Future Thinking Series

If you look at waves for long enough, you don’t need to be a surfer to realise that the ocean waves move in rhythmic patterns.

For example, you may pick up that every third wave in each series tends to be larger than the preceding two waves. If you are a surfer, it is through recognising waves’ patterns that you can prepare and your chances of catching the strongest wave to ride are increased.

Another analogy that speaks of pattern recognition is stock traders who are speculating on the future through trying to predict the rise and fall of stocks by comparing what is happening now to what has happened before.

“History doesn’t repeat itself, but it often rhymes.” — Samuel Clemens (1835–1910)

Samuel Clemens (a.k.a. Mark Twain) is credited for this adage, which is a compelling statement that observes how history often plays out in cycles and patterns. Just like ocean waves that come in groups and sets, if you look close and long enough, events do seem to hold noticeable similarities.

One of the closest personal experiences of seeing this quote in action is witnessing how the introduction of the Internet influenced people (addiction, online gaming, censorship) when it was first introduced in Singapore and Philippines in the 90s, and how a similar cycle was triggered in Myanmar when it was introduced here in the 2000s.

The power of pattern prediction in business (and surfing) success

Spacecraft landing in the middle of the ocean. Image still from Interstellar (2014).

Let us return to the surfer for a moment. Imagine that he has been airdropped into the middle of an ocean. How would he be able to speculate on the size of upcoming waves?

Should he ride the next wave because it might be the Big One? Or should he hunker down because it could be hazardous to ride?

These questions would be easy for him to answer if only the surfer could recognise at what point in the pattern he is currently in.

Encountering a huge wave. Image still from Interstellar (2014).

This surfing dilemma can be seen as an analogy for new start-ups and micro-business, which leads us to the question: How can new entrepreneurs know whether to ride the next opportunity or protect themselves from risk in today’s volatile, uncertain, complex, and ambiguous (VUCA) world?

In this article, I dissect the 2 simple questions that I usually prompt my clients to answer when we discuss their business’ future.

Question #1: How far are we from the next recession?

Photo by Masaaki Komori on Unsplash.

Based on our knowledge of past economic cycles, it takes around 5 to15 years for asset bubbles to form before they pop. If you want to learn more about why periods of recession keep repeating, this answer from Quora provides a simple and clear summary.

Phases of the business cycle. Image from Wikipedia.

The purpose of this question is to assess if the business owner has given themselves enough time to prepare for the next recession (financially). And, if recession is just around the corner, are they prepared to grasp new opportunities in the coming crisis.

Never let a good crisis go to waste

“You never want a serious crisis to go to waste. I mean, it’s an opportunity to do things that you think you could not do before.” — Rahm Emanuel, President Obama’s Chief of Staff

During the 2008 recession, several successful start-ups were launched to help households earn and save during this economically challenging time. Some examples: Airbnb helped households earn supplemental income by renting out their property. Uber provided individuals the opportunity to be self-employed, utilising their underused cars. Groupon, a deal-a-day website, gives families ways to save more through group purchases.

If opportunities can be found in moments of crisis, how does one find good ideas in moments of extreme uncertainty?

Same-same, new name

These start-ups’ good ideas were derived from solving major problems. And the problems that sprout during recessions are mostly tied to securing jobs, seeking new opportunities, or adapting to changes. With each new recession, the problems are the same, but the solution likely takes on a different form each time.

Photo by Clem Onojeghuo on Unsplash.

Take, for an example, the lipstick effect, a theory that people seek personal comfort during periods of recession by spending on small indulgences. This effect can be traced back to the Great Depression of the 1930s, when the sales of lipsticks rose despite the decline in industrial output. However, in the 2008–2009 recession, nail polish sales did better than lipstick, proving that the desire to spend on personal indulgences still remains, even while the avenue might change.

Another intriguing correlation between recessions and increased spending is spending on comfort food. In 2009, impulse ice cream purchases grew 11% in France, while retail sales stagnated. This trend can be seen during our current pandemic time, where the demand for comforting ice cream at home has increased sales in that category.

Surge in ice cream delivery during pandemic period — Google Trend

The problems that one faces during a recession will be like previous recessions in terms of solving people’s needs.

If you are searching for your next big business idea or wondering how your business can make it through a recession, I believe you can find the answers to both by studying past recessions and thinking of how you can connect the dots through solving the problems that people are faced with during economically tough times.

Question #2: When will your tools for work become toys? How far away is that tipping point?

The meme on the left, funny but true, reflects how technology has an expiry date. It is entirely possible that your work or your business might be disrupted around the corner. The question is not how, but when.

I have been running a design agency for the past 13 years and have seen tools that were once essential in our work slowly replaced due to market demand for increased productivity. Website development, once a specialised skill in the 2000s, was made accessible to everyone through no-code website builders, such as Webflow or Wix, where one does not need to learn a programming language to build a website. The same cycle applies to app development and even machine learning, where tools for a specialised programmer can be a toy for a kid to develop the next killer application.

This does not apply to the software industry only. I have a client who has been running a corporate gift-printing company for years. They commented to me that their business has been greatly disrupted in recent years by affordable desktop machines that print quantities as low as one (e.g., direct-to-garment printer, UV printer, 3D printer), allowing anyone to run a small printing business at home without investing large capital in large-quantity printers.

Photo by Adam Winger on Unsplash.

Back in 1988, Steve Jobs claimed that all computer architectures, all computer systems, have a 10-year life cycle. At the start, you must get people to build an application for it. At around year 5, it reaches the architecture’s actual peak. He continues by saying, “Then it goes on what you call a glide slope where the architecture is everything it’s going to ever be at that point.” If technology has a lifespan of about 10 years, businesses might want to start exploring new possibilities or gather other possible trend signals when the technological tools they are working with enter its 5th year.

Here is a set of specific sample questions that I prompted one of my clients to answer. But you can rephrase these questions to help you think about the future of your company.

If Epson makes 3D printers accessible to households…

1. When do you think it will happen?
2. How will it affect your business as a hardware shop, restaurant, or trading company?
3. Where are you now?
4. How will you ride the upcoming wave that you see up ahead?

If you want to stay updated on technological trends, envisioning.io is a virtual research institute that explores emerging technology and has a data visualising tool, which can help to educate you on the timeline for emerging tech development and associated trends.

Envisioning Tool to visualise emerging trends.

Chance favours the prepared mind

In today’s VUCA world, small businesses do not have the resources nor the access to corporation-sized budgets nor research teams that could help them to navigate uncertain seas. Rather, small businesses will have to rely on personal experience and critical evaluations of history and data.

The crystal ball to the future. Photo by Muhd Asyraaf on Unsplash

Surprisingly, what I have gathered from casual conversations with entrepreneurs is that having adequate resources to fund data-gathering is not a primary concern. In fact, many small business owners tend not to see the value in thinking hard about the future. It often seems too distant to them, and they think it could result in over-thinking or improbable suppositions.

However, many of these same small business owners readily seek advice from mystic sources, such as astrologers, to give them a sense of what lies ahead. In fact, a client shared with me that J.P. Morgan, the most powerful banker of his era, was rumoured to have said, “Millionaires don’t need astrologers, but billionaires do.” This client also recommended I watch a 6-hour video by a local astrologer where she convincingly shares her astrological insights on technology and upcoming trends. Truth be told, I was fascinated by how she tied astrology and modern business concepts together, leading me to the epiphany that a futurist is simply a modern-day fortune teller who connects the dots, but with a different set of tools.

Find the dots and connect it. Photo by James Wheeler on Unsplash

“In the field of observation, chance favours the prepared mind.” — Louis Pasteur (1822–1895)

This quote by Louis Pasteur (a French chemist and microbiologist, whose work led to the discovery of vaccination) highlights the same concept. I feel strongly about this idea as it reflects that it is better to be prepared for an opportunity or accident and to approach the matter with openness and foresight, so that one can cultivate a prepared and growth mindset that is needed for successfully navigating the future.

Recently, I watched a Korean movie Default, released in 2018, that dramatises the story of the financial crisis in 1997.

At the end of the movie, 3 simple pointers scrolled across the screen, sharing with the audience how to protect oneself from recurring crises, which I found to be quite practical and relevant when imagining the future.

1. Keep asking questions and checking for facts.
2. Do not take mundane things for granted.
3. And always watch the world with open eyes.

Pay little attention to the tools you will be using — which have a 10-year life span. But give your utmost attention to the unchanging principles required of all small businesses to survive in the future:

Either evolve and adapt — or perish.

“You can’t predict or control the future. You can only adapt.” — Raghav Mathur. Photo by Ciaran O’Brien on Unsplash

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