From Softening Venture Valuations to Richer Rewards for the Small & Scrappy
Pete Blackshaw, CEO
1 – TRUST TAKES A HUGE HIT. AN OPPORTUNITY?
From “Fake News” and major hotel chain data breaches to cynicism— even anger — over how platforms like Facebook use data, trust took a hit in 2018. European GDPR regulation forced companies everywhere to look in the mirror, often revealing contradictory practices between customer positioning (simplicity, relevancy, personalization) and reality (bad experiences, spam). This will open up new opportunities for startups in 2019 from personal identity management and dynamic fact-checking to the return of “trust” infomediaries.
2 – BRANDS SHIFT TO “MULTI-SENSORY” STORYTELLING & EXPERIENCES
The explosion of tech enabled “multi-sensory” experiences — AR/VR, voice activation & services, eSports and Gamification — will hit a new tipping point in 2018, disrupting marketing and organization models for large advertisers like P&G, Unilever, and Nestle and virtually every major retailer, online or offline. Servicing “experiences” will prove more challenging that exploiting technology to optimize and “personalize” media. We’ll see a renaissance of startups aggressively tackling this opportunity.
Want to read more from Pete? Here’s what he did in 2018.
- Pete Blackshaw’s 2018 Year in Review [The Drum]
- 2018 Cintrifuse Annual Meeting Recap
- Leadership, Courage And The Digital Concierge: An Interview With Pete Blackshaw
- Nestle’s Pete Blackshaw: It’s challenging for a company our size to pivot
- [WATCH] The Concierge Economy | Pete Blackshaw | TEDxHSG
- [WATCH] Pete Blackshaw, Nestlé on What’s Next for Brands in Digital Advertising
Eric Weissmann, VP of Communication, Community and Economic Inclusion
3 – A FOOT IN BOTH WORLDS
This year, while the dialog intensified in the build-up to Amazon’s HQ2 decision and the result saw established tech hubs still attracting the lion’s share of talent – we noticed an interesting trend in Greater Cincinnati. Whereas the “coast vs. the rest” decision used to be seen as binary, we saw at least two sizable startups choose to have a foot in both worlds. Flowspace and Finix Payments are venture-backed startups with impressive pedigrees, trajectories and EACH have sizable outposts in the Queen City as WELL as in California.
4 – MIDWEST OFFERS A HOME TO SCALE
I think what these startups are seeing is the unique diversity of assets (space, talent, longer runway, etc.) of the Midwest is an advantage. Provided a strong executive team on the ground and clear guidance/leadership from homebase, it’s a huge advantage for scaling companies to scale in this area of the country WITHOUT having to pick up stakes completely. It’s a major advantage as we look to turn up the volume on recruiting established tech companies to set up shop in Greater Cincinnati.
Want to read more from Eric? Here’s what he wrote in 2018.
- Creating An Ecosystem: Who Benefits When Big Companies Work With Startups? [Forbes]
- We are not alone: the Midwestern startup campus
- Recapping Steve Case’s Rise of the Rest Summit 2018 | A StartupCincy Perspective
Emily Geiger, VP of BigCo Innovation
5 – THE BIG GET BIGGER, BUT THE WINNERS WILL GET SMALL, FAST
2018 was a monster year in M&A consolidation across several verticals, especially healthcare and telecom. Companies are buying each other into a fury of corporate monoliths (see Sprint +T-Mobile, Aetna+CVS, IBM/Redhat). But do their customers buy it? Not so fast. In a 2017 Global Future Consumer Study, 55 percent of U.S. consumers reported very little or no confidence in big brands, which was up from only 36 percent in 2012. What’s winning? Hyper-localization, purpose-driven mission, convenience and transparency.
6 – THE SCRAPPY SURVIVE
Corporate strategy teams are getting pragmatic and hands-on. I am seeing hyper-focus on speed, rigor and focus with a gear toward high-volume bets on growth opportunities earlier in the innovation cycle. The best are learning from the front-lines by sending their own teams externally, loosening up ownership rights and rather building long-term relationships with “pools” of disruption agents.
Want to hear more from Emily? Here’s what she did in 2018.
- [LISTEN] Cintrifuse leaders appear on ‘Origins’ podcast
- Cincinnati Resource Leverages Tech to Tackle Healthcare and More
Patrick Henshaw, VP of Growth, Technology and Startups
7 – #FRICTIONLESS ARRIVES
With companies like Robinhood, Bird and Venmo – you can easily see why a massive point of difference in today’s market for companies (both large and small) is constructing a frictionless experience. Stock trading wasn’t invented in the last 24 months, but the ability to do it with little to no friction WAS created very recently. This is why Robinhood has already surpassed the “legacy” player E-Trade. Similar stories exist for both Bird and Venmo – scooters and writing a friend an IOU existed before, but Bird and Venmo made these experiences frictionless.
8 – STARTUP ECOSYSTEMS ARE TRULY ALIVE
Do you remember building an ecosystem out of 2 liter bottles in high school? I do. It taught be the interconnectivity of each and every element of an ecosystem – everything is dependent on each other! Not much differently – startup communities are being built as TRUE ecosystems and you have to engage the entire entrepreneurial stack. This includes every level of innovation – driven entrepreneurs AND enterprises. This enables not only startups to thrive and revive, but also innovation-driven enterprises to realize the value of talent from startups. It can come from successful exits or “flame-outs” recycled back into the ecosystem or a number of other ways. All of them are equally valuable when helping an ecosystem grow and excel.
Want to read more from Patrick? Here’s what he wrote in 2018.
Sarah Anderson, Fund Manager
9 – CORPORATIONS ARE THE SECRET SAUCE
BigCos continue to be an important differentiator – both for our fund and VC interest. We have been able to get into leading venture funds that are oversubscribed and access constrained to most new LPs. One of the biggest reasons we have been able to access these high performing and storied funds is because of our corporate LPs. Their desire to dig in with these VC’s, test and pilot new technologies and create an open community of ideas around innovation brings substantial value to the table for the VC’s – the startups, and the corporations.
10 – VENTURE VALUATIONS SOFTEN. IPOs NEXT?
The venture industry has been overheated for a while now. We typically look at the public markets as a leading indicator and we are starting to see fractures in the credit markets that will likely bleed into the public equity markets. These markets tend to be front runners to private market performance. 2019 will likely see a softening of valuations and round closures; although I expect to see several large tech IPOs that will indicate how big the IPO window will be.
Want to hear more from Sarah? Here’s what she did in 2018.
- Cintrifuse Syndicate Fund: Thinking About Returns
- [LISTEN] Cintrifuse leaders appear on ‘Origins’ podcast
Maurice Coffey, Executive-in-Residence from Procter & Gamble
11 – DIVERSITY & CAPITALISM
Companies in the tech world, and specifically tech-based startups, are often the furthest behind in realizing the power of diversity and inclusion to their bottom line(s). This year, we’ve seen a massive shift in strategy and willingness to tap into this cultural reservoir, from the likes of Hollywood with Disney raking in $1.3 billion global box office thanks to the imaginative world of Black Panther’s Wakanda… to real-life leaders like business hero Tristan Walker of Walker Brands, who recently merged with Procter & Gamble in a subsidiary deal poised to empower his vision of growing his company into a globally-recognized ethnic powerhouse. Understanding the real power of cultural diversity and embracing the ability to utilize technology in a way that is inclusive and accessible to the widest audience possible will continue to be a differentiator for woke startups and investors that are serious about maximizing their growth potential.
12 – UNIVERSITIES OFFER A UNIQUE VALUE PROPOSITION
The competition for talent took center stage as tech giants such as Amazon and Apple looked to expand their operations in cities with an already strong presence of tech based talent. Universities, too, are on the hunt for the best and brightest students to come up with solutions
to problems that haven’t been invented yet. It’s interesting to consider the possibilities when pairing higher-ed horsepower with existing innovation needs, particularly from the BigCo sector. This unique relationship could supercharge a city or region and act as its own beacon to draw more talent who are interested in working on what’s next, not what’s now.
Want to hear more from Maurice? Here’s what he did in 2018.