2016Predictions

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2016TED LEONSIS PARTNER, REVOLUTION GROWTH

Predictions

2016Predictions

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In 2016 these 10 predictions will take hold, some good and others not so much. These predictions are driven by recent advances in technology, the economic climate, changes in consumer behaviors, and everything in between.

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2016

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⎕ TED LEONSIS

The Good: •E-gaming leagues become as valuable as national sports leagues

•Over-the-top (OTT) Content becomes the norm •Team Robotics joins the Olympics •An unexpected M&A transaction acquires a 100-year old company

•Advancements in wearables for the elderly •The rise of the Super City

The Bad: •Drone regulation debate intensifies •A cyberterrorism attacks will cost more than a natural disaster

•The public’s fascination with driverless cars becomes skepticism and doubt

•Existing Unicorns will go public with lower valuations

2016Predictions

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Drones

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Drones and air space management will come to a head.

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It won’t be long before a drone incident intensifies the conflict between consumer drone usage and commercial.

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01Drones and air space management will come to a head.

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⎕ TED LEONSIS

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167%Increase in consumer drone shipments in 2014

2013

2014

2015

E

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XXNumber of drone incidents in 2015

969

# of Drone Shipments in the US

Units expected to be sold during 2015 holidays

1 MM

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It won’t be long before a drone incident intensifies the conflict between consumer drone usage and commercial.

⎕ TED LEONSIS

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Cyber terrorism ⎕ TED LEONSIS

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The cost of a cyberterrorism attack will be greater than that of a natural disaster.

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2016Predictions

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In 2016, the U.S. government and major corporations will face an onslaught of attacks that will prompt a new industry to be created— the hacking economy?

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The cost of a cyberterrorism attack will be greater than that of a natural disaster. 2016

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⎕ TED LEONSIS

Types of Attacks • State-sanctioned • Criminal • Terror

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$575BCost of cyber crime to the global economy, including $100B to the U.S.20

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2014

2015

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XXEstimated cost of the 2014 cyber attack on Sony

$35MM

The cost of a cyberterrorism attack will be greater than that of a natural disaster.

Total cost of cyber crime to the average

US company

$15.4MM

2016

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⎕ TED LEONSIS

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Super Cities

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Super Cities will become more valuable and influential than most countries.

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A Super City is a metropolitan region with a population over ten million people. In our lifetime, the era of the nation state will be replaced by the rise of Super Cities.

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03Super Cities will become more valuable and influential than most countries. 2016

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⎕ TED LEONSIS

Characteristics of a Super City: • 60% of inhabitants under 30 years old • Three airports • Five (or more) research institutions • Major broadband infrastructure

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2X Number of cities with more than 10 million people is expected to double in the next 15 years

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Square miles encompassing greater London

600

Super Cities will become more valuable and influential than most countries.

Following the Great Recession, migration patterns shifted to cities, reversing the suburban exodus.

46%

54%

2015 Urban population

34%

66%

2050 Urban population

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Was the first year that 50% of the world’s population lived in cities.

2008

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Driverless Cars⎕ TED LEONSIS

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Society’s utopian view of driverless cars will crash into the practical realities.

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Almost every majorcar manufacturer and technology company is developing some type of driverless vehicle and has started testing them.

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04Society’s utopian view of driverless cars will crash into the practical realities. 2016

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2016Predictions

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471kNumber of hackable vehicles on the road today via the vulnerable Uconnect system

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Number of vehicles recalled by Chrysler after the 2014 Wired magazine story about hackers taking over a Jeep Cherokee

1.4MM0

2.5

5

7.5

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2015E 2016E 2017E 2018E 2019E 2020E

10MM

Estimated # of installed base of cars with self-

driving features

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Society’s utopian view of driverless cars will crash into the practical realities.

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Wearables⎕ TED LEONSIS

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Within the next five years we can expect advances in wearables will add 3-5 years to a person’s life expectancy.

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Quick advancements in wearables for the elderly are needed as the world population is aging at an unprecedented rate – by 2050, 2 billion people will be over 60. And those individuals will have grown accustomed to technology being a part of their daily lives.

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Within the next five years we can expect advances in wearables will add 3-5 years to a person’s life expectancy. 2016

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⎕ TED LEONSIS

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80MMNumber of baby boomers in the U.S. Apple considers 41% of their customers boomers.

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XXEstimated market opportunity for the “longevity economy”

$20BWithin the next five years we can expect advances in wearables will add 3-5 years to a person’s life expectancy.2014

2015

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U.S. Adult wearable users

$64MM

$25MM

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Unicorn Companies⎕ TED LEONSIS

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Less than 10% of existing Unicorns will go public in 2016 at valuations greater than their current value.

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Next year several Unicorns will face down rounds when they go public below their most recent and highest growth private rounds.

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Less than 10% of existing Unicorns will IPO at valuations greater than their current value 2016

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⎕ TED LEONSIS

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145Number of Unicorns in the world (92 of which are in the U.S.)

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XXAmount Square lost of its value following its highly anticipated IPO

1/3

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70

140

210

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169 IPOs

273 IPOs

The IPO market fell to a six-year low in 2015

Priv

ate

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Less than 10% of existing Unicorns will IPO at valuations greater than their current value

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2014 2015

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Mergers & Acquisitions

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An unexpected pairing will emerge after a company of a younger generation takes over an old one.

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The latest generation of companies—Google, Amazon, Uber, Tesla—will make a major transaction in business impacting an older generation of companies. Amazon might purchase the US Postal Service, Tesla buys Ford, Airbnb replaces Sabre systems, PayPal and Visa merge.

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There will be an unexpected pairing.

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$203BApple cash reserves

07

XXCumulative 2014 US M&A deals

$1.4T

There will be an unexpected pairing.

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Future Olympics

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The IOC will create an Olympic sub-group for robots to compete in their own events.

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The Japanese are leading the charge and are planning to include a robot village at the 2020 Tokyo games.

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08The IOC will create an Olympic sub-group for robots to compete in their own events.

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25%Percentage of total supply belonging to China in 2014

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XXSize of the global robot market by 2020

$40BThe IOC will create an Olympic sub-group for robots to compete in their own events.

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1.5

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2011 2012 2013 2014 2015 2016 2017 2018 2019

$6MM

$2MM

Consumer and office robot units shipped

2011 2012 2013 2014 2015 2016 2017 2018 2019

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eSports⎕ TED LEONSIS

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E-gaming teams, stars and leagues will emerge and rival the NFL, NHL, NBA and MLB.

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E-gaming leagues will rival NFL, NHL, NBA and MLB in terms of attendees and dollars spent; just as video games passed movie attendance revenues.

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09E-gaming teams, stars and leagues will emerge and rival the NFL, NHL, NBA and MLB. 2016

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2016Predictions

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55MMNumber of users on TWITCH, a popular video-streaming site for gamers

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XXNumber of people who watched or played eSports in 2014

205MM

E-gaming teams, stars and leagues will emerge and rival the NFL, NHL, NBA and MLB.

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375

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Size of the eSports market in millions

465

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This trend is already taking hold in places like China and Korea

eSports could also be a sub-category in the Olympics (similar to robots)

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Television & Content⎕ TED LEONSIS

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Over-the-top (OTT) content will become the breakthrough platform for millenials.

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Cable and satellite connections are slowly disappearing as more consumers only use the Internet to deliver content.

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10 Over-the-top (OTT) content will become the breakthrough platform for millenials.

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57%Percentage of TV watching on a computer, tablet or smartphone by those ages 14-25

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Minutes accounted for by mobile app consumption on mobile devices

7 of 8

Over-the-top (OTT) content will become the breakthrough platform for millenials.

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9.5

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28.5

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NetflixHBO

37.7MM31.4MM

Number of subscribers

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THANK YOU

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2016

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⎕ TED LEONSIS