I recently got a chance to chat with Sumeet Jain, a principal over at CMEA Capital, about emerging trends for 2011 and what he thinks will do well in the coming year. In sum: social and location will continue to revolutionize the market.
“It’s a matter of time—within the next five or so years—before more business will be done on Facebook than Amazon,” Jain told me.
Social commerce, said Jain, will dominate the market, and it will take a number of different forms. Social information will become more available to show how people are linked together, and the social graph will be tied to commerce data to provide more personal and more relevant information. Jain used the example of recommendations, which will evolve to become more personal and immediate.
Additionally, more innovative models of shopping and commerce will emerge, particularly where location-based services are concerned. The shopping app RedLaser is a perfect example of the direction in which commerce is going, Jain told me. The app allows iPhone or Android owners to scan a barcode with their mobile device and see price comparisons online and at local brick-and-mortar stores, allowing them to locate the best price possible. These kinds of mergers of online and offline shopping will become more prominent in 2011, said Jain, who believes that Foursquare will be the principal driver of developments in location, commerce, and social.
Part of the new evolution of mobile commerce will be new developments in near field communications, which involves the use of proximity sensors to guide mobile users through stores and malls. These proximity sensors, said Jain, will be deployed more widely among small businesses in the coming year to allow users to locate specific items down to the very aisle and shelf. For anyone who tried to shovel their way through Best Buy this holiday season to find that one stupid gadget (that’s always hidden under a pile of other gadgets that other customers have pushed around), an app like that would be a God-send.
“Google is being pretty aggressive about deploying this kind of technology,” said Jain, who predicts that Android will lead the fray in mobile-based commerce.
So what kind of companies will do well in the coming year and what is CMEA specifically on the lookout for? “Companies leveraging existing information and using that information intelligently in driving commerce will do well,” said Jain, who used Blippy as an example.
Additionally, said Jain, funding in 2011 will go towards “real” businesses—those with real money to be made by “selling stuff,” rather than one that promises to make money once it gets to a certain size. I asked Jain if that means the market will be moving away from advertising-based models, but he doesn’t believe that to be the case. Rather, it’s about companies that believe they actually have a product or service to sell. That might be through advertising, but we will begin to see the market move away from companies with a lot of hype about their future and some day getting big enough to monetize.
CMEA, specifically, will be moving towards entrepreneur-focused funding, investing in smart people and teams rather than specific products, said Jain. “For a long time people have been focused on technology and speed, but we want to see how well the team can move and whether they’re leveraging a lot of information and data.”
So what flopped in 2010? Over-the-top TV, said Jain. This time last year, everyone was predicting a massive shift over to IP-based TV and other TV revolutions, like 3-D TV applications, but nothing really happened with that, and a much smaller segment of the population actually did cut off their cable services.
CMEA capital is a 25-year-old VC firm that has invested in such companies as Blekko, Pixazza, Solaria Corporation, Jobvite, and more.
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