What’s Hot and What’s Not in 2008?                    Spring 2008

            Sumner Redstone, founder and Executive Chairman of Viacom said: “Great success is built on failure, frustration, even catastrophe.”  This year, many of the opportunities available will come from others’ failure and frustration.  Here is a two-part list of what will be hot in business and what won’t.  Paradoxically something may be hot, because someone else twists in catastrophe.

What’s Not Hot:

Casinos in Atlantic City- All 11 casinos in Atlantic City are doing worse this year than last. The opening of new casinos in Pennsylvania and elsewhere skimmed the cream off their milk.  Casinos are basically a “low life” business, as my grandfather used to say. They are better than nothing in creating jobs, but certainly are not a higher and better use for society.

US Financial services in general- There are banks on every corner, all competing for the same customer.  Margins have narrowed, and instead of trimming costs by using the internet, ATM’s and credit cards, banks have expanded their branch systems in recent years.  This creates more overhead, not less, which makes those institutions less competitive.

Retail aimed at the upscale consumer-We don’t need another white table cloth restaurant, jewelry store, or hair salon with black clad beauticians unless it’s different enough to make a compelling case.   I predict that there will be shake out and consolidation in upscale retail over the next several years.

Hedge Funds- Anyone interested in making a quick buck from buying and reselling something undervalued will not have much success in the next year or two.  Patient long-term investors will do very well.

Foodstuffs or Pharmaceuticals imported from China- While it is clear that we are in a global economy, and that we will continue to eat Chilean grapes and Costa Rican pineapples, consumers will become more aware of the source of what they put into their mouths.  I was golfing with a buddy of mine who brought along a bag of apple chips for a snack.  Could you believe that the apples were imported from China?  As if we don’t have enough apples here in the US.

Bookstores- The President of Philadelphia University, where I am Executive in Residence, effused over Sony’s electronic book. 40,000 titles are available to download. Yeah, it is expensive now, but so were all of the other electronic gizmos to which we are now addicted.  I would hate to be Borders or Barnes and Noble.

What’s Hot:

Products and Services desired by immigrants and minorities- A Pew Research Center study shows that the nation’s foreign born population will surpass the previous peak in the 19^th century of 15% of our population.  All of these folks want better lives for their families.  That includes  housing, clothing, and food they can afford, and which appeals to them.  More ethnic specialties will show up in supermarkets. 

Wal-Mart-This is the place for the common man, and in 2008 everyone will be trying to stretch a buck.  With its superior operations able to deliver low prices, Wal-Mart will continue to be a competitive tiger.

Pet Care- I invited Zeth Weissman to speak, Co-Founder of Philapets.com (a pet sitting and dog walking firm), at my Leadership Lessons seminar.  According to the National Pet Products Manufacturers Association, in 2007, 63% of American families had a pet.  $41 billion was spent on them- an increase of 5% over the year before. 

United Arab Emirates- Have you seen the incredible plans to remake Dubai into the center of the world?  There is a skyscraper that will be the tallest in the world, and another coming that will be three times as high as the Empire State Building.  While attention focuses on China, the oil wealth will keep flowing there. 

Efficiency through computers, the internet and wireless communication- One of the firms that we’ve helped, Netrepid, is a wireless communications solutions provider. They install communications antennas,  an alternative for business and nonprofits communication without using cable or telephone lines.  The next time that you see your Verizon or Comcast bill, think about that.

Green- When our next president is elected, republican or democrat, we will see a “man on the moon” type push for energy independence.  This will create many jobs, and bring our economy out of the recession. 

It will be fun a year or so from now to look back to see how my predictions were. Give me a call to let me know your thoughts on them.

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