In the next decade we will see an unprecedented number of companies become obsolete. With people ... [+]
You may have a sense of it, the stock market is in danger. Granted, it’s been over-promising and under-delivering to the masses for a long time. We can thank corporate greed, flash trading, a myriad of fees, and the inevitable “correction” that transfers wealth from the masses to the minority. The stock market has been a failed financial experiment when it comes to funding retirement or creating financial independence.
There is a radical difference in the thinking for privately held companies if they become a public company. Fewer companies are going public. This will alter the overall returns of the market long term, but based upon the fiduciary rules that have emphasized investor gains over value, short term reporting over integrity, and without much consideration for the treatment of employees or customers, less IPOs is a good thing. Antiquated ideals that have been well funded eventually become exposed.
Of all the companies that comprise the Dow or S&P, how many do you enjoy doing business with? Do you feel valued and that they create products and services that make your life better or do you merely tolerate using them due to lack of options. Through technology we will see many of these antiquated models die. We will see a large portion of these companies be replaced by more nimble and customer focused companies. Small companies that use technology for advancement rather than obstacles and politics to create roadblocks for the competition.
The exciting news is this will alter the way we live and life, the way we do business and transact. This will change the perspective of buy, hold and pray or being in it for the long haul. The time has come to vote with our dollars, judge companies by their value, and stop allowing Wall-Street to tell us it takes money to make money while they make money on our money (needing none of theirs).
It deserves restating: New and upcoming technology can disrupt and displace companies that we don’t love doing business with or working for.
In the next decade we will see an unprecedented number of companies become obsolete. With people able to leverage technology and the internet; we are seeing smaller businesses change the landscape of how business is done. And all without relying on the big business models of using the stock market. It is less about how well funded you are or who you know and more about how you can impact the most people or more deeply impact people.
Great news for business: no longer allowing the snakes behind Venture Capital to hijack your life and company. No longer losing your purpose and vision by allowing investors to infringe on your life and occupy all your time trying to appease them.
Although people are concerned about Artificial Intelligence due to massive disruption, it will expose those that are not committed to value. With AI, a disruption of power will ripple through the market. Many major companies that stick to older models and refuse to adapt to the influx of artificial intelligence technology will be buried faster than they can even imagine, because this new technology will allow for faster development, greater reach, and even a massive reduction in cost for employees and marketing.
The possibilities with AI are expansive. Some people may be afraid of what this can mean for the future of their business, but just like with the other technology that has taken over the market, like the internet and automation, we see it hasn’t destroyed jobs, but created different ones. You don’t see anyone out there petitioning for a return to typewriters and typewriter repairman in the world of business, right? And that’s because computers, internet, and connectivity have led to both efficiency and expansion.
The companies that didn’t adapt, died.
Your portfolio may do the same if you rely too heavily on the big companies and mutual funds. AI will lead to the same sort of change on an even bigger scale. But just as the typewriter repairman isn’t still in business, you can expect there to be some major changes in the status quo when this new technology hits the streets.
In the new world, everything is moving so much faster. Before current technologies were available, you’d need thousands of employees to accomplish great things in business. Now, with new and upcoming tech, we see more and more companies and small businesses doing the work of thousands of people with just a handful. Automation takes care of the rest, and even outsourcing through the auspice of the internet. It’s amazing, really, how far we’ve come in a short amount of time. And with AI, the work of those dozen people who replaced the thousands could be done with just one person at the helm. That is the future of business.
That is why the future of the stock market isn’t looking too bright. It’s the reason why the big, slow, archaic companies are at risk, which means your money is at risk too.
Earlier in human history, everyone was a business owner. Think about it, people owned a plot of land, worked it with their offspring and neighbors, produced crops, and traded them for other materials. Everyone was an owner and producer, and it worked for most of us. Then came the industrial revolution, people moved into cities, left behind the small, personal enterprise, and joined into greater companies to do greater work. Then came the internet. Those big businesses could move mountains, but they had to go slowly because of the bureaucracy required to manage so many people. With the internet, people could once again own their own little plot, as it were, where they can have their own business. But the effects of post industrialism are still in there; so even if you want to own your own business, just like your ancestors, you have some challenges to overcome. You’ll require a certain level of Relationship Capital to get it.
When you throw AI into the mix, that threshold for necessary capital will be drastically reduced. Anyone who can access the technology will be able to use it to accomplish the work of many employees at once, and this artificial employee won’t need to sleep or eat. You’ll see an even greater degree of decrease in businesses going public. More and more people will be able to gain their employment not by working for a business, but by opening their own.
In the old days, the valuable commodities were the crops you grew on your land. With AI, it will be the ideas you grow in your head. Those will be limitlessly valuable to the new world.
Welcome to the free market revolution.
