2015 will be ‘Fear and Loathing’ in Silicon Valley

It is challenging for my youthful soul to accept that this is the eighth annual edition of my technology predictions here at VentureBeat. I hope this doesn’t hit 30 editions and I’m writing from a self-driving, hovering rocking chair. Here are my predictions for 2015…

1. Outflow of security-related startups

2015 looks to be a year of paranoia, where 6-step authentication will come into vogue and 3-factor biometrics systems roll out. Driven by the thousand plus hacks across Home Depot, Target, Michaels, Chase and countless other companies, governments and nonprofits, every organization in the world is horrified over the possibility of getting their pants pulled down in the middle of the world’s public square.

Beyond Anonymous, Syrian Electronic Army, and Lizard Squad, expect a plethora of new hacker groups and nicknames such as Komodo Squad, North Korea Sneakers, Sony Insiders, and The Outsiders.

Being more serious, A recent survey found that 45 percent of Americans said they have been notified of a payment data breach. I would predict a steady increase of security related startups in personal and enterprise domains.  Fear is a better motivator than loathing or frustration.

2. Uber’s valuation flattens

It is difficult to bet against a freight train with a $3 billion war chest, but I’ve been 2 for 2 in predicting the minor slides of freight trains. I got it right about Groupon’s rocket fizzling and Zynga losing half its market cap (from $6 billion to $3 billion), so I predict Uber’s valuation will level off at $40 billion whether it goes public or stays private. The founders, early investors, and management team will be financially set for life, so please don’t shed a tear.

I’m a frequent user of Uber and Lyft, but there’s a finite pool of drivers out there, and the qualifications for being a driver is higher than working at a fast food chain. Unless Uber captures all the drivers from taxi companies going belly up, its growth will eventually be capped based on resource constraints and continued competition. Growth abroad looks promising, but governments are increasingly resistant and the competition continues to grow — GrabTaxi, for example, raised $250 million from Softbank — so it’s difficult to be optimistic on this front.

I’m also not a believer in the notion that Uber can easily transfer its infrastructure over to other industries, such as delivery, moving, and other services. There are too many other variables to account for when it comes to the success of these new business lines.

3. Rise of machine learning

With years of “big data” buzz, 2015 will be the year machine learning enters the mainstream market.  Big data raised questions about what we do with such information. Machine learning aims to answer these questions by taking these big data sets and creating predictive models. Machine learning is already under the hood of such services as Google Now, various online recommendation engines, search services, GPS systems, and others.

Google has had its Prediction APIs, which help developers improve their applications, since 2011. A big move in 2014 was IBM making Watson’s machine learning APIs available for public use. This came soon as Microsoft announced its Azure Machine Learning service. Both services from these tech titans seek to assist data scientists, which are probably the most desired hire in companies today. I assume these services and others can also help cover the lack of such critical hires, but that remains to be seen.

Anyway, 2015 will bring machine learning under the hood of many more of the services we use everyday, and it will be a good thing.

4. Xiaomi becomes the third largest mobile phone manufacturer in the world

Xiaomi will continue its meteoric rise in 2015. The last quarterly report from IDC had Xiaomi with 5.3 percent market share to Lenovo’s 5.2 percent but doesn’t include Lenovo’s acquisition of Motorola, which would put it at 8.7 percent. This seems like a lofty number, but I assume Xiaomi will continue its efforts outside of China in 2015 and attain the third overall position by year’s end.

That’s it for my 2015 forecasts. But I still owe you my grades for last year’s predictions. Here they are:

“Facebook Relaunches Messenger” Score: D-

Barely a month after my recommendation for Facebook not to buy Whatsapp, Facebook acquired Whatsapp for $19 billion.  Good thing I don’t sit on Facebook’s board because I probably would have gotten a heavy boot.  I don’t get a big fat “F” because Facebook kept Messenger and went out and hired PayPal’s President, David Marcus, to expand its features and continue to grow their core messaging product.

“’Internet of Things’ Explodes into the Mainstream” Score: B-

A week after last year’s prediction post Google acquired Nest for $3.2 billion, Samsung acquired SmartThings in a rare move beyond semiconductor chips, and Cisco has been trumpeting of the “Internet of Everything” throughout 2014.  IoT was splashed throughout the media and in the consciousness of many, but connected devices have yet to reach a significant percentage of U.S. households.

“Birth of New Mobile Search and Discovery Paradigms” Score: F

This is a big fat “F”.  Maybe no entrepreneur felt my pain and frustration with mobile search.  Since I don’t even have peripheral information to discuss, this is the equivalent of me completely missing the rim in a NBA dunk contest. Not missing the dunk, but the RIM.

“Big Dumb Pipes Become Slightly Smarter” Score: D

ATT, Cox, CenturyLink and others have slowly expanded higher speed services in pockets throughout the U.S., but not enough to help propel the U.S. into any leadership in broadband speeds, services or technologies.  In terms of speed, the U.S. still doesn’t even break into the top ten in the world.

“Rise of the Rest for Innovation and Startups” Score: A

Even if I didn’t run a global seed fund, the headlines throughout tech news sites would have confirmed this prediction.  From Alibaba’s historic IPO to Google’s acquisition of the UK’s DeepMind to Sweden’s Klarna continued growth and $115 million raise in 2014, the rest of the world is rising. Talented entrepreneurs are everywhere and the Internet has led the way to closing the knowledge gap between Silicon Valley and the rest of the world.

What are your predictions for 2015? Let me know what you think of mine. Have a great 2015!

Bernard Moon is cofounder and General Partner at SparkLabs Global Ventures, a new global seed-stage fund, and cofounder of SparkLabs, a startup accelerator in Seoul, Korea. Follow him on Twitter.