Tech and Business

A New TMT Hypersector

During the first internet boom, 20 years ago, there was ample talk about the convergence of Telco, Media and Technology (TMT). Now, the last months have completed this convergence, creating an scenario that would have been difficult to imagine back then.

First, eight new technology giants have emerged, threatening to take over the world. They started in Digital Advertising (Google, Facebook, Tencent, Baidu), Digital Commerce(Amazon and Alibaba), or managed to transform their way from traditional PC software and hardware (Microsoft and Apple). Now those eight companies have grown into unstoppable behemoths that dominate the top 10 most valuable company list and are worth over 3 Trillion dollars. They have expanded to take over adjacent industries like media and IT infrastructure, they took control of the smartphone age, they buy up companies that threaten their dominance and they are betting hard on AI as the new paradigm to continue their dominance.

Media has finally, and painfully, converged with Telco and Technology. Print media was decimated and has mostly moved to digital, with even the largest properties struggling to hold their relevance. Pay TV is progressively integrating into telco (Liberty into Vodafone, Direct TV into ATT) or content (Sky in Fox). New content majors have emerged, Netflix already more valuable than any other media company and Disney completing its transition to a full range media giant. Traditional majors are being bought up by telco (Universal by Comcast, Warner by AT&T), tech players (Columbia by Sony), with Fox up for grabs between Comcast and Disney, and Viacom embroiled in a corporate dispute about its future.

IT infrastructure and hardware is being taken over by cloud, which has been taken over by Amazon, Microsoft, Google and Alibaba. This is putting great pressure on traditional blue chips like IBM or HP, which could be quietly moving to irrelevance. Only the technology giants seem to have the scale, skill and daring to conquer this new world. The cloud dominance of only a few companies could eventually have knock-on effects on other industries like hardware or chips.

Business Software is in full transformation with the traditional players (SAP and Oracle) having been able to buy their way into the new world world of Software as a Service. The price they have paid is to dilute their shareholders by buying innovation, in a similar way to pharma companies, and to admit three new players into their oligopoly. Salesforce, Microsoft and Adobe, have improved their position and now have joined SAP and Oracle as key providers to many large and small companies. Beyond the new Big 5, there has been an amazing explosion of innovation with tens of thousands of SaaS companies creating new software, which is only comparable to biotech innovation in the pharma sector.

Telco keeps its place in the world as the gateway to the new connected world. A couple of years ago, connectivity seemed under fire, with Google Fiber or Facebook Aquila apparently focused on eliminating telcos from the equation. However, the Big Techs realized that telco was about perspiration and territoriality, while they are about inspiration and global scale. In consequence, they have abandoned their connectivity projects and moved to work with the telcos (e.g. Facebook with TIP and Google with RCS).

Device manufacturers lost their position and a new set regained it again. The pre-smartphone ecosystem was almost completely wiped out, with Apple and Samsung becoming the only profitable games in town. Only recently, did the Chinese players (Huawei, Xiaomi, 1plus1,…) manage to recreate a competitive ecosystem on the Android part of the equation.

Internet services have been captured mostly by the Big Techs, either directly or through acquisitions, and some independent unicorns. Messaging and communication with Whatsapp and Skype. Social networks with Facebook, Linkedin and the new wave (e.g. Instagram, Snapchat). Only some specific verticals like transport (e.g. Uber, Lyft) or lodging (e.g. AirBnB) have been large and independent enough to create their own ecosystems

The new TMT Hypersector is very different from what could have been expected 20 years ago in the eve of the dotcom boom and crash, or even 10 years ago at the start of the smartphone revolution. We can only guess how the next ten years will evolve for each of the subdomains and for the dominance and balance of power among players.

integrated reality, Tech and Business

Facebook’s F8: VR First

Facebook’s developer conference F8 gives great information on what the company is proud about and what are its priorities. This year two highlights stand out: its commitment to creating an iPhone moment in VR and its deep acknowledgement and willingness to tackle its social responsibility after Cambridge Analytica. While the mea culpa and resource shift to safety and privacy has been much talked about, the VR First mantra in Facebook is still underappreciated.

VR’s potential iPhone moment

Time has given the unveiling of the iPhone mythical status. Mobile internet had been severely hyped with the launch of 3G in the early 2000s, but usage had never lived up to expectations. Mobile browsing was only happening in Japan through iMode, while even the most advanced “smartphone” models from Nokia were driving very limited use. Steve Jobs managed to take mobile data across the usage chasm with the iPhone, creating a new dominant interface for the Internet over the last ten years and more than three quarters of a trillion in value for Apple shareholders (from less than $100 billion in 2018 to close to $900 billion).

VR is in a similar place to mobile data pre-iPhone. It has been severely hyped, many players have been putting out headsets but nothing is catching on. VR and AR are still stuck in the wrong side of the innovation chasm, with only techies and geeks using it. Many in the tech industry have acknowledged the new VR/AR winter and downplayed their ambitions. However, Facebook continues to push on all cylinders.

Maybe dating or watch party for Facebook, Group video for Instagram and Whatsapp, or instant translation for Messenger might have been more flashy announcements. However, VR/AR is the area in which Facebook’s commitment and investment is clearer across the board. Its Oculus Go $200 headset could be a game-changer. Its Rooms, TV and Venues are also creating new social use cases for VR that could go viral. Beyond that, Facebook is working to overcome one by one all of the problems VR still has. Overall it seems Facebook is fully committed to VR and it will doggedly pursue creating the “iPhone” of VR through Oculus and seeding the “VR Appstore” with content through its other properties.

It still has not been made explicit, but Facebook has a “VR-first” smell to it which is different from the other Big Techs, which are all following a Cloud/AI first strategy. Its other two long term strategic priorities, AI and Connectivity, seem to be important enabling elements, while VR/AR is the one that will “bring people closer together”. Facebook has unique capabilities that could make it successful: technical capability, consumer sensibility, user experience focus and a depth of VR/AR capabilities in its Oculus unit which is unrivaled by the other Big Techs.

Facebook had a near-death experience with mobile which has led it to try to define its own destiny in the next interface transition. Mobile seems to be reaching maturity, and smartphones are increasingly banal in their differentiation focusing on increasing megapixels and number of cameras. VR/AR could be a transformative interface that leads to a new wave of deeper person-machine integration. If Facebook manages to pull off its VR iPhone moment we could see it skyrocket from the smallest of the Big Techs to a dominant force. We can expect Zuckerberg to do it in his own terms, Jobs was the paranoid perfectionist that wanted to surprise the world in a big event, Zuckerberg seems more the relentless engineer who gets there in sprints by “moving fast and breaking things”. So Facebook “VR iPhone moment” might look more like a continuous improvement curve, rather than a big announcement. However, if the VR interface vision is realized the change and opportunities created will be at least equivalent to that of the momentous iPhone presentation.

Europe, Inteligent Processes, Values

Enlightenment Now: A European Call to Arms

In “Enlightenment Now” Steven Pinker shows how the world is better than ever thanks to the values of the Enlightenment, but declinism and misunderstanding are leading us to doubt the foundations of our progress. He calls for people to reclaim the pride and moral conviction once rightfully associated with Enlightenment values to continue progress and challenge the new problems we are facing. Europe has a unique responsibility to answer this call to arms and show that Reason, Humanism, and Science can lead to an alternative way of life which is poverty-free, ecologically-balanced and meaningful while at the same time respecting Human Rights and Democracy.

“Enlightenment Now” is Steven Pinker’s latest and most comprehensive book. It follows in the footsteps of “The Better Angel of our Natures” to continue to demonstrate that the world is getting much better, much faster, whatever our survival-optimized brains think. Then it quickly turns to why this is happening, the values of the Enlightenment: Reason, Humanism, and Science. And how a majority of Enlightenment-friendly citizens is letting this progress slip by turning or permitting more demagogic doctrines to flourish.

Pinker starts by setting out the values of the Enlightenment, Reason, Humanism, and Science. Explaining how these values gradually took over from values easier to implement in our simian brains like Superstition, Deism, and Declinism. It then goes on to demonstrate empirically how these values have brought forth the best period ever in a wide number of dimensions:

  1. Violence is orders of magnitude down whatever measure you take and peace has become the norm
  2. Health has improved dramatically throughout the world, with the country with the shortest lifespan today (Swaziland at ~50 years) matches the one with the longest life expectancy in 1890 (Sweden at ~50 years). Safety from murder or accident has also been improved beyond 10x in most cases. Even Terrorism has improved, even if it is anecdotical in terms of the real risk it represents
  3. Poverty is being reduced at an astounding rate with the extreme poverty reduction millennium development goal being reached 5 years ahead of schedule
  4. Inequality having been reduced substantially at a global level, even if some middle classes in developed countries have lost ground compared to the rich.
  5. Democracy and Human Rights have expanded across the world with increasingly higher standards across the board.
  6. Quality of Life and the Standard of Living has multiplied. With technology allowing a kid in sub-Saharan Africa more access to communication, information, and entertainment than a US president had two decades ago while work hours diminish and leisure increases. Even measures of happiness and psychological well-being have improved, even if they are subjective and difficult to standardize.

At the same time, Pinker recognizes that the majority of us doesn’t seem to recognize this and many tend to think the world is actually in decline. This is related in part to our biological information processing biases, the way the news industry works, and the incentives of populists and pundits. At the same time, there are a number of real problems we are facing as a species which need a solution:

  • Substantial poverty, violence, war and human rights violations in many parts of the world which still need to be improved beyond the incredible progress we have already made.
  • Climate Change and environmental destruction, which we have the technical prowess to tackle but which are a grand-scale “tragedy of the commons” that could endanger our civilization, standard of living and progress.
  • Winner-take-all economic dynamics and automation that are leaving a substantial part of the population in developed countries with limited access to economic opportunity with financial and psychological consequences, unless met with redistribution at a new scale.
  • Limits to the current implementations of democracy which lead to radicalized partisanship and bias, anti-scientism, “post-truth”, populist alternatives and a generalized distrust of institutions and disenchantment with democracy itself.
  • Finally, “existential dangers” are out there, with nuclear annihilation being still a real and present danger and others like AI-replacement of humans potentially lurking in the future.

However, the real threat that Pinker perceives is that declinism and disillusionment have sapped the popular support and faith in the Enlightenment values. An epidemic of lack of meaning, psychological issues and chemical addictions in the developed world are pushing people to embrace more primitive ideologies. Ideologies that have already shown their fatal flaws, but that are attractively simple and comforting for our brains:

  • Populist authoritarianism, which as Donald Trump has shown in the US is a direct consequence of economic disenfranchisement, wild inequality, and democratic manipulation. It could also sap the ability to keep progress going and forestall dangerous developments (e.g. Climate Change)
  • Tribalism, with calls to put race, nation or other supposed “natural groups” in the circle of trust, while keeping “others” out.
  • Religious fundamentalism, especially in the Muslim world. Where strict adherence to scripture is freezing the development of progress of a large part of the world which was at the forefront six centuries ago and now accounts for most wars, terrorism and many human rights violations.
  • Illustrated authoritarianism, embodied in China. In which a technocratic elite decides what is better and implements quickly and without opposition.

In the end, the book concludes with a strong call to arms. We need to reclaim the pride and moral conviction of our enlightenment ancestors to defend and expand Reason, Humanism, and Science as the values that have brought prosperity and happiness to millions. We need to continue to push these values as the way to overcome existing and coming challenges, and defeat and defuse long dead alternatives which are threatening to come back even if they have proven to be disastrous already. Pinker stresses that the “we” that spouses this values is the largest and growing section of the population. However, the more virulent ideologies like authoritarian populism or religious fundamentalists are able to make much more noise as they are excited to concerted action.

I believe this call to action is especially relevant for Europe. The world needs Europe to show that there can be another path beyond authoritarianism, inequality, and fundamentalism. A path based on the European values of democracy, human rights, the welfare state, freedom, and progress. Europe is one of the largest economies and talent pools and the best place to live in the world. However, we are still under the cloud of shame and self-doubt brought by two world wars and the crimes of colonialism. We need to embrace our mission and show the world that technology makes it possible to create a poverty-free, ecologically-balanced and meaningful way of living while enjoying human rights and democracy.

In a sense, the US did its job in the second part of the twentieth century promoting progress, democracy, and human rights, China has taken hundreds of millions out of poverty in an orderly and efficient way, and now it is up to us in Europe to contribute and show that a better world is possible.

SaaS, Tech and Business

10 expensive lessons from the startup world

In my experience as an investor, entrepreneur and startup advisor I have learned a number of lessons. They are fully aligned with the advice you get from startup and VC gurus, but at least for me, it takes a bit of pain in my wallet and my pride for the lessons to really sink in. I hope I can make it slightly cheaper and less painful for others, or even to prevent them from making at least one or two mistakes.

expensive

Startups are a wonderfully invigorating experience. I have been a full-time operator in two, have advised extensively five, have invested in over 10, and have seen countless examples. I find startups incredibly inspiring as a professional experience and startup people a lot of fun and learning to be around. You get to do almost everything in each function, you are creating something from scratch so you can move fast, without bureaucracy. You are inventing so you need to creatively design an experience for a customer. It is really a great package that is a lot of fun.

At the same time startups usually imply a significant short-term opportunity cost as most of the equivalent compensation is equity. And they can be very stressful, there is never enough time to do everything, and you experience a very quick succession of highs and lows. With the highs being very high, but the lows being really low.

In the last years, I have read a lot of stuff about startups. When I did my first one in the internet boom there was almost nothing, not even the term or the glamour. Now, you have great textbooks on how to do things and what pitfalls to avoid. Still, making a startup work is really difficult as a lot of moving parts have to fit and work out.

I have distilled the top 10 mistakes I have made myself or seen made. Nothing new but even if it helps just one person avoid a mistake well worth the time writing. They are mostly relevant to B2B tech plays, especially SaaS, which is what I am familiar with, but they probably translate to other domains too.

  1. Tech is king. A tech startup has tech in the name for a reason. It depends heavily on digital technology and as such tech talent is the key competitive advantage it has. Forget about the glitzy business plan, the domain expert, and the ex-consultant. Tech founders and tech talent are priority number one. Tech talent will determine your speed to iterate and your value for a potential exit. Tech giants like Facebook mainly buy and look for engineers, the rest is overhead.
  2. Pain-killer. Of course, many startups with outstanding tech founders fail. For the most part, this is because they build things no one wants or just “vitamins” that will make life better but are not absolutely necessary. Startups need to offer pain-killers for a big bleeding wound that someone has. Alternatively, they need to pander to one of the seven deadly sins as Linked In founder has famously said. If people don’t scream for your product you probably are onto a “nice-to-have”. That is going to take too long to sell to survive, even with people telling you that they should be using it.
  3. CEO Sales leadership. The CEO is, among many other things, the salesperson-in-chief and evangelist of the company. A CEO that doesn’t go out to sell will have trouble finding traction. This is especially difficult for technical founders that sometimes are not used to sell and communicate. Of course, selling only means in-person selling for some products, but the CEO will always need to be close to the customers to listen to what they really need. A CEO that isn’t always selling their product (in their own unique way) is a big red flag.
  4. Customer personas and budget. This is very much B2B, you need to know whom you are selling to and the budget line item you want to be part of. It might take time to discover, but it is inescapable. Only people with budgets buy products, and people have job titles and worries that come with them. Even if you are selling to a small business owner that determines budget autonomously you will have to fit in some of her mental categories.
  5. Long-term commitment and passion. The stories you hear about startups in newspapers are about quick fame and riches. The stories you hear from entrepreneurs are about 7 to 10 years of hard work and overcoming disappointment. Your only chance to slog through those hard years with a steadily increasing opportunity cost is if you are really passionate about your goal. So take this as an at minimum 5-year (realistically 7+) decision and make sure you are so passionate about the topic that you will be happy even saying “at least we tried” at the end.
  6. Founder alignment and culture creation. Being co-founders is like a marriage, but seeing each other all the time and having grown-up kids that you have to motivate to work for much less than they could be making someplace else. You need to be totally aligned from the start and keep that alignment over time. Don’t paper over disagreements rather tackle them head on, get your prenuptial agreement (aka shareholders agreement), and make sure you agree on which culture you want to build.
  7. Anti-goldilocks talent. Talent in startups is tough. You have infinite work so you would want the best talent, however, you always have insufficient money so you always want the cheapest talent. As the CEO of Blackline said in the last SaaStr you have to choose two of cheap, talented and not crazy, and you can’t afford anything but cheap and talented. The consistent advice I have heard is to go towards three extreme profiles: (1) a few absolute stars that have done it before, as they will drive incredible impact and leverage on others even if they are expensive, (2) many cheap, enthusiastic and hopefully talented very young talent that hasn’t much experience but wants to learn, and (3) talented people who are quirky enough that they find it difficult to work in large corporations. Avoid someone that is reasonably cheap, talented and sane, you want to go to the extremes, goldilocks talent is better for corporates.
  8. Funding. You need money for everything. Even if the amount is much less than ten years ago you won’t able to build the product, sell to customers or deliver them the promise without money. If you are short on money you will spend all your time worrying about it and solving the problems it causes. Of course, funding doesn’t mean VC funding. You can have customers fund your startup and bootstrap it successfully even if it takes a bit longer. Just avoid being unrealistic about being able to do stuff without money, or hoping that a round of funding will materialize from thin air. Money is your gas and you will get nowhere with your tank empty.
  9. Data and analytics. Product, Technology and Sales have been the traditional pillars of startup success. Now Data is claiming its place in the table. Analytics will allow you to create much better product much faster and to sell a lot more much more profitably. Who is your analytics founder? You need one, so get it from the start.
  10. Family sport. On a more personal level, you can’t get into this alone. Your family and your friends have to be your support group. You won’t be able to talk or think about anything else, you will work 24×7 (even if you can do it from home), you will only be making money at the end of the rainbow, you will have at least a couple of horrible downs per month, odds are against you. Have you told your loved ones what they are getting into? Have they bought the ticket? You’ll need your loved ones to get you through the bad times and support you in your probable failure so make sure they have your back.

This doesn’t intend to discourage anyone. The list of obstacles is long, but the fun and professional and personal growth for trying is amazing, even if you don’t get the pot of gold. Just be aware of what it requires to have a chance and what sacrifices you will have to make. Newspapers, LinkedIn, Twitter and business books only talk about the exceptionally good cases because that is what people like to see. You will experience the full distribution of potential outcomes and need to be ok with them, even if the end you manage to get to the pot of gold through hard work, talent and luck.

Bioprogramming, Blockchain, Digital Governance, Energy and Transportation, integrated reality, Inteligent Processes, Neurogamification, Tech and Business

Beyond Digital: 6 Exponential Revolutions – The Book

I have put together my explorations of Exponential Technologies in my new book “Beyond Digital: Six Exponential Revolutions that are changing our world” (en castellano “Más Allá de Digital: Seis Revoluciones Exponenciales que están cambiando el mundo”) which you can find on Amazon both in physical and digital format.

The book is my attempt to give anyone who wants to understand what is happening a window on six new waves of change that are coming our way through an accessible understanding of the technological underpinnings and plenty of real-world examples. The six technological revolutions I cover are:

  1. Intelligent Processes. The application of AI to information processing and the transformation it will represent in software, business, and government processes. How many processes that now require human intervention will be digitalized through AI allowing cheaper, faster and higher quality outcomes. This could be the end of drudge work and lousy customer experience but might bring significant technological unemployment and inequality
  2. Integrated Reality. How IoT, Virtual and Augmented Reality, Robots and 3D printing are blurring the lines between the physical and digital worlds. Allowing us to interact with the physical world with the same ease we do in digital, and to embody ourselves in the digital world with the same subjective experience as in the physical world. This will bend our physical world even more to our will but could create alienation and escapism as in Ready Player One or a techno-controlled police state that makes 1984 seem liberal.
  3. The New Energy and Transportation Matrix. How solar, electric and autonomous technologies will change how we produce energy and transport ourselves. Potentially bringing an age of free and clean energy and swift and secure transportation. We could potentially be able to overcome global warming, ecological impact and the toll on human lives and time that our current transportation system takes. At the same time, this new matrix will tear down the energy and transportation infrastructure jobs on which many of us depend.
  4. Digital Governance. How Blockchain technologies together with cryptography and the cloud are ushering a new age of financial markets, trust, and law. Digitising money, trust, contracts and the law to give them the same digital speed and quality we have grown used to in the digital world. Still in its early stages, it holds the promise to make our world freer and fairer, with the parallel dangers a bug or a virus could have if computer code runs our financial, legal, and even democratic systems.
  5. Bioprogramming. Understanding the code in which life has been written and learning to manipulate it is given us surprising power and flexibility in using and changing life for our own purposes. The ability to edit, program and even build from scratch living organisms, allows us to change living beings like we change computer programs. With amazing potential in terms of healthcare, human augmentation, and biofabrication, but unexpected risks as we play Mother Nature at an accelerated rate.
  6. Neuroprogramming. Our understanding of neurobiology and neuroeconomics is decoding how our brain, the most complex structure we know of in the Universe, operates and thinks. Being able to understand our neural circuits is giving us new paths in creating technology that replicates the best design principles of our brain and interacts with it effectively. It will be used to further accelerate our technology, augment human capabilities and cure the human suffering linked to brain disease, at the same time it has the potential to take digital manipulation even further robbing us of free choice.

The book would not have been possible with the help of my wife, my family, my friends, my colleagues in Deloitte and McKinsey, the readers of my blog and some dear readers of the beta version of the book who painstakingly read and help me improve the English and Spanish versions of the book. I am really grateful to all of them. As Mario Vargas Llosa says: “Escribir no es un pasatiempo, un deporte. Es una servidumbre que hace de sus víctimas unos esclavos” (“Writing is not a hobby or a sport. It is a bondage that makes slaves out of its victims”). That bondage is mostly born by those around as the slave happily bangs on the keyboard.

Tech and Business, Values

Technology for People and Planet

We have a unique opportunity to improve billions of lives and the whole planet through the technological revolution. However, myopic profit and power maximizing behavior is creating more problems and existential risks rather than solving the ones already on our plate. We need to put values at the center and use technology at the service of people and planet. In Europe, we have the opportunity to showcase to the world that this is viable.

Technology is changing our world faster than ever, and new trends like AI look poised to transform it even further. At the same time, we seem to have lost sight of the values and ethical underpinnings of the technological transformation. Democracies have been manipulated, personal data sold, employment and wages are at risk, and China, the US, and Rusia seem to be locked in a new Cyber cold war. We need to remember what we value, liberty and the pursuit of happiness, giving to each according to her needs, making our little blue dot sustainable. If not, we have the risk of ending up in some dystopia created by mindless technology.

There has never been a time of such opportunity through technology. Since the industrial revolution, we have gotten used to a breakthrough every handful of decades: the steam engine, the internal combustion engine, electricity… Now, without having finished the implementation phase digital revolution of the 90-2000s we have many different world-changing revolutions in the making. Artificial Intelligence (AI) has demonstrated its capacity to do more and more with less and less human intervention. Distributed Ledger Technologies like Blockchain have unleashed the early stages of a new wave of technological, financial and governance revolution with the likes of Bitcoin. The connection of billions of sensors and actuators is changing the fabric of our world through the IoT. New energy technologies like solar are promising to change our energy equation. Biotechnology is increasingly able to manipulate genes beyond our wildest dreams. Cybersecurity and cyber attacks are locked in a new deadly struggle that takes place in milliseconds. Neurobiology is showing us how the brain works behind the curtains, and creating the tools for incredible enhancement and irresistible manipulation.

Just one of these technological revolutions could have the potential to significantly improve the lives of billions of people around the world, and repair much of the harm we have done to our planet. We have the opportunity to accelerate even further the Millenium Development Goals, reducing hunger, poverty, disease, and war, while giving everyone a common base of education. We can transform energy consumption and tackle Global Warming before it is too late. In essence, we have the opportunity to bring an age of abundance and prosperity for all. We need to start focusing technology on people and the planet, instead of thinking just about profits and power.

Up to now, technology has been mainly viewed as an asset for financial gain or a weapon for hegemonic advantage at the nation-state level, rather than as a tool to help solve our problems. We have digital monopolies that have brought free applications we use broadly, but have monopolized the internet through network effects and aggressive disposal of competitors, manipulated human brains into addiction through careful design, and trafficked with citizen data to achieve previously unheard of valuations. We have an AI and Cyber-attacks race between the US, China and to a lesser extent Russia, with an understanding that “winner-takes-all”. And sadly, we have much less progress than is needed or possible to reduce existing problems.

This attitude has also created three additional threats looming, that might materialize challenging humanity further if we continue down the path of profits and power at all costs:

  • AI-induced job destruction might happen to different degrees. Some claim that this is business as usual, and we will “only” face 5 to 7 decades of declining wages for those who can’t adapt fast enough, like in the first and second industrial revolutions. Others claim that we are like horses seeing the combustion engine come and will be totally or mostly out of jobs, even if it could be a good thing. In both cases, we will have to deal with substantial social disruption and increasing inequality.
  • Techno-authoritarian dictatorships can combine traditional authoritarian methods with technology to create a police state that is almost impossible to overcome. China is already deploying pervasive face and person tracking and an integrated way of measuring a person’s “citizen score” to reward the good and keep close watch of those with less stellar scores. This can be used for good but has the potential to take Stalinist Russia to a whole new level. Combined with autonomous weapon systems it could allow a very narrow group to control a state or even the whole earth with little recourse. AI-induced job destruction is accelerating this by creating authoritarian leanings in the “digital have-nots” and threatening the logic of democracy.
  • General AI could render humans obsolete. While there is a strong debate on the possibility and timing of General AI, some people like Bill Gates or the late Stephen Hawking think it is important enough to warrant attention. How AI is developed and the consequences of the AI Arms Race that China and the US seemed to have embarked in could be earth-shaking. Scenarios considered by thinkers like Nick Bostrom and Max Tegmark run the gamut from human annihilation to paradise on earth, including AI-enhanced techno-authoritarian dictatorships.

It will be key to take technology back to values and ethics to manage the current and looming threats in a way that it is positive to humanity. We have seen what unbridled technology brings: user data breaches, manipulated election results, smartphone addiction, seemingly benevolent monopolies, reduced opportunity for most, and increasing inequality. At the same time, technology holds the power to improve the human condition and give incredible opportunities to everyone. Each of us and the organizations we represent need to place people and the planet first, even if that reduces profits and power slightly. Of course, only regulation will ensure a level playing field in which does playing for people and planet don’t get outcompeted by those who are willing to destroy in order to get more.

In Europe, we are in a unique situation. We don’t have the tech giants to “win” the unwinnable race, but we have a respected international position, a strong and large economy and a very developed talent base. We need to be the example for the rest of the world of how technology can be used for the people’s and the planet’s good. We need to put the regulation in place so tech players can bring innovation while respecting the values and rules of the game we cherish and hold true and contributing financially to sustaining a just society. If we manage to do it we might show that there is a viable alternative to unchecked techno-capitalism with masses of dispossessed citizens and techno-authoritarianism through a police state 3.0. This alternative will put people and the planet before other goals, like profit and power, which are really instrumental rather than fundamental.

Neurogamification, Tech and Business

3 ways in which a Neuron is better than a computer

Neurons are one of the most remarkable inventions of evolution. Modern neuroscience is allowing us to understand how neurons and the brain work at increasingly deep levels. This understanding has led an appreciation of how optimized neurons are for information processing. Some of the brain neatest tricks are being copied by technologists (e.g. self-organization) with more to come (e.g. information and energy efficiency)

Anatomy of a Neuron

We know since the early drawings of Santiago Ramon y Cajal thanks to the neuron staining techniques of Camillo Golgi (shared Nobel Prize 1904) that all neurons share four key elements. The dendrites are the input, they listen to the electric signals of other neurons or to the outside world. The axon is the output, it transmits the electrical signal from the neuron to other neurons or to muscles. The cell body (soma) is the power supply, supplying energy and chemicals for the neuron to function. The synapse is the connection, where an axon transmits the electrical signal to the dendrites of another neuron.

Dendrites are the input terminals, like the keyboard, mouse or internet of a computer. Most are internal, processing the signals from other neurons. A few connect directly to the outside world, allowing us to sense it. Our body has dendrites that are sensitive to a wide variety of stimulus including light (eyes), vibration, sound and movement (ears), physical contact and heat (skin), stretch and force (muscles), chemicals (nose and tongue). Neurons can have thousands of dendrites connected to other neurons and combine those signals with different weights and time delays. The signal processing is done analogically and is very versatile, making scientists think that a lot of our learning could be there.

The axon is the output terminal, it takes the electrical signal the neuron calculates and transmits it to the neurons that are listening to it. An axon is digital, it either has an action potential or it doesn’t. The action potential is a voltage spike from -70mV to 40mV that lasts milliseconds and has a refractory period of ~10ms. The initial segment of the axon is where the input of the dendrites determines whether the action potential happens or not by an extremely ingenious electro-chemical process that was characterized by Huxley and Hodgkin (Nobel Prize 1963). Consequently the axon “speaks” to the dendrites through trains of electrical pulses in the hundreds of Hz in frequency.

The cell body or “soma” is the power supply. Like any other cell, it has the instructions (DNA), the power supply (mitochondria) and the protein factories. It supplies axons and dendrites with the significant amount of energy and chemicals they need to function and keeps the inside of the cell in the right working order to be able to generate and receive the pulses.

The synapses are responsible for communication, they are chemical junctions between neurons that transmit instructions from axon to dendrites whenever the axon fires an axon potential. The instructions are mainly about transmitting the electric signal, but they also include many others that determine if the synapse strengthens or disappears. The synapses are in a way the “software” of the neuron as they determine the strength and type of communication the dendrites of a neuron receive.

Advantages of neurons over electrical circuits

Contrary to what might be thought, neurons are much better at many processing tasks than the computers that we have built. There are three main advantages, all of which technology companies are trying to copy to make computing more powerful

Self-organization and learning.

The first advantage has to do with the plasticity of neurons and the brain. Brain development is extraordinarily complex but it is based on the less than 1 Gigabyte of information humans have in their DNA. The rest is self-organization based on external information and adaptation during development. For comparison purpose, Windows 98 was the last operating system that would have fit in the human genome, with Windows 10 being already 20x the size and any of the current “intelligent” systems like Watson being many orders of magnitude larger.

The self-organization and learning advantage of the brain makes great sense in the context of evolution. Without any explicit design or ample instruction storage capacity whatever emerged had to be very sparsely designed.

Self-organization and learning are starting to be copied which has led to the boom of artificial intelligence around machine learning and deep learning which uses self-organization and learning principles derived from neurons by creating artificial “neural networks”. These techniques are still in the early days with the most complex networks currently in use being probably in the thousands of neurons compared to the brain’s 100 billion neurons.

Information efficiency.

A second related advantage is the much lower amount of information neurons require to learn. Human and animal brains and neurons are able to learn very quickly compared to machine learning models. A human needs just limited experience with words or driving to perform very accurately, while computers need to “drive” millions of miles or go through billions of words, something which a human would be incapable of doing. The root cause of this advantage is still only speculated about, but it could be around the fact that neurons integrate computing, communication, and information storage together without separating between data, transmission, and computation explicitly.

Information efficiency is also deeply necessary for evolution and highly selected for it. The organism that requires can learn to identify a threat or an opportunity quicker will have a definitive advantage over slower learners.

There is frantic research in getting more information-efficient machine learning models, both in terms of software (e.g. new techniques like deep learning) or hardware (e.g. IBMs neuromorphic chips).

Energy efficiency

Finally, brains also have an incredible advantage in terms of energy efficiency. Our brain functions with approximately 20Wh per day, this is 20% of the total energy budget of a human that is around 100Wh. However, it is extremely energy efficient compared to a computer with comparable power. According to Forbes a smartphone clocks 1kWh per year, or ~2Wh per day, a laptop according to some sources is around 200Wh per day (so 10x more than a human). If we take the laptop as a reference a supercomputer with brain-like processing power would be using millions of times more energy than a human brain.

Energy efficiency is another cardinal design principle of nature. Brains are already very expensive energetically at a biological level, so the brain has optimized itself as much as possible while keeping its processing power.

Energy efficiency for computers is a key design principle, especially for mobile phones and the internet of things. Apparently combining analog and digital processing like the brain does, could be a key to increased energy efficiency in our own digital tools

Long-term electrical advantages

However, electrical digital computers have other advantages over neurons that will probably allow them to dominate long term.

First, electrical circuits currently work in 10s of GHz of clock speed. This is 10 million times faster than what neurons can muster with their 5ms action potentials and 10ms refractory periods. 10 million times difference is equivalent to the difference between evolutionary time scales (i.e. how long does DNA take to evolve new species) and the speed at which we live our lives and improve our economy and technology.

Second, digital storage allows for perfect recall of data. Our brains are not optimized for exact data, which is quite useless in real life. So computers have an advantage in terms of storing, retrieving and processing detailed information, while the brain is quite adept at extracting patterns and getting the gist of an issue.

Finally, digital computers are almost infinitely scalable. Our brains are famously limited by the breadth of the birth canal, with our heads being as big as they can biologically get. Computers, on the other hand, are being stacked in greater and greater numbers through cloud technologies with potentially limitless processing power and storage.

Will Moore’s law take electronics beyond what neurons can do? It is a distinct possibility, and it could bring an upheaval in how the world is organized. Neuron-only organisms are already at a clear disadvantage against digitally-enabled ones. If that enablement is made more direct through brain-machine interfaces we could have a race of super cyborgs like Yuval Noah Harari describes in Homo Deus. If alternatively, we manage to manufacture conscience in electronics, it might decide it has no use for the outdated neuron-based monkeys that brought it here.

In any case, the power of electronics and neurons has to be harnessed towards our values and goals. Ethics, human rights, global development, freedom and the pursuit of happiness have to be front and center in what we do with our neurons and electronics.