT/ Brian Carney, Harbert Venture Partners
Carney sees a changing insurance landscape driving huge changes in Healthcare IT. In fact, just by referring to the Affordable Care Act by its acronym, ACA, he shaved fully 30 minutes from his talk, to keep within his allotted time. Outcome-based approaches to health delivery are emerging where healthcare providers will be increasingly accountable for results (imagine!). In addition, healthcare risks will be pushed to consumers and healthcare providers, and away from employers and insurance companies. Consumers will be responsible for covering a greater proportion of healthcare costs, and they will face greater financial pressure for making good lifestyle choices, such as smoking cessation. This will help cut costs for insurance providers and employers. These developments will create positive change for consumers, including unprecedented transparencies in healthcare pricing, and provider service quality.
Exits: M&A and Private Equity/ Carter Griffin, Updata Partners
Companies held record amounts of cash in 2011, which amounted to $5 trillion. That number is even higher today. The unprecedented cash hoard is one reason why “2014 will be a good time to be a seller and for private equity exit deals,” Griffin said, adding, “big companies will cut R&D, and growth will continue to plateau.” But investors, antsy for equity growth, will put pressure on management to do something more with their cash than just sit on it. That means looking for fast-growing opportunities, so expect revenue growth to drive company valuations more than EBITDA. EBE – Earnings Before Expenses. What every savvy investor will need to know.
Until we have the perspective of time, we can’t vouch for the accuracy of any soothsaying. I was off the mark in 2008, when I predicted that there would be a redistribution of information power from providers to consumers. My ebullient crystal ball did not foresee the reverse—that there would be a simultaneous redistribution of information power from consumers to providers. In hindsight, it would have been safer just to say “there will be a redistribution of information power,” and leave it at that. Maybe I’ll put that tidbit in an upcoming article I’m considering, Prediction Accuracy: Five Popular Tips and Tricks.
Right now, I’m all in with what these four experts have predicted. Either they’re very smart, or very persuasive. But as any accomplished soothsayer will tell you, it’s both.
