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Today, we’re doing a rundown of the worst tech predictions ever (and what we can learn from them).

Also this week:

• Lex Fridman’s book list
• The most valuable unicorns
• Some really dumb memes (including Apple Pay)

Prediction gone bad

I know it’s fashionable this time of year to do predictions.

But I’m officially out of the prediction game after a disastrous performance in 2022 (hat tip to legendary New York Yankees catcher Yogi Berra for one of the great quotes ever: “It's tough to make predictions, especially about the future”).

In lieu of my 2023 predictions, we’ll look at the worst tech predictions and the rationale behind them. The list includes bad predictions for cars (1903), the PC industry (1970s), mobile computing (1992), the internet (1995, 1998), music streaming (2003), the iPhone (2007) and cloud computing (2008).

The predictions we’ll cover were made by some of the most-qualified people to make said predictions (which is probably why we remember them).

Cars Prediction (1903)

“The automobile is a fad, a novelty. Horses are here to stay.” 

This advice was given by the President of Michigan Savings Bank to Horace Rackham, who was Henry Ford’s lawyer. In addition to giving this banger quote, the Bank President turned down an offer to invest in Ford Motor Co (the Model T came out 5 years later in 1908).

• Rationale? The Bank President was extrapolating from his understanding of the bicycle market. Right before the famous line to Rackham, the Bank President says: “You see all those people on their bicycles riding along the boulevard? There is not as many as there was a year ago. The novelty is wearing off; they are losing interest. That’s just the way it will be with automobiles.” (Quote Investigator)
  

PC Prediction (mid-1970s)

“There is no reason an individual would ever want a computer in their home.”

This quote is attributed to Ken Olsen, founder of Digital Equipment Corporation (DEC), a minicomputer manufacturer.

• Rationale? Olsen’s quote is relayed by David H. Ahl, a former DEC employee that worked on a home-computing product for DEC. Apparently, Olsen “refused to support the full development and marketing of the system”. Ahl was not happy about it and — in 1980 — told the story of Olsen shutting down DEC’s home computing efforts in a tech publication. (Quote Investigator)
  

Mobile Computing Prediction (1992)

The idea of a wireless personal communicator in every pocket is "a pipe dream driven by greed."

Quote by Intel CEO Andy Grove at the '92 Mobile Conference.

• Rationale? Grove’s line is included in a New York Times article titled “The Executive Computer; 'Mother of All Markets' or a 'Pipe Dream Driven by Greed'?”
  
  There is no further context around his quote, but the rest of the article talks about a seeming gold rush for mobile computing devices. The technology was vastly underdeveloped, though (it was all hype). This 1992 stance is probably related to Intel completely missing the mobile wave in the iPhone era.
  

Internet Prediction #1 (1995)

“I predict the Internet…will soon go spectacularly supernova and in 1996 catastrophically collapse."

Ethernet inventor Robert Metcalfe wrote this in Infoworld Magazine and said that if his prediction was wrong, he’d eat his own words. In 1999 — when it was clear his prediction was wrong — he put the column in a blender and "ate" his words at WWW Conference; before eating the goop with a spoon, he confirmed that the ink wasn’t toxic.

Rationale? Metcalfe provided a number of very reasonable reasons for his prediction:

• Internet data links would be overloaded
• The proposed flat-rate business model would not bring in enough money to fund growth
• Investors would not be willing to stomach long-term losses
• The Internet would face significant security issues

Internet Prediction #2 (1998)

“The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law' becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s”

Paul Krugman wrote it -- no joke -- in an article for Red Hering titled "Why Most Economists’ Predictions Are Wrong"

• Rationale? Per Snopes, Krugman owned the gaffe by saying “I must have tossed it off quickly (at the time I was mainly focused on the Asian financial crisis!), then later conflated it in my memory with the NYT piece. Anyway, I was clearly trying to be provocative, and got it wrong, which happens to all of us sometimes.”
  

Music Subscription Prediction (2003)

“The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model and it might not be successful."

Steve Jobs in a Rolling Stone interview.

• Rationale? Jobs’ view on subscriptions is based on how consumers typically consumed audio up to 2003: “They bought 45s, then they bought LPs, they bought cassettes, they bought 8-tracks, then they bought CDs. They’re going to want to buy downloads.”
  
  The idea of an all-you-can-eat music service was incongruent with music history. Also, the existing subscription services (MusicNet, PressPlay, Rhapsody) weren’t that good and didn’t have full catalogues.
  

iPhone Prediction (2007)

“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”

This is what former Microsoft CEO Steve Ballmer told USA Today.

Since the iPhone is the greatest consumer product ever (2B+ devices sold and $1T+ in sales)…this is my “worst” prediction ever.

• Rationale? Per CNBC, Ballmer says he whiffed on iPhone because he didn’t see Apple’s business model innovation. Ballmer explained: “I wish I’d thought about the model of subsidizing phones through the operators. And there was business model innovation by Apple to get it essentially built into the monthly cell phone bill.”
  
  Honestly, Jobs played some 4D chess with the phone carrier subsidy…so I kind of want to give Ballmer a mini-pass here. Jobs was so keyed in on the carrier relationships that — at one point in the iPhone’s development — the team handling carrier negotiations was as big as the phone software development team (the rebuttal here is that Microsoft could have done a carrier subsidy, as the arrangement was established for higher-end Blackberry and Nokia phones). 
  
  Somewhat ironically, Jobs’ music streaming prediction was off because he didn’t fully see the business model innovation (people like the convenience of an all-you-can-eat option).

Cloud Computing Prediction (2008)

“The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is [cloud]? It's complete gibberish. It’s insane.” — Larry Ellison at OracleWorld.

• Rationale? Ellison has always been very outspoken and cloud is so orthogonal to Oracle on-prem database business that was launched in the mid-1970s. Cloud was obviously a direct threat to Oracle’s bread-and-butter. After years of resisting cloud, though, Oracle is finally cracking the market.

So what are the takeaways from this list of bad tech predictions?

• People just talking their own book: The #1 takeaway for me is that the business execs are just making calls that align with how their companies make money. And here’s the obligatory Upton Sinclair quote (“It is difficult to get a man to understand something, when his salary depends on his not understanding it”). The following predictions were just people talking their own book:
  
  
• • Ken Olsen on home computing (DEC was a selling mainframe computers)
  • Andy Grove on mobile computing (Intel was dominant on PC/Data Centers)

  • Steve Jobs on music subscription services (Apple had iTunes and the $0.99 per song model)

  • Steve Ballmer on the iPhone (Microsoft had its own mobile ambitions)

  • Larry Ellison shitting on cloud computing (Oracle dominant in on-prem data centers)

When you’re business is already crushing it, you keep doing what works. But that myopic focus on what works makes you vulnerable or unable to respond to industry shifts [Insert something smart about “the innovator’s dilemma”].

• Earn the right to make bad predictions: These predictions are iconic because the individuals that made them obviously put themselves in a position to prognosticate. Like, no one gives an F what Trung has to say about the future of cloud computing (although, my World Cup predictions are highly sought after)
  
  
• It’s impossible to not get burnt in the business of predicting: You just have to be OK with it. Professor Scott Galloway gets ridiculed a lot for making predictions that go awry. But he says he doesn’t make predictions to be right, but to learn.
  
  As Byrne Hobart point out about Krugman’s bad internet prediction, the economist actually had a very salient call in the same essay that everyone has forgotten: “Sometime in the next 20 years, maybe sooner, there will be another '70s-style raw-material crunch"
  
  Per Hobart, the tens years after Krugman’s prediction saw the NASDAQ drop 5% while oil went up 848%).
  
  No matter the Ws, it’s much easier to be remembered for your worst takes (I think people are just naturally trolls). If you’re willing to take those arrows, though, publicly predicting stuff can def sharpen your thinking.

Having said all of that, wow did the President of Michigan Savings Bank completely whiff on that Ford opportunity. Horses are here to stay? C’mon bro.

Bearly AI update 

As some of you may know, I've been building Bearly AI, an AI-powered research app for reading (instant summaries) and writing (grammar correction, reword, auto-gen text).

Over the past two months, our team had >100 one-on-one chats with users and integrated the feedback for V2 of the app including: 

• Mobile browser support 
• Marketing templates 
• Chat 

Coming soon: AI-powered image generation and instant podcast summaries. 

Links and memes

Lex Fridman…is an AI researcher and popular podcast host. On January 1st, Lex tweeted out a list of 25 books that he planned to read over the next 25 weeks:

In the most Twitter way possible, he got absolutely dragged by the internet. Why? There were a few streams of criticism:

• The reading list looks half high school English curriculum and half popular classics section at airport book store
• Posting the list looked like he was being a try hard (Fridman has been accused of over-using his association to MIT for internet clout)
• The idea that someone could read and comprehend a book like “Brothers Kazamov” in one week is absurd (the biggest critic on this point is author and internet flamethrower Nassim Taleb, who tweeted about the book list: “If you don't get why, between 2019 and 2022, I turned down exactly 10 requests to be on his podcast, this will provide a succinct explanation…Anyone who pretends programmatically reading, discussing and digesting these books one/week is a total fraud.”)

I like Lex’s podcast and have zero qualms with the list. Also, I think it’s a bit much to troll someone for posting aspirational reading goals. But Taleb’s point about programmatic reading rings true. I used to read books to say “I finished X number of books this year” while remembering exactly zero of the content.

Either way, this meme about the incident was amazing.

The most valuable unicorns: WSJ reports that OpenAI — the AI research firm behind ChatGPT — is valued at $29B following a tender offer. That would make it the 10th most valuable unicorn startup in the world. Yes, I understand that private market valuations are due for deep markdowns…so I pulled the latest numbers I could: 

• Bytedance ($275B)
• SpaceX ($137B)
• Stripe ($74B)
• Shein ($70B)
• Canva ($40B)
• Revolut ($33B)
• Epic Games / Fortnite maker ($32)
• Databricks ($31B)
• Fanatics ($31B)
• OpenAI ($29B)

Of these companies, three have had pricing in the past 3 months (SpaceX, Fanatics, OpenAI). A few others have written down their valuations in the past year (Bytedance, Stripe, Shein, Databricks). Meanwhile, two are due for big write downs (Canva, Revolut).

Speaking of OpenAI…Microsoft — which has invested $1B+ into the AI startup — plans to integrate ChatGPT into the Bing browser (side note: ChatGPT was recently banned on the computers and networks of New York public schools due to the cheating threat).

Bing actually brings in $10B+ a year in ads. While that is like 1/15th of Google search, Microsoft’s multi-year investment in Bing created incredible optionality for the company. And so many people are frustrated with Google’s ad-filled search pages, that there’s actually an opening to take market share (OpenAI’s $29B valuation on only “tens of million in revenue” is clearly in recognition of the search opportunity). All of the hoopla really makes Google’s 2014 acquisition of DeepMind for $600m look genius.

Remember when I said “I’m not doing predictions"? Well, I actually did make this ChatGPT / Bing prediction in December as a joke…so the lesson is I should make more joke predictions.

And here some good tweets...

Listen, I know we don’t do politics in SatPost…but the inability for US Congress to elect a speaker of the house has lead to some really good memes:

Side hustle idea 2023:

Last week, I did a round-up of my top tweets in 2022. I included a few that had 100k+ likes and “did numbers”. The day after the email send, I ended up doing my first 7-figure liked tweet ever. It's all downhill from here. 

Speaking of 7-figure tweets, Greta Thumberg — the 19-year old climate warrior — has stormed to the top of the “most-liked tweets” ever scoreboard with two tweets in 3 days (December 28th and 30th). For the uninitiated, here is what happened:

Andrew Tate — a kickboxer turned controversial internet influencer — tweeted at Greta a photo of him gassing up his Bugatti and telling her how much emissions he puts out:

1. Greta’s account quote re-tweeted Tate’s tweet with an email referring to him as [email protected] (#3 on list, 3.9m likes)
2. Tate made a rebuttal video that involved cigars and pizza boxes (remember this)
3. The day after Tate made that video, he and his brother were arrested in Romania for human trafficking as related to a webcam business he operates. An early — but eventually debunked theory — was that Romanian authorities arrested him after finding out he was in the country based on the pizza box in his video
4. With Tate arrested, Greta dropped a knockout tweet: “this is what happens when you don’t recycle your pizza boxes" (#7 on list, 3.5m likes)

Thumberg's tweets are the only one on the list that qualify as a "dunk" on someone. Meanwhile, if you want to know how insanely popular the Korean boyband BTS is...17 of the top 30 most-liked tweets of all time are short BTS tweets with an emoji or shouting out an artist the worked with (eg. Coldplay, Harry Styles). 

Written by me, Trung Phan.

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