(cross posted from NewCo Shift)
So many predictions from so many smart people these days. When I started doing these posts fifteen years ago, prognostication wasn’t much in the air. But a host of way-smarter-than-me folks are doing it now, and I have to admit I read them all before I sat down to do my own. So in advance, thanks to Fred, to Azeem, to Scott, and Alexis, among many others.
So let’s get into it. Regular readers know that while I think about these predictions in the back of my mind for months, I usually just sit down and write them at one sitting. That’s what happened a year ago, when I predicted that 2017 would see the tech industry lose its charmed status. It certainly did, and nearly everyone is predicting more of the same for 2018. So I won’t focus on the entire industry this year, as much as on specific companies and trends. Here we go….
- Crypto/blockchain dies as a major story this year. I know, this is a silly thing to say given all the hype right now. But the Silicon Valley hype cycle is a pretty predictable thing, and while new currencies will continue to rise, fall, and make and lose tons of money, the overall narrative thrives on the new, and there’s simply too much real-but-boring work to be done right now in the space. Does anyone remember 1994? Sure, it’s the year the Mozilla team decamped from Illinois to the Valley, but it’s not the year the Web broke out as a mainstream story. That came a few years later. 2018 is a year of hard work on the problems that have kept blockchain from becoming what most of us believe it can truly become. And that kind of work doesn’t keep the public engaged all year long. Besides, everyone will be focused on much larger issues like…
- Donald Trump blows up. 2018 is the year it all goes down, and when it does, it will happen quickly (in terms of its inevitability) and painfully slowly (in terms of it actually resolving). This of course is a terrible thing to predict for our country, but we got ourselves into this mess, and we’ll have to get ourselves out of it. It will be the defining story of the year.
- Facts make a comeback. This has something to do with Trump’s failure, of course, but I think 2018 is the year the Enlightenment makes a robust return to the national conversation. Liberals will finally figure out that it’s utterly stupid to blame the “other side” for our nation’s troubles. Several viral memes will break out throughout the year focused on a core narrative of truth and fact. The 2018 elections will prove that our public is not rotten or corrupt, but merely susceptible to the same fever dreams we’ve always been susceptible to, and the fever always breaks. A rising tide of technology-driven engagement will help drive all of this. Yes, this is utterly optimistic. And yes, I can’t help being that way.
- Tech stocks overall have a sideways year. That doesn’t meant they don’t rise like crazy early (already happening!), but that by year’s end, all the year in review stock pieces will note that tech didn’t drive the markets in the way they have over the past few years. This is because the Big Four have some troubles this coming year….
- Amazon becomes a target. Amazon is the most overscrutinized yet still misunderstood company in all of tech. For years it’s built a muscular and opaque platform, and in 2017 it benefitted from the fact that, so far anyway, Russians haven’t found a way to use e-commerce to disrupt western democracy. Yes, Trump seems to have a bug up his bum about the company, but his tweets last year seemed to only increase Amazon’s teflon reputation with the rest of society. In 2018, however, things will change for the worse. The company is smart enough to keep hiding its power — it hasn’t accumulated the cash of its GAFA rivals, nor does it play (as much) in the high profile worlds of media and politics. But by 2018, the company will find itself painted into something of a box. Last year I thought the fear of automation and job losses would dominate the political discussion, but Russia managed to eclipse those concerns. This is the year Amazon becomes the poster child for future shock. In particular, I expect the company’s “Flex” business to come under serious scrutiny. And what it’s doing with in house brands is the equivalent of Google giving preference to its own products in search results (that hasn’t worked out so well in Europe). Further tarnishing its image will be its lack of leadership on social issues — Jeff Bezos is no Tim Cook when it comes to empathy. By year’s end, Amazon’s reputation will be in jeopardy. Then again, I do think the company will be nimbler than most in responding to that threat.
- Google/Alphabet will have a terrible first half (reputation wise), but recover after that. Why a terrible first half? Well, I agree with Scott, there’s another shoe to drop in the whole Schmidt story, not to mention more EU fines and fake news fallout, and that will kick off a soul-searching first half for the search giant. The company will find itself flat-footed and in need of some traditional corporate revival tactics — ever since Page stepped back into the obscurity of Alphabet, the company has lacked a compelling overarching narrative. I’m not sure how the company recovers its mojo, but it could be by pushing deeper into a strategy of letting its children grow up outside the Alphabet conglomerate structure. Perhaps not a government driven breakup, per se, but a series of spin outs, led by Sundar Pichai (Google), Susan Wojcicki (YouTube), and perhaps a new spinout around Doubleclick/Adtech, possibly run by Neal Mohan. Alphabet will remain as a holding company with stakes in all these newly (or soon to be newly) public companies, as well as a place that incubates new ventures and figures out what the hell to do with Nest.
- Facebook. Ah, what to say about Facebook. Well, let’s just say the company muddles through a slog of a year, with a lot of rearguard work politically, even as it starts to dawn on the world that maybe, just maybe, every advertiser in the world doesn’t want to be handcuffed to the company’s toxic engagement model. Of course, with YouTube in particular, Google has this issue as well, so here’s my Facebook prediction, which is more of an ad industry prediction: The Duopoly falls out of favor. No, this doesn’t mean year-on-year declines in revenue, but it does mean a falloff in year-on-year growth, and by the end of 2018, a increasingly vocal contingent of influencers inside the advertising world will speak out against the companies (they’re already speaking to me privately about it). One or two of them will publicly cut their spending and move it to other places, like programmatic (which will have a sideways year more than likely) and places like….
- Pinterest breaks out. This one might prove my biggest whiff, or my biggest “nailed it,” hard to say. But for more, see my piece from earlier in the week. Advertisers will find comfort in Pinterest’s relatively uncontroversial model, and its increasingly good results. The big question is whether Pinterest can both scale its inventory in a predictable and contextual way, and whether it can make its self service/API-based platform super simple to use. Oh, and of course continue to attract a growing user base. Early signs are that it’s doing all three.
- Autonomous vehicles do not become mainstream. I’ve said it before, I’m saying it again: This shit is complicated, and we’re not even close to ready. We’ll see a lot of cool pilots, and maybe even one (probably small) city will vote to let them run amuck. But I just don’t see it happening this year. However, I do think 2018 will be the year that electric vehicles are accepted as inevitable.
- Business leads. Business doesn’t change by fiat, it changes through the slow uptake of new social norms. And a crucial new norm in business poised to have a breakout year is the expectation that companies take their responsibilities to all stakeholders as seriously as they take their duty to shareholders. “All stakeholders” means more than customers and employees, it means actually adding value to society beyond just their product or service. 2018 will be the year of “positive externalities” in business, and yes, NewCo will be there to take notes on those companies who manage to live up to this new normal. A good place to start, of course, is the Shift Forum in less than two months. I hope to see you there, and have a great 2018!