Predictions are a funny thing. We love to make them but we aren’t really keen on going back a year later to see if they came true. As I was thinking about that, it struck me that the whole business of predictions has less to do with the future than it does with the present. It’s about how people are feeling right now-in the moment, as the Taoists say.
Taking this thinking a step further, how people feel can determine what actually happens. While it’s true that markets can change the way people feel and behave, it’s equally true that the way people feel can change the way markets behave. Look no further than the Dow Jones.
So, when you consider the predictions made in this issue (see pages 34 to 37), the consensus opinion is that people are going to behave very cautiously because they expect another down year. (That’s factoring out the prediction by the incessantly cheerful Tim Draper).
In some cases I was surprised by the pessimism of particular people, like Jim Breyer of Accel Partners (see Q&A). I’ve known Jim going on nine years and he is anything but a pessimist. So when he sees more gloom ahead, I give that serious weight. Notably, Jim doesn’t expect the overall economy to improve until the second half of 2004, he doesn’t see the IPO window reopening this year, and he believes we’ll see more fund cuts and a thinning of the VC ranks.
It’s not just talk: Jim’s got at least a couple of profitable, growing portfolio companies that investment bankers are urging to go public, but he’s advising them to sit tight.
My prediction for 03: Everyone is going to be sitting tight-even Tim Draper.