By: The current public health crisis has exposed many things about the global economy. We are a lot more dependent on each others mutual success than we would’ve ever imagined - Hello, Butterfly Effect. The dependency means that the global economy is not as resilient to challenges. It also means that nations require much more high level cooperation than many of us believed was necessary or even possible.
However, one of the biggest insights that the recent events have revealed is that the future is digital and it is already here. If we take a look at which companies have been the most successful over the past several months, we can see that they are technology companies with global scale. Amazon, Square and Zoom along with many others are proving that our digital future has arrived and those companies that don’t figure this out quickly will not survive.
This rapid shift means that we must make sure that the next generation is better prepared for this massive disruption.
Future of Money - Digital
Recently the financial services company, Square, reported earnings. Many people were surprised that their mobile payments application, Cash App, generated ~50% of their 2019 Q4 revenue from Bitcoin.
While most people were surprised that Bitcoin was still a thing, there are many retail and institutional investors that have been quietly building a position in this emerging space within the financial space.
There are some who view cryptocurrency, generally, and Bitcoin, specifically, as a way to generate above average returns from the volatility. While this is certainly an attractive element for speculators and traders, there are many who believe that the internet needs its own digitally native currency.
If we believe that the digital commerce will continue to grow then it becomes increasingly inefficient to utilize cash or credit cards to conduct business on the web. Ultimately, the transaction fees and speed will become an inhibitor to growth.
Although this transition point is still in the distant future, the time to invest in new opportunities is before everyone else realizes what a great idea it is.
There are even more traditional institutional investors who are making the case that Bitcoin could be the single biggest investment opportunity of their entire lifetimes.
By studying the history of money, they have found a lot to like about a native digital currency for the internet.
Future of Commerce - Digital
Many people are not surprised to realize that Jeff Bezos, CEO of Amazon, has increased his net worth during the past several months. What they may not realize is that in just 3 months, his net worth has jumped by a massive ~$24 billion dollars. Although Amazon has been building a tremendous business for quite some time, the reality is that it won’t just be Amazon that will continue to gain once the public health crisis is over.
In fact, we can already see that major retailers are declaring bankruptcy. These legacy operating models are not capable of withstanding even a short period of time with reduced revenues. For many retailers, it is starting to seem as though the retail storefront is an expensive and perhaps unnecessary luxury. Restaurants may also not be immune to these current challenges. Although, one could argue that restaurants have a stronger value proposition that traditional retailers.
However, even with this desirability, restaurants without digital or delivery operations are now paying a hefty price to tap into already established networks.
However, even with this desirability, restaurants without digital or delivery operations are now paying a hefty price to tap into already established networks.
On the other hand, e-commerce retailers have digital storefronts that are accessible 24 hours a day, 7 days/week. These digital storefronts are the front-end to a back-end of globally distributed warehouses and logistics that are hosted & managed using cutting edge cloud technologies. Within the food service space, there is also the possibility that ghost kitchens may see an increased prominence even after the public health crisis is over.
Given the scalability of technology, it is likely that these e-commerce native solutions will continue to rapidly grow.
Given the scalability of technology, it is likely that these e-commerce native solutions will continue to rapidly grow.
Within a traditional storefront, you design for browsing, discovery and impulse purchases. In e-commerce, the focus is on efficiency of operations and offering a nearly infinite amount of options. Small, local retailers will find it increasing difficult to compete with global e-commerce businesses like Amazon especially because the algorithms that underpin these platforms can simulate one of the most profitable elements of retail - the impulse purchase.
Future of Marketing - Digital
One of the fastest growing social media sites is Tik-Tok. While some may imagine this platform to simply be a place that their kids go to make funny dance videos or voice over lip syncs, the reality is that, Tik-Tok has surpassed 1 billion downloads and has over 800 million monthly active users.
The platform was doing great before the global public health crisis, but it has exploded during it. And, for many who experimented with creating and watching videos; they are likely going to stick around afterwards due to the strong and growing network effects.
For many years, the focus for many businesses has been on search (Google) & social media (Facebook). Many have also experimented and invested dollars on Instagram, Twitter, Pinterest, and others. However, this single or dual platform strategy is very limited in many ways.
Instead, there needs to be a cohesive strategy around how businesses can successfully participate in both established and emerging platforms. It is no longer enough to simply dabble in search and social. Your business won’t survive if your website is not optimized for search. It also will find success difficult if you aren't able to get people to visit your website from 3rd party platforms. This is where your customers are spending their time. Lots of time!
Each day that your business waits to develop a cohesive digital strategy means that it will be that much harder to find success once you focus on this area.
In many ways, companies will find excuses around the lack of ROI or the difficulty in building their brand on these channels. Unfortunately, the nature of technology platforms means that if you don’t invest while the platform is early stage or maturing, you will have to pay the price once you dive in.
The main reason for this is that digital platforms have robust analytics. Once the algorithms and analytics identify what behavior drives value, the laggards who join the platform have to pay for the privilege.
The early adopters paid as well. But, they paid through experience and learning. In many ways, they have been rewarded for their initial bet that the platform would be successful. Given the typical distribution between early adopters and mass users, the platforms are ok with this tradeoff.
Conclusion | Future of Education Must Be Digital
Given the accelerating shift towards a digital future, it is also true that the future of education must be digital. This does not necessarily mean that distribution of education will be digital. As many of us has seen the challenges with online learning are real. Although there will be an increased appetite for digital distribution at least in the near term from a health & safety perspective.
Instead, this means that the next generation needs a foundational education in technology.
Instead, this means that the next generation needs a foundational education in technology.
Technology in a broader sense than simply learning how to code or program computers. Technology in the sense of being able to understand and adapt to all the emerging trends outlined above along with those that will develop over the next decade.
K-12 students need to be able to realize that the next version of the internet will have a native digital currency and adapt themselves to figuring out how to build business models that can be successful with that insight.
K-12 students need to understand that commerce will be digital. So, they will need to understand what makes commerce work at internet or global scale. They will need to think of solutions for millions, tens of millions and hundreds of millions of users. This type of analysis requires big picture thinking that is fundamentally different than how society has historically conducted on the local or regional level.
K-12 students need to understand how digital marketing works and what they need to be successful. Instead of just consuming content on Tik-Tok, they will need to think about how the algorithm for this and other platforms work. Why do certain videos show up in their feeds? Why do certain videos get more likes? What do certain videos get more shares? Why do certain videos get more comments? What do certain accounts have millions of followers?
These questions along with many others are fundamentally about how we prepare our kids for success in the digital first world which they are already apart of. While we have talked about digital peripherally for many years, the reality is that the shifts that many have been projecting for decades are accelerating.
Once the public health crisis subsides, there will be very few people who won’t have digital at the top of their agenda. However, it is not good enough to simply talk about these developing trends. We must make sure that we are taking action so that our kids are prepared. This requires incorporating digital learning into their educations now. Not next year. Not when we got budget approval. Now!