Investor Insight into Tech Trends

Having invested in more than 100 startups (“which means I’ve looked at well over 1,000 of them”), Santa Barbara Angel Alliance founder John Petote shares these insights on today’s tech trends. 

Watch the Legislation: “You’ve got the government coming down on the four or five big leaders in technology. That’s going to slow them down in some form. I’ve seen this cycle a number of times, where three to four horses take off and they just start dominating. Then the government gets involved, and that means there’s a new fertile ground opportunity for startups to really address niches that they can exploit in a three- to seven-year period.” 

5G Is Next: “The more you increase bandwidth and the cheaper you make it, the more opportunity there is for new technology to exploit it. We’re going to see a lot of startups come up to take advantage of that, and they should. It is going to be a whole new cycle.”

Locals to Watch: “Some of the companies that are starting to mature as startups and getting ready to go to a blast-off phase are Apeel Sciences, Invoca, and Impact Radius. You don’t hear about [Impact Radius] much, but they’re doing really well. Some data companies as well, including HG Insights and Carpe Data, are starting to accelerate. They are young enough and nimble enough to keep morphing their product to capitalize on more bandwidth that’s faster and cheaper.”

S.B. on Upswing: “When I started investing in 1997, the VCs would laugh at us and say, ‘It’s just a little beachy tourist town.’ When a billion-dollar company exits like Lynda.com (purchased by LinkedIn, then by Microsoft), Procore is probably $4 billion now, and Apeel is probably hitting $1 billion, and it goes on and on, then they go, ‘Wow.’ They’ve got to take that seriously. Over the last 15 years, the Bay Area is really so crazy, and it’s polluted and it’s so crowded, so they’re saying, ‘We’ve got to get out and come to Santa Barbara.’”

Success as Fertilizer: “When a company exits, these people either get rich or get richer and then they think, ‘Well, I’ll be bored,’ so they want to have fun again and start another company and bring more talent in. Or they become an investor, if you’re like me, and help coddle these companies and sit on boards and really mentor them.”

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