• Investing replay

    HEDGEYE INVESTING SUMMIT

    SPECIAL HEDGEYE TV EVENT

    The sharpest minds in investing discuss the most important market and economic developments and their investing implications.
    Watch the free replay.

Takeaway: We sat down with Neil Howe (Hedgeye Demography) to discuss risks and opportunities for tech investing in the coming decade

Generational Impacts On Technology | What We Learned From Neil Howe - Jedi Ami and Neil cartoonFIX

This week HedgeyeTech hosted a special discussion with our world renowned demographer Neil Howe to discuss key headwinds and tailwinds for technology in the coming years. 

CLICK HERE to access the webcast and slides.

We find that when we speak with Neil, most of our assumptions for behavioral directions that are true today and tomorrow may run into 5-10 year walls due to the crossover from one generation to the next in leadership, business formation, attitudes towards large scale projects, or other items unforeseen to us but within Neil’s headlights.

6 things WE LEARNED FROM NEIL:

  • Where Society Breaks AI: The shift to cloud software has enabled enormous pools of data from which collection springs predictive analytics. The benefits of predictive analytics, often associated with AI, include dynamic pricing. Dynamic pricing helps companies capture an appropriate revenue curve of selling both the lowest price point per unit and discovering elasticity, while simultaneously mining the richest per unit prices that can be absorbed by the marketplace. It sounds good for businesses. But for consumers, not so much. It can mean that pricing isn’t flat, or ‘fair’. Today AI is used to curate content and product to suit individual tastes and needs. But when it ubiquitously offers un-fair pricing models, will that be the ‘line too far’? Will society begin to see the enablers of AI as parasites? The same cloud software companies that are celebrated today for their growth may at some point turn from heroes to antagonists. The newly minted Snowflake millionaires, for example, the kings of big data enablement, may at some point be seen as enablers of a more vicious trend in society. This would affect the desirability for Millennials to work at SNOW or similar peers, would hinder future innovation at those companies, and eventually would bring down the equity multiples for the entire group. The architecture change towards cloud hosted software has set off an epic growth curve which has produced millionaires and billionaires and made Silicon Valley software companies ‘the place to work’. But it wasn’t always this way. Pre-2010, the world was not so enamored with software. Perhaps this was especially true in the 1990s when movies like Office Space famously flashed this type of company as peak-undesirable. If society decides that dynamic personalized pricing is a technology step too far, software companies might go from heroes to antagonists. Don’t believe this can happen? Just ask Palantir how it feels to go from post-9/11 tech hero to today's villain #1 for helping the same government.

  • Discontinuity vs. Continuity: While Xers were motivated to break up the old federations of the previous generation, Millennials will prefer continuity and centralization of organization. In Tech this may imply that the average age of founders of startups will continue to rise and business dynamism may decrease as Xers fade out of the working generation, and Millennials move in. 

  • Millennials embrace the ‘borg’ but regulate it. The takeaway is that big cap Tech is unlikely to be ‘broken up’ by Millennials but rather regulated so that the social benefits of the cloud centralization, for example, can continue.

  • The Information building blocks that would naturally constitute collusion inside an industry are stored and, in some cases, provided to customers as product from their cloud providers. Will regulation be required to mitigate the information centralization and associated pricing power that comes with it?

  • The shift to modular (e.g. API) building blocks is very 'Millennial' in that it will enable further centralization as different companies will all participate and ‘donate’ to the creation of a larger whole, and each will hold a stake in its success.

  • …& the worst part. As China accelerates technology investment and leadership ahead of the USA, will Millennials look over their shoulders towards authoritarian governments as ‘not so bad’?

CALL REPLAY & TIMESTAMPS:

Webcast & Slides: CLICK HERE

Topic Timestamps:

  • Intro to HedgeyeTech and the Process Cycle (1:08 – 2:40)
  • Themes of Discussion & The Underlying Data (2:40 – 14:50)*
  • Centralization of Information & Associated Pricing Power (14:50 – 30:37)
  • The Millennial Vision of Computing & Leadership (30:37 – 36:33)
  • Sociological Implications of a Dashboard-Company Future (36:33 – 42:19)
  • Re-Aggregating Around the IP of Others & Declining Labor Mobility (42:19 – 46:20)
  • What Could Go Wrong (& Right) for Tech: COVID + Cyber (46:20 – 52:15)
  • Geopolitical Risk Beyond COVID: Semis Supply Chain, China, Taiwan (52:15 – 56:44)
  • Antitrust, Price Discrimination, and the Unseating of Liberal Democracies (56:44 – 67:59)
  • The Discontinuity of Xers + Boomers vs. the Continuity of Millennials (67:59 – 72:20)

*please note that the first 8 introductory minutes of the call have been re-recorded due to technical difficulties encountered during the live presentation. We apologize for any disruption experienced during the live event.