Fred Wilson On Bitcoin, Unbundling, Data Leakage And Health Care

During the 10th edition of the LeWeb conference in Paris today, New York-based investor Fred Wilson explained the “mega trends” that currently influence which companies he invests in.

Wilson stressed that he doesn’t so much look at technologies but at the trends that are influencing society in general. This way, he can build a framework that helps him to “think about what are the big opportunities that will present themselves.”

The first macro trend, Wilson said, is the transition from slow bureaucratic hierarchies to technology-driven networks. In his view, the old top-down hierarchies worked, but in today’s post-industrial world, they are just not efficient enough.

The first place we saw this trend was media, but we are now also seeing it in other places, too, with Airbnb and hotels, for example, and in creative industries thanks to Kickstarter or learning through Codecademy and Duolingo.

photo (9)The second trend, according to Wilson, is unbundling. Until now, it was more efficient to package a bunch of services or product up in bundles and deliver them together. Now, however, buying a la carte and getting the best possible service is how we expect to do business. Instead of getting our business news and world news from a single newspaper, for example, we can now go online and just get the best news in a specific category.

Other industries that are now ripe for disruption because of this, he said, are banking, including in lending and asset management, education, where online classes are disrupting the traditional models, and research, where technology makes collaboration much more efficient. Entertainment, too, he believes is already going through this stage of disruption thanks to Hulu, Netflix and similar services.

The last trend – and the most obvious, he believes – is that we are all now nodes on the network thanks to the smartphones we all carry around with us. Now that we are nodes on the network, we can all reach each other all the time with very little effort. This enables tools like Uber, but also┬ápayment and dating apps (Wilson used the example of Tinder here).

Every investment Wilson makes, gets evaluated based on these criteria right now. Wilson himself, of course, is known for making very few investments per year (one or two) and his firm, Union Square Ventures, makes about ten. To make these pay off, he has to be smart about finding these mega trends and the companies that fit into them.

Wilson was also very bullish on Bitcoin. To him, it is a layer of the Internet infrastructure – and a protocol – that entrepreneurs will use to build tremendous amounts of new technologies and services on top of in the coming years. To him, the fact that Bitcoin isn’t controlled by banks or governments makes it a very “investible” trend.

Health care, too, is something he is clearly interested in investing in. All the three megatrends he is focusing on, he believes, are coming together in health care right now. One of Union Square’s latest investments, Human Dx, for example, is tackling collaboration in health care by applying many of these trends.

Wilson also thinks fixing data leakage is something worth investing in. When the industrial revolution came along, he said, we started polluting, but we didn’t do anything about it for a century. In the information revolution, this pollution is data. It’s the data that eventually leaks out that lets governments and companies like Google spy on us.

While we allowed Google and others to become our identity providers, “what essentially we are doing is giving them access to everything we are doing.” Wilson believes that there will soon be a Bitcoin-like protocol that will emerge that allows us to do the same thing, but which will give us full control over identity, privacy and data.