What I Predicted Wrong About 2023
I overestimated the productivity of Congress, was foiled by a recession that never came, and underestimated the wealth of the world's richest man
Twelve months ago, I made a bunch of predictions about 2023. In the spirit of accountability, let’s see what I got wrong…
❌ Prediction #1: TikTok Ban or Divestiture
Congress got started on the process of banning TikTok -- or requiring its divestiture -- but never finished:
The House Foreign Affairs Committee in March voted along party lines on a bill aimed at Tiktok that Democrats said would require the administration to effectively ban the app and other subsidiaries of ByteDance. But the entire U.S. House has never taken up the bill.
Last week, a U.S. judge blocked Montana's law to bar the use of TikTok in the state starting Jan. 1.
The U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS) in March demanded that TikTok's Chinese owners sell their shares, or face the possibility of the app being banned, Reuters and other outlets reported, but the administration has taken no action.
Treasury Secretary Janet Yellen told CNBC last month that as there was legal action currently pending in regard to TikTok, further CFIUS actions could not be pursued.
Biden's predecessor, Republican Donald Trump, tried to ban TikTok in 2020 but was blocked by U.S. courts.
The White House backed legislation sponsored by Senator Mark Warner and more than two dozen other senators to give the administration new powers to ban TikTok and other foreign-based technologies if they pose national security threats.
But that legislation has never been voted on. Warner told Reuters on Friday that the bill has faced intensive lobbying from TikTok. "There is going to be pushback on both ends of the political spectrum," Warner said.
Why I was wrong:
The context and sentiment around TikTok haven’t materially changed. In fact, calls for a ban or sale were renewed this fall amid claims of anti-Israel misinformation and indoctrination following the Hamas’ attacks on Israel in October. As expected, TikTok has lobbied Congress and leveraged its creators to push back against potential legislation threatening its presence in the U.S. market. But none of the pushback precludes a forced sale -- my prediction for the most likely outcome -- despite TikTok’s insistence that it would not sell its U.S. business.
What I got wrong was Congress. I overestimated the productivity of Congress as measured by new laws. Perhaps I wasn’t alone. “In 2023, the Republican-led House has passed only 27 bills that became law, despite holding a total of 724 votes. That is more voting and less lawmaking than at any other time in the last decade,” according to a review of an analysis by the New York Times.
I don’t think Congress is more prone to make this happen in a presidential election year. This is why a TikTok ban or spin-off of its U.S. business is unlikely to happen in 2024.
❌ Prediction #2: Remote Work Accelerates
While the share of remote working in the U.S. -- as measured by the percentage of paid days worked from home -- was basically flat at 28% as of October (the last data available as of the time this was originally published), I predicted that it would finish the year above 30%.
Why I was wrong:
It's going to take longer for this to play out. Legacy employers, plagued by inertia, will be slow to evolve. Much of the growth in remote work will be driven by newer companies, which are small and less influential on the aggregate data.
Whether I’m ultimately right or wrong, this specific data will take a long time to move meaningfully. As measured by two different surveys, the data on the number of days worked from home has been flat for 18 months.
❌ Prediction #3: Elon Musks Twitter Saga Ends
I predicted a very specific series of steps, many of which were correct but the most important of which was wrong.
1. ✅ Elon will manage Twitter by proxy.
2. ✅ Elon’s desire for attention continues to harm Twitter’s brand value for advertisers.
3. ✅ Twitter’s user growth and engagement thrive while revenue stalls.
4. ❌ Elon sells Twitter at a loss and perhaps tries to buy back some of Twitter’s debt in the process.
Why I was wrong:
Elon’s purchase of Twitter and subsequent behavior in 2022 in managing the company weren’t terribly rational. My mistake was assuming that his financial moves in 2023 would be any different. While a typical owner might be forced by economic forces to act rationally, Elon -- with a more than $200 billion net worth -- is rich enough to transcend the economics of typical corporate ownership. However, my biggest mistake might have been calling this too early. I still think this same sequence of events is in play for 2024.
❌ Prediction #5: A Coming Wave of Corporate Scandals
Despite headline-grabbing scandals such as a shallow and short-lived banking crisis, the continued debacle of FTX, and the fraud behind JPMorgan’s acquisition of fintech startup, Frank, there’s no evidence to show that 2023 saw any meaningful jump in the number of corporate scandals.
Why I was wrong:
The recession implied in this prediction never happened. If we see an economic downturn in 2024, this prediction may still be right, just delayed.
❌ Prediction #6: Boards Strike Back
In 2023, mostly because of depressed deal activity, early-stage investors took fewer board seats. According to Pitchbook, “there are fewer rounds with a new lead investor obtaining a board seat than at any time in at least a decade.”
Why I was wrong:
Fewer deals means fewer opportunities to take board seats.
Early-stage investing in startups slowed down dramatically in 2023 compared to the previous year. Through the third quarter, deal volume was on pace to be the lowest since 2017, according to Pitchbook.
As of Q3, pre-seed and seed stage deals — where there is the greatest untapped opportunity for investors to take board seats and push for independent board directors — were on pace to return to the lowest volumes in over a decade.
❌ Prediction #10: Black Women In Charge
❌ Fortune 500 - “In 2023, we’ll double the number of black women Fortune 500 CEOs from two to four, and a number of high-profile organizations in civil society and business will put black women in the top position.”
❌ Think Tanks - “...many of Washington’s most influential think tanks have long-tenured leaders who may be looking to step down this year. The most forward-thinking among them should have black women on their succession shortlist.”
❌ Law Schools & Business Schools - “I predict that a top 20 law school will get its first black woman dean this year. I also expect another black woman to join [Wharton’s Erika] James as dean of a top 20 business school.”
❌ Intergovernmental Organizations - “Few black women are leading any of the world’s major multilateral organizations (i.e., the United Nations, the World Bank, the World Health Organization, etc.). In 2021, Ngozi Okonjo-Iweala became the first woman and first African to lead the World Trade Organization. In 2023, we’ll see at least one other black woman join these ranks.”
As I wrote this, Claudine Gay, the inspiration for this prediction and Harvard’s first black president, resigned after disastrous congressional testimony and a series of plagiarism allegations.
Even before Gay’s resignation, it felt like this prediction could not have been more wrong. While black women specifically, and women of color more generally, got the top job at several high-profile organizations, the number of black women CEOs of Fortune 500 companies stayed flat at two.
Beyond the numbers, the climate for black women executives, whose plight has been lumped in with the corporate world’s broader DEI efforts, feels more hostile than at any other time in the past few years.
Why I was wrong:
The cultural moment I mentioned still exists in some institutions, but the inertia to change is strong. More broadly, we’re in the midst of a backlash to the real and perceived racial justice progress that followed George Floyd’s murder in 2020.
In 2024, we’ll see new high-profile appointments of black women CEOs, but I’d now be quite surprised if the rate of progress took a significant leap. I also think 2024 will see more of this climate of hostility.
Stay tuned. I’ll soon be taking a look at the 2023 predictions that I got right.
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