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Back to the future
Nobody knows what the world will look in five or ten years. Decisions on which ideas to pursue, in which business models to invest, and how to use our team are all fraught with uncertainty.
The problem with predictions
The past shows us that things often turn out differently to what we would expect. In the 1970s, the Club of Rome foresaw a major decline in the world's forests. This has not taken place. There was great enthusiasm for space travel during the Apollo programme and the first Moon landing. Having space stations on the Moon and trips to Mars were seen as a simply a matter of time. Visions of the future from the 1930s depict students being freed from the effort of learning and being “fed” with books or “injected” with knowledge as they sleep.
All of these visions speculated as to what the world of the future would look like. But we only know what scenarios will prove to be accurate and in which form once they actually occur. We still don't have an interface linked to the brain to save us from having to learn anything. But with the Internet, we do have direct access to an incredible store of knowledge. The online encyclopaedia Wikipedia has achieved the vision of the classroom of tomorrow to some extent, and memorization is almost unnecessary. Swiss Post still delivers consignments by foot. But for urgent medical items, it has taken to the air in the form of transport drones.
Legendarily bad decisions
How can we tell which business ideas have potential? The answer is simple: we cannot – all we can do is look out for indicators. Such as by conducting surveys, analysing trends or keeping a close eye on technical progress. But it is the major disruptions that can often be hard – although not impossible – to predict using simple common sense. This is why the list of poor decisions is so long. Yahoo, for instance, could have bought Google multiple times over but was not prepared to spend $5 billion in 2002 (Google’s current market value is over $700 billion). Yahoo also turned down a buy-out offer from Microsoft of more than $47 billion and is now only worth a fraction of that sum. Kodak is another example: they developed the first digital camera in the 1970s but did not want to cannibalize their analogue film business and so they went bankrupt in 2011. Or computer pioneer IBM, who chose to sell its operating system to Bill Gates for almost nothing, enabling Microsoft to become one of the most valuable companies in the world.
Testing the future
I personally never thought that Uber would be able to stay on the market for so long, that the smartphone would become so quickly established, or that a once minor search engine would give rise to the one of the largest companies in the world. I too, have often had doubts about my own innovation projects. Such as in March 2015 when we launched the Swiss Post delivery drone project. Drones? Why would anyone want to transport things by air? Who would be willing to pay for that? Could it ever function reliably? What would we do if the weather were bad and the drone couldn't fly? What about a legal situation that does not recognize drones or other autonomous vehicles? It seemed impossible. Nevertheless, we persevered and pushed on with the Swiss Post drone project and gradually resolved the many obstacles and challenges. We put the world’s first urban delivery drone into operation in March 2017 and have been operating the first commercial delivery drone service in Lugano since October 2017. Of course, we don't know whether drones will become established as a supplementary logistics tool. But we want to help shape the future by testing things out, learning, pushing ahead with what works, and stopping the things that don't work.
Chance of success: 1:17,000
An article in the Harvard Business Review from March 2019 showed that the possibility of a start-up achieving future revenue of at least $500 million is 1:17,000. So a total of 17,000 ideas need to be realized and tested until you come across a truly good idea. The chances are somewhat better for investors: the rule of thumb in Silicon Valley is that nine out of ten investments will fail, but the tenth investment will be so successful that it cancels out the other losses. Experience, sector knowledge and open-mindedness can certainly help improve the rate of success when it comes a company’s visions for the future.
Here at Swiss Post we also make decisions every day. In our innovation teams at least, the end goal may not necessarily be multi-million dollar sums; it is about how Swiss Post will provide its services in the future. Nobody knows where the journey will take us exactly and what logistics will look like in ten years. That's why we are testing innovative, forward-looking solutions from an early stage. Some may laugh now, but who knows, maybe having medication or food delivered by a small, autonomous and eco-friendly delivery robot will seem commonplace in just a few years' time.