Why predicting the future is more about sociology than technology

Technologies arriving by 2025

This chart above is from a new World Economic Forum report, Deep Shift: Technology Tipping Points and Societal Impact, predicts 21 dates in the future when previously unimaginable innovations will enter our daily lives, transforming the way we live and the way communities and governments function. And after perusing the report, I couldn’t help but think that the results focused too deeply on technological capabilities rather than social and economic incentive. It seems that while predicting the future is always a difficult task, every time I read such predictions, human behaviour is not considered at a deep enough level.

I disagree with most of the predictions above, but mostly for two reasons:

  1. The flawed and simplistic definitions from the past. (This is how companies get disrupted by the way, but more on that later)
  2. The lack of consideration given to how incentives shape behaviour.

Simplistic Definitions:

Report Claim: 10% of people wearing clothes connected to the internet. Reality: We are already wearing technology. Our phone is a device we have been wearing as clothing for nearly 10 years. The definition given in the report doesn’t serve the function of why you’d wear technology – it’s too limited. It’s a yesterday definition.

Report Claim: Over 50% of internet traffic to homes to be for appliances & devices. Reality: The internet of things (IoT) in the home will be at least 10 times the size of humans connected, current estimates are for 50 billion items. So in pure connections it will be way bigger than their estimate. But as a portion of traffic and bandwidth it will still be small compared to human generated internet traffic. Most IoT devices will have simple sensors and awareness functions through connected nodes, which in real terms generate very little traffic as long as we maintain Net Neutrality. I’d also add that we are already generating more than 50% of web traffic through home connected devices – aren’t TV’s, smart phones and laptops in the home ‘devices’? Again the way things are defined mislead.

Report Claim: First city of over 50,000 people with no traffic lights. Reality: We already have hundreds of cities around the world of more than 50,000 people without a road rule in sight, let alone traffic lights. Seriously, have any of these people behind the report ever been outside of the confines of Davos or their Ivy League Learning Institute? China, India, Indonesia, Africa, Eastern Europe and South America all have cities that fit this definition today. Another example that the world view of the economically fortunate is often myopic and first world centric.

Report Claim: 1st 3D printed production car by 2025 Reality: At volume this will not make sense, but it also depends on what they mean by ‘Production’. If less than 10,000 units then this is a clear ‘No’ as the industrial production line has advantages 3D printing will never have, an undisputed fact among 3D printing experts. While many parts of cars will come from printers, the entire production process will not. In fact, they key benefit of 3D printing is the exact opposite of ‘production efficiency’, it’s about customisation. They’re missing the reason.

Ironically, the reason many companies get disrupted through technology is how they define their business. They define things in terms of what they sell, and not the problems they solve. Technology often unveils new ways to solve old problems, which renders yesterdays logistics and infrastructure outdated. 

Incentives & Social Considerations

Report Claim: First Robotic Pharmacist will arrive by 2025. Reality: We already don’t need pharmacists and it is largely the strength of their government lobby that keeps them putting little labels on little bottles. There is no economic incentive for the pharmacists to replace themselves, and so I doubt they’ll let it happen. If this incentive existed, they’d already be selling medicine in grocery stores. If however, the report is referring to 3D printed medicine, well the FDA approved that in August this year.

Report Claim: 5% of consumer products printed in 3D by 2025. Reality: While I think 3D printers will be in a majority of homes, it’s still like 1975 was for personal computers. An entire infrastructure of software, materials and socialisation around the industry needs to be created. The opportunity is really in platforms to support the potential of 3D printing – read here, selling shovels, not finding gold nuggets. But let’s add the social reality to the mix. We are more than 20 years into the World Wide Web and e-commerce is still only 7% of US retail sales. And this is more evolutionary and easier to adjust to socially than 3D printing items is. This tells us the truth more than any predictions will.

Report Claim: First AI machine on a corporate board of Directors by 2025. Reality: As per the pharmacists being a Board Member is not a question of need and decision making ability, it’s a question of power, influence & gettin’ paid. The incentive for board members to replace themselves, is really not there. If someone does it, and they will, it will be a mainly be about company PR.

Report Claim: Driverless cars will represent 10% of all cars on US roads. Reality: This number will be significantly higher, maybe even higher than 50%. This is true for a few reasons. Firstly, the cost of self driving cars will be a lot lower than people expect. Because cars are now rolling computers, the same pricing dynamics now apply. Costs decline while performance increases exponentially. I’ve already written about why every car on the road will be electric in 10 years, and when we add things like; the ability to watch movies or sleep while travelling; having an extra drink after work on a Friday night, putting your car to work to earn money while you’re not using it (if indeed you own one); and not having to pay insurance for a self driver, then the incentives for self drive put this in the smart phone category – we curve jump to it as soon as it’s available.

The problem with the report, was in my view, that it was done by asking opinions and averaging them out. A bit like designing something by committee. You end up with well, average results which probably don’t reflect the real views of any individual who was asked.

You should totally read my book – The Great Fragmentation.

What startups can learn from Studio 54 and the velvet rope

Studio 54 opening night

As soon as we launch a startup we’re secretly desperate to get as many users as we can as quickly as possible. Even if we’ve hacked some kind of alpha test, or user MVP – or any other buzz mechanism to justify that this shit is gonna work. That aside we still want users, bodies, customers, people to come, use, share, evangelise as quickly as possible. It’s all about speed to market, so we move super quick to make this happen. Speed of customer acquisition is the key right?

Maybe not. Maybe what we should really be doing is the exact opposite. Maybe we should keep people out. Even those in our desired audience. Maybe we should be focused less on the quantity of users and instead focus on the quality and frequency of interactions with insiders. Those we let in. Just like a popular night club does, it creates desire by creating a space not everyone is allowed into. The line outside, is not a bug, it’s a major feature.

Look at anything valuable in life, and you’ll see a place where people had to earn their spot. People had to get invited, pass a test, earn recognition, or create value before they were allowed to be part of the thing in question. This process creates the human fear of missing out

When Facebook launched you had to have a Harvard email address to join.

When Gmail arrived, you needed an invite to get access.

When Uber came along it launched city by city.

The first Tesla cars went to high profile people.

Even the original Frequent Flyer programs were by invite only.

And Studio 54 turned exclusivity into an art form, literally.

While it is very hard to build a big business with a tiny audience, it is much harder to create a great product while trying to please everyone. We should instead create an isolated market so we can serve the faithful few. Make a product they love so much that they can’t help but talk about how great the thing is. we need to get them raving about it so others will want in on it. We need to put a velvet rope around what is on the inside. We need a door person who has the task of saying ‘Not in those shoes pal‘ or the classic ‘members only tonight.’ Of course, none of this is actually designed to exclude others, it’s more about making those on the inside know how special they are, that they are part of creating something valuable. It’s only then that they’ll help you make something which can grow beyond the group who started it.

You should totally read my book – The Great Fragmentation.

How toilet paper weirdly tells a story of industrial disruption

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If you’ve been wondering recently why you use so much toilet paper. Why it seems every year you’re buying more rolls than ever before. Wonder no more. As a bonus you’ll also find out with a weird example how so many industrial companies sow the seeds of their own disruption.

The first every job I held with a big company after graduating was with Kimberly Clark. An American multinational paper goods manufacturer. A big brand of theirs is Kleenex. The market leading toilet paper which we now buy giant packs of up to 24 rolls. But it wasn’t always this way. When I started working there more than 20 years ago the best selling package size of toilet paper was a 4 pack. Did we all of a sudden start going to the toilet more frequently to require more toilet paper? If not, then how is it that most families could survive on a 4 or 6 roll pack from the weekly shop and now we need to purchase to a 24 roll pack?

Here’s how:

When I started working at Kimberly Clark most toilet rolls had between 300 and 500 sheets (paper squares) per roll. Some brands had up to 1000 sheets per roll. But what I discovered as a few years went by is that instead of raising the price, the company would simply remove 10 or 20 sheets per year. They did this as they believed that consumers are more sensitive about price than quantity. It’s a popular fast moving consumer goods ‘pricing‘ tactic to maintain profitability without changing the selling price. Kleenex Cottonelle is now down to 180 sheets per roll. In addition to this Kleenex Cottonelle is 1 ply, and the Kleenex brand it replaced was 2 ply. Some toilet papers are down to 100 sheets per roll. They even increase the size of the core of the roll to keep the same perceived roll width. So there is your answer. Each roll we buy these days has far less paper on it. Often by a factors of 4, 6 and even 10. This is why we need to buy packs which are 4x times the size. But the paper companies got what they wanted, they kept their prices per roll roughly the same.

But this goes deeper than a story of bathroom anthropology. It tells the story of how many large legacy companies are coming undone. It’s a story of their industrial mindset. And that mindset is as follows: They’d rather give their customers less for the same price than be transparent. In fact, it’s exactly what industrialists do, they want to get more for less, every single year. But in a strange kind of reversal, they end up costing themselves more and giving themselves less. Their cost per roll in distribution, and packaging goes up. And their cost per tonne of what they sell in retail margins increases. And it is of course a race to the bottom. A brand can only cut product delivery so far until the product is no longer. It also creates a worse product experience for the end consumer. I know I don’t want to carry home toilet paper packs four times the size in my trolly or buy it 4 times as frequently.

Above all of that, it shows where the focus is for these companies: On selling stuff they already sell, as cheaply as possible, using the machines they’ve already got, with a short term focus. At no point is the end user considered, or part of a strategy which doesn’t involve trickery. They have a mindset of scarcity, not abundance. On the flip side we have many startups and technology companies focused on giving more for less, and creating platforms for consumer creation and collaboration. It’s no wonder half of the the Fortune 500 lost their invitations to the party in the past 10 years.

New Book – The Great Fragmentation – out now.

The global content playbook & how the internet actually works

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I’m a big fan of the John Oliver show Last Week Tonight. Which, in an unconnected web world I wouldn’t even know about as it has never been shown in Australia. But through the wonder of sharing great content online I became a big fan. The show airs in the USA on Sunday nights, and in their wisdom, HBO would publish much of the shows content on Youtube a day later. I’d eagerly await to watch it here on Monday night in Australia through the Last Week Tonight Youtube channel. At last, a media company that gets it. A media company that understands the value of building connection and fan bases globally in real time. They even made it available to non subscribers – wow.

That was until this week. For some reason, most likely the HBO launch in Australia or some other licensing arrangement in Australia with Stan, Presto or Netflix, I now get the classic picture above: Sorry, This content is not available in your region.


This content is available in my region, they simply made a decision to give up their direct relationship with me, and forced me to get it elsewhere. Now they won’t share any of the potential advertising revenue or other prizes which come from direct customer relationships. Weirdly, much of it is ‘still’ available on youtube channels where others have uploaded it. The back door has been opened. And it’s licensing deal structures born of the late 1970’s cable TV era that create this back door leakage.

More than 20 years into this thing, here’s a simple lesson every media company should already know: Once it is released anywhere digitally, it is released everywhere digitally. The desires of the content owners to limit distribution are irrelevant. Given this is the new truth, a better strategy might be to just embrace it.

New Book – The Great Fragmentation – out now. 

The culture of the power flip

upside down house Many of the economic ideologies we learned in business school are turning upside down. What once worked, now doesn’t. What was expensive, is now cheap. What was impossible, is now humdrum. But unless we stop, consider and look, we just might miss some of these changes in what is true. Capital used to be expensive, and labour used to be cheap. Now it’s moving in the opposite direction. We used to think that the accumulation of capital was the key to success. But we forget it was a substitute to try and uncover intrinsic value. Thankfully we are starting to remember money is a tool, and not an end. Creativity used to be chosen by gatekeepers, now it’s chosen by us through sharing. We got tricked into believing that we should leave creative pursuits to others in the media, in the movies, and to the rock bands with recording contracts. To those who got picked. But now we know that was just because they owned expensive tools and could afford to buy our attention. We’ve now proved there is no monopoly on art, we’re all artists. Technology used to be expensive, and walled behind industrial barriers. We could only experiment with it while ensconced in corporate quarters building things for them as employees. Now we have NASA in our Pocket, maker spaces and collaborative tools to make better tech than those who gave us the tools to do it. The best tech now comes from hacking entrepreneurs because it’s accessible to all now, at disposable price points. The challenge most established businesses face isn’t technology, or ideas but belief systems. They develop a culture that makes them fall in love with what made them successful. It’s why big business is being disrupted after years of relative stability. Sometimes the most important thing ‘Big Co’ can do is forget what they know, and maybe even burn the map that got them to their current destination. New Book – The Great Fragmentation – out now!

The strategy day you’ve probably never had

While I’m a firm believer we can achieve more as entrepreneurs than we can as employees, there are some damn good lessons we can learn from corporates. One such thing that large companies tend to do is strategy planning. Annual or quarterly events, where time is taken out to sit down and plan the future. So my question is this:

When is the last time you did this for your most important startup: Your household?

Yes, the startup that is the people who live in your home. It seems ever so weird that we spend an inordinate amount of time doing strategy for the companies we work for, and yet fail to do it for ourselves and our family. My household is a 5 year old startup which is clearly the most important in my portfolio – the capstone of all the matters to me. Within it, we have two other startups, otherwise known as children.  So my wife and I are investing a few days where our entire focus is what we want out of life for our family, and how we might go about achieving it.

So what might we include in such a day? Our approach to health, loving, learning, sharing, housing, career, finance and our community. We’ll ratify our guiding philosophy on how we invest the 24 hours in each day. We’ll decide how we allocate our resources to maximise happiness. We know that the major asset in life is time, and the people we love. The financial part of our strategy day – our plans for income and investing – is last on the agenda. This should serve what we want as people, and so setting numbers before we know what we need, would be back to front. The outcome will be an operations plan for a happy home.

We often go through life thinking that if we earn enough money, and do well in our career, the other life stuff will be ok. Turns out the opposite of this is true.


Wood chips, sugar & hazelnuts

It was recently the 50th birthday of that favourite chocolate spread we sometimes convince ourselves is ok to eat between two piece of bread. Nutella.

Nutella Jar

What a lot of people don’t realise is that Nutella is what it is because they couldn’t afford to make it the way they wanted to. Originally Nutella was a pure chocolate spread, but during the post WW2 era, a time of heavy rationing in Italy, they bulked up the ingredients with hazelnuts. They did this because hazelnuts were plentiful in the local area and much cheaper than cocoa per kilogram. The presence of mind to turn to the woodchips, in this case hazelnuts, and remarket the brand was very clever indeed. The branding was adapted to talk up the nut credentials and make people believe it was actually a hazelnut spread.

In fact it only has 13% hazelnuts and a whopping 52% sugar by volume – ironically about the same amount as the white label on the jar. While I’ll leave the moral discussion on the marketing of Nutella for another blog post, the question it poses for all of us is this:

How do we turn necessary cost cuts or lack of availability of inputs into brand advantage?