Max Gladwell

We make our predictions for MG01: Twitter, MySpace, Oil Prices, Facebook, Higher Education, President Obama, Recession, Housing, Facebook, Climate Change, iPhone 3.0, and more.

On the evening of April 1st, we celebrated the Max Gladwell New Year with parties in San Francisco and Los Angeles. We recapped the first year in the Max Gladwell calendar, a memorable and historic year marked by the highest of highs and lowest of lows. It’s now time to look forward.

What does the New Year (MG01) have in store? It’s anyone’s guess. As they say, making predictions is quite difficult, especially about the future. Nevertheless, we’ll give it a shot. Following are 10 that readily come to mind:

1. We’ll pull out of the recession and start to thrive by year’s end (MG01). This will hopefully include a new economic ethos based more on production than consumption and more on regulated, sustainable growth than a free-for-all that incentivizes short-term gains at the expense of long-term prosperity. The first signs of a recovery are being seen in housing markets where prices have fallen as much as 50% to 2002 levels. This is largely a false bottom, but what’s important to note is the shift in psychology. When you’ve been in a recession as long as we have, any glimmer of hope can be enough to stop the downward spiral and trigger the long road to recovery.

2. We’ll take meaningful action on climate change. It will likely be cap and trade, though we’d prefer a straight carbon tax that simply prices the cost of CO2 into everything we use, creating a market for low-carbon technologies of every kind. But you can’t expect government to do anything the most efficient way possible.

3. Oil will shoot back above $100/barrel as the global economy turns around and U.S. inflation kicks in. In response, we hope to see a steady increase in the national gas tax in order to (a) reduce the flow of wealth to hostile foreign governments, (b) fund clean, domestic alternatives, (c) create a market for clean, domestic alternatives, (d) incentivize efficiency, and (e) pay down our soaring national debt. Eliminating corporate welfare programs (subsidies) for oil companies would also be a good move.

4. MySpace will finally offer a webmail service (yourname@myspace.com), something we’ve recommended for years as a way to get its users to invest in the network and to discourage abandonment to Facebook. That was possible at one time. Alas, this will be too little and too late. Facebook has already won and will continue to dominate. MySpace will go from “A Place for Friends” to “A Place for Music”. Music is where the network got its start and that’s where it will end. Unlike we previously thought, however, MySpace Music will not make money. The lesson to be learned here is that when a startup is bought by a huge company early in its growth trajectory and the exit incentive is removed, those running the company tend to get complacent. MySpace took its foot off the gas and has been phoning it in for the past couple years. Meanwhile, it placed a misguided emphasis on monetization at the expense of providing value and improving the user experience.

5. It’s seems inevitable that Twitter will be acquired. The only question is by whom. Facebook already made a $500M offer, which consisted entirely of funny money (stock), and now rumors are swirling about talks with Google. It makes most sense for Google, as the true value of Twitter is real-time search capability and a heap of data. Granted, Google could readily reproduce Twitter, but you can’t beat its brand equity. Not only is Twitter a verb, it has its own language: Tweets, Twits, Tweeps, Retweet, Twestival, etc. Most any term can be somehow Twitterized. The big unknown, though, is Microsoft. It’s possible Redmond would out-bid everyone, but that would be a huge mistake. That aforementioned brand equity would evaporate overnight because people don’t like Microsoft. Which brings us to #6.

6. Regardless of who acquires Twitter, viable Twitter rivals will likely emerge. As micro-blogging becomes as popular as social networking, Twitter will become a too generic and one-size-fits-all for many. Twitter will launch a groups feature in an effort to combat this, but people tend to like their niche products and communities. We may see a Ning-like platform for micro-blogging, which fragments this trend into hundreds of thousands of unique mini Twitters. A couple rival startups might actually gain traction by adding value in new ways. We saw several Twitter wannabes fail already, but that was before micro-blogging went mainstream. Indeed, “status updates” will become a standard feature for any type of community-driven site.

7. We’ll continue to export our online experiences and tools into the offline world i.e. The New and Improved Matrix. The mobile web is truly the new frontier, but it’s not confined to the online environment. Geo-location is the new local, and offline is the new online. The question VCs will have for startups is, “How do you plan to take this offline?” or “What is your offline strategy?”

8. The iPhone will dominate like no other phone in history. An iPhone Nano will make it available to those who think the iPhone is just too bulky. The term “killer app” will become entirely cliche because so many iPhone 3.0 apps will, indeed, be killer. Apple will see $200/share.

9. Social media will be added as coursework at leading universities with majors and advanced-level degrees. Over the past few years, we’ve seen a fairly rapid increase in sustainability coursework and Green MBA programs. Now that social media has become a standard business practice, it needs the academic support, research, and legitimization that major universities afford.

10. Despite his mistakes on the economy and bailouts, which any American president would have made given the way politics works in Washington, President Obama will prevail. His approval rating will not dip below 50%. And by August, we will feel that the worst is behind us. Indeed, it will feel a helluva lot better than August of MG 00, when we’d already been in a recession for seven months, and we were staring down the barrel of the worst financial crisis since the Great Depression.

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