Y-Combinator Sam Altman's Future Predictions

From this week's Econtalk podcast

Sam Altman, president of startup accelerator Y Combinator, mentions three interesting startup investment trends:  wearables (it's inevitable that we'll all have computing devices that we wear), bitcoin (which he views a bit pessimistically, except for the block chain idea), and this one:

Health care: That is an area I think we're seeing great development, after having been ignored for a long period of time. Most investors interestingly enough are still not paying a lot of attention. And probably in two years, when some of these health care companies get successful, there will be a true flood of investment into this space, and it will already be too late.

Before the emergence of cloud-based computing services (like AWS, Azure, Rackspace, etc.), operating a server farm was an expensive hurdle for any new internet business. Similarly, interesting health-related products need access to expensive wet labs in order to put together their inventions. But the cost of lab time is plummeting, thanks to super-cool bioinformatics software plus robots that can make the lab work much more efficient, and now there are new ways to borrow time from other labs:  Science Exchange, QB3, and soon many more.

Of course, regulatory hurdles make the health + biotech businesses tricker than plain ole software, but that will get easier too. Innovation finds a way.

[podcast] The Second Machine Age

My favorite podcast, Econtalk, is always worth a listen. Here are my takeaways from this week’s interview with Erik Brynjolfsson of MIT and co-author of The Second Machine Age. His book has already been in my queue, and I’ll write more about it later.

[Sorry for the messy notes: I’m just putting the highlights here of some things I learned.  This deserves a much longer post]

• Driverless cars may take longer to be adopted in inner cities because they aren't allowed to "bend the rules", which is pretty much required if you're going to survive in those crowded, chaotic conditions.
  
• Measure the Consumer Surplus, which is about $300B/year. This metric, though difficult to measure, is arguably more relevant than GDP, because it more accurately reflects what really matters to people (how good is the "deal" I'm getting out of engaging in the economy?)
  • example: Wikipedia vs. Encyclopedia Britannica
  Better to teach statistics to high schoolers, not calculus
  
• Voltaire: work addresses (1) boredom, (2) vice, and (3) need

Drivers of change

• skill-biased technical changes
  
• capital-biased technical changes
  
• superstar-biased technical change

You must, must, must learn to adapt to new technologies.

That last point, about the importance of adaptation, is easy to ignore for most people because it’s so hard. Technology changes so quickly that even those who think they’re on top of it, you can miss the trends and fall behind.

CEO as Editor (Jack Dorsey)

I often listen to Stanford’s Entrepreneurial Thought Leaders podcast, but there's a particularly good one this month with Jack Dorsey.  Best known as the co-founder of Twitter, he’s a wonderful speaker: short, clear, to-the-point, with great takeaways like:

“Make every detail perfect, and limit the number of details.”
“Expect the unexpected; and wherever possible, be the unexpected.”

He wraps this in the idea of “CEO as editor”, how leaders should be responsible for the story of their organization: hiring (the cast), internal and external communication, and attracting customers and investors. Apple, he reminds us, is one of the truly great story-telling organizations: their business cycle revolves around events and unveilings.
His talk is about 30 minutes: perfect for a commute.

"If you loved it, you'd be doing it"

Great one-hour video/podcast by Ken Robinson, public education expert.

I liked this part (about 43 minutes in) when he relates a conversation he once had with a musician:

Ken: "I'd love to do what you do."

Musician: "No you wouldn't."

Ken: "What do you mean?  Of course I would."

Musician: "I practice six hours a day and play five times a week. I've been doing this since I was a small boy. I do it because I love it. You like the idea of doing it.

If you loved it, you'd be doing it."

Many more great ideas in there about why today's entire education system is misguided and needs to be transformed, not simply reformed.  It's a video, but no slides or anything, so go ahead and listen to it on your commute like I did.

Note: you have to buy a $5/month subscription to Fora.TV to download from the site, but you can get the MP4 file for free if you subscribe on iTunes.

Don't share your dreams

In this new TED Talk, Derek Sivers (the guy who made that viral video on how to start a movement) gives reasons to walk the walk, rather than talk.

He's right. We all know people who are forever making some new affirmation about themselves.  But notice that physically fit people talk about fitness after they're healthy, real authors talk about books after they're written, engaged people talk about marriage after they've set the date.  You know who you are.

One of the many things I respect about the New Apple (the one after Steve came back, as opposed to the one where I once worked) is how they talk about new products after they're finished and ready to sell. Too many people and companies, in the name of "setting expectations" or "being predictable", give their customers a "roadmap" for the future.  I think the only roadmap that counts is your track record.

Meeting Bruce Bassett at Starbucks

Local elections should be about local issues, so why waste your vote on somebody you've never met, or who isn't already a friend of somebody you know or trust?  Endorsements from Big Shots or national political organizations won't help you much the next time your street gets a pothole or your kids' school needs their soccer fields repaired.

I like Bruce Bassett because I know him.  He's a long-time resident of Mercer Island who has been active in local organizations for many years, long enough to know what matters to normal people. I saw him at the South End Starbucks yesterday and talked to him about the campaign (and his competitor, Patti Darling),  downtown traffic issues, and what he thinks about technologies like Wikis and Blogs.

See for yourself: click here for a 3-min video summary of our chat:

Bruce Bassett for Mercer Island City Council

Still trying to figure out how to vote for Position # 5 on November 6th?  Contact Bruce yourself -- I know he'll be more than happy to talk about what matters to you too.

Transcripts of Voters Forum

Thank you to everyone who responded with their comments letting me know about last week's Voter Forum.  I can listen to the the whole podcast on the plane to New York this morning, but meanwhile, my readers pointed me to two audience questions near the end, where the differences between Mike Cero and Maureen Judge were most obvious.

The first was about whether the City Council should sign a petition for the Families and Education Program.  Here's Mike's answer:

I'm in favor. I have two years experience on the signing board; I was Lakeridge PTA president last year; I understand the challenges of the district. From the beginning, looking at Olympia, I don't see relief on our financial issues with the district from Olympia to happen in the short term. So I am all for islanders helping Islanders. That's going to be an efficient tax, if you will, to improve our school district.

Now, I may try to influence, if you will, a little bit of the direction that the school board goes, and they all know what direction that may be--Frank you know what direction that might be, we served on the same committee together (class size). Absolutely, I think that's a win-win situation. The reason my wife and I moved here 11 years ago were primarily for the schools and the education that our schools will get from the district and I certainly support that Frank and would use that as an opportunity to promote class sizes -- at least get the ship going in the right direction.

Here's Maureen:

I support the petition as well. It is one of those things about MI that makes it so special. People move here for the schools, and if we don't fund them properly, not only do our children suffer, all of us suffer. So yes, I am definitely in favor of the petition.

I also believe that we need to apply more pressure at the state level, for appropriate funding. When I met with the MIEA for their endorsement interview I made the point of saying "We're all in this together" and as a City Council person, I would be down in Olympia testifying that we need more money. We're in this together. It's not just up to Brian and Judy and Fred. I will be standing by them when they need to, perhaps, increase taxes so that we are appropriately funding schools.

Interestingly, both of the sitting councilmen (Steve Litzow and El Jahncke) were non-committal, reminding the audience that the City is already hugely exposed to a looming budget shortfall caused by a $20M lake sewer project and that any use of tax money for schools would be lower priority.

To the second audience question, on low-income housing, El Jahncke (Councilman up for re-election this year) responded by saying he prefers the term "workforce housing", and that we should find incentives for City police/fire and teachers to live where they work.

Here's Mike:

I'm a little bit apprehensive about low-income housing, workforce housing -- whatever you want to call it. This is an affluent island and I don't apologize for that. It's going to be tough to maintain the charm and character of our many different neighborhoods and get quote-unquote affordable housing. I was on a police ride a couple weeks ago and he basically said 'I don't live on Mercer Island; I don't care to live on Mercer Island." Yes it would be nice to have our teachers, some of the police force, some of the firemen living on the island but the fact of the matter is, this is an affluent island. I don't apologize for it. We have some wonderful neighborhoods with charm and character, and you start fooling around with that charm and character, with great intentions for affordable housing, but the end result is it doesn't end up being affordable housing because of the market demands. It ends up being a very expensive, affluent house like we have on Mercer Island.

Here's Maureen:

I think we can work with the developers -- there's still so much building going on Mercer Island. I think there are creative solutions to try to block out affordable housing. You know, it's not a simple answer but I think creative solutions in this case -- working with developers, giving them incentives so we can make housing available to people who do want to be on the island and to stay.

I was pleased to see that, in spite of the short amount of time given to audience questions, it was still possible to see sharp differences between the candidates, and I look forward to listening to the whole thing.

Meanwhile, you know who I think did the best job overall?   Steve Litzow:  his opening statement about "pothole" issues nicely summarized exactly what I think a local official should be, and his informed responses to the parking and education issues gave me a new level of respect for him.

Reading list for September

So much to write, so little time. Several good friends have asked me about what interesting books I've read lately. I say "check out my blog", but now I realize that I'm so far behind on my summaries that it'll be hard to get a good glimpse. So rather than do a helpful, thoughtful review, here's a brief look at where I'm getting my new ideas:

Podcasts

I listen to an hour or so of various things each day. My favorite is Econtalk, which comes out every Monday. Every one is good, but in the last few weeks I've particularly enjoyed the interview with Black Swan author Nassim Taleb. The basic idea is that many processes we think of as statistical (like stock markets or insurance) are really much more complicated. It'll be on my short list of books I want to read.

I also listen to the Wall Street Journal This Morning, a daily business news summary, and I follow IT Conversations in case there's anything good. Nothing special lately, except for a nice summary of open source telephony that's relevant to what I do at work.

Books

I'm reading Steven Pinker's new book, of course, and I'll write up something in more detail when I'm done. I also read Tyler Cowen's Discover Your Inner Economist, but I found it disappointing: Cowen's Marginal Revolution may be a nice blog, but in book form he just meanders too much.

There's much more to write, about movies (like the Enron Documentary I just watched) and tons of magazines. But I can't write now -- I have too much reading to finish.

How societies grow and innovate

My new job puts me back in marketing, doing a new phone, but one special thing about the team is that I'm part of Microsoft Research.  My VP, Rick Rashid (who grew up right next to Wisconsin, in Iowa, by the way) is an old-timer who has followed computer technology forever and has a good sense for what will happen in the future.  Today I listened to a podcast interview with him where he speculates on a few key trends:

• Yes, the world is moving to 5 big computers that will be run by Microsoft, Google, Amazon, eBay, and Salesforce.com.
• Communication -- the biggest barrier to innovation -- is undergoing a huge transformation as new technologies (search, social networking, etc.) make it far easier for people in different fields to share their similarities and breed more solutions to common problems.
• Massively-distributed sensors, measuring everything from weather to traffic patterns, will enable another level of understanding about the world and our ability to manipulate it.

It would be interesting to pair Rick up with Paul Romer, subject of another podcast interview on Econtalk this week, who studies economic growth.  Romer, an ex-physicist turned economist was trained to think about conservation of matter and wonders how economists can talk about "increased output" and "productivity growth" when the total supply of inputs in the Universe is constant.  The answer is that the way things are organized is what leads to innovation and what makes the world a better place.  Rick and the 800 PhDs of MSR are right at the forefront of figuring out how to organize things better.

[Podcast] Matt Ridley

Matt Ridley doesn't say much new about genes and the environment in his interview with Moira Gunn and David Ewing Duncan, but I enjoyed the conversation anyway. One intriguing bit at the end hints at his next project: why for thousands of years have people been pessimistic about the future, when things long-term have clearly been getting better? fifty years ago, nuclear war was going to do us all in; then it was over-population; now it's global warming. Each generation somehow manages to pass itself on to the next, though always with a forelorn shake of the head at how the future has never been so gloomy. The end of the world will come eventually, so in that sense the doomsayers' predictions will come true eventually, but why do we insist it's just around the corner?