We live during a time in which it is increasingly hard to separate technology milestones from cultural milestones.
To take just one example – right now in April of 2015, most of the world is aware of the Apple Watch, but almost no one has one. Despite this, there is no shortage of predictions about the Watch:
It reminds me a bit of a similar period eight years ago – spring 2007, after the iPhone had been announced, but before anyone owned one. (The iPhone was released in June 2007.) Here are a couple of the (now humorous) predictions about the iPhone from January, 2007:
What we know now, of course – 700 million iPhones later — is that the iPhone fundamentally changed not only the mobile industry, but also:
To demonstrate that this isn’t just an Apple story, here are some other things we didn’t have back in spring 2007:
- Amazon Kindle
- Xiaomi (world’s 3rd largest smartphone distributor and most valuable private company; currently valued at $46 billion)
- Uber (current valuation: $41B)
- Snapchat ($15B)
- Pinterest ($11B)
- Airbnb ($10B)
The point is that when you try and predict the potential size of a new market, it is not necessarily useful to look to existing, mature markets for comparisons. We learned this when:
In these cases, the new markets that emerged became much larger than the markets they replaced.
As Benedict Evans has eloquently described, when trying to estimate the market potential for something fundamentally new, you have to do two things:
As technology companies become lifestyle companies, and every new sensor creates a new business opportunity, we are going to see this happen not only with well-designed wearable products, but with ioT in general, as well as the new platforms and use cases they engender.
We should never underestimate the ability of new markets to completely upend the current state of things. To the contrary – we should assume they will, and plan accordingly.