Our 2026 Predictions

🧠 Takeaways: Major ‘26 predictions

Making my 3 big bold predictions for 2026.

1. Meta will increase it’s share of your advertising wallets.

2. The Winner <> Loser gap divides even more.

3. Consumers will keep struggling and spending.

+ Looking back at the rough results from my 2025 predictions.

LBAB Community: Let’s Revisit My 2025 Predictions

If I’m going to run my mouth I have to admit what I got right and what I got wrong.

So let’s keep me honest on what I nailed vs. whiffed on in 2025.

1) Applovin’ didn’t become DTC Ad platform #2. ❌

Adoption did explode and the stock went BOOM! But Google still holds the Spend #2 spot.

I’m probably 2-3 years early on this one. I should disclose I made a trade in Q4 2025 and got out in Q1 2025 when I knew the stock would rip on a big 2024 holiday push.

I needed the capital for Coco. I took a 50% win in 3 months. It’d be 2x right now.

2) eCom will Rip in 2025. ❌

While it was a year of decent growth it definitely didn’t rip. It was much more of an okay year where things went up a little above average.

3) The great AI embarrassment will set adoption back. ❌

I completely whiffed here. AI adoption exploded and accelerated at the same time. And it doesn’t show any signs of slowing.

Let’s Predict 2025

Coming off a tough year for predications. Here are my 3 big predictions for 2025 and where that takes us.

1) Everyone Will Spend More on Meta This Year

While everyone wants to diversify away from Meta they will actually spend more money on Meta in 2026.

Despite all the promises of great new acquisition channels, none of them will pan out to become a meaningful percentage of your spend.

The majority of customer acquisition will still come from Facebook/Meta.

As Facebook acquisition gets more complicated + competitive, you’ll end up allocating a larger % of your overall marketing budget to Meta just to maintain performance.

On top of that, Meta is naturally going to continue increasing costs across all of its platforms.

The result: you’ll be spending more money to achieve similar or worse results.

Someone has to pay for the ~$200B Meta has invested in AI infrastructure (+~$70B this year), and their only real monetization path is advertising.

Somehow that investment will be passed directly to advertisers.

Takeaway: Get every biz area tights. It’s going to be another expensive year.

2)  Bigger Extreme Exits + More Bankruptcies

We’re going to see the largest valuations, biggest fundraisers, and biggest exits eve.

While also seeing more bankruptcies/shut down than ever before.

Bankruptcies will continue to rise as consumers increasingly look for deals + concentrate their spending on fewer brands. For many bizs, the economics simply won’t work anymore.

We’re finally going to see real market consolidation.

There won’t be 500 clean beauty brands or 1k yoga pants bizs anymore. Categories will compress down to a handful of dominant players.

At the same time, massive amounts of capital will continue to concentrate into what investors perceive as the lowest-risk opportunities.

This will drive enormous M&A deals, outsized investments, and a resurgence in IPO activity. We’ll likely see some of the strongest IPO markets in a long time.

We’ll also see a small number of eye-watering acquisitions at prices that don’t seem rational, but large companies have very few places to deploy their excess cash, and these deals will be where that money goes.

Takeaway: The Winners vs. Loser Divide will only grow.

3) Consumers Will Keep Struggling + Spending

Consumers will continue to struggle but still spend.

The biggest mistake people made with tariffs was expecting their impact to be immediate.

Instead, inflation is creeping up slowly + consistently. Unemployment is also ticking up. Again, slowly.

The cumulative effect is a steadily tougher environment where consumers pull back over time rather than all at once.

At the same time, the Fed has made it clear that meaningful interest rate cuts are unlikely in the near future.

This puts us in a prolonged, uncomfortable middle ground:

1. Everything gets slightly more expensive from Tarriffs.

2. Bizs don’t make any more money.

3. Consumers feel slightly poorer.

Conditions aren’t bad enough to stop spending entirely, but everyone will continue to feel like they can’t afford anything.

The result will be a stagnation period where brands need to run 50–100% more promotions than before, because consumers will be consistently and aggressively hunting for deals.

Takeaway: 2026 will be another year of promos.

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Final Thought - Tariffs Make Everyone a Little Poorer

The most important outlook to have for 2026 is that tariffs make everything a little more expensive, and everyone a little poorer.

If you look at the consensus from serious economic analysis on tariffs, the expectation is a 1–2% inflation increase/year from Tarriffs.

In a normal economy, target inflation is about 2%.

If inflation rises by an additional 1–2%, that puts it at 3–4%.

That may not sound big at first, but in reality, it means inflation is 50–100% higher than normal. Regular consumers will feel that difference.

The key point everyone needs to understand is why this makes people poorer.

When goods become more expensive due to tariffs, the government is the only party capturing the increase in prices.

If a product becomes 10% more expensive because of a tariff, the company selling it is not making 10% more money.

Even if the biz passes the entire 10% increase to consumers, all that happens is the consumer pays 10% more. The company’s margins do not improve.

This creates a structural problem.

1. Prices go up.

2. Employees need higher wages to maintain the same standard of living

3. Bizs are not earning more profit to justify giving employees raises.

The result is a steady decline in purchasing power.

Consumer prices rise, wages lag behind, and bizs actually face more pressure, not less.

As prices increase they will need to spend more on marketing & sales to convince consumers to keep buying the same products for more money.

That dynamic reduces the likelihood of broad-based wage growth and makes it increasingly difficult for normal people to get meaningful raises, even as the cost of living continues to rise.

There is an interesting debate to be had of should we monetize consumers to decrease the federal budget, but to bizs focusing on selling to consumers, this is the underlying calculus we all need to overcome.