Opinions And Ramblings By Adam Kmiec On All Things

Reviewing and Analyzing My 2020 Predictions

2020 Dumpster Fire

When I said, “2020 is going to be a firecracker;” I wasn’t forecasting a once in a lifetime global pandemic. COVID-19 changed the course of so many industries and lives. Too often, this year, we’ve focused on the grave, sad, and tragic aspects of COVID-19. With so many other people having covered those stories so well, I’ll pass on adding my voice to that dialogue.

However, COVID-19 accelerated and brought about positive changes in a number of areas. To start:

  1. Mental health and the stigma associated with it, change, for the better. Access to a plethora of mental and emotional wellness services seemed to double overnight.
  2. The scaling and adoption of telehealth services increased access to healthcare like never before.
  3. The digital transformation in organizations was like nothing we’ve ever seen before. We saw the updating of legacy systems and the changing of end-to-end supply chain operations (e.g. order online and have someone deposit your item in your trunk). And, of course, wholesale changes in business models (e.g. launching new movies on-demand first). We saw it all.
COVID-19 and Digital Transformation

A quick reminder, I’ve been offering predictions since 2012, with a historical scoring rate of:

  • 2019: 8.5/20 for a 42.5% hit rate.
  • 2018: 18/22 for an 82% hit rate.
  • 2017: 7.5/10 for a 75% hit rate.
  • 2016: 8.5/15 for a 56.7% hit rate.
  • 2015: 6.5/10 for a 65% hit rate.
  • 2014: 8/10 for an 80% hit rate.
  • 2013: 3/5 for a 60% hit rate.
  • 2012: 9/10 for a 90% hit rate.

As I review my 2020 predictions, there will not be a COVID-19 curve. The scores are what the scores are. The original prediction is in bold font, with my assessment in regular font.

  1. Apple will continue its efforts to be seen as the tech company that cares about your privacy by taking one or more of these actions. They will buy/launch a VPN service to keep your internet usage data private from telecom and internet service providers. They will buy DuckDuckGo. DuckDuckGo is the de facto search engine for people who care about their privacy. In many ways, they are the anti-Google. Purchasing DuckDuckGo and making it the default search engine for all iOS devices and Mac Computers would be a significant declaration. There will be a mass expunging of apps from the App Store that originate from China, Russia, or other countries in the Middle East and/or new rules brought about for the App Store that imposes higher thresholds for data collection transparency. A lesser person would take a full point. But, I specifically said there would be an acquisition and there wasn’t. But, everything else happened. iOS 14 brought about massive new privacy features. Apps were kicked out, suspended, or forced to change. Oh, and there was the whole TikTok thing, that wasn’t a thing, that was a thing, that might be a thing. Net-net, Apple was tougher on privacy, expunged apps, added hire thresholds, and became more transparent about data collection. But, they didn’t acquire a company in this sector. 1/2 point.
  2. Global TV Ad Sales dropped by 4% in 2019. Many ad executives believe we’ll see a massive rebound in 2020 because it’s an election year for the United States and the Summer Olympics take place. I don’t think this is going to happen. I see more money in politics shifting online at the expense of TV. In my opinion, this was going to happen no matter what. COVID-19 simply made it worse. By all accounts TV ad sales were dismal and most of the money shifted to digital. I’ll take the point.
  3. Speaking of politics, President Donald Trump will be re-elected. This did not happen.
  4. This will be a very pivotal year for the retail industry. We’re going to see 3 things happen. First, iconic and historical brands like Macy’s, J.C. Penney’s, and Gap will shrink their footprint. Second, we’re going to see 3 brands of significance change their CEOs and/or file for chapter 11 bankruptcy protection. Likely candidates would include L Brands, Ambercrombie, and Bed Bath and Beyond. Third, we will see brands that were once shuttered come back as online-only operations. For example Radio Shack. ALL of this happened. Seriously. Here’s what GAP said, “We will be shrinking our North America footprint and getting out of mall-based locations, and by 2023, we will have reduced our store fleet by 35 percent. The goal is to create a new operating model in a cost-effective way, and all of the changes will help us become a digitally-led brand.” On the bankruptcy protection side, you can take your pick. I said, 3, so here’s 3: J. Crew, JCPenney, and Nieman Marcus. Radio Shack did come back as an online retailer, as did Pier 1, and a host of other formerly traditional retailers. We will take the full point!
  5. Despite the slings and arrows that continued to be thrown at Facebook and Mark Zuckerberg, Facebook will continue to thrive. We will see stock growth, record revenues, and 2 or 3 meaningful acquisitions. I could see them buying Roku to bolster TV/content streaming offerings…that would be personalized, of course. Yeah, this happened. Despite being in the cross-hairs from both sides of the aisle, the reality is, the business has never been stronger. They also made acquisitions that are clearly aimed at diversifying their revenue streams. Specifically, Giphy and Mapillary. A full point here.
  6. Apple will make all their “+” offerings free, so long as you are enrolled in the Apple upgrade program, have an Apple credit card, or have a phone/iPad that’s less than 2 years old. This includes Apple News+ and AppleTV+. These services become choice differentiators for why you would pick an Apple device over a competitor. I AM NOSTRADAMUS!!! This was the obvious move from Apple. Buy something new and get things for free. Although, it’s not really free; it’s more like free for a period of time.
  7. Netflix can’t continue to spend what they’re spending on content creation. The debt they’ve racked up and the current cost structure won’t allow for it. We will see an ad-supported version of Netflix in 2020. This didn’t happen. But, I wonder if COVID-19 hadn’t happened, if we would have seen this shift. I think Netflix was getting a bit of a pass on financials because of short term adoption numbers during COVID-19. They’ve already announced another fee hike for 2021, which gives a tiny indication of things. All that said, it’s a miss.
  8. Snapchat will implode. There are too many short-form content platforms to compete with. One of these years, I’ll be right about Snpachat imploding. This was not the year.
  9. Related to #8, TikTok will implode as well. The concerns over data privacy will see it stricken from app stores and parents taking more action to restrict access for their kids. Boy, this is a tough one. I’m taking the point. If your business is forced to sell because of privacy concerns and without the sale, you can’t operate in the U.S.A., I think that’s an implosion – regardless of usage metrics.
  10. Much like vinyl sales and record store growth, we will see a resurgence for independent book stores. This happened and based on the data, one could argue that without COVID-19, it wouldn’t have happened.
  11. We will see the start of companies like Facebook or Google, offering to pay off your debt and/or fund your health insurance, if you actively use their platforms. Impressions and MAUs are the currency for ad dollars. Without them, platforms make less money. Someone will figure out a model where it’s financially sound to pay down $X against your student loan so long as you agree to be tracked in a way that allows the platform to monetize your usage habits. Maybe next year. I’m still bullish on this one.
  12. Tesla will start to license its battery technology to other car manufacturers as a means to bring in an additional revenue stream, increase the number of electric cars on the road, and make the environment better. This could happen through a direct license for building the car or by allowing other car manufacturers to leverage Tesla’s Super Charger network. The critical word in this prediction was, “start”. While Musk and Tesla did announce they would be willing to license their technology, it hasn’t started to do so. I missed this one.
  13. With real estate being one of the most costly line items for organizations, 2020 will be the year we see a sizable shift in companies actively pushing for more remote workers and leveraging co-working spaces as part of everyday business. By the end of 2020 will see the % of remote workers go from under 5% to above 5%. That seems small, but it’s a massive number of people. Is 33% above 5%? Um, I think so! Clearly, getting this right was influenced by COVID-19. But, I think it would have happened without the pandemic’s impact.
  14. One of these two new California laws enacted in 2019 will be repealed and/or found unconstitutional. AB5, the law the impacts regarding freelance workers, seems the most likely. But, the mandate for a quota system on a company’s board of directors, SB826, is the other likely candidate. Both were challenged. Those challenges, thus far, have been squashed. I’m not surprised about AB5. Though, in the end, it might be irrelevant given the stance of companies like Uber. They’ll simply elect to not operate in California and may relocate to Texas or Florida as so many other tech companies are doing. But, the feeling from most legal minds was that SB826 would never persist. They were wrong, as was I. No points.
  15. The robot/automation/AI economy will finally arrive in earnest. There will be more than 1 million jobs lost to robots, automation, or artificial intelligence in 2020. While there won’t be any federal laws enacted to combat this trend, it will be debated and discussed as part of the 2020 U.S. Presidential Election. We get half a point here. There have been more than 2 million jobs lost to automation this year. But, A.I., automation, robots, etc. were not part of the debates.
  16. Peloton is going to have a challenging year. Every few years a new workout fad takes center stage. Eventually, they all fade away, some permanently. The model isn’t sustainable. One of 2 things will happen. The “talent” will seek to unionize, go on strike, or demand something that will reduce the number of personalities that riders have grown to love. There will be a data breach/breach of trust in the data collected from members. This was actually happening, and then COVID-19 happened. The gyms couldn’t open. Places like Soul Cycle couldn’t happen. Peloton and companies similar to them took off. We don’t make excuses though. No points here.
  17. Disney will have a down year at the box office. After carrying 80% of the box office hits in 2019, there’s simply no place to go but down. But, Disney+ will be a massive success. In fairness, everyone had a bad year at the box office. Disney+ has more than 60 million subscribers. That’s simply astonishing. It’s also a massive success. Wow!

Ok, so how did I do? Well, I struck gold on #2, #4, #5, #6, #9, #10, #13, and #17. I got half a point on #1 and #15. I completely missed on #3, #7, #8, #11, #12, #14, #16. For those of you without a calculator that means 8/17 for a 47% success rate. Ouch!

Like many, I’m already looking toward 2021! If you read the whole piece and made it this far, thanks. Have a safe and healthy New Year!