When Tech “Experts” Have No Clue

There is little doubt that we live in a culture that glorifies success in all of its forms. Whether on the news, in magazines, and even our IS courses, we constantly hear about the immense wisdoms of the various titans of the technology industry. We hear of Jeff Bezos’ disruptive vision for the future, Mark Zuckerberg’s ability to leverage culture to produce innovation, and how Elon Musk’s genius transforms not only our world of atoms but also of bits as well.

Though one can learn much from their examples, one has to be wary of over glorifying these individuals and their success. Often times, we fall prey to viewing these individuals as oracles, whose vision of technology’s place in the broader business landscape is flawless and without error. In reality, this vision of tech’s most successful businesspeople is far from the truth, as many of tech’s greatest leaders have made some seriously off-the-mark predictions about the future of technology. Here are a few examples:

Steve Ballmer on the Apple iPhone 

The release of the iPhone in 2007 sent shockwaves through the consumer electronics industry. Though many people correctly viewed the Apple’s innovation as the future of mobile communication, others were quite skeptical as to whether the iPhone would gain marketshare. Among the most visible detractors was Steve Ballmer, former CEO of Microsoft, who whiffed badly on his view of the iPhone: “500 dollars? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard. Which makes it not a very good email machine.”

Here’s a live look at Steve:

Fast forward today, Apple has sold 78 million iPhones in Q1 of 2018 alone.

Tim Maurer on Robo-Advisors

Unlike the iPhone, robo-advisors such as Wealthfront are relatively new. However, one thing is for certain in the these new products definitely have a market and are here to stay. However, just a few short years ago, these services garnered serious doubt. For example, Tim Marurer, director of personal finance at Buckingham stated in a 2015 op-ed that robo advisors “will never supplant relationships as the optimal construct” and that they don’t compete with “comprehensive wealth management”.

This projection can be nicely summarized by the following:

Three short years later, John Hancock, a company who competes within the wealth management space has invested directly in this area. Twine, as we learned last week, is an app meant to rival competitors such as Wealthfront and ThinkOrSwim. Its incredible how a prediction like Maurer’s can become out-dated so quickly.

Netflix and The DVD-By-Mail Business

Anyone who has ever taken an IS course at Boston College is most likely quite familiar with Netflix’s rise to dominance over the likes of Blockbuster. What people don’t know about is that the company’s path has not always been so clear. In an interview with NBC’s “Nightline”, Reed Hastings, former founder and CEO of Netflix, as well as Ted Sarandos, Netflix’s Chief Content Officer, offered a wildly inaccurate view of the role of DVD’s in their business model: (Jump to 5:22)

You would think that Hastings and Sarandos would have had a better forecast of the changing digital landscape. Though Netflix  easily survived this wild miscalculation, their former predictions serve as an example of how leaders in tech are not always as informed as we think they are.

Key Takeaway

Each business leader mentioned above, as popular culture would contend, is incredibly smart and can offer us all tremendous insight into how one can be successful. It is also worth understanding that all of us, even the most successful, can be incredibly wrong at times. Examples such as these demonstrate that we as future leaders ourselves can never be overconfident of our firms’ respective digital maturity. At all times we must be continually seeking improvement when it comes to adapting to an increasingly digital world.

5 comments

  1. I agree with your takeaway that these examples show how important it is for firms to remain adaptable. Technology evolves so quickly that its impossible to predict the future and where an industry may go. An element that could be invovled in these examples is that CEOs need to play the game to appease their shareholders. In 2007 Microsoft was pushing the Windows Mobile 6. If Ballmer publicly says “this new iPhone is going to destroy us!”, then shareholders might panic. Netflix’s bread and butter business was DVDs, if they say “DVDs will be gone in 2 years”, then shareholders might panic.

  2. I said that I thought it was risky for FB to move beyond the college market. Clearly I was wrong there. Of course, we do need to remember that the iPhone 1 wasn’t particuarly good (it took off with the 3S), and FB wasn’t always great. It is about continual evolution and improvement (and sometimes a little bit of luck).

  3. I liked your bit about how success is almost over “popularized” in the United States. However these success stories are the ones that people want to follow and strive for. Therefore, the people who were wrong get pushed to the side and forgotten unless someone does the research. Really cool piece, really liked the takeaway as well.

  4. I think Matt said it well above that Microsoft would never had admitted defeat to Apple in that very moment concerning the iPhone 1. Frankly, Steve Ballmer might not even have believed his own opinion but that was what needed to be said for his shareholders or even for his benefit.

    Furthermore, I think that it’s crazy Netflix said comments like this. If you look back into research, Netflix banked on the fact that streaming would become bigger and they actually risked a lot doing so I believe, spending money on this research while their DVD business was thriving. This was opposite of Blockbuster who decided that their business model would win out and they failed to properly straddle or change their business model.

    I think the best way to approach these tech leaders words is knowing that they probably have good notions about things in their sphere but will only say something about it if their company is making efforts to exploit the fact. Microsoft wouldn’t talk about the rise of exclusive electronic ecosystems if their company is based on compatibility. Nintendo would probably not speak about the rise of Mobile Gaming because it could cut into their portable console sales which dominate the youth markets.

    Lastly, I’ll connect this to a conversation I’ve had many times in class involving the rise of index funds. Managed funds and Private Wealth Managers fail to acknowledge the rise of index funds and passively managed funds because they claim that their way is better. I find that many younger people disinterested in the markets are realizing how accessible investing is from a digital platform. We spoke about it last week with John Hancock’s Twine. Therefore, the rise of index funds or passive investing might be occurring but no financial institution based on relationships would ever acknowledge this movement.

  5. I think that people have such an easy time agreeing with the most successful businessmen partially because of success and partially because of herd mentality. People like you and I or even a successful businessperson, for different reasons, are more than likely not going to disagree with these wildly successful people especially if you are making investment decisions. It would be hard to tell the people whose money you invest that you did not listen to someone like Jeff Bezos because your intuition told you differently. At the same time, if you go against the herd and end up being right you may look like a genius. I think the biggest thing this points to is do your research. Even some of the best minds say some things, informed and uninformed, that are wrong. The best you can do is respectfully hear their opinions, do your best to research, and make decisions about investments or form opinions about the future of a product like the iPhone based off of that.

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