I saw a new acronym the other day, "SoLoMoClo," which stands for Social, Local, Mobile, Cloud. The reason people are focused on these four categories are the multi-billion dollar ecosystems created by Facebook and Twitter in Social, Groupon in Local, iOS (Apple) and Android (Google) in Mobile, and Amazon and Salesforce in Cloud. I think we've only scraped the tip of the iceberg in these categories, and that a number of SoLoMoClo companies will break out in 2012.
Facebook will be the biggest tech IPO in history. It deserves the spotlight as getting 1 in 10 of the world's population to use your service is an astounding feat. Enormous companies in their own right have been built on their platform, including Zynga which beat Facebook to the public market. There is a lot of room for growth for the platform itself and companies leveraging the social graph and rich personal data, such as BranchOut. Twitter, the other behemoth in social, still has the zeitgeist but has yet to find a scalable business model. They are banking on their data licensees (Mass Relevance, Crimson Hexagon, Datasift and Gnip), and hope they can build a multi-billion dollar ad network. As Twitter and others in this category pave the way for social ads, I think intermediaries for ad spend (think Madison Avenue 2.0) such as Nanigans in Boston and Unified (stealth) in NYC will be winners. That being said, my prediction for the biggest breakout in social will be product sharing site Pinterest, which will cross the chasm in 2012.
The road to SMBs is littered with bodies. Unit economics are really hard to make work in this category because scale typically requires a huge feet-on-the-street salesforce. Groupon's prospectus painted a pretty bleak picture of this even with aggressive accounting. It is also difficult to get SMBs to spend money. As Yanda Erlich told me there is a reason this category is called SMALL business. The most interesting thing happening in local are marketplaces for highly verticalized surpluses in capacity such as AirBnB (apartments), TaskRabbit (small tasks), Getaround (cars) and loosecubes (work spaces). I like these businesses because they are consumer facing and are likely to have a higher viral coefficient than B2B.
Many people think of Zynga as a social app since they started on Facebook, but they've built an iOS and Android empire with their own titles like Farmville as well as through acquisitions (the biggest being Newtoy, but it is rumored that Rovio (makers of Angry Birds) turned down a $2 billion overture). Mobile gaming is a huge market and as the iOS and Android marketplaces mature there will be room for more dominant development shops like Zynga, EA and Rovio. On the recommendation front, with Yelp going public but their mobile experience leaving a lot to be desired, they will be making acquisitions to spur growth. Urbanspoon and Google (and probably Groupon) will be competing for these deals. Keep your eye on apps like Foodspotting, Ness
In cloud, infrastructure-as-a-service startups will continue to gain traction with other startups and some will make headway into the enterprise with Mashery and Twilio paving the way. Kinvey has cleverly adopted the tagline "We've got your backend". Related to this are hosted apps like WP Engine (blogs), Chargify (payments), LiveFyre (comments), and UserVoice (feedback). Platforms like AWS and Salesforce's Heroku, make it easy and inexpensive to quickly build and deploy apps. The company I co-founded, Infochimps, and others with data chops will make it easy for any developer to leverage "big data".
Healthcare startups will get more attention thanks to incubators like RockHealth and the high profile investment by DST in ZocDoc. Mass customization will cause disruption in retail as well as e-tail with startups like Gemvara and Custom Made. Also products-as-a-service startups like the ones Brit Morin blogged about will go mainstream in 2012. I'll be ringing in the new year with SoLoMoClo and lime.