At Applico, we ring in each new year with predictions. Whether we hit or miss, we have a lot of fun thinking through challenges and opportunities that platforms face. 2019 is shaping up to be an interesting year (or distressing, depending on your point of view) in terms of politics and economics – a year which defies prediction. That only made this exercise all the more fun. Here’s our 5 platform predictions for 2019.
In December both Uber and Lyft raced to file paperwork, within days of each other, for IPOs in 2019. Remarkably, they’re not the only household name platforms eyeing IPOs in 2019. AirBNB, Pinterest, Slack, and Postmates are also preparing for 2019 IPOs. We don’t expect that to be the final list either. Rumor has it that InstaCart and big data platform Palantir are weighing their IPO options as well.
If market analysts are right about a looming multi-year recession, then it would make sense for big platform companies to get ahead of the slump. Any platforms who were eyeing IPOs in 2020 may speed up their timeline and go public in 2019 before the recession has really depressed the stock market.
Bonus prediction: Your word-of-the-year will be decacorn: a unicorn that reaches a $10bn valuation.
Last year, we predicted there would be no mainstream application of blockchain in 2018. We expect this non-trend to continue in 2019. Like we said last year, blockchain technology’s applications are over hyped. It’s a promising technology that’s still working through its challenges.
However, blockchain’s best known application, Bitcoin, is poised to have a strong comeback in 2019 after an abysmal 2018. Bitcoin ended the year at less than half the price it held in January. However, the cryptocurrency made important strides throughout the year, such as lowering its high transaction fees and improving its public profile.
In November, Ohio became the first state to allow residents to pay taxes in bitcoin. While the SEC rejected proposals for Bitcoin ETFs, two US lawmakers have proposed to exempt cryptocurrencies from US securities laws (politically controversial, but uncontroversially good news for Bitcoin). NASDAQ is also planning to list Bitcoin futures in 2019. Thus, we expect Bitcoin to have a good year, even if blockchain technology as a whole doesn’t expand to any other part of our lives.
Google, Amazon, and, of course, Facebook have been embroiled in scandals and controversy this year. While the scandals range from sexual harassment (Google) to employee maltreatment (Amazon) to covering up election meddling by a foreign power (Facebook), one type of scandal was common to all three platform companies: data security and misuse.
Security breaches have exposed sensitive user data to would-be thieves. Often modern monopolies are slow to report the breaches in an effort to avoid a PR firestorm. As we wrote in October, in hiding security breaches, companies like Google make the need for platform regulation clear. Exacerbating the issue, big tech does a poor job of highlighting which measures have been taken to bolster data security. We expect the issue to be relevant as 2020 electoral candidates begin to jockey for position.
However, even more salient is the issue of fake news. In 2018, content platforms like Facebook and Twitter, and search engine monopoly Google were called before the US Congress to answer questions centered around the issue of misinformation and propaganda. Across the pond, the EU Parliament also grilled Mark Zuckerberg about Facebook’s role in selling user data to political advertisers and propagandists. We would be shocked if platform-spread fake news did not become a heated political issue during the 2020 campaign, with the rhetoric taking shape in 2019.
Although Netflix beat earnings expectations in 2018, the year was a bad one for the company. In July, Disney bought 21st Century Fox, thereby expanding its rights to major TV shows like American Horror Story and The Simpsons, and completing its Marvel collection with X-Men and Deadpool – oh, and it now also owns the Star Wars franchise. And it also now owns Netflix-competitor Hulu, which it can pump with all this new Disney content. Or perhaps all that content will go to Disney’s own subscription streaming service, Disney+, set to launch in 2019. This short list of Disney’s gains is only the tip of the iceberg.
And Netflix’s nightmare doesn’t end there. The month before, in June, AT&T bought Time Warner. Time Warner owns popular content brands including TBS, CNN, and HBO, as well as Warner Bros. After the acquisition AT&T could market Time Warner’s content either through cable companies, or, more lucratively, directly to consumers through its own streaming service, also set to launch in 2019. AT&T would also be able to collect viewer data and build a digital advertising arm to compete with major rivals like Facebook and Google. (Perhaps unsurprisingly, Netflix began to, controversially, test ads in 2018.)
In 2018, Netflix responded to the coming storm by pumping out more and more original content, hoping that some of it will reach the cultural significance of Star Wars, Marvel, or HBO shows like Game of Thrones. If it can’t (and it likely won’t in 2019 despite some excellent shows and successes), expect consumers to switch from Netflix to Disney+ or AT&T.
We’re not the only ones with a dim view of Netflix’s near future. Some of Netflix’s top executives (excluding the CEO) opted to take more of their compensation in cash than in stock options in 2018, despite the fact that Netflix’s stock is down and thus, if everything were smooth sailing, should rise again.
One caveat to our prediction, on the AT&T/Time Warner acquisition: the Justice Department has since appealed the acquisition, but the appeal is unlikely to reverse the acquisition.
The majority of platform companies focus on B2C services and products such as product marketplaces, ride-sharing apps, financial service apps, and more. While many B2B marketplaces and service platforms exist, few have reached the status of modern monopoly. In terms of big name brands, Salesforce is the best known B2B platform.
We expect that to change in 2019. While Salesforce will continue to grow its suite of products and services (a combination of linear and platform) for business, other players will emerge in B2B as well. For example, we expect Palantir, a data analytics platform founded by Paypal founder Peter Thiel, and Convoy, a logistics platform (and potential IPO darling in 2019 or 2020) to have a strong 2019s and further B2B platform services.
But it isn’t just tech companies that will push the platform business model on B2B. We expect traditional B2B distributors to launch a B2B marketplace of their own. Applico CEO Alex Moazed has spoken at B2B industry events in 2018 such as UnleadWD and the MDM Forum to promote the idea. At private dinners and meetings, the industry-backed marketplace has been discussed, and we expect B2B distributors to at least test the marketplace in 2019 – and hopefully, launch it.