Much like crypto, the only constant last year was the pace at which it changed.

At Lightspeed, the pace was… well, at lightspeed! We partnered with over 150 new Founders across Consumer, Enterprise, and Health, welcomed 8 new Partners to the firm and saw many IPOs, including Affirm and Honest.

Every moment felt like execution mode. One issue with that mode is we may not be able to see the wood for the trees (a good British phrase!). I am a believer that board meetings, offsites and end of year vacations are terrific times to take a metaphorical walk in the woods and reflect on where the world is going. That’s why I take time every year to put pen to paper about predictions for the year ahead.

Here is a recap of my 2021 predictions:

* Mental health apps are on the rise → ✅ (Calm*, Real*, BetterUp* & others)
* Social shopping becomes part of US pop culture → ❓(Popshop, Whatnot)
* Networking will be (mostly) virtual → ✅ (Zoom, Lunchclub*)
* Consumers are the new creators → ✅ (increasingly true in a Web3 world)
* The pace of work will only increase → ✅ 🙈 (unfortunately, this is too true)
* The lines between B2B and B2C are blurring → ✅ (Cameo*, Calm*, Zoom)
* Our ears will be as important as our eyes →❓(little change here)
* Tech will grow more diverse in every way →❓(still work to do)
* Hybrid work environments will be the new normal → ✅ (we’re living it)
* The future will be happier → ❌🙈 (perhaps the most important one of all but it’s hard to tick this one. Come on 2022!)

Here are 10 predictions for 2022:

1. NFTs will become mainstream and attract far more diverse consumers
2. VR and AR will cross the chasm and games will be the gateway to the metaverse
3. Quick Commerce and eCom will boom in a Web3 world
4. Meta-influencers will be a new growth channel
5. Content creators will finally be paid their worth
6. Kids are the next big focus in mental health
7. Consumerization of early healthcare diagnosis
8. The oxytocin and adrenaline economy will boom
9. The verticalization of social media for Gen Z
10. Everyone will be an entrepreneur

1. NFTs will become mainstream and attract far more diverse consumers

You could argue that being a consumer investor in 2022 will be synonymous with being a crypto and metaverse investor. At Lightspeed, we started investing in crypto in 2014 with Blockchain.com and others. We’ve spent the past couple of years investing in crypto infrastructure and there has never been a better time to build the next layers.

NFT trading volume hit $13bn for 2021, which was a yoy increase of 43,000% (!!). Despite this rise, the audience remains largely a crypto community with ~80% of the audience being male. 2022 will be the year this changes with companies such as Autograph opening up NFTs to the masses and welcoming more diversity in every way.

The use cases of NFTs will also emerge from mainly speculative to utility. My Partner Mercedes Bent believes:

the next generation of NFTs will be dominated by utility and gaming NFTs that provide functional value, NFTs that return value like tokens or revenue. This could include character NFTs for online games (avatars) that let you earn tokens when you play to the NFT of a digital billboard that produces daily ad revenue.

2. VR and AR will cross the chasm and games will be the gateway to the Metaverse

Epic* CEO, Tim Sweeney believes the metaverse could be a “multitrillion-dollar opportunity” and our investment thesis on Epic is that they are well positioned to be a leader in the metaverse, albeit I believe there will be many winners given the size of the prize.

I remember sitting on a flight with one of the Oculus founders and hearing him say that it will still be 5–10 years before VR crosses over from just gaming to be adopted for other use cases. That was 5 years ago and the time is now.

We have also crossed over to where the majority of young consumers consider themselves gamers (as shown by the chart below) which should continue to increase the adoption of VR and AR. They will come to the metaverse for the games but stay for the community.

3. Quick Commerce and eCom will boom in a Web3 world

If we believe in a Web3 future, which I certainly do, then we need to consider how Web3 becomes integrated in our lives and what changes we need to make as a result. The number of hours on screens is currently 8 hours a day and could be nearly all our waking hours in a few years.

If we are working, socializing, playing, working out, speaking to therapists, etc all in the metaverse then we need products, especially food and drink, brought to us where we are. Enter Quick Commerce (where you can get anything in just a Zapp*)!

eCom growth saw a step change as a result of Covid (see chart below) and I believe it will see another step change as we adopt the metaverse. While the competition in Quick Commerce and food eCom is fierce, the prize is only getting bigger and will be worth the fight.

4. Meta-influencers will be a new growth channel

We believe the metaverse will be a cultural phenomenon with applications across art, gaming, collectibles, music, education, sports, etc and in each of these areas influencers will be crucial to its mass adoption.

At Lightspeed, we have backed companies in the influencer space including marketplaces such as Cameo, consumer subscription such as Calm and brands such as Goop, HAUS and Honest Company. There are many learnings here around what worked particularly well which will also apply in the metaverse.

The metaverse will attract a new type of influencer who will use their avatar to inspire consumers and build emerging and global brands.

5. Content creators will finally be paid their worth

Following on from meta-influencers rising in popularity, we believe creators will be paid significantly more in this new world. Web 2 has created a culture where it’s accepted that a) consumers are both the product and revenue stream, b) creators end up giving the lion share of their revenue stream to the platforms.

Web 3 will be the opposite. Its open, accountable and collaborative nature will instead allow consumers to be the owner and make money from being the fan. Fans can then become tastemakers themselves and the very best ones will become creators and celebrities in their own right. They will all own the community and be paid the true value that they are creating in the world.

6. Kids are the next big focus in mental health

Suicide rates in young people have more than doubled over the past decade. More technology is resulting in loneliness and while I remain bullish on the metaverse, we need to consider the implications of 12+ hours a day online.

“They spend less time with their friends in person and less time sleeping, and more time on digital media.” — Twenge

Human beings are resistant to change so as we change the way we live through technology we will need to adopt mental health solutions to deal with that change. Nothing has been a better representation of this than the mental health solutions we needed when school/work moved online and then the help as school/work go back to in person. Companies such as Daybreak are offering support through schools and pediatricians as we need to act earlier in finding solutions. Calm* and Real* also have terrific offerings for young people.

7. Consumerization of early healthcare diagnosis

Following on from a focus on our mental health is an obsession with our broader health. My Partner Dr Ling Wong believes:

Proactive consumer driven preventative & personalization healthcare is the new “in” — todays consumers don’t wait for something to go wrong, they want to know about it now and do something about it beforehand.

We used to wait for symptoms before doing a diagnosis and then insurance would pay… but often it would then be too late. Now consumers are paying out of pocket to for early diagnosis… and finding stage 0 cancers just in time. QBio and Prenovo are good examples of this where their scans help us measure and monitor ourselves. Continuous glucose monitors is another category where companies such as Nutrisense, Levels and Signos provide us with health data at any moment. There will be many more categories!

8. The oxytocin and adrenaline economy will boom

After being locked in for 2 years, many believe they will move to a more nomadic life. While these are mainly people without children (I wish I could live a nomadic life!), most of us are longing for the real life experiences we had before. The excitement of travel, the spontaneity of experiences and the joy of adventures fill us with oxytocin and/or adrenaline. Hibernating at home, on the other hand, leaves us lacking in oxytocin and adrenaline, which our bodies are now craving. Tourhero* and Flickplay* both offer us the ability to have fun IRL. We are excited to invest in this space. After all, the experience economy is due a come back!

9. The verticalization of social media for Gen Z

Gen Z and Millennials now say they feel more like themselves online than offline and nearly 40% of their closest friends are people they’ve met online. As a result, Gen Z are most comfortable socializing virtually but want to speak to like minded others. We will continue to see niche communities develop through the disaggregation of Tinder, Reddit, Twitch and Facebook. Many of these will be built in the metaverse. By the people and for the people.

10. Everyone will be an entrepreneur

It’s never been easier to start a company due to the no/low code tooling and availability of capital. Shopify, Stripe / Block, ClickUp, etc have all made it significantly easier to launch a startup or a side hustle (many of which turn into startups!). Platforms including Google and Apple have both introduced Small Business Programs (reducing take rates from 30% to 15%) that make unit economics more attractive for early stage startups.

More of the boldest and brightest students will see the pandemic as an opportunity to start companies while in university or as soon as they graduate, while living that nomadic lifestyle!

In 2022 and beyond, Lightspeed is excited to invest in the change-makers building tomorrow’s companies today. As you can tell by the above, I am investing in areas such as web3, marketplaces, social, creators and health. These are all areas I believe will be important and impactful going forward. If you are building a company in any of these areas, I would love to hear from you. My email is nq@lsvp.com.

* Denotes a Lightspeed portfolio company.