It’s time we move past all this nonsense about Coal and Tariffs and focus on what’s next. Other countries are, especially China. Some smart folks like those at the Roosevelt Institute are thinking about the issues of AI, automation, jobs and policy. Their report “Don’t Fear The Robots” is an interesting read. Whether you fear or fear not, it’s time to start paying attention.
Divorce your good business instincts from your bad ideas. If you’re a good entrepreneur, you can assume your instinct is right 95% of the time, and your ideas might be right 25% of the time.
Mark Pincus – Zynga
I like to think I have good instincts, but often have found it hard to reconcile myself to my occasional business failure. I really like the distinction between instinct and ideas.
A youtube channel is the new paper route
Reed Hastings – Netflix
My friends and I often reminisce about our early jobs and lament the lack of part time and entry level positions available to our teenage kids. I think we often have a biased and limited view of what meaningful early employment looks like.
Be proud of your choices, be grateful for your gifts
Jeff Bezos – Amazon
There is a really unhealthy sense of entitlement that comes with everything the tech culture has achieved. It’s important to have a little humility and perspective when your chance gifts of zip code and IQ have so much to do with success, and increasingly drive income inequality.
You could never convince a monkey to give you a banana by promising him limitless bananas after death in monkey heaven.
Yuval Noah Harari – Author of Sapiens: A Brief History of Humankind
The most impactful idea I’ve been exposed to this year is that we humans are separated from other species primarily by our ability to organize in huge numbers through establishing vast fictions. Religion, governments, and laws that guide commerce are just stories we tell each other and more importantly believe enough to dictate our behavior. Capitalism, socialism, objectivism, libertarianism, and all the religions are just evolving fictions competing in their own process of natural selection.
I’d love to hear what you found impactful over the last crazy year?
I’m curious to know how you are thinking about our time. How are you counting what “age” we are in and what do you call it? Is this the fourth industrial revolution? The fifth technical revolution? The era of the Cyber Machine? The immediate prelude to the singularity?
In the Agrarian transition, starting 5,000 years ago, we removed ourselves from the food chain. We set ourselves apart biologically. For the first time we weren’t dependent on our natural surroundings for sustenance. We usurped biology to produce our own food, with domestic crops and animals. We went from nomadic to settled.
In the Industrial transition, starting 250 years ago, we removed the limitations of biological strength. With steam, internal combustion, electric motors, and chemical thrust, we availed ourselves of seemingly limitless power. We mechanized farming and developed mass production of goods. We put the equivalent power of 100s of horses in our carts, 1,000s in our boats, and propelled ourselves and our goods on land and sea. We learned to fly and soar to the outer reaches of the solar system.
Just as profound, I think, is this new transition. I’m not sure what to call it. If “AI” weren’t such a maligned term I might call it the AI transition. In this transition we remove mental limitations supercharging our ability to make discoveries, organize sharing on a global scale, customize products and processes for units of one while driving incremental costs to zero. This transition holds out the promise that everything can be abundant and universal, that the only scarcity will be human attention.
The transitions that removed us from the food chain and freed us of our physical restraints upended existing economic roles and models. They fundamentally changed our human experience and world view. Each yielded a step function in life expectancy and population growth.
The only other transition I can think of that may fall in this category is the use of fire for cooking. Evidence shows that cooking of food enabled us to unburden the brain in a way that lead to the development of the prefrontal cortex and rationality.
But for now I’m sticking to my big three – Agriculture, Industrial and whatever this thing is. What do you call it?
The day is coming when all I carry is my smart phone and Driver’s License. Mark Andreessen didn’t quite have it right. It’s not software but the smart phone that’s eating the world.
For me, it started 17 years ago when I bought a Kyocera 6035. That smart phone ate my day planner. Better yet if gave me email any time any place without having to get out my laptop and find a network connection. My phone’s next big meal came with the iPhone in 2007. I got mine in Oct of that year and haven’t carried a music player since. Subsequent iPhones ate my camera and my Mio610 portable GPS device. I got rid of my travel wallet in 2009 with advent of reliable e-tickets for airlines.
Last year I changed my wallet, from a trifold to a slim card case and a money clip. As most all transactions go to plastic, I find myself carrying my money clip less and less.
What’s left to eat? I’m using ApplePay more. I suspect we’re not far from eliminating credit cards. So that leaves my ATM, my Health Plan ID card, loyalty cards, and receipts.
Software has already eaten these things but not yet the smart phone; that’s what matters. What Andreessen misses with his software comment, is that the user experience trumps the automation. Sure it requires both to work, but I’m not dropping all my credit cards until it is easier not to have them.
I spent last week at the Exponential Medicine Conference (xMed) in San Diego, put on by the Singularity University (SU). SU is a group dedicated to the notion that Moore’s Law (number of transistors in a dense integrated circuit doubles approximately every two years) will soon result in computing capacity that eclipses the computational capacity of the collective human brains on the planet. This is referred to as the singularity; a concept advanced by Ray Kurzweil. It will change the way we do everything including healthcare.
In the course of the conference I had a couple of ah-hah moments.
1) Physics is science built on first principles while medicine is an observational art
This first “ah-hah” came in a conversation with Dr. Catherine Mohr who trained as an engineer before going to Med School. When I asked her the biggest difference between engineering and medicine, she observed that engineering is built upon first principals. We know definitively how materials behave and have a complete understanding of physical dynamics (at least at the human scale). Medicine on the other hand is essentially observational. We don’t yet have first principals for biological systems.
2) Health sensing and health data will be ubiquitous and zero cost
The second “ah-hah” came from pattern recognition; today’s healthcare looks a lot like the early commercial Internet. I started an Internet email company in 1993 when the Internet was first becoming commercialized. The Internet was born from telecom and institutional computer centers. In those environments bandwidth and computing power was scarce and precious. But the models and companies that won on the Internet assumed that bandwidth and computing were ubiquitous and zero cost. That’s why we have Instigram, and Kodak is dead. The winning models of Health Care will assume sensing and health data are free.
Combine 1 and 2 and you get the real ah-hah – medicine is experiencing exponential advances emerging from observations, correlations and analysis of ubiquitously available data. The pace of change will only increase. As Vinod Khosla put it: technology will replace 80% of what doctors do.
Our experience at SweetSpot Diabetes Care reflected this trend. Standards of care for diabetes are moving from measuring HbA1c three times a year, to measuring blood glucose levels every minute and combining it with blood pressure, caloric intake, pulse rate, activity, etc. Smart analytics turn thousands of data points into actionable insights and visual indications reflecting the specific metabolic dynamics of each individual. This informs medications, behaviors and potential interventions.
We don’t yet have the first principles of what causes diabetes, but the art of care is rapidly transforming. It’s getting easier to live well and long with diabetes, as with most other diseases. That’s what xMed is all about.
I’m sure you heard someone exclaim last week, “How can Uber is worth $18B?” Those that follow me on Twitter (@chrislogan) know I’m be pretty obsessed with Uber. It’s a great example of distributing William Gibson’s uneven future. It combines many elements into a seamless experience that greatly improves the lives of everyone that uses it.
Uber has a brilliant value proposition – give me a car right now, right here, to go where I need to go.
And it solves so many problems, so gracefully, that most customers forget they were problems: Safety, cleanliness, comfort, promptness, uncertainty of schedule and delay, parking, traffic and directions, uncertainty of fares, integrity of the driver, method of payment.
In solving these problems, Uber improves the quality of life for the customer. But better yet, it also improves the community in which it operates. Among other benefits, it decreases congestion, decreases air pollution, increases tourist revenues, and makes it easier to do business.
It provides all these benefits by leveraging capabilities that have only been available for a few years. It leverages a smart phones many magical abilities: local computing power, high-resolution display, geo-location, cell communication and data networking. It adds massive amounts of cloud data: maps and traffic. And, marries it to powerful applications and integrations: an app that tracks, rates and ranks usage and routes for user accounts and driver accounts. It uses databases of participating vehicles and drivers, and integrates into payment systems that tie to virtually every credit card and financial account on the planet.
This is innovation on par with Amazon’s disruption of retail commerce. Books were only the beginning with Amazon. Similarly, Black car services are only the beginning with Uber. It’s a platform that can support an on demand usage model across dozens of our daily activities. Imagine the next time you needed to …(fill in the blank)… you just tap your phone and it’s made available to you.
In 2004, Amazon was worth $18B. For the last 10 years there’s been a steady chorus of naysayers complaining that there wasn’t enough value, or profit, or growth to justify the price. Amazon today is $150B and still growing at clip that is the envy of all of Wall Street. Uber is the next Amazon.
I look forward to the Uberization of my life. Imagine when healthcare is Uberized. Today, when I am sick and at my least mobile, I have to figure out who to see, make appointments, wait in rooms of sick people, to be shuffled between providers who don’t share my information, take repeated tests and have competing diagnoses and prescriptions. In an Uber health system, the system would know who I was, where I was, what was wrong, route me (or better yet my medications) in the most efficient manner and be sure I was dealing with the right provider for the right things at the right time. Like Uber today the result would improve my life, and it would benefit everyone. The system would cost less, be able to see more people, and have better out comes.
When people complain that we have a device in our hands that gives us access to all information and knowledge…and we use it to watch cats and send selfies, I point to Uber.
It’s time to rally again to the cause of net neutrality. We need the net to be open. We need the pipes not to discriminate against content. But, more, we should shift the debate. This is fundamentally about the role of the net in our lives. It is time we get to the core issue:
THE INTERNET IS A SOCIAL NECESSITY
We need the net, like we need water and electricity. You can’t function as a productive member of society without Internet access. So we should start talking about bandwidth and access as a fundamental social underpinning of our health and welfare.
In that context, tying access and bandwidth to content is obviously a mistake. It is fundamentally wrong. Not just because it allows large companies to control and distort what is carried, and more importantly, what is not carried on the net. It undermines the utility of a basic component of social fabric.
It is similar to allowing Walmart trucks to have dedicated lanes on our highways. The parallel argument would be: the majority of Americans shop at Walmart and the resultant efficiencies would help the majority gain better access to the goods they want. And because it would allow Walmart to optimize their trucks in ways they couldn’t if the roads weren’t integrated with their trucks…which benefits everyone due to fuel efficiencies, safety, etc.
But, it would be fundamentally wrong, and the reason has nothing to do with those arguments. It would be wrong because access to our roads is a fundamental social necessity. Individuals and business depend on road access to function in our society. Discriminatory access undermines our socio-economic system.
Today we’re utilizing the efficiencies and advantages of the net and net connected devices to re-engineer everything we do. This is already having tremendous impacts on our quality of life. Private companies, government, and individual social interactions use the net to transform themselves for the better. Web commerce, the Federal Paperwork Reduction Act, Meaningful Use initiatives for medical records – examples could fill volumes; there is not a single aspects of society that is not being transformed by the net.
Net access and bandwidth are too fundamental to be cooped by private interests for competitive advantage. Of course private interests and private capital are needed to effectively build and evolve the net. But we need to think of it like we think of electricity and water. Our lives would look very different if we let GE match their power plants to their electrical appliances. If in the 1950s GE had developed and people had accepted a system that guaranteeing optimized power from GE plants to GE appliances, we might have had better washers and dryers in our homes for a time. But it would have inhibited the development of virtually every powered device in our homes today.
We need policy that ensures everyone has net access and encourages continual increase of indiscriminate bandwidth. We can’t allow bandwidth to be tied to content. We can’t restrict the content that any part of internet carry. We need to translate privacy, property rights and commerce laws to net infrastructure. This is perhaps one of the most important policy imperatives of our generation.
A friend of mine, who recently moved his tech company to Portland from SF, is joining a group of other Tech execs for a meeting with the governor. He asked me what I suggest he discuss…what should the State be doing to improve the Tech eco-system in Oregon?
I’ve always believed that a good entrepreneurs don’t let the government get in their way. Like Gary V puts it “I’m completely of the notion the government can’t stop me.” But despite my libertarian business leanings, I think there are things the State of Oregon and the City of Portland should be doing. Oregon and Portland can leverage its strength – affordable, high quality of life – and encourage the continued influx of over-educated young people.
There is a burgeoning creative class in Portland, yet our economy is out pacing the talent pool. I don’t know of a single local tech company that isn’t wanting for additional talent. My own company SweetSpot hasn’t been without a slew of unfilled reqs for the last three years. Oregon State University, Portland State University and other Oregon programs are upping their game and turning out more qualified programmers, but that isn’t enough…we have to continue to import.
First, we could start a program to target the top several dozen Computer Science programs across the country. Any graduating student with a 3.0 or better should be provided a plane ticket to Portland, a couple nights at the Ace and an intro to half a dozen local tech companies. With Portland’s national reputation, there’d be no problem wooing some of the best and the brightest out for a few days of micro brews, fine food and interviews. State and local development agencies could fund this. A few hundred thousand dollars could see a very good return in the form of highly compensated new taxpayers.
Second, we need to advance policies to improve and encourage life for Tech companies. Oregon and Portland should embrace the digital re-invention of all our daily activities. Things that can continue to make Portland a great place to live, especially for highly educated young people. We should reverse the silly antiquated policies that restrict services like AirBnB, Uber, Lyft and other “sharing economy” apps. By embracing these innovative services, we not only improve our quality of life, but also encourage innovation and growth for local tech companies. It’s time our city leaders get their heads out of their…out of the sand…and figure out creative ways to encourage, not inhibit these new services.
Don’t treat new ride sharing services like antiquated taxi and traditional limousine services. Don’t treat AirBnB like traditional hotel services. Embrace and encourage digital reputation and dynamic application mechanisms to enforce quality and safety with regulations as a backstop. Embrace game dynamics that drive pricing and usage optimization decreasing congestion and waste.
With a few policy changes, Oregon and Portland could go from technical backwater that can’t even develop a functioning web site to the place every smart technical savvy person wants to live. We’re competing for talent with San Francisco, Boston, and New York, not to mention London and Berlin. It’s time we start acting like it.
I just read Ben Horowitz’s excellent book, The Hard Thing About Hard Things. It reminded me how hard it is to scale a high-tech growth company. I’ve been involved in four ventures that made the leap to scale. When it is done in short period of time – inception to $100 mil in revenue in 5 years – it’s a bit like a jump to hyperspace…Hollywood can only describe it as streaks of light. Ben does an excellent job of analyzing and articulating all the elements of scaling a business. It’s really hard, but as last years Unicorn Club discussion highlights, it’s really rewarding.
Building high growth Tech companies to scale is the Portland’s next big economic challenge. The acquisition of Simple by Spain’s BBVA is the latest example of Portland’s ability to build successful tech companies. But even Simple is an order of magnitude from the bench mark of high tech scale – $1B in valuation.
Five years ago Portland undertook a concerted effort to build a vibrant tech startup ecosystem. Resources, public and private, rallied around multiple efforts, formal and informal. The results have been impressive. Startup tech jobs are indeed leading Oregon out of the recession. Over a dozen active incubators are helping to mint dozens of viable Portland companies each year.
Can Portland companies now make the jump to scale? It’s going to be harder than sparking the initial startup ecosystem. Portland benefited from the fortunate confluence of several factors that provided a fertile environment for startups. Portland has been a desired destination for collage educated young people for more than a decade. The recession set the stage for individuals and institutions to take risks on new ventures and local capital was willing to provide modest seed funding required to fuel fledgling ventures.
But the primordial stew to spark the creation of scale companies is a different matter. Starting with the talent; the smart young people migrating to Portland may be able to move up an incubator fueled learning curve to succeed in a Startup, but As Ben points out, expertise and experience required for scale is a much higher standard. It’s much harder to grow organically. And, unlike the SF Bay Area, Portland doesn’t have a pool of successful scale companies to draw upon.
To date Portland has shown little appetite to take the risk required to scale a company. Like my own venture, SweetSpot, many Portland companies are finding early exits rather than driving to scale. The list is long – GetListed, Geoloqi, RNA Networks, CroudCompass, SmallSociety, SecondPorch, StepChange, Instantiations, Giftango, Meridian, Preka, Rumblefish, Simple, Vizify. While these demonstrate great success in Portland’s ability to mint Startups, they also show our lack of ability to grow companies to scale.
A viable growth company can always find capital. But, as I’ve written about earlier, it’s more expensive in Portland than areas. Portland has a number of growth companies that have accessed expansion capital – Elemental, Urban Airship, Puppet Labs, Janrain, Act-On Software, Jama. We’ll see which are successful at jumping to scale.
Expertise, talent, appetite for risk, and access to capital are just the table stakes to execute at scale. They just get a company to the table of contents of Ben’s book. Then the hard things begin.
I think more than anything, Portland needs to find the desire to scale. My first experience with Portland’s Startup ecosystem is indicative of the old attitude that is still too prevalent. I left my last Bay Area job in ’07, ending a weekly commute to Palo Alto. In my last year, the company doubled revenue with a top line above $100 mil. In Portland I started working on a business plan for mobile application venture. When I pitched one of Portland’s most active Angel groups, a fund partner told me the plan had no credibility because I showed a revenue curve that went from zero to $100 mil in 5 years. I was told to be taken seriously, I should instead show a 5 year pro forma to $20 mil, for none of their investments had ever gotten anywhere close to $100 mil in 5 years.
I find it refreshing every time I talk with Luke Kanies at Puppet Labs. Puppet is in a multi-billion dollar market place and to Luke success is nothing short of leadership in that market. That’s a standard for scale. A few more Lukes and a perhaps an IPO could turn the tide for Portland.
I’m enamored with the concept of “Return on Luck”. I think it plays a much bigger role in StartUp success than people appreciate. Often successful entrepreneurs are considered lucky, and sometimes considered “just lucky.” Like somehow they had nothing to do with a successful exit.
But we all get luck, good and bad. There are two critical factors: first, getting in a position to be lucky; and, second making the most of it.
Australian Steven Bradbury has been a hero of mine. In the Salt Lake City Olympics, Australia’s Steven Bradbury skated to Gold after everyone in his final fell in front of him. He got to the finals because everyone in his semi-final heat also fell. This may seem like dumb luck, but you need to appreciate what it took for him to find his way to an Olympic qualifying heat (in fact it was his fourth Olympics). Especially from a country like Australia that is not exactly a winter sports powerhouse.
We saw this example of return on luck again in Sochi when China’s Li Jianrou repeated Bradbury’s feat. She won gold when all the skaters in front of her fell. Like all entrepreneurs that deserve credit for their successful outcomes, Jianrou and Bradbury deserve their gold medals as much as every other winner.