Technology startups: 10 sectors to watch in 2014

January 23, 2014

Boule de cristal 2014

Photo: Mark Skipper

As an observer of the local and international technology start-up scene, I have the opportunity to be quickly exposed to emerging trends. In this post, I’d like to share with you ten areas that I think are particularly promising in the coming year. And whenever possible, I’ve also identified Montreal startups already operating in the space. Without further ado, here’s what I see in my crystal ball for 2014.

1)  Local vertical marketplaces.

Players like Airbnb (hotels) or Uber (taxis) have shown in recent years that you could create next-generation local marketplaces by addressing a very specific vertical. These players are generally characterized by content depth, better consumer decision-making tools and/or complete vertical integration up to the final transaction. Knowing that there are 4,000 vertical categories in business directories, we are still in my opinion in the infancy of these next-gen vertical sites.

2) Software-as-a-Service (SaaS) tools for SMBs

2013 saw the emergence of companies offering a variety of SaaS software for SMBs (small & medium-sized businesses), especially in customer relationship management, accounting and marketing. I believe we will see other small enterprise software tools launching in 2014 particularly in the offline-to-online space, to optimize sales when a potential customer physically visits a retail store.

3) Small hardware + software products

Following Google’s acquisition of Nest for $3.2 billion last week, this is the sector that will be the most active in the next few months. The democratization of hardware development in recent years is mainly due to the emergence of tools enabling rapid deployment (whether in prototyping or crowdfunding). Top projects usually include a user-friendly, well-designed software layer and are made by the best industrial design talents. With its smart watch, Montreal-based Neptune is a good example of this trend.

4) Digital currency platforms

In 2013, everyone was talking about Bitcoin, the emerging electronic currency, but very few people know that there are now dozens of other so-called cryptocurrencies. Most news articles focus on the increasing value of Bitcoin, the speculative side, but what’s really interesting with electronic money is the emergence of distributed currency/transaction platforms (and the potential around micro-transactions). If the topic interests you, do read Marc Andreessen’s take in the New York Times. Montreal startups Bylls and BitCredits operate in this vertical.

5) Cable companies ready for disruption

I think disruptive innovations will soon threaten CableCo monopolies especially around television broadcasting. Netflix’s strength, the “cord-cutting” trend, the availability of legal streaming content, forced bundles that consumers don’t want are all elements that support this trend. In my opinion, there are dozens of interesting opportunities linked to this trend.

6) Artificial Intelligence and ambient technologies

In 2013, my biggest revelation was Google Now, the almost magical mobile application that analyzes my data exhaust (geo-location, Gmail inbox content, etc.) to provide me with useful real-time alerts such as travel time, weather, flight itinerary, package tracking, etc. We talked a lot about “Big Data” in 2012 and 2013 but 2014 will be the year where we try to proactively make these large data sets useful to users. There are dozens of interesting opportunities here also.

7 ) Security and privacy

Revelations of massive spying by the NSA and targeted advertising abuse by large Internet companies is leading to the rise of new products enabling users to better protect their privacy. Montreal-based Syme is building a software solution that allows you to share content and messages in a private environment. Multiple opportunities exist in this area too.

8) Health

2012 and 2013 saw the emergence of the “quantified self” movement and the launch of multiple applications related to physical health improvement (sleep better, eat better, etc.). This sector stays red hot in 2014 with new applications that can help improve your mental health (relaxation, yoga, stress, etc.).  Montreal startups OMSignal  and Hexoskin operate in this sector.

9) Food

New food technologies in either infrastructure (better distribution, traceability, etc.) or next-generation food products (nutraceuticals, organic and local food, new types of food, etc.) will be top of mind in 2014. Lufa and Provender are proud Quebec representatives in this technology sector.

10) Robotics

Directly linked to trends # 3 and # 6, and the rise of the drone market and Google’s acquisition of Boston Dynamics a few weeks ago , I predict a great future for this area in the coming years .

This article originally appeared in French in my Journal de Montreal blog.

Update:  Boris Silver, Co-Founder and President of FundersClub, just blogged about 10 things the broader tech venture capital community is paying close attention to:

  1. Drones
  2. Bitcoin
  3. Wearables
  4. Big Data
  5. Crowdfunding
  6. Quantified Self
  7. 3D Printing
  8. The Internet of Things
  9. Mobile
  10. Virtual Reality

Definitely some overlap with the things I’m watching. Always interesting to compare.

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One Response to “Technology startups: 10 sectors to watch in 2014”

  1. Abid Chaudhry Says:

    I’ve become a Super fan of Google Now. I really think the move from ‘list of results’ to answers and relevant data when it’s most timely is going to continue to be a major disruptor in how consumers engage with information and commerce online. Also agree with health tech.


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