2023 Partner Technology & VC Predictions

Below we have compiled thoughts and predictions for the technology and VC industry from a few partners including Mark Sherman, Matthew Koertge, Steve Schmidt, Saad Siddiqui, and Marcus Bartram.

Mark Sherman:

• Companies will discover that they need to be talent makers v. talent takers.  The average company spends $1071 on training per employee per year (maker) versus $4000 to get a new employee (taker). In 2023, companies will invest their training spend to “known” employees v. spending more to attract “speculative” prospects to bring on new skills.
• Mark Zuckerberg will separate the social media assets (Facebook / WhatsApp / Instagram) from Meta and spin out Meta as a separate business (Oculus / Metaverse assets).  Zuckerberg will lead Meta and while Meta may look like a failure at first, it could be successful long term by powering new use cases in 6G particularly around gaming, home decorating, home improvement and the future real estate brokerage.
• Time critical logistics (Airspace*, same day) is a multi-billion-dollar market that is growing much faster than time sensitive market (FedEx, DHL, UPS, overnight). Time critical logistics powered by machine learning innovation will model and automate the 1000s of decisions to move cargo the most time efficiently relative to today’s time sensitive hub and spoke models.

Matthew Koertge:

• As global tension increases, cyber-attacks continue to be a top threat. Cyber security companies will stay highly relevant and new companies are needed to stay ahead of the bad guys. Data and digital assets will continue to become more valuable over time and with the digitization of everything more and more assets in the world are subject to cyber-attacks.
• 50% of the VC firms built in the past five years will fold in the next five years. Many of the new VC firms created will fail to raise capital in the future but new VC firms evolving innovative models will attract entrepreneurs that demand more measurable value add from their investors.
• With many of the big tech companies laying off staff (10k+ people at each of Meta, Amazon, etc), this will likely create many new start-up companies. History has shown that the years following a market correction make for excellent investment vintages.
• Climate Tech will be a massive thematic area of growth which will attract substantial VC and infrastructure investment over the coming years. Climate change is the #1 threat to the world and the future of our society. We need to fund start-ups that can make an immediate IMPACT today as the clock is ticking on the heating planet and irreversible damage
• 2023 will continue to see the evolution of AI across consumer, enterprise and government applications. Whilst AI is already everywhere, I strongly believe that AI is still at its infancy and the innovation over the next few decades will be amazing. This evolution will continue for some time, however, there will also be some truly revolutionary AI innovation which we cannot imagine today that will create new products and services used by the majority of the population.

Saad Siddiqui:

• Companies will need to grow by 2.5x just to get to the same valuation as they did in 2021. On top of that they will need to show impeccable unit economics and management teams will need to manage their burn as they work on becoming more efficient.
• Remote work will become an economic decision not a philosophical one. Employers are trying to manage costs considering the economic realities. Employees want more flexibility around where and when they work as long as they get their work done. In 2023, this decision will become black and white.
• In 2023, blockchain projects will need to prove that they can deliver true hard benefits compared to traditional solutions. It will be crucial for entrepreneurs to demonstrate technologies married to use cases that have user traction rather than the technology tokens having user traction.

Steve Schmidt:

• Generative AI (GAI) will boom in 2023. In 2023, the next Steve Jobs of AI will finally create an amazing UX to hide all that complexity and release a new wave of GAI based functionality and creativity.  We’re already seeing early signs of GAI with a better UX in simple things like predictive text suggestions, grammar correction suggestions and to generate human like content with sentences that make sense while others are using GAI to create realistic images of art from text input.  By 2030, I wonder if I’ll be able to release my inner Steven Spielberg and create an autonomous GAI blockbuster movie, complete with GAI voices, a music score and action visuals, all from a text-based screenplay. The company Descript might help others beat me to it.
• Digital immunity and autonomous systems will be key buzzwords in 2023.  While autonomous vehicles are likely another 10 years away in terms of achieving any level of respectable scale, we’ll progressively see fewer human fingers piloting the trillion-dollar industries for vehicles, airplanes, manufacturing and IT.  The best autonomous systems will leverage digital twins, generative adversarial AI simulation, and new technology orchestrators to create better system resilience and intelligence. Companies will progressively move more IT budget from reactive and defensive controls to a more proactive, strategic and data driven approach.  In case you were wondering, as human, it took me 12-15 minutes to write this text.  I typed “autonomy 2023” into the chat.openai.com app and it wrote a similar piece in 3 seconds.

Marcus Bartram:

• Customer appetite has not decreased for digitization projects, solving cyber-security problems and technology and software that will help them increase revenues, improve efficiency and deliver improved customer experiences. What will be different in 2023 is how closely projects will be scrutinized for ROI and an increase in NPS.
• It will be a massive year for strategic M&A for private tech companies and public companies whose valuations are down significantly. For startups, valuations will continue to flatten, and early-stage seed series A deals will become more competitive. Great sectors to look for investments into 2023 – cyber-security, AI driven platforms and companies, climate change and digitization.
• We are going to be in an inflationary cycle for several years with tightened monetary policy, increased interest rates as governments try to bring inflation under control.

* Signals an investment of Titanium Ventures