2017 Business Predictions – Facts or Fiction?

business predictions

Perhaps the only thing more challenging this time of year than dropping those holiday pounds is scrolling through social media without seeing bold business predictions for the upcoming year. It seems the only thing we like doing more than ringing in the New Year is speculating on what it will bring in the various business sectors.

Image courtesy of techrepublic.com

They are simply everywhere. It’s as if the shortened days and plummeting temperatures somehow bring out our inner-Nostradamus.

2018 will be the year the edge displaces the cloud.

Cybersecurity will be the fasting growing sector in 2018.

These articles tend to be well-reasoned and clearly articulated. By the end, we are absolutely convinced that the edge will displace the cloud and no sector could possibly grow faster than cybersecurity.

But how often are these predictions on the mark? What is the point of taking a deep dive into the bold predictions for the upcoming year without any analysis of how these prognosticators have fared in the past?

So with the new year upon us, rather than exploring the business sector predictions for 2018, we thought it might be more illuminating to take a handful of 2017’s forecasts and see if they actually came to pass.

We’ve taken three predictions for 2017 and, with the benefit of hindsight, put them under the microscope to determine if they are more fact or fiction.

Prediction #1 – 2017 will be the year bitcoin/blockchain goes from “proof of concept” to widespread practical usage.

This prediction came from Oliver Bussmann and Nick Williamson in their December 2016 article Blockchain in 2017: From proof to pilot in which they outlined their case for the widespread adoption of blockchain technology in the coming year.

“2017 will be the ‘year of the pilot’ for blockchain in financial services, as it moves from a proof-of-concept technology into production, especially in the cross-border payment and trade finance areas. This will move more quickly than expected, and we could reach a “tipping point” over the next 12 months if enough players with enough financial capacity come together, as seems to be the case in several areas at present.”

After robust growth in blockchain adoption in 2017, it would appear Bussman and Williamson got this one mostly correct. Certainly, they were correct in predicting that the financial sector would find ways come together around the new technology.

In a recent article looking back on 2017, Bussman noted, “Ripple became a fully operational platform with over 100 members and payment volumes in the billions, and industries began to form blockchain business networks, for example, the Digital Trade Chain consortium (DTC) in trade finance.”

As for the growth of Bitcoin, 2017 proved to be a banner year. In terms of Initial Coin Offerings (ICO’s), there were $297 million at the beginning of the year. By the end, that number had skyrocketed to over $3.7 Billion.

The only area where Bussman feels they missed the mark was in the number of “golives” in the field.

Final Analysis: FACT

Prediction #2 – 2017 will be the year chatbots enter the mainstream of our online experience

This prediction came from a January 2017 article 2017: The Year Of The Chatbot in which they foresaw chatbots becoming a regular part of online retail operations. “If 2016 was the year chatbots entered the retail scene, then 2017 will be the year brands will start to realize real business results from the technology, through increased sales, conversion rates or customer loyalty.”

So did 2017 turn out to be the year of the chatbot? The short answer is not really. There can be no question that they are becoming more prevalent and not just in the online sphere. Many brick and mortar stores are implementing AI that can be accessed as a virtual sales assistant in the store. People can text a number with specific questions about merchandise on site.

But in terms of chatbots causing online sales to skyrocket, that doesn’t appear to be the case. At least, not yet. The theory as to why can be found in the article 5 B2B Chatbot Case Studies: Do Chatbots Increase Conversions?

“Sadly, this was always going to happen. When there’s so much hype surrounding a new technology, it always falls short of early expectations. It’s not because the technology itself is lacking, though. Instead, it’s got more to do with people jumping on the bandwagon and making a half-hearted or misguided effort to implement it.”

Business Insider has another theory as to why chatbots have yet to reach their full potential as fully formed AI virtual assistants.

“Chat apps are the next frontier for digital commerce, but without payments functionality, the opportunity is extremely limited. Customers can — and do — ask for support, take advantage of deals, and browse many stores within chat apps. But when it comes time to pay, users have to switch to another app or the mobile web — a turnoff that could hinder adoption and lower conversion rates.”

Final Analysis: FICTION

Prediction #3 – 2017 will see Crowdfunding supplant Venture Capital as the main source of investing for startups. 

This prediction came from not one source but a consensus of observers who saw the growing trend towards crowdfunding continuing into 2017.  Luke Lang, co-founder of CrowdCube predicted in 2016 that “…crowdfunding would reach a critical turning point and cement its position as a mainstream route to funding, rather than an ‘alternative investment’ option.

There can be no question that investor crowdfunding has risen dramatically over the past few years. In 2010, crowdfunding accounted for only $880 million in investments.

Four years later, that number jumped to $16 billion crowdfunded and by the end of 2016 crowdfunding reached more than $34 billion. That number easily exceeds that average annual VC total of $30 billion.

Just by looking at Q1 totals from 2016, we can see the declining VC activity. Their total spent was 12.1 billion invested across 969 startups, which is down from 13.7 billion raised the previous year across 1,085 deals.

For SME’s, which constitute a fair amount of family-owned businesses, the rise of crowdfunding investment options is good news. More choice means more opportunities and more paths to secure capital without necessarily giving away chunks of equity.

But the news is not all bad for VC’s. They, like every other industry, are forced to deal with a disruptor in their midst. But if they take the right approach, crowdfunding could provide opportunities for traditional VC’s as Jan Bednar, CEO of ShipMonk.com, points out.

“In a traditional crowdfunding environment — which functions more or less like a presale — VCs have the opportunity to immediately access the addressable market for a product and its desirability. This information fosters more prudent decision making.”

Final Analysis: SPLIT DECISION