3 Forces Shaping the Future of Business

Anurup Gaurav
Sep 9, 2018 · 7 min read
(Image credit: iStock.com/Wavebreakmedia)

What Mark Zuckerberg Saw That Day:

In July 2006, Yahoo! offered to buy Facebook for $1 billion.

At the time, Facebook was just two years old and not yet profitable. Its CEO Mark Zuckerberg was all of 22.

Peter Thiel, PayPal co-founder and early Facebook investor, in his book Zero to One, recounts this important moment in the history of Facebook: “When Yahoo! offered to buy Facebook for $1 billion in July 2006, I thought we should at least consider it. But Mark Zuckerberg walked into the board meeting and announced: ‘Okay, guys, this is just a formality, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here.’ Mark saw where he could take the company, and Yahoo! didn’t.”

Today, nine years later, Facebook is one of the largest companies in the world by market value (topping $300 billion), and with more users than the population of China. Mark Zuckerberg is now one of the world’s 10 richest persons (with net worth over $46 billion).

That day Zuckerberg saw something that no one else did. He saw Facebook’s future, not in as much detail of course, but with enough clarity and conviction to turn Yahoo!’s billion-dollar offer down.

So, Can We Predict the Future?

No and yes.

No — not all of it, not till the end of time, not with absolute certainty.

Yes — certain aspects of it, till a little ahead of us, with reasonable confidence.

Predicting the future is difficult, yet essential. For entrepreneurs and enterprises that aspire to create outstanding value, a timely perception of what is going on and where we are headed is an existential necessity.

We may not be able to predict the future with absolute certainty — resulting, as it is, from mutations and interplay of myriad complex systems and laws, known and unknown. However, using the tools of perception and reason, like headlights through the night, we can see some of the major forces shaping it (and its trillion-dollar business trends) in the distance.

Three such forces stand out.

Three primal evolutions — intertwined like DNA strands, engaged in an eternal dance, influencing and being influenced by each other — which no future business can afford to ignore.

1. The Evolution of the Customer

Nobel-prize-winning playwright George Bernard Shaw once remarked: “The only man who behaved sensibly was my tailor: he took my measure anew every time he saw me, whilst all the rest went on with their old measurements and expected them to fit me.”

The customer, metaphorically speaking, has also changed. Today’s customers are more connected, mobile, aware, and empowered than ever before. Generation C — The Connected Customer — is now mainstream. Digital natives, they have unprecedented control over getting what they want… and when, where, and how they want it. Rapid urbanization and the rise of the consuming class in emerging markets is fast shifting the world’s economic centre of gravity (from the United States and Europe toward Asia). Ageing populationsaround the world are giving rise to a powerful ($15 trillion by 2020) Silver Economy.

Much like Shaw’s tailor, great businesses take the time to understand their customers’ changing needs, expectations, sensibilities, and influence. Through deliberate and continuous effort, they try to look at the world through the eyes of their customer — to understand unmet expectations, to discover latent needs, to serve them better.

This desire to understand customers is evident, for example, in SAP’s creation of Idea Placeto continuously listen to product improvement suggestions from its vast community, and Facebook’s quest for building deep-learning software that understands its users.

2. The Evolution of Technology

It took 75 years for the telephone to reach 100 million users. The mobile phone took 16 years to reach as many. The internet took seven years. Facebook did it in four and half; Candy Crush Saga (video game), in little over a year! As technology moves apace — cutting across industries, geographies, and socioeconomic spectra — we now experience more change at a faster rate than any other time in history.

On one hand, in developed economies to begin with, technology is pushing the boundaries of what is possible, and turning science fiction into science facts. Breakthroughs in virtual reality, artificial intelligence, Internet of Things, 3D printing, nanotechnology, genetic engineering, bionics, drones, etc. are setting the stage for a brave new world.

On the other hand, technology is making its way to the remote corners of the planet and to the bottom of the economic pyramid. As internet and mobile connectivity percolate down to billions more in developing economies, it will have the potential to drive grassroots social change and squeeze out gross systemic inefficiencies.

Both are equally magical, transformative, and game-changing for the inhabitants of these two parallel economic universes. Eric Schmidt and Jared Cohen, two leading thinkers on technology, in their groundbreaking book The New Digital Age, brilliantly envision our hyper-connected world of the not-so-distant future. They describe the duality thus: “… being ‘connected’ will mean very different things to different people, largely because the problems they have to solve differ so dramatically. What might seem like a small jump forward for some — like a smart phone priced under $20 — may be as profound for one group as commuting to work in a driverless car is for another.”

For value creators, however, it will be a mistake to romanticize technology. Unlike a rising tide, it will not lift all boats. Kodak, the photography industry leader of its time, saw the digital wave coming (it even had the patent for the world’s first digital camera), but could not act in time to save itself from bankruptcy — let alone ride the wave. Such surging waves of new technology — only more frequent and powerful — will keep arriving from the future, upending entire industries and putting companies in their path, small and big, at the risk of extinction.

3. The Evolution of Value Creation

Victor Hugo observed years ago, “You can resist an invading army; you cannot resist an idea whose time has come.” We are living in arguably the most innovative period in human history. A number of favourable conditions are converging today (for example, globalization, technological maturity, customer readiness, spirited entrepreneurship, and lower barriers to entry & scaling up). This is making possible, at an amazing speed and scale, the kind of businesses that would have seemed unthinkable a generation ago.

For example, six-year-old Uber now operates in more than 300 cities worldwide and is valued at $51 billion, which is roughly equal to the market capitalization of General Motors, a century-old auto giant. Similarly, seven-year-old Airbnb — with already 60 million guests in 34,000 cities across 190 countries — commands a richer valuation than established hotel giant Hilton. Who could have predicted this a decade ago? With more and more entrepreneurs capitalizing on the demise of ownership, many on-demand services are bursting on the scene, ushering in the Uberization of the economy. This Sharing Economy is estimated to grow 3,000% from 2015 to 2030.

Yet, in the meteoric rise of these new companies, many hear echoes of the dotcom bubble that burst spectacularly 16 years ago, taking down with it small and big internet-based businesses of the time. Could all this then be a fad, a flash in the pan, a bubble waiting to burst one day not long from now? — Passionately asked and cogently argued. But not known with certainty. Maybe many of these new companies will die, as they invariably do, but the few that remain will rise and change the world in fundamental ways.

Only time can tell.

More importantly, however, this portends the tectonic shifts that will transform the landscape of value creation in the future. Bubble or no bubble, our journey to the future will be marked by exponentially increasing creativity, innovation, and disruption at all levels — powerfully altering how value is sought, discovered, created, and captured.

When the Sun Rises Tomorrow

In conclusion, the future of business will be unprecedentedly altered by the evolution of customers, technology, and value creation. The dynamic interplay of these three powerful forces will create the necessary conditions and tipping points for tomorrow’s billion- and trillion-dollar megatrends. Some such trends are already surging in (3D printing, for example, is expected to reach mainstream adoption in around five years), while some others are just beginning to take shape.

Moreover, as the three forces continue to converge, collide, and cross-pollinate, they will give rise to new possibilities never before imagined. Simple extrapolations won’t help foresee those, as Bertrand Russell’s chicken reminds us. Human creativity and ingenuity will pleasantly surprise itself, and, when the Chaos Theory butterfly flaps its wings, breakthroughs will come that will beat many a smart forecast, and the future will arrive in ways not fully known yet.

This will happen, and when it does, the rules of the game will change. Conventional methods, found lacking to navigate the future world, will be increasingly questioned. Speed and innovation will challenge size and scale. Agile new competitors will challenge flat-footed old incumbents. For old incumbents, it will be imperative to overcome strategic inertia, rethink their raison d’être, and reimagine, reset, retool their businesses in bold and inventive ways.

The price of relevance is continual and preemptive self-disruption. You may be a 123-year old GE, a six-year-old Uber, or a would-be entrepreneur with a twinkle of an idea in the eye. No matter who you are today, when the sun rises tomorrow, you will have to… disrupt, or be disrupted. Facebook says it best in its Little Red Book, which it gives to its new employees: “If we don’t create the thing that kills Facebook, someone else will.”

(I first published this post on LinkedIn and my website.)

Data Driven Investor

from confusion to clarity, not insanity

Anurup Gaurav

Written by

Thoughts on business, technology, and human excellence.

Data Driven Investor

from confusion to clarity, not insanity

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade