2016 – A peek into the horizon

Just opened up office for 2016, hoping for a glorious year and wishing all my friends and readers a great year ahead.

Opening my SOHO office translates to ‘booting up my laptop’ and jotting a few notes on whats coming up, where we need to be heading and defining a few checkpoints both personal and business. I’ve been a big Evernote user all the while and the folks have come up with a very nice month and year planner. They’re free and work inside evernote.

Whether you like paper or digital, a bit of planning ahead for the year is invaluable. Its like peering out into the horizon from your ship’s masthead, you need that once in a while to get your bearings right. Do remember to check back in a few weeks and take stock of what’s working and what needs to change.

With that, here’s my horizon study of finance and economy and how I’m planning my year ahead

State of economy, and what we should be doing

I keep coming across these articles that paint a gloomy economy, so it makes sense to minimize your exposure to stocks and risky investments in 2016. If you watched the big short and believe it to be a flag bearer, there’s even more reason to worry. Metals seem to be relatively stable for this year. Overall sentiment is orange and cautious.

Spreading your risk across categories seems to be the way to go for now

Nice reads on economy predictions elsewhere:

The Atlantic: Global Economy 2016

10 Warning Signs The World Will See A Terrifying Collapse In 2016 

Real estate, potential bubble burst coming up

Prices are back to peak levels, loans(mortgages) have become easier to acquire but it seems there are not a whole lot of buyers. So caution is advised on real estate investments, a bank lending money does not mean that your repayment strengths are great, it could just be that there are not many takers. Overall sentiment is deep orange and more towards red.

CNN talk about market bubble in 2016

Young startups should continue to use creative ways for finding office space. There’s a story about a famous startup running their data center from a van in the early days. Coffee shop is not a bad idea, make sure you get a good pair of noise cancelling headphones though.

Startup funding

From an India perspective the mad investment rush for apps that turn traditional logistics business into ecommerce is slowing down, retail ecommerce seems to have learnt its lessons from the big names. Indian VC backed firms topped $12 billion over two years. Infact the slow down looks like a long needed correction in one sided investments. Eventually leading to more consolidation and buyouts.

Expect a slower 2016 with little bit (you can read as tiny bit) more emphasis on R&D projects as investors realize long term visionary projects bring the maximum benefits and investors appetite for quick money fades off (you can read as ‘there is no such thing’, sure a few outliers are not statistics). Overall sentiment is a neutral yellow.

Which basically means India startups should give up pitching delivery, ride sharing services and real estate innovation and look for more long term value propositions

Valley based funding seems to be narrowing down on on tech areas like IOT, drones, wearable, automation, robotics and a healthy mix of energy solutions. Looks like a good trend of investing in futuristic technology and wait it out for returns. Thankfully the fancy for social products has saturated and investors are discovering that there is more to world changing technology than the next best collaboration and social media tools. Overall sentiment is positive and green.

Corporate culture

Why talk about corporates? well its a good sign of what majority of the work force feels about the overall economy and their plans to handle risks. As always I hear of organization reshuffles and big names dropping the bell curve, which is a confident sign from the employers. But I also see a big lack of job security from tech workers, frequently quoting shuffling of jobs/costs followed by lack of long term vision at most places. Overall I would say yellow but not a great feeling inside the corporate cubicles.

Not much has changed inside the trenches, and expect more of the same (good or bad is a perception)

So how does that impact a SOHO business?

Today Brite.li is still in a ‘mythical’ garage, but expansion plans will have to be more cautious. I’m considering funding options to scale the overall business idea and execution. Otherwise the plans are to keep moving towards profitability with the least expenses. (Does’nt sound any different that last year right? , I guess thats how startups will always be until they reach the tipping point)

My plans of burning more bootstrapped money is now downgraded to risky, pursuit of funding options seems good for the long run, Overall I plan to be extremely cautious of every penny I spend till cash flow materializes.

Do small business have product strategy?

Of course, spread out across segments where possible. If you have more than one product, it makes a lot of sense to pull them under a single umbrella, a’la Alphabet style.

Essentially you are spreading the business risk across categories but looking at profits from a single umbrella.

If you have only one around, its time to start a skunkworks project and spare a little time for the next big thing, after all you don’t put all your eggs in one basket. I luckily have a few of them and will be pulling them in soon.

Let me know what you are thinking and what are your predictions for the year.

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