Category Archives: Internet Economy

Amazon warehouse accidents total 440. What’s the story?

According to a BBC news story “Amazon warehouse accidents total 440”.

While this is obviously bad news for the people involved, is it good or bad compared to the industry as a whole?

The tenor of the story implies it is bad news.

But then the details of the story don’t quite back that up.

Firstly, the 440 figure is the total of four years worth of data collected by the GBM union from local authorities via freedom of information requests. The figure for the last complete year, 2017-2018, was 149.

Is this number high? Well, Amazon says it has 25,000 people employed in the UK and the Health and Safety Executive says the average non-fatal accident rate in the warehousing and transportation support industries category in 2016-2017 was 1,577 per 100,000 workers.

Assuming the rate has stayed about the same the following year, for Amazon to have had an average accident rate it would have recorded 394 accidents. So on these data you could say Amazon is a substantially better than average performer on accidents.

The BBC story quotes the GMB saying : “the actual numbers were probably higher, because some local authorities were unable to provide details of incident reports.”

That may well be so, but frankly they could be double and it still would not be much of a story.

Apple gets serious about content

Apple’s acquisition of Texture looks like a pretty shrewd move against the back-drop of “fake news” and worries about social media network enabled “bubbles”. Whether the company can turn Texture, which offers monthly subscriptions for unlimited content for hundreds of participating media, into a text version of iTunes remains to be seen. But having Apple, which does not have advertising as its principal business model, pushing quality paid-for content is an interesting and healthy development.

Thinking Digitally in Tyneside

The Sage
The Sage, Gateshead

This year was something of a turning point for Thinking Digital as the Tyneside-based event, regarded as a kind of home-grown TED since its launch in 2008, this year branched out into satellite events in London and Manchester. The original event was slimmed down from two days to one and there were worries that the unique quality which was Thinking Digital may be lost in the changes.

So how did it fare? Really rather well, actually. The conference’s first segment, called Sport, Culture and Terrorism, started off a little unpromisingly with a slightly underwhelming account of the IBM partnership with Wimbledon tennis by Bill Jinks is IBM’s CTO for Sales & Distribution in the UK.

Yes, the fact that the partnership has lasted 27 years is quite remarkable – this is longer than quite a few marriages. And, yes the stats are pretty impressive – 21.1m unique devices, 71m visits, 542m page views. And there were some interesting details – such as the pains they go to paint the wifi and 4G aerials green to preserve the ancient mystique and the fact that they employ 48 tennis players as data analysts to process the sensor data from all around the site so that they can maintain their reputation for having all the information as it happens.

But at root this felt like a usual tale of one old business harnessing the power of technology to speak to modern, global audiences across platforms. Jinks did hint that Watson might be brought into play in the future but was rather hazy on the details.

One specific did emerge which put the spotlight on IBMs technical prowess – the cloud services are provisioned entirely through predictive analytics based on previous traffic patterns, the popularity of players and the like. It’s a shame there weren’t more of this kind of details.

The second session was, if anything, the weakest of the day in my opinion. Irini Papadimitriou is Digital Programmes Manager at the V&A and responsible for programmes such as the annual Digital Design Weekend. She spoke about various collaborations between the venerable museum, the UK’s leading museum of fashion and design. These included the Met office and V&A climate and fashion hackathon (which apparently led to Helen Storey’s Dress for Our Time which was on show during the Paris climate talks), and other projects bringing together scientists and designers, and economists and designers, and lots of different people to look at the recycling of old electronics. It all looked well-intensioned but it was hard to grasp the real relevance to the V&A mission, or what the legacy of such collaborations was. Perhaps I’m being unfair.

Things started to look up on the third presentation, given by veteran cyber security expert Mikko Hypponen, Chief Research Officer of F-Secure.

Hypponen explained that his task was to hunt hackers for a living and he says that one of the most important lessons that he has learned is that you have to understand your enemy. It is quite a different proposition to protect your networks against hackivists or criminals or nation state or terrorists.

Complexity, says Hypponen, is the enemy of security. When they get large enough all networks will be breached. He points out that all 500 of the Fortune 500 are hacked right now.  You can’t avoid it, so you need resilience.

“Security getting better but we keep running into the old problems,” he said.

He used a good example of a scam from 1989 and one from 2016, both of which were essentially the same ransom trojan although the former was actually on a floppy disk.

Ransom software companies have a great business model, he says: “selling data back to the people who value it most – you.” The Cryptolocker Trojan, for instance, has so far made €300m and is, in fact, a “cybercrime unicorn.” And, he points out, they don’t pay tax.

“If there is one thing you learn today it’s: Don’t click the enable content button,” he said. It was by clicking this kind of link that both the 1989 and the 2016 trojans were able to gain access.

What of the future?  The Internet of Things will bring a lot more challenges. With IOT no device will be small enough that it won’t end up online, he argues.

But he is broadly optimistic: “The internet has brought us so much more good than bad and I hope the same will apply to IOT.”

There is already a problem with many industrial control systems being accessible through the internet. “If you scan the internet you find things which shouldn’t be there,” he says, such as generators, swimming pool systems, even hospital bed charts. And all the examples he showed on screen were not password protected.

Perhaps the biggest shift, though, was the fact that the world was now entering a cyber arms race: “Most of the things attributed to governments are spying rather than cyberwar.” Last December’s attack in Kiev against a power company, for instance, was Russia engaged in cyberwar. In the event it wasn’t that serious and they recovered power in a couple of hours, but things are escalating. “Last year the US launched drones to kill hackers twice”, he said.

But it is still the simple things that keep failing us. The attack on the Ukrainian power company started in November when one of the employees was sent and Excel document with an “enable this content” button.

“Don’t click the button.”

Session two, entitled Blockchains and Bass Drums brought together John Thorp, Sarah Meiklejohn and Ed Hipkin.

John Thorp, described as “an internationally recognized thought leader in the field of value and benefits management” opened by saying that the track record of organisations in getting value out of technology is poor.

“I joined IBM in Canada in 1984 which was going to be the year of the electronic health record. We are still waiting.”

What is needed is a real shift of mindset – moving from technology delivery to a real focus on business, he said.

Best practice was the approach that most companies relied on. But best practice works for simple environments but it doesn’t work in complex environments, such as we now find in all large firms. What is needed is “emerging practices”.

“When things aren’t working we need to do something different.” In modern large companies we are managing an uncertain journey to an unknown destination, he said. “Leadership needs to move from top down to distributed capability and projects need to be led by different people at different times according to need.”

This is anathema to the industrial mindset which is, he says, “top down,  risk averse and controlling.” Modern challenges call for a collaborative, networked environment.

“There is a huge leadership deficit in the public and private sectors,” he said. “I’ve never done a consulting job where someone in the business didn’t already know the answer.”

Sarah Meiklejohn, a Lecturer in the Departments of Computer Science and Security and Crime Science at University College London, was next up discussing the poster child for the distributed environment – the blockchain.

Most people, she said, had a very sketchy view about the issue of online privacy but there were principles which people did hold dear: confidentiality, integrity and what she called data democracy (having a say in how your data is used).

“Goals do matter to people, for instance when we find our government is spying on us or when a  company we buy from has child labour in supply chain.”

Transparency is the only way ensure democracy on the internet, she says.

That’s where she thinks blockchain, essentially a distributed ledger which is the underpinning technology is cryptocurrency Bitcoin, comes in.

“Transparency is real USP for the first companies who adopt it and if we find the killer apps then we will see a lot of progress.” At the moment, she argues, we have a “technology hammer looking for nails.”

The session ended with Ed Hipkin (aka bassdrummer). He explained briefly his inspiration (he was blown away the first time he heard dance music on the school playing field in the 90’s and since then he has been trying to get his drums to sound more like his hero’s music) before going on to give a fabulous and very well received demo.

Session three was called “The Searchers”.

First up was Will Dracup, the CEO of Biosignatures. He spoke about proteonics which he described as looking at blood protein signatures for differences between those with a disease and those without.

There had, he said, been too little progress so far – “We are eight years into a 9 month project.” The goal is to look for unique signatures for prostate cancer and others. “The principle is that you can take a blood test and diagnose many diseases.”

But bad science is holding us back he says. What is needed is blind tests in all studies to test results. “Science is getting a bad reputation because too many stories in the press are contradicting each other – wine causes cancer, wines prevents cancer.”

Next up was James Murray, the Search Advertising Lead for Microsoft UK. On the face of it Bing has a big problem in that it is way behind Google in public awareness and market share terms. There is even a term “to Google” which is synonymous with the act of search. But Murray says the company isn’t discouraged – after all, he says, owning the verb isn’t enough. He illustrated the point with another synonymous verb – to Hoover. How many people used the term “doing the hoovering” he asked the audience – virtually everyone. Now how many people own a Hoover – less than a quarter. Now, “who owns a Dyson?” Three quarters of the room. QED.

“Bing is trying to be the Dyson of search,” he said, by reinventing search as a contextual technology.

People often use the wrong terms for what they are searching for, says Murray, so the key to being useful is to sort the context to provide the right answer at the right time. For example when the film Jurassic World was launched many people were actually searching for “Jurassic Park release date”. Giving the “right” answer in this example means returning the strictly wrong answer.

“Search engines are very good at patterns once the know what they are looking for.”

He listed several different types of context to illustrate how Microsoft are thinking about the issue:

  • Emotional. Microsoft is starting to research facial monitoring in order to understand how the user is feeling. In the MS Research labs in Cambridge he says you don’t need to sign in as the reception computers reading faces to grant access – and even, futuristically, to check your calendar to summon lifts and choose floors in order to get you to your meeting on fifth floor.
  • Environmental. The search engine can know that your usual favourite coffee is Costa and so would normally direct you to the nearest one, but now it knows it’s raining so it offers you another chain much nearer so you don’t get wet.
  • Social. “I am different with my wife than when I’m at work”, he says, and he’d like the search engine to understand that.
  • External. There are other things like global recession, or Brexit, or climate change, which also have a bearing, he says, but the biggest external context is your own culture and language. “Disney are really good at this,” he says. “Disney makes many versions of a film for different places to account for the cultural nuances.”

Context, he says, is king. How different this is really than Google’s approach is open to question, though, so we shall have to wait and see.

Last up in the session was “tech jester” Tom Scott who describes himself as someone who makes things with lines of code, video editing tools, and a few meters of network cable. Scott gave an entertaining talk about the history of emoji which demonstrated just how unexpectedly powerful seemingly simple things can be if they are widely adopted. He explained how there are now permanent committees deciding which emojis are given official Unicode status which means they will be adopted worldwide and visible on every machine.

“The serious point is that in 2017 there will be a condom emoji which means teens all over the world will be able to text each other about safe sex.”

The final session was called Present at the Creation.

First up was Joe Faith, who sold his first software – a computer game – at 14, and is now a Product Manager at Google.

Google, he says, is the “least process driven company I have ever worked with”.  And the reason is because process “doesn’t fit the people who work there”.

What drives Google instead are strong core values, he says.

One of the key ones is Focus on Users.

“The shallow sense of focussing on users is talking to users,” he says. “The deeper meaning is adoption before money.”  For example, he says, with the development of the Android operating system is was not clear where the money was coming from at the beginning.

The success of the adoption before money approach depends on two things, he says: the scaleability digital gives you and venture capital firms who understand the model.

The real difference comes when you ask for really big improvements. “What’s the 10x?” is the question most asked about new projects in Google. “How is it much better? What does it do for the users? How would you get there?”

He says the 10x ideal is so powerful because “10x is big (not incremental) but not too big.” Also, you are looking for 10x in one dimension not all, he says. “It forces you to rethink the basics.”

The key to the Google approach is to launch and iterate, he says. “There is a lot you don’t know about innovative products by definition so the key is to launch as quickly as possible and learn as quickly as possible whether it’s worth it.”

Google always front-loads the technical risk, he says, as this is thing which is really going to kill you.

Google Docs was “not good when it came out”, he says. And Chrome, Google’s browser, now the most popular in the world, was poor at first. “But it was fast and auto updated.” These were the 10x’s. Getting users to update browsers to combat security issues was a serious problem, so if a browser was able to auto update it would be major improvement. And being fast is the main thing users want from a browser.  “The first version was just a box on the screen – there wasn’t even a button,” he said. But it auto updated which means that those Googlers who were persuaded to try the product didn’t have to do anything – it just kept getting better and better automatically.

Focussing on the user and looking for the 10x is easy to say but hard to do, argues Faith. “You are always working in problems outside your comfort zone. It means you have to kill projects. And it means you will get difficult feedback.”

Next up was Katherine Harmon Courage, an award-winning freelance journalist and contributing editor for Scientific American magazine, whose new book Cultured is coming out next Spring.

She gave a fascinating talk about, of all things, the large intestine.

Microbiomes are everywhere – mouth, soil, washrooms”, she said, but the gut is hot, acidic and lacking in oxygen so studying our own was hard because bacteria didn’t survive outside the body.

Eventually, though she said, we developed better environments and then genetic sequencing was the big leap forward about 10 years ago. “There are hundreds or thousands of species on and in you and they are changing all the time.”

Now we can study these organisms we are beginning to look at their interactions and how they affect our  health.

One of the problems with modern healthcare is that antibiotics wipe out good bacteria as well as bad and can result in some serious conditions such as clostridium difficile colitis which occurs when clostridium difficile (c-diff) outperforms other gut bacteria.

One of the ways that this condition is treated is “fecal microbial transplant” which is pretty much what is sounds like and has a bit of an image problem, says Harmon Courage.

The future is to create the well balanced biome mix in the lab and tackle a wider range of conditions through simple pills, she says.

In the meantime, eat more fermented foods, she advises.

“Fermented products are all around the world,” she says. Miso for instance is created in ancient vats and with human hands. “Kimshi and miso have much more bacteria than probiotic yogurt in the West.”

There have been recent studies which show that the live bacteria in yogurt in the West don’t survive long in the gut, and so some have questioned their efficacy.

But, she says, the key is to eat them all the time. “Then it doesn’t matter if they don’t survive.”

The final talk was from Mary Teresa Rainey, a tech and advertising industry veteran who was awarded an OBE for Services to Advertising in 2015.

Rainey have a highly personal account of her involvement with the young Steve Jobs and Apple. She was a young advertising exec working on a small team on the TV commercial for the Lisa computer. She recalled a film shoot for the ad which was directly by Ridley Scott, who had already made Blade Runner but who was far from having the cult status that he later enjoyed.

The star was a very young Kevin Costner who, she recalled, had a dog “and I had to look after it.” She did a bad job and the dog ran onto the set. “Ridley Scott just said ‘damnit let the dog be in the picture’ and he turned out to be a star”, she said.

Speaking about Steve Jobs, with whom she worked closely on the Macintosh project as one of only six agency insiders, she said he instinctively understood communications and design. She is convinced he was a genius.

Steven had the “revolutionary idea of personal computing”, she said, and it was this idea of revolution which inspired the now legendary “1984” ad. She recalled how the Board of Apple didn’t like the commercial at all, but Steve was convinced. So as a callow 23-year-old she “had to persuade the board”.

The ad only ran once in the Super Bowl (the Apple Board insisted that they cancelled all other slots). But Steve was right, she says, and the ad is now regarded as one of the finest ever made.

“Steve was a hot person not a cold person”, she said. “He could be rash, passionate and gesticulating. But he also often broke into a grin, or jumped up and down on the table.”

Another great thing about Steve Jobs was that he was genuinely only interested in talent. “There were a lot of great women in Apple,” she said. “He was a great support of talent whoever they were.”

The more things change the more some things stay the same, she says. “Ideas are a powerful patent for brands. Technology changes but humans don’t. Powerful communications trump everything.”

All in all a packed programme with a lot of food for though. To my mind it still remains to be seen whether the Newcastle event can keep its unique status – I rather doubt it as Manchester and London grow in stature – but I certainly hope so.

The future is coming faster than we think

 I’ve just finished belatedly reading An Optimist’s Tour of the Future by Mark Stevenson. I say “belatedly” as it was written in 2011 which wouldn’t normally be a problem except that this is about accelerating future technologies (and why they are going to be good for us).

It was a very good read, but already there are signs it is getting dated. Take this example. He’s meeting Ray Kurzweil who is telling him about exponential growth in technologies, which he argues can allow us to make pretty accurate forecasts of the future. Noting that some critics believe Kurzweil is either delusional or mad he discusses the forecasts which Kurzweil made in his 1999 book The Age of the Spiritual Machines about the technology which would be available in 2009. Kurzweil himself says, of the 108 predictions, 89 turned out to be correct, 13 are “essentially correct”, three are partially correct and two are 10 years off.

Stevenson makes his own tally. He concludes he got nearly two thirds right. Of the rest he put half in the “sort of right” category (it came true but not quite as Kurzweil anticipated).

The remainder are ‘wrong’ but only in that Ray was optimistic on the time frame. For instance, critics tend to leap on his prediction that ‘translating telephone technology (where you speak English and your Japanese friend hears Japanese, and vice versa) is commonly used,’ which hasn’t happened.”

Except of course that by the time I’m reading this it now has come true.

And this brings me to my point. When you are in the middle of things it is often very hard to accept that advances are happening quite as fast or quite as disruptively (a point Stevenson makes, too). It’s all too easy, if you earning a good wage working for a large, profitable company, for example, to dismiss warnings such as this, also from the book:

“John is speaking with some urgency now. ‘The old-age companies don’t know why they have to run faster in order to lose more slowly,’ he says, laughing. ‘All the practices of those companies are exactly the practices that keep you from being able to engage in the world of fast-paced innovation. They have routines and beliefs built on the assumptions of stability. Almost any company that’s more than twenty years old isn’t built right for this. In fact, I would argue that companies that are five years old aren’t ready either.’”

That fact that ‘John’ is John Seely Brown, formerly director of PARC (the Palo Alto Research Center) which famously invented laser printing and the mouse, should give us pause. The fact that in five years Kurweil’s “wrong” forecast has turned out to be true should also.

As Stevenson himself says: “I have to make peace with the fact that this book is already a historical document. It’s less a posed portrait, more a blurred snapshot”

Bots are a transitional technology

Yesterday Facebook announced, as predicted, the launch of a range of tools to facilitate the development of “bots” on its Messenger platform. The argument being made far and wide is that bots are a replacement for apps which have become so numerous that their usefulness to users is plunging and most developers are no longer making any money. 

It’s easy to see why Facebook is so interested. Unlike Apple or Google they don’t have a hardware and operating system platform with which to “own” the customer. Facebook needs to make its apps perform this function and bots give it the chance to make Facebook, and specifically Messenger, much more useful and immersive and in the process make hardware and operating systems much less significant. 

But bots are only a transitional technology. The holy grail (told to me over 20 years ago by the head of Microsoft Research and still true today) is the Star Trek Computer. The film Her is the best modern take on that vision. That’s why Google (with Now), Apple (with Siri) and Microsoft (with Cortana) and even Amazon (with Alexa) have been pouring so much time and money into developing competent AI-driven assistants.

But the technology still falls short of the vision, so in meantime we will have bots – highly specific and constrained AI-driven chat bots which aim to do one thing (booking a hotel room or flight for instance) very well and reliably. 

They will undoubtedly be a huge success – WeChat in China has already demonstrated that quite clearly. This post from Andreessen Horowitz has the best account I’ve found. How long the success will last rather depends on how quickly the more general AI being developed by Google, Apple et al gets good enough. Expect them to develop bot platforms of their own, but also to amp up their own investment in generalized AI. We all still really want the Star Wars computer, after all. 

The era of emulation and what it means for us

Robin Hanson
Robin Hanson

What is the next phase for humanity? Robin Hanson set out to answer this question in a thought-provoking and lively talk to London Futurists on March 19th.

He argues that humanity has been through several distinct economic growth phases each of which has been “exponential” in character. The first lasted nearly 200,000 years from the moment Homo Sapiens first emerged as hunter-gatherers. These early humans were vastly superior to the animals they replaced, successfully exploiting their environment through the use of organisation and tools. The next economic era began with the arrival of agriculture about 10,000 years ago and brought about a huge acceleration in development, with efficient use of labour and larger and more sophisticated societies. This ended with the birth of the third era, the industrial era, which started around 1760. Again, an exponential increase in economic output and efficiency. This gave way to the computer age in which we currently are. The exponential periods of these eras has been becoming shorter and shorter with world GDP doubling roughly every 15 to 20 years today.

What, Hanson asked, could create an economy which doubles every week or month?

And the answer he comes up with is – robots.

What Hanson means by “robots” is true general artificial intelligence and he argues there are three ways to do this: better software, a comprehensive theory of intelligence, or emulating a human brain.

And it is his belief that the most likely scenario is that we will first develop the capacity to emulate a human brain and that this should happen “sometime in the next century”.

All we need, he argues, are “many parallel computers” which are capable of scanning a human brain, modelling every brain cell type and recording what we see and then “running the model”.

This doesn’t mean we need to understand how a brain works – he thinks we may be centuries away from this. But we would be able to run what he calls “EMs” – short for emulations.

If we had them there would be a new age – the age of EM.

It is this new era, then, that he sets out to describe. Running in software, EMs are effectively immortal -“like houses and cars, if we choose”. But it’s unlikely EMs will choose to be – much more likely that they will spawn short-lived versions of themselves to carry out repetitive or one-off tasks and then shut these down when they have served their purpose.

The new age will have new morals – EMs will probably be OK with termination and respooling.

Partly this is simply a result of obsolescence – “Currently if the economy doubles every 15 years your skills as an individual become obsolete in that time.” This is why we retire and let the next generation learn the next set of skills. “In the world of the EM faster emulation means faster obsolescence.”

They will run faster because, even though these new consciouses are essentially human brains, “human brains are parallel so more hardware means more speed.” And they will take up very little space as they only really need to inhabit robot bodies when they need to do something in the physical instead of the virtual world. Hanson believes most of the time they will inhabit a purely virtual environment.

Hanson sees the birth of EMs as inevitable – they will be developed to speed economic development. And in the early days humans will own the EMs – much like slaves were owned. But just like slaves, some EMs will “buy” their freedom and from there they will quickly make up more and more of the economy (which may now be doubling in a matter of weeks or days).  Because they are so cheap to create (an EM could be copied millions of times at very little cost) and because they cost so little to run he says wages will effectively fall to way below human subsistence wages.

Humans will be eclipsed. The whole human race will retire.

Whether that retirement is a happy or a tragic one is very much up to us, he believes, as we will be quite rich enough as a whole to ensure a good outcome, although those riches will be extremely unequally distributed.

But either way, we might be retiring into a very different world. “Robots don’t need nature” he says. “They may choose to save nature but don’t need to.”

And if we are thinking all this doesn’t sound too good, and that we humans are bound to resist, he doesn’t really buy the “robot wars” scenario, either. “There wasn’t a farmer-industry war during the switch to the industrial era.”

So if this new era could begin soon, how long will it last? Hanson believes that because EMs will be running so fast the whole era could last just a couple of years. After that, maybe they will develop true software AI which will spawn the next era – who knows….

Robin Hanson is an associate professor of economics at George Mason University and a research associate at the Future of Humanity Institute of Oxford University.

Network Society: the coming socio-economic phase transformation

The world is headed for a big transition, says David Orban, entrepreneur and Singularity University faculty member, speaking at a London Futurists lecture in London on February 6th.

“Technology created humans,” he says. “And we continue to use reason to advance technology for humanity’s benefit.” But the key to the future wellbeing of society lies in practicing open science and having an open society, he says.

David Orban
David Orban

Historically we are always “shackled to moral norms by limitations of technology” he says. For example we had child labour because our technology wasn’t good enough to run industrial revolution mills without them. We had slavery because our agricultural and engineering techniques were running behind our economic development.

Now we destroy the environment because it is deemed necessary in order for economies to grow and citizens to consume. Once these ills become untenable, necessity drives alternatives, he says.

Widespread social and cultural change only happens once a robust technology platform underpins them

The networked exponential technologies which are coming next are going to profoundly disrupt the Nation State, he argues.

Solar panels are a good example. When people put solar panels on their roofs they make lots of small decisions, each of which doesn’t cost much. When the State makes energy decision for the country it is done by one big, long term centralised project (think Hinkley Point). The opportunity to call the future wrong is vastly more in the second case than the former.

Another example is 3D printing. This can stop waste from centralised manufacturing getting it wrong but distributes power to the consumer.

And growing food hydroponically in the basement of apartment blocks, reduces waste by bringing food production close to the consumer, using exact quantities of nutrients and light and heat, and growing year-round.

And there are lots more examples, he says:

  • Health sensors keeping people healthy
  • MOOCs educating people wherever they are
  • Crypto currencies reducing the cost of transactions and challenging the power of the banks
  • Even Airbnb competing with security agencies through “a self-reinforcing reputation system which expels from the network if breached”

All such examples are inevitably portrayed as passing fads, he says, but they are in fact part of unstoppable trend.

In this environment exponential technologies lead to exponential uncertainties, he says. There is great value for those whose get it right.

The next trillion dollar companies are being born right now

What has to happen next, he argues, is for computers to be allowed to make decisions by themselves. The world is rapidly become too complex and fast-moving for humans to be the only decision-makers. The LHC, for example, throws away 99% of data itself because it knows it is of no value and the human scientists would become overwhelmed. “Self-driving cars need to make their own decisions.”

Dumb machines must lose and smart machines must win

The idea that it is essential for humans to have the last word was fatally undermined when Andreas Lubitz decided to deliberately fly Flight 9525 into a mountainside, he says. “Planes must be able to disobey and save their passengers.”

But for computers to make decision we need to make them moral. We have a “cosmic responsibility to adapt and face our challenges” he says. We need a global network of ideas which can evolve scaleable solutions. First there will be a science of morality then we will need to engineer morality into our machines. It is, he says, inevitable.

The promise of the fully networked society is great, but the outcome isn’t a given.  “It is up to us whether this phase transition will be peaceful or not”, he says. The current levels of inequality will be just the start unless we meet the challenge to change society so that everyone can enjoy the coming benefits. “We cannot continue vilify the unemployed as we do now,” he says, because in the future we all will be unemployed.

David Orban is an entrepreneur, a member of the Faculty of, and Advisor to the Singularity University, and the Founder of Network Society Research, a London based global non-profit.

How to build a company

I spotted ReWork on my bookshelf yesterday and it reminded me how much I had enjoyed reading this thought-provoking account of 37 Signals’ business philosophy. That inspired me to see if I could find Jason Fried, the founder, talking about his approach and I found it here.

Here are some of the main points:

Don’t lose control of your growth. The key decision the company took was to limit the maximum price on customer could pay (initially $99 a month). This means the company has hundreds of thousands of customers, but none of them are so big that losing them would cause a ripple. Key to this is not to customise – one product, one code base.

Hire late not early. Many companies hire ahead of when they think they will need resources, especially if they have received funds from investors. This is a big mistake, Fried argues. Hiring early means there’s often not real work yet for the newcomer to do. That leads the company to make up work which is not important – a cardinal sin, in Fried’s philosophy. A related point: never hire for new type of position before you’ve had someone in the company try it first and fail. That way you know exactly what you need to get done and can hire appropriately.

Develop an audience. This is different from developing a fan base. An audience comes back to you time and time again. It takes time to build up, but once there is the most powerful way to get products out. Spend money on teaching and sharing, not marketing. 37 Signals has no salespeople: “We only want to have people who are building the product.”

Focus on the things which will stay the same. Most companies spend most time focussed on new things, innovations. But this piece of advice, from Jeff Bezos, the only investor in 37 Signals, was key. In Amazon’s case the things which will always stay the same are low price, good selection and great logistics. No matter what else changes, these fundamentals will hold true. In 37 Signals’ case the core unchanging things are simplicity, clarity and speed.

 

Old and new automative – a re-run of old and new media?

Tesla S

The battle between electric cars and traditional cars will follow the same lines as the battle between new and old media – here’s how.

The first reaction of old media to the arrival of the internet was to dismiss it as irrelevant.

Then, as the internet became more accepted traditional media companies dabbled, setting up websites but with the same content as you could get in old media – and often with real obstacles (like having to log in with the subscription number which was on the polythene wrapper you threw away).

Then, as the march of new media became ever-more serious they started buying internet companies so they could own some of the magic – think News International’s disastrous purchase of MySpace.

Only after many years, as the relentless economic logic continued to bite, did they start divesting the old titles and investing (buying or launching) in new online and mobile brands.

This was a very painful cycle and affected many well-know giants of old media  – think EMAP, for instance.

My belief is that this same cycle will happen with electric cars. I’d say we are just out of the first stage where the traditional car companies dismiss electric cars as irrelevant, niche and unlikely to catch on. Tesla, however, has challenged that view and we are moving into the second stage where traditional car companies are building and marketing their own electric cars.

First, they focussed on hybrids. These are like the old/new media bundles which traditional media companies were so keen to foist on their customers. Hybrids are cheaper to fill up than conventional cars, but they are more expensive to buy and being more complex than conventional cars will probably work out more expensive to service. Thus the car companies have something which they hope looks green but which doesn’t challenge the economic status quo – servicing is where the money is made in the car cycle.

But, as Tesla has shown, there is a future which is entirely electric – and it’s much simpler, much cheaper to run and doesn’t require anything like the same level of servicing – as there are many fewer moving parts.

Of course, currently the achilles heel of the electric car is the cost. But this is almost entirely driven by the cost of the batteries (which also provide less range than consumers would like). And battery technology is undergoing a surge of investment and there will be dramatic developments both in the efficiency and cost of batteries.

In media the economic differences between old and new were in production costs. Paper, ink and distribution were really significant costs which new media avoided entirely thus the cost disparity was startling. The revenue model, though, which was solid for old media (advertising and subscriptions) was much more problematic in new media – proliferation mean subscriptions were hard to establish and advertising rates were very, very low indeed, at least compared to paper.

So new media’s challenge was to innovate around the revenue model and once the innovation started to pay off effects on old media competitors could be profound. In the world of cars the revenue models are going to be pretty similar and at parity (at least until truly self-driving cars arrive). The cost model is where the battle is going to be fought – and won by the electric car industry.

At that stage the traditional car companies will be propelled into the next stage: they will start buying innovative  start-ups in order to own the magic. This is likely to be doomed to failure (again, think MySpace) because of the dynamic famously described by Clayton Christiansen in the Innovator’s Dilemma. Traditional car companies will continue to think like traditional car companies for years to come and they will kill the very innovation they seek to acquire.

Only after the snowball really starts rolling down the hill and the economic pain really starts piling up will we see the kind of changes we are finally starting to see in media. By then it may well be too late for some of the well-known brands which have been with us through the halcyon days of motoring.

At least, that was the likely scenario before Volkswagen was caught in a massive fraud aimed at skirting environmental controls. It seems pollution ceilings in the US (and maybe the EU) are now high enough that it’s making it hard to produce the performance without cheating. The legally-enforced remedy, when it comes, could well end up pushing conventional cars back just when advancements in electric cars continue pushing impressively forward.

It could be that when we look back at the history of the migration of the world to electric cars the Volkswagen moment is seen as the turning point.

 

The radical potential of Blockchain

Niki WilesBlockchain, the technology which underpins Bitcoin has the potential to disrupt many large and powerful industries believes Niki Wiles.

Speaking to London Futurists in a session in London today Wiles, Lead Data Scientist for the London-based digital media agency, 360i said Blockchain solved some of the biggest problems with today’s centralised services.

Big disadvantages with centralised services such as lack of transparency, resilience, security and cost, would all be resolved if Blockchain technology was used.

The big problem which has traditionally mitigated against decentralised systems was the risk of double payment, he said.

The pseudononymous programmer or programmers Satoshi Nakamoto solved this with the Blockchain protocol in which everyone on the network effectively has a copy of every transaction in sequence and there is no central repository.

“Paying with Bitcoin is like shouting in a crowded room,” said Wiles. “All transactions are seen by all.”

Despite the fact that Bitcoin has taken most of the limelight he belives the underlying technology can disrupt basically any centralised system.

DNS allocation, currently the responsibility of the central ICANN organisation is one such example. Moving DNS allocation to a distributed system would defend websites against censorship as well as make DNS much less vulnerable to attack.

In fact he sees censorship-resistant communication as of the killer apps for Blockchain. There are already services like Bitmessage which offer decentralised P2P encryption.

Decentralising cloud storage and computing could bring real benefits too – more security, less downtime, lower cost. Storj.io, for example, aims to be many times cheaper than Dropbox while Zennet is hoping to do the same for computing resources. Because there are no ‘sysadmins’ they should be much more secure, too.

Blockchain should prove effective in the sharing economy he believes – La’Zooz, for example is Blockchain ridesharing.

Social networks could also migrate. Twister is a decentralised social network similar to, you guessed it, Twitter.

There is even a project called Bitnation looking to see what aspects of the state could be delivered on the platform.

There are many other example – decentralised energy networks powered by solar, p2p drone deliveries, decentralised smart contracts, the list goes on.

IBM is even working on Blockchain for powering the Internet of Things.

There are problems however. Blockchain technology is very resource hungry. It takes a lot of computing resources to run the encryption algorithms at the core of the technology and because the whole database is distributed it is very bandwidth-hungry, too.

As a example Bitcoin can currently only process seven transactions every second – hardly a rival for Visa yet.

However, Wiles believes Moore’s Law is on the side of Blockchain. “Decentralised systems are likely to become cheaper and more cost-effective.”

And when they do the financial industry is ripe for change. Blockchain’s strength in transparency and the automatic enforcement of rules could be a real game-changer in a global financial system which is riven with issues. “Financial audits could be done automatically, for example,” says Wiles. “Counterparty risk could be eliminated by all banks sharing one ledger based on Blockchain.”

And because the technology is fundamentally very cheap with very low transaction costs the world’s unbanked could find a solution with just their phones.

It could even lead to the formation of Decentralised Autonomous Organisations – as Wikipedia describes them  “corporations run without any human involvement under the control of an incorruptible set of business rules.”

Things are moving fast is the Blockchain world and in many directions. The next two or three years should show which of these directions is the most promising.