I use GoDaddy.com for most of the domain names that I own. GoDaddy is not great but I have been using them for over a decade and it’s too much of a hassle to change all of my domains to another provider. This morning I was a bit annoyed with them when I received a number of emails with a reminder about activating my domains.

I didn’t buy any domains recently and I also didn’t receive any other mails from them about activating domains, so I assumed they were trying to upsell me something and I didn’t open the emails. GoDaddy is good at upselling, when you buy or renew domains you need to read the screens during their check out process carefully, otherwise you may end up with a lot more than you had wanted to buy.

Literally 6 minutes after their reminder I received another stream of emails with ‘final reminder’ in the title, which was a bit puzzling. But it did incentivize me to open the emails. Turns out that they were all about my Chinese domain names (ones that end in .cn or .com.cn). For some reason GoDaddy suddenly started complying with Chinese regulations about real name registration and now wants to see proof of who the owner of the domain is. Real name registration is not just limited to people living in China but to anybody using a Chinese domain name…

Because I don’t live in China I was worried that I would need to find someone to register the domain names on my behalf. But luckily for me they also accept ID copies from a few selected other countries (HK, Taiwan, Singapore, Australia, USA and Canada), so I sent GoDaddy a copy of my Canadian ID. GoDaddy warned that they will share this information with the Chinese government, but what can you do? Among others this blog uses a Chinese domain name (marc.cn) and I don’t want to lose it.

I was just wondering, suppose someone living in Europe would own a bunch of .cn domain names, would this person all of a sudden lose control of his domain names because European IDs are not accepted by GoDaddy? It seems that will be the case.

I am a bit annoyed by this whole thing, GoDaddy should have at least given its users an advance warning, and not send a reminder (which was actually a first notice and not a real reminder) and a final reminder within minutes of each other. I would not be surprised if they suddenly received a warning from China and after that immediately implemented the policy.

After reading the mails I was a bit worried that I had lost access to my blog already (the email literally said that marc.cn was not activated yet and so I could not use it for hosting a site!), but that was not the case. However, I wonder if I now need to start self-censoring my blog posts? Can China just take my domain away if they want to? I am not too worried about that, but find it all a bit strange. Maybe it’s time to start making a back-up of this blog on one of my other domains.

For a while I have been planning to write about the consequences of artificial intelligence and the need for a political discussion about Basic Income. So when I saw Albert Wenger’s video on Basic Income from last week’s DLD conference I decided to spend my Sunday evening with a glass of wine and my laptop and finally get this post out.

A couple of months ago I wrote a post about autonomous vehicles. They are a good example of the coming age of robotics and artificial intelligence: technology will replace things that so far only humans can do. This won’t be just automation of low-level jobs, but also very high end jobs will be replaced soon. If you are a family doctor or even a highly specialized surgeon you may be out of a job in 10-15 years. Singularity Hub wrote about this last week:

“Though many doctors will not like this thought, any test that requires pattern recognition will ultimately be done better by a machine than by a human.

Many diseases need a pathological diagnosis, where a doctor looks at a sample of blood or tissue, to establish the exact disease: a blood test to diagnose an infection, a skin biopsy to determine if a lesion is a cancer or not and a tissue sample taken by a surgeon looking to make a diagnosis. All of these examples, and in fact all pathological diagnoses are made by a doctor using pattern recognition to determine the diagnosis.”

Some people believe that new jobs will be created when old jobs go away. Their argument is that this has always happened in the past when jobs disappeared  because of a new technology, and why would it be different this time? Well, unfortunately for them this time technology does not affect just one category of work (like in the past), but potentially most jobs that we currently have. Even newly created job categories (whatever they are) might soon be disrupted by artificial intelligence. Even many scientists don’t seem to understand that the time of linear growth is over, we are now seeing exponential change in technology, which means that humans won’t  have time to adapt. Technological change will be faster from now on.

It’s maybe hard to imagine right now, but I believe my kids will likely never have a real job (in terms of working full-time for more than one year for a company in one location). They are 6 and 8 years old right now. When they are done with university 15 years from now I believe society will have changed. Of course there are still companies, but they will have a lot less employees than nowadays.

Most of the work will be done by robots (in any form) instead of people. Take a restaurant for example, likely cooks will be replaced by robots that can cook excellent dishes and may even come up with better recipes. Don’t believe me? Next year a robot will go on sale that can cook 2000 dishes at the touch of a button. And the first cook book written by artificial intelligence is already available. Do you think you’ll be served by robots or by servers? It depends on how much you want to pay. I expect that in high-end restaurants you’ll still have human servers, but if you want a great but less expensive meal a robot may bring the food to your table and refill your wine glasses.

I can give tens of examples of how jobs will be disrupted, but I won’t do that here. I have been thinking about this for years and my conclusion is that only arts and sports will likely not be disrupted by machines, and that human service will be something that’s available only at a premium.

Is this a problem? Yes, if you look at it from today’s perspective, because everything in society is about work right now. People are expected to have jobs, that’s why most people go to school and university. Most people don’t study what they really love, but choose subjects that they can get a good job with (I don’t think any law students starts law school because he or she is passionate about it, although that may change after a while. Full disclosure, I studied law for 2 semesters next to studying economics). So the education system that we have right now will have to change.

But also people’s expectations will have to change, you can’t expect to have a full time job anymore when you finish your studies. But because most people will be without a formal job the norm will change. The social stigma of unemployment will disappear and not having a job will become a normal thing. My expectation is that most companies will transform into platforms where you can work for a few hours whenever you want. Something like Uber, where you can use your car as a taxi for a few hours per day or week to earn some extra income.

However, the biggest problem will be that people can’t survive without money. I am very worried about the transition period from full employment to almost full unemployment, a period that has started already. People need to take care of their families and will become desperate if they can’t provide for them. This will lead to social unrest and crime, and this could start much sooner than politicians are willing to acknowledge.

But there is a solution, and that is Basic Income. Over the past 2 years I have become convinced that Basic Income can solve most of these problems and can lead to a very bright future for humanity. How does it work?

For me Basic Income means that anybody, old or young, rich or poor, would get an income that would be sufficient to survive on. For Canada and the US that would be something like $1000 per person per month. Enough to have food, Internet and housing, but not much more than that. Everybody will get this, whether your have a job or not, or whether you just won the lottery or are a homeless person.

Basic Income should replace the current social system, so no unemployment payments or social security anymore, but only this monthly income. The problem with the current system is that it does not encourage you to find a job, because you will lose your benefits if you find a job. With Basic Income you’ll keep your monthly payments, so everything you earn will be on top of it.

Won’t people get lazy and just watch YouTube videos the whole day instead of looking for a job? Possibly, but that’s fine. Basic Income gives you the choice to do with your life whatever you want to do. You can find or create work so that you’ll have more to spend, but if you think the Basic Income is sufficient and you want to stay home that’s okay as well. My expectation is that most people will do something useful with their free time if they know they can survive on their Basic Income, but there will always be people who will are happy not to do anything.

As mentioned before, platforms will become the new companies. Anybody can work on one or more platforms or marketplaces at the same time to earn some additional cash and to do something that they may enjoy. Do you like cooking? Very likely platforms will come up where you can sell your home-cooked meals to others (delivery by drone anyone?). Are you good at playing piano? You can teach anybody in the world through new virtual reality platforms, with automatic payment per minute in a cryptocurrency. Do you have a boat? Others can rent it from you (with or without you as a skipper) on another platform.

That’s what the world might look like, and a Basic Income can make this happen. You have enough to live a reasonable life and have unlimited free time to do whatever you like to do. Afraid to do a start-up? With Basic Income the hurdle will be a lot lower because you will always survive if you go bankrupt.

Without Basic Income marketplaces may pay less and less (you can already see that with Uber right now), but Basic Income will give more bargaining power to workers. It may also solve the current US discussion about minimum wages. When people have enough to survive it is likely that they don’t want to work for $10 an hour anymore, so if companies like McDonalds are still around they are forced to increase their wages to get people to work for them.

Life with Basic Income will be one where people have a lot more time for themselves and where they can make choices what they want to do with it. I expect that more people will do volunteer work for example, or that they will only do work that they like to do. And people will educate themselves, they will study what they really like and use their knowledge to help others or to sell it on platforms.

My expectation is that prices for goods will fall because of robotics, so life will be a lot cheaper. Not only food and daily necessities, but also the cost of transportation. Electric vehicles will be shared and will likely cost less than 10 dollars per day for unlimited transportation. How? A basic electric car will cost $10K when it’s mass produced, will last for 5-10 years and has hardly any additional costs because of free solar power. Just do the math.

Entertainment is already mostly free because of the Internet. Videos you can find online for free on YouTube or for a small monthly fee on Netflix. All music and radio stations are available on Spotify and for books Kindle Unlimited gives you a huge collection to read. Platforms like Coursera will make education virtually free as well, so as long as you have access to Internet nobody will have to be bored anymore.

How can we pay for this? If you replace the current system in the US with a basic income system it means that the cost to implement it will be less than 10% of gross output. That is something that can be financed. However, when less people have jobs it also means that income and capital gains taxes will have to be increased. You will start paying higher taxes from the moment you earn additional income, although I would expect that a system would likely mainly affect higher income groups. For more details on this and how Basic Income can even lead to lower taxes see this article in the Huffington Post.

Possibly there will be a few companies that will get most of the revenues in the future. These are the companies that develop artificial intelligence and own the robots. I would not be surprised if corporate taxes could go up to 80-90% to make up for the job losses that they cause. I now already invest in the potential winners of the future such as Google and Amazon, they may not only be the first trillion dollar companies, but if AI takes off even the first multi-trillion dollar companies. Most other companies won’t survive, so they will have to finance the majority of the cost of Basic Income.

For most people Basic Income may sound like something out of a communist country, but it really isn’t. In a classic communist system you are told what kind of work to do and how much you get paid for it (a low amount that is similar for most people). Basic Income instead gives you the freedom to do with your life what you want to do with it.

I believe the future could be quite bright if Basic Income would be implemented. I believe that because of AI we will have a world of abundance and in such a world time is the most important thing. Because of AI we will all have more time and Basic Income will make people less afraid of automation. It will give people options: do you not like your job? Now you can walk away from it. Or even more radical, if a housewife doesn’t like her spouse her options might currently be limited because of money, but with basic income she may have the option to choose a better life.

It will take some time for politicians to wrap their heads around the idea, but I think they will eventually see the benefits it will bring to society. I am a capitalist (although a fairly liberal one), but I believe that the not-so-much-capitalist idea of Basic Income is needed to ensure a good future for anyone.

I am not yet sure how we will get there, but I hope this post will get some people thinking. Some countries are already taking a serious look at Basic Income, for example Finland and Switzerland. I expect that Europe will be the first continent where most countries will start to implement some sort of Basic Income. China might also be a good candidate, especially when the party is worried about unrest once unemployment starts going up. The US won’t be in the first group, but once it sees the results of Basic Income in other countries it may change its mind.

Obviously there is a lot more to say about Basic Income, but these are the main arguments that people should consider when thinking about this subject. I hope we will see Basic Income before mass unemployment will hit all of us.

 

On a sunny September day I was driving top down to a friend’s house when the Google Streetview camera car drove by. I totally forgot about it until just now when I came home after a short trip to Toronto, and Scott told me that Google Streetview had updated the pictures of West Vancouver.

So I did a quick search and found myself right away. Because the Google car has 360 degree cameras you can see me driving towards the Google car, but you can also see the back of my car after the Google car passes me. Google Streetview seems to get updated about every 12-18 months in this area, so until at least early 2017  you can find me at this Google Streetview link (and after that you can still scroll back in time to September 2015).

Today it is exactly 20 years since I left The Netherlands. I moved to Stuttgart, Germany on December 31, 1995. I had lived in several other countries before that already, among others during primary school in Curaçao, during high school in the USA and as a university student in France, but always returned to live in Holland after a period of time. So I assumed I would live in Germany for 2-3 years and then move back. But that never happened.

Within 3 months after starting my first job (a management traineeship at Daimler-Benz headquarters) I got a project in Indonesia. I was involved in a SAP implementation project at the Mercedes-Benz plant south of Jakarta. The project was not very exciting but it gave me a taste of life as an expat for a multinational. 

At my desk at Daimler headquarters in 1996

So after moving back to Germany later that year and finishing my traineeship 2 projects later, I decided to focus on my new job in financial planning and controlling for a few years and to become really good at it. I wanted to make sure I would be able to get an interesting job abroad after that.  And that worked, because in 1999 I managed to land a job as financial controller for Mercedes-Benz Canada.

But before starting it I heard a similar position would become available at Daimler’s regional headquarters in Beijing, China. I had to give up my future job in Toronto in order to apply, which was a risk I was willing to take. My thinking was that I could always go back to Canada later, but that I might not choose China anymore when I would have a family (turns out I was right, although I had not really expected it). I was lucky and also managed to get the job in China (I later heard there were several other applicants), and started my career at Daimler Northeast Asia in Beijing in January 2000.

With my 4×4 Jeep Cherokee (a great car for Chinese roads) in 2000

My thinking was that I would stay in China for 3 years and then move to a different country for Mercedes-Benz, but working and living in China changed me. I quickly realized that China was going to see some major changes and I wanted to be part of that. But not in a corporate position: things move too slowly in big companies and I thought I could do a lot more things when I would strike out on my own as an entrepreneur. So when the topic of renewing my contract came up I decided to quit my job in late 2002. I then studied Mandarin Chinese at Beijing Foreign Studies University for a while, while also setting up my first (consulting) business. 

Well, 13 years after moving to Beijing I was still in China. In those years I did a couple of start-ups, moved to different places in China about 8 times, and I started a family with 2 young kids. It was time for a change again, especially because the pollution got totally out of hand. 

This time we moved to North America and we’re still in Vancouver almost 3 years later. I plan to stay here for at least another couple of years, and maybe even for a much longer period. Vancouver is an amazing place to live, maybe the best place in the world in terms of lifestyle and nature. I may go back to Holland for a few years in the future, mainly so the kids will improve their Dutch and understand Dutch culture better (they both have a Dutch passport, so I feel that’s important), although it’s unlikely I would go back for good.

One thing I learned over the past 20 years, is that I can feel at home almost anywhere. People are not that different once you get to know them better and you can make friends everywhere. I also learned that I don’t want to be in one place too long. I have travelled a lot over the past 20 years (literally hundreds of transatlantic or transpacific flights) and I realize I don’t want to be in one place for more than 4-6 weeks at a time. Change makes life more interesting.

Let’s see what 2016 will bring, Happy New Year!

First of all a Merry Christmas to all my readers! Even though I don’t blog as much as a few years ago (mainly because of Facebook), the number of readers of this blog still goes up slightly every year. This year I had over 63,000 unique visitors so far, in 2014 that was just over 56,000. The increase mainly comes from Canada, that’s now the number 3 country in terms of readers and it passed The Netherlands which is now in 4th place.

Geographic distribution of the readers of my blog

In 2015 I taught Scott the basics of computer programming. We started off with some Python during the school holidays, and after blogging about that one of my readers suggested to check out Scratch. I did so and it’s the perfectc language for kids: easy to understand, not much typing required (it’s drag and drop) and a steep learning curve that allows kids to make games in days instead of weeks or months.

Scott did a college level Scratch course over the past months, and I helped him with some of the concepts that he was not familiar with yet. For example, if you don’t know that a circle is 360 degrees it’s impossible to make a game character move left, right, up or down. Scott picked it up very quickly and started developing his own simple games right away.

He then had the idea to make a Christmas game for his school friends and after a few afternoons of trial and error he managed to come up with a fun game. I promised him to put the game on my blog as well, so here it is: https://scratch.mit.edu/projects/76626698/. It won’t work on most mobile phones because Scratch uses Flash, so give it a try on your laptop or PC.

 

Screenshot of Scott’s first game

The aim of the game is for the snowman to reach the Christmas hat while avoiding the big snowflakes that fall from the sky. You start the game by clicking the green flag and you can stop by pressing the red button. You have 5 lives in total, each time a snowflake hits you or if you hit one of the walls you will lose a life. If you manage to reach the Christmas hat you will get one extra life. Once you have no lives left you lose.

Keep in mind that Scott is only 7 years old (almost 8 he would say, he will turn 8 this week), so it’s not a highly polished game and there are still some minor bugs. But I am quite proud of what he managed to make without almost any help. Enjoy the game and looking forward to your future games Scott!

I normally don’t write about politics on this blog. It doesn’t really interest me. Politics is a game to me, a game by people who are good at playing games, but not necessarily at ruling a country. I’m not a big believer in democracy anymore, I would prefer to see a country being run like a succesful multinational. Don’t elect people every 4 years, but let them grow from within into leaders that have a long-term vision, instead of only going for short-term results with slogans that sound good but have no real meaning.

That doesn’t mean that succesful business men are per definition good at leading. Some certainly are, especially ones that are decisive but can also work together with others to achieve their goals. But others, such as ones that reach their goals by being arrogant and not caring about their employees, are not the ones you want to see in power. They can be worse than the worst politicians. 

To me Donald Trump is the ulitmate example of a ‘successful’ business man who can be extremely dangerous to not only the USA, but to the whole world. This man is a bully who does not care about anyone else, probably not even his own family. That’s what made him his money and that’s fine, but those are the same traits as some of the biggest dictators in the world. I would normally be hesitant to make a comparison to Hitler, but after what Trump said this week about not allowing Muslims into the US anymore, I think a comparison might actually be justified. 

I am worried, because this guy is dangerous. The average Republican American doesn’t see it, because Trump’s dumb rhetoric is so simple that they don’t even think about his message. They want America ‘to be great again’, without understanding what that means. A great country does not close its borders, only a scared country. A great country doesn’t discrimate based on religion, especially not a country founded by people persecuted because of their religion. And a great country should be a free country, free for all to enter and free for all to leave.

I write this post after reading some of the comments on Donald Trump’s Facebook page. Reading those comments made me really worried. I know the average Joe generally doesn’t really think much about the world around him, and the comments made that very clear. His thinking is more or less emotional, based on simple messages (that’s why TV ads are so successful) and slogans that can be easily memorized and repeated. 

I am worried because Donald Trump knows that and uses the same tricks as advertisers to get these people to vote for him. He wants to become the ‘leader of the free world’, another one of these slogans mainly uttered by people who have never been outside the US. They don’t realize that the US is not a real free country anymore, and has not been like that for a very long time. If Donald would win the elections (still a big if, but one that becomes more likely now that nobody is able to stop him and the masses seem to adore him) and would indeed try to bully the rest of the world, the USA is doomed and we may end up in World War III before we realize it. 

I am worried because none of the US business leaders seems to be willing to make a stance against Donald’s racist words. There are some exceptions (Mark Zuckerberg’s note about Muslims always being welcome at Facebook being a notable one), but most companies don’t seem to care. 

I am worried because I realize that his popularity is a sign that the US population is unhappy and wants to have a better life. People are looking for scape goats (Mexicans, Muslims) and Trump delivers that to them. I see parallels with what was happening in Nazi Germany. The way Trump talks about Muslims is very similar to how Hitler talked about Jews. The masses love it without thinking about it, just like the Germans during the crisis in the 1930s. 

I am worried, because for a long time I thought that what happened in Germany would not be possible in the Western world anymore. Social media and free press would be able to stop it, but that’s not the case it seems. The debates on the Internet are tense, with many people really believing in Trump and completely defending his statements. Not as anonymous trolls, but with their full names and backgrounds on Facebook! How is it possible that people are so stupid that they don’t see what is going on? History is repeating itself and people don’t want to see it. 

The other Republican candidates should make strong statements against Trump, because if they don’t the next thing might be that he will tell people that all Muslims should be rounded up. And although that won’t happen in reality, many people may see that as a statement to take their rights into their own hands and a new civil war could start. Far fetched? Maybe, but nobody could have predicted a year ago that Donald Trump would be able to get away with his current statements about Muslims.

I am worried, and I don’t know what I can do about it. I don’t live in the USA, but that doesn’t mean I should just sit still and not say anything. If everybody would do that Trump might eventually really be elected. So at least I want to put my thoughts on virtual paper and hopefully make some people think. Of course I realize that the people who vote for Trump likely don’t have the attention span to read more than a few sentences and would never find or read this post in the first place. 

Is this a sign of the times? Real wages have gone down over the past years and that’s a trend that will only get worse. That is one reason why people are angry. Because of artificial intelligence and robotics most people will lose their jobs in the next 15 years (many people still don’t want to see this, but it’s inevitable with universal machines that get exponentially better, faster and cheaper, and won’t just do one job, but will eventually be able to do most jobs).

This will lead to mass unrest, unless visionary leaders take the helm in the US and some of the other big countries on this planet. With people like Donald Trump that won’t happen and the fact that he is so popular and gets away with racism might be a sign of what is to come. I have been contemplating a post about mass unemployment and potential solutions for a long time, maybe it’s time to sit down and write down my thoughts on those topics. They may be more relevant now already than I had realized.

I am worried.

Last week I spent some time in Germany’s capital Berlin. I like the city, it has both great old architectural gems such as the Brandenburger Tor, the Reichstag and the Gedächtniskirche, but also brand new buildings such as the ones around Potsdamer Platz or the new German parliament.

The city has undergone a complete transformation since the fall of the Berlin Wall in 1989, and it’s now often hard to know whether you are in the former East Berlin or in West Berlin. Of course there are still a lot of former communist buildings, for example along the Karl Marx Allee, but even most apartment buildings in the East have been completely renovated by now. The city feels like one city again.

I am a fan of very high end cuisine, the kind of restaurants that you don’t find in Vancouver. Berlin has a couple of “over-the-top” restaurants and so one night we decided to try out Lorenz Adlon Esszimmer at Unter den Linden. The restaurant has 2 Michelin stars, which guarantees you the very best food and service. Problem was that you normally can’t book a table on the day of your dinner, but with a bit of luck and some phone calls I managed the get a table at the window, looking out over the Brandenburger Tor!

Grace and I arrived at exactly 7 pm and it turned out we were the first guests. The Esszimmer (which is German for dining room) is a relatively small restaurant. There are just 7 tables, set in a beautiful classical setting with a fireplace and windows with great views.

We were welcomed by the head waiter and the sommelier and were given the choice of several Champagnes. To start we opted for a glass of rose Champagne. They then gave us the menu, which had the choice of either a 6-course or an 8-course tasting menu. Because we had no important plans for the next morning we decided to go for the 8-course one with 8 paired glasses of wine (at least for me, Grace stayed with Champagne).

Before the 8 courses we first had 3 rounds of amuses, which gave us an indication of what was to come. Beautifully designed small dishes with amazing combinations of ingredients and aromas.

While we were having our amuses the restaurant slowly filled up. Most tables were just 2 people, but one table was set for 4 persons. There was also one table for a single person. Most of the guests were in their 50s and 60s, and all were well very well dressed. That’s what I like about this kind of restaurants, having dinner here is a special occasion, even for people who eat more in restaurants than at home.

The 4-person table turned out to be 2 older gentlemen and 2 young good looking Thai women. A bit of a strange combination of course, but who am I to judge. They spoke English and some German among themselves, and I didn’t think much of it until I realized that the accent of the men was Dutch. I took a closer look at them and then realized that I actually knew one of the men. He was a well-known former CEO of a large public company and I actually had had a business meeting with him once. (Given that the Thai girl was not his wife I won’t mention his name here.)

He looked at me as well, but I think he could not place me. He certainly did not realize I was Dutch, because after a few glasses of wine the 2 businessmen switched to Dutch. They talked quite loud and I could understand everything they said. Unfortunately the topics they discussed in Dutch mainly involved their accomplishments with young women. I am not easily embarrassed, but some of the things they said I really did not want to hear. I am sure they would have never discussed these topics in either German or English in this setting. For a moment I considered walking by their table and making a remark in Dutch to show them they were not the only ones speaking that language, but in the end I just let it go. The details sure make for a nice story over beers with friends in the future (most Dutch people know his company).

The dinner itself was fantastic and the wine pairings were excellent. The creations were like art on dinner plates and they tasted even better. Top chefs are really highly skilled artists! Some of the dishes reminded me a bit of Ultraviolet in Shanghai (which is still my #1 restaurant in the world). The wines were mainly European ones and there were some real gems in there. What I like is that they give you decent sized glasses and every now and then refill your glass if you really like the wine. Not every top restaurant does that, but in this price range (about EUR 700,- for 2 people) I like it if they are not stingy.
The only downside was that it was almost too much for me, and Grace stopped eating her full portions after 4 courses already. You actually should not eat more than a soup and a salad at lunch when you know you’ll be having a meal like this.

I had a fantastic evening at Lorenz Adler’s Esszimmer. The combination of the food, the wines, and the view was just perfect. Observing the Dutch business people actually added to the fun, although it was difficult to ignore their loud talking sometimes. If I would live in Berlin I would probably go here at least once a year on a special occasion. I highly recommend this restaurant if you’re a foodie and don’t mind spending a lot of money for an amazing meal in a great setting. Just make your reservations well in advance!

There are many well-know tech predictions that turned out to be completely wrong, and over the past week I came across a couple of new ones that (I think) totally miss their mark.

First a few of the old ones to have a good laugh:
– “I think there is a world market for maybe five computers.” Thomas Watson, chairman of IBM, 1943
– “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication.” Western Union internal memo, 1876.
– “There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television or radio service inside the United States.” T.A.M. Craven, Federal Communications Commission commissioner, 1961

What they have in common is that these statements were made by people that work in the industries they make predictions about. They all fail to see that industries constantly change and that these changes also apply to their own industry. They are probably surrounded by people who don’t see these changes either, or who don’t want to see them because they can cost them their jobs.

My job consists of spotting trends and disruptive change before others and by placing bets (=making investments) based on that. I am certainly not always right and I am often too early, but I feel I have a better helicopter view of certain industries than some of the CEOs running the leading companies in those industries. Often when I read their interviews I wonder if they really live in the same world as I do. This week I read 3 articles that I totally disagreed with and that may eventually be added to the list of disastrous tech predictions.

Hilton
First one article about the hotel industry: Hilton CEO Christopher Nassetta said “I strongly do not believe that they (AirBnB) are a major threat to the core value proposition we have.” He is confident that AirBnB is not stealing his hotel guests. Right, maybe not many yet, but given that AirBnB has far more rooms than Hilton, that will likely change soon.

I have stayed in AirBnB’s over the past years instead of staying in luxury hotels. And given that AirBnB is now focusing on the business market as well, Hilton could be in for a surprise. Mr. Nassetta stated that Airbnb cannot match the amenities that Hilton hotel rooms come with, so business travelers won’t stay there. If that’s really the main differentiator (it’s not, AirBnB has better choice, is often much cheaper, and has better facilities such as kitchens and laundry) that’s easy to solve. In China the first AirBnB clones with personal concierges and chefs have launched already, I am sure the US will see this soon as well. The hotel industry won’t change overnight, but it’s a process that is unstoppable. Good luck competing Hilton!

MoneyGram
Second, the remittance industry. MoneyGram, a huge global remittance company, doesn’t see Bitcoin as a threat. Peter Ohser, the executive vice president of business development feels digital currency doesn’t pose any threat or solve pressing problems. What? Does he not talk to his customers? Does he not follow what’s happening in the real world outside of MoneyGram and Western Union?

He believes existing payment behaviors are too entrenched, and that bitcoin is unlikely to offer enough utility, because people trust paper more than data and that behavior is not going to change (my emphasis). Especially that last sentence makes clear that he is out of sync with the real world. It reminds me of Kodak, that did not believe 15 years ago that people would stop using photo cameras with film. Well, I don’t think my kids even know what paper photos look like. Disruption happens fast Mr. Ohser. Good luck competing MoneyGram!

General Motors
Third, the car industry. I started my career at Daimler-Benz (now just called Daimler). I loved the company and did not believe it would ever lose its place as one of the top companies in the world. So far they haven’t and I still like the brand, but given how slow they are with implementing new technologies I wonder if they won’t lose their place to Google, Apple or companies like Tesla. I was in a Mercedes showroom last month, and although I loved the models I would not consider buying one of their cars anymore until they would have a pure electric car with a range like Tesla’s.

Bob Lutz, former vice chairman of GM, wrote a column for Road and Track with the title ‘Is Tesla Doomed‘? It is clear that he does not see what differentiates Tesla from the traditional car companies and he gives Elon Musk some fatherly advice: Cut costs and build a small car with a hybrid drivetrain. I had to laugh at that. Because of its current investments in the Gigafactory and in the Model 3, Tesla will eventually print money. But if they would cut back costs now they would never be able to get there. The idea for a hybrid drivetrain is ridiculous, Tesla sets itself apart with its electric-only engines with a great driving range.

Next to that, Mr. Lutz compares Tesla’s showroom strategy to that of BMW in the 1970s, but totally misses that you can’t buy Tesla cars in a showroom and drive away (you order them and wait 2-3 months, or longer, so there are no inventories).

In a few hours Tesla will publish its Q3 results and they will likely show bigger losses. Not sure how the stock price will react (I believe investors expect it and it’s reflected in the current price), but I believe these losses are necessary for huge profits a few years from now. My biggest concern is that they can’t scale up production, but maybe that is something where the traditional players can help Tesla: as their future car parts suppliers! Then Tesla can focus on its software, R&D and design, just like Apple does (they don’t produce their own products either). I am long Tesla and fully believe in Elon Musk. Good luck competing General Motors!