While the Brunch Briefing will be back to its usual scheduling next Sunday, I thought it might be fun to start the year with something a little different. Hopefully, the below provides food for thought and prepare the mind for opportunities that may arise. Wishing you all healthy and happy 2020. 💙
The name ‘Nostradamus’ has become synonymous with a certain type of prediction: vague and provocative, susceptible to being spoofed. A sixteenth century astrologer, Michel de Nostradame made near 6,500 prophecies over the course of his life, each written in his trademark hazy verse. He would go on to receive patronage from the Medici family, among other benefactors.
But though commercially successful in his own day, Nostradamus’s popularity ballooned in the 20th century thanks to the translation of his book The Prophecies. As English speaking audiences acquainted themselves with the Frenchman’s writing, many began to believe Nostradamus had successfully predicted some of history’s most significant events: the French Revolution, both world wars, the moon landing. While the level of credulity required for each claim varies, some are undeniably intriguing. One of the augur’s verses, believed to have predicted the scientific breakthroughs of Louis Pasteur, as follows:
The lost thing is discovered, hidden for many centuries.
Pastor will be celebrated almost as a God-like figure.
This is when the moon completes her great cycle,
But by other rumors he shall be dishonored.
It’s a persuasive match, down to the detail: Pasteur’s work was tarnished after his death with personal journals revealing the doctoring of experimental outcomes. Uncanny (as long as you ignore the bit about the moon).
With that ambiguous legacy in mind, I have decided to stare into the crystal ball and take on the seer’s mantle. These are my prophecies for the next 12 months.
🥩 Beyond Meat will face a backlash
Flesh of plants once adored,
Renounced as pablum, next abhorred.
While once blue birds sang of endless surge,
The melody transforms, becomes a dirge.
The market showed plenty of appetite for Beyond Meat in 2019, with the company ending the year 64.3% above its IPO price and many hailing the product’s potential impact on the environment and broader public health. Expect a turn in 2020. Dissenters have begun to pay attention to the high levels of saturated fats in these ostensibly health products, in addition to the use of protein isolates from peas or soy. A price correction for BYND will be just the beginning of this change narrative: other plant-based proteins will need to work harder to justify their ingredients list, while lab-grown meat will attract more venture dollars, but remain content to remain in the shadows a while longer.
🇺🇸 Trump will win, powered by deepfakes
The self-same fool will sculpt a mask,
To aid him in his wretched task.
Soon thousand rictuses from palms will bloom,
His Mark made, four years more of gloom.
In May of last year, footage surfaced of Nancy Pelosi slurring her words. The Speaker of the House was presumed to be drunk or otherwise debilitated. Over the course of a day, the video spread across Facebook, receiving millions of views and gaining extra exposure thanks to derogatory tweets from both Rudy Giuliani and President Trump. It seemed to matter little that the recording was doctored.
While the Pelosi clip was not a deepfake — fabricated videos that leverage artificial neural networks — relying on more rudimentary technology, it is illustrative of the effect that can be expected. There is little reason to believe that Russia will halt the diffusion of dezinformatsiya this time around, particularly given the administration’s incentives.
Expect a flood of concocted videos to surface on social media this summer. If Biden or Sanders win the Democratic candidacy, this will likely focus on their age and perceived infirmity. Sanders’s socialist leanings will also be exploited with ‘private footage’ — think Romney in 2012 — showing him spout hare-brained, radical leftist schemes.
Facebook, Twitter and others will make a show of taking the most widely circulated down, but the damage will be done. As the research of Harvard psychologist Dan Gilbert illustrated, humans default to truth, accepting the validity of information in order to understand it; changing our minds takes effort. Much of the most damaging content won’t be visible to us at all, thriving in private Whatsapp groups.
Ironically, as the only certain liar, Trump will benefit, winning comfortably. Rather than countenancing rebuilding belief around a new, potentially flawed candidate, Trump-voting moderates will stick with the devil they know, while many others simply skip the polls, dissatisfied with all available options.
🛌 CBD will chill out
Hail the slippery emissary of peace,
Beloved tincture, civil grease.
But day is short and night unknown,
Means a once Green path must be walked alone.
The snake oil of 2019 will lose some of its luster. The last 12-18 months have seen CBD lauded for its range of benefits and breadth of applications, appearing in lattes, dog food, cosmetics, vitamins, hair pomade, and dozens of other inexplicable creations. Even Martha Stewart got in on the action, penning a deal with cannabis company Canopy Growth to produce a line of branded products. Mercifully, a decline is upon us: per Google Trends, peak CBD appears to have hit in May of this year, with interest waning since. Expect to see a steeper slump in 2020 with CBD retreating from all but the most down-the-line formulations like hand creams and oral drops, as consumers demand more explicit proof of CBD’s ostensible effects. Getting the thumbs-up from Martha will make little difference.
🏦 Fed Coin will materialize
A forge of digits begins to turn,
Spewing Bits and bobs of gold to earn.
Only steps behind the Eastern sun,
So lurks a battle, to be won.
“The Federal Reserve is not currently developing a US central bank digital currency,” chairman Jerome Powell wrote in a November letter to two congressman, “but [we] continue to carefully examine the costs and benefits.” 2020 will see the latter outweigh the former as China moves towards a full-scale launch of its digital renminbi, expected to be usable on both WeChat and Alipay. With Russia, Iran, and North Korea also interested in using the blockchain to skirt the US-controlled financial system, the Fed will be compelled to ensure its position as the global reserve currency is maintained in the digital realm.
🕺 TikTok influencers will start to earn
The ceaseless clock with smiling hand,
Commands an army, fully-manned.
It opens up its palm to give,
The earnest soldier a roll of bread, enough to live.
Three years since its launch, TikTok has 500MM monthly active users, a feat that took Facebook four years, and Instagram six. That traction has led to interest from advertisers, with brands like Nickelodeon, Chipotle and Skittles testing the channel. While that’s resulted in some Tiktok creators getting paid, the figures remain comparatively small — one estimate suggests the top-end of TikTok influencers can earn hundreds of thousands compared to the tens of millions earned by YouTubers. That’s left some frustrated with personalities like Brendan Robert pointing their followers to YouTube.
Look for this dynamic to shift in 2020 with TikTok building better analytics for brands, and making more of an effort to ensure smaller advertisers avoid FTC violations. To date, many smaller advertisers have neglected to properly tag their posts as sponsored. The result of these changes will be a more mature TikTok, friendlier to big brand dollars. As they open their wallets, expect a new level of professionalization among creators and the minting of fresh millionaires.
👻 DTC brands will take a beating
A painted egg with glossy shell,
Cherished item, object belle.
But eggs can crack, and color grows gray,
The stumbling Ghost, be gone, Away.
The tech industry ended the year in flames. WeWork had been shelled to pieces, Uber and Lyft smoldered, and Away was still ablaze. 2020 will see further casualties, particularly among direct-to-consumer brands.
Three unicorns will end the year struggling to justify their valuations*:
Allbirds, which raised $50MM from T. Rowe at a $1.4B valuation in October 2018, will lose share to Amazon’s $35 knock-offs, the knitted and recycled creations of Reebok and Adidas, and trendy alternatives like Veja and Cariuma. I expect the company to raise an additional $20MM-35MM at a discount from their last round, before negotiating a solid if unspectacular sale in 2021.
Casper’s revised mission to be the ‘Nike of Sleep’ will not lead it into the public markets. With a $1.1B price-tag after a $100MM top-up in May, the company has still not posted a profit. In search of a compelling narrative for investors, the mattress-maker has expanded its product line to incorporate sleep-inducing lamps, grown its digital footprint by producing guided meditation, and shifted focus to providing a superior service with plans to staff sleep experts at every store. None of these will justify a tilt at an IPO with the likeliest outcome a round of venture debt, or cut-price sale. Walmart, or existing backer, Target, look likely buyers.
Away will remain a toxic tire-fire through Q1 with fresh revelations forcing more managerial turnover. Competitors like Rimowa and Paravel will turn on the gas, increasing advertising spend and taking market share. With its veneer tarnished, Away will have little choice but to close its doors or sell at a fraction of its $1.4B valuation; I would venture 1-1.5x of an entirely speculative $45MM in revenue.
*I have no inside knowledge of how these companies are doing. Others with more information may find these suggestions risible.
🔵 You will drink Blue Tea
Concocted powders displace the bean,
Create elixirs of milk and steam.
Dust of leaf still pleasure brings,
Though more derives from butterflies’ wings.
Pantone’s color of the year has been announced: Classic Blue. This may be just the beginning of a cerulean craze, with butterfly pea powder poised for a pop-culture moment. Often described as Blue Matcha (or “the new matcha” by the NYT) butterfly pea powder shares little functional overlap with its namesake. Critically, it does not contain the caffeine or antioxidants of its green forbearer, though it may reduce stress and improve memory. The fuzziness of its value proposition will not matter: prepare your feeds for the blue invasion.
🌎 Sustainability will be the definitive status symbol
To waste nor want, casts a handsome pallor.
Allure of thrift, hint of valor.
Riches ebb from ye who cut and burn,
Flow to those, fresh air they yearn.
Metal straws may be distinctly out of vogue, but that won’t stop a commitment to the planet being 2020’s biggest flex. Expect red carpet treaders to discuss the environmental bonafides of their sartorial choices as consumers shift from fast-fashion factories like H&M to more mindful options. This will create an opportunity for a few resolutely environmentally conscious brands to breakout — By Humankind or For Days are candidates — encouraging a greater flurry of insurgents.
From an investment perspective, aggregators like Package Free will be particularly well-positioned. Consumers will look for straightforward ways to exercise their conscience without the headache of hopping between individual purveyors.
📹 The Privacy Paradox will escalate
A heart divided ‘twixt two desires,
Defense of self and Siren’s choir.
And though the seclusive urge may rise,
So too the Siren’s enthralling cries.
At some point in 2020 — at a dinner, or company drinks, or yoga — you, or someone you are with, will complain about the level of surveillance in our world. You might discuss the recent data breach (there will be more), the escalation of the Uighur crisis in China, the use of genetic records by police, or the slight discomfort of paying with your face. A few hours later, you will set a timer on your Alexa, query Google, and log onto Facebook.
This is the privacy paradox — the conflict between our desire to break away from abusive, data hungry technologies, but the inability to do so given their ubiquity and usefulness. 2020 will see our cognitive dissonance strained further as we allow voice assistants into our cars, and add cameras to our streets.
📈 The Third Halvening will lead BTC to all-time highs
Half is taken, yet more is made,
A coin of bronze reclaims a silver shade.
To much chagrin and much delight,
Too late for Cinderford’s son, his Member’s plight.
Bag-holders that began 2019 in tears had something to cheer about in December: the price of bitcoin rose 88% over the intervening 12 months. While it wasn’t nearly enough to salve the wounds of those that bet heavily in 2017, it should have provided some succor.
Better days are ahead in 2020. On May 20th of this year, bitcoin production will be cut in half, meaning that 50% less bitcoin will be created every 10 minutes. This is the third iteration of ‘The Halvening’, having previously occurred in 2012 and 2016. In both instances, in the face of reduced supply, price shot up: 80x in the year after the first split, and 4x after the second.
Though some believe the effect of the halvening is already priced in, a significant bump can still be expected, driving the price above the previous high of $20K, before settling around $15K by the end of the year. This will be good news to many, disastrous news for one: rogue antivirus scion John MacAfee has promised to eat an intimate body part if the value of a single bitcoin does not reach $1MM by the end of 2020.