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By Keith Teare • Issue #290 • View online
A new year always triggers reflection on the past 12 months and speculation on the next 12 months. Let’s do it.

We all have Andrew Keen to thank for this week’s newsletter. I wasn’t planning to do one, but he strongly suggested I do and even suggested, after a conversation, that we do predictions for 2022. I didn’t have the heart to say no. So here it is.
I am not by nature a person that tries to make accurate predictions about specific events or their timing. But I do think that the near future is fascinating, always. Mainly because it is so unpredictable. For me the near future is measured in months, 18 at the most. Beyond that, it is the future and needs no modifier such as “near”.
So what I am about to do is really about the near future. And as That Was The Week has focused on several key themes in 2021, I will restrict myself to those same themes.
My 2022 Predictions are as follows:
  • Venture Capital will continue to evolve towards a more structured asset class and encompassing three very distinct business models - seed-stage investing, venture investing and growth investing. The gains to be made by the growth in the rate at which unicorns are produced will once again draw record amounts of capital into the venture ecosystem. Only two of the three asset classes will benefit - the seed stage and the growth stage. As has been the trend in 2021, the death rate of seed-stage companies will stay high, but those that graduate to Series A and B rounds of financing will increasingly take more capital onto their balance sheets than ever before. And more of it will come from growth investors. This will force venture funds to continue to seek business models enabling them to compete with growth investors and we will see the venture model evolve with more funds choosing to form “top companies” sitting above their funds and possibly choosing a public listing as a means of staying relevant. The best seed funds will benefit enormously from the opportunities to build large companies fast. But they will be challenged to maintain their ownership in those companies as the capital requirements accelerate to scales not previously seen.
  • The Creator Economy will produce the first individuals who attract investment in return for sharing in their revenue. We have already seen Sam Lessin of Slow Ventures articulate this investment thesis, and deploy the first cash. But 2022 will see well-known names accept investments. Just as in music artists are selling the rights to the proceeds of their catalog, so too will other creators in the podcasting, video blogging, live audio, art, entertainment, and news spaces. NFTs will thrive in this environment and extend beyond art to other digital artifacts.
  • Web3 will continue to attract talent, especially from engineers and product designers. The promise of fully decentralized infrastructure will dominate but the first decacorns built on top of Web 3 will be minted, probably in the fintech space. The UK will become a major center for Web 3 projects that are fintech-centered. Bitcoin will reach $100k at some point in the year. But there will be no “killer app” pulling regular consumers into the Web 3 world. Consumers will continue to use Amazon, Uber, Facebook, Twitter, and other centralized Web2 infrastructures.
  • The Metaverse will not become mainstream and there will be no compelling AR experiences that are embraced by consumers. Mark Zuckerberg will continue to make most of his money by selling adverts on Facebook feeds. But the word metaverse will be used more and more to describe the internet as PR forms earn fees from associating everything with it.
  • AI will be neither artificial nor intelligent, and no general AI will be launched. GPT3 will continue to impress against lesser goals.
  • No DAO will provide living income to more than a few hundred people as developers fail to build products that replace mass-market brands with better versions. But the promise of DAO’s will continue to attract developers seeking such breakthroughs.
  • SPACs will not recover from their collapse in 2021. Most will close down having failed to find a target at a value the public markets welcome.
  • Big Tech will not be regulated by Lina Khan or any of the other agencies seeking to do so. The political will and intellectual depth to construct a better technology ecosystem will simply not materialize. Web 3 will continue to be the best hope of an improved future and in the short term, Apple’s desire to protect privacy will be the single biggest brake on the advertising-led attention economy.
  • Globalization will not slow down. Trans-National and Cross-Border issues will proliferate. The distinction between trans-national (technology-led) infrastructures like bitcoin, and stable coins, and cross-border (product and marketing led) technologies like money-transfers and challenger banking will become more obvious.
  • China will become self-sufficient in chips for many tasks. Chinese EVs from companies like Nio, Xpeng, and Li will start to be sold in Europe ahead of a 2023 appearance in the USA.
In short, venture capital, startups, creators, web3 developers, and big tech will impress in 2022. Spac sponsors, regulators, nationalists, and politicians will disappoint.
There are many other opinions in the curated articles below. Enjoy.
Happy New Year.
Web 3 Thoughts
Prediction Stories
Kellblog Predictions for 2022
22 predictions for the consumer internet in 2022
The Information’s 2022 Predictions
2021: Best year ever for £26bn UK tech sector with larger VC inflows, 116 unicorns, record London listings, more jobs and new futurecorns - City A.M.
Startup of the Week
AngelList just closed a $25M fund to back startups based on hiring velocity – TechCrunch
Tweet of the Week
#292: Diving into tbDEX with Mike Brock
#292: Diving into tbDEX with Mike Brock
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Keith Teare

That Was The Week is a editorialized and curated weekly look at developments in tech, startups and investing

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Keith Teare, Palo Alto, California