While I am no Elon Musk/Bill Gates, here is me taking a stab at how the world & India is shaping up at least by 2030. Will help me look back on this periodically to reflect on, how stupid/intelligent I was.
1. Disruption as the New Normal
Every business, product or lifestyle will get disrupted far more rapidly than in the past decades. Stability will be limited to a few small pockets around only in smaller cities/villages, that too in nuanced physical work. For most, adapting to continuous change has become a crucial survival skill.
2. The Multiplier Effect of AI on Decision-Making
The advent of artificial intelligence (AI) has exponentially increased the leverage of decision-making within companies. This has made accuracy and predictability more critical than ever. For instance, when hiring for CFO or senior VP roles, companies are willing to pay significantly higher salaries for candidates who may be just a little better than their peers. At scale, this marginal improvement can translate to billions of dollars in revenue, underscoring the immense value of top-tier talent in key positions.
3. Employee Cost Pressure and Wage Barriers
There will be a lot of employee cost pressure on most companies. So, other than strategic top roles, the general masses will find it difficult to cross the wage barrier. There will only be a high performance core group of employees, who will earn handsome returns on scale and rest would be miles away from that position.
As innovative uses of AI continue to emerge, the level of uncertainty in salaried jobs is expected to rise. Companies are increasingly favoring a variabilized workforce, making the practice of hiring and firing more commonplace across both large and small enterprises. This trend reflects a shift towards more flexible and responsive workforce management strategies.
5. Challenges in Loyalty and Retention
Companies are discovering that building loyalty and retention is more costly than anticipated. In today’s market, loyalty is driven more by offers than by brand or product loyalty. Without discounts, retaining customers and ensuring repeat business is challenging. For venture capital-funded companies, this means that sales and marketing expenses will need to grow more linearly with revenue, leading to strategic shifts in marketing investments.
6. The Dominance of Scale in Commoditized Industries
In most commoditized industries, companies that can leverage scale will dominate. However, there are numerous niche opportunities that can open up new business lines and attract new customers. Strong new brands are emerging faster than ever, capitalizing on these pockets of opportunity and challenging established players.
7. The Reality of the Indian Market
It has become widely accepted that the Indian market is not as large as consultants had projected over the past two decades. With 95% of the population too poor to be viable consumers, the remaining 5% of wealthy Indians are highly heterogeneous and geographically dispersed. This diversity in preferences means there is an invisible ceiling for new ambitious brands, likely capping their revenue potential at around 1000–2000 crore.
8. The Hype of Premiumization
Value for money and design aesthetics have become crucial considerations for consumers. Even with a great product, poor design or packaging can be a significant drawback. Legacy brands are feeling the impact of this shift as their associations with previous generations make it harder to appeal to modern consumers. A contrary trend to this is also, trust is becoming far more important, and newer companies in niche areas can hyperscale once they establish trust with their targeted segments.
In conclusion, these trends highlight a landscape where agility, innovation, and strategic foresight are more critical than ever. Complacency will no longer be rewarded or tolerated, and only the best will move forward in the maze!
