Next Economy

douglas rushkoff:

I'm trying to get businesses to think less about extracting value from a market and storing it in share prices

Tim O'Reilly:

we see huge amounts of capital sitting on the sidelines rather than being part of a city - how do we fix this?

douglas rushkoff:

people are learning to take less money so they don't have to 100x to succeed, and to answer to VCs

VCs would rather see you die than hit a double or triple when they need a home run

We should promote flow over growth - look at velocity of money rather then growth. Bring back dividends

How about banks encouraging businesses to crowd fund as well as giving loans to create a local stake

Uber has drivers doing R&D for a robot car company that will destroy their jobs - what if they had ownership too?

SV stock options are weird instruments that only pay out on a unicorn event that pays the VCs more

Tim O'Reilly:

Tom Kartsotis was the founder of the Fossil watch company, who made a new watch company in Detroit

Tom told me that he wanted to cut costs at Shinola so that he can hire more people

Why did you call the company Shinola?

Tom Kartsotis:

our lawyer said "you want to build a watch company in detroit? you don't know shit from shinola" and shit was taken

when we started we wanted to build a factory in detroit that would employ 100 people and make watches

I left Fossil after working there 26 years, and I liked the idea of mechanical watches built in Detroit

we ended up creating between 350 and 375 in Detroit and ~200 elsewhere

we were originally going to make watches for other companies, but we ordered parts for 2500 watches to try out

and put them out for $500 and they sold out straight away

Our second category was bicycles - we met Richard Schwinn who made a hundred bikes a year, and ordered 1000

Once the demand for watches showed up, we opened stores and sold the watches and bikes and looked for other things

We wanted to make notebooks that people would love, that smelled like your first grade textbooks

we're trying to grow small batch runs that will create jobs in America that grow employment

We found that the small batch price came in at $7 for american manufacture, when we were expecting $12

This isn't a Made In America play, this is a job creation vehicle - people want to know what companies stand for

Tim O'Reilly:

You avoid the spotlight; you've asked that there are no photographs of you, you focus on the workers

Tom Kartsotis:

Obama sent people to talk to us, and they told us to apply fro government grants, but we didn't do that

I said we'd like to get the President to give one of our watches to the president of Switzerland…

We made a presidential watch, and we got Krystal to present it to him.

Now Krystal started out cleaning floors in our factory, then learned to make watches and now manages 14 people

We were buying our straps in from Florida, but we ended up building our own strap factory to fulfil our own demand

now they're making small leather goods and bags as well - because we invested in the training to create the jobs

Marco Zappacosta:

Liquid marketplaces are a big part of the future of work, and Thumbtack has built one

there are 10s of millions of americans with talent sitting latent, and people who wanted to employ them

we set out to dramatically lower the transaction costs for businesses to hire service professionasl

a lot of people have a talent, but that doesn't extend to online marketing and biz administration

there are 1000 categories from home improvement to events and accountants

Marco Zappacosta:

we are not the brand that does the service - we sell revenue for professionals

we scaled this business without a sales force to call into these professionals

when you talk to professionals they don't want an advertising or marketing product, they want customers

Tim O'Reilly:

so how is this different from Yelp?

Marco Zappacosta:

Yelp etc are mostly about 'where should I go' not 'who can come to me'

Tim O'Reilly:

the whole question of platform capitalism is having enough liquidity

Marco Zappacosta:

we are able to get these professionals ahead of having demand

Tim O'Reilly:

you're not a taskrabbit getting paid a fee, just an introduction fee?

Marco Zappacosta:

we'er not making a market for fungible resources, but for professional people

Tim O'Reilly:

how do you vet these professionals?

Marco Zappacosta:

we do anything and everything we can - we look at licensing and background checks and reviews too

the vast majority of people are good people - we now provide a million dollar guarantee

These folks are great at providing a service - it mostly goes very well

it starts with us mining the web and brings back a machine score - if you have no info we run additional checks

our biggest categories are local movers, entertainers these roll up to Home Improvement or Event Services

int he US customers spend $700B on local services - and most of it doesn't happen online yet

Google and Amazon have pitches here - if they're not competing with you then the market isn't big enough

Tim O'Reilly:

How many of you expected Pokémon Go? John Hanke built that

Steven Levy:

Dutch officials have asked Pokémon Go to remove monsters from a nature reserve in The Hague

John Hanke:

Virtual creatures causing commotion in the real world is a strange thing - we have to work with them

I spent a week in Washington talking to lawmakers about augmented reality and overlaying things on the world

trying to avoid laws being too reactive to this kind of thing

we turn the entire world into a virtual gameboard - you go out there with your phone to find the pokemon monsters

the goal was to get people out of the house and to explore their cities more

I grew up in a small town of 1000 people in West Texas - it was a boring place to grow up

there's a lot to be said for boredom - if your kids are bored they will make things up

a teacher gave us old issues of National Geographic and the photos and maps sparked my imaginations

I grew up coding games, and met people from SGI - they built flight simulations

the inspiration of Keyhole was to bring these rich maps from industry to everybody

Tim O'Reilly:

the first thing you did when you got Keyhole was zoom in and see where you live

John Hanke:

or where you grew up yes

I was very much influenced by Mirrorworlds and Snow Crash

Mirrorworlds imagined the world we live in now 20 years ago - a digital mirror of the physical world

not just the maps, but the systems and processes that take place in the world too

Steven Levy:

you helped mash google earth and google maps together - is the map now the territory?

John Hanke:

maps tend to be very powerful in how people perceive the world

we started out with the satellite imagery and naively put geopolitical boundaries on top of it

and it turns out many governments care a lot about where you draw the boundaries - it carries a lot of power

with Niantic we wondered if adding things to the virtual world could influence the real world

Steven Levy:

Niantic's first product was 'field trip' that catalogued places - 'adventures on foot'

John Hanke:

in building maps we became aware of all the information about the places in the world that existed online

but when you're out in the world on your phone you may not have this available Field Trip shows you this

so as you walk around it would show you a card about the places or read it into your earpiece

as it turns out Field Trip was a kinda nerdy concept - a PBS view of the world

when we added these places to an interactive game it took off - first Ingress and then pokemon go

Steven Levy:

not only are you layering a game on a map full of interesting things to visit, you're also overlying on video

John Hanke:

digital overlay onto the real world will be part of everyone's perception

if people have different overlays at once, are the experienceng the same world?

by making the historic places into gyms and pokestops we are attracting people to places out in the world

we gather people together to places where these virtual overlays exist

Steven Levy:

a lot of people dropped everythign to rush into central park for a rare pokemon

John Hanke:

people showed us before and after gps tracks of their commutes, where pokemon had made them deviate from the route

we found with Ingress and Pokemon Go people came back into Detroit to experience the growing businesses

Steven Levy:

that is an incredible power to direct people to places like that - is it humbling?

John Hanke:

we've reached out to the Knight foundation that are working to rebuild parks in cities

Tim O'Reilly:

Airbnb is central to my thinking about the Next economy - it uses scale but emphasises uniqueness

there's a lot fo talk from big technology companies about smart cities, but you're building it bottom up

Brian Chesky:

Thanks for inviting me here to a hotel to talk about AirBnB

we're running a conference in LA with talks in theatres and the hosting in homes not hotels

what we're talking about is the future of city as community, where we know the people there

Cities were designed for a different use - in the future they will look more like villages

instead fo the mass chains you will have more and more local businesses

because the small businesses will have reputations so you don't need the brands uniformity

Tim O'Reilly:

we're not seeing a coffee network, we still see starbucks and peets

Brian Chesky:

if you middle class and live in cities, you prefer organic and farmers markets to supermarkets

Tim O'Reilly:

you've managed to register 3 million people worldwide with homes available - why is the city trying to register?

Brian Chesky:

I thought we'd work with a model city and create an API and roll it out worldwide

every single city said 'we understand you did that, but we're different'

many cites have their own registration systems that they want you to plug into

I hoped we would be able to bring them together better, but there are a lot of systems

every city has something different - SF wants us to only use home people live in, Tokyo wants commercial ones

before you regulate something you should understand it and try to use it

we have relationships with a lot of cites - when we have an open discussion and it works out well

Tim O'Reilly:

there id a real problem here in san francisco - how do you build a system to model that

you could have a conversation whth the city based on how much of the time people could rent their houses

Brian Chesky:

if you have a nights cap on one platform they can register on multiple platforms to work around it

LA is a good example - we have created lots of possibilities where people can stay outside the hotel district

The average middle class family has not grown income in years; airBnB can contribute to helping this

in 2012 people wanted to offer their homes for free for Hurricane Sandy - we built a disaster response tool

and there's a system to remit help for the disasters via FEMA

many of our partnerships with cities start with disaster relief

when people look at AirBnB they see a bunch of spaces - the heart is the people, not their spaces

I don't think technology needs to leave people behind, it an make cities better in future

Infrastructure is needed, but remapping cites to make them more like villages can recreate opportunity

Mustafa Suleyman:

we looked at how the dynamics of a datacentre - all the parameters of cooling and the inbound requests

the nice thing about our approach is that it is general - cooling datacenters and Go are applications

we managed to reduce the cooling that was required for the datacentres by 40% wiht the same performance

Steven Levy:

the rap on these deep learning systems is that they are black boxes - you don't know what they are doing

Mustafa Suleyman:

a datacentre is a valuable utility - we don't want to deploy something that we don't understand

we deploy these very carefully, and always keep a human in the loop - humans remain the final controller

Tim O'Reilly:

I think about a lot of systems we build that are not AI, but subject to boundary conditions

we set up tax polices 50 years ago and didn't understand their consequences now

how do we get back control if we find we have done it wrong?

Mustafa Suleyman:

by training systems in simulated environments, you can try out scenarios

with economics we don't have that yet, we try out macro changes in the real world

Steven Levy:

you've been expressing what might be called best practices - DeepMind is in the partnership on AI

Mustafa Suleyman:

we partenered with facebook, amazon and IBM to deelop best parctices about machine learnign in practice

we want to figure out how to do this in an ethical and transparent way and show how the benefits distributed

we want to convene an non-profit that includes community organisers, ethicists and academics to review this

Tim O'Reilly:

how does Open Source play into this?

Mustafa Suleyman:

we commit to publish our research in peer reviewed journals - this is important to academics

Alpha Go has led to over 100 peer reviewed papers already

we have over 250 researchers in AI, but they could go anywhere - we want their social impact

we want to take the best from academia with their long term focus and combine with resources of a big company

Tim O'Reilly:

The next topic I want to address is regulating new technologies

too often regulation has mud-slinging and unclear goals - Colin Megill has developed AI consensus building

Colin Megill:

Imagine that you get a phonecall from a regulatory agency tomorrow about regulating new technology

AI can listen to everyone at once - it can scale up what the government can take in

listening is magic - allowing people to know that policy will pay attention to what you say is transforming

for example: how should the governmnet regulate UberX

there is a 'what do you think' box, then there are questions created by others

200 comments from 6000 people is nto good for humans but machine learning can make sense of it

so we can visualise opinion groups, and how they move about on different questions

but we can also find consensus between the different subgroups, which is normally hard to find

We need to have a platform to allow the entire society to engage in rational discussion - Minister Jaclyn Tsai

this led to vTaiwan - a place to create binding policy on Taiwan

direct democracy is something that we can build online - Corbyn's #DigitalDemocracy is based on this too

sending signals on complex issues in a binary presidential vote is not helping. We need to disagregate

Jeff Smith:

Jeff Smith si the CIO at IBM

you were a CEO ata big bank - how did you become CIO at IBM

I lived in Australia for many years, and as CEO of Suncorp we realised we had to be a tech company to be a bank

we ran out of capacity, and I trained IBM staff to work our agile way too, and I got hied to do it at IBM

clarity is more important then certainty; course correction better than perfection

if we can break big problems into small problems and spread them across 10 person squads we cna get things done

Tim O'Reilly:

reminds me of Gen McCrystal - don't follow my orders, follow the orders that I would have given you

Jeff Smith:

we can make agile work by teaching practice through working with your team

Sara Holoubek:

Macs were previously banned at IBM, so we came up with a way to treat them like mobile devices so they could be used.

Next up is Sara Holoubek and her Human Company Manifesto

Milton Frriedman said that the only duty of a business was to generate profit - anything else is pure socialsim

Drucker said that the purpose fo a business was to serve it's customers.

we chose Friedman over Drucker, and added some Gordon Gekko

that changed with the last recession.

most Americans could not handle a $400 emergency

in Jan 2016, Aetna increased minimum wage to $16; companies are making more social benefit decisions

Maybe we are the beginning of a sea change of how companies create value by valuing people

almost every CEO talked about the long term, and what happens after they are gone, not after they sell

"no assholes" is now showing up in job descriptions

I think we've hit peak 'always on' - offering less intense working hours

what did it say when Mark Zuckerberg took family leave? what does it say when the CEO doesn't

I thought for years that my staff wanted a bonus plan, but when we asked, they wanted a 401k as well

after the industrial revolution we decided that child workers, slavery were no longer acceptable.

Tim O'Reilly:

I asked my COO Laura Baldwin and Jake Schwartz of General Assembly to talk about corporate education

Laura Baldwin:

No one person can accomplish anything - you can come up with an idea but you need everyone to build it

we were a book company and conferences business and we were very focused on product

so we stepped back an decided we were focused on curation for the customer - what else could we use?

Jake Schwartz:

General Assembly is and education to employment company - how does it help an employee?

the cost fo doing training is dwarfed by the cost of taking people out of work to do the training

Laura Baldwin:

people want to be abel to take something and apply it right away to their job, not for its own sake

not all employees need the same learning - some are already proficiene

Tim O'Reilly:

it's almost like a thermocline in the ocean where there are 2 kinds of water eitehr side of the layer

Jake Schwartz:

we have to do a lot of explaining that we are teaching structural literacy rather than a specific language we instruct with

there's 2 non-zero-sum ways to boost talent - train your own people, & bring people in that isn't just poaching

companies need to be thinking longer term about developing the talent they have and more diverse sourcing

Tim O'Reilly:

in the future, more of your employees will be programs, and programmers will be their managers

Peter Skomoroch:

we're in the middle of a hype wave about bots at the moment

Satya Nadella has said that bots are the new apps

when you think about workplace bots now there is a big gap - how many have been disappointed?

back in 2002 there was Minority Report, and execs said they wanted to talk to computers with their hands

a few years ago the movie Her gave a new model where people cna talk to their computers via AI

what if we could tap into the conversations going past and make sense of it as knowledge?

Ellen Choi:

I'm CEO of CareerLark - a chat first talent management program

Millennials are now the biggest sector of the workforce and they want constant feedback

annual perf reviews were invented 30 years ago, and needs to be replaced by chat

you can ask for feedback to a slack bot and it will come back on a 1-5 scale inside slack

continuous micro-feedback in chat helps make better decisions

Hilarie Koplow:

New Relic is a very technical company - we are software that sits inside your software and understands perfromance

you often don't know where customers get stuck -

Tim O'Reilly:

wiht code for america we have had to do it from the outside by watching people use it rather than model

Data driven used to mean doing surveys; increasingly it is real time - a digital nervous system

Hilarie Koplow:

we collect all the clickstreams that customers generate into the cloud and make it available to the company

Tim O'Reilly:

Disneyland has changed the experience of long lines by being able to order a ride at a time

we had connected taxicabs for ages, but all they did was play ads and take credit cards, not allow hailing

Hilarie Koplow:

what is different now is better capacity planning by letting customers give more information

Tim O'Reilly:

there are so many examples in government when you have to repeat the same info again and again

Hilarie Koplow:

the thing that makes transformation of workflow effective is companies not thinking in silos, but share data inside

Tim O'Reilly:

you say 'data is a team sport'

Hilarie Koplow:

I visited an airline company that specialises in short trips - they tried a mobile app

they found that by offering a flight, hotel and car they could see n bookings a minute

when the tickets booked per minute dipped, that usually meant a service outage that need fixing

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