The people who consistently build products and services that reach massive scale are often those who are able to accurately predict what people want, often before people realize they want them.
I tend to follow the works, speeches and thoughts of these people more often than I follow traditional journalists. One person who fits this category for many in the tech community is Peter Thiel, co-founder of PayPal, and early investor in Facebook, SpaceX and many more.
Last year, Thiel published an amazing book titled Zero to One which highlighted important themes for aspiring entrepreneurs. One of the key themes was that many of the greatest businesses derived from someone’s fundamental belief of something that opposed both popular opinion and common sense.
A few examples include businesses that allow people to sleep in strangers’ beds instead of hotels [Airbnb], request car rides from strangers instead of regulated taxi cabs [Uber] and become an electric-car manufacturer in an industry that hasn’t seen a new manufacturer in decades prior [Tesla].
In an effort to identify future opportunities, I created a list of drastic societal trends that I predict will create the next wave of businesses.
Here are five things about the future that I know to be fundamentally true that almost no one agrees with me on:
1) How we manage personal identity will radically shift in the near future
Social Security numbers, date of birth and mother’s maiden name – all key forms of identity that mean everything today will mean very little in the future.
Why? Because identity theft and corporate data breaches will continue to happen, in vastly larger numbers.
In fact, over 70% of organizations have cited being affected by some cyber security issue last year alone. These companies have personal data about millions of Americans, ranging from personal identity information to consumer spending and health habits.
So what must change? The way we use date of births, social security and other pieces of identifiable data will shift from the current model of extreme privacy to a system of transparency and validation.
Therefore, it will be less about proving who you are and more about proving that a specific transaction should happen.
Banks are already looking into an innovative technology known as the blockchain because it leverages a public ledger of data, allowing institutions to cross-reference whether or not a transaction is real or fraudulent.
While I don’t know what the exact process/system will look like, I’m confident that it will be drastically different from how it looks and works today.
2) Direct participation in public financial markets by consumers will practically disappear
Within the next 15-20 years, the United States will witness some of its largest demographic shifts in history. Much of the senior population will age out of society and millennials will control much of the spending power in the country.
The problem is that this is the same millennial generation that appear to have less savings and are accumulating more student loan debt.
So this, paired with the data that millennials remain weary of investing in the stock market, will result in a disconnected involvement in traditional financial markets that is drastically different than what we saw with our parents.
We will likely see practically all investments done through traditional vehicles like 401Ks and far less, if any, direct consumer participation of buying and selling stocks.
According to a Bankrate study, only 26% of millennials are investing in stocks and bonds. Compare this to 58% of the generation before them.
One analyst framed it correctly by stating: “That’s ‘particularly troubling’ because the beginning of a career is the best time to start investing.”
To top off, the trust in the financial system nears an all-time low and isn’t showing signs of gaining consumer favor.
3) Our economy will shift from having 9-5 workers to 1099-workers
The preference of flexibility and convenience is one core tenant that is emerging from the younger portion of the workforce.
Having a job or career that not only aligns with a person’s goals, but also having the ability to work during the days and hours that match their personal schedule, is mattering more.
Technology companies are increasingly finding ways to enable this sort of work. Think about companies like Uber, Postmates, Instacart and others.
Many of these companies rely on 1099 employees to scale their business out in each market they operate in. [For reference, 1099 refers to the IRS tax form required for independent contractors.]
And there will be many more companies to emerge in this field. According to a CB Insights report, venture capitalists have invest $9.4 billion into on-demand startups.
Even members of the baby boomer generation are taking advantage of these growing flex-work opportunities to supplement social security and pension incomes. This speaks to the mounting reasons we will see a shift from the traditional 9-5, Monday through Friday, type of worker.
4) Access to things will become more important than ownership
Building on increasing preference toward work flexibility and shifting generational preferences, we hit on a key trend that will define much of the future of commerce.
For many, having access to products and services will take precedence over the preference to own them.
Let’s take one of the oldest tenants of what some call the American Dream: owning a home.
According to a report by the The Council of Economic Advisors, millennials are less likely to be homeowners when compared to young adults of previous generations.
Whether this is because of an increasing burden of student loan or simply a preference towards being renters, access to rooms [renting] will be much more important than owning the building.
Looking at another traditionally large purchase that Americans make, let’s examine car ownership.
According to a recent Fast Company article, the percent of new vehicles sold to people 18-35 years old have steeply declined.
People are caring more about getting from point A to point B than being able to own the keys and countless new options are emerging, beyond traditional public transportation.
A more simplistic analogy would be the shift of how consumers value ownership of content like movies and music.
Previously, paying for songs and albums and having DVD collections were the norm. Owning it was important.
Today, streaming content (e.g. Netflix and Spotify) is increasingly more common than purchasing it. As long as you have it when you want to access it, it’s all good.
This interesting podcast, hosted by some of the technology industry’s most influential voices, elaborates on this point further.
5) Reliance on some professional services (Doctors/Financial Advisors) will diminish
While I don’t think certain professions will ever (or should ever) disappear, I’m confident that the extent to which most people rely on the services of doctors and lawyers will drastically change.
Why? Technology will intervene early and often, empowering us to prevent the need for those visits that often result in little/no actionable information.
On the health front, hardware and software developments are reaching a point were consumers will have increasing ability to monitor their own data and make changes in their actions to improve their health.
Just think about the power of our existing smart devices (iPhone, Fitbits and emerging vital-tracking tools like Scanadu), and consider where this technology will be in 5-10 years. That, paired with where genetic testing capabilities will be in the near future, will allow us to take action before things go bad.
This shift from reactive healthcare to preventative will dramatically alter how and when we leverage doctors. That being said, the rate at which we utilize other medical professionals like surgeons and radiologists likely won’t change.
For instances where financial experts previously dominated, consumers will have access to more intelligent data and tools that will create customized and actionable steps to increase wealth without paying those erroneous compounding fees.
We are already seeing this debate happen among Silicon Valley’s wealthiest investors, who are now trusting their money to software rather than the local financial advisor. Companies like Wealthfront and Betterment are seeing significant traction as skepticism of Wall Street-types remains prevalent.
What did I miss?
So, there you have it. These are a handful of predictions of the future that I’m confident will transpire.
Do you agree? Why not?
Do you feel like I’m overestimating how much things will change? I’m curious to know where you think I got it wrong.