The future of Facebook

Is Facebook worth $100 billion? The valuation seems excessive – it’s more than Boeing is worth, but on some levels it could be seen as something of a bargain. Other tech companies such as Google and Apple are worth far more and many of the big trends are moving in Facebook’s direction. Global connectivity is increasing rapidly (from 1.6 billion online in 2010 to 3 billion in 2016 according to Boston Consulting) and the move to the mobile web also benefits Facebook hugely.

At the heart of Facebook’s success is surely a deep and long standing human desire to connect with other human beings. People like Facebook because Facebook makes finding new friends, or looking up old ones, easy. It’s also a fast and convenient way to stay in touch and share everything from party invitations to baby photos, which is probably why the website now accounts for one in every seven minutes spent online globally. Don’t forget that Facebook also knows an extradordinary amount about the minutiae of its users lives, which is why it’s able to target advertising so effectively (and why 85% of its revenue comes from advertising). The sheer number of Facebook users (currently 850 million and rising) and the amount of time users spend on the site (15.5 hours per month in 2011) means that Facebook is rapidly becoming the world’s de facto homepage with other companies increasingly linking to it because users have to login in using their real identities.

But what might go wrong for Facebook in the future?

The first problem the company faces is operational. How to scale a small start-up into a giant corporation? This shouldn’t be too difficult. The second problem is around regulation and this could be tricky. If Facebook continues to be successful it will, at some point, start to resemble a monopoly in the eyes of the US regulators, at which point there could be an anti-trust case. It happened to Microsoft and it could easily happen to Google and/or Facebook. The third problem concerns privacy. To date Facebook has been very clever about mapping the connections between people and what interests them and then selling this information on to third parties. Much of the time Facebook’s users have little or no idea that this is happening and those that do know don’t seem to care. But this could change.

The network effects that made Facebook so large so fast could act in reverse if users start to feel exploited financially or no longer trust what is increasingly seen as a rather arrogant and potentially autistic company. Recently, users were forced to adopt a new feature called Timeline and had to opt out if they did not like it. This created a few mutterings, as did the acquisition of Instagram and the use of facial recognition technology, but so far there are few signs of a serious Facebook fallout. But as the company grows larger there will be inevitable tensions between attracting users and getting them to part with their money. One also suspects that when it comes to privacy the company’s devotion to online openness will continue to cause it problems in the real world too.

The great innovations swindle

I’m mad as hell and I’m not going to take it anymore. I’ve been trying to soak in the bath and the plug is broken so all the water has been rushing out. How do you break a plug? Simple. Replace a perfectly good and inexpensive plug on the end of a chain with a really complex and expensive series of rods and joints plumbed in behind the bath so you can’t get at it to fix it.

It’s much the same story everywhere else in and around the house. My new car has lights that when they break have to be replaced, either with a hugely expensive unit or one where you have  to dismantle half of the car to get at a bulb, which, of course, costs a fortune. Contrast this with my old car. If the light broke you just unscrewed the cover, the lens fell out and you put in a new bulb – which cost about two quid. It’s the same with the car keys. One has a push button start linked to a remote unit with a battery that keeps going flat. Last week all the electrics just stopped working for no reason and the car couldn’t be started. With the old car there was a metal key. No batteries and not much to go wrong.

Or take my dishwasher (please take my dishwasher…). Why I’ve got one is anyone’s guess. It takes longer to stack and remove the dishes than if I washed all the dishes by hand. But that’s not the real problem. The real problem is that when it finishes washing it beeps to let me know it’s finished. Fine. Not necessary, but fine. Only, it never stops beeping. It beeps until I stop whatever I’m doing (sleeping, for example) and attend to its desires. It’s all about it. I can hear it right now, laughing at me.

It’s all enough to make me write Future Files 2 about how the world is making some of us go slightly mad. I could, for example, also include the helpful suggestion from BT’s automated answering service that if I am having problems with my broadband connection I can go online to find out how to fix it. Are they serious?

BTW, I saw a good quote today in a bookshop window.

“Experience is what you get when you didn’t get what you wanted’
– Charles Saatchi.

On forecasting

I’m going through a pile of newspaper cuttings for the next issue of my What’s Next report and found this tiny morsel from an old issue of the FT lurking under a pile of New Scientist magazine cuttings.

Philip Tetlock, author of Expert Political Judgement, found that experts of any professional or practical persuasion make very poor forecasters. At best, expert predictions perform little better than randomly sticking a pin on a list of stocks or picking economic predictions out of a hat. So what can one do if what one wants to do is make good predictions?

The answer, according to Tetlock, is contained within an essay published a very long time ago by Isaiah Berlin, which itself harks back to the thinking of the Greek poet Archilochus. The secret, it seems, is to develop a cognitive style that is highly promiscuous, self-doubting, frantically curious and meddlesome. This will, on most occasions, work better than thinking that is based on a single worldview or a lone idea.

In other words, question everything.

The Skyscraper Index

There used to be a saying that when large corporations built themselves fancy new headquarters featuring flags and a water feature they were usually in trouble.
A new spin on this is the so-called skyscraper index, which equates the building of tall buildings with economic collapse. According to Barclay’s Capital, China’s share of current skyscraper construction is 53%. Personally, I don’t quite buy it.

Strategic foresight

 

 

 

 

 

 

 

 

 

 

 

 

 

I was in Cambridge today talking about the benefits of long-term planning. It went well apart from the fact that I was speaking at 9.30 am and most of the audience had been in the bar until 4.00 am the previous night.

Anyway, what I totally forgot to mention, which would have been such a perfect example of forward thinking, was the story (allegedly true, but easily an urban myth) of New College Oxford. After the giant oak beams in the College’s great hall rotted away, the Dons of the college were at a total loss to source some replacement oak timbers of a large enough size. Apparently the dons asked if the College owned any land that could be sold to buy some timber. Well it turned out they did. Not only that, when New College was built, 500 years ago, the Dons had arranged for some oaks to be planted on the land and they were now of sufficient size to be used for the new beams. Now that’s what I call strategic foresight!

Of course the question is did the college then plant some acorns so that the beams could be repaired again in another 500 years.

Stat of the week (and a book)

In its last fiscal quarter, Apple sold more iPhones (37m) than babies were born in the world (36.3m). So, given that Apple products are now so popular, when will someone design a virus specifically targeting, say, iPhones?

BTW, I like the sound of this book (left). Wait: The Art and Science of Delay by Frank Partnov.

And, yes, I’ve also just noticed that I blogged the Apple stat a few weeks ago!

New book on scenario planning

It’s done. Oliver and I have sent it off for an edit. If you are interested here’s the intro.

People have always been curious about what lies over the horizon or around the next corner. Books that speculate about the shape of things to come, especially those making precise or easily understandable predictions, have been especially popular over the years. Interest has not diminished of late. Indeed, the number of books seeking to uncover or explain the future has exploded. The reason for this, which ironically no futurist appears to have foreseen, is that rapid technological change has combined with world-changing events to create a future that is characterised by uncertainty and thus anxiety. The world offers more promise than ever before, but there are also more threats to our continued existence.

During the preparation of this book we have seen the sudden collapse of Egypt’s Mubarek regime and the domino affect it has had on the Middle East; the emergent recession in parts of the United Kingdom; the economic plight of Italy, Greece & Spain; the medieval atrocities being perpetrated in Syria; the continuing demise of Barack Obama and the introduction of the iPad which is selling over one million units every month – not to mention 911-style attacks on confidential government and commercial data and John Galliano being caught on a phonecam making racist remarks in Paris.

In short, the future is not what it used to be and needs rescuing. There is now a high degree of volatility in everything from politics and financial markets to food prices, sport and weather and this is creating ubiquitous unease – especially among generations that grew up in eras that were characterised, with 20/20 hindsight, by relative stability and simplicity. A world more like Downton Abbey than Cowboys Meet Aliens!

Thus the interest in books that explain what is going on right now, where things are likely to go next and what we should do about it. But there’s a problem with all these books about the future. Indeed, there’s a fatal flaw with almost all of our thinking about what will happen next. Regardless of our deep desires, a singular future doesn’t exist and there is no heavenly salvation in sight. The present, let alone the future, is highly uncertain and we are even starting to question what happened in the past. At a recent futures summit in Provence, Grigori Yavlinsky, the ex-presidential candidate, admitted to us that the most uncertain thing about Russia was its past. Logically, if the future is uncertain there must be more than one future.

There are, of course, different ways in which the future might unfold and suggesting, as many futurists and technologists do, that one particular future is inevitable is not only inaccurate, but is dangerously misleading. What is worse is when we are asked to assign probability to this future emerging rather than that one. Linear analysis and the extrapolation of current events is a very straight road that promotes directly unforeseen shocks coming from all sides.

As the historian Niall Ferguson has observed: “It is an axiom among those who study science fiction and other literature concerned with the future that those who write it are, consciously or unconsciously, reflecting on the present.” Or as we like to say – all futures are contemporary futures in the same way that all prediction is based upon past experience. This is one reason why so many predictions about the future go so horribly and hilariously wrong.

For example, in 1884, an article in The Times newspaper suggested that every street in London would eventually be buried under nine feet of horse manure. Why would this be so? Because London was rapidly expanding and so too was the amount of horse-drawn transport. Londoners would, it seemed at the time, soon be up horse manure creek without a paddle.

What the writer didn’t foresee, of course, was that at exactly this time the horseless carriage was being developed in Germany by Daimler and Benz and their new invention would change everything. But four years later, in 1898, Karl Benz made exactly the same mistake by extrapolating from the present. He predicted that the global demand for automobiles would not surpass one million. Why? Because of a lack of chauffeurs! The automobile had been invented but the idea of driving one oneself had not. Thus it was inevitable, he thought, that the world would eventually run out of highly skilled chauffeurs and the development of the automobile would come to the end of the road.

The preoccupation with trends analysis is doubly misleading. Not only must trends be lined up with ‘discontinuities’, counter-trends, anomalies and wild cards, which have a nasty habit of jumping into view from left field, they are also retrospective and not ‘futuristic’ at all. A trend is an unfolding event or disposition, which we trace back to its initiation, and trends tells us nothing about the direction of velocity of future events. It is true that occasionally an idea or event occurs that is so significant that history is divided into periods of before and after. The steam engine, the automobile, the microprocessor, the mobile phone, the world wide web, the collapse of the Berlin Wall, 9/11, Google, Facebook and Amazon are all, arguably, examples.

But even here there is confusion. We all have a particular lens through which we see the world and no two individuals ever experience the present in the same way. Moreover, our memory can play tricks. As a result, there is always more than one reality or worldview as we like to call it.

Equally, it is not a binary world. It is a systemic one in which influences making for change interact with each other in complex and surprising ways. It is also a world where it is rare for a new idea to totally extinguish an old idea, especially one that has been in common usage for a very long time. For instance, despite the facility with which mobile technology can deliver ‘media content’, there’s still something reassuring about the daily newspaper dropping with a thud on to the hall mat as we begin another day.

Moreover, while means of delivery, business models, materials, competitors, profit margins and even companies may change radically the deep human needs (e.g. the desire to tell or listen to stories) often remain relatively constant.

Change happens rapidly, but in most instances it takes decades, often generations, for something new to result in a linked extinction event. The slow pace of fast change is observable. We all witness this. Like the destroyer in Sydney Harbour’s Maritime Museum at Darling Harbour – built in 1943 – which has in its ops room a fax machine.

More often than not different individuals and institutions will experience present and future in slightly different ways depending on where they live, what they do and how they have grown up (i.e. more than one reality again). There is more than one present let alone more than one future.

This is a good thing, as is the level of uncertainty that surrounds the future. Indeed, in many respects this is one of the most interesting times ever to be alive, because almost everything that we think we know, or take for granted, is capable of being challenged or changed, often at a fundamental level. Even human nature if Joel Garreau the author of Radical Evolution is to be believed.

It is the view of the authors of this book that the only rigorous way that one can deal with a future that is so uneven and disjointed is to create a framework that reveals a set of alternative futures covering a number of different possibilities.

This technique, called scenario planning or more properly scenario thinking, originated as a form of war-gaming or battle planning in military circles and was then picked up by, amongst others, Royal Dutch Shell, the oil company, as a way of dealing with ambiguity and uncertainty. In Shell’s case, scenarios correctly anticipated both the 1973 oil crisis, which hiked prices dramatically, and the corresponding price falls almost a decade later.

Other incidences where scenarios have foreseen what few others could include Adam Kahane’s Mont Fleur Scenarios in South Africa in 1992, which foresaw a peaceful transition to democratic rule, and two sets of scenarios created by the authors of this book for a major bank in 2005 and the future of the Teaching Profession in 2006/7, both of which identified futures around the global financial collapse that occurred in 2008/9

This, then, is a book about the future that offers readers a number of alternatives for dissection and discussion. It is not a book about trends, although key trends within demographics, technology, energy, the economy, environment, food, water and geopolitics are commented upon in depth. Equally, it is not a ‘how to’ book about scenario planning, although in the second half of the book the authors explain how scenario planning works and outline how each of the four different scenarios presented in the book were developed. Rather it is a book that considers a number of critical questions and then uses a robust and resilient process to unleash four detailed scenarios about what it might be like to live in the world in 2040 from a variety of different perspectives. It is not simply about where today’s trends might take us but about what the world in 2040 might be like.

It is not our intention to predict the future. We are not seeking, as it were, to get the future totally right. This is impossible. Our aim is rather to prevent people from getting the future seriously wrong. This is achievable, but only if we give ourselves the chance to think bravely and creatively. The book is intended to form part of a deep conversation. It is designed to open peoples’ minds to what is going on right now and create a meaningful debate about some of the choices we face and where some of the things that we are choosing to do – or allowing to happen – right now may go next.

It is intended to alert individuals and organizations to a broad range of longer-term issues, assumptions and decisions and to firmly place a few of them on the long-range radar for careful monitoring and further analysis. It is about challenging fundamental assumptions and re-framing viewpoints, including whether or not people are asking the right questions. And in this context disagreement is a valuable tool.

Most of all, perhaps, we would like liberate peoples’ attitude towards the future. In all our work we discover that people from all kinds of professions and backgrounds want to make a difference – to generate change as well as adapt to it. As Peter Senge once remarked: “Vision becomes a living thing only when most people believe they can shape their future.” So, yes, people need to understand the opportunities and threats that lie ahead but also consider in which direction they would like to travel.

For example, is mankind on the cusp of another creative renaissance, one characterised by radical new ideas, scientific and technological breakthroughs, material abundance and extraordinary opportunities for a greater proportion of the world’s people, or are we in a sense at the end of civilisation, a new world characterised by high levels of volatility, anxiety and uncertainty?

Are we entering a peaceful period where serious poverty, infant mortality, adult literacy, physical security and basic human rights are all addressed by collective action or are we moving more towards an increasingly individualistic and selfish era in which urban overcrowding, the high cost of energy and food, water shortages, social inequality, unemployment, nationalism and increasingly authoritarian government combine to create a new age of misery and rage?

Some urban economists and sociologists are predicting a future in which between one and two billion people will be squatters in ‘edge cities’ attached to major conurbations – Mexico, Mumbai, Beijing and more – while others believe in the concept of a smart planet in which our expertise delivers a triumphal response to the drivers of change and we create local self-managed inclusive communities which resonate with traditional democratic value.

Just what does the future have in store for us? This is what this book aims to find out.

Housebound children

So it’s the school holidays (again!). The sun is out. It’s warm. We have a couple of acres of woodland and one of freshly cut lawn. We have footballs, rugby balls, cricket balls, bicycles, a fire pit, trees to climb and enough air rifles to start a small war.

Where are the kids? Inside playing on the Wii.

I am very tempted to place an ad in a national newspaper offering all outside areas free to any family, or children, that would like to enjoy the great outdoors.

I’ll even cook the sausages.