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The Future of Money Management – How to Thrive Amidst Artificial Intelligence, Blockchain, and Massive Disruption
Mike about Money | Future of Money Management
Patrick Schwerdtfeger is a business futurist who specialized in technology trends, and he’s written a new book, Anarchy, Inc: Profiting in a Decentralized World with Artificial Intelligence and Blockchain. And he writes “change is coming. Decentralization has already planted its roots. Anarchy is within sight. In fact, elements of anarchy are already here. A few will flourish while the majority struggle.” We wanted to know how can we be among the winners and not the losers in this new technological and financial struggle.
There’s a revolution taking place right now, and most people aren’t even aware of it. Of those that are, very few comprehend the degree of disruption on the horizon. Technology is redefining every corner of our world, and it’s evolving along an exponential curve. The impacts will shake humanity to its core.
When it comes to managing money, one needs to understand the trends and causal relationships in order to succeed. You must understand the dynamics of disruptive innovation within capital markets, and it's important to recognize the implications of an increasingly decentralized world.
To be clear, the impacts of technology are both positive and negative. Countless things will improve. Indeed, we are optimizing our planet. Person by person, company by company, region by region, country by country, we are optimizing every aspect of life and business. Operations are becoming more efficient. Products and services are becoming more intuitive and integrated. The world is becoming more intelligent.
But there are also negative impacts on the way. Dramatic increases in productivity will diminish the value of human capital. Algorithms and robotics will displace literally hundreds of millions of jobs. Meanwhile, technology is enabling a shift from centralized to decentralized power structures. The combination is fueling an increasingly individualistic, tribal, and self-reliant world. It’s leading to anarchy on a global scale.
Job displacement at the hands of automation will be a major news story in the years ahead. Customer service people will lose jobs to chatbots, socialbots, and cashierless retail stores. Commercial drivers will lose jobs to autonomous trucks and vehicles. White collar workers will lose jobs to sophisticated enterprise software platforms. All of these people will have to find other ways to earn a living.
There are basically three types of jobs that are safe from automation. The first category includes truly creative people, including artists, architects, scientific researchers, and business entrepreneurs. The second category involves building complex human relationships. Nurses, teachers, and therapists all qualify. And the third involves highly unpredictable occupations. Hired guns and problem solvers come to mind, including everything from plumbers and electricians to project managers and corporate turnaround specialists.
People should focus on activities that benefit from these characteristics. Creative solutions, strong communications skills and a problem-solving mentality will define success in tomorrow’s economy. In addition, the following five recommendations can help people plan for a decentralized future.
Look forward. Don't allow yourself to live within an echo chamber, including only those opinions you already agree with. Actively seek out opinions that contradict your own. The truest measure of intelligence is the ability to hold two opposing views at the same time. The world is becoming more decentralized, resulting in vastly divergent realities. Nobody's willing to change their mind, and everyone has plenty of evidence that they're right and everyone else is wrong. This is a form of anarchy. Do it differently.
Look in the mirror. Success amidst anarchy requires defiant leadership! The most strategic thing you can do is fine-tune your unique value proposition. Open a document on your computer, or pull out a notebook and write down your thoughts to this: Who are you? What do you stand for? Since the world is characterized by competing realities, you have to pick your reality and ignore the rest. You can't change people's minds. Build your tribe and ignore the haters. The only thing that matters is your unique value proposition and how it differs from competing products or services.
Look up. Introduce more premium options for your VIP customers. Take your highest price and multiply it by 10. What done-for-you solution could you sell at that 10x price? What would need to be included in order for that 10x price to be a great deal? Focus your marketing on that 10x solution. It will expand the 'frame' of your business. It projects confidence into the marketplace. What would an industry leader do? Now, act like an industry leader!
Look down. Be the disrupter, not the disrupted. Watch for simpler and less expensive solutions for your most cash-strapped customers. Disruptive innovation often caters to the least profitable market segment first, so identify those cash-strapped customers and imagine what they want. Innovations down there will create disruption everywhere else. Generally speaking, they want simpler and less expensive solutions. Can you create those solutions?
Look side to side. Change creates opportunity. Set aside a couple of hours and evaluate your marketplace. What are your competitors doing badly? What do people complain about in your industry? Who are the cash-strapped customers, and what do they want? Capitalize on opportunities to steel revenue from "adjacent markets." Don't ask: Who's going to eat my lunch? Ask instead: Who else's lunch can we eat? Anarchy is an opportunity for offense, not defense!
In summary, change is coming. Run toward those changes! Learn as much as you can about robotics, analytics, data visualization, algorithms, artificial intelligence, and blockchain. Treat them as your friend, not your enemy. Change creates opportunity for those who help facilitate the transition. Be among the technology advocates, and you’ll already be better positioned than most when earning and investing your money.