Revisiting 2024 Predictions

Grading myself, and what others predicted would be the next big thing this year.

Dec 18, 2024

Welcome to issue #56 of next big thing.

A year ago, I wrote What I’m preparing for in 2024. Today I’ll grade those 7 predictions, as well as assess others’ submissions for what The next big thing in 2024 will be…

Fundraising Frenzy

Venture capital fundraising slowed considerably in the U.S. in 2023 (Q3 ‘23 was the lowest total dollars of new investments in a quarter in 6 years), after slowing down in 2022 more than 30% from the peak in 2021. But what we’re going to see in 2024 is a bit different — there will be a frenzy of companies trying to raise capital because they need to raise capital. That wasn’t the case for the past two years, especially because so many companies raised money in 2021 and have had enough runway to ride out 2022 and 2023 without raising more. Couple this with lower interest rates, with continued excitement for making new investments in early-stage companies, with founders having multiple reasons (AI and other trends as enablers, layoffs and a lack of quality job opportunities as a forcing function) to go start companies, and this leads to a very, very busy year for venture firms. Lots of new companies will get funded, companies that are progressing well and have real product-market fit will raise follow-on rounds (at lower valuations than the founders desire), and unfortunately there will be many companies unable to raise that will therefore have to make tough decisions.

Grade: B. The data so far shows that 2024 will be a slight uptick to 2023 in terms of the number of venture capital financings (~15,000), and the total dollars invested (~$175B). It wasn’t quite the frenzy I thought in terms of companies raising because they needed to, but it did feel, especially for new AI-native companies, like a different kind of frenzy. Rounds happening in a few days, highly competitive, and high priced, for companies with star founders or with real momentum. At Footwork we had our busiest year of new investments in our history, and I’ve anecdotally heard several other venture firms say the same thing.

IPO Readiness

There are a number of late-stage companies that are thinking about going public — the latest PitchBook-NVCA report estimates 75 companies in the IPO backlog — but I don’t expect many of these will actually go public in 2024. These companies are trying to make sure they have predictability in their revenue growth, at least six quarters of strong and consistent financial performance, profitability or a very credible path to get there, and management teams and boards that are ready for being public. Some companies are well on their way to all of the above, but most are going to need this year to get there. As interest rates lower, and the IPO window starts to crack open, “getting ready to go public” will be the goal at a lot of companies, with the plan of actually doing so in 2025.

Grade: A. With ServiceTitan’s IPO last week, others like Reddit that had successful debuts this year, many public companies near all-time highs in their stock prices, and a pro-business presidential agenda, it feels like the IPO floodgates are open, and that 2025 will be a banner year. We’ll look back on 2024 as the readiness year I thought it would be.

AI Rollercoaster

AI is going to be everywhere this year. Some of the most promising companies will be ones that are growing very quickly in users, customers, and revenue, with products that are AI-enabled or lay down important AI infrastructure. But there will also be AI backlash — from those who sue foundational models for using copyrighted content in training data (as The New York Times is doing in suing OpenAI and Microsoft), as well as those who worry about AI safety (such as the faction at OpenAI that was perhaps some of the reason for the drama a few months ago). It’s going to be a bumpy ride, particularly for the companies building models, and the lawsuits and safety concerns will slow progress. But I am excited to watch the applications that gain consumer and enterprise adoption — products like ChatGPT, ElevenLabs, EvenUp, Glean, Harvey, HeyGen, MidJourney, Perplexity, ReflexAI (where Footwork’s an investor), RunwayML, which all seemed to have deepened or found exciting signs of product-market fit in 2023. That list should be much, much longer at year-end.

Grade: A. AI was indeed the central theme of the year in technology, by a long margin. There was some bumpiness, but mostly it was a year where the list of AI-native companies gaining consumer and enterprise adoption grew much, much longer, as I had speculated.

Crypto Usefulness

It feels like 2024 could finally be the year where we see several useful, real world applications of crypto, beyond store of value and speculation. There are a few reasons for this:
Talented and non-hype-driven builders have been working to build products, enabled by crypto technology, that end users love, during the crypto winter of the past few years.
Crypto assets have had a great year (Bitcoin up 2.5X, Ethereum up 2X, Solana up 10X), Coinbase (the leading crypto exchange in the U.S.) has had very strong stock performance this year (up 5X), Bitcoin’s 4th halving will take place in April, Bitcoin ETFs are likely to get regulatory approval, and all of this activity leads to more incentive for crypto builders to build real-world, useful applications in decentralized finance (DeFi).
The centralization concerns in AI, as evidenced by the drama at OpenAI, give more credence to decentralized approaches in AI and other sectors, which could be enabled by crypto and blockchain technology.
We’ve now been through many high and low cycles, builders have been building for a while (Bitcoin’s been around for 15 years, Coinbase was founded 12 years ago), and it just feels like the right time based on all of the above for some really interesting products, that deliver great user experiences and just happen to have been enabled by crypto technology, to gain end user adoption.

Grade: A. This is the prediction that I wish I had prepared better for, via buying more cryptocurrencies, and paying closer attention to products like Polymarket, Kalshi, Bridge (acquired by Stripe for $1.1B), and Sling Money, all of which found exciting signs of product-market fit in 2024. With Bitcoin trading at $100K, and the intersection of AI and crypto feeling like a very fertile ground for new company creation, this was a banner year for crypto believers and builders.

Consumer Health

In 2023, consumer health was the sector in which we saw the most number of interesting early-stage investment opportunities at Footwork. We spent time with several companies in areas such as diet and nutrition, weight loss, mental health, neurodivergence, addiction treatment, with services paid for by insurance and delivered virtually, that were seeing early exciting signs of product-market fit in a short period of time post-launch. I expect this will continue to be a fruitful area to build and invest in in 2024, with continued growth in demand for GLP-1s (weight loss drugs), mental healthcare, and preventative medicine covered by insurance, as key accelerants. It remains to be seen what is defensible about some of the startups in this area, and how they ultimately get valued at exit, based on the services nature of many business models.

Grade: B. While we continued to see exciting consumer health opportunities this year (and Footwork made one investment in this category that is making great progress), it wasn’t as fruitful of a year as I had hoped it would be in this market, and I’m not sure there was a breakout consumer health success story, hence the B grade.

Vision Pro

The most exciting consumer product launch of 2024 is likely to be the Apple Vision Pro. No one does hardware and launches like Apple, and though the price point of this product is high ($3,499), limiting the addressable market, I expect that Apple’s strategy of limiting supply will lead to Vision Pros being in high demand. The early reviews of those who were able to test the product in 2023 were very positive. I think we’ll see a lot of excitement from those who are able to get their hands on Vision Pro, and we’ll see startups specifically calling out the Vision Pro as their “why now?” as they rush to build compelling applications for the platform. TBD on whether the product becomes mass-market enough to yield massive new companies at the application layer.

Grade: F. So disappointing. It feels like Meta, with the Ray-Bans and with Orion, has a more compelling set of recent hardware launches than Apple.

Political Chaos

Unfortunately I believe that a year from now we’ll be dealing with the ramifications of the 2024 U.S. Presidential Election more than any other event in the year. The problem we have is that, whether Trump wins or does not win, chaos and turmoil are guaranteed. While I hope that it does not happen, there’s a good chance that he does win, and I worry about the uncertainty that could cause, given the unpredictability of his actions, and in a world that feels increasingly tense. The markets may rally of course — political uncertainty does not necessarily mean economic chaos — but the longer-term impact on America’s democracy is what will keep me and many others up as we end the year.

Grade: C. Change, yes, but chaos, no, because the election was not as close as I thought it would be.

There were many great submissions by 50 of technology’s top thinkers to last year’s The next big thing in 2024 will be… piece. Here are some of the ones that feel particularly on-the-nose as the year draws to a close (look for the ⭐s!).

… AI showing ROI.

The next big thing in 2024 will be "Prototype to Production." In 2023 everyone was experimenting with AI. But there were lots of questions that limited the roll out of these experiments. What would they cost? Are they secure? What are the compliance risks? In 2024 a lot of these questions will be answered, and we'll see AI applications moving from experiments / prototypes / internal apps to large scale customer facing deployments.

-Jamin Ball, Partner at Altimeter Capital

The next big thing in 2024 will be startups experimenting with outcomes-based pricing. As GenAI starts to show quantifiable business impact, startups will move to align value creation incentives with their customers. Note what Intercom is trying with Fin- charging $1 per resolved ticket. This experimentation will be bumpy- I expect 2024 to be a learning year.

-Jake Saper, General Partner at Emergence Capital

There were several great submissions here, from Jake predicting that outcomes-based pricing would become a thing in 2024 (this feels like an increasingly important trend!), to Jamin’s point that this will be the year we go from prototype to production AI.

… AI infrastructure.

The next big thing in 2024 will be AI models that push beyond the limitations of the transformer architecture, giving us larger context windows, faster and cheaper inference, and more powerful AI systems overall.

-Bucky Moore, Partner at Kleiner Perkins

The next big thing in 2024 will be a form of routing infrastructure for LLMs. Cost is the most prohibitive element of LLM usage at scale. Companies will use multiple LLMs in real-time for different purposes. A breed with of companies will be formed around intelligently routing requests to the right LLM for the right use case.

-Harry Stebbings, Founder at 20VC

The next big thing in 2024 will be the open-source foundational model ecosystem, which will be a key enabler of enterprise adoption of GenAI. Data privacy concerns have been a hurdle to adoption thus far, and maturing open source models and training infrastructure will enable privacy-concerned enterprises to deploy GenAI while minimizing third-party risk.

-Jake Saper, General Partner at Emergence Capital

While some of this (e.g. models well beyond LLMs) hasn’t yet materialized, it did feel like Bucky, Harry, and Jake captured much of what was the next big thing in 2024 — open-source models, routing infrastructure, and builders pushing AI models to new heights.

… AI-enabled applications.

The next big thing in 2024 will be an explosion in AI agents of all kinds, focusing on every consumer need and on every kind of business transaction.

-Gokul Rajaram, Product and Business Helper at DoorDash

The next big thing in 2024 will be AI-native applications. Today, Anthropic’s Claude and OpenAI’s ChatGPT are the “Excel” of LLMs – simple to start using but offer immense depth and potential to solve complex use cases for power users. Opportunities will emerge for AI-native SaaS applications — built AI-first from day one — to unbundle these complex/specialized workflows that are executed in Claude and ChatGPT today.

-Natalie Sandman, General Partner at Spark Capital

Natalie and Gokul nailed what I think we’ll look back and remember 2024 for — the year of breakthrough AI-native applications!

… voice-first AI.

The next big thing in 2024 will be voice-first AI applications. Voice will be a new emerging way to interact with technology and the heart of a new set of productivity apps. LLMs can deliver voice-first productivity at a level far beyond Siri + other legacy agents. This will give every person an assistant on-call (literally). Audio allows for more natural and higher fidelity interactions, and tools built on this will become integral to our lives.

-Anish Acharya, General Partner at Andreessen Horowitz

The next big thing in 2024 will be the rise of personalized UIs that are generated on the fly, adapt to the use case, and are multimodal and dynamic. This means fewer chat bot interfaces and more ambient, voice first, and generative UIs.

-Talia Goldberg, Partner at Bessemer Venture Partners

While voice isn’t *mainstream* yet, it trended significantly upwards in 2024 as Talia and Anish thought it would, becoming the way in which more and more consumers and enterprises interface with AI.

… robotics.

The next big thing in 2024 will be a ton of movement in the robotics industry. Figure and Tesla are newer entrants for humanoids and I expect the landscape to explode. Fundamental infrastructure to build them has been built by legacy players. Opportunities in manufacturing alone are in the trillions in terms of market opportunity.

-Nichole Wischoff, Founder & General Partner at Wischoff Ventures

I hear increasing excitement for the advancements happening in robotics, which weren't made public in 2024, but which are very likely to shape 2025 and beyond. Humanoids like Tesla Bot and Figure, foundational models like Physical Intelligence and GeneralistAI… the future here is very bright, with the movement Nichole thought would happen this year.

… a flight to quality.

The next big thing in 2024 will be quality technology public stocks proving yet again to be the best risk-adjusted sources of return for the long term.
The managements of technology businesses, specifically mid-to-large cap, have learned some tough lessons post ZIRP, and have re-structured their costs, are re-focusing on operating discipline and capital allocation.
Software businesses should see fundamental demand for their services as cost optimizations have troughed across the board at their enterprise customers, Internet businesses should gain market share relative to their offline counterparts (and especially so if we have consumer recession in the US), and payments businesses should see multiples increase (post-capitulation) as rates remain steady (and potentially even decline).
After a strong 2023, another six months of strength should result in the IPO window finally opening again, especially as long duration assets become more attractive. Databricks and Stripe, I am looking at you to bring much needed liquidity to the tech markets!

-Ram Parameswaran, Founder at Octahedron Capital

Ram got a lot right in this submission! It was a great year for quality technology companies in the public markets. And the IPO window feels open again as the year ends.

… in the office.

The next big thing in 2024 will be the return to the office! For most of 2023 we saw wavering stances from CEOs in fear of massive churn. By the summer, I think we will be back to 4 days a week in office across major fortune 500s, with a cascading effect down into big tech. This will lead many to quit (mostly those who were ready to leave anyways) but will also increase efficiency and bring those closest to the company back in alignment around what it takes to not just survive, but win.

-Brian Hollins, Co-Founder & Managing Partner at Collide Capital

The next big thing in 2024 will be office culture. Starting an in-office company will go back in vogue. We are officially in a post-Covid world (not that Covid isn't over, it's just fact-of-life now). As employers gain leverage, they'll start dictating more of the terms and one of them will be wanting people back in office. It's not clear if this will be an alpha or not. Maybe a positive on the margins, but not a real game changer either way.

-Can Duruk, Co-Founder & CTO at Felt

I heard over and over again this year that companies are back fully in-person and seeing real benefits from it. In San Francisco, there was a real vibe shift in 2024, back to in-person office culture, as Can and Brian thought would happen.

… geopolitical.

The next big thing in 2024 will be the global rise in nationalism, making the sovereignty of technology — software and hardware — and defense applications more important than they have been in 40 years.

-Kanyi Maqubela, Co-Founder & General Partner at Kindred Ventures

2024 was the year of change elections in most democracies, and an overall rise in nationalism. As Kanyi highlights, defense technology is a more relevant theme than I can remember and one where many venture firms are spending significant time.

… old, not new.

The next big thing in 2024 will be the expansion of DeFi to enable borderless payments at scale.
Over the last decade, the concept of borderless payments was frequently hailed as crypto’s killer use case. Designed to operate globally from the start, crypto payments could make moving money faster, cheaper, and more resistant to hyperinflation. But for an idea arguably as old as the industry itself, we still have yet to see platforms solving this problem for consumers at scale.
Things are changing, however, as the facts surrounding borderless payments’ feasibility have changed as the industry has evolved. Specifically, the last few years have seen massive developments across the infrastructure stack. Blockchains have become faster and cheaper (particularly, the Solana blockchain has emerged as a popular choice for builders in this category). Self-custody wallets have been made more user-friendly by way of account abstraction and multi-party computation. Stablecoin APIs have matured and their use cases have expanded. This new set of tools has provided an increasingly compelling foundation on which companies in this category can be created. I’m optimistic that 2024 and beyond will usher in even more companies that are building on the foundation of what consumers need. Perhaps what once was old is new again.

-Gaby Goldberg, Investor at TCG Crypto

As Gaby articulated, borderless payments leveraging crypto took a significant step forward in 2024, with companies like Bridge, Sling Money and others growing quickly with these products. It’s a reflection on the importance of market timing — so many companies were too early in DeFi money transfer in the past decade. The technology improvements, greater user need and comfort, and increasingly defined regulatory frameworks led to real progress in 2024.

That’s a wrap on 2024. I’d love to hear your reflections on these predictions, and what the key developments were in the year from your perspective.

Next up: 2025, and a post before year-end on what tech thinkers believe the next big thing will be next year (send me a note or leave a comment if you have a contribution!), as well as what I’m personally preparing for.

Happy Holidays!

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