Rebooting And Building Economy 2.0
Mark Cuban's Pomp-Pod,, Sam Parr's 4 Recession Proof Skills, Derek Sivers vs. A.I., and Marc Andreesen's Call To Build
Building the future means rebuilding our economy. It’s time to reboot for Economy 2.0
Hephaestus was the God of Makers. The Romans knew him as Vulcan - a god of fire and fabrication. He made the tools and weapons of the Greek Pantheon (such as Zeus’ thunderbolts).
He would have fit into today’s tech culture for his creations.
Hephaestus CV included: A.I., automation and robotics when he created mechanical “automatons” to serve as assistants, Olympian biotech through creating the first human female, the source of mankind’s discovery of fire via theft from his forge; more modest projects involved the creation of Olympian active-casual fashion and footwear when he created Hermes’ sandals and winged helmet, Achilles’ armor, and Aphrodite’s girdle.
He was as much a “creative” as he was a “maker”.
Born under bleak circumstances, and made lame and ugly by those in charge, Zeus and Hera, his powers were artistry, creativity and ingenuity. He was the god of building the future.
Here we are, in new darkened circumstances, financially hobbled and marred by the “powers that be”, but we still possess the powers of art, creation and genius. We must build the future.
Let’s consider the following thoughts from a group of creative founders who built our current economy to get inspiration about how the rest of us can play a part in building the next one.
“For capitalism to continue to thrive when we come out of this, it’s going to have to be a lot more compassionate” - Mark Cuban
Cuban’s autobiography about his early years is an easy, fun and instructive read. His origin story was entertaining and educational. He operated a bar, shared a crowded house packed with bachelor roommates, and read the want ads with clunky glasses, which he kept stowed on top of his toilet tank, in search of the next gig or opportunity.
He became a manager for an early personal computing store and taught himself the early PC tech business. In less than a year he was fired as his reward for chasing new business instead of opening the doors. That marked the beginning of a greater journey.
This would be followed eventually by his launching of “Broadcast.com”, part of the Internet 1.0 vanguard of startups which he sold to Yahoo. Cuban kept his fortune from the sale of Broadcast.com unlike other Internet 1.0 winners.*
Cuban admitted to Pomp that he hit the “F5” key to stare in wonder on his computer at a 10 digit balance and celebrated with a “naked dance” - a nice bit of humanity. Cuban then went straight back to work after his billionaire dance - a dose of humility.
The compelling part of this talk was Cuban’s framing of the pre- and post virus crisis economy as 1.0 and 2.0. Before the virus shutdown crisis, there were already tech trends unfolding in A.I. and robotics which have been accelerated by the shutdown.
Podcast Notes, covered this Pomp-pod and quoted advice good for both 1.0 and 2.0:
“.You got to be agile, you got to be resilient…it’s not going to be easy…aggressiveness, hustle, grind,… traits of small businesses that do well.”
CB Insights chart of the robotic processing trend depicts a tech trend likely to be accelerated by the virus crisis shutdown. With people furloughed or fired, there will be an even greater push for businesses to compensate for the loss of revenue. The shutdown will throw more fuel on this employment fire.
Cuban points out that this is not “the end” of the economy. It’s just the end of “Economy 1.0” and there’s no going back. At the same time, economic policy and corporate culture has to push past short-term focused expediency and efficiency and towards “long game” capacity and compassion.
His focus on the “long game” is timely and many who operate by last year’s, last decade’s and the last century’s rules are struggling to adjust but they must adapt to protect their brands. They can’t play a short game - history’s pendulum is swinging away from a “gilded age” culture.
Our current just-in-time global infrastructure has exacted a heavy price on society and proven to be too fragile. The next economy, according to Cuban, will still be competitive but it must be caring too. There may have to be both a robotics tax AND massive investment in domestic robotic research for future job creation. Capacity and caring vs. expediency and cut-throats.
We may need both tax and investments. Olympian scale Automation is on its way everywhere.
CB Insights observed:
Several industries are increasingly relying on workplace automation, from healthcare to retail to financial services.
And while the concept isn’t new, tech like Robotic Process Automation (RPA) is playing a central role in this process. Businesses across industries are leveraging RPA to automate manual, repetitive tasks such as data entry, document review, transaction processing, and customer onboarding, among other things.
Even if there weren’t a recession already unfolding, the shift towards Economy 2.0 is here.
It’s both a dangerous and promising time. There are no guarantees that large mature industries and incumbent businesses will survive these changes. One way or the other however, people have to survive and thrive in Economy 2.0. But how given the rise of the machine?
Sam Parr, founder of “The Hustle” and “Trends”, gave a heartfelt and helpful talk about recession-proof skills - which happen to be also future-friendly and anti-fragile.
Sam Parr’s Four Recession-Proof Skills:
Parr’s 4 skills are self-awareness, copy-writing, management, and persuasion.
Self-knowledge helps prevent self-sabotage.
Copy-writing is writing to sell. The power to write and rewrite is the power to think, communicate, entertain, educate, persuade, sell, and to learn.
Management skills of a business with its many employees and stakeholders are different from those for founding a startup. Parr knows the difference between starting and growing a business versus managing and maintaining that company.
You might blast a tunnel a mountain to make way for a new railroad but it’s another thing to make it stable and safe for trains to use that tunnel for decades.
Persuasion is connecting and influencing people.
The future brings growth & innovation for some - but disruption & obsolescence for others. A new tech bull market is an old incumbent industry’s off-the-cliff recession.
Cuban highlights that A.I. and Robotics secular tech trends will bring sweet opportunities for some. It’s also a bitter cup of poison for obsolete industries.
Parr’s future friendly skills overlap with recession-proof skills. He’s right - we’ll need them.
Parr was speaking from experience. His 2014 Hustlecon conference was a demonstration of his 4 key skills - to create a conference for non-tech builders is a very timely event.
Parr is not the only one who reminds us of the power of human artistry over artificial intelligence. Derek Sivers is another founder and creator to learn from as well.
Sivers, who created early music ecommerce site, CD Baby, highlighted where humans had an advantage over A.I. which dovetailed with Cuban’s and Parr’s advice.
Sivers talked about the value of the human, which Cuban wants to uplift via broader policies and Parr through individuals leveling up emotional quotients:
The competitive advantage of using human labor is that I feel that the year is not 2500 yet.
We’re still in 2020, but everybody’s so focused on trying to be the next robotics genius and beat the game that a lot of people ignore the things that can be done by a human right now in the name of continuing to program and trying to develop some ultimate machine learning way of doing things.
Because of this, for example, they start these software companies that don’t pick up the phone because they say, “No no no. I’m going to automate all of this. I’m going to get voice recognition. So people will call and they’ll tell the voice recognition system what they want. My machine learning voice recognition system will direct them to the current way.”
I think, “Yeah, or you know, for $15 an hour, you can have somebody pick up the phone on the first ring. Doing that makes a brand loyalty that a thousand hours of machine learning can’t.”
…
It wasn’t my prices. It wasn’t my site. It wasn’t my service. It was basically, “Oh, dude, you should sign up with CD Baby.
You know why? They answer the phone. You can contact them. If anything’s wrong, you pick up the phone and they pick up on the first ring. There’s no voicemail system. There’s no routing. You can reach them. This is the owner right here and you can email him and he replies.
Cuban talks about this same thing via brand and legacy - it’s long game played day by day.
Before we get too caught up in future fever dreams and nightmares, let’s tip our hats to those who can work with COBOL - which is decades old - for all those older medical and banking systems which have to be maintained, by human beings (for now), during this shutdown. On a long enough time-frame it’s all legacy software. Legacy is “Lindy”.
Sivers wouldn’t be shocked by the need for COBOL coders. He also mused about “lindy”:
They found that the longer a Broadway musical has been running, the longer it’s likely to stay open. I think of that when it comes to technology.
What technologies am I going to focus my precious time on? I’d rather go deeper on the ones that are likely to be around the longest. Programming-wise, I’d rather learn C, SQL, and Lisp instead of the language that was invented this year because my time invested into the timeless ones will probably continue to be around for the rest of my life.
There’s plenty for humans to do: maintaining “Lindy 1.0” but also upgrades for Economy 2.0.
Economy 2.0 will be created by those who have the will, the desire and need to build. Marc Andreessen threw down the gauntlet in a “It’s Time To Build”.
Famous for the Netscape browser, which ushered in Internet 1.0, Andreessen became a venture capitalist. His firm’s blog a16z is filled with fascinating thought pieces, including one released at the beginning of the 2010s, “Why Software Eating The World” which correctly identified a key secular trend of the past decade.
Andreessen’s most recent essay is a call to arms - to “build” a new infrastructure - in the face of the current system’s failure to respond effectively to global viral and economic crisis. The crisis has shown the vast gap between our needs versus our ability to meet them, because of a lack of foresight, a failure of imagination, lack of preparedness, and a certain kind of complacency:
Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t *do* in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to *build*.
And it’s led to an age of complacency:
You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life.
WHY the complacency?
The problem is desire. We need to *want* these things.
The problem is inertia. We need to want these things more than we want to prevent these things.
The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don’t like it, even if only to force the incumbents to build these things.
And the problem is will. We need to build these things.
And we need to separate the imperative to build these things from ideology and politics. Both sides need to contribute to building.
In a way we’re looking hard at the fruits of a generational culture focused driven by “financialization” which Ben Hunt has decried. Andrew Smithers for decades has been an observer. An FT piece summarized Smithers’ most recent book “Productivity and the Bonus Culture”:
He argues that the growth in performance-related pay since the 1980s in both the US and UK has been accompanied by widespread shirking on capital investment.
Incentives have instead encouraged executives to keep profit margins high and substitute equity with dangerous amounts of leverage, thus promoting earnings volatility.
Such practices are a major contributor to the ongoing productivity malaise.
Managers find it easier to engineer for equity driven benefits (& benefit from the tax incentives of debt financing) than it has been to raise equity for engineering buildouts. Smithers observes that productivity is not about technological leaps, it’s about investment, a/k/a capital expenditures which come from “building”. We need to find out way back to this mindset.
The will to build and create is informed and fueled by our creativity and desires.
Cuban’s big picture described just how we should begin the age of Economy 2.0:
“The news needs to talk more about good things such as innovative businesses, new products that are being created, what people want to do once this is over, etc.
“I want to hear about those visions…”
(End note: This piece is a “living document” will be tweaked and rebooted by me.)
(*It wasn’t all Cuban’s idea. The original founder started with shortwave & satellite.)