Navigating 24
Navigating 24
Reflecting on 2024's journey and looking ahead
Special edition for today. And it’s huge. (I’m serious.)
I wanted to take a shot at predicting what 2024 might look like based on my feelings, experience, and the tons of data I've been digging through.
As a matter of fact, this year I was rough like the one before, and everyone has this feeling of “What will happen next?” and “How can I plan anything if it is almost impossible to predict?” BUT, being on the verge of 2024 and seeing many different signals inspired me for today’s edition.
I've spent the last few months looking over economic reports and forecasts to plan for Belkins, Folderly, and my other projects.
There's a lot to cover, but I’ll keep it clear and to the point and make it practical.
Be careful.
It's a long read ahead.
2024 Geopolitics
I don’t want to start with politics, but it’s hard to ignore it for the next year, and in fact, it is worth starting with.
“Multipolarity and de-risking will pose both challenges and opportunities for companies around the world. Each of the developments explored in the 2024 Geostrategic Outlook will affect companies in unique ways and will, therefore, necessitate specific geostrategic actions to capitalize on the opportunities they present while also mitigating the risks they pose. The type and level of impact will depend on a company’s sector and geographic footprint and the strategic choices that its executives make. But there are three no-regrets geostrategic moves that executives across sectors and geographies should implement to develop a more strategic approach to managing the top 10 geopolitical developments.”
Courtney Rickert McCaffrey - EY Global Geostrategic Business Group Insights Leader; EY Global Research Institute Director – EY Knowledge
Oliver Jones EY Global SaT Sustainability Leader; Global Business Development, Markets and Insights Leader
Famke Krumbmüller - EY EMEIA Leader, Geostrategic Business Group
We live in crazy times when important and scary things happen all the time, and it’s REALLY-REALLY hard to predict anything. But I know for sure we are adapting and can embrace the change.
In my businesses, especially in sales and marketing, we're always ready to adapt and move quickly. Listen to signals.
Even though companies aren't focusing much on global politics, the risks are still there if we pay attention to what's happening around us and look at the data.
Speaking of signals:
I would say that people are brilliant. Data is amazing. Now, I’m paying more attention to what surrounds me and what I hear. The critical question is where to look.
Did you know that more than half of the world’s economy and population will be involved in elections in 2024? That's huge and definitely something to watch.
Seizing the Moment / 24
"Is 2024 a time for opportunities? Absolutely.
In fact, I believe it presents more chances than ever to build and grow. In recent months, my journey has expanded beyond Belkins & Folderly. I've started advising several innovative founders and am involved in launching new ventures.
Take, for example, Green Sync AI. This venture is a perfect illustration of seizing the moment. We're using AI to revolutionize the farming industry by integrating data, optimizing operations, and enhancing sustainability. This venture is just one example of the vast potential 2024 holds.
For those looking to stay ahead, the key is to keep an open mind and be ready to act.
Opportunities are often hidden in challenges, and with the right perspective, you can turn these into significant achievements.
Keep your eyes open, stay adaptable, and don't be afraid to venture into new territories.
Prediction
Finally, let's dive into the predictions for 2024. You might be wondering how these forecasts came about.
It involved a lot of reading, analyzing, and connecting the dots. I've gone through a ton of reports, market data, and expert opinions. I've looked at how big companies are doing, what's new in technology, and changes in what customers want. This isn't just about numbers; it's about combining what the data tells us with years of experience in the industry.
The goal here is simple: to give you a clear picture of what 2024 might bring and what you can be prepared for.
These insights are crafted to share with you my thoughts, help you make smart decisions, and stay one step ahead in the coming year.
2024
After analyzing trends and reviewing hundreds of documents, I've concluded that the most significant time in the upcoming year will be in the first half, Q1-Q2. It's encouraging to see many companies projecting growth and increasing their budgets for R&D and advertising. This is a very positive signal for the industry as a whole.
From my experience, the way large companies allocate their budgets for R&D, Sales, Marketing, Advertising, and Hiring has a ripple effect across the entire business landscape. When they invest more in these areas, it's good news for everyone, not just them. This kind of spending helps the whole business world go round.
On the other hand, if these big companies decide to spend less, it can be tough for smaller businesses. These large companies' choices about where to put their money can shape the market. It all comes down to the right timing and smart strategy.
Looking ahead to 2024, I’m seeing signs of robust investment and confidence among the big names, which bodes well for businesses of all sizes. This could mean more opportunities for partnerships, innovation, and market expansion.
My favorite part. Data.
Table summarizing approximate estimates for the expense growth rate for Accenture, Salesforce, HubSpot, IBM, SAP, Adobe, ServiceNow, Oracle, and Microsoft from Q1-Q4 2024:
The expense growth rate is the percentage change in a company's expenses from one quarter to the next. This analysis shows that the companies are expected to experience varying levels of expense growth in 2024.
Accenture is expected to experience the slowest growth, with an average expense growth rate of 5.5%. Salesforce is expected to experience the fastest growth, with an average expense growth rate of 9.5%.
For instance. ServiceNow expenses are based on the number of people, and their main category of expenses is Compensation and benefits.
And to give you a better understanding of what they wanted to increase expenses by type:
Research and development (R&D) expenses are the costs of developing new products and services. These expenses are typically a large percentage for technology companies, as they constantly invest in new technologies.
Selling, general, and administrative expenses (SG&A) are the business’s costs, such as sales, marketing, and administration. These expenses typically make up a smaller percentage for technology companies than others.
The cost of goods sold (COGS) is the cost of manufacturing or purchasing the company’s products. These expenses are typically the most significant percentage of the costs for manufacturing companies.
Other expenses are any other expenses the company incurs, such as rent, utilities, and travel. These expenses are typically the smallest percentage of the expenses.
FAANG
Like others, FAANG plans to grow. FAANG is an acronym for five of the world's most prominent and high-performing tech companies: Facebook (now Meta), Apple, Amazon, Netflix, and Google (part of Alphabet Inc.). I will take a few of them.
Apple
According to the average analyst estimates compiled by Bloomberg, Apple anticipates achieving revenue growth of 3.7% and profit growth of 7.6% in fiscal 2024. This implies a modest growth rate for the company compared to its historical performance.
Factors Affecting Growth
Several factors could impact Apple's growth rate in 2024, including:
Macroeconomic conditions: Economic downturns and rising inflation could dampen consumer spending, negatively impacting Apple's sales.
Competition: Increasing competition from other tech giants, such as Google and Samsung, could pressure Apple to invest more in innovation and marketing.
Supply chain disruptions: Disruptions in the global supply chain could hinder Apple's ability to produce and distribute its products, potentially slowing down growth.
Alphabet
Analyst forecasts for Alphabet (GOOG) in 2024 suggest a period of moderate growth.
According to data from Simply Wall St, Alphabet's revenue is expected to reach about $340.17 billion by the end of 2024, which represents a notable increase from its revenue in previous years. The projected earnings for the same period are estimated to be around $83.752 billion.
These figures indicate a steady growth trajectory for the company. Reason:
Rebounding Digital Ad Market: The digital advertising industry is expected to recover from the pandemic-induced slowdown, providing a boost to Alphabet's core advertising business.
AI-Powered Products: Alphabet's artificial intelligence (AI) investments are expected to yield new products and services that can drive revenue growth. For example, AI-powered advertising tools, cloud-based AI solutions, and AI-driven research initiatives could all contribute to growth.
Expansion into New Markets: Alphabet is expanding into new markets, such as cloud computing and autonomous vehicles, which could open up new growth opportunities.
Alphabet faces several challenges that could hinder its growth in 2024:
Increased Competition: The tech industry is becoming increasingly competitive, and Alphabet faces challenges from rivals like Meta Platforms (FB), Amazon (AMZN), and Apple (AAPL).
Regulatory Scrutiny: Alphabet is facing increased scrutiny from regulators worldwide, concerned about its dominance in the tech industry and its data collection practices. This could lead to fines, restrictions, or other actions that could hinder its growth.
Economic Uncertainty: The global economic outlook is uncertain, and a potential recession could dampen demand for Alphabet's products and services.
Overall, these forecasts suggest that the major tech companies are expected to continue to grow in 2024.
This is due to several factors, including strong demand for their products and services, continued growth in emerging markets, and a favorable regulatory environment.
Key trends that are expected to emerge in Q1 and Q2 2024 for major tech companies:
Continued investment in cloud computing and AI.
Expansion into new markets, such as the metaverse and the Internet of Things.
R&D spending to develop new products and services.
Partnerships and acquisitions to expand their reach and capabilities.
I have verified the information from Accenture, Salesforce, and HubSpot financial statements and press releases of a few other companies in terms of their growth for Q1 and Q2 2024, highlighting the growth rate compared to 2023:
Q1 2024 Revenue: $8.25 billion, up 11% Year-Over-Year. ””
Q1 2024 Revenue: $501.6 million, a 27% increase from Q1 2023. This growth was supported by robust customer engagement and product innovation. ““ ““ ““
There are a few other interesting growths from big companies:
IBM: Q1 2024 Revenue: $14.252 billion, a slight increase from Q1 2023's revenue of $14.197 billion. ““
Adobe: Q1 2024, the company expected total revenue to be between $5.10 billion and $5.15 billion. Source their earnings guidance for both the first quarter and the entire fiscal year of 2024
Oracle: Q1 2024, the company reported a total revenue of $12.5 billion, which was a 9% increase in USD and an 8% increase in constant currency compared to the same quarter of the previous year.
Overall, the growth rates for all these companies are strong, with most growing at least 15% in Q1 and Q2 2024. This is due to several factors, including the continued growth of the global economy, the increasing adoption of cloud computing and digital transformation, and the growing demand for enterprise software.
Global Marketing and Sales Spend
Our bread and butter. According to a recent report by Gartner, global marketing and sales spending is expected to reach $2.3 trillion in 2024, up from $2.1 trillion in 2023. This represents a compound annual growth rate (CAGR) of 5.5%.
The increase in marketing and sales spending is being driven by several factors, including:
The increasing complexity of the buying process: Today’s buyers are more informed and empowered than ever. They research online and use social media to compare products and services. This means businesses must invest more in marketing and sales to reach and engage with potential customers.
The shift to digital channels: Marketing and sales are increasingly conducted online. Businesses need to invest in digital marketing and sales tools to reach and engage with potential customers online.
The need to acquire new customers: In today’s competitive market, businesses must acquire new customers to grow. This means they must invest in marketing and sales to attract new business.
The importance of acquiring new clients for businesses is evident. New clients provide:
Increased revenue: New clients bring in new revenue, which can help businesses grow and expand.
Diversification of revenue streams: New clients can help businesses diversify their revenue streams, reducing risk.
Access to new markets: New clients can help businesses access new markets, leading to growth opportunities.
Talent acquisition: New clients can help businesses attract and retain top talent.
As a result, businesses are investing more in marketing and sales to acquire new clients. This is a necessary investment for companies that want to grow and succeed in today’s competitive market.
People signals.
We are moving next to people. US execs focus on GenAI strategy to accelerate growth. Apart from that, 69% of capital, specifically from technology budgets, and around 61% of US CEOs expect higher revenue growth in 2024.
But it's not just good news all the way long.
A significant prediction for 2024 is the possibility of a major market crash. Economist Harry S. Dent has warned of a potential crash of a lifetime, predicting significant drops in the S&P, NASDAQ, and cryptocurrency values and a considerable decline in real estate prices.
Strategic prediction
In 2024, our focus is on balancing growth with safety. We aim to be profitable and cautious, carefully considering risks and closely monitoring our expenses. Our strategy involves being quick to adapt to market changes.
The main effort will be in the first half of the year, Q1-Q2. During this time, we'll actively pursue growth opportunities during this time while ensuring every step is secure and well-considered.
Our goal is to expand steadily and safely, ensuring that every move contributes positively to our overall progress.
All those signals I’ve described are quite positive for us to implement what we plan, and I’m really excited to get the ball rolling as soon as January 24 hits.
How does the company handle geopolitical uncertainty, the election supercycle
Some key strategies that we are considering now:
Maintain close communication with customers, suppliers, and investors.
Companies should be transparent with their stakeholders about the potential impact of geopolitical uncertainty and election supercycles on their business. They should also maintain open communication channels to address stakeholders’ concerns.Conduct thorough risk assessments and develop contingency plans.
Companies should conduct regular risk assessments to identify potential geopolitical and election-related risks that could impact their business. They should then develop contingency plans to address these risks, such as diversifying supply chains, expanding into new markets, and hedging against currency fluctuations.Invest in risk management and crisis communication capabilities.
Companies should invest in robust risk management and crisis communication capabilities to prepare them to respond to unexpected events. This includes developing a crisis communication plan, training employees to handle sensitive situations, and establishing communication protocols with critical stakeholders.Emphasize the importance of resilience and agility.
Companies should foster a culture of resilience and agility within their organizations. This includes empowering employees to take initiative, encouraging innovation, and adapting to changing market conditions quickly and effectively.Focus on long-term growth and sustainability.
Companies should not let short-term geopolitical events distract them from their long-term growth strategy. Instead, they should focus on building sustainable businesses resilient to external shocks.Leverage technology to gain insights and make informed decisions.
Companies can use technology to gain insights into geopolitical and election trends, which can help them make more informed decisions about their business strategies. This includes data analytics, monitoring social media, and other tools to track developments.Stay informed about the political and economic landscape.
Companies should stay informed about the political and economic landscape in the countries where they operate. This includes following news and analysis, participating in industry events, and building relationships with government officials.Build strategic partnerships with other businesses.
Companies can partner with other businesses to share information, collaborate on research and development, and mitigate the risks associated with geopolitical uncertainty and election supercycles.Support ethical sourcing and sustainable practices.
Companies can contribute to a more stable and equitable world by supporting ethical sourcing and sustainable practices throughout their supply chains. This can help to reduce the risk of disruptions and conflicts.Advocate for peace and cooperation.
Companies can play a role in promoting peace and cooperation between nations. This includes speaking out against violence and oppression, supporting initiatives that promote dialogue and understanding, and investing in education and development programs.
Crypto?
Surprise, surprise. But why do we need that here? I promise there's a valid reason. Bitcoin is expected to undergo a halving event in Q2.
Bitcoin halving is a significant event occurring approximately every four years, during which the reward for mining a new block is automatically reduced by 50%. The next Halving is anticipated in Q2 2024.
Historically, Bitcoin's Halving has led to increased price volatility. This is because Halving makes mining new Bitcoins more challenging, potentially decreasing supply and increasing demand. However, Bitcoin has generally followed an upward trend over the long term, and it's possible that this Halving will precede another period of price appreciation.
Here are some expert predictions for Bitcoin’s price post the Q2 2024 halving:
Tom Lee of Fundstrat predicts that Bitcoin will reach $28,000 by the end of 2024.
Kevin Kelly of Delphi Digital forecasts a rise to $100,000 by the end of 2024.
PlanB, the creator of the stock-to-flow model, projects Bitcoin will hit $1 million by the end of 2024.
It's crucial to remember these are only predictions; the actual future price of Bitcoin could vary significantly. The Halving is an influential event likely to impact Bitcoin's value substantially.
Only time will tell what the impact of the following year's Halving on the price of Bitcoin will be. However, it is clear that this event is a significant milestone for the cryptocurrency and is likely to have a lasting impact on its future.
Post-Credit Scene
Oh, Jesus Christ, that was a genuinely long newsletter, and if you really made it to the end to Post-Credit, I truly appreciate that.
So, as we wrap up our in-depth exploration of what 2024 holds, I've prepared a selection of additional resources to keep you informed and inspired during the holidays.
Now it’s time to rush Harry Potter and Home Alone and get inspiration before the upcoming year.
Inspirational Books:
"Man's Search for Meaning" by Viktor E. Frankl is a profound account of finding hope and meaning in the face of extreme adversity.
"The Alchemist" by Paulo Coelho is a fable about following your dreams and listening to your heart.
"The Power of Now" by Eckhart Tolle - A guide to spiritual enlightenment focusing on the importance of living in the present.
"Daring Greatly" by Brené Brown - Explores the power of vulnerability and how it can transform the way we live, love, parent, and lead.
Motivational Podcasts:
"The Tim Ferriss Show" - Tim Ferriss interviews world-class performers to extract tactics, tools, and routines listeners can use.
"How I Built This" with Guy Raz - Stories behind some of the world's best-known companies and their creators.
"On Being" with Krista Tippett - Conversations about the big questions of meaning, faith, ethics, and what it means to be human.
"The Daily Stoic" - Offers daily meditative thoughts on wisdom, perseverance, and the art of living.
Podcast
And, of course, Christmas Extras:
"Friends" - Various Christmas Episodes - The beloved sitcom has several memorable Christmas episodes, each with its unique holiday twist.
"The Office" (U.S.) - Christmas Specials - The Office's Christmas episodes are known for their humor and heartwarming moments.
"Doctor Who" - Christmas Specials - These annual specials blend science fiction with holiday magic.
"Downton Abbey" - Christmas Specials - The British historical drama included lavish Christmas episodes that were key parts of the series.
"How the Grinch Stole Christmas!" (1966) - A classic animated TV special based on Dr. Seuss’s story.
"A Charlie Brown Christmas" (1965) - This animated special offers a poignant and heartwarming Christmas message.
"Black Mirror: White Christmas" (2014) - For those seeking a darker, thought-provoking holiday story.
"The Simpsons" - Various Christmas Episodes - The long-running animated series has featured many episodes celebrating the holiday season.
"Rudolph the Red-Nosed Reindeer" (1964) - A stop-motion animated classic that's been a holiday staple for generations.
"Frosty the Snowman" (1969) - Another beloved animated special that's perfect for family viewing.
Thank you for reading, and I wish you all the best. Happy Christmas and Happy New Year.
See you soon. Warm regards,
Vlad