Year 1 for the Forest

At a family dinner last year, my dad put us on the spot and asked us to be vulnerable “what’s something we don’t know about you?”

Now, keep in mind – this was a dinner with my parents and my two brothers – not nervous twenty-somethings speed-dating… but it was still a good question. In our house, volleying movie quotes back and forth typically counts as an intimate conversation, so questions like this are the best way to get a real answer.

At that dinner, I shared that I was planning to start writing about tech. I didn’t know if it would be any good, but I was looking forward to flexing my creative muscles and giving it a shot.

And because I said it out loud, I felt compelled to follow through. So a few weeks later, I sent the first Forests Over Trees post to 33 family and friends. And I’m really glad I did.

I was looking through the archives, and I have to admit I’m shocked to see how many different topics we’ve covered this year. If this was a more professional, more polished newsletter, maybe you would expect to see more consistency and continuity from week to week… but it’s not!

Focusing on the tech stories I’m curious about – or hot takes that I need to get off my chest – keeps it fun. It also helps my writing feel less like a book report and more like an adventure… or at least that’s my hope.

But because we’ve covered so much ground, I wanted to do a bit of a recap. Here’s the plan:  1/ highlights, 2/ revisiting old predictions, 3/ making new predictions.

Highlights from Year 1:

Here are my favorite posts from this first year. And in true New Years’ fashion, I’ll count them down, starting with #10.

#10——

This one required a hell of a lot of research, but I learned so much. We got to understand just how interconnected the global chips supply chain is, and for the first time I finally learned why Taiwan is so important to the US.

#9——

Honestly, this one didn’t get as much love, and I think I know why! First, it was about Meta and Zuckerberg… a polarizing company and CEO, so I get that. Second, it suffered from a really shitty title. Here’s a ChatGPT title re-write for your consideration: Metaverse Mythbusters: WSJ's Missteps Exposed. Wow, that does sound scandalous!

#8——

I learned so much writing this post. When it comes to crypto regulation, there are lots of terms reporters through around without defining them: securities laws, the Howie test, regulation by enforcement, etc... It was helpful to me to finally get clarity on how regulators view crypto.

#7——

I enjoyed the digging on this one. It made it crystal clear for me how AI and Reddit’s blackout are related… It was also a good reminder that at the end of the day, these tech platforms (even the ones that rely on users and moderators to help shape the “product”) are still commercially motivated.

#6——

There were 2 really rewarding parts about researching this one… First, I finally had an example to point to of what Netflix should be doing – broadcasting live sports as an extension of a great sports series. Second, I got to do pseudo-math about the price Apple paid for their MLS rights. Pseudo-math is way more fun than real math.

#5——

One major realization after a year of writing about tech – regulators will always be part of the story. Hate ‘em or love ‘em, that’s up to you… but you should at least understand them. I enjoyed the chance to learn what makes tech regulators tick, and it was hugely helpful for understanding stories later in the year about Google and Adobe.

#4——

This was such a tasty story to hear and to re-tell. countries are forming factions that will compete for dominance in space!? And there was a come-from-behind win by India in a race to the dark side of the moon!? It doesn’t get much better.

#3——

Spotify was (and still is) catching some heat for its podcast strategy, but I personally think they are learning the right lessons. This is a good one for dissecting company strategy and putting yourself in the shoes of the executives, because it’s a product many of us have used.

#2——

I know… it’s technically two posts! But these write-ups about AirBnb were an absolute blast to write, and it’s fun to put on your strategy hat and think about what you’d do if you were Brian Chesky. He’s pushing them to operate the way Apple operates, and he’s under huge pressure from investors – so it’s an interesting case to dive into.

#1——

Don’t let the name fool you – this is really about the car market as a whole, and how self-driving is threatening to completely upend it. Not only was it incredibly rewarding to research and write, but it changed the way I look at Tesla and the moves they’re making, like licensing their charging network.

Checking in on Old Predictions

Over the course of the year, I made several predictions… some more bold than others. Today, I wanted to highlight a few of them and talk about what I got right and wrong. The others haven’t played out yet – I promise I’ll own-up when it’s time to report on those too!

1. TikTok will get banned in 2023 (link to post)I’m so embarrassingly wrong on this. I made this prediction in April, when politicians were starting to consider a ban and the US Federal Government had banned it on gov’t devices. I still think my analysis of the situation – and the reasons why it should be banned – are valid. But I underestimated two forces pushing against a ban: 1/ political pressure to not be the candidate that took something away from consumers. 2/ lobbying pressure against tech regulation. I don’t think we’ll see either of those change in 2024, so a ban is unlikely.

2. Japan will not restrict exports of chips raw materials to China (link to post)The US hit China with chip-related export restrictions in October 2022, and then they pressured the Netherlands and Japan to introduce similar bans for their critical pieces of the supply chain (Netherlands = equipment; Japan = raw materials). Japan had already agreed to restrict some chip-related equipment exports, but that isn’t their super-power in the chips supply chain – raw materials are. I predicted Japan wouldn’t hurt a key export, especially since raw materials can’t be differentiated by cutting-edge vs. not (which is the model the US was using for its export controls). So far, I’ve been right about this.

3. US unemployment will peak ~13 months after the inflation peak (link to post)I continue to be wrong about the economy, which reinforces my career choice to be in tech! However, it has been helpful to study the market and the moves the Fed is making, since they directly impact the health and hiring policies of many tech companies. In December 2022, I saw that historical data supported a 13-month lag between peak inflation and peak unemployment in past cycles, so I predicted peak unemployment in July 2023. We still haven’t seen any spike, and as of Nov 2023 unemployment is a low 3.8%. It’s possible that because a soft landing is rare (but seems to be in progress), our current situation is an exception to the rule, which maybe holds up next time? In any case, I’m not going to be upset that unemployment has stayed low…

Predictions for 2024

And because I’m a glutton for punishment, here are a few predictions for 2024…

Bitcoin will reach all time highs

Because the Fed is expected to begin cutting interest rates in 2024, risk-on assets will have a terrific year. Among those assets, the riskiest ones will have an even more terrific year, and bitcoin is extremely risky. This is not financial advice, but I expect bitcoin to catch fire and set new records this year.

Twitter’s spiral will continue

Elon is too stubborn to sell or handover leadership responsibilities. So instead, he’ll build on his Twitter accomplishments from 2023… and continue running it into the ground. If this was purely a business decision, and he wasn’t a power user of the platform, this would have been over months ago, but I think he’ll only walk away if users completely abandon the platform. I don’t think we’ll reach those lows until maybe 2025.

Residential real estate prices will drop

Because interest rates skyrocketed last year, homeowners who ordinarily would have sold avoiding doing so, not wanting to give up their low mortgages. Supply was effectively “locked” by high rates, which meant that housing prices stayed high. If the Fed cuts rates significantly in 2024, my theory is that after enough homeowners are “unlocked” and feel able to sell, the selling pressure will drive prices down. While rates continue coming down, more homeowners will be unlocked. At the same time, those that are on the fence about selling will see home values (and their unrealized gains) declining – which will push more of them to sell. Declining rates will also “unlock” demand, counteracting this effect, but I think sellers will feel more pressure than buyers.

Wrapping Up

It’s the time of year for sentimental thoughts and heartfelt thank you’s, and this post is no exception… let me end with some appreciation.

First, thank you to my wife Alyssa, who has gone above and beyond to help me keep this project going. Not only did she design the logo and proofread dozens of articles… She kept me positive when I was stressed-out about what to write or how to make it better, and she wouldn’t let me quit. You’re amazing, and I’m a lucky guy. Couldn’t have done it without you.

Second, a big thank you to the 33 folks that got the first email. You’ve been incredibly supportive from day one, including waiting patiently (to this day, and despite a growing body of evidence!) for the writing to improve. I really appreciate all your words of encouragement. It’s an awesome feeling having friends and family in your corner.

Third, thank you to everyone who helped introduce this newsletter to your friends, colleagues, and family! It’s gutsy to say “yes” to a weekly newsletter, adding to your already crowded inbox… but to encourage others to do it too!? That’s downright courageous.

Last, and certainly not least, thanks to everyone else reading (especially at the bottom of this ridiculously long email). I’m really enjoying this and learning from it, and I hope you are too. Glad to have you along for the ride.

Talk to you next year!