C2V 2023 Predictions Recap
Welcome friends! As we near the holiday season, it’s time to assess the year that was and take a look at the year that will be. In other words, buckle up, it’s prediction time!
As a sign of our gratitude to you, our loyal readers, we’re giving you the gift that no one asked for, a double-dose of C2V! Below is a review of our prognostications for 2023, to be followed tomorrow by our regular monthly newsletter which will include our predictions for 2024 (so be sure to tune in for that as well).
Without further ado, a look back at our prophecies for the year that was, starting with perhaps the craziest of them all (cheating a bit, as this was actually the lead from our January newsletter):
“We had planned a snappy intro on what to look for from the macro and tech/venture worlds in 2023, but we decided to shelve it as [among other things]… Chris wouldn’t let Matt do 400 words on the macro parallels to Mr. Burns’ having every disease known to man (and whether that would actually make the economy similarly indestructible)”
Well, shame on Chris because this is exactly what happened!
At this time last year, just about every major driver/indicator of economic health was pointing in the wrong direction, and somehow, the US economy still had a good year.
Consider some of the headwinds we faced in 2023:
Inflation – While we’ve seen a significant slowdown in CPI growth in the back half of this year, the index is still up 18% since the end of 2020. To put that in perspective, the CPI’s total increase over the prior 12 years (2008 to 2020) was 20%.
Interest Rates – The Fed raised rates 525 basis points in 18 months, the largest raise in that short a period in more than 40 years (and the last time this happened, we had 2 recessions in 3 years).
Asset Prices – The S&P started the year off 20% from its end-of-2021 peak (officially in “bear market” territory).
Geopolitical Instability – Not one, but two wars in critical geopolitical and energy- and food-producing regions.
Yet GDP and the S&P are up more than 2.5% and 20%, respectively in 2023, among the strongest years in the past decade, and even home prices are up 6% YTD (which doesn’t sound like much until you consider that mortgage rates more than doubled in the preceding 12 months).
Chalk this up as a major a missed opportunity (thanks, Chris).
2023 Review
As for our 8 specific, tech-related predictions, we give ourselves a score of 5.5 (just under 70%, a rate that would be the envy of professional gamblers and meteorologists the world over).
What we got right
Climate tech will go mainstream, but with an impact that will take years to be felt.
Despite an absolute decline along with the rest of the market, climate tech’s share of overall VC and PE funding continues a decade-long climb.
But of course, there remains a very (very) long way to go (so keep at it, climate founders and investors)
AI will spread well beyond “big data” into nearly every sector, including computer vision and robotics applications.
No need to elaborate here, right?
The onslaught of new “future of work” tech products will go nowhere.
The migration back to offices remains choppy, to say the least, yet nearly every corporate leader we’ve heard opine on the subject (publicly and privately) wants their teams back in the office with at least some regularity, as tech has proven unable to replicate the benefits of personal interaction.
Virtual reality migrates back to the novelty-product fringe while augmented reality has a breakout year.
Apple announced its new Vision Pro VR headset announcement in July to great fanfare, yet analysts predict sales of only a million units in its first full year (compared to hundreds of millions of Apple phones, watches, etc.).
Meanwhile, we continue to see a bevy of new AR applications across a wide range of sectors and applications, including our first foray into the sector (Argyle, an AR productivity platform for commercial contractors)
ChatGPT proves to be a little too good, leading to widespread high school and college cheating scandals (and maybe an academic journal submission scandal or two)
This is about the quickest one of our predictions has ever come true, but GPT-driven scandals went well beyond academia, including notable legal and journalism incidents.
What we got half right
OG social media is losing relevance and ad share to podcasts.
We predicted continued 45-50% growth in podcast ad spending, and while it only grew around 25% in 2023, it did outpace the growth in social media ad spending by nearly 3x.
We completely missed the rise of NS (“new school”) social media, namely TikTok, which saw a 33% YoY growth in ad spend.
What we got wrong
The rise of a viable Twitter competitor that would start to take material user engagement share from the incumbent.
While using “dumpster fire” to describe Twitter’s trajectory might have been an understatement, we were still dead wrong.
Despite
1) Its best efforts to self-combust, with a universally panned rebrand and revenues off 60% even before the latest advertiser exodus (not to mention the curious subsequent damage control strategy of telling its largest remaining revenue providers, “Go f**k yourself. Is that clear?”); and
2) The July launch of Meta’s Threads, which saw 100 million signups in 5 days…
… no one seems to have left.
Threads' engagement is off more than 80% from that initial peak, and X continues to be cited as an information and opinion source literally everywhere (even if everyone still calls it Twitter). You have to hand it to the original founders; they built one hell of a resilient, sticky platform.
Software-driven efficiency improvements (along with geopolitical and supply chain issues) will drive a noticeable uptick in US manufacturing growth.
2023 was more choppy/directionless than anything else, though we think our mistake here was more timing than overall trend, which will need more time to play out and likely won’t do so in a completely straight line.
As for what lies ahead, you’ll have to come back tomorrow to find out…