It’s time for digital organics – Algorithms are the MSG of the modern age

Increasingly, our lives are shaped by secrets companies keep. The corporate secret de jour is algorithms.

These secret algorithms are designed to do two things:

  1. Make us like the product more.
  2. Improve the profit of the company via the algorithm.

(Objective 1 is only ever designed to facilitate objective 2.)

No doubt you’ve heard the word ‘algorithms‘ bandied around recently in the media, but unless you’re involved in tech or have had someone explain them to you, it is difficult to know what they are, what they do and why you should care. The definition coming straight at the top of a Google search is a pretty good one:

Algorithm: A process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.

For the most part, algorithms are a damn convenient tool during an era where the amount of data is literally exploding and we need shortcuts. By the way, an algorithm helped me find that definition too. From the screen print below, you can see the results of Google’s algorithms: a definition inside their search results, hence removing my need to leave Google and go to an online dictionary – aka a competitor.

Rule 101 for Algorithms is pretty simple. They are designed to benefit their creator. If they can serve the end customer too – well, that’s a bonus. The problem of course, is that the customer doesn’t know what they didn’t see and which decisions have been made for them. It’s hard to make an informed choice when the algorithms increasingly make those choices for us via filtered options.

A little over 6 months ago, I wrote about the fact that we will need to open up the black box of algorithms if we want to maintain a democratic society – yes, it’s that important. Before anything physical happens in our world, something informational always happens first.

A recent landmark federal court case in Australia focused on a poker machine called Dolphin Treasure whose manufacturer and casino operator have together been accused of misleading gamblers about their chances of winning. This is essentially algorithms on trial. It’s the start of something much bigger, and we can expect to see our most successful and revered technology companies algorithms on trial very soon. All it takes is a little more understanding by the public, and some front page news of algorithms gone wrong where there is blood on the floor – and sadly, it will happen. In many lower profile cases it has happened already.

Here’s what we can expect to see in the corporations around the world: C-suite level executives to emerge in order to build better algorithms and understand those in the market they need to deal with. Boards will need and put algorithm experts on their roster.

Here’s what we can expect to see from the Ambulance Chasers: Hidden algorithms to be the target of legal cases which deceive and cause financial or physical harm to consumers – a new angle to misleading and deceptive conduct.

Here’s what we ought expect from each other: To educate each other on the good, the bad and the ugly of algorithms so we can help shape a world we want to live in. Like we did with food and other suboptimal corporate behaviour patterns.

Here’s what I’d like to see from entrepreneurs: To launch services that benefits users sans algorithm as a key selling point or algorithmic ingredients on clear display – a new form of Digital Organics… to invent a new market and make the entrepreneurial profits they deserve by doing it.

What we need to remember is that every problem presents a new opportunity for nimble entrepreneurs. For business people who steer technology from its current trajectory to a new path is to say ‘no’, we want and deserve more than what you’ve giving us, and we are going to be the people who do it.

Check out my new book – The Lessons School Forgot – to redesign your own future.

The Hustle Hoax

I came across this article recently discussing the Startup Hustle Bubble which is occurring in many entrepreneurial circles. The title said that working 9-5 is for losers. I tend to agree, but in the opposite direction than many of the Silicon Valley disciples espouse. They promote the 18 hour work day, I reckon that’s a better number for the week, only kidding, but not by much. To save you reading it, the proposition of the so called Hustlers goes like this:

  • Workaholism is a desirable life choice
  • To succeed you must give up everything (depends how you define success)
  • Out grind, outwork and out hustle everyone
  • A cottage industry of Hustle conferences are emerging
  • There’s even a Hustle Jesus – otherwise known as Gary V, that hustlers genuinely worship
  • Then there was some wonderful counter claims by the journalist.

Here’s a few things worth considering:

Firstly, there is no doubt work is required to get results in anything, but there is no evidence that working a crazy hours makes people any richer – if that’s the goal. I’d add to this that most of the people I know with incredible financial wealth, didn’t hustle all day and night, they used their brains, took calculated risks, saved, invested and compounded small advantages over time. But you know what they did more than anything else? They got others to work the hours for them and arbitraged their wages. It’s how capital works. Capital wins, capital always wins simply because each individual will only ever have 24 hours to give.

It’s also worth remembering that only thing we can never earn back in life is time. No amount of money will buy it back, your kids (if you have any) will only be young once and they’d rather have your time, than toys. We all know that money doesn’t lead to more happiness over a certain threshold. But mostly we should always be driven by our own personal objectives, when it comes to what we sacrifice. It’s vital we don’t get caught up in ‘fashion’ or the goals of others who a vested interest in the amount of hours we put in anything.

If you want more life hacks – then you’ll totally dig my new book The Lessons School Forgot. By the way, I went surfing on Tuesday, had a two hour nap today and I still got all my work done!

Why energy will be free in under 10 years

It’s easy to forget how many things we used to pay for that we now get to use and consume for free.
Energy is very close to becoming one of them. The global economy is very quickly transforming to an all electric economy. Yes, for both your house and your car. Very soon we’ll only have to pay a one off set up fee to go entirely off grid and generate all the energy (electricity) we need, for free. It will come from the worlds most powerful energy source, the original fossil fuel called the sun. I hear you saying a one off set up free isn’t free, and that’s true, but this is where the economy is changing and catching many existing industrial companies off guard.

 

In the past the factors of production were all centralised: Factories, Retail Stores, Power Plants, Media Channels, Computers. Sector by sector, they are being decentralised as technological advances allow these tools to be cheap enough for us to access them or own them for a very low cost. The super computer in your pocket comes to mind, or the factory you don’t have to own as you access manufacturing capacity via Alibaba. They way it will work is in 3 simple steps:
     

  1. Set up solar panels + Battery storage  = Price X
  2. When Energy bill > 20% of Price X
  3. Finance will fund the off grid set up. (cost of money around 7% for unsecured loans + principal repayment)

It will be much like what happened with our shift from the dumb phone to the smart phone. We have a contract to pay off the hardware (which actually includes hidden interest costs), but in this case, the hardware is paid for by the money we’d normally be paying the electricity company with a quarterly bill. But now it will go to the companies setting up a mini power plants in our homes.

So where are we today with the cost of going ‘off grid’ and having enough energy to power our homes?

The average home in Melbourne, Australia (where I live) uses 16 kwH per day. In order to set up a solar PV, inverter and battery system which can provide this level of energy on a daily basis, in all weather, it currently costs around $25,000 – just google “off grid solar 16kwH” to see the various options. The current average energy bill in Australia is $550 per month. Already the cost is very close to the switch covering the cost of finance and repayment in 3-5 years – the typical length of unsecured loans. The switch will happen very quickly when we consider the rapidly declining cost of both solar panels and batteries. Currently the cost of Lithium Ion rechargeable batteries is falling by 40% every 2 years driven by large scale production efficiencies. Based on the current price trend, within 5 years the cross over will start to occur.

And here is where it gets interesting. It will happen quicker than we think based on other non-battery based system efficiencies:

Solar Panels (PV cells) cost performance improvement 20% per doubling of manufacturing capacity – otherwise know as Swanson’s Law. This too will continue. Within 5 years their cost will be 75% less than they are today, and they will be more efficient at capturing energy, due to energy capture improvements. Since 2011 the average PV panel went from only capturing 11% of available joules of energy to 19% currently. Add to this the potential of a curve jump to better technology and we could surpass even our current optimistic estimates. A report just this week from the Journal of Material Science revealed a way to recharge Zinc Air batteries which could be 5 times more efficient than Lithium Ion. 

And finally, lets not forget that the amount of electricity / and energy we use in the home currently has wastage rates of up to 30%. New devices and IoT functional smart homes will significantly reduce the energy wastage in our homes. Once our houses become IoT enabled, not only will the efficiency and capture of an off grid system be much better, there is a highly likelihood we will not require as much energy as we do today. This is because most devices requiring energy in our homes will essentially become computers. This is where Koomey’s Law comes in. Koomey’s Law states that at a fixed computing load, the amount of battery you need will fall by a factor of two every year and a half. This will  have a more dramatic impact on the energy industry as most machines we use computerise.

When we add this up, all these pieces from different previously isolated sectors, it is clear to see we’ll have all the energy we need from the sun and other sustainable sources. Which means, that unless you sell oil or burn coal for a living, the future is certainly bright.

Check out my new book – The Lessons School Forgot –  thrive in the technology era.

The start of the end of the screen – Google Home

Why is no one talking about the things that really matter with Google Home? Like how it changes the economy, and how it might have the kind of impact mobile apps did on our web habits. I’ve read a number of articles about the Google Home device being launched in Australia this week. Lots of them discuss the effectiveness of the natural language processing and which apps it works best with. Like this article and this article. None of them seem to cover the issues that really matter on the topic. So here they are.

Ambient Computing: This is a shift away from typing to talking. We are now entering the age of ambient computing. The killer apps on interacting with artificial intelligence have just shifted from eyes and fingers, to mouths and ears. This is the start of a permanent change in the way humans interact with intelligent machines. The shift is as big as the smart phone was. The only difference is that this will take a little longer to establish itself. The reason it will take longer than the smart phone did is that there isn’t a direct substitute for such home devices. The smart phone had the advantage of replacing a tool we all already used – a feature phone. Most of which had a 12-24 month replacement cycle – like items under contracts typically do. Therefore, we can put this device in the Amara’s law category – a bit slower to take hold, but once they do arrive en masse, the impact will be greater than most people suspect.

The smart home killer app: Every new regime in technology requires a centre piece technology to augment and co-ordinate disparate devices. The graphical browser ushered in the era of the World Wide Web. Google home and friends, namely Echo and Homepod are the devices that will usher in the era of the smart home. A home where everything functional, mechanical, and electrical will interact with web. This is where we can expect to move to renewable energy faster than most predict. Currently just under half the energy we consumer in home is wasted. We don’t need more efficient PV Solar panels and larger batteries, what we need is homes that know how to efficiently allocated energy and resources to the devices inside it.

So what does a smart home look like? It’s a place where most everything has computational capacity, it knows everything that’s in it and it efficiently allocates energy and activities based on what it learns. We can expect energy usage in the home to decrease by at least 30% in a truly smart home. When technology makes our homes more efficient, the value equation and ability for renewables to create an off-grid solution increases exponentially. A positive cycle of both demand and supply side efficiency may change how we power our homes ahead of schedule due to the arrival of complimentary technologies. We can expect the centre piece AI to be a party to the dismantling of the coal and fossil fuel industries. Disruption is horizontal – it is usually a juxtaposed technology which changes things unexpectedly.

The end of SEO: Once people start talking to their devices and asking for and expecting verbal responses, being on the homepage of Google becomes irrelevant. There wont be a page at all. In a world of ambient computing, we need be the first recommendation which gets returned audibly. Which means any brand, product or service hoping to be recommended by a search engine needs to be asked for by brand, or be the best in category. Even worse, companies like Amazon and Google might not care what’s most relevant, and instead start recommending what is most profitable. So long as it ‘solves the problem’ of the end user it’s most likely to give them the highest margin option, for them. Remember, Google promises not to be evil – to it’s share holders at least. SEO, will become VPO – Voice Pod Optimization, a game where only a single option is mooted to the end user.

Privacy on steroids: This is the time when we allow multinational corporations with backdoor pipes to governments hear every word in our homes and learn every habit. All of which is permanently recorded. And if you think this only matters for people committing crimes, then never forget that the most extreme externalities are those we can’t plan for, or even predict. If this isn’t enough to convince you to think twice about privacy, this little post might at least open the mind a little. Privacy and secrecy are not the same thing.

Given these changes aren’t in the maybe category, best we start acting on them now.

The inevitable merger of our species with machines

It is said that we become the thing we are immersed in. I feel like we are starting to merge with the technology we have become so reliant on. From the world’s most connected human, to a gentleman named Mr Meow Meow who recently had an NFC chip installed in his body to make catching public transport more convenient in Sydney.

For a long time we have been augmenting our bodies with technology – hip replacements, heart valves, contraceptive devices, but until now, most of the technology has been static and does not interact with anything outside the body. We may be on precipice of radical change.

This week I had a discussion with ABC radio on the issue and even a potential split in our species – organic humans and augmented humans, or cyborgs… These here are interesting times. Click here to have a listen.

Be sure to follow my instagram page – @sammartino with regular posts on the evolution of technology, and making sure you too, are future proof.

Stay rad, Steve. 

Expertise during a data explosion

No one really knows how much data is being created in the world. We know that most of the data that exists was created in the past couple of years. Some people say it is doubling every year. The reason that this is even possible comes back to lower barriers of entry. Until we had low cost computing, internet connectivity, and more recently the smart phone, data was isolated, segmented and verified by institutions who were given the authority to create, curate and store it. Authority in this instance was a function of finance. The cost of creating permanent information was expensive – print materials, broadcast hardware, costs of distribution all limited the ability for information to be created and shared. It meant there was far less data, but it also meant we knew where to look to find what was available.

Data has moved from being something which was structured, in know-able places, to something which is unstructured, distributed and without authority. It’s now organic, alive and rapidly evolving. Authority and tools go hand in hand. Now that the tools of creating and storing data are omnipresent and almost free, their is no authority governing it. This means two important things:

  • It will continue to increase exponentially
  • Knowledge no longer has a boundary

So how can anyone be an expert on anything?

In this environment expertise has no choice but to change. No one can know everything, even in the most niche of subjects. If we add to this the idea that the major factors of production are shared – that being 1’s and 0’s – then the potential for cross fertilisation of ideas is infinite. What is true today might be kiboshed tomorrow by new inventions, ideas and collaborations.

The new art of expertise has to become this – knowing where to look and who to rely on.

While we’ll never know everything that has ‘just happened’ and we’ll never be able to predict exactly what is next, we can study the trajectory. Pattern recognition, is quickly becoming more important than knowing. What experts will need to be able to determine in the future is how likely something is, how to assess the sentiment of future behaviour and how to be able to verify what just happened. Expertise is becoming a weird kind of reverse archaeology.

Increasingly what we need to know is how to work with the tools to uncover knowledge as it is created.  The age of memorising things for future reference is quickly becoming obsolete.

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Come join me Tuesday Night in Melbourne to dig into your future and some of The Lessons School Forgot – register here. See you then, Steve.

The one word that ties this revolution all together

If I had to use one word to tie together this technology revolution we are living through it would be this:

Mobility.

Once we think about all the tools arriving and what they allows us to do, much of it revolves around geo graphic independence and mobility.

Smart phones – mobile computing in all it’s capacities. Mobile communications.

Driverless cars – increased mobility of people and things, independent of human touch.

Wikipedia / Blogging / Vlogging – Mobility of information and ideas, not locked down the the physical location of books or other data sources.

Social networks – Mobility of connections to people, what we are doing and saying flies across the globe at the click of a button.

Work – Ability to get information work done anywhere in the globe.

Drones – Mobility of things, visual footage and data points, and soon people.

Payments gateways – mobility of finance outside of physical banks.

Crypto Currency – mobility of money and payments, independent of any geography or government.

Blockchain & Smart Contracts – Mobility of promises independent of location, and premised on execution of that promise without parties having to meet physically.

3D printing – Mobility of manufacturing – send a file, make it anywhere.

Crowd Funding – Mobility of innovation outside of funding ecosystems.

e-commerce – Mobility of retail, sell to anyone, anywhere.

Cloud Computing – Mobility of data storage – it follows you around the world

Cloud Manufacturing – Alibaba providing access to the world of manufacturing with a few clicks

Freelance markets – Mobility of labour forces for information work.

Given all of this, we need to ask ourselves a simple question to future proof ourselves and or the company we work for;

How are we increasing the mobility of what we make sell or do. It’s a great place to start.

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If you want to increase the mobility of your future join me for my new book launch – The Lessons School Forgot – on Tuesday night in Melbourne. Reserve your seat here for a night of inspiration & ideas with good people.

See you then, Steve.