WTF?: What’s the Future and Why It’s Up to Us

399 Pages·2017·2.48 MB·English

by  Tim O’Reilly

DEDICATION
For all who work to make tomorrow better than today.
CONTENTS
Cover
Title Page
Dedication
Introduction: The WTF? Economy
Part I: Using the Right Maps
1 Seeing the Future in the Present
2 Toward a Global Brain
3 Learning from Lyft and Uber
4 There Isn’t Just One Future
Part II: Platform Thinking
5 Networks and the Nature of the Firm
6 Thinking in Promises
7 Government as a Platform
Part III: A World Ruled by Algorithms
8 Managing a Workforce of Djinns
9 “A Hot Temper Leaps O’er a Cold Decree”
10 Media in the Age of Algorithms
11 Our Skynet Moment
Part IV: It’s Up to Us
12 Rewriting the Rules
13 Supermoney
14 We Don’t Have to Run Out of Jobs
15 Don’t Replace People, Augment Them
16 Work on Stuff That Matters
Acknowledgments
Notes
Index
About the Author
Credits
Copyright
About the Publisher
INTRODUCTION: THE WTF? ECONOMY
THIS MORNING, I SPOKE OUT LOUD TO A $150 DEVICE IN MY kitchen, told it to check if
my flight was on time, and asked it to call a Lyft to take me to the airport. A car
showed up a few minutes later, and my smartphone buzzed to let me know it had
arrived. And in a few years, that car might very well be driving itself. Someone
seeing this for the first time would have every excuse to say, “WTF?”
At times, “WTF?” is an expression of astonishment. But many people
reading the news about technologies like artificial intelligence and self-driving
cars and drones feel a profound sense of unease and even dismay. They worry
about whether their children will have jobs, or whether the robots will have
taken them all. They are also saying “WTF?” but in a very different tone of
voice. It is an expletive.
Astonishment: phones that give advice about the best restaurant nearby or
the fastest route to work today; artificial intelligences that write news stories or
advise doctors; 3-D printers that make replacement parts—for humans; gene
editing that can cure disease or bring extinct species back to life; new forms of
corporate organization that marshal thousands of on-demand workers so that
consumers can summon services at the push of a button in an app.
Dismay: the fear that robots and AIs will take away jobs, reward their
owners richly, and leave formerly middle-class workers part of a new
underclass; tens of millions of jobs here in the United States that don’t pay
people enough to live on; little-understood financial products and profit-seeking
algorithms that can take down the entire world economy and drive millions of
people from their homes; a surveillance society that tracks our every move and
stores it in corporate and government databases.
Everything is amazing, everything is horrible, and it’s all moving too fast.
We are heading pell-mell toward a world shaped by technology in ways that we
don’t understand and have many reasons to fear.
WTF? Google AlphaGo, an artificial intelligence program, beat the world’s
best human Go player, an event that was widely predicted to be at least twenty
years in the future—until it happened in 2016. If AlphaGo can happen twenty
years early, what else might hit us even sooner than we expect? For starters: An
AI running on a $35 Raspberry Pi computer beat a top US Air Force fighter pilot
trainer in combat simulation. The world’s largest hedge fund has announced that
it wants an AI to make three-fourths of management decisions, including hiring
and firing. Oxford University researchers estimate that up to 47% of human
tasks, including many components of white-collar jobs, may be done by
machines within as little as twenty years.
WTF? Uber has put taxi drivers out of work by replacing them with ordinary
people offering rides in their own cars, creating millions of part-time jobs
worldwide. Yet Uber is intent on eventually replacing those on-demand drivers
with completely automated vehicles.
WTF? Without owning a single room, Airbnb has more rooms on offer than
some of the largest hotel groups in the world. Airbnb has under 3,000
employees, while Hilton has 152,000. New forms of corporate organization are
outcompeting businesses based on best practices that we’ve followed for the
lifetimes of most business leaders.
WTF? Social media algorithms may have affected the outcome of the 2016
US presidential election.
WTF? While new technologies are making some people very rich, incomes
have stagnated for ordinary people, and for the first time, children in developed
countries are on track to earn less than their parents.
What do AI, self-driving cars, on-demand services, and income inequality
have in common? They are telling us, loud and clear, that we’re in for massive
changes in work, business, and the economy.
But just because we can see that the future is going to be very different
doesn’t mean that we know exactly how it’s going to unfold, or when. Perhaps
“WTF?” really stands for “What’s the Future?” Where is technology taking us?
Is it going to fill us with astonishment or dismay? And most important, what is
our role in deciding that future? How do we make choices today that will result
in a world we want to live in?
I’ve spent my career as a technology evangelist, book publisher, conference
producer, and investor wrestling with questions like these. My company,
O’Reilly Media, works to identify important innovations, and by spreading
knowledge about them, to amplify their impact and speed their adoption. And
we’ve tried to sound a warning when a failure to understand how technology is
changing the rules for business or society is leading us down the wrong path. In
the process, we’ve watched numerous technology booms and busts, and seen
companies go from seemingly unstoppable to irrelevant, while early-stage
technologies that no one took seriously went on to change the world.
If all you read are the headlines, you might have the mistaken idea that how
highly investors value a company is the key to understanding which technologies
really matter. We hear constantly that Uber is “worth” $68 billion, more than
General Motors or Ford; Airbnb is “worth” $30 billion, more than Hilton Hotels
and almost as much as Marriott. Those huge numbers can make the companies
seem inevitable, with their success already achieved. But it is only when a
business becomes profitably self-sustaining, rather than subsidized by investors,
that we can be sure that it is here to stay. After all, after eight years Uber is still
losing $2 billion every year in its race to get to worldwide scale. That’s an
amount that dwarfs the losses of companies like Amazon (which lost $2.9 billion
over its first five years before showing its first profits in 2001). Is Uber losing
money like Amazon, which went on to become a hugely successful company
that transformed retailing, publishing, and enterprise computing, or like a dot-
com company that was destined to fail? Is the enthusiasm of its investors a sign
of a fundamental restructuring of the nature of work, or a sign of an investment
mania like the one leading up to the dot-com bust in 2001? How do we tell the
difference?
Startups with a valuation of more than a billion dollars understandably get a
lot of attention, even more so now that they have a name, unicorn, the term du
jour in Silicon Valley. Fortune magazine started keeping a list of companies
with that exalted status. Silicon Valley news site TechCrunch has a constantly
updated “Unicorn Leaderboard.”
But even when these companies succeed, they may not be the surest guide to
the future. At O’Reilly Media, we learned to tune in to very different signals by
watching the innovators who first brought us the Internet and the open source
software that made it possible. They did what they did out of love and curiosity,
not a desire to make a fortune. We saw that radically new industries don’t start
when creative entrepreneurs meet venture capitalists. They start with people who
are infatuated with seemingly impossible futures.
Those who change the world are people who are chasing a very different
kind of unicorn, far more important than the Silicon Valley billion-dollar
valuation (though some of them will achieve that too). It is the breakthrough,
once remarkable, that becomes so ubiquitous that eventually it is taken for
granted.
Tom Stoppard wrote eloquently about a unicorn of this sort in his play
Rosencrantz & Guildenstern Are Dead:
A man breaking his journey between one place and another at a third
place of no name, character, population or significance, sees a unicorn
cross his path and disappear. . . . “My God,” says a second man, “I must
be dreaming, I thought I saw a unicorn.” At which point, a dimension is
added that makes the experience as alarming as it will ever be. A third
witness, you understand, adds no further dimension but only spreads it
thinner, and a fourth thinner still, and the more witnesses there are the
thinner it gets and the more reasonable it becomes until it is as thin as
reality, the name we give to the common experience.
The world today is full of things that once made us say “WTF?” but are
already well on their way to being the stuff of daily life.
The Linux operating system was a unicorn. It seemed downright impossible
that a decentralized community of programmers could build a world-class
operating system and give it away for free. Now billions of people rely on it.
The World Wide Web was a unicorn, even though it didn’t make Tim
Berners-Lee a billionaire. I remember showing the World Wide Web at a
technology conference in 1993, clicking on a link, and saying, “That picture just
came over the Internet all the way from the University of Hawaii.” People didn’t
believe it. They thought we were making it up. Now everyone expects that you
can click on a link to find out anything at any time.
Google Maps was a unicorn. On the bus not long ago, I watched one old man
show another how the little blue dot in Google Maps followed us along as the
bus moved. The newcomer to the technology was amazed. Most of us now take
it for granted that our phones know exactly where we are, and not only can give
us turn-by-turn directions exactly to our destination—by car, by public transit,
by bicycle, and on foot—but also can find restaurants or gas stations nearby or
notify our friends where we are in real time.
The original iPhone was a unicorn even before the introduction of the App
Store a year later utterly transformed the smartphone market. Once you
experienced the simplicity of swiping and touching the screen rather than a tiny
keyboard, there was no going back. The original pre-smartphone cell phone
itself was a unicorn. As were its predecessors, the telephone and telegraph, radio
and television. We forget. We forget quickly. And we forget ever more quickly
as the pace of innovation increases.
AI-powered personal agents like Amazon’s Alexa, Apple’s Siri, the Google
Assistant, and Microsoft Cortana are unicorns. Uber and Lyft too are unicorns,
but not because of their valuation. Unicorns are the kinds of apps that make us
say, “WTF?” in a good way.
Can you still remember the first time you realized that you could get the
answer to virtually any question with a quick Internet search, or that your phone
could route you to any destination? How cool that was, before you started taking
it for granted? And how quickly did you move from taking it for granted to
complaining about it when it doesn’t work quite right?
We are layering on new kinds of magic that are slowly fading into the
ordinary. A whole generation is growing up that thinks nothing of summoning
cars or groceries with a smartphone app, or buying something from Amazon and
having it show up in a couple of hours, or talking to AI-based personal assistants
on their devices and expecting to get results.
It is this kind of unicorn that I’ve spent my career in technology pursuing.
So what makes a real unicorn of this amazing kind?
1. It seems unbelievable at first.
2. It changes the way the world works.
3. It results in an ecosystem of new services, jobs, business models, and
industries.
We’ve talked about the “at first unbelievable” part. What about changing the
world? In Who Do You Want Your Customers to Become? Michael Schrage
writes:
Successful innovators don’t ask customers and clients to do something
different; they ask them to become someone different. . . . Successful
innovators ask users to embrace—or at least tolerate—new values, new
skills, new behaviors, new vocabulary, new ideas, new expectations, and
new aspirations. They transform their customers.
For example, Schrage points out that Apple (and now also Google and
Microsoft and Amazon) asks their “customers to become the sort of people who
wouldn’t think twice about talking to their phone as a sentient servant.” Sure
enough, there is a new generation of users who think nothing of saying things
like:
“Siri, make me a six p.m. reservation for two at Camino.”
“Alexa, play ‘Ballad of a Thin Man.’”