From crime to finance, there are plenty of gaps waiting to be filled. Has the world hit “peak social media”? The past couple of days have seen both Facebook and Twitter losing some 20 per cent of their value. Because Facebook is so huge, the decline in its market capitalisation on 26 July of $120bn was the largest that has ever occurred. There was not, however, a corresponding fall in high-tech shares generally. Apple will report earnings next week, and Microsoft did a few days ago.
Shares in both are solid. Amazon reported $2.5bn profit in the first quarter, far above expectations. Alphabet, Googles parent, reported a surge in revenues and shares rose on the back of that.
Message in a nutshell: high-tech America is racing ahead, social media is stuck.
Stuck is a relative concept in that there will be some growth, but once you have nearly one third of humankind on your platform, as has Facebook, the scope for further growth is limited.
So where is the growth? Where is the next Facebook? If anyone could answer that they would invest in it rather than try and write about it, but maybe there are a couple of principles that can guide us.
The first is that communications technology will become so cheap and so competent that it will do more or less whatever we want from it. The second is that we should try and identify what people really, really want.
People long wanted mobile telephones before they became mass market items, and they were available to the very rich. People wanted to communicate long-distance visually, but it took a long time before the iPhone gave a truly competent way of doing do. As for Facebook, those of us who went to Davos in the 1980s and 1990s will recall the little fat directories we were given, with a page for each participant – with bio, contact details and a photo.
Here then is my list of five things that people really want, and where somewhere or other there will be a technical opening.
The first two are negative. What to do about crime? That is not a comment on the recent rise in stabbings in the UK, or the cases of people snatching phones. Rather it is something broader: crime in general. Take bicycle theft. When I was a child in Ireland you never needed to lock your bike because people didnt steal them. And a few years ago when hiring a car on the Greek island of Chios, I was amazed when I was told to leave it at the airport unlocked, keys on the seat. Wouldnt someone steal it? No, because they couldnt take it off the island.
Second, what to do about fraud? It is extraordinary how much financial fraud there is at every level. Technology should be able to eliminate that, but so far it seems to have instead created new opportunities for scams, including someone ringing to say there is a fault on your computer or something wrong with your bank account, and adverts dishing advice on how to get rich quick. Why do they go on mainstream platforms when technology should be able to stop them?
Now to the third item, which is positive. Education. It is an almost universal good, in the sense that better educated people benefit for the rest of their lives. The MOOCs model (massive open online courses) is fine as far as it goes. Wikipedia is great as far as it goes. Google and Bing are great for sources of information. But as yet, no technology has transformed traditional education systems. Somewhere there is the scope for radical advance.
A second potential positive is healthcare. Every country in the world is struggling to improve health outcomes, and spending more and more as a proportion of GDP to do so. But results are mixed and technology, instead of cutting costs, has tended to increase them. Robot doctors? Non-invasive health monitoring? Low-tech solutions to improve overall health, and narrow the very different health outcomes in different parts of a country? Somewhere out there the new technologies should be able to help.
And the final area is finance. There are many financial apps but they dont really provide any comprehensive service to help people secure their financial futures. What is needed is the service that private offices provide for the very wealthy, but at a cost that is affordable for all. Conceptually this would be done by replacing human skills with technology – or at least supporting human skills and enabling costs to come down. People are chipping away at bits of the problem, with things like robo-investment services, or apps that help people manage their finances on a day-to-day basis. But no one has really cracked it.
These are only vague areas where there are needs that are not currently being fulfilled. There may be no scope for new Facebooks or Twitters here. Maybe instead there will be lots of small, incremental advances that cumulatively make for better outcomes. But the idea that you should look at what people need or at least what they would like to have, rather than what technology can do, is surely the right way forward. We know too that when a winning application is created, it will spin around the world with astonishing speed.