Reflections on 2022 Predictions

Dec 28, 2022

Last year I wrote about my predictions for what would happen in 2022. A look back at what I was thinking:

First, a few meta-lessons learned, at the risk of extrapolating from only a few data points:

  1. Predictions, like goals, should be observable and testable. It's maybe better to treat it as a hypothesis. For example, one of my "predictions" was "remote development hits the mainstream." While it has surely grown in popularity, it's unclear how you'd score something like this: what does mainstream mean? It might have been better to be more concrete in my thinking.
  2. The best predictions were events where the pieces were just starting to get into motion.  It might just be a simple fact of predicting fewer things in the causal chain.
  3. There's an enormous recency bias in predictions – last year, I found myself writing about events that had recently happened. Most of these events were fleeting. It's easy to overlook things that continue to gain steam, even after the initial buzz dies down.

Some thoughts on the predictions:

SaaS economics become less attractive / interest rates increase – The Fed didn't raise interest rates until March 2022, but there was already chatter of what the interest rate regime would look like back in December 2021. While I knew this would impact SaaS companies to some degree, I didn't realize that we would see multiples drop as much as they did. I certainly thought that the cloud providers would be much more insulated from these economics as well.

  • Interest rates and SaaS multiples are even more correlated than most models would show
  • Even infrastructure providers were severely affected

NFT craze ends – Based on the brief history of the first NFTs (i.e., CrypoKitties), I knew that it would be very hard to sustain liquidity for a large number of small markets.

  • It's hard to predict systemic shocks to the system
  • Liquidity is important, but I imagined it would migrate from market to market. Instead, much of it seemed to dry up completely.

Web 2.0 holdouts get acquired by big names – The Twitter acquisition was the big M&A event of 2022. I had Twitter on my list, but nobody could have predicted that it would have gone down as it did.

  • Consolidation didn't happen as much as I thought it would in 2022. Maybe 2023 will be the year of private equity in tech.

Cryptocurrency regulation is coming. Specifically for stablecoins – Despite major events (LUNA collapse, FTX bankruptcy, Binance proof of reserves) that directly or indirectly involved stablecoins, there was no regulation. In fact, many are questioning Gensler's oversight that led to multiple large events that hurt retail traders. Again, maybe the right idea, but wrong timeframe.

Large tech companies will find it difficult to make employees return to the office. No mandatory in-office date set – We saw this on a smaller scale – companies struggled with setting new policies around remote work. Others used them as an opportunity for a reduction in force.