Aug 28, 2016

Musk has his plan, perhaps we should all have one too

Is there any point in having a masterplan?

The world’s most famous tycoon-inventor — Elon Musk — has just produced a new blueprint for what his business empire is going to achieve in its next phase.

He published his first one 10 years ago, announcing that he was going to build electric sports cars, and then create the infrastructure to charge them with clean electricity. Through Tesla Motors and SolarCity, he appears to have done that.

Now he wants to expand from making luxury cars, solar panels and batteries into producing SUVs, pick-up trucks, mass-market cars and even buses. As the news site Quartz writes, his “latest goals seem almost untenably ambitious”.

Even if Tesla Motors’ next targets are never met, Musk shows that you can think about your life in an audacious, long-term way — and, to paraphrase a book title, For Some the Dream Will Come True.

After co-founding and selling PayPal, he decided to wager his fortune, reputation and time on a far-sighted idea of what people would need in the future. He had “big picture” goals. His belief in solar energy and electric cars may well come to fruition — even if he relies heavily on taxpayer subsidy and optimistic backers willing to tolerate many years of losses. Most of us don’t fall into that category. Either we never have the vision in the first place or our plans are never achieved.

I will readily admit that my career path has been haphazard at best. I commenced university with the intention of becoming a doctor; I then switched to entrepreneurship, but on the way worked in advertising and as a stockbroker, among other jobs.

If I had a grand scheme, I can’t remember what it was, except that I did know I wanted to be self-employed.

I stumbled into the trade where I have spent most of the past 30 years — working in restaurants and bars by accident rather than design. I confess I never had a masterplan.

I was lucky rather than far-sighted in my choice of industry. The boom in eating out started to gather pace in the mid-1990s and over the past two decades it has expanded steadily. The market is now estimated to be worth £75bn a year. I chose it because I enjoyed it, I understood it and it was a cash- generative consumer business. We would never have guessed how large and diverse the food and drink scene in Britain would become, or foreseen the success of so many casual dining chains.

I can’t deny I have been opportunistic rather than long term and calculating in my strategic shifts. These days I argue that we have deliberately deployed capital in the “experiential” economy and made thoughtful investments based on demographics and the greying of society.

Others who I got to know in my twenties were probably more astute. They picked asset management, property development and mobile phones. In hindsight they were sure-fire winners, although at the time one could not have made such a confident prediction. But betting your career on any of those industries over the past quarter of a century has generally been a great move. There have been some ups and downs, but overall the growth and returns have been excellent.

I have known others who were just as talented and well qualified but made less profitable selections. They went into footwear retailing, or printing, or the record business, or video rental, or making film for cameras. Sadly, these industries have been economic graveyards for many.

So how on earth does a twentysomething decide what their occupation should be? Most do not obtain vocational degrees, so they must find a different path.

I wonder how many have any form of serious plan beyond just trying to earn a living, or simply copying what one of their parents does. I fear most of us act on almost random advice at that age.

I am reminded of the party scene in the movie The Graduate, when the main protagonist is asked, “What are you going to do about your future? Your life?” and a friend of his father gives the simple recommendation: “I’ve got just one word to say to you — plastics.”

Yet the world is awash with information like never before. Every ambitious young adult should research hard to understand where the golden opportunities lie. Making long-term forecasts is risky, but not bothering to consider the options is negligent.

I was recently given a copy of a new book called The Industries of the Future by Alec Ross, an American expert on innovation. He covers fields such as robotics, cyber-security, genomics and big data. It is fairly straightforward to identify those four sectors as ones that are likely to show substantial growth in the years to come. Meanwhile globalisation and technological progress will continue to dominate the coming decades.

If you do decide to draft a masterplan, then you need to factor these two powerful trends into your thinking before you narrow your search.