Happy Holidays from the Trenches
Updated: Jan 11
Happy Holidays, friends! While there’s no rest for the intrepid early-stage VC, we did manage to hang some lights and raise the Festivus Pole at C2V HQ, so the holiday spirit is alive and well here in the trenches. In that spirit, we thought we’d give you the gift of some quality reading material to distract from the 47th viewing of the Home Alone trilogy that your kids dragged you into.
So pause that argument with your significant other about whether Die Hard and Lethal Weapon are really Christmas movies (which is ridiculous to begin with, because they clearly are), hoist an eggnog (no comment on whether ours will have some of Kentucky’s finest mixed in but check out Chris’s post from last year in England and judge for yourselves) and let’s light this non-denominational holiday candle, starting with….
The Ghost of Christmas Past
We begin our December newsletter with a look back at Chris's 2019 predictions which is a C2V annual tradition. We must say that unlike a few other years he seems to have nailed the 2019 picks (and believe us when we say we hate to give him any credit), but have a look and let us know if you agree?
The Ghost of Christmas Future
Now, the moment you’ve waited 12 long months for… it’s C2V’s 10 Predictions For 2020!
Without further ado here are some shots in the dark that we decided needed to be etched in digital stone… on the internet… forever….
The Podcast boom continues and begins to cannibalize other forms of media. The larger music providers Apple and Spotify continue to support creators and new shows but like the app ecosystem, many will come and go. New products and features built by third parties to support the podcast rush will continue to 2020 and Spotify will continue its M&A mega push, that is until they get acquired next year.
Amazon will experience its first stumbles. It still gets to 10% of overall ad spend but look to see some negative headlines on Amazon in 2020. Through a data breach, poor performance in its ad business, consumer frustration, Amazon hits turbulence but of course, will survive and be just fine.
With the continued rise of streaming content; Disney, Netflix, Hulu and even Snap busting out quality originals; and Youtube TV being fairly priced, the only thing keeping the cable operators relevant are live sports and that's being taken over now as well. Too many options available and cords will be getting cut while cable companies take a massive hit. Consumers will benefit through less price bundling creating better price options. Consumers always win in the end.
CBD surpasses Cannabis as far as market share, distribution, consumer demand, and regulation. While most people have been jumping on the cannabis bandwagon there are still many questions to be answered. CBD, on the other hand, becomes the consumers' choice for relaxation, sleep and workout recovery. CBD products will evolve from direct to consumer to mass-market retail.
Like it or not, legalized sports gambling makes its way into the majority of US states, as any remaining stigma quickly disappears, and governments cannot pass up on the incremental taxpayer revenue it offers. New services and apps and security services will make it easier and faster to use. Gambling becomes a topic of conversation on the mainstream. It would be good to see a business emerge that helps teach and educate new gamblers the risks and controls their action through capping wagers.
SaaS platforms will reinvigorate productivity growth and maybe (maybe) start to help shrink the income gap. Years into the digital age, many long-standing and still highly relevant “old economy” industries (commercial aviation, construction, food service, etc.) are still suffering from stagnant productivity growth and shrinking margins. Potentially sitting on mountains of game-changing data that they can’t use because they don’t have a way of efficiently and intelligently organizing and distributing it. Software to the rescue (and late adopters, be warned).
The early-stage funding gap will return. Five or six years ago traditional VCs had gotten so big that institutional money in Seed rounds became increasingly scarce and eventually the gap was filled by a wave of new smaller early-stage funds (remember all those “Here Come the Micro-VCs” headlines circa 2015?). Now that group has matured, with the underperformers dying out and the outperformers getting bigger and bigger, just as their predecessors did (a Twainian example of history rhyming). So dust off your 2014-era “funding gap” content, because the comeback is imminent.
AI moves from consumer gimmicks, talking speakers and type-ahead features to becoming more helpful in every task. AI bias in algorithm models will become a bigger topic and concern, while Healthcare, Manafucting and Government will embrace AI like never before in 2020. We hope from an investment perspective AI is a feature — a core competency of one's business in which certain domain expertise exists. AI is not a company or a stand-alone buzzword like Blockchain and Crypto 2019, which became overhyped and undervalued very quick by public perception.
I mentioned in my 2018 predictions that DTC would explode, and it has, but in 2020 we will see increased interest from brands new and old speaking with consumers directly, not only in your social feeds like IG but with using influencers that become the ambassadors for these brands. See C2V portfolio company Beam who uses cross trainers and athletes to market their products more so than paid advertising. Influencers push DTC forward. In addition, DTC brands look to buy ad-tech stacks to help support their business growth while ad-tech companies go out of business as the middle man simply is a thing of the past.
Both from a start-up perspective and investing thesis, companies start building for the future for people, humanity, environment and mental health dominate funding, growth, talent and the conversation. People generally have had enough with the bullshit and finally, start to do what they can for the planet and what is right. It may sound hard to quantify it now but it’s coming and it’s a good thing for all.
And here’s a bold bonus prediction for all of you because C2V always goes deep. App stores will cut their 30% commission. We’ve seen large publishers go toe-to-toe with these gatekeepers, but in 2020 this clash will reach its boiling point.
The Ghosts of Christmas Present
Our 6th Portfolio Company investment
Did we just invest in the next Peloton? Will it be even better and more successful than Peloton? Time will tell and so will we… but you’ll have to wait until January’s newsletter.
(Our first newsletter cliffhanger – exciting times).
As many of you have already heard the first-ever Stories Summit is coming April 16th in New York. This is not a conference but rather a dedicated day to the founder community to learn from each other. We are thrilled both with the partners supporting us and the early registrations who are confirmed.
Head this way to register to attend, as well as for additional information on the event and a sampling of the participants. Space is limited!! Don’t do what Matt would do here and assume he could sign up at the last minute only to find it had been sold out for three months (and if that didn’t convince you, picture yourself having to call Chris and beg for a spot – grim, no?).
See you there if you know what’s best for you!
Super Powers Podcast
In case you haven't caught a Superpowers Podcast show yet, you are in for a treat. Bill Wise and Chris are having a blast interviewing some really fun and thoughtful people.
Today we release two new episodes #3 and #4 with Max Snow and Josh McFarland from Greylock Ventures. You can find all the shows here and please subscribe and listen on your favorite service.
Come on, you know the answer to that.
We are also pleased to introduce C2V's new website which has a fresh new look and feel. Give it a spin so you can meet our incredible group of operator investors as well as get familiar with C2V's portfolio. And as a reminder, you can always get the latest words of inspiration (and a whole lot more) on our Instagram account.
Are You Done Yet?
Yes, and thanks for bearing with us.
2019 was a huge year at C2V and we are just getting started. We’re excited to introduce new investors, new investments and continue to bring a community of smart and like-minded people around founders to help them best succeed, and we sincerely thank you all for riding this train with us.
Yippee-ki-yay motherf****rs, we’ll see you in 2020 (See? Unquestionably a Christmas movie).
- Chris & Matt