Ignore Trends and Predictions

This first appeared in the Wall Street Journal’s Accelerator series last week under the title Don’t Believe the Hype.

Every year, at this time, I get a flurry of requests for my “predictions for 2013” or “exciting, hot, new trends for 2013 that I’m looking at.”

I respond with “I don’t care about trends and my only prediction is that one day I will die.”

This is usually not a particularly satisfying response to whomever sent me the request. One of two things happen: They either ignore my response and drop me from their prediction request list for whatever article they are writing. Alternatively, they press a little further, usually with something like “c’mon, you’re a venture capitalist — you must have an opinion about what is going to be hot next year.”

Actually, I don’t. I have never been a short term investor, and I don’t think entrepreneurs should be short term thinkers. Creating a company is really hard and it almost always takes a long time. Sure, there are occasional short term success stories — companies founded two years ago that get bought for $1 billion, but these are rarities. Black swans. Things you don’t see in nature and can’t count on.

So don’t. If you are an entrepreneur and following a trend, you are too late. You want to be creating the trend that other people are following. And then you need to work your butt off to stay ahead of them. Every single day. For a very long time. Through many product cycles and multiple trends.

As a VC, I feel exactly the same way. At Foundry Group, we have a set of well-defined themes. We believe there will be investment opportunities in these themes for the next ten to 20 years. We are constantly tuning the themes, learning from our investments, and exploring new themes. But these themes aren’t trends and we don’t predict anything around them, other than they are constructs in which we think great companies can be created and built.

So I don’t really care about the predictions for 2013. I don’t care about hot new trends. I don’t care that some people think the world is going to end on 12/21/12. I take a much longer view. And I encourage you to as well.

  • takingpitches

    Brad, love this:

    “If you are an entrepreneur and following a trend, you are too late. You want to be creating the trend that other people are following. And then you need to work your butt off to stay ahead of them.”

    Reminds me of:

    “He who stands for nothing will fall for anything.”

    i like reading people’s trends lists, just to know what people are chattering about.

    BUT the big BUT is that you have to have the internal conviction that comes from a deeply held vision to be able to persevere through the toil and trouble of building something big and long-lasting; it seems unlikely that you gain that from what is on a list of trends.

  • http://twitter.com/judyshapiro judy shapiro

    Brad –

    Ah – the startup dilemma.

    This is so true – “If you are an entrepreneur and following a trend, you are too late. You want to be creating the trend that other people are following”…

    The BIG BUT is that while you have to be ahead of the curve – you can’t be too far so investors cant see it. In our particular case – we’re creating the trend for “opt-in” social marketing which is the reverse to the pervasive “push” based ad model of today,

    The trick is partnering with investors who can see that far ahead since today most can only see the trend as they unfold…A look at most VC portfolios confirms this to be true.

    But when you do find those type of believers (a.k.a. investors) – magic happens and fairy tales do come true :)

    • http://www.feld.com bfeld

      Yup – there is incredible power in finding investors who are true believers in what you are working on!

  • http://www.charliecrystle.com Charlie Crystle

    It’s actually kind of fun to do them though.

    Here’s mine from 2012 revisited, http://diggingintwo.blogspot.com/2012/12/2012-predictions-howd-i-do.html. And color-coded just for fun :)

  • http://twitter.com/herringunderfur anne weiler

    How about trends in problems/opportunities rather than solutions? Doesn’t mean that start-ups will solve the problems but you can start to see patterns in what needs to be solved: proliferation of big data, online portability of identity/authentication, the mess that is healthcare technology….

    • http://www.feld.com bfeld

      Are these really trends or just “thinks that could be worked on?” Big data is a particularly useful one to try to define – I don’t actually think “big data” is a problem or a trend. It’s just a nice marketing term for something that in 20 years we will refer to as “tiny data.”

      • http://twitter.com/herringunderfur anne weiler

        I guess I was thinking that advances in technology can shine light on problem areas and looks like a trend. Big data is an opportunity assuming there’s actually some insight to be had from it.

        • http://www.feld.com bfeld

          Got it – yes – I agree that advances in technology matter enormously. I’m just not sure I’d bother linking them to the concept of a trend.

  • http://www.mills-scofield.com/ Deb Mills-Scofield

    Brad, thank you!!! I get a bit fatigued with all the 2013 predictions and the top 10 lists for 2012. Perhaps I’ll publish my 10 least read posts of 2012 :-)

    • http://www.feld.com bfeld

      That would be a good WordPress plug in to surface some oldies but goodies.

  • http://twitter.com/JannScott Jann Scott

    OMG. You’re hung over. a little grumpy?? Well, OK then I’ll make some predictions:

    Jann’s Predication’s for 2013.

    1. a shit load of drug addicts will move to Boulder seeking dope.

    2.The newest biggest start-up in Boulder will be dope on Apps

    3.The DEA will center a bust in Boulder

    4.a photo will emerge of a Chihuahua licking the balls of a bulldog at Snooze

  • http://engag.io/ William Mougayar

    It seems that you and Lao Tzu, a 6th century BC Chinese poet agree. He said:

    “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

    I’ve become blaze about year-end trends and predictions. Totally useless except for generating headlines and it gives something for the media to write about. As I said in the other post, trends don’t care for Dec 31st or Jan 1st. They have their own timeline and cycles.

    That said, it’s useful is to be able to see the little inflection points, user habits, signals, data points, all uncertain things, but possible predictors of trends to come.

    It is Voltaire who said “The present is pregnant with the future”.

    • http://www.feld.com bfeld

      Another great Voltaire quote along these lines is “Each player must accept the cards life deals him or her: but once they are in hand, he or she alone must decide how to play the cards in order to win the game.”

      • http://engag.io/ William Mougayar

        Bien dit mon ami. Voltaire would be proud of us tonight!

    • http://twitter.com/judyshapiro judy shapiro

      My fav Voltaire quote: Judge a man by his questions rather than his answers.” Wise words for the startup because in the end a startup must REALLY LISTEN to what a VC asks them. Ventures with the best chance of success are the ones ahead of the curve or wave (as Howard Lindzon suggests) – IF they survive long enough to win the day. Trouble is the wrong VC can really hold a budding venture back.

      • http://www.feld.com bfeld

        I love that quote also. And the Epictetus quote “We have two ears and one mouth”

      • http://engag.io/ William Mougayar

        Voltaire fest! He must be rolling in his grave. But not just VC’s asking questions. The market & your users ask good questions too.

    • http://about.me/kirsten.lambertsen Kirsten Lambertsen

      I’d be willing to wager that 90% of those here have read Lao Tzu :-)

  • http://byJess.net/ Jess Bachman

    Given your predilection for science fiction you may want to reconsider your one and only prediction.

    • http://www.feld.com bfeld

      There are days that I revisit that prediction.

  • http://www.TalkingPointz.com Dave Michels

    Wow Brad, I’ve always felt a certain kinship to you – perhaps it is because I too am fairly certain I will die in the future! Small world.

    • http://www.feld.com bfeld

      There are some things that are very predictable.

      • http://www.TalkingPointz.com Dave Michels

        I was going to predict that it won’t end in 2012, but that seems like a stupid dare. To a long and healthy future.

  • http://www.kineplay.com/ben Ben Milstead

    Idealistically I agree. Short-term prediction is a game while a real business/product, not unlike life, is a lot bigger than a game. But it can be fun to play, to make educated speculation, theory, guesses, predictions about interesting topics. And can be fun to read, especially at a more substantive level, e.g. Science Fiction. In any case your main point is real wisdom — but I can’t think of a corporation I’ve ever been involved with, directly or indirectly, that gave a plug-nickel about long-term anything. It’s all about the next quarter. Sometimes the next dime. Hell even that plug-nickel sometimes… Yikes I’m getting pessimysticly here. Okies, back to my regularly scheduled Happy Splace :-). And Happy New Year, btw!

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  • http://adamlieb.me/ Adam Lieb

    One obvious caveat. ephemeral social networks. How great are these things? Poke!

  • http://twitter.com/JarekP Jarek Piotrowski

    Brad, I’d be very thankful if you could expend little more on differences between themes and trends.

    • http://www.feld.com bfeld

      We define how we think about themes at http://www.foundrygroup.com/themes. These are broad horizontal concepts that have 20+ year innovation arc.
      I don’t really know or care what trends are, but my impression is that most people view them with a much shorter time horizon.

      • http://twitter.com/JarekP Jarek Piotrowski

        Thank you for clarifying Brad. I still wonder how this view compares to your friend Howard Lindzon’s view that you should not invest in creating new trends and be a fast follower that does things better & faster. Here is his talk on this subject: https://www.youtube.com/watch?v=ZTGtgXIUXKQ Should entrepreneurs just seek out spaces in themes (i.e. long term trends) that has not been found by others?

        • http://www.feld.com bfeld

          Howard has a mental split here between his public market and private market investment. We also approach things somewhat differently, given his trading background. As with many things in life, there is no right answer and there are multiple, often conflicting approaches.

          • http://twitter.com/JarekP Jarek Piotrowski

            Yep, Howard looks like a person with mental split;))

          • http://www.feld.com bfeld

            Hah – such subtle truth in that statement. I love Howard – he’s awesome, and a total genius in a unique way.

  • http://www.facebook.com/peter.bordes Peter Bordes

    Brad we need to incubate a site the indexes predictions and the outcomes a year later.. #JustSayin :) it would at least make them a bit more interesting

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