2018. What an incredible year. Some will exult in America’s 3%+ growth and be ecstatic that such market health hasn’t be observed in over a decade. Others will complain that the stock market hasn’t seen such volatility for a long time and talk about scary times ahead.
I’m no financial expert. But as a market observer, I have noted a fair amount of #fails this year.
Here are at least 3 that I thought would be worth recapping. I’m sure I’ve missed a few. Feel free to tweet me at @brunoaziza for comments and suggestions.
“Juuling”
Just last week, the Altria Group, Marlboro maker, invested close to $13B in an e-cigarette start-up called Juul Labs. The investment valued the San Francisco based firm at about $38B, more than Space-X or Ford...
Altria justifies its investment by explaining that Juul Labs gives it the ‘sophistication’ it needs to modernize its approach. Others interpret this as a desperate move by the company to broaden and grow the cigarette smoker market. Not sure which is which. Although, it’s worth remembering that, earlier this year, Juul Labs had a surprise visit from the FDA and that the startup faced strong criticism because its marketing was deemed to attract underage users…
The future of Juuling still needs to play out. In the meantime, Juul employees have been told to behave. Earlier in December, they found out that they could no longer “Juul” (yes, it’s also a verb) at work. E-cigarette use has been illegal in California workplaces since 2016 and the company finally felt it might be a good idea to comply.
Bitcoin
What were you doing on December 17 last year? I can tell you what I was doing. I was furiously trying to understand Bitcoin’s incredible and wild ride. On January 1, 2017, one Bitcoin was worth less than $1,000. On Dec 17, 2017 one Bitcoin could be sold for over $19,000. That’s the kind of growth and timing that would allow brave souls to retire.
2018 felt “different” for crypto investors. This past month, Bitcoin had lost 80% of its value since the beginning of the year and the total market value of all cryptocurrency had fallen about 87%.
Worse, the future for the industry felt rather gloomy. In November, Steemit laid off 70% of its staff. The company’s coin, STEEM, had fallen 96%. It was trading at $0.37. ConsenSys, a large technology conglomerate focused on cryptocurrency was expected to let go as much as 60% of its 1,200-person workforce.
So, is crypto over?
I’m no financial adviser and I don’t even play one on TV. But I’ve noticed one thing: at the time of this writing, one Bitcoin can be sold for about $4,000. So, if you had bought one in January 2017, you would have grown your investment by 4X…
Fortnite
If you are the parent of a teenage child who has grown addicted to this game, you’ll probably lobby to call Fortnite the biggest fail of your parent life this year.
From a business standpoint, the game is an incredible success. In less than 18 months, the last-man-standing shooting contest attracted 200 million players and it continues to grow at an incredible clip. What’s more, the game is free!
How does the company that develops it make money, you ask? In game purchases. Things like player costumes (aka “skins”), dances (or “emotes”) that avatars can use and perform. Close to 70% of players buy. The result? Since its launch, Fortnite has raked in more than $2 billion selling virtual goods.
What’s wrong then? The technology behind the game is testing the delicate balance between societal benefits and business profits. When I was in school, I wrote a paper showing that, when taken too far, our business models and technology approach could end up destroying our society.
One of the reasons why Fortnite is so successful is because it appears we have perfected the science behind what makes certain activities addictive and what will most likely convert an activity into a purchase. Fortnite developers indeed have ‘cracked the code’ of mass-gaming. And, the more data they collect from players, the more they can perfect the game to make it even more addictive.
Is that good or bad? It’s good for business. That’s for sure. But, when you’re trying to convince your child to drop the controller to go play outside you can’t help but wonder if what’s good for business might be bad for society...
