The season for predicting the future is upon us. Except its become extremely hard to predict the future after what happened this year: the financial system nearly collapsed, an African-American with Hussein as his middle name became the President, the Iraq war became a fringe issue, Alaskan geography and bridges became the center of editorials written by foreign press, China had great success with Olympics but still got hurt by the American consumer and finally, the house prices in New York and San Francisco came down.
Seven Predictions for 2009
1. Oil will not go back to $100
Despite dire predictions of increasing demand from emerging global giants (China & India among others) and oil supply peaking, this myth will be nearly impossible to recreate in 2009. Airlines and SUV manufacturers can breathe easy.
2. Personalization Gets Widely Adopted
I am currently reading the book by CK Prahlad (New Age of Innovation) and it advocates a move towards a reality where businesses are targeting and selling to one customer at a time – in fact, ‘co-creating’ value with one customer at a time. Together with interesting case studies by another great book on related topic – Groundswell (by Charlene Li) – it seems likely that businesses will look to personalize and offer solutions rather than mass products and that this trend will go beyond technology to what are traditionally known as manufacturing, retail, banking etc. but in the new world order are all businesses offering personalized services/solutions to the individual business or consumer. In order to do this effectively, businesses will need to change their mindset and use information technology platforms that enable agility. Clould Computing platforms like Force.com can play a key role here – look at how Starbucks is co-creating value with its customers by running Starbucks Ideas and so is Dell with Dell Ideastorm.
3. Obama disappoints
Its bound to happen and we might as well accept it – Obama will disappoint his most ardent supporters especially the ones on the left. But this is a good thing in my opinion – George W Bush made his supporters proud and look where we landed.
4. Social Networking becomes (just) a feature
Social networking has rapidly become mainstream. While this is good for the consumers – in that they can expect a social experience on their favorite online property be it Google or Yahoo! – it does pose a challenge to stand-alone social networking companies that will increasingly have to offer more than just ability to connect to keep customers happy while they continue to struggle with revenue models. Its quite likely that leading search, email, IM and homepage providers will continue to drive social networking features into their products. The leaders in social networking (Facebook and LinkedIn) have a window of opportunity but if they fail to grow revenues, they may end up in the arms of the giants rather than as the next Google on their own right.
5. Madoff level online fraud
The major banks and online brokers have done a commendable job over the years of beefing up security but its still too lax. These entities still have not moved to state of the art multi-factor authentication or use pre-approvals for major transactions. I don’t understand why its possible for me to transfer $50K from my online brokerage without them requiring me to verify my request by at least one other means (like SMS or Phone). The technology exists. Can you imagine the damage if 10s of thousands of us lost $100,000 overnight? As far as predictions go, I hope and pray that this does not come true but wanted to raise it since the ramifications of a major online bank or brokerage being compromised on a grandscale would be really bad (like the Madoff scandal) and further erode confidence in our institutions.
6. Airlines start treating customers fairly
Okay, so this is a complete joke. They will continue to use every excuse in the book to raise fares and fees while lowering the levels of service. This is one industry that is somehow set up (due to incentives? economics?) to compete on price and rarely if ever delight customers.
On that note, I recently was in Las Vegas and prepaid for my room via Luxor’s online website for booking rooms. I get there and they add a $5 per night charge for “telephone service”. Stop and think about it – they want to charge $150 per month for basic telephony service that I don’t want to use. I protested since I have a cell phone and don’t care for their phone and did not plan to use it. It was a non-negotiable fee and they refused to waive it. What really outraged me was that if they want to charge me $5 (or more) and its compulsory, why can’t they simply add that to the room rate when I booked the room especially when I used their own website. Outrageous! I guess they are learning from their friends in the skies charging all kinds of funny fees.
6. Telepresence is The Killer App of 2009
Yes, telepresence. The ingredients are here: displays (and televisions) are getting cheaper, networks are already dealing with increasing video content, and the software/hardware to bring it all together is here. Cisco is clearly a leader here today but I expect others – both that have announced products like HP & Polycom – and those with lower profiles so far (Microsoft, Nokia) to join in.
7. GreenTech Bubble Bursts, Seeks Bailout and Subsidies
With the price of gas staying low and consumers cutting back on spending (and therefore fewer Hybrids will be bought for status), it will put enormous pressure on some of the green technology companies. Also, the tens of billions of dollars our government seems ready to pump into the dying three automakers will make it an attractive target for lobbyists for the green technology companies to seek their “fair” share. In the end, we the taxpayers, will end up subsidizing both sides of this battle. This reminds me of what Vinod Khosla, the genius investor, has been saying throughout this current boom – the only viable green technology is one that can compete at a price point of coal powered energy in India/China (the Chindia Test). As before, he was right and those VCs that followed him blindly and overinvested will look back on the year of $100 oil with longing.
While I shared a few ideas that have caught my attention, there are several more trends worth watching from personalized medicine to the “Better Place” experiment. I will keep an eye out for these trends and keep writing about them.
Finally, I want to thank each one of you for reading my blog. Time and attention are the ultimate currency in today’s world and I am delighted you spend a tiny fraction of your fortune in talking with me. Thanks!