Ten Things I’m Thinking About Heading into 2017

Hi Everyone, and Merry/Happy whatever-it-is-you-celebrate (or not!).  When writing an end-of-year blog post, it is tempting to write something about “reflecting on accomplishments”, or “setting goals”..   Those topics don’t happen to be something that I’m terribly into.  Instead, here are 10 specific topics I find interesting and I think we will all learn about as 2017 matures.

#10 – What Kind of Company is Apple?  The new Macbook Pros, the silence on updates to the Mac Pro and Mac Mini desktops, reports that Macs are not an area of focus for engineers within the company, along with Apple exiting the router and monitor businesses, have people  inside Apple wondering whether the Macintosh is important to the company – to the extent that Tim Cook felt compelled to respond.  One can’t help but think that this is akin to the dreaded “vote of confidence” given to so many coaches right before they are fired…  Whether Apple offers a meaningful update to the Mac Pro and/or Mac Mini will tell us if they are still in the desktop computer business at all.  Note – 90% of Apple’s profits come from the iPhone.  You can easily make the case right now that it’s a phone company.  That feels weird to say — “the phone company” must be the harshest insult you can hurl at a company like Apple – but there it is.

#9 – Is Microsoft the New Apple?  After years of missteps and customer vitriol (much of it, to be fair, unearned), Microsoft is now relevant in the consumer hardware space in a big way.  That the Xbox and successors quickly vanquished Nintendo and compete well with Sony’s Playstation is remarkable.  Microsoft is steadily getting it more right with the Surface computer line.  The Surface Book and Surface 4 do many of the things Apple users wish a Mac would.  Touch screen, stylus interface, detachable screen.  The Surface Studio is the kind of groundbreaking product Apple used to make.  The Surface Dial is kind of a device looking for problems to solve, but they will be found.   Windows 10 works extremely well and incorporated many of the things that make Mac OS work well.   Windows 8 and Vista are basically Thoughtcrime now.  I remain perplexed that Microsoft can’t figure out the phone market. Microsoft phones seem like they have been exiled like Napoleon to the Island of Elba. The (incomplete) integration of Windows and Xbox will cement Microsoft’s hold on the home network, but will not dominate home automation because…

#8 – Is the Amazon Echo Going to Become the Home Appliance Control Device of Choice?  Early signs are encouraging, and Amazon flat-out ran out of both the Echo and her little sister, Dot.  I can’t imagine the odd Tap will be around much longer.  Here’s the thing – once you get one of these things in your home, you’re going to want one in almost every room.  We do – they control many of our lights, our Nest thermometer, they are a great timer, music player, bluetooth speaker, news briefer, and can do a bunch of other stuff.  I think there is a good chance that Google is too late to the market (by the way, saying “OK Google” is surprisingly awkward) – and if there’s one thing we know about Google, if they think they are failing, they will wave the white flag faster than Rick Perry did in the 2016 Republican Primary race.

#7 – Can Tesla Stand Up to Real Competition?  Teslas are cool.  They have become the 1st place medal you get anytime you exit your VC-backed startup.  But, Tesla has just taken too darned long to make enough cars to satisfy demand and to make a mass-market car.  They had a nice lead, but were unable to sustain it.  Steve Wozniak just received his Chevy Bolt – built by a company that has been in the auto business about 115 years longer than Tesla – with longer range and more practical applications.  Many more electric vehicles are on the way.  Has Tesla effectively served as the world’s most expensive focus group company for the auto industry to prove out the viability of electric vehicles?  One thing’s for sure – Elon Musk doesn’t have the road to himself anymore.  Once Mike Tyson ran into a fighter who wasn’t afraid of him, his career quickly declined.  Is Tesla the same?

#6 – Is Virtual/Augmented Reality for Real?  Pokemon-Go seems to have went, though not without racking up asphyxial data charges for families.  Now, we see commercials all over the place for VR glasses for your phone, for your (very powerful) PC, your Playstation 4.  I picked up a VR Gear for cheap last year from someone who didn’t use it, and now we don’t use it.  Fitting.  I can’t help but wonder if VR is similar to the odd 3-D movie and TV craze we had a few years ago.  The trouble is, people who don’t wear glasses don’t like to wear them to watch TV or play a game.  People who do wear glasses don’t want to wear a second pair to watch TV or play a game.  Unless that game is truly a killer app – like Avatar (no, don’t ask – never saw it – I’ve never seen almost any movie you can think of).  By the way, did you notice? – the old Viewmaster is back, in a VR goggle form factor

#5 – Will Tech Initial Public Offerings Come Back?  Tech IPO’s slowed in 2016, big-time.  2017 may be a rebound.  There was no, single reason why tech IPO’s slowed – rather a multitude of contributing factors.  Instability in oil prices.  Uncertainty over the elections.  Ultimately, I think the companies going IPO were just not going to attract their desired value in the market. It’s great to be a unicorn, unless you’re the last money in.  In that case, it’s hard to find that one, last, bigger fool…  If you put your last money in at a $60 billion valuation, you need a $70 billion valuation in your IPO to make it worth your while.  That’s hard to do.  Some of the businesses just aren’t up to t he task when Wall Street looks at them closely.  Blue Apron just cancelled their IPO – Buzzfeed’s report makes their fulfillment facility sound like a Mad Max Thunderdome.   Uber, despite their model, their brand, and making nice with regulators, continues to leak cash like the Edmund Fitzgerald.

#4 – Will Coal Come Back?  The U.S. is the Saudi Arabia of coal.  Except, we don’t want it.  President-elect Trump seems to want to make coal great again.  Of course, the coal companies want it.  The miners and their families want it.  The states where those mines are located want it.  However, it seems that, unless natural gas and renewables are massively taxed, the best case scenario is for coal to “hold it’s ground.’ (I couldn’t resist!).  Natural gas has already overtaken coal in terms of energy generation in the U.S., and you can’t just switch back.  You can’t put food in coal’s mouth without taking it out of natural gas, and the U.S. is the Saudi Arabia of natural gas also.

#3 – Will Private Companies Be in Reach of Putting Humans in Orbit?  Blue Origin plans suborbital test flights in 2017.   Virgin Galactic plans passenger suborbital flights in 2017.  I don’t mean to debase these accomplishments, but what excites me is putting humans in orbit and finally replacing the Space Shuttle program (we could not have possibly invented a more expensive way of transporting humans to space).  SpaceX claims they will do so by 2018.  Yeah yeah we can make jokes about Elon Musk and delays, but they did have a rocket blow up on the pad earlier this year, so we can forgive them for being careful.  Private space stations may go into service as soon as 2020.  We are tantalizingly close to a tangible space age, and my hope is that we will stay on track.

#2 – What Will the Russia-U.S. Relationship Look Like?  The CIA is blaming the Russian Federation and Vladimir Putin for handing Donald Trump the Presidency. (By the way, doesn’t the CIA know a thing or two about making sure the “right person” rises to or stays in power?)  Russia, incredibly, did not respond after the U.S. expelled as many as 35 Russian diplomats – clearly President Putin is waiting to see how The Donald is going to pursue U.S.- Russian relations.  My guess is that we will go back to a Cold War-like mutual recognition of spheres of interest.  I’m going to deliberately sidestep the comparisons between Trump and Putin as “authoritarians”, “nationalists”, etc.  One area where I do think they agree is that they want to make deals, and everything they do is about anticipating making a deal, and giving themselves the greatest leverage.  If you want to know why Trump or Putin says or does anything, I think you ask yourself, “what kind of deal do they think is on the table, or needs to be on the table?”

#1 – What Are We Going to Do With the Newly-Discovered American Heartland?  Many of us, including yours truly, were offered a potent lesson throughout the 2016 Presidential Campaign about the state of the American Heartland – notably, that much of it has badly-clogged arteries.  Through a combination of trade and technology, the middle class working economy in the United States has been decimated, and their woes were exacerbated by the 2008-2009 recession and financial crisis, and those populations found their voice in a quasi-third party candidate.  As a result of the Donald Trump victory, we are (or ought to be) much more aware of these structural issues – each generation in working class America seems, on balance, doomed to be financially worse off than the previous one.  Whether those jobs are being bid down or taken away by China, immigrants, robots or web sites is almost immaterial.  We need new ways of thinking about preserving the dignity and opportunity of a large section of the population that may not have the desire or aptitude to become engineers, programmers, nurses, doctors, or accountants, or they will behave with increasing despair and/or desperation (the last major revolution that wasn’t basically a bread riot was the American Revolution), and I have become convinced that these problems cannot be structurally fixed by a) taxing the wealthy and increasing welfare benefits, b) reducing taxes and regulation, c) building roads, bridges, airports, and bullet trains, or d) criminalizing trade.  None of those approaches will address the fundamental truth that in the next 20 years, almost every manual labor job can and will be replaced by automation.  Are we headed for a Blade Runner society (another movie I have not seen?) No, but I will be interested to see how much recognition there of this fundamental fact.

2017 looks like a ripe your for thinking, and we will start to learn important things about our economy and our world.  Maybe you agree or disagree.  There are lots of other important things to think about.  What’s on your list?  What should be taken off of mine?

 

 

 

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2 Comments

  1. Good piece Mike,

    Frankly, I’ve no idea how Tesla ever came to the valuation that it had / has. Sans government handouts & manipulation it drowns in a sea of red. With a new administration I would expect that some of that support to disappear… but unfortunately, not all of it. Will it have used the lead time to get far enough ahead of competitors… Not sure, but I’ve been VERY wrong about investors being willing to pour good money after bad for a long time. If OPEC can’t sustain it’s limits gas prices are headed south and Tesla stock with it… Unless Gerry Brown figures out a way to leverage CA regulations to screw the rest of the country.

    Coal has the possibility of making a comeback, but as you know, it’s often easier to build a new plant than it is to resurrect an old one, and my guess is that it’s cheaper now to build a plant run off gas than one by coal. As such, the Obama administration regulations may have put a stake in the heart of coal that will outlast it…

    It sounds like you’re not a fan of movies. If however you find yourself stuck and need to watch one, try Galaxy Quest… One of the greatest movies almost no one ever saw!

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