Hope everyone is enjoying their holidays.  As food for thought, as I did last year, I submit a few predictions, looking ahead to 2007:

1) NYC:  Imbalance No More.  There is a huge VC-entrepreneur imbalance when comparing New York City to its little parochial cousin, Boston.  Although the population difference is a stunning 14x (8.2m NYC residents as compared to 0.6m Boston residents – and NYC is growing while Boston is shrinking!), there are far more venture capitalists in Boston than NYC and, illogically, many more VC dollars get poured into MA than NY.  This imbalance can’t last.  Although NYC VC firms have to compete for talent with far more hedge funds, private equity shops and investment banks than their Boston brethren, 2007 is the year where the NYC VCs and start-ups begin to flourish and make their mark as a credible, top 3 (on its way to #2?) VC-entrepreneur market cluster.

2) Vietnam as the Next Frontier.  After watching the country’s economic development over the last few years through the lens of our nascent fund, IDG Ventures Vietnam, I received a call the other day that served as the catalyst for this prediction.  A Harvard professor wanted my help connecting to our team there as part of her leading a trip to Vietnam with tens of top-tier limited partners to scout out the investment opportunities.  The combined funds under management of this group is in the tens of billions of dollars.  Vietnam is a fascinating country – it has a population of nearly 100 million people, one-third of the United States, and an average GDP per person of $3,000 (as compared to $42,000 for the United States) growing at 8-10% per annum – the second fastest economy in Asia after China.  With its entry into the World Trade Organization (WTO) in November 2006, Vietnam is well-positioned in 2007 and beyond to become the next China or India – a low-cost center for Western and Asian businesses to manufacture and build.

3. Laptops No More – The Mobile Phone Dominates.  At some point in everyone’s life, you realize that you are an old fogey.  For my 30-something peers who grew up, like I did, with the personal computer and laptop, that point in time is 2007.  This is the year that the mobile phone will be declared the absolute dominant computation and personal device for the next generation.  Today’s teenagers are using their phones to text, chat, Skype, IM and decidely not sitting at desktop computers.  Ringtones and wallpapers are cute (and, yes, now a multi-billion dollar business), but we ain’t seen nothing yet when it comes to the range of future applications, content, community on mobile.  With the number of mobile phones now over 2 billion, the advent of video over mobile networks, Wi-Max and dual-mode phones coming into play, municipal wireless networks being built and devices getting more powerful thanks to Moore’s Law and nanotechnology, these cute devices are becoming truly ubiquitous, powerful computation tools.

That’s all for now.  See you in 2007!

Today marks the end of "CyberWeek":  the week after Thanksgiving Week, when everyone is supposed to be glued to their computers, frenetically pressing "BUY".  Last Monday, or CyberMonday, was the much celebrated coming out party for Internet retail, as promoted by shop.org.  As someone who was involved in the very earliest Internet commerce sites and fought the e-commerce wars during my 5 years at Open Market (1995-2000), I was pretty blase about the whole affair.  I figured it would be roughly flat or perhaps slightly better than last year.  With housing prices crashing, the stock market stalling, Iraq in civil war (Matt Lauer said it was ok to say this, honest), how much incremental e-commerce would we really see?

Boy was I wrong.

Online shopping activity on CyberMonday was explosive.  Reports showed a 26% gain in sales from the same day in 2005 and a 40x overall increase in online shopping as compared to Black Friday (the Friday after Thanksgiving).  Consumers are expected to spend an average of $800 online and nearly 50% plan to make at least one holiday purchase online, up from 36% a few years ago.  In total, an estimated 61 million people will shop from work this holiday season, 10 million more than last year.  One of my portfolio companies, Mall Networks, powered the CyberMonday.com website and gleefully reported explosive traffic numbers this week.

With this kind of growth, it’s no wonder there are many companies pursuing "E-Commerce 2.0" strategies.  Nearly 12 years later, I’m pleased to see that this time, it’s real.