Beware the forecasters of innovation failure What makes for a nighsayer?
Whether decades-old technologies like TV or the PC, relative newcomers like social media or SMS messaging, or something in its infancy such as the phablet (a cross between a smartphone and a tablet), there’s always someone trumpeting its imminent demise or utter failure. These types are not just naysayers: their level of scepticism and dire warning are more like that of a cartoon figure holding a sign proclaiming that the “End of the World is Nigh!” Hence my coining the term ‘nighsayer’.
In a series of blog posts, I’ll take a swing at breaking down the various motivations for this kind of behaviour. These folks are often wrong, and understanding why is important for anyone who wants to be more accurate in judging when something truly is about to go away, and how soon. We are all futurists these days: tech, media and telecom are changing fast, and being able to predict the winners and losers is important to leaders at all levels and in all industries.
Conflict of interest The first and most obvious motivation for predicting the failure of a new technology or media is when someone’s livelihood is directly at stake; to quote the lawyers, cui bono (who benefits?). This phenomenon is often seen on financial news channels, when portfolio managers who own a million shares of a stock publicly put down that stock’s largest competitor. The phrase in the stock market is that the manager is “talking their book”, meaning every word out of their mouth is going to reflect their current holdings. A similar pattern is seen in government meetings: in a discussion about the military, for example, the opinions from the representatives of the army, navy and air force are entirely predictable based on the perceived self-interest of each service. The idiom used here is “where you stand depends on where you sit!”
Similarly, we can imagine blacksmiths or ostlers bad-mouthing these newfangled horseless carriages 120 years ago. They made their living on a horse-based economy, and the economic threat from the automobile and the internal combustion engine was real and material. Their negative views should have surprised no one. Equally, swing jazz musicians belittled the future of rock and roll in the late 1950s. It may have been a matter of taste, but it was certainly a matter of money. Therefore, the person who makes tablets or smartphones — but not PCs — is probably not the most reliable predictor of the likely fate of the personal computer. Makers of online video have skin in the game on predicting the death of TV. Instant messaging app makers are dying to tell you that the number of Mobile Instant Messages (MIM) sent over data plans is 50 billion a day while Short Message Service (SMS) is a ‘mere’ 20 billion a day, and that the two formats were tied as recently as 2012. But they are curiously mute on the dollar value accruing to each service; SMS’s $100 billion per year is over 50 times as big as all MIM revenues combined.
So the next time someone tells you that a hundred-billion-dollar business like SMS or TV is dead, consider on which side of the debate his or her bread is buttered. The next post will look at the old fogeys who ‘nighsay’, and the one after will be about the hipsters.
This post originally was published at the Deloitte iDeas blog: http://www.deloitte.com/view/en_CA/ca/insights/ideas/tmt-beware-the-forecasters-of-innovation-failure/index.htm