In today’s Exponential Investor…
- Dying form a telephone
- The rise and fall and rise and fall and rise of QR codes
- Two key innovations for investors
Last week I learnt something new.
During the 19th century rapid technological change was taking place.
From the middle of the 1800s people had witnessed the invention of the telegraph, telegram, phonograph, light-bulb, x-ray – all powered by electricity.
But this electrification of devices and the subsequent rollout of electricity globally came with genuine fear, misunderstanding and uncertainty about how this “modern” world would impact people.
There was a fear they could even threaten people’s lives.
Many sceptics wrote off these technologies. In fact, it got so wild that in 1869 a New York neurologist actually named a syndrome, “neurasthenia” – with the prime causes being the acceleration of people’s lives due to the telephone and telegraph.
This syndrome has since (obviously) been debunked. But it goes a long way to showing that people are often fearful of new things. Sceptics are always quick to criticise something that may challenge the status quo or disrupt the world we live in.
Of course we need sceptics – we cannot progress, refine, develop and innovate without sceptics. We need to be cautious and ask questions about new ideas, new technologies, new breakthroughs and societal developments.
But if you’re grounded enough and prepared to sometimes hold the unpopular view, you can get ahead of some of the world’s most exciting trends and opportunities today, ahead of time.
The death of (insert name of tech here)
The funny thing about the scepticism that comes with new breakthroughs is how it applies to anything.
It’s easy to point out big technologies, like electricity, the telephone, television, the internet and “smart” devices.
But people forget how many other examples there are in our world.
One thing that I’ve noticed recently is the fact we’re using QR codes everywhere now. The last year and a half of Covid restrictions has accelerated their adoption and use, and now scanning a QR code is pretty common.
But I’ve been around long enough to remember around 2011 and 2012 when the death of the QR code was predicated by the mainstream media en masse.
QR codes have been around since the early 90s! That’s right, they were developed in Japan in 1994. It wasn’t really until smartphones came along almost two decades later that QR codes started to become a “thing”.
Even then the use of them was iffy at best. You could find them everywhere from the side of buses to advertising billboards and often in retail shops.
But the point of them was questioned. What exactly did they do? A link to a website was the main use case for them. So there was a bit of rational to the cries of the QR code being “dead”.
However, I believe it was really just a case of the innovation leading the technology. A situation where the innovation needed to bide its time to allow for the technology and the mainstream to catch up.
That can often be a hallmark of great innovation that it is ahead of its time and that it may go through many cycles of boom and bust before it reaches an inflection point of mass adoption and ubiquitous usage.
I believe the QR code, more than anything, typifies this reasoning.
Now we use them to help us order food, to mix with augmented reality (the blending of our digital and physical world) we use them to transact digital assets, they’re even used to help authorities “track and trace” people.
I didn’t say their use was always good…
The point being that QR codes are an example of innovation that required patience to really seize on its potential.
The thing is, I believe right now at this very moment there are two other innovations that require similar patience. Not as long as a couple of decades thankfully, but a little short-term patience for these innovations to fully seize their potential.
Breaking through to the mass market
Right now the mainstream media are in a tizz about two key areas of investment. They see these areas as too risky and fraught with danger for the average investor.
I think they’re wrong. In fact, I know they’re wrong.
Sure there’s an element of risk to both, but you’re not stupid. You know certain assets carry more risk than others, and if you accept those risks, then who is anyone to say what you can and can’t do?
I believe the two biggest areas of investment opportunity right now lie within SPAC-listed companies and cryptocurrencies.
When it comes to special purpose acquisition companies (SPACs), the mainstream makes one fatal mistake in their usual analysis. The SPAC itself is just a vehicle. It is not the company that ends up being listed. It is not the potential in an opportunity. It’s just the carriage that’s taking Cinderella to the ball.
This is where superficial analysis of SPAC-listed opportunities comes unstuck. They neglect to see these innovative vehicles and the incredible companies finding their way to public market through them, for what they really are.
They just basket them all into the “SPAC stocks” basket and judge on presumption instead of intellectual research.
They miss the companies that are coming to market in areas like the commercialisation of space, green energy, cryptocurrencies, quantum computing and autonomous systems.
They just see SPAC and cast their view accordingly. But for switched on investors with an eye on the future and a penchant for taking the unpopular view, I believe the SPAC market to be one of the hottest areas to invest in the stock market right now.
The other area which is so heavily critiqued is cryptocurrency. I’ve never seen something where people have such emotive opinions without actually understanding what their opinion is about.
Without even beginning to understand crypto, people call it a scam, a Ponzi scheme, tulip mania and lack any semblance of fundamental understanding of what is being built in this incredible industry.
But again, if you have an eye on the future, have a little patience and are prepared to take an unpopular view and cop the criticism for it, I believe it’s the ripest market to build generational wealth we’ve ever seen in history.
Editor, Exponential Investor