Alright, here we go. My predictions for 2019. I am not great at these “looking ahead” posts. We all know the unknown will happen. Looking at my post last year, it wasn’t that great — and my take on crypto was proven wrong. Ok, let’s move on…for 2019’s prediction, I tried to keep it simple and cook up big questions that are on most peoples’ minds, and offer my two cents on them.
As to 2019…here are the big FAQs out there:
When will companies start going public? I predict: soon! Well, actually, quite a few tech companies IPO’d in 2018, though many of those are a bit underwater now given December’s public market volatility. That’s still OK given the IPO is more of a financing event than anything else, right? Many of the companies who are waiting for 2019-20 are likely wanting to file papers (or already have) and list. I am expecting to see this happen as soon as mid/late January. The next two years could be epic for tech IPOs and the Bay Area specifically — the combined market caps of the pipeline, even taken with a discount, total in the hundreds of billions, with many of the key shareholders (as investors and employees) residing in the Bay Area. If things hold up through lock-up periods, waves of cash will wash up in northern California. Caveat: The market could not be kind to some of these companies — What will investors think of Uber losing billions of dollars per quarter? How will they price Lyft (operating just in the U.S.) vs Uber (global)? Will Pinterest’s ad engine be compared to Facebook and Google, or to Snap? Ultimately, I predict these and other companies will go out soon, but for many of them, they may also go slightly underwater relative to their most recent private round valuations.
When will larger tech companies be subject to regulation? Not anytime soon, I think. Clearly, some of these companies have to look in the mirror and make difficult choices. That said, I don’t think Congress can do much (and are in deadlock as I write this), so taking on this subject now given all the other issues on the plate make it unlikely.
When will the crypto sector rebound? Not in 2019. I think this bear market is real and is medicine to deal with all the ICO hype of 2017. That doesn’t mean all things are bleak. There are great projects out there, stable coins continue to generate interest, and new models for network participation make me bullish that, perhaps after 2019, we could see a new platform (like Ethereum did) unlock a new innovation. I hope that is the case.
When will the Mueller Investigation be over? A few disclaimers: I am not a lawyer. I also want to share my apolitical point of view here without getting into a partisan squabble (if that’s possible). As some people play Fortnite or binge on Netflix, I am somewhat embarrassed to admit that I am obsessed with this storyline. And, I think it carries some pretty big implications for all of us, regardless of political persuasion. Here’s what I predict: The Special Counsel’s [SC] investigation will likely end in 2019. I believe the SC, which has a broad mandate, has referred material its found that are adjacent to the main investigation to other jurisdictions, such as the Southern District of New York (federal) or the New York State Attorney General (state), among others. I can’t keep track, but there are well over 10 separate investigations that touch on an organization tied to the current U.S. President. Many assume that an SC Report will mark the beginning of the end of the current presidency. I do not believe that will be the case. First, I expect significant litigation between the Justice Department, Congress, and The White House over whether the report can be made public. If it is made public, then these departments may redact certain portions of the report in the name of national security, individual privacy, or executive privilege. No matter what happens, no matter how damning any report could be, I expect the Senate to continue to still support the President. As 2019 rolls around, at some point (perhaps the fall), it will be too close to the next 2020 presidential election, such that Congress would likely prefer to have the voters express their will in 2020 than trying to interfere with the will of 2016 voters. The current President still has a very large and strong base of support, and I do not see that support changing enough to warrant other big changes in 2019.
When will the music stop? Everyone thinks we are headed for a downturn. December public market volatility was pretty messy. That all may be true, but as it pertains to technology startups and the long-term opportunity for technology and networks to seep into every part of the economy, even if the music stops in public markets, I still think we are past the point for the music ever stopping for funding startups. I subscribe to the thesis by USV’s Albert Wenger, that we are in a “World After Capital,” where capital is abundant and it is attention which is the scarce asset. Many countries around the world will continue to want to invest in innovation in the U.S. (especially the Bay Area) and China. That demand may actually intensify if the overall market corrects. And, who is to say a little correction here or there is a bad thing? We should all be on our toes and not take tomorrow for granted.
And with that, we wrap up 2018. Thank you for reading, happy holidays, and best wishes for the new year!