I love predictions. Nothing is more certain than the past, nor more uncertain than the future. Similar to a jet launching off an aircraft carrier, predictions ask us to mentally chart a path on the hard surface of the past. We leave the safety of the flattop and trust our wings of logic and creativity to support the prediction on the airflow of the future. I’m not sure if what I just said is more poetic or lame. Good money is on “yes.”
Anyway, let’s review our predictions for 2018 and dispatch a new crop for 2019.
Predictions Made January 2018
Wayfair crashes — Wrong
The Pets.com of our generation may just be the Overstock of our generation.
25 US brands launch online marketplaces — Wrong
A bunch of brands talked about launching their own marketplaces, but most don’t have the brand, equity, or capital to build a marketplace.
Twitter, Snap, and BuzzFeed will be acquired — Wrong
Amazon will acquire Nordstrom and/or Carrefour — Wrong
Could be a “not yet,” but the integration problems with Whole Foods have been more challenging than anticipated. If they did another high-profile acquisition right now, it would ring antitrust bells at the DOJ.
Disney will become the fifth horseman — Wrong
Disney has the media properties (Pixar, ESPN, Star Wars), parks, and consumer goods assets to launch an incredibly compelling paid bundle. But instead, by trying to protect legacy businesses, they are parsing off pieces with vertical offerings that don’t hold enough value to compete with Netflix.
CPG firms unite to fight voice — Meh
Voice will be the destructive force in brand, in particular for purchases that are more commoditized, like in the CPG categories. However, we’ve seen Kroger partner with Microsoft.
Amazon will surpass Apple in value — Disco
There is no firm in history that has performed this well, in so many unrelated businesses that are somehow strewn together to create a flywheel the size of Saturn’s rings. We made this prediction when Amazon was 40% of the market cap of Apple. The fastest growing media company is also the leader in loyalty programs (Prime), cloud, e-commerce, and voice is the same company. #mindblown. The company that boasts the best business decision of the last 20 years (Apple opening stores) is the same firm that owns the biggest blunder (ceding leadership in voice).
Voice (specifically Amazon’s Alexa) is going to be the next big thing — Disco
The baton has been passed from the iPhone to Alexa as the most transformative technology over the next decade.
The ad tech market surrenders to Facebook and Google — Disco
No single brand has been able to establish a competitive advantage through digital. Think about this: the defining medium has been a tax for all manufacturers’ brands, as none has been able to do what Nike did with television or Williams-Sonoma with catalogs (establish sustainable advantage via deft mastery of a medium/channel). Google and Facebook’s genius has been not the quality of their tools, but ease of use, which has created a level playing field that all firms must use, but none can master. The result is Google and Facebook have become a tax, not a tool, for business. Every brand, agency, and organization has had two dump trucks called Facebook and Google show up and take shareholder value.
Amazon Media Group will surpass the revenue of Twitter and Oath — Disco
At the beginning of 2018, Morgan Stanley predicted AMG would have a revenue of $4.5B by the end of the year. The reality is that AMG did $2B in Q1, $2.2B in Q2, $2.5B in Q3, and assuming a monstrous Q4, AMG’s estimated 2018 revenue will be about $11B.
Facebook stock will peak — Disco
Predicted this would happen when the stock was growing 40% each year since the IPO. In 2018, the firm shed 35% of its peak value.
Walmart will become the online grocery leader — Disco
Walmart is the first company to successfully throw any counterpunches at Amazon and is the 2018 retailer of the year. The in-store experience at Walmart is ok but the grocery is outstanding, and their aggressive investment in grocery delivery and pickup have positioned them as the hero against the threat of total domination from Amazon + Whole Foods.
Cryptocurrency will crash — Disco
M&A activity booms — Disco
The only way to effectively fight the Amazons and Alibabas of the world is to bulk up.
Poland will make their first appearance in the World Cup finals — Wrong
My son is a soccer fan and was 100% convinced this would happen. Poland was knocked out in the first round. I still have not forgiven him.
The world will become a better place — Wrong
- For the first time since WWI life expectancy in the US has declined for a third year in a row. More people will die from opioid overdoses this year than died from the entire Vietnam war.
- The US is exploding our national debt, despite a strong economy. We have a criminal gang in the White House.
- Russia continues to weaponize the objects of our affection (tech platforms), and we fail to address it, as only 7% of our elected officials have a background in tech and it’s easier to fool people than convince them they’ve been fooled.
The breakup — Meh
- Starting to see bigger fines and data protection laws in the EU.
- More and more tech hearings in the US.
Predictions for 2019
Snap is the walking dead
It will be cut in half … again.
Every digital media firm other than Facebook, Google, and Amazon Media Group loses share
Lots of great firms (Refinery29, Buzzfeed) begin to show signs of asphyxiation as the oxygen continues to be sucked out of the room.
Amazon becomes one of the five largest media firms
By the end of 2020.
A bevy of consumer and tech firms enter into strategic alliances and partnerships with only one objective: Push back on Amazon.
Hot or not
VR and crypto go from bad to worse. AI fails to live up to the hype. 3D printing rises from the ashes. Smart cameras become a hot category.
Amazon spins AWS and births one of the 10 most valuable firms
Spinning AWS will reduce antitrust concerns for Amazon. The cloud is the fastest-growing part of technology, and there is no pure-play way to play it. At the spin, these two firms could be worth more than as a whole.
- Amazon begins a march toward becoming the most valuable healthcare company in the world.
- They know your body mass index, how well you eat, if you’re in a monogamous relationship, and if you have kids — all the data to offer insurance, healthcare, and testing services.
- The Seattle giant has the best data set on the two-thirds of US households with Prime, and may target the healthiest with an Amazon Prime health offering at substantially lower cost than existing insurance.
- Upon introduction of the service, or maybe even in the press release describing the initiative, Amazon records the greatest single-day appreciation (in value) of any company in history.
- Apple’s healthcare forays underwhelm.
Don’t let the door…
Sheryl Sandberg resigns. The stock appreciates $50B+ within 10 trading days of her departure.
The consumer world begins to distill to a small number of mega brands or networks that are recurring revenue bundles (“rundle“). Business has mistaken “choice” as a good thing. Consumers want less choice, but instead confidence in the (fewer) choices presented to them. We begin to witness a finite series of consumer networks: media, apparel, travel, and health. It’s going to be an arms race, with cheap capital as the munitions, to see what brands and retailers can establish credible/compelling bundles.
Woke as a business strategy
The majority of new wealth creation is being captured by urban dwellers with college degrees (i.e., progressives — see map). As a result, we will see a number of companies become very woke in the next 12-24 months. 70% of high school valedictorians are female; same-sex male couples make on average $60K per year more than straight couples, and college graduates make +$1M more than non-college grads over their lifetime. The people who burned their Nikes in protest used their Discover card to buy their first pair.
From voter identification to the Chinese social credit system, the way we define and validate our personal selves is going to be a key topic in the year ahead.
We make progress against the threats of technology and kleptocracy, and cauterize their damage. #ihaveadream
It could happen
Ms. Sandberg marries MacKenzie Bezos. They pool the $70B fortune and become the largest shareholders in Alphabet. Ms. Sandberg reanimates Google+, and Ms. Bezos takes over Google’s voice group. They legally adopt Evan Spiegel.
I buy a steel blue Great Dane puppy, experiment with Cialis and edibles, and consume an inordinate amount of Chipotle and scripted television. Wait, that was 2018.
Life is so rich,