Mind Crunches #9: Looking Forward & Backward
My favorite Mind Crunches for 2020 and my observations on what is coming next in the enterprise space
2020 was a tragic year and unfortunately we will be experiencing the COVID spillover effects for the foreseeable. However, there is always a silver lining. In this case, it was the acceleration of the scientific research celebrated with the COVID vaccine release, the extremely fast pace of digital transformation and the realization on how symbiotic the relationship between humans and technology is.
Another silver lining, which is usually neglected, is the opportunity we had to spend time with ourselves - a lot of time since most of us were stranded in our homes for months. Most people I know invested time and energy to read more, pick up new hobbies, creatively express themselves and most importantly to contemplate on what they want to do with their lives. If you think about it, the world actually got a bit slower. It felt like we paused and this is something I personally found to be very refreshing.
One area that I focused on was being more programmatic on managing my knowledge, structuring my thoughts, reading about topics that I didn’t have time to invest in the past and exercising long-term scale thinking (which I highly recommend).
Double-clicking on the knowledge management topic, I have been a big advocate of the “knowledge worker training” concept, that Tyler Cowen popularized a few years ago, and meta-practice. The idea of the meta-practice says that the maximum level of proficiency people can achieve at any given skill is limited by the time spent practicing and the amount of feedback gathered in each practice session. Therefore, it is critical that we not only practice our skills but also practice our practice, tweaking it so that we can learn the most out of it.
This newsletter, for example, is a result of my intentional effort to meta-practice my thought leadership and community building skills on digital transformation and enterprise technology.
2020 has shown us that every company — no matter their industry or size or age — has to become a technology company to survive and that every knowledge worker has to stay agile exercising a learning mindset if he wants to stay relevant . Before the pandemic, digital transformation was happening, but hyped; today, it’s happening faster than we could have anticipated.
In this newsletter, I have listed my thoughts and observations on the technologies that will reshape the global economy and the new enterprise norms that are emerging. At the end of the newsletter, you can find which were my favorite “reads” for 2020.
Hope you enjoy it!
TECHNOLOGIES
GPT-3
The core of GPT-3, which is a creation of OpenAI, is a general language model designed to perform autofill. It is trained on uncategorized internet writings, and basically guesses what text ought to come next from any starting point. This might seem unglamorous but the potential is tremendous. GPT-3 can converse at a conceptual level, translate language, answer email, perform programming tasks, help with medical diagnoses and perhaps serve as a therapist. GPT-3 technology allows for the creation of remarkably human-like writing of great depth and complexity. It is a major step toward the creation of automated entities that can react in very human ways . My prediction is that it will be the foundation for the emergence of “narrative-driven enterprise”. Bonus: Sam Altman’s thread with GPT-3 predictions.
No-code/Low-code
Everyone is now empowered to build without having a technical/CS/engineering background. This is huge because it can fuel a new era of entrepreneurship but more importantly because this new “breed” of non-technical founders will come from different educational backgrounds. Visionaries from social sciences and liberal arts for example will have the tools to build a -potentially- better and more just Internet. This is also huge for the future of digital transformation enabling companies to unlock “intrapreneurship” and be faster on automating processes. Microsoft acquisition of Softomotive is a great example. Bonus: No code cohort-based courses have already launched. Bonus 2: this is a great library of no-code tools.
Put on your Spacesuit
Space business will be very hot in 2021. As barriers to space access fall, organizations are already taking advantage of the opportunities that satellites and other space technologies. Space-generated data is growing exponentially, requiring expanded ground control capabilities as well as data processing, storage and analytics – turning this data into knowledge and actionable solutions. Moreover, data collected from space to observe Earth is instrumental in helping address global challenges such as climate change and furthering of scientific discovery and innovation. The cloud is central to both modern communications scenarios for remote operations and the gathering, processing, and distributing the tremendous amounts of data from space.
Microsoft introduced Azure Orbital + Azure Space in collaboration with Space X.
Starlink, a satellite internet constellation being constructed by Space X, is disrupting the telco industry and recently won subsidies to bring service to customers in 35 U.S. states.
Varda Space, a Southern California-based orbital manufacturing startup, has raised $9 million. The company is not sharing much about what it plans to manufacture in space, but says that "super high-value and super sensitive materials" like semiconductors and pharmaceuticals are examples.
Other notable disruptive technologies & advancements:
5G: The foundation upon which (among others) transportation will be reinvented, manufacturing will become more intelligent and healthcare will be revolutionized. Or in other words, 5G will be a building block of the Fluid Enterprise (see below).
Consumerization of AI: AI is developing fast (deep learning for example is moving from vision to language) and is not a sci-fi technology in the hands of very few scientists anymore. AI is everywhere not only in the enterprise but in the consumer space as well. We all have smart-voice assistants and building a bot was never easier. This means that consumers already expect highly sophisticated, fair, non-biased and safe AI applications.
Computational biology + mRNA: We have made great advancements building computational methods to analyse large collections of biological data, such as genetic sequences, cell populations or protein samples, to make new predictions or discover new biology. This is literally saving our lives (COVID vaccine) but we need to act fast if we want to be prepared on the disruption that pharma and healthcare industries will be facing soon.
Crypto will go mainstream (Bitcoin already is) revolutionizing monetary systems and fueling trust in cloud communities.
ENTERPRISE (MACRO)TRENDS
The Fluid Enterprise (Experience as a Service)
The lines between industries are becoming blurry. The days where a retail, a banking and a healthcare organization had totally different operating and business models are long gone. We are now witnessing how advanced technologies (AI, IoT, blockchain, 5G) empower a new breed of fluid organizations. Retail, banking, healthcare, telecommunications, entertainment, mobility will soon merge forming a single platform of experiences.
Experiences will be the single currency between companies and customers!
There are many reasons behind this phenomenon but the most important ones are:
the success of platform enterprises
the great customer experience in both the supply and the demand side of the business
the rapid rise of cloud technologies
the new revenue streams that organizations build
Let’s take the example of banking. Banking is changing as we speak and in a few years every company will be a fintech company. We have reached a point where non-banking organizations build new revenue streams by releasing “financial products”. By products, I mean more sophisticated services than payments. As vertical SaaS companies access better fintech tools and banking-as-a-service, they are moving beyond payments to include a range of financial services and products for bigger margins, larger addressable markets, and a better customer experience. Financial services also allow companies to gather data about customer preferences and therefore offer more personalised user experiences to consumers.
The same case stands for the retail industry. If you are a merchant, it was never easier to set up an e-shop and build a direct-to-consumer (D2C) business. Shopify, among other platforms, is here to help you. If you are a retailer, your store is not a store anymore. It is a service providing experiences. (Microsoft recently partnered with Kroger to launch a RaaS platform)
Transportation, entertainment, telco and healthcare follow the same pattern. The recent news of Apple targeting car production by 2024 is the perfect example of a Fluid Enterprise. Imagine a car with exclusive streaming content, intelligent insurance customized to your driving behavior and healthcare data captured by a smart device that you could purchase with a personalised loan. All these services could be easily provided by a single organization!
The Multi-Cloud Enterprise
Cloud computing has passed the inflection point of being a technical certainty. With such rapid adoption of cloud, more and more organizations are now operating in more than one cloud platform for a variety of reasons like the desire to increase agility and have modular app architectures. Over the next three years, IBM forecasts that the number of companies using multiple clouds will grow to 98% . These organizations want solutions that provide a consistent experience across cloud platforms. But multi-cloud isn't just something enterprises can make use of. Many consumers use multiple cloud services in everyday life, and many businesses do so without necessarily realising it.
And this is where the product-led growth and the consumerization of enterprise come in. The consumerization of enterprise , defined as corporations adopting consumer-like solutions for business use, and often purchased through consumer channels, is a trend that’s growing and will keep growing as organizations will become more flat and collaboration will be democratized. For example, the widespread adoption of BYOD policies in the workplace has given employees an expectation of choice in the tools they use. The a16z teams calls this “the importance of minor users”. Traditionally, if enterprise software were sold to the finance leader, the major users would be the CFO, a controller, and maybe some accountants in the finance team. But in today’s world of remote work and bottom-up SaaS, the winning products provide benefits and visibility for minor users. In a financial accounting tool, for instance, all of your different managers may become minor users, leveraging the tool for annual planning, budgets, and finance approvals.
The Self-Learning Enterprise (Brain as a Service)
Individuals and organizations are facing a very similar problem. How can they systematically extract knowledge from the data cataclysm they manage every day? How can they boost their productivity leveraging this never-ending library of amazing content online without getting lost by the digital distractions? How can a company build a “live” library of insights and knowledge coming from the projects, mistakes, products and fails that they have launched the past years? And probably most importantly, how can they build “context” that will connect the dots of the countless digital bits they consume and generate every day?
Knowledge management is already attracting a lot of attention and will soon become a key collaboration SaaS differentiator. Microsoft Sharepoint Syntex seems to have great potential opening the Machine Teaching business! This is an argument about companies hiring librarians + these are my predictions. Enterprises will soon have to design self-learning systems building collective intelligence and knowledge.
On an individual user level, the speed is faster. Roam is becoming mainstream. Authors and thinkers publish their brains online for a premium price. For example, I recently bought Nat Eliason’s brain for $25! (in case you are wondering about the quality of his insights, look here). eBooks are now morphing into rBooks, allowing non-liner exploration. In a nutshell, the Brain as a Service market is here!
The Decentralized Enterprise & the Sovereign Individual
I have previously argued that Covid didn’t bring any major tech transformation, it just accelerated the adoption of digital tools and practices by individuals and organizations. The only socioeconomic trend that Covid probably created is the death of tech hubs. Location is not a monopoly anymore and together with the rapid rise of crypto, they create an interesting momentum for decentralization in all levels. Remote work is not a trend, it is the norm. (here is a list with my predictions on how remote will totally reshape how we define work) We are currently witnessing the San Fransico exodus. As Balajis writes, the center of gravity for tech will be decentralized with hubs around the world and with people networked by the internet.
Taking into consideration that technology was already fueling a new era of individualism, I believe we are in front of a huge transformation. Cloud-first communities, charter cities and consumer citizenship will be the norm the next years. The mayor of Miami is now a “startup politician” leveraging Twitter to build a new tech and crypto hub. Cities will soon resemble SaaS companies fighting for knowledge workers. The city of Beijing recently unveiled its plans for blockchain-based government. This is my blogpost on the future of the sovereign individual and consumer citizenship.
MY FAVORITE BOOKS FOR 2020
You can follow all the books I read in 2020 here. These are my favorite ones:
Entangled Life: How Fungi Make our Worlds, Change our Minds and Shape our Future - An excellent book on how fungi, extraordinary organisms we hadn’t previously studied in depth, can help us understand how networks and life works. Wood wide web is way cooler than world wide web!
The Weirdest People in the World: How the West Became Psychologically Peculiar & Particularly Prosperous: In this book, WEIRD stands for Western/Educated/Industrialized/Rich and Democratic. To anthropologist Joseph Henrich, if you were born and raised in the “West”, you are psychologically weird. He is providing a very interesting framework to explain how culture, institutions, and psychology shape one another. Hands down one of the most thought provoking books I have ever read. Bonus: his interview with Tyler Cowen. Bonus 2: If you are interested in cultural evolution and economic development, I recommend you follow Nathan Nunn’s work.
Good Enough: The Tolerance for Mediocrity in Nature & Society - For the past years, Darwin’s evolution and natural selection theories course through capitalism’s core terms like innovation and optimization. Survival of the fittest is a framework that many consulting organizations are using to promote their efficiency and cost-benefit practices. However, evolutionary biology shows that nature is strongly biased towards excess and every living organism actually “leaks” and will never be wholly efficient. “Good Enough” explains why “excess” is good in nature. Extreme focus on efficiency and cost optimization will not necessarily make your organization more successful.
History Has Begun: The Birth of a New America - Bruno Macaes is a controversial figure, to say the least, but he always stays true on being an original thinker. In this book, he provides a really fresh look and intriguing narrative on what is the future of America by placing a tech-enabled “magical realism” at its core. This is my Twitter review. Being a European who recently moved to the US, this book has influenced my thinking a lot on how I decode the everyday American life.
Radical Uncertainty: Decision Making Beyond the Numbers - I consider this book a great read for those who are not Taleb’s fans. John Kay reminds us that more data isn’t always the answer to a better decision and explains what are the limits of certainty and the power of human judgment. The concept of narrative as a vehicle to understand the world is central to the book. “Knowledge doesn't advance through a mechanical process of revising probabilities that we attach to a list of possible future outcomes. Conventional wisdom is embodied in a collective narrative which changes in response to debate.”
Incerto: This is the boxed pack with Taleb’s all four volumes - Antifragile, The Black Swan, Fooled by Randomness and the Bed of Procrustes - updated with new material. Taleb has now gone mainstream, especially after many people have mistakenly associated COVID with Black Swans, which is good because his insights can help many people navigate difficult decisions. However, reading all four volumes together is eye-opening because you get to experience you his master narrative on how the world works in full length and great depth. Personally, I found myself diving deeper on the concept of ergodicity and now I can’t help seeing it in front of me every day. Can’t recommend it enough! Bonus: In case you are also intrigued by ergodicity, I recommend you follow Luca Dellanna’s work.
No Rules Rules: Netflix & The Culture of Reinvention - I rarely read business books because I believe that most of them could be longform articles and they rarely provide tangible examples of how the X theory would work in real life. I decided to read Hastings’ book though because he is an original thinker and his book proves so. If you are running a company or managing a team, Hastings provides great insights on what truly motivates people, how to build team trust and most importantly how to give freedom while not sacrificing responsibility. Bonus: Satya Nadella shadowed Reed before becoming Microsoft CEO.
MY FAVORITE BLOGS & NEWSLETTERS FOR 2020
Slow Boring: Matthew Yglesias on politics, economics and current affairs. Bonus: his book “One Billion Americans”.
Erik Torenberg’s Thoughts: Weekly newsletter on tech, ideas, education, knowledge management. Bonus: Torenberg’s On Deck.
Pirate Wires: Mike Solana on technology, politics, culture, and the electric points at which they intersect. Pretty contrarian but always insightful.
Nintil -> As per Nintil’s welcome note “Many blogs have a topic they are about, but not so with Nintil, there is no common thread that unites all the posts here other than I've written them. The motivating aims behind each of them tends to be that I want an explanation for something and nothing available is good enough”. My favorite essays are on the future challenges for AI and mastery learning.
a16z Enterprise: Enterprise software + cloud economics + digital transformation.
Stratechery: One of the most interesting sources of analysis on any subject around the tech and media business. Ben Thompson is a legend. If you decide to subscribe to only one blog, this is the one!
Remains of the Day: Eugene Wei is one of the most original thinkers in tech. He is also one of the very few people who understands how and why China is “different” than the West when it comes to tech (both in business modeling and consumer behaviors). His post on Tik Tok is a must.
Thoughts in Between: Matt Clifford is an entrepreneur, investor and writer based in the UK, which means that his newsletter has great insights on the European startup business (on top of everything else)
Trilobites: Trilobites are a group of extinct marine artiopod anarthropods, among the most successful of all early animals existing in oceans for almost 300 million years. Trilobites is also the title of the NY Times Science column, which I find to be one of the most interesting content corners on the Internet. Business leaders can learn a lot about organic development, consumer behavior and the human psyche if they follow the news of the scientific and academic community.
Happy Holidays 🎄
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Wishing you a new year with hope, joy and good health!