A few years back, I received an invitation to speak at a conference on data networks and start-ups, a time when start-ups were riding high with massive investments, soaring valuations, and profit projections. However, I assumed the role of a devil's advocate during the conference, shedding light on the dark corners that many preferred to ignore in their technological enthusiasm. Some labeled me an alarmist, but privately, numerous attendees approached me for further discussion. Notably, a leading venture capitalist sought advice on when he should consider withdrawing from the market, though I reminded him that I was not a businessman.
It took just a year for my expressed concerns to materialize. The significant meltdown of internet start-ups became a harsh reality. Even today, large data-driven companies like Uber and Ola are grappling to secure new investments to cover their substantial cash burns. Therefore, anyone proclaiming that data is the future of business should be met with skepticism. Such claims may serve to mask job losses or perpetuate a misleading narrative of a technological-data fusion that never truly transpired. The internet continues to resemble more of an amusement park, where individuals pay for various adrenaline-inducing experiences before eventually moving on.
Even in mapping applications, often hailed as the next big data technology, people seek real-world locations and sites, not virtual realms. This underscores that technological progress remains constrained by physical reality and human needs.
The issue with contemporary technology is that it has become ensnared in a web of exaggerated projections without realistic economic parameters. It mirrors the derivative trade within the stock market, where everyone hides behind jargon, formulas, numbers, and images to mask their losses while dragging others into their downward spiral.
In the early days of computer programming, grappling with COBOL, there was a joke about a half-hour system breakdown taking days of analysis and resulting in 345 kilometers of printed program code in the USA. The envisioned data business appears to have fallen into a similar quagmire. Unraveling even a small piece of information demands collating billions of hours of data and millions of hours of analytical efforts.
Studies indicate that a substantial portion of internet data serves amusement and entertainment purposes. Removing categories like pornography would free up 37% of the internet, and in the UK alone, gambling revenue on the internet reached 13.8 billion, with approximately 80% of Americans using the internet for gambling. Removing gambling from the internet would free up another 28% of its data. An additional 10% is estimated to be consumed by film and music viewing. Overall, more than 75% of internet data serves entertainment purposes, with social networks permeating all facets of human activity.
The belief that 25% of the remaining data is useful or decipherable within the 75% of seemingly extraneous data is a far-fetched notion that requires an astonishing level of naivety. Similarly, assuming that 75% of data is beneficial for 25% of legal business is equally misguided. The reality is that technology can be experimental and prone to failure, but business and investments cannot afford such unpredictability. Unfortunately, this vital distinction is often overlooked in the industry.
The heart of the issue lies in the disparity between the breakneck pace of technological advancement and the time required for business investments to yield returns and profit. Modern technology demands capital-intensive investments, while businesses need ample time for market recapitalization and product lifecycle. The relentless speed of technological evolution seldom affords this luxury to businesses, resulting in rapid turnover and limited opportunities for investment recovery.
The emergence of a black hole or bubble in the market is evident, causing growing distrust among the business community toward technological investments. Fear looms large, as significant investments have already been swallowed by this expanding abyss. To recover their funds, more investments might resort to illegal avenues like pornography and gambling, further tainting the already 65% illegal trade space and transforming it into a shadowy underworld. The internet could evolve into a realm society seeks to evade.
This scenario hints at an eventual collapse or government intervention to create another bureaucratic behemoth where technology cannot keep pace. Whether it's a gradual decline or a swift collapse, the internet appears destined for a protracted demise. Contrary to assumptions that these events will take a long time to unfold, economic cycles have compressed to around a seven-and-a-half-year span - the lifespan of business peaks and meltdowns. Consequently, we can anticipate the eventual collapse or meltdown of the internet within the next five to eight years, at most.
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