The season of top 10 predictions is fully upon us and I could not resist coming up with my own top 10 list.
- Google Will Decide Against Doing Something: After years of saying yes to every problem they seem to encounter and even some non-problems (Google Products, Google Checkout, Google Base), Google will finally refuse to do something. As a wise person said - Don't Just Do Something, Sit There!
- Steve Ballmer Gets Fired: Bill Gates will go on one of those famous one week sabbaticals and come back with a realization that his college buddy has not been able to defeat Google, kill Apple or even Yahoo! He will then ask Steve to become the Chief Motivation Officer while he hires a young silicon valley executive to run the company.
- Chinese Currency Skyrockets, American Exports to China Boom: After reading Taleb's book (Black Swan), the Chinese premier realizes that there policy of keeping the currency artificially low is like picking up pennies in front of a tank (sorry for the metaphor but its Taleb's not mine). In order to mitigate the risk of a blow up in future, China allows Yuan to float - and it sinks nonetheless (despite the term "float").
- College Enrollment in Computer Science Shoots Up: Thousands of college kids realize that learning computer science is a much shorter path to success and with better odds than trying to become the next Britney or Angelina Jolie. The trend is even more surprising when the students signing up include more girls than boys.
- Telcos and Banks Offer Transparent Fee Plans (and IRS Follows): After realizing the folly of their ways, mobile phone companies and banks decide that alienating customers is not the best way to win friends and influence people, or make money in the long run. So they decide to provide clear documentation in an easy-to-use format for their rates and fees. IRS takes the hint and also decides to hire ex-Telco and Banking executives to restructure the IRS Code.
- Democracy Returns to Pakistan (and Russian Democracy Thrives): The elections in Pakistan turn out to be exceptionally well conducted. The winners and losers accept the verdict and Musharraf allows the newly elected Prime Minister to actually run the country while he stays the titular head. Meanwhile, Putin continues to let freedom reign as capitalism and democracy thrive. (A note: I wrote this on December 27th and I am leaving it in despite what has unfortunately happened in Pakistan yesterday with Benazir Bhutto being shot dead. Irony sometimes turns into tragedy.)
- Wall Street Firms Re-organize to Curb Excessive Risk-taking: Major banks and other financial institutions realize that the problem with mortgage blow-up was not just because of inflated house prices or lenient lending but there is an underlying more perverse cause - the incentive structure for the players rewards risk-taking (article by Taleb in PDF). The problem is that the bonuses are paid out annually and no matter how much money I loose in one year, my pay out can not be less than zero (I can loose my job in worst case scenario). This means that employees think in one year cycles (or few year cycles) while the investors (especially the naive retirement account holders) are in it for the long-term. Once identified, the problem is addressed with fees and bonuses that are held in escrow over a period of 10 to 15 years. The escrowed funds are invested in the very same investment vehicles!
- No New Platforms in 2008: Technology companies realize that there are enough platforms in every conceivable market and niche from mobile computing to social networking. So, venture capitalists stop funding any startup that aims to be a platform for anything. All new ventures (whether funded by VCs or not) aim to solve real problems. After all someone needs to build apps on top of the dozens of platforms out there.
- Three New Text-based Communication Formats: After the success of blogging, twittering, instant messaging, Facebook Wall, Orkut Scraps venture capitalists continue to fund new formats for communicating in text. As a result, 3 new formats will become popular with variations on the length of allowed messages, where you have to go to fetch these messages and how often they interrupt your life. At least one of the 3 formats, will become so pervasive and frequent that Twitter will seem so last generation and slow. Psychiatrists will come up with a new term (Polytextphilia) to describe this new form of online addiction and will offer treatment using latest Web2.0 technologies. Patients can subscribe to online newsletters, sign up to receive RSS feeds of de-addiction reminders, become Twitter friends of the psychiatrist, join Google Groups to get support and blog about their experience. (I have to stop, irony police called).
- None of My Top 9 Predictions Come True: This is my insurance. If this prediction is true, I got one right. If I get this wrong, at least one other came true. Either way, I get to write a post in 2008 claiming that I predicted the future accurately. And if I have learned one thing in 2007, it is how to look at risk. Thank you, Taleb.
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