History is littered with the failed predictions of experts. Yet governments hire high-paid consultants to advise on policy; businesses use them to vet research and development projects; and venture capitalists have them make investment decisions. Experts excel in looking backward, protecting their turf and saying what their clients want to hear. Their short-term predictions are sometimes right, but they are almost always wrong in forecasting the more-distant future.
Experts are the greatest inhibitors of innovation — the ones who shouldn’t be listened to. Entrepreneur Peter Diamandis, founder and chairman of XPrize Foundation, says it best: “An expert is someone who can tell you exactly how it can’t be done.”
Look at some of the most famous historical examples:
“The telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” — a Western Union memo from 1876.
“Heavier than air? Fying machines are impossible.”— Lord Kelvin (William Thomson), president of Royal Society of London in 1895.
“There is no reason for any individuals to have a computer in their home.” — Ken Olsen, president, chairman and founder of DEC in 1977.
The problem with experts is that they think they know it all; ignore data that don’t fit their points of view; and extrapolate from the past on a linear basis. If some disruptive technology hasn’t come along in the past, the assumption is that it won’t happen in the future. Worse, experts often try to block technologies that might upend their roles. After all, if things change too fast, they will no longer be experts. Government experts usually have an agenda. Business experts are typically old-timers trying to protect their jobs. Academics specialize in digging deep into fields that most people consider arcane or obscure. They gain tenure by writing academic papers and being extremely knowledgeable in a narrow area. They often remain in the same field for decades and can’t see the forest for the trees.
Technology is moving faster than ever. Advances that took decades, sometime centuries, such as the development of telephones, airplanes and the first computers, now happen in years. Witness how smartphones and social media have come out of nowhere in the past seven years and changed the way we communicate. We are always connected to each other and to our employers. Computing power is advancing at exponential rates and causing acceleration in fields such as artificial intelligence, robotics, 3D printing, sensors and medicine.
When advancing technologies converge, they lead to artificial intelligence-based apps that analyze data from medical sensors, with the potential to disrupt the industry. Apps such as Uber and AirBnb threaten transportation and lodging. Amazon has made bookstores disappear and Apple changed the music industry. Which experts predicted these disruptions? The experts are becoming more wrong — and irrelevant — than ever.
More current examples:
In the early 1980s, McKinsey &Company created a forecast for AT&T of how many cell phones would be in use in the world in 2000. It estimated this number to be 900,000. The actual number was greater than 100 million.
In June 2007, then-Microsoft CEO Steve Ballmer told USA Today there was “no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item.” The iPhone currently has 42 percent market share in the United States.
Silicon Valley’s most respected venture capitalists can’t see even the near future. Mary Meeker, of Kleiner Perkins Caufield &Byers, produces a yearly report, Internet Trends, which is the tech industry’s bible. Its May 2013 report analyzed the leading players in social media and made predictions on the future of mobile technologies. It did not mention WhatsApp, which Facebook acquired for $19 billion in February. This was the largest acquisition in history of a venture-backed company and was not on Meeker’s radar.
As an academic expert in advancing technologies, when entrepreneurs come to me for advice, I tell them, as I am telling you, to take it for what it’s worth. No one can accurately predict the future of business any more, because too much is happening too fast. At best, you can gain an understanding of the overall trends and the types of opportunities and obstacles that lie ahead. You can look backward to understand what problems have already been solved, how others overcame hurdles, and what types of business strategies worked best. You can learn what questions to ask. You can realize yourself when your idea is either just plain silly or impractical.
I tell entrepreneurs that if they really believe in their gut that they have a world-changing idea, they should pursue it. They shouldn’t let anyone stop them — no one really knows more than they do. As Diamandis also says, “The day before something is a breakthrough, it’s a crazy idea.”
Wadhwa is a fellow at Rock Center for Corporate Governance at Stanford University, director of Research at Duke University, and distinguished scholar at Singularity and Emory universities. His past appointments include Harvard Law School and University of California Berkeley.