2015, the year of birth, for next facebook?

Why this year is significant?

September 1998 when Google was born, it was a very special time as internet was unfolding. Back then, Google understood that the world wide web was a huge information ocean and you needed a way to surf through that ocean to find what you were looking to find from that sea of information. At its peak in 2004, Google was serving close to 84.7% of all search requests on the world wide web.

Exactly at the height of Google's peak in February 2004, there was another small company launched at a dorm room in Harvard called "thefacebook", which looked at connecting human beings in a social ocean. Today that small company, Facebook, is a big social giant with 1.3 billion users and $200bn in valuation. That’s a staggering amount of value, built in just a decade.

Now, somewhere in dorms or garages, some hungry entrepreneur is working to leverage another big wave that is starting to churn up. Some call it Internet of things (IOT), some prefer calling it, Internet of everything, or some other new jargon. But the impact, promises to be massive, with 212 billion things connected together by 2020 (IDC research) compared to couple of billion nodes on facebook. Right now, Facebook buys close to a billion plus dollars worth of servers annually to store our data. Just imagine the scale of data so many devices connected together will generate.

So, it’s important to consider, what current assumptions about our everyday lives will fail, as we start to think about things 15x in scale and impact. These are the places, where the big opportunities for future unicorns are. The opportunities for smart entrepreneurs are in challenging and questioning current assumptions, that will no longer prevail in this new context. I believe, 2015 will be the year when a smart company will be born, exploiting these holes, which could become massive really fast. May be 10 times more massive than facebook.

Big challenges and possible unicorns ?

These are 5 big challenges, where the enormous scale of the connected things can disrupt our current way of thinking.

• How to power all these devices?

Currently, massive data centers eat up close to 3% of all the electricity produced in US. One needs energy to power the data centers, which hold massive amount of data as all things start store data in the cloud. Also, more power is actually consumed, when these devices communicate with each other all the time. Hard to believe, but your iphone consumes more energy than a refrigerator.

Just imagine, how power intensive this new connected world is, and it's going to be super hungry very soon. If these connected things multiply by just 15x, what will happen to energy requirements for such an ecosystem? Either, we would need to figure out a new energy source, a new way to transmit, or get more optimal in usage of power. But it’s clear that it will need way more power to keep these devices up and running. A massive amount of power. Think of batteries that hold more power? Or more efficient way of transmission of power? Using human bodies to power our things (the Matrix way)?

• Big data or small data, I need my devices to be simple and intuitive ?

Big data challenge of today, would start to look small pretty soon, as all these sensors would start generating lots of data. Data about images, data from location, data from event triggers, and what not. Its going to be massive amount of data, could be 50x times the data we are struggling with right now. How to store it, index it, and retrieve it, based on one's need, in a seamless fashion? Answers aren't obvious yet and it could well be possible that the answer doesn't lie with “ORACLE”.

It would become even more important to figure out what is it that exactly needs our attention, and what doesn't. This is the place, when small data (data about immediate context) comes into play. Sifting big data through context provided by small data becomes not just important, but critical from the purpose of usability. We need much more smarter controls about, what data we need to act on, and what to leave as it is. We already see "watsons" of the world getting into play, but I feel the real play could be more around human context and experience, which is still open to a disruptive play.

Given that each of us would be connected to 20+ smart things soon, how do we work with them in a seamless fashion? And also, what data interactions are worth our time and energy? How can we make the attention overload of such interactions close to zero, without reducing their effectiveness? Fitbit buyers don't wear their devices beyond a few months or even weeks after purchase (My experiment with Fitbit lasted all of 3 weeks), and they are arguably doing it, the best way possible in their segment. Very interesting to see how the ecosystem around, "Apple Watch" would develop? Because, it is both a trendsetter and a powerful platform, there will be an acceleration of experimentation, both around devices and dataflow “big” and “small” it would enable.

• Messaging, that allows these things to talk? Social network of things ?

If you look at the big acquisitions that came up post initial internet, Hotmail stands out. It was about messaging (email), same behavior on which blackberry became big. Recently Whatsapp and whole bunch of messaging apps shook the market up with their massive amount of growth. For connected things, messaging is even more critical and I believe that there could be an interesting company with a valuation north of $100bn, waiting to be built here. All these smart watches can be the control hubs of these things, but exactly how, is the unknown part, and as such, a massive opportunity for disruption. While it’s fun to discover skynet finally in action, it’s even more interesting to look at patterns around messaging ecosystem. Both one way and two way messaging are right now up for disruptions. It would be interesting to note, what applications on messaging for IOT, could evolve on top of sensor networks? Something that can rival “Whatsapp” for simplicity and ubiquity. Imagine, if your Apple Watch sends out a status update that you are in the garage. While, you park your car, your home prepares to receive you with the right temperature, and music to suit your current mood. How does that happen? How do "things" email or facebook or whatsapp other "things" (including us)?

• How do you give sensory responses to things?

All the hardware and software that goes into creating (eyes, nose, ears, mouth, touch) interfaces for things (I/O) would be a big opportunity. Hardware players like Samsung, Bosch, Siemens, Arm, Freescale, Intel etc. have built scale to deter any new one coming in, specially on the hardware side. However, there could be some disruption possible, on how things can sense other things, and us humans as well, from software perspective. On the software side, I believe there are some smart players emerging around voice interfaces, like wit.ai, which are using crowdsourcing models, to beat out biggies like Google, in tuning the interface (which is the toughest part of problem in voice). Major disruption would be players, that would enable different kind of sensory interfaces to come into being, and applications that could build on top of these specific interfaces. When touch based gestures came into being, suddenly apps like “Tinder” and “Instagram” shot up with enormous traction. There could be interesting apps or devices, that exploit these new interfaces, much better than incumbent, and create the next Google for food search (based on smells)? For instance, what if your speaker could discover by itself, music based on what could sound great, in the acoustic constraints of your small home?

• Business models that are new and adopted for IOT?

This area has the most interesting, and unexplored potential, that is wide open for companies new and old, to experiment with. Real time availability of information, about supply and demand in transportation industry, is fueling the $40bn + valuation of UBER . This wasn't even possible 10 years back. Similarly, in most industries prices are static and fixed on cost + margin basis, but I believe, that very soon, we would see prices that would become dynamic based on demand (ex. surge pricing for most in demand toys around xmas). Elastic pricing is going to drive even a bigger disruption in retail industry, as demand information becomes more real-time and transparent, thanks to things that think. So, think of all new business models that would become possible, with prices being dynamic, based on real-time demand? Or business models that would thrive on enabling products, to give out continuous revenues based on incremental services delivered to consumers based on demand? SAAS (Software as a service) is a great business model that is disrupting Software vendors, how would that apply in IOT context? Or may be other hybrid business models around sharing gains, would emerge? We really don’t know the answers and in reality, no one is sure either. And that is the perfect recipe for disruption.

I believe 2015 will be the year, when smart unicorns will be born in these challenging waters. Brilliant entrepreneurs, working on these big changes could blindside many incumbents. Would you be the one that would be building or shaping them? I Would be happy, to hear more about interesting companies, that you have heard about, you are building or going to build? So please drop in your comments.

Note :- Special thanks to John Edson for his insights and constructive feedback and yes English is not my native language, so there could be challenges with my english grammar ;-). I do hope that my ideas will transcend beyond my mode of expression.