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SXSW 2016: Our Foolish Recap

By Simon Erickson - Mar 24, 2016 at 9:04PM

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Analyst Simon Erickson is back from the South by Southwest technology festival, where he scouted out developing trends and Rule-Breaking companies. He shares his thoughts about artificial intelligence and the two other big concepts everyone was talking about.

Austin's annual South by Southwest festival is a glimpse into our future. Tech-savvy start-ups and multibillion-dollar enterprises alike are eager to show the world their newest projects and latest technologies.

Our attendance at SXSW is an investment in our investments. We want to know about developing trends, and assess their impact on our existing portfolio. And we want to find the smaller, growing companies, that could be well-positioned for massive future upside.

For those interested in hitting the high notes, there were three key takeaways that seemed to keep bubbling up in several of the festival's discussions:

  1. Artificial Intelligence is getting significantly smarter.
  2. Big Data Analytics is expanding into new markets.
  3. Virtual Reality is the buzzword everyone is talking about.

I dig deeper into each of these themes in the following video, and in the written piece below. I hope you find the research useful. 

Foolishly,

Simon aka TMFInnovator

About 4 minutes.

Aritificial Intelligence is progressing in its perception: It has come from being a science-fiction idea to drawing initial skepticism to now attracting corporate investment. Similar to how Internet-connected users continually update Wikipedia pages with new information, Internet-connected cars, robots, and search engines are continually being updated with data taken in from the world around them.

Algorithms are becoming less "static" and "brute-force," and are instead learning about user preferences to improve results. Androids with lifelike, humanoid bodies are now capable of carrying on intelligent conversations.

The early adopters of Big Data were online marketers that wanted to improve customer-conversion rates by anticipating users' buying intentions based on their web behavior. This concept is proving it has legs, and is catching on in other industry verticals, particularly healthcare.

With an increasing number of electronic health records at their disposal, and with biometric information now being collected by healthcare-related wearable devices, data scientists are looking for statistical correlations to predict and prevent costly medical conditions. In large populations, less than 5% of patients drive 80% of healthcare's overall costs. Accurately preventing these conditions could bring huge benefits to our country's medical and financial health.

Virtual Reality is in the early stages of the hype cycle, and it was undoubtedly the most commonly cited two-word phrase at SXSW this year. A variety of headsets are becoming commercially available, and tech-savvy consumers are paying upward of $800 to buy them and plug into new, immersive worlds. Journalism and telecom companies have begun subsidizing the upfront costs as a way to encourage adoption.

But the amount of VR content available is still limited, and the experience isn't yet lifelike. Once the number of headsets placed hits a critical mass, we'll watch for larger media companies to begin developing their own VR content. That could mark an inflection point, where VR transitions from a cool idea to a profitable and sustainable industry.

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