12 Ways to Predict the Future as an Entrepreneur
Many people will tell you, never make any predictions because you might be wrong. “What if you’re wrong about your prediction?” is a question I get asked. When you are wrong people are going to criticize you. “You have no idea what you’re talking about.” and “why did you say something like that?” are some of the comments you will hear, but here’s the reality of it, there is a reason why people continuously invested with Warren Buffet. There is a reason why people keep trusting Ray Dalio with their money, how do they manage to keep making money, can they predict the future? If Elon Musk gave you a call and said, look, I’m thinking about starting a new company and I would like you to be one of my first 20 employees, equity in the company is a part of the contract, what would you say? Most people would say yes. Why would you say yes, how do you know that he most likely would make you a lot of money? By predicting the future, there are many ways to do this.
- Studying the frustrations of each generation
Point number one is studying each generation’s level of frustration in any area of their lives. Chip Wilson is the founder of Lulu Lemon, when I interviewed him, he shared with me how he came up with the idea of Lulu Lemon. He would go to yoga classes and afterwards he would go sit outside next to women who left the yoga classes and listen to their frustration. He realized everybody was frustrated with their yoga pants. The ladies kept saying “you know what, I’d love to go to the mall, but I don’t feel comfortable going to the mall with these pants.” So Chip Wilson went and created a pair of pants that made women feel comfortable wearing it at the mall. He takes his business from zero to $12 billion. He’s worth $4 billion today simply for fixing a generations frustration.
Need a business idea? Go listen to what the current generations frustrations are and you’ll get a list of potential business ideas.
- Understanding the energy of a team
I can walk into a company, office or an organization and see based on the energy of the team, if they will work well together long term. The way how they solve problems together in the boardroom is often enough to know if they will work out or not. I look for how they work together, if they get along as a team, if they are afraid of confrontation and if someone is bullying or pushing the others around. I can make a good prediction on how they process issues together, likewise, on the other hand, if no one’s opinion matters, people do not dare to speak up or offer any advice, that is a good prediction that this business wouldn’t stick around for long. The energy of the people can also predict the future of a company or an industry. It is important to understand the energy of a team.
- Using data to give you certainty
Point number three is being able to use data to study trends that will help you to make certain predictions. I like to look at numbers both internally and externally. What do I mean by internally? I want to know what kind of customers like my products, what kind of customers don’t like my product and why? I look for what kind of sales people work well with my product? What kind of sales people don’t work with my product? I want to know what kind of executives do well. I want to know seasons, months and hours my salespeople do the best and try to find trends that will help explain why. I want to study all the data that I can.
If you were to buy a sports team with the goal to earn as much money possible, what sport would you choose? Your choices are NFL, MLB, NBA, NHL or MLS, what’s your choice?
Remember, we’re not buying a sports team for fun, like we’re not buying it because we like the one sport better. Which one is going to have the biggest return on our money, which of those five sports are going to give the biggest return on our money?
Here’s why, soccer is the only sport in America that we are not very good at. However, what’s the one country that attracts the most immigrants around the world? America, and outside of America, what is the number one sport in the world? But immigrants are coming to America and sports is about selling more people on that sport or team. How many times were you not a fan of a sports? Somebody sold you on it. With a steady flow of immigrants that love soccer, the popularity is rapidly growing. Every four years is the World Cup, a time when every American is briefly obsessed with soccer, this only promotes the awareness. One of my investors bought a soccer team a few years ago for $40 million, now it’s worth over $200 million. Five X, crazy right? But you must study the data and the trends in every possible way. For the best possible investment, it is important to study all the data, analyze the trends and see where things are going, based on your research you will be able to make predictions on where things will go in the future.
Soccer might not be the biggest or most popular sport in the United States, but it is the sport with the biggest X factor.
- Quality of leaders and leadership development
You can predict where an organization is going if they have an incredible leader who is serious, believes in the product, believes in the cause, believes in the mission statement, is 100% convinced that what they’re doing is going to make an impact in world and they know how to develop leaders. This company is going places, it is safe to predict that. This doesn’t mean they will all the time, but the odds are always good if you have an incredible leader that knows how to develop leaders.
Why is this?
Because it’s so hard to find great leaders nowadays. There are many investors in the marketplace, VC’s private equity firms that don’t invest into ideas. They invest in to a founder, they bet on the CEO. They invest into an entrepreneur because that person believes in leadership development. They invest in the person that believes in personal growth, the person that believes in self-education and the person with a mindset that bleeds into other people. This is why people banked on Jack Welch. This is why people banked on the way Andy Grove built leaders. This is why people bank on a certain group of leaders that know how to develop leaders around them. That’s leadership. Sometimes we can simply predict where an organization is going based on the leader in charge.
- Systems being automated
Point number five is something you are hearing a lot of people talk about, it’s AI and robots. I’m going to simplify it for you. You can spot where an industry and trends are going, based on the level of automation already taken place. If any processes start becoming automated, you can make a prediction on what’s going to happen long term
Low level skillsets become automated. If we used to go to the airport where we would check in and we would get our ticket, now it is a machine, you can make a prediction on what’s going to be happening within that field. I used to go to a bank where I would talk to a teller, know you no longer do that because everything’s on the phone.
You can learn a lot about an industry based on how automated it already is, odds are the automation will only increase over time.
- Associations that can harm a company
Point number six. It’s like point number four but opposite. Sometimes you look at a company, you look at an organization, you look at a team and say, you know what, I think they’re heading in a bad place. This can be predicted based on team members or leaders they bring in. These are the leaders that only solve problems to give themselves a short-term win and the credit that comes with it. It’s all about them. Talented people don’t like working in environments like this, so they usually leave the company, making the company even more unattractive, creating even more trouble. Sometimes you can make a prediction on a company that’s going in a bad direction simply by the recruiting they do.
- Keeping your ear to the ground
Number seven is really directed to the entrepreneurs and executives. You need to leave your corner office and hear what people are saying about your company and product. Online forums and social media are great for hearing what your customers are talking about. What are the issues they are experiencing? Are you focusing on the areas that you or your customers think are important? Should you double down or pivot and make a slight adjustment in order to get the higher profits.
- Paying attention to politics and regulation
Point number eight is political. I know most people don’t like to touch politics, but here’s the reality, politics do affect certain businesses. You need to listen to what the different parties and candidates say about certain issues. Are they for regulation or de regulation? These are important topics as an entrepreneur and business owner. Certain candidates run for office based on the promise of regulating an industry, and when they get to office, they do their best to implement the changes, so pay attention to the politics and regulations that could affect your business.
- Customer loyalty
Sometimes there are companies that are so good at serving people and their customers, where the customer experience is so incredible that the customer wants to make sure that company stays in business. I don’t know if this makes sense. Sometimes you can look at a company and say, these guys are going to be around for a while. If they keep offering customer service and experience like that, people are not going to let them go out of business. I go to a restaurant twice a week when I’m in Dallas called “neighborhood services.” They are so incredible, and I want to make sure they stay in business, every time I’m there it’s packed, it doesn’t matter what time I go there. They have a system that works well. You can predict that with small companies. You can predict that with big companies, you can predict that with individuals as well. You can predict that with great salespeople, you can predict that with great executives, CEOs and entrepreneurs as well. If somebody treats their group of people well, they’re typically going to be winning long term. You can bank on it.
- Strategic thinking
Point number 10 is a very personal one. To really understand this point you must look at your biggest insecurity, your absolute Achilles ‘heel, the thing that would break you if the whole world knew. Now realize that every company has this weak spot, this one weak spot that can literally put them out of business over night. An important way to help you predict the future is to understand this weakness and find a way to protect it. This way you have a barrier that keeps you separated from your competition.
Sometimes the best way to stay in business isn’t to make the investment that will give you the highest return, but rather, make an investment that will help strengthen some of your weak spots. This requires strategic thinking as an entrepreneur or business owner.
- Fixed mindsets
Point number 11 is what some might call “having a traditional way of thinking.” This mindset can also be known as a stubborn way of thinking or you can call it a fixed mindset. Often it is required to make money, but it can just as well backfire. Here is how, a company creates a vision where they say, this is where we’re going, and this is what we’re doing. This part is important, you have set a goal to aim for. However, sometimes leaders confused a very crystal-clear vision with a clear path on how to get there. Instead they need to realize that sometimes on a way to goal, you get lost and find a better, faster way to get there. You can’t say, “here’s the only way to get there.” You need to be willing to innovate, adapt and be open to new ideas over time. Companies rapidly fall once they get a fixed mindset and stop adapting and innovating.
- Creating the future
The last point is the toughest one, but it also has the highest upside and by far the biggest downside. A lot of people predict the future based on the data they collect, and the trends they see projected in front of them. Point number 12 is all about creating the future, something very few people do, because you’re either a hero or you end up a very public fiasco. Phil Knight is the founder of Nike. Do you know how Phil Knight suddenly built the empire Nike is? Here’s why.
Back in the day, Phil Knight would put $25,000 endorsements into 20 different players during the NBA draft. However, in 1984 one of his advisors said, don’t put $25,000 into 20 players, put $500,000 into one player, and that one player was Michael Jordan. Jordan helped build Nike into the brand it is known as today through his sheer domination on the basketball court. Now imagine if Michael Jordan had flopped as a basketball player, where would Nike have gone? Most likely they would have taken a huge hit that would have set them back massively.
Let me give you another example, Lavar ball comes out and says, “My son is not signing a contract with Nike or Adidas because we are going to come out with our own brand called Big Baller Brand.” People claimed that he was out of his mind. How much is the shoe going to be worth? What $495? Yes, that’s expensive. But hey, you don’t have to go buy the Louis Vuitton purse if you don’t want to, but this is what big baller brand is. We dictate our price. Everybody called him crazy.
Now today everyone’s saying he was a crazy guy and that it wasn’t a great idea. People are questioning him “how come it didn’t work out?” Because Lonzo ball didn’t end up becoming the player that everybody thought he was going to be. He was drafted second, but he should have been drafted number seven or eight instead.
Now let’s imagine Lonzo Ball was replaced with Lebron James, what if Lebron James was Lavar ball’s son and Lebron became the big player that he is. Big baller brand might be a $5 billion company and all these other players are chasing $20-40 million contracts. Lavar ball just got his son, a $5 billion company, and now people say “what a brilliant genius Lavar ball is.” That is how close you are to be a genius or very public fiasco.” That’s what happens when you predict the future and go try to create it.
But if you make it through, you’re a rock star, if you don’t make it through, you’re an absolute crazy human being. That is why so few people dare create the future and simply stick to just predicting it.