Monday, January 28, 2013

Daniel Burrus: Predicting the Future

Daniel Burrus says there are clear ways to predict the future in an uncertain world. You need to unplug yourself from the present and look at examples of linear change -- things that will not go backward and will definitely happen in the future.

Transcript -- We live in an amazingly uncertain world. What's going to happen with Europe? What's going to happen with our economy? What's going to happen with sales the next six months? Will China be strong? Will you be strong? What'll happen with housing? The problem with the uncertainty is it keeps you frozen. It doesn't let you move forward. It doesn't give you any confidence. So in an uncertain world, I have to ask myself, "What am I certain about? Am I certain of nothing?"

And the answer is you can be certain about so much, it's unbelievable. For example, right now it's winter. I'm certain it'll be spring followed by summer. By the way, I had that certainty because there is a science of cycles; there's over 300 known cycles - weather cycles, business cycles, biological cycles, that give you a complete handle and accurate forecast of the future.

As a matter of fact economists have been trained in the science of cycles. But if you noticed the economists have been really wrong lately. Why have they been so wrong? They're using the science of cycles. After all, Warren Buffett is the richest guy in the world because of the science of cycles. He knows when the stock market goes up; he's going to sell and when it goes down he's going to buy, which is probably the opposite of most other people. That's why he's rich.

So, is there another kind of change, you have to ask yourself. And the answer is yes. And I call it linear change. Unlike cyclical change, when linear change hits we're not going back. Once you got a smartphone, you're not going back to a dumb phone. Once the people in China parked their bicycle and get a car, they're not going to say, gee, lets get rid of the car and go back to the bike. Once people in India get refrigeration for their homes, they're not going to say we don't need refrigeration. Now these are one way - they're not cycles - one-way linear changes that had profound and amazingly predictable consequences.

So in a world of uncertainty, I have to ask am I certain of anything and create a list of certainty. The reason is because strategy based on uncertainty has high risk. Strategy based on certainty has low risk and high reward. So we are bombarded with all of this uncertainty. Create a list of things that you can be absolutely certain about. Lets give you a technological certainty as a good example. Let's take the iPhone. How about the next iPhone? I know we just got our new one but what about the next one? Could you say anything about that? Do you know anything about that? Hey, no one's left that in the bar lately.

And the answer is, you know all about the next iPhone. For example, will it have a faster processing chip in it than the current one? And the answer is of course it will. Are you certain? Yeah, been doing that with technology for 40 years; it's call Moore's law. We have 3G wireless now; we're getting 4G wireless. Is that it? Or might you be able to predict what they'll call the next one? The answer is, of course; it'll be 5G, followed by 6G. I've been tracking that out for over 30 years.

It's fully predictable on a curve. You can just see it right there. And can we get more in that device or is it full? Can't get anymore? And the answer is of course, we can store more in that device; it's on a similar curve to Moore's law going up like this. Very predictable. So if you look at all the things that you can be certain about, you will find amazing possibilities and amazing opportunities as you look at the future.

Spend an hour a week unplugging from the present. Yeah, why? Because it's more related to your past than your future. You know there's a reason your windshield is bigger than your rearview mirror. Hey, let's start looking ahead a little bit. The more you look, the more you see. The future is more visible than you might expect. Make a list, not of the things you're uncertain about, but the things you are certain about. First of all, the cycles. What are the cycles that we know? What are the cycles, the sales cycles, the business cycles.

By the way if there's a sales cycle, hint don't abide by it. I always go the opposite of the sale cycle because I want to have the deal closed before the cycle begins, but that just me. Anyway take a look at the cycles. Make a list of those things. We know when Father's Day will be, we know when Christmas will be, we know when the next election will be. Makes list of all the things that you know and look at the problems and predictable opportunities.

Directed / Produced by Jonathan Fowler and Elizabeth Rodd

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