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Alec Dafferner

Partner at GP Bullhound

VR, edge computing and the streaming wars set to shape the startup scene in 2020

As we head into the new decade, it’s becoming increasingly clear that the tech industry is no longer restricted by what is technically possible, but rather by what is achievable within the confines of resources and infrastructure.

Startups are setting new standards and demonstrating an agility and ability to embrace creativity. For example, in the financial sector in 2019 it was startups that led the way into new territory: Stripe launched a corporate card and HSBC has signed a global partnership agreement with fintech startup Bud, after it helped the bank launch mobile banking app Artha.

Startups face differing challenges – and opportunities for disruption – from tech giants. Consequently, forecast trends will often be different for the startup space –  whether it is niches where startups will be the dominant provider, or changes in models and applications which will impact their scaling and operational approaches.

Edge computing

Edge computing is expected to be a significant disruptor to the traditional private versus public cloud structures – and a prime space for startups and mid-sized companies which provide compute, network, infrastructure and cybersecurity for the edge.

In a world which is producing ever-increasing volumes of data, with more and more mobile and Internet of Things (IoT) devices having built-in data-intensive applications, companies are acting to reduce the volume of data moving through networks to centralised data centres.

These players will look to provide a viable alternative to a single cloud solution and challenge existing large enterprises such as Amazon Web Services and Microsoft Azure.

AR, VR and retail technology

Over the last year, retail technology is an area where startups have come into their own. Of the companies which continue to lead the implementation of artificial intelligence and augmented- and virtual-reality-driven (AR and VR) retail solutions to facilitate demand, smaller startups are developing competitive solutions to augment the physical retail experience. Certain startups focus on enabling an increasingly personalised and bespoke in-store experience – such as the likes of Modiface and Scandit.

The streaming wars

A further trend with a strong consumer focus is that the streaming wars are set to be amped up in 2020. The platforms will continue to be dominated by giants such as Netflix and Amazon Prime – but by mid-2020, consumers will be able to choose which streaming service they subscribe to from an increasingly long list of names, from Hulu to MLB and Disney+.

As the platforms battle for supremacy and audience loyalty, there is a ferocious appetite for new and unique content to showcase and own. In 2018, Netflix alone invested $12bn on 700 original shows. Such an approach encourages creativity and risk-taking in content creation – and this provides a plethora of opportunity for startups.

With streaming platforms on the constant prowl for the next consumer hit, never before will the door be open wider for startups to move into the creative content space, and see their material snapped up by streaming platforms.

The streaming wars is further indicative of a model highly likely to continue trending throughout the next twelve months, beyond the entertainment sector. The Consumer Subscription Software (CSS) ecosystem proliferated in 2019, and throughout 2020, it is expected that entrepreneurs will buy into the benefits of the CSS business model across a range of sectors. The notion that everything is a service will become further embedded – and will afford startups greater flexibility and agility to scale in their formative years.

Entrepreneurs who carve niches for themselves and succeed in their respective spaces are the ones who are able to identify and take a shrewd appraisal of upcoming trends. This allows them to stay ahead of the game – vital in establishing their own space and identity when challenging more well-established companies.

Identifying trends is not enough – the startups that maximise results will be the ones with initiative to react and adapt to upcoming trends. Ultimately, what we witness in the technology landscape in 2020 will depend upon startups and businesses capitalising efficiently on such trends as they continue to gain momentum.

Alec Dafferner is a partner at GP Bullhound