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  • Louis Hernandez Jr.

Disruption Will Be Faster and More Transformative in the 20's as the Digital Tsunami Gains Momentum.


What will the new decade mean for technology and the industries it impacts?

At Black Dragon Capital, we expect that disruption will accelerate as the digital tsunami, a massive technology transformation wave, gathers momentum.

In the 2020s, AI will go mainstream and the customer will take center stage as technology innovation transforms workflows, value chains, and entire industries. New technologies will collapse industry boundaries, wiping out sectors and functions. Every business will be in direct contact with customers and will be forced to master customer intimacy. The pace of change will grow ever faster, and once-dominant technologies will be overwhelmed and replaced.


To help our portfolio companies and entrepreneurs navigate the coming years, we lined up our predictions for the industries that are our focus: industries disrupted by digitization.


We also asked some of our professionals and entrepreneurs to layout predictions of their own for their particular industries – payments, e-commerce, financial services, and sports, media, and entertainment.


Here’s what we expect for the coming year.

Overview – Louis Hernandez Jr.

  • Technologies and processes get disrupted, quickly. Going forward there will be little or no “daylight” between content creator and consumer; the purveyor of goods or services and the buyer; the person with excess capital and the person in need of capital. Technologies that had made the value chain more efficient or powerful will be overwhelmed in every industry by the direct digital connection between buyer and seller. 2020 will mark the beginning of the end for a number of segments of major industries – once celebrated technologies that made a step or process more efficient will be gone by the end of the decade.

  • A heightened imperative to master customer intimacy. Because traditional workflows will vanish and because most sellers of goods and services will increasingly have relationships with end-user customers, companies will have to rethink and redefine for themselves what good service is. Believing you are only a business-to-business enterprise will be dangerous – and a thing of the past.

  • Significant blurring of industry boundaries. Where industries like media, retail, and banking begin and end will get grayer and blurrier. Companies in each of those industries will want to be the customer’s primary relationships: Card and payment networks, cell phone carriers, cloud providers, retailers, media companies all will want your primary intimacy and loyalty for whatever you buy. Loyalty will go to whoever can best tell the story of why what they’re selling will make the customer’s life better.

  • Floodgates open for cloud-based technologies. Early adopters drove Amazon Web Services, Google Cloud and Azure to dizzying heights. Now the media industry, banking, and retail will become major consumers of processing power as cloud-based technology goes even more mainstream. Legacy players that are slow to move to the cloud will likely end to meet the same fate as Sears and Toys “R” Us.

  • AI goes mainstream. While debates continue about privacy, data management, and computational innovation, AI is gaining significant traction in a range of industries. It has proved its ability to support medical diagnoses, identify fraud better and more accurately and enhance content creation. In the 2020s, we’ll see AI become as powerful as the internet itself and, of course, supplant other once-promising technologies.

Payments – Ron Bergamesca, CEO, Payveris

  • Real-time payments start to go mainstream. Billers will embrace financial institution (FI)-centric bill pay, as opposed to biller-direct approaches, as The Clearing House and MasterCard Bill Pay Exchange begin to ramp. Real-time settlement and invoice information exchange is what will appeal to billers. Financial institutions will accelerate their movement to a payments-hub approach, where all payment types are handled by one platform.

Retail – Moris Chemtov, CEO, Digital Goodie Ltd., and Ken Bonning, Black Dragon Capital

  • AI drives retail decision-making. Most retailers are sitting on large amounts of transactional data, from point-of-sale, customer profiles, and enterprise resource planning. With AI tools, they can now look at that data and find common patterns (how many red dresses did we sell with the yellow blouse?). These analyses are business-critical. Retailers can save millions through better forecasting. AI can also drive better use of customer data to drive more targeted, more effective marketing.

  • Improved customer experience becomes a focus, especially in brick-and-mortar stores. Retailers will try to find new ways, including digital shopping with in-store pickup and augmented reality offerings, to attract customers back to their stores, where most selling still happens. Better experience is a goal but “quick and seamless” also becomes a watchword.

  • Retailers go wireless to track inventory. RFID tagging becomes standard. Real-time tracking lets retailers use store inventory for e-commerce customers and helps cut down on losses from theft and poor sorting.

Financial services – Hernando Torres, President, and CEO, ASI Group

  • Digital banking threatens community banks. The number of community banks in the United States will be pressured as consumers have simple and improved full digital offerings from large national banks. They must respond by partnering together.

  • Wireless carriers introduce additional microlending products to continue addressing the unbanked population, currently estimated at 5 billion.

  • Non-financial players continue to innovate and launch additional payments and lending alternatives, including some type of free cross-border transfers.

Media – Frank Capria, Director, Black Dragon Capital

  • A reckoning for video streaming services begins as cord-cutters find they have to pay high prices for a-la-carte content for established services like Netflix and new ones like Disney Plus and CBS All Access. The cost of streaming starts to approach the cost of cable TV.

  • Targeted television advertising arrives. Mostly unfounded privacy concerns will slow, but not halt its launch.

  • Consolidation hits the media technology industry. Consolidation is overdue. Look for it to accelerate as the global economy slows and puts pressure on media technology companies’ earnings.

To sum up: Disruption in the 2020s will be massively challenging. But the opportunity is vast, and the rewards may far outweigh the collateral damage.


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