2015 predictions: Where the hipsters get it wrong

Fred Wilson is a great VC. One of the best in the country and likely one of the all-time great VC investors. However, I read his 2015 predictions and was struck with how different our views of reality are based on where we live and work. As everyone knows, Fred is a VC in New York and spends most of his time on the East and West Coasts. I think this artificially colors his perspective and makes many of his 2015 predictions incorrect.

I’m an entrepreneur and investor in Middle America — yes, the “fly-over” country. While maybe hipsters on the coasts would never consider the opinions of Middle America, it is a fact that 70 percent of the U.S. population lives here. I manage a healthcare investment platform in Nashville called Jumpstart Foundry. While I’m not as famous as Fred, I think my world in Nashville is much more reflective of the overall U.S. economy. This affords me a better understanding of what to look for in 2015.

So here is what will really happen in 2015 (outside the Silicon Valley & NYC hype cycle):

1. Several very large private companies will go public to huge success, but others will set records for the largest failures in the history of the planet. Yes, there are some great private companies valued in the billions, but there are several over-hyped private companies that will crater in 2015. The key distinction between the winners and losers is the adoption rate in Middle America.

Two examples I’ll point to from past years to illustrate the point are Foursquare and Pinterest.

I spend a lot of time in the San Francisco area and observed the Foursquare craze a couple years ago. I tried it out and thought it was a fun app. However, I value my privacy too much and never used it on a regular basis. No one else in Middle America did either, and Foursquare has struggled and will continue to have difficulties.

On the other hand, Pinterest grew up in Middle America. Housewives found it to be an incredibly useful tool in sharing the “look & feel” of a room, party, or new outfit. Things that can be very challenging to explain in text could be easily described through the use of three to five images. Pinterest usage on the coast actually trailed Middle America. The company has gone on to great success and is one my predictions for a 2015 breakout winner.

2. Consumer wearables will disappoint in 2015 (including the Apple Watch). These devices are highly-priced toys and don’t add significant value. Of course, there are some Apple crazy fans who will buy every new product. However, I predict the company will not sell enough to impact either Apple shareholders or the wearable market in general.

Apple isn’t alone in this folly. Google Glass is another fun but overly expensive toy. Until value-creating applications are built, no one in Middle America will buy Glass. Luckily, it looks like Google may be coming to its senses, as it just announced it’s going to stop selling the device — at least for the time being.

The wearable niche that will surprise everyone in 2015 is business wearables. This segment of the market has gotten much less press, but it is driving significant value. A 2014 study in England demonstrated that wearable technology can be used to improve worker productivity by 8.5 percent. This cost savings will drive adoption, and I expect businesses to be the early adopter in this space.

4. Bitcoin and related alternative currencies will continue to struggle to gain widespread adoption.  This is a classic example of the difference between the NY and CA perspective and Middle America. On the coasts, the people are so excited about the future promise of the Bitcoin technology that they are willing to put up with significant friction in the actual product.

Across the rest of the country, the benefit to using Bitcoin as compared to my credit card, is hard to see. If anything, the credit card system is easiest and more secure. Sure, there is credit card fraud, but it is paid for by the merchants and not by the consumers. The case for Bitcoin seems to simply be a case of technology for technology’s sake. While it is really cool technology, don’t expect Middle America to adopt it.

5. Healthcare is the most promising market in 2015. I believe this so strongly that my investment platform — Jumpstart Foundry — has moved to invest only in healthcare. However, the hype areas of smartphone EMRs and doc-in-the-cloud are not going to work with most of the country. Most regular folks have very strong brand loyalty to their physician or healthcare system. It is a mistake to think that technology can replace this established trust relationship.

In 2015, there are three broad areas that will all be huge areas for innovation and market success. These include data analytics, smart-passive diagnostic sensors, and technology-enabled healthcare services.

So as you think about investing in 2015, forget about what the hipsters are calling the next big thing and ask your mom what technology is really helping her.  Middle America adoption is the real driver of multibillion-dollar market caps.

Vic Gatto is founder and CEO of Nashville, Tenn.-based healthcare startup accelerator Jumpstart Foundry.