Worst Tech Predictions

A good article on the worst tech predictions ever Including on the iPhone, internet, cloud computing and PCs. It is around 3 min reading and will open a new horizon in front of you.

Today, we're doing a rundown of the worst tech predictions ever (and what we can learn from them).

"The worst tech prediction ever is when Steve Ballmer said the iPhone would fail" (prompt for AI-generated art from Midjourney Prediction gone bad

I know it's fashionable this time of year to do predictions.

But I'm officially out of the prediction game after a disastrous performance in 2022 (hat tip to legendary New York Yankees catcher Yogi Berra for one of the great quotes ever: "It's tough to make predictions, especially about the future").

In lieu of my 2023 predictions, we'll look at the worst tech predictions and the rationale behind them. The list includes bad predictions for cars (1903), the PC industry (1970s), mobile computing (1992), the internet (1995, 1998), music streaming (2003), the iPhone (2007) and cloud computing (2008).

The predictions we'll cover were made by some of the most-qualified people to make said predictions (which is probably why we remember them).

Cars Prediction (1903)

"The automobile is a fad, a novelty. Horses are here to stay." 

This advice was given by the President of Michigan Savings Bank to Horace Rackham, who was Henry Ford's lawyer. In addition to giving this banger quote, the Bank President turned down an offer to invest in Ford Motor Co (the Model T came out 5 years later in 1908).

Rationale? The Bank President was extrapolating from his understanding of the bicycle market. Right before the famous line to Rackham, the Bank President says: "You see all those people on their bicycles riding along the boulevard? There is not as many as there was a year ago. The novelty is wearing off; they are losing interest. That's just the way it will be with automobiles." (Quote Investigator)

PC Prediction (mid-1970s)

"There is no reason an individual would ever want a computer in their home."

This quote is attributed to Ken Olsen, founder of Digital Equipment Corporation (DEC), a minicomputer manufacturer.

Rationale? Olsen's quote is relayed by David H. Ahl, a former DEC employee that worked on a home-computing product for DEC. Apparently, Olsen "refused to support the full development and marketing of the system". Ahl was not happy about it and — in 1980 — told the story of Olsen shutting down DEC's home computing efforts in a tech publication. (Quote Investigator)

Mobile Computing Prediction (1992)

The idea of a wireless personal communicator in every pocket is "a pipe dream driven by greed."

Quote by Intel CEO Andy Grove at the '92 Mobile Conference.

Rationale? Grove's line is included in a New York Times article titled "The Executive Computer; 'Mother of All Markets' or a 'Pipe Dream Driven by Greed'?"

There is no further context around his quote, but the rest of the article talks about a seeming gold rush for mobile computing devices. The technology was vastly underdeveloped, though (it was all hype). This 1992 stance is probably related to Intel completely missing the mobile wave in the iPhone era.

Internet Prediction #1 (1995)

"I predict the Internet…will soon go spectacularly supernova and in 1996 catastrophically collapse.""

Ethernet inventor Robert Metcalfe wrote this in Infoworld Magazine and said that if his prediction was wrong, he'd eat his own words. In 1999 — when it was clear his prediction was wrong — he put the column in a blender and "ate" his words at WWW Conference; before eating the goop with a spoon, he confirmed that the ink wasn't toxic.

Rationale? Metcalfe provided a number of very reasonable reasons for his prediction:

Internet data links would be overloaded

The proposed flat-rate business model would not bring in enough money to fund growth

Investors would not be willing to stomach long-term losses

The Internet would face significant security issues

Internet Prediction #2 (1998)

"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law' becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's"

Paul Krugman wrote it -- no joke -- in an article for Red Hering titled "Why Most Economists' Predictions Are Wrong"

Rationale? Per Snopes, Krugman owned the gaffe by saying "I must have tossed it off quickly (at the time I was mainly focused on the Asian financial crisis!), then later conflated it in my memory with the NYT piece. Anyway, I was clearly trying to be provocative, and got it wrong, which happens to all of us sometimes."

Music Subscription Prediction (2003)

"The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model and it might not be successful."

Steve Jobs in a Rolling Stone interview.

Rationale? Jobs' view on subscriptions is based on how consumers typically consumed audio up to 2003: "They bought 45s, then they bought LPs, they bought cassettes, they bought 8-tracks, then they bought CDs. They're going to want to buy downloads."

The idea of an all-you-can-eat music service was incongruent with music history. Also, the existing subscription services (MusicNet, PressPlay, Rhapsody) weren't that good and didn't have full catalogues.

iPhone Prediction (2007)

"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."

This is what former Microsoft CEO Steve Ballmer told USA Today.

Since the iPhone is the greatest consumer product ever (2B+ devices sold and $1T+ in sales)…this is my "worst" prediction ever.

Rationale? Per CNBC, Ballmer says he whiffed on iPhone because he didn't see Apple's business model innovation. Ballmer explained: "I wish I'd thought about the model of subsidizing phones through the operators. And there was business model innovation by Apple to get it essentially built into the monthly cell phone bill."

Honestly, Jobs played some 4D chess with the phone carrier subsidy…so I kind of want to give Ballmer a mini-pass here. Jobs was so keyed in on the carrier relationships that — at one point in the iPhone's development — the team handling carrier negotiations was as big as the phone software development team (the rebuttal here is that Microsoft could have done a carrier subsidy, as the arrangement was established for higher-end Blackberry and Nokia phones). 

Somewhat ironically, Jobs' music streaming prediction was off because he didn't fully see the business model innovation (people like the convenience of an all-you-can-eat option).

Cloud Computing Prediction (2008)

"The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is [cloud]? It's complete gibberish. It's insane." — Larry Ellison at OracleWorld.

Rationale? Ellison has always been very outspoken and cloud is so orthogonal to Oracle on-prem database business that was launched in the mid-1970s. Cloud was obviously a direct threat to Oracle's bread-and-butter. After years of resisting cloud, though, Oracle is finally cracking the market.

So what are the takeaways from this list of bad tech predictions?

People just talking their own book: The #1 takeaway for me is that the business execs are just making calls that align with how their companies make money. And here's the obligatory Upton Sinclair quote ("It is difficult to get a man to understand something, when his salary depends on his not understanding it"). The following predictions were just people talking their own book.

Ken Olsen on home computing (DEC was a selling mainframe computers)

Andy Grove on mobile computing (Intel was dominant on PC/Data Centers)

Steve Jobs on music subscription services (Apple had iTunes and the $0.99 per song model)

Steve Ballmer on the iPhone (Microsoft had its own mobile ambitions)

Larry Ellison shitting on cloud computing (Oracle dominant in on-prem data centers)

When you're business is already crushing it, you keep doing what works. But that myopic focus on what works makes you vulnerable or unable to respond to industry shifts [Insert something smart about "the innovator's dilemma".

Earn the right to make bad predictions: These predictions are iconic because the individuals that made them obviously put themselves in a position to prognosticate. Like, no one gives an F what Trung has to say about the future of cloud computing (although, my World Cup predictions are highly sought after)

It's impossible to not get burnt in the business of predicting: You just have to be OK with it. Professor Scott Galloway gets ridiculed a lot for making predictions that go awry. But he says he doesn't make predictions to be right, but to learn. 

As Byrne Hobart point out about Krugman's bad internet prediction, the economist actually had a very salient call in the same essay that everyone has forgotten: "Sometime in the next 20 years, maybe sooner, there will be another '70s-style raw-material crunch" 

Per Hobart, the tens years after Krugman's prediction saw the NASDAQ drop 5% while oil went up 848%). 

No matter the Ws, it's much easier to be remembered for your worst takes (I think people are just naturally trolling). If you're willing to take those arrows, though, publicly predicting stuff can def sharpen your thinking.

Having said all of that, wow did the President of Michigan Savings Bank completely whiff on that Ford opportunity. Horses are here to stay? C'mon, bro.

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