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Technology is Solving the Wrong Problems


6.08.2018
FaceTime with 32 friends, updates to Siri and a walkie-talkie on your Apple Watch are just a few of the feature update announcements coming out of Apple’s World Wide Developers Conference this week.

Adam Smith, the Scottish philosopher and economist whose “invisible hand” theory defines modern capitalism, is facing a shift in the definition of his theory. In the age of technology, resources are no longer allocated to the highest-value, specialized opportunities. Convenience is the “Invisible Hand” of the 21st century. 

Tim Wu wrote a few months ago that convenience is the most underestimated and least understood force in the world today. Immediate gratification has led to entirely new business models that rely on reducing individual effort to zero. Asserted value is created through removing personal choice via a “curated, recommend list”. The rapid growth of companies such as Uber, Instacart, and Postmates demonstrate the resonance of convenience as the core value proposition. 

Venture capital flows reactively to the next startup that promises to be “the Uber of XYZ.” Yet the price we pay is that some of our best minds, AI experts and data scientists and engineers, are deployed at these low-value problems. Why wouldn’t these superstars work for a company with unlimited resources and a powerful, growing user platform? There are over 500,000 unfilled computing jobs nationwide, according to Code.org, and that number will double year over year. And yet millions of people apply to the few open positions at Google.

At the same time, we are confronted with a growing list of society-threatening challenges: extreme weather, cyberattacks, data fraud, data privacy, water crises, and large-scale involuntary migration, to name just a few. Adam Smith is clearly not in charge, and the hand that properly allocates resources has gone from invisible to nonexistent. 

I believe we must expect more from the technology industry. I believe the actions of today’s entrepreneurial leaders are critical to the future of our society and, not to be too hyperbolic, our democracy.

The strides we’ve made in machine learning, predictive analytics and artificial intelligence make it possible to create a better, more sustainable world in ways that were unimaginable even just five years ago. We must commit to measuring our success in a different way. Not just by our profits, likes, users, growth, valuation, or market share, but by the number of people whose lives are truly, positively impacted and improved by our work. It’s time to prioritize consequence over convenience. 

What would that look like? New businesses attacking hard problems, leveraging venture capital for what it was meant to enable: risk-oriented investments in high impact opportunities, with moonshot change at stake. Talented people making the decision to take a job at a company that leverages technology to tackle the challenges we face.

Confronting climate change is a responsibility we all must assume for generations to come. Significant strides can be made if we continue to invest in the productivity, reliability and optimization of renewable energy sources. In the U.S., the fleet of wind turbines is growing rapidly and its energy output rose by a whopping 20 percent in 2016. Through a combination of connected sensors and predictive analytics, the wind industry can ensure that wind turbines are spinning when the wind is blowing 99 percent of the time — as opposed to the current availability, which is 94 percent. That small increase in optimization would be the equivalent of adding 2,250 new wind turbines to the grid. We’re not yet at 99%, but we could be. Currently, preventable equipment outages across the country (when a wind turbine fails or stalls) still leave enough unused energy on the table to power every home in Chicago for a year. Imagine that: Chicago could run entirely on renewable, clean energy if we just optimized the wind turbine fleet that already exists - without building any new turbines.

The cybersecurity of physical connected things, what is popularly called the Internet of Things, has never been more important. Physical things such as infrastructure, control systems, machines, and buildings are more networked and connected than ever. A well-constructed attack can wreak havoc on hospitals, utilities, airports, banks, factories, corporations and other critical assets, as evidenced by the WannaCry and Petya/NotPetya attacks in 2017. Just as adversaries and terrorists become more aggressive and advanced, it’s now possible to use technology to fight back. The data from sensors on machines can be monitored, and by leveraging predictive technology and machine learning, we can prioritize early detection and respond to vulnerabilities and threats before they cost money and lives.

Elon Musk is the pioneer of tackling big problems. It’s unnecessary to list out his accomplishments, but for folks living under a rock, he’s founded a number of businesses, all of which make a significant contribution to the world: Tesla, SpaceX, the Boring Company, and SolarCity. A more mysterious venture that he founded, Neuralink, is reportedly developing brain computer interfaces that in the near-term, would treat serious, intractable brain diseases like epilepsy and depression.

These are the problems worth addressing: How can we ensure the cyber security of our critical infrastructure, as more assets are connected to the internet every day? How do we build a more sustainable world through renewable energy sources and electric cars? How do we cure incurable disease? How do we create technology platforms that lift everyone up?

These aren’t problems of convenience. These are sticky, complicated, multi-dimensional problems.

A blended model is the philanthropic arm of the massive tech company. Since 2005 Google has committed 1% of its profits to funding innovative nonprofits, and in 2017, committed to delivering $1 billion in grants over the next five years. Google is undeniably doing good; one of my favorite stories is that Google.org invested and supported the catastrophic growth of the Khan Academy, democratizing learning for all. But the bulk of Google (now Alphabet’s) business is still delivering the best search engine in the world, and with that monopoly, operating an incredibly powerful and targeted advertising machine. Their business model is built on the foundation of, “How can we make it easy for people to search for things?” and more critically, “How can we make it easy for advertisers to sell things?”

I know first-hand that business leaders must think first about market-driven problems, growth and revenue. Yet I’ve been building companies for two decades now and I know that it’s not an either/or. You can make money and make a difference. In many cases, companies that are addressing problems of consequence are real, rapid-growth, highly-defensible and highly-profitable businesses.

And for those entrepreneurs that are turned off by the now-mythical failure that was Theranos, I argue that Elizabeth Holmes was trying to solve the right problem; she got lost in ambition and execution.

There are many dimensions to the technological and economic opportunity in front of us, much of it good and some of it bad. It would be foolish and irresponsible to ignore the bad. We must take a holistic and proactive approach to the impact of 4th industrial revolution technologies. The same advancements that will deliver incredible value to our world in ways not yet imagined, quite literally saving lives and our planet, also may have a darker side. We can’t ignore the questions being raised by leaders around the world regarding the ethics of artificial intelligence, the algorithm, data ownership and privacy, or the future of automation and jobs.

In many cases, we’re already seeing progress with real action. For example, Harvard and MIT are jointly offering a new course on the ethics and regulation of artificial intelligence, and the University of Texas at Austin launched a course entitled “Ethical Foundations of Computer Science”. We know that tech is not neutral and our work has ramifications. In order to deliver impact and maintain trust, the tech community must take responsibility for how we move forward.

No matter what, it is now or never. The dark pull of convenience should not dominate the priorities of venture funding. Entrepreneurs and technologists and innovators must recognize that we live in an era with boundless potential, in which the power of technology and our ability to harness data will allow us to confront the challenges in front of us. We have a responsibility to spend our resources – our talent and time - on the problems that will affect our children and grandchildren. That’s what I’ll be doing.

Adam Smith, the Scottish philosopher credited as the founder of modern political economic theory, proposed that the “invisible hand” of capitalism optimally allocates resources, ultimately benefiting society at large. It’s hard to argue that Smith’s theory can’t be validated through the progressive gains in productivity and innovation throughout history. Just look at Ford’s assembly line or the global supply chain.

Despite the impact of Adam Smith’s contributions to our world, it seems he was ignorant of the power of convenience, the ultimate seduction for capitalist actors. 




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