In 2000, Goldman Sachs employed more than 600 traders.

• By 2017, only two equity traders were left because algorithms handled by computer engineers could perform the same work.
• The same thing is happening at all the traditional investment banks on Wall Street.
• (Source: Forbes) 

There are more than 550,000 open jobs requiring computer-science skills.

• But fewer than 50,000 computer-science majors entered the workforce last year.
• (Source: Federal labor data analyzed by Code.org)

25% of the adult population globally is illiterate.

• It’s why internet companies are now focusing on Voice First.
• (Source: The Churchill Club, one of Silicon Valley’s longest-running and most successful business/social organizations)

 

Read on below for more stats on companies where reality is finally catching up to the hype.

Blue Apron

• In June 2017 after its IPO, Blue Apron was valued as a $2 billion company.
• They’re currently losing 200,000 customers a quarter . Even before their IPO, they were not able to retain customers for more than 6 months.
• Their shares are now trading 80% below the IPO price of $10.
• Not sure what’s scarier: the decline in the business or the fact that smart Wall Streeters considered this a business to begin with.
• Chance of survival: 5%

MoviePass: If It Sounds Too Good To Be True, It Probably Is

• In case anybody is not familiar, MoviePass offered subscribers all the movies they wanted to see – in theaters – for $9.95 a month. Until it didn’t.
• The problem was too many subscribers, seeing too many movies.
• Fundamental business model mistake.
• Last week, the company ran out of money and temporarily shut down the app for a night.
• Since then they’ve been dialing back their offerings.
• Chance of survival: 10%

Snapchat

• Lost 3 million active daily users in 2Q 2018.
• Their users were not happy with the redesign of the platform.
• Major influencers like Kylie Jenner left Snapchat to focus on Instagram.
• However, revenue increased by 44% to $262m.
• Not sure what gives. Need to wait another quarter.
• Chance of survival: 70%

Instagram: about to be flooded with even more ads.

• After Facebook experienced the biggest stock price drop in stock market history, here’s what COO, Cheryl Sandberg had to say about the company’s Instagram opportunity:
• “When we think about Instagram, we think we have a great opportunity: 25 million Instagram business profiles, 2 million advertisers. We see both anecdotally and in the data that this is a great place for people to become aware of a product in the first place.”
  
• In other words, expect a tenfold increase of ads on your Instagram feed.

 

Bottom Line.

Things are out of kilter from Wall Street to Main Street.

Three biggest problems are:

1. The inability to get right-skilled workers (huge drag on business, I’ve seen this firsthand)

2. Overhyped, over-inflated valuations for companies that make no sense and make no money.

3. All the free rides we’ve been getting from tech-driven companies – whether it’s Instagram or MoviePass – are coming to an end.  It’s either going to be more advertising or we have to pay for the service or we have to be comfortable having our data monetized.

One thing is for sure: THERE’S NO FREE LUNCH!  There never was and there never will be.