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Expect more robots, health-focused start-ups in the next 5 years, say VCs

The Churchill Club’s 18th annual tech trends dinner in Santa Clara, California.
Lauren Thomas | CNBC
The Churchill Club’s 18th annual tech trends dinner in Santa Clara, California.

Prepare for many more household robots, a new wave of health-conscious individuals and more data extraction. At least that's what some of Silicon Valley's top venture capitalists are predicting.

Five VCs discussed up-and-coming tech trends Wednesday night during Churchill Club's 18th-annual dinner in Santa Clara, California. On the panel were Pat Grady of Sequoia Capital, John Lilly of Greylock, Emily Melton of DFJ, Ann Miura-Ko of Floodgate and Aydin Senkut of Felicis Ventures.

Throughout the night, each of the panelists held up green or red paddles to indicate whether he or she agreed or disagreed with each trend as it was revealed. The audience also reacted to the trends via an online polling service, and most attendees agreed with the VCs' 10 forward-looking insights overall.

Importance of design, data

Grady kicked off the night, arguing the importance of companies focusing on design in order to succeed in Silicon Valley today. "Anyone who thinks with a design-first mentality will thrive within the next five years," Grady said. "And anyone who thinks of design as 'pretty pixels' will fail."

Companies such as Snapchat, Uber and Instagram all started by solving a design problem, Grady said. And for that reason they've done well.

Later in the evening Grady discussed his second prediction for the future of Silicon Valley, being "data is the new oil." This was notably the most agreed-upon trend among audience members, according to the online polling.

Counter to "traditional Silicon Valley narrative," which says that disruption will come from below and from the start-ups, it's actually the large companies that have the data and the sources to refine that data, Grady said. This gives companies such as Amazon, Google and Facebook a huge advantage.

"Hope isn't lost for start-ups," he reassured the audience. "But start-ups must narrow their scope of products and build up their data reserves because data is going to fuel the absolute best digital experiences."

Household robots

Data aside, Lilly envisions a future filled with robots.

"We will all start to live with several robots in our houses," Lilly said. "Robots are already here, and they're coming pretty fast." Lilly said he uses Grillbot, the iRobotLooj and iRobotLoomba in his own home today.

The introduction of the iPhone, drones and autonomous vehicles has significantly reduced the cost of the components that go into robots, making this trend one that will likely reach mass markets within the next five years, Lilly argued.

Health trend continues to grow

Having spent more than a decade working with early stage companies, Melton sees the trend of health-conscious individuals on the rise, with a "new wave" of products and technology likely to arrive within five years.

"We're on the cusp of a profound transformation," Melton said. She believes people are increasingly engaged with their financial health via applications on their smartphones, and tracking one's biological health will soon have equal importance.

The creation of more consumer-facing apps is leading this trend, allowing more individuals to have access to data about their health, Melton said.

Silicon Valley vs. Washington

Miura-Ko, whose investments include Lyft, Refinery29 and Wanelo, foresees the "empire striking back" within five years — the "empire" being the government.

With the rise of start-ups in unfamiliar spaces — think Uber and Airbnb — there are more questions about regulation of those business models, and the government is bound to "swoop in" and try to rein things in, Ko said.

Most companies thrive, however, when given room to grow, and Ko cited the automotive industry in the '60s — before emissions controls and seat-belt laws — as a testimony to progress by way of unregulated growth.

"I'm not saying everyone in government is evil and trying to take down tech," Ko said. "But there are a lot of people who don't understand tech and are threatened by it, and their actions lead to deeper regulation than is necessary."

Breaking down the "us versus them" mentality that pits the government against Silicon Valley will be imperative for the success of start-ups, the panelists agreed.

Lilly further argued that America will be successful as a "digital government." The digital state is as important as the physical state of things, and people need to protect their digital assets, Lilly said.

"Silicon Valley is coming to Washington fast now, and it's already making a difference," he said. "The encryption debates being part of it, Silicon Valley will get more people to the government," Lilly said.