by Venkatesh Rao, it's all going to collapse!!
Modern basic science tends to take far longer to reach markets than it used to (~20-30 years at least), so if you are focusing on the next decade, basic science is not the place to look. You want to look at market pull based around known problems and opportunities and validated disruption patterns rather than disruption potential of basic science innovations.
Here are some of my favorite things to bet on. I'd bet on them if I had anything to bet.
I'll call out the 13th opportunity separately because it is a meta-opportunity with respect to the others.
Technology to reinvent capital markets and investment: A meta-problem is that the capital markets are simply obsolete. They suck at spotting such opportunities, entrepreneurs who can attack them, and putting money in the right places. The government would do worse, so that's not a solution. So a big meta opportunity is just technology that allocates money and other resources far more efficiently to these opportunities. The current VC/entrepreneurship worlds are in a mess, and to their credit, the players are doing some serious introspection. But mostly, it is still business as usual.
I have nothing against VCs and angels. Most are extremely smart people. But the world of problems and opportunities is now so complex and fragmented that any system that relies on “bottleneck star-spotting talent” (i.e. the sagacity of a small active investor class or inbred entrepreneur-turned-investor class) is doomed to hits its limits in short order. Peer investing, crowdfunding, the transparent processes of AngelList, and bootstrapping are the beginnings of alternate models, but they simply don't move enough money around yet. This is the reason Silicon Valley seems like such a messed up place to outsiders: the world's highest concentration of extraordinary talent is being funneled towards some of its most unimportant problems (and in fact, towards work that exacerbates rather than improves things).
People in the Valley, I find, believe in the myth that theirs is an efficient free market economy of investment and that attempting to “direct” the entrepreneurial energy will kill it. This is laughable. The system is explicitly set up to direct entrepreneurial attention in extremely non-free ways. The entire region is wired to the capricious opinions of a few key people, who drive not only their own investments, but via imitation, the money of lazier thinkers. Even if these people were 1000x geniuses with wonderful intentions for the world and preternatural ability to direct money in the right ways, there would still be a huge shortfall in the diversity of intelligence needed to make the money they control truly “smart” money. The money may be smarter than average investor wall-street money, but it is nowhere near as smart as it could be.
Example: A very simple measure of this is simply the high degree of localization of investment. Ghemawat in World 3.0 tracks liquidity and global flow of venture capital and estimates that the lion's share of investment happens within 20 miles or so of the investor. This happens because the investors mitigate the risks of their own limited knowledge by only investing in companies that set up shop locally, down the street. To get the money, entrepreneurs flood to the location of the money rather than the location of the markets/problems to be solved. Some justify this by pointing to the advantages of high concentrations of talent. While this is certainly valuable, there is a very high cost paid in not being close to the problems and market opportunities. People who have the market intelligence to solve water management problems are not going to emerge out of water-rich Northern California. They are going to emerge in Southern California, Nevada and Arizona. If you try to put out a call for “water management ideas” in Silicon Valley because all the 10x engineers and serial entrepreneurs are located there, you will get brilliant ideas for social networks where water-technologists can interrupt each others' attention, rather than ideas that actually help manage water better. So simply creating a technology that lowers the geographic distance risks of investment would be a huge plus. If a Valley VC firm could invest in an Africa-based entrepreneur with only 10x the risk of investing in a University Ave. firm, instead of 1000x, money flows would change DRASTICALLY.
The mis-utilization of talent is so extreme, that if I had money, I'd rather invest in an average hustler and a non 10-x engineer team who are near an actual important market/problem than in a 10x super-star team in Palo Alto. Sure the latter would execute far more brilliantly and with all the latest technical tricks. But they are at a far higher risk of solving the wrong problem and then struggling to find a market. We are reaching diminishing returns from investing in the right team in the wrong place. Investing in even mediocre teams in the right place should provide good returns by comparison, on problems that actually matter and map to interesting markets.
There is a just-so excuse I've heard in the Valley lately, that you can't figure out a market before hand, and that a startup is an organization designed to “search for a business model.” True, but in a way, we've had to invent this whole Lean Startup process to efficiently “hunt” for markets primarily because startups are in the wrong place.
In a way the Lean Startup is a Californian solution to a problem created by trying to do everything in California in the first place. Steve Blank said at some point that you should get out of the building to be an entrepreneur. I think that's WAY too weak. You have to get out of California. If you've ever tried literally “walking out of a building” in SoMA or University Ave., you know that you've basically not left the building at all.
Much less efficient models may end up working well if you simply made the “hunt” part easier by NOT trying to solve every damn problem while sitting in Coupa Cafe in University Ave. It seems idiotic that I actually have to explicitly argue that a startup focusing on making money by delivering mobile banking services in Africa should, err… be located IN Africa. No amount of screaming that “all the 10x engineers are here!” will convince me that Silicon Valley is the right place to solve that particular problem. By extrapolation, I refuse to believe that most of the important business opportunities are somehow magically accessible to people sitting in California. 90% of the opportunities require you to leave the building…err… California I mean.
Better geographical distribution of entrepreneurial talent and money near markets and problems is merely one way to make the capital markets “smarter.” There's tons of others.