WEBVTT - Bad Predictions in Tech

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<v Speaker 1>Welcome to Tech Stuff, a production from iHeartRadio. Hey there,

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<v Speaker 1>and welcome to tech Stuff. I'm your host, Jonathan Strickland.

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<v Speaker 1>I'm an executive producer with iHeartRadio. And how the tech

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<v Speaker 1>are you? You know, Predicting the future is really hard,

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<v Speaker 1>even though that's where we're going to spend the rest

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<v Speaker 1>of our lives. Thank you, Plan nine from outer Space.

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<v Speaker 1>So I used to start every year off with a

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<v Speaker 1>big tech predictions episode, and I would sit down and

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<v Speaker 1>try and guess what could unfold in the following year.

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<v Speaker 1>And I think I had a pretty dismal average on

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<v Speaker 1>those predictions. Some years I was like, you know, mostly correct,

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<v Speaker 1>but in a very lame way, and a lot of

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<v Speaker 1>times I felt like it was because the predictions I

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<v Speaker 1>made were very, very safe ones, so I was never

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<v Speaker 1>particularly happy with them. Some of the time I would

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<v Speaker 1>get big predictions partly right, very very rarely, I would

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<v Speaker 1>get one right on the money, but it wouldn't again

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<v Speaker 1>be impressive because the writing would already be on the

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<v Speaker 1>wall right, like saying that a company is going to

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<v Speaker 1>go out of business when the company is currently like

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<v Speaker 1>massively struggling, not a big prediction. So yeah, most of

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<v Speaker 1>the time I was off the mark, and sometimes by

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<v Speaker 1>a significant margin. However, I have learned I should not

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<v Speaker 1>beat myself up over that, because, as it turns out,

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<v Speaker 1>a lot of people have made really bad tech predictions

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<v Speaker 1>over the years. Some of those folks were or are

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<v Speaker 1>way way smarter than I am. So today we're going

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<v Speaker 1>to talk about a few predictions that were notably incorrect. Now,

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<v Speaker 1>let us first remind ourselves, and I'm going to touch

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<v Speaker 1>on this a couple times in this episode, that often

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<v Speaker 1>we end up being wrong in our predictions because we

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<v Speaker 1>are rejecting from what we know is possible today, right,

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<v Speaker 1>And that's understandable. But obviously you can't bring into the

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<v Speaker 1>picture anything like breakthroughs in fields that make the previously

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<v Speaker 1>impossible now possible, or on the flip side, we can't

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<v Speaker 1>imagine the hurdles will encounter that will slow or stop

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<v Speaker 1>our progress toward a lofty goal. See also driverless cars,

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<v Speaker 1>which have proven to be much more complicated than most

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<v Speaker 1>folks believed a decade ago. Or if you want to

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<v Speaker 1>be really cynical, you can take things like farahanos and say, well,

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<v Speaker 1>of course people believed it was possible, even though it

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<v Speaker 1>would later turn out that no the technology was not

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<v Speaker 1>possible or not practical, all right. So we are also

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<v Speaker 1>really good at misattributing statements to folks. So several of

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<v Speaker 1>the claims that I'm going to talk about today did

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<v Speaker 1>not come from the peer people who often will see

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<v Speaker 1>their names attached to those statements, and this is a

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<v Speaker 1>real problem. As I was researching this episode, I would

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<v Speaker 1>come across a prediction and I'd think, Wow, do they

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<v Speaker 1>really say that? Then I would do some more research,

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<v Speaker 1>and I would start digging in, and I would start

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<v Speaker 1>looking for the history of a particular statement and ultimately

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<v Speaker 1>find out that the person who was doing the supposed

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<v Speaker 1>prognostication never actually said the ding dang darned thing in

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<v Speaker 1>the first place. Sometimes someone else said it and actually

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<v Speaker 1>was trying to predict it. Sometimes the prediction just appeared

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<v Speaker 1>to be an invention meant to make a famous person

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<v Speaker 1>seem foolish. So we'll talk about a few of those

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<v Speaker 1>two in this episode. Now. To kick us off, I

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<v Speaker 1>thought I would talk about a very likely apocryphal story.

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<v Speaker 1>In fact, I'll just say I think this one is fake.

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<v Speaker 1>The person who allegedly made the prediction would later deny

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<v Speaker 1>that it ever happened. Frequently, and there's no reason to

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<v Speaker 1>disbelieve this person. So this relates to Bill Gates, the

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<v Speaker 1>co founder of Microsoft. Now, according to the story, supposedly

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<v Speaker 1>back in the early eighties, Bill Gates proclaimed that six

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<v Speaker 1>hundred and forty kilobytes of memory quote ought to be

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<v Speaker 1>enough for anybody. End quote. Now this line pops up

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<v Speaker 1>again and again if you start looking for examples of

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<v Speaker 1>people who are making bad predictions or outright dumb statements

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<v Speaker 1>about technology, and you know, there's this delicious irony, this

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<v Speaker 1>person who is really influential in the text space making

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<v Speaker 1>an outright incorrect statement or prediction. So, if you're not aware,

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<v Speaker 1>six hundred and forty kilobytes was a decent amount of

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<v Speaker 1>memory back in nineteen eighty one when this story supposedly

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<v Speaker 1>took place. But it's a minuscule amount of memory these days,

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<v Speaker 1>like not even worth talking about. Like you know, computers today,

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<v Speaker 1>if you if you've got a computer that is on

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<v Speaker 1>the low side, you're still talking something like two gigabytes

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<v Speaker 1>of memory, maybe up to sixty four gigabytes, and then

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<v Speaker 1>you could maybe expanded up to one hundred twenty eight gigabytes.

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<v Speaker 1>If you've got a sixty four bit system. So remember

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<v Speaker 1>a kilobyte is one thousand bytes. Okay, well, really we

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<v Speaker 1>should be doing this in base two. It should really

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<v Speaker 1>be one thy twenty four bytes. But it really depends

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<v Speaker 1>upon the company, Like some companies will just round it off,

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<v Speaker 1>and some companies will use the base two. So either

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<v Speaker 1>a thousand or one thousand, twenty four bytes, that's what

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<v Speaker 1>a kilobyte is, So six hundred and forty would be

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<v Speaker 1>six hundred forty times that. A gigabyte is a billion bytes,

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<v Speaker 1>or if we're going base two, it's technically one billion,

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<v Speaker 1>seventy three million, seven hundred and forty one thousand, eight

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<v Speaker 1>hundred and twenty four bytes. So yeah, like gigabytes are

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<v Speaker 1>orders of magnitude larger than kilobytes. So obviously the story

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<v Speaker 1>seems to paint Bill Gates as extremely short sighted. To

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<v Speaker 1>assume that six hundred and forty kilobytes would be enough

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<v Speaker 1>for anybody would be an enormous whiff when these days

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<v Speaker 1>even a bargain computer will have orders of magnitude more

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<v Speaker 1>memory as standard. But the thing is, Gates says he

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<v Speaker 1>never actually made this claim. In fact, he said that

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<v Speaker 1>he was always pushing to create systems that could take

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<v Speaker 1>advantage of more memory, which is pretty much the opposite

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<v Speaker 1>of what the claim says. So on top of that,

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<v Speaker 1>while the general stories that Gates said this at some

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<v Speaker 1>point at some trade show in nineteen eighty one, there's

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<v Speaker 1>no actual record of him saying that. There's no account

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<v Speaker 1>from that year that says at this event, during this conversation,

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<v Speaker 1>Bill Gates said this thing. So Gates would later say

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<v Speaker 1>in an interview quote, I've said some stupid things and

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<v Speaker 1>some wrong things, but not that No one involved in

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<v Speaker 1>computers would ever say that a certain amount of memory

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<v Speaker 1>is enough for all time. End quote. So if Gates

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<v Speaker 1>had said this, he would certainly qualify someone making a

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<v Speaker 1>wrong prediction or statement about tech. But it doesn't seem

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<v Speaker 1>like that ever happened. There's lots of stuff we could

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<v Speaker 1>say about Gates that is terrible and deeply disturbing, but

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<v Speaker 1>when it comes to making this particular prediction that appears

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<v Speaker 1>to just be made up in whole cloth. There's a

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<v Speaker 1>similar story that I want to touch on that also

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<v Speaker 1>paints a tech leader in a foolish light, but this

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<v Speaker 1>is due to a lack of context. This leader would

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<v Speaker 1>be Ken Olsen. He was a co founder of a

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<v Speaker 1>company called Digital Equipment Corporation or DEC. Later on COMPAC

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<v Speaker 1>would acquire DEC, and then even later Hewlett Packard would

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<v Speaker 1>acquire COMPAC. So there's always a bigger fish. But the

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<v Speaker 1>story goes that Olsen, back in nineteen seventy seven gave

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<v Speaker 1>a present at the World Future Society in which he proclaimed,

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<v Speaker 1>quote there is no reason for any individual to have

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<v Speaker 1>a computer in his home. End quote. Now, if we

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<v Speaker 1>take that quote on the face of it, it sounds

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<v Speaker 1>like what Olsen was saying is that the very idea

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<v Speaker 1>of a home personal computer is ludicrous. And considering that

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<v Speaker 1>the nineteen seventies, the late seventies that was the launching

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<v Speaker 1>ground for the home computer, Olsen's words appear to be indefensible,

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<v Speaker 1>like he was just totally wrong. The personal computer would

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<v Speaker 1>become a huge deal. Today it's a market that's nearly

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<v Speaker 1>two hundred billion dollars in value. But here's the thing.

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<v Speaker 1>Olsen explained that the problem was people were lifting that

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<v Speaker 1>statement out of his presentation without the benefit of context.

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<v Speaker 1>He later defended what he said. He said he wasn't

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<v Speaker 1>talking about personal computers. He wasn't talking about little desktop

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<v Speaker 1>computers that let us do all sorts of stuff. He

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<v Speaker 1>obviously believe that those would be a thing, because dec

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<v Speaker 1>was in that business itself, So there's no reason why

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<v Speaker 1>his company would be pursuing that line of business if

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<v Speaker 1>he didn't believe that it was viable. Rather, what Olsen

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<v Speaker 1>was talking about was that you were not going to

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<v Speaker 1>see people get a mainframe like computer system installed in

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<v Speaker 1>their home for the purposes of automating everything, like having

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<v Speaker 1>a computer run household. That's what he was talking about.

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<v Speaker 1>So we're not going to see people get a computer

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<v Speaker 1>to be the central operating system of your home. So

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<v Speaker 1>we're talking about functions like controlling your lights or climate controls,

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<v Speaker 1>or the sort of stuff that we can now do

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<v Speaker 1>with network products like smart thermostats and light bulbs. Olsen

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<v Speaker 1>was saying he didn't see a future where people were

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<v Speaker 1>going to buy and install these hefty computer systems, and

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<v Speaker 1>also that people wouldn't want their lives to be run

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<v Speaker 1>by computers. And this would have been back in the

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<v Speaker 1>night teen seventies when he made this statement, and he

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<v Speaker 1>was mostly right right, like, we didn't see people pay

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<v Speaker 1>ridiculous amounts of money to automate their homes. Now these days,

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<v Speaker 1>we do have lots of home automation products out there,

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<v Speaker 1>and depending upon how deeply integrated your computer calendar is

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<v Speaker 1>with your life, maybe you do feel like you're being

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<v Speaker 1>your life is being run by a computer, which that's

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<v Speaker 1>a possibility, but it doesn't. It's not the same thing

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<v Speaker 1>as holding his statement up and saying, oh, he was

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<v Speaker 1>totally wrong about home computers. So Olsen's point was aimed

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<v Speaker 1>more at Pie and the sky futurists who had imagined

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<v Speaker 1>the fully automated home, which is a vision that actually

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<v Speaker 1>dates back decades. Some of my favorite cartoons as a

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<v Speaker 1>kid were cartoons that were about the home of tomorrow,

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<v Speaker 1>and the cartoonists and writers found goofy ways to poke

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<v Speaker 1>fun at basic automation concepts. Olsen was saying that was

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<v Speaker 1>the sort of system no one would be buying for

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<v Speaker 1>their home, and he was right about that, but a

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<v Speaker 1>misinterpretation of his meaning had people to say that he

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<v Speaker 1>was absolutely wrong and that he was talking about home computers. Okay,

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<v Speaker 1>Next up, I want to talk about The Hitchhiker's Guide

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<v Speaker 1>to the Galaxy and how Douglas Adams dreamed up an

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<v Speaker 1>outlandish technology in the titular Guide. When Adams wrote the

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<v Speaker 1>first version of the story, which was actually a radio

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<v Speaker 1>play for BBC Radio back in nineteen seventy eight. There

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<v Speaker 1>are like half a dozen different versions of the Hitchhiker's

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<v Speaker 1>Guide to the Galaxy story, and no two are exactly alike.

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<v Speaker 1>You know, you have the radio play, you have the novels,

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<v Speaker 1>you have a TV series, you've got a movie like

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<v Speaker 1>and each version tells the story slightly differently. Even even

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<v Speaker 1>the vinyl record which took the radio play scripts, changed things.

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<v Speaker 1>So there's no definitive version of Hitchicker's Guide to the Galaxy. Anyway.

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<v Speaker 1>When he wrote this back in nineteen seventy eight, personal

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<v Speaker 1>computers were really new, right, they had not been around

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<v Speaker 1>for very long. So in his story he has a

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<v Speaker 1>character that has this Guide to the Galaxy, and it

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<v Speaker 1>is essentially a digital book. It's about the size of

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<v Speaker 1>a book, and it contains enormous amounts of information on

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<v Speaker 1>pretty much anything you could encounter in the great big

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<v Speaker 1>galaxy out there. Although some entries warranted longer descriptions than others,

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<v Speaker 1>Earth's entry, for example, was just mostly harmless, and even

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<v Speaker 1>before that it was just harmless. While Adams's work reveled

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<v Speaker 1>in absurdity and comedy, this idea of this sort of

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<v Speaker 1>portable device that could have access to vast amounts of

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<v Speaker 1>information would persist beyond the pages of fiction, and as

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<v Speaker 1>companies found ways to build smaller components and then cram

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<v Speaker 1>those components into microchips, computers got more powerful and capable

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<v Speaker 1>of storing more information. Adding the ability to network these

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<v Speaker 1>devices and things really would start to take off. This

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<v Speaker 1>brings me to Andy Grove, the former CEO of INDI Hell.

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<v Speaker 1>Back in nineteen ninety two, Andy Grove famously dismissed the

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<v Speaker 1>notion that before long, executives would be walking around with

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<v Speaker 1>a wireless digital personal communications device capable of doing things

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<v Speaker 1>like sending and receiving email or can you just imagine

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<v Speaker 1>being able to pull up like real time local maps

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<v Speaker 1>complete with traffic information and a suggested route to get

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<v Speaker 1>to your next destination. Essentially, Grove thought this vision, which

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<v Speaker 1>would slowly coalesce into the smartphone, was a pipe dream,

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<v Speaker 1>and that it was something being hyped up by companies

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<v Speaker 1>that were greedy but unrealistic. Of course, Grove was wrong.

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<v Speaker 1>The invention of the personal digital assistant and then the

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<v Speaker 1>gradual convergence of the PDA with the cell phone would

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<v Speaker 1>give birth to the modern smartphone, and it wouldn't just

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<v Speaker 1>be executives who would carry them around. It would be

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<v Speaker 1>tons of people, hundreds of millions of people. Something that

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<v Speaker 1>was once in the realm of science fiction would now

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<v Speaker 1>be a reality. Now we all have access to a

0:14:04.800 --> 0:14:08.640
<v Speaker 1>vast database of information. Some of the information is really useful,

0:14:09.440 --> 0:14:13.320
<v Speaker 1>some of it is diverting, some of it's outright harmful.

0:14:13.840 --> 0:14:18.040
<v Speaker 1>We can send and receive emails or instant messages, even

0:14:18.120 --> 0:14:21.120
<v Speaker 1>photos and videos. We could jump online and interact with

0:14:21.280 --> 0:14:24.440
<v Speaker 1>various platforms. We can shop from our phones, we can

0:14:24.520 --> 0:14:27.600
<v Speaker 1>use them as navigation devices. We could just play with

0:14:27.680 --> 0:14:31.240
<v Speaker 1>them like toys. It turns out that the pipe dream

0:14:31.560 --> 0:14:34.960
<v Speaker 1>was in fact a possibility and then a reality. But

0:14:35.040 --> 0:14:38.920
<v Speaker 1>back in nineteen ninety two you could probably understand Grove's skepticism.

0:14:39.320 --> 0:14:42.440
<v Speaker 1>Apple launched the Newton in ninety two, and that became

0:14:42.480 --> 0:14:45.760
<v Speaker 1>the first product that would be called a personal Digital assistant,

0:14:45.840 --> 0:14:49.040
<v Speaker 1>or PDA. But that particular device had a lot of

0:14:49.040 --> 0:14:53.840
<v Speaker 1>limitations and quirks, plus it lacked wireless connectivity. Still, IBM

0:14:53.920 --> 0:14:56.840
<v Speaker 1>released a PDA with analog cell phone connectivity in nineteen

0:14:56.920 --> 0:15:00.520
<v Speaker 1>ninety four, and Nokia followed with a PA that had

0:15:00.560 --> 0:15:04.200
<v Speaker 1>digital cell phone connectivity in nineteen ninety six, so it

0:15:04.320 --> 0:15:09.760
<v Speaker 1>did not take very long for Grove's prediction to fall flat. Okay,

0:15:09.760 --> 0:15:11.360
<v Speaker 1>we're gonna take a quick break and then we'll be

0:15:11.400 --> 0:15:24.200
<v Speaker 1>back with some more bad tech predictions. We're back and

0:15:24.320 --> 0:15:28.600
<v Speaker 1>next up. Sometimes the guy who helped build the thing

0:15:29.440 --> 0:15:32.600
<v Speaker 1>ends up being very wrong about the thing. So in

0:15:32.640 --> 0:15:37.120
<v Speaker 1>this case, I'm talking about Robert or Bob Metcalf. So

0:15:37.320 --> 0:15:41.320
<v Speaker 1>when he was a graduate student, Metcalf worked on ARPANET.

0:15:41.720 --> 0:15:44.960
<v Speaker 1>So for those who are unfamiliar with arpa neet, you

0:15:45.000 --> 0:15:47.760
<v Speaker 1>can think of it as sort of the predecessor to

0:15:47.840 --> 0:15:52.120
<v Speaker 1>the Internet. You add a lot of engineers and scientists

0:15:52.240 --> 0:15:56.120
<v Speaker 1>and researchers who worked to create the means to network

0:15:56.240 --> 0:15:59.840
<v Speaker 1>different computers together, even if those computers were far apart

0:15:59.840 --> 0:16:02.760
<v Speaker 1>from from one another. This was a non trivial task.

0:16:02.840 --> 0:16:05.800
<v Speaker 1>You know, these different computers worked on different operating systems.

0:16:06.560 --> 0:16:09.480
<v Speaker 1>You could think of it as they communicated in different languages.

0:16:09.560 --> 0:16:12.360
<v Speaker 1>So you had to create a way, a common ground

0:16:12.960 --> 0:16:16.240
<v Speaker 1>for these different machines to be able to send and

0:16:16.280 --> 0:16:19.360
<v Speaker 1>receive information in a useful way with it or other machines.

0:16:19.560 --> 0:16:24.400
<v Speaker 1>And then how does that information travel across communications lines.

0:16:24.680 --> 0:16:26.560
<v Speaker 1>You had to come up with ways for that to

0:16:26.680 --> 0:16:29.480
<v Speaker 1>be foolproof, or at least as close to foolproof as

0:16:29.480 --> 0:16:31.720
<v Speaker 1>you could get, because if it were something where it

0:16:31.760 --> 0:16:35.240
<v Speaker 1>was just a solid connection and there was an interruption

0:16:35.360 --> 0:16:39.680
<v Speaker 1>in that connection, then what happens to the process. These

0:16:39.680 --> 0:16:43.080
<v Speaker 1>were all practical problems that the arpinet folks had to solve,

0:16:43.600 --> 0:16:46.720
<v Speaker 1>and the work would become a foundational component for the

0:16:46.800 --> 0:16:51.000
<v Speaker 1>Internet which would follow after arpinet. Metcalf wrote an early

0:16:51.120 --> 0:16:54.680
<v Speaker 1>definitive work describing different ways to use the arpinet. He

0:16:54.760 --> 0:16:59.120
<v Speaker 1>also included information on resources and instructions to make use

0:16:59.200 --> 0:17:01.640
<v Speaker 1>of arpinet. He would then go on to take a

0:17:01.720 --> 0:17:04.680
<v Speaker 1>job at Xerox Park. That's a facility that I've talked

0:17:04.720 --> 0:17:09.000
<v Speaker 1>about in recent tech Stuff episodes, very important in various

0:17:09.040 --> 0:17:13.120
<v Speaker 1>technological innovations, although Xerox itself had a reputation for failing

0:17:13.200 --> 0:17:16.680
<v Speaker 1>to capitalize on the developments that came out of Park.

0:17:17.440 --> 0:17:20.600
<v Speaker 1>And while he was at Park, he developed ethernet. That's

0:17:20.680 --> 0:17:25.200
<v Speaker 1>the cable based technology that allows data transfers between connected computers.

0:17:25.520 --> 0:17:28.560
<v Speaker 1>He based it off of the Alohan net that was

0:17:28.640 --> 0:17:32.080
<v Speaker 1>used by the University of Hawaii, which relied on radio

0:17:32.080 --> 0:17:35.200
<v Speaker 1>waves rather than cables to send signals back and forth.

0:17:35.480 --> 0:17:40.040
<v Speaker 1>But he built upon the technologies of alohan Net to

0:17:40.119 --> 0:17:44.840
<v Speaker 1>develop ethernet. Okay, but let's flash forward to nineteen ninety five,

0:17:45.320 --> 0:17:47.640
<v Speaker 1>So this is five years after the US government had

0:17:47.640 --> 0:17:50.960
<v Speaker 1>already decommissioned Arpinet. It had been shut down a couple

0:17:51.000 --> 0:17:55.600
<v Speaker 1>of years earlier, got decommissioned in nineteen ninety the Internet

0:17:55.680 --> 0:17:59.159
<v Speaker 1>itself was actually really taking off. It was helped in

0:17:59.280 --> 0:18:03.200
<v Speaker 1>large part by the development of the Worldwide Web, which

0:18:04.080 --> 0:18:07.480
<v Speaker 1>wasn't a thing when the Internet was first coalescing, but

0:18:07.720 --> 0:18:11.000
<v Speaker 1>became a thing in the early nineties. And on December fourth,

0:18:11.320 --> 0:18:15.880
<v Speaker 1>nineteen ninety five, the magazine InfoWorld published an article written

0:18:16.040 --> 0:18:20.639
<v Speaker 1>by Metcalf in which the network visionary said, quote, I

0:18:20.760 --> 0:18:23.879
<v Speaker 1>predict the Internet, which only just recently got this section

0:18:24.000 --> 0:18:29.119
<v Speaker 1>here in InfoWorld, will soon go spectacularly supernova and in

0:18:29.240 --> 0:18:36.560
<v Speaker 1>nineteen ninety six catastrophically collapse end quote. So Metcalf thought

0:18:36.600 --> 0:18:41.560
<v Speaker 1>the Internet was growing beyond the technological and economic capacities

0:18:42.000 --> 0:18:45.440
<v Speaker 1>that would be needed to support the Internet. He envisioned

0:18:45.440 --> 0:18:49.240
<v Speaker 1>a scenario in which the money just wouldn't be there

0:18:49.400 --> 0:18:52.600
<v Speaker 1>to build out the infrastructure that would be required to

0:18:52.800 --> 0:18:55.840
<v Speaker 1>allow for the explosive growth. He didn't deny that the

0:18:55.840 --> 0:18:59.000
<v Speaker 1>Internet was growing. He just said it's going to reach

0:18:59.040 --> 0:19:02.960
<v Speaker 1>a tipping point where where we're not able to supply

0:19:03.080 --> 0:19:05.680
<v Speaker 1>it with the technology needed to let it run, and

0:19:05.720 --> 0:19:08.480
<v Speaker 1>it's going to collapse under its own weight. So he

0:19:08.640 --> 0:19:11.080
<v Speaker 1>also predicted that we were going to see a lot

0:19:11.119 --> 0:19:14.920
<v Speaker 1>more vulnerabilities in the Internet that would facilitate security breaches,

0:19:15.119 --> 0:19:17.240
<v Speaker 1>and that would convince folks that the Internet would be

0:19:17.280 --> 0:19:20.000
<v Speaker 1>too dangerous. Right once you have a couple of big

0:19:20.000 --> 0:19:25.040
<v Speaker 1>security breaches, people would say, oh, we can't you know,

0:19:25.040 --> 0:19:27.040
<v Speaker 1>we can't rely on the Internet because if we do,

0:19:27.160 --> 0:19:30.480
<v Speaker 1>we're going to potentially lose everything. So he proclaimed that

0:19:30.560 --> 0:19:34.040
<v Speaker 1>he would even eat his words if he were proven wrong.

0:19:34.640 --> 0:19:38.919
<v Speaker 1>In April nineteen ninety seven, Bob Metcalf proved to be

0:19:38.960 --> 0:19:41.440
<v Speaker 1>a man of his word. While at a tech conference,

0:19:41.760 --> 0:19:45.560
<v Speaker 1>Metcalf had a cake wheeled out. His column was printed

0:19:45.680 --> 0:19:49.159
<v Speaker 1>on icing on the cake. Some versions of the story

0:19:49.240 --> 0:19:51.639
<v Speaker 1>say that the crowd kind of turned against him, saying

0:19:51.640 --> 0:19:54.000
<v Speaker 1>that he was taking the easy way out, and so

0:19:54.080 --> 0:19:56.159
<v Speaker 1>at least one version of the story says that he

0:19:56.280 --> 0:20:00.000
<v Speaker 1>then had the actual physical article on paper brought out

0:20:00.080 --> 0:20:02.880
<v Speaker 1>out and then put the article in a blender with

0:20:02.880 --> 0:20:05.560
<v Speaker 1>some water and blended it into kind of slurry, and

0:20:05.600 --> 0:20:09.280
<v Speaker 1>then he ate the goop. But either way, he reportedly

0:20:09.359 --> 0:20:11.960
<v Speaker 1>did in fact eat his own words and admitted that

0:20:12.000 --> 0:20:16.879
<v Speaker 1>he had been wrong, which I totally respect. Metcalf failed

0:20:16.880 --> 0:20:20.560
<v Speaker 1>to predict the innovations that would drive the Internet's expansion,

0:20:21.240 --> 0:20:23.639
<v Speaker 1>and again that really gets back to that heart of

0:20:23.720 --> 0:20:26.440
<v Speaker 1>a lot of wrong predictions that we lean so heavily

0:20:26.600 --> 0:20:29.960
<v Speaker 1>on basing our guess of what comes next by looking

0:20:30.000 --> 0:20:33.879
<v Speaker 1>at how we do things currently. But obviously this fails

0:20:33.880 --> 0:20:37.360
<v Speaker 1>to take into account new techniques and technologies and ideas, which,

0:20:37.440 --> 0:20:41.040
<v Speaker 1>let's be fair, makes sense because if we could predict

0:20:41.640 --> 0:20:45.720
<v Speaker 1>new techniques and technologies and ideas, we would already have them. Like,

0:20:46.560 --> 0:20:50.040
<v Speaker 1>you can't fault people for not guessing something that hasn't

0:20:50.080 --> 0:20:52.840
<v Speaker 1>been thought up yet, because otherwise they would have thought

0:20:52.840 --> 0:20:57.080
<v Speaker 1>it up. Of course, technologists aren't the only ones who

0:20:57.080 --> 0:21:01.080
<v Speaker 1>get tech predictions wrong. Economists can do a real fine

0:21:01.200 --> 0:21:06.080
<v Speaker 1>job of getting stuff wrong too, while also referencing a technologist,

0:21:06.240 --> 0:21:09.959
<v Speaker 1>perhaps in the process. See In nineteen ninety eight, an

0:21:10.040 --> 0:21:13.840
<v Speaker 1>economist named Paul Krugman had a dire prediction for the Internet,

0:21:14.200 --> 0:21:17.840
<v Speaker 1>and he ended up referencing our previous example of Robert Metcalf.

0:21:18.440 --> 0:21:21.560
<v Speaker 1>Krugman wrote an article in a magazine titled red Herring

0:21:22.080 --> 0:21:25.919
<v Speaker 1>and said, quote, the growth of the Internet will slow

0:21:26.040 --> 0:21:30.199
<v Speaker 1>drastically as the flaw in Metcalf's law, which states that

0:21:30.240 --> 0:21:33.760
<v Speaker 1>the number of potential connections in a network is proportional

0:21:33.800 --> 0:21:37.160
<v Speaker 1>to the square of the number of participants, becomes apparent.

0:21:37.720 --> 0:21:40.360
<v Speaker 1>Most people have nothing to say to each other. By

0:21:40.359 --> 0:21:42.520
<v Speaker 1>two thousand and five or so, it will become clear

0:21:42.720 --> 0:21:45.520
<v Speaker 1>that the Internet's impact on the economy has been no

0:21:45.640 --> 0:21:50.760
<v Speaker 1>greater than the fax machines. End quote. All right, so

0:21:51.440 --> 0:21:54.640
<v Speaker 1>this does raise the question about Metcalf's law. What is that?

0:21:54.800 --> 0:21:57.280
<v Speaker 1>What actually comes from an observation that Robert Metcalf had

0:21:57.280 --> 0:21:59.600
<v Speaker 1>made way back in nineteen eighty, which was that the

0:21:59.600 --> 0:22:03.560
<v Speaker 1>financial value of a telecommunications network is proportional to the

0:22:03.600 --> 0:22:07.480
<v Speaker 1>square of the number of connected communication devices on that network.

0:22:07.520 --> 0:22:10.240
<v Speaker 1>Sometimes we simplify this to say the number of users

0:22:10.280 --> 0:22:12.880
<v Speaker 1>on a network, but it's really more fair to say

0:22:13.080 --> 0:22:18.000
<v Speaker 1>nodes or connected devices. Essentially, met Keef was saying that

0:22:18.080 --> 0:22:21.600
<v Speaker 1>the more devices you have connected within a network, the

0:22:21.680 --> 0:22:26.560
<v Speaker 1>more possible connections exist between those devices, and we can

0:22:26.600 --> 0:22:30.879
<v Speaker 1>express this mathematically with the equation of n times n

0:22:30.920 --> 0:22:34.400
<v Speaker 1>minus one divided by two. In in this case would

0:22:34.400 --> 0:22:38.119
<v Speaker 1>be the number of users or connected devices or nodes

0:22:38.119 --> 0:22:39.879
<v Speaker 1>however you want to think of it. So if we

0:22:39.920 --> 0:22:42.080
<v Speaker 1>only have two devices, right, let's say that we've got

0:22:42.119 --> 0:22:44.520
<v Speaker 1>a direct connection between device one and device two. But

0:22:44.560 --> 0:22:47.359
<v Speaker 1>that's it. Well, we would fill in our equation. We

0:22:47.400 --> 0:22:49.800
<v Speaker 1>would use two in place of end, So our equation

0:22:49.880 --> 0:22:53.520
<v Speaker 1>will be two times two minus one, which is one

0:22:53.800 --> 0:22:56.080
<v Speaker 1>and then divided by two. So then that means we

0:22:56.119 --> 0:22:58.560
<v Speaker 1>get two times one divided by two. That means we

0:22:58.600 --> 0:23:01.720
<v Speaker 1>eventually just get one. That's the number of possible connections

0:23:01.760 --> 0:23:04.840
<v Speaker 1>between these two connected devices. You only have one possible connection.

0:23:05.400 --> 0:23:10.320
<v Speaker 1>But let's say we've got twenty connected devices on this network. Well,

0:23:10.320 --> 0:23:14.000
<v Speaker 1>that means now our equation is twenty times twenty minus

0:23:14.000 --> 0:23:17.879
<v Speaker 1>one divided by two, So that means it's twenty times

0:23:17.960 --> 0:23:21.280
<v Speaker 1>nineteen then divide by two, or we get one hundred

0:23:21.320 --> 0:23:25.600
<v Speaker 1>and ninety possible connections. So as you add more users

0:23:25.640 --> 0:23:29.800
<v Speaker 1>or devices to a network, then network's value increases significantly.

0:23:30.240 --> 0:23:33.240
<v Speaker 1>But Krugman was saying that if no one has anything

0:23:33.280 --> 0:23:35.320
<v Speaker 1>interesting to say to each other then you don't really

0:23:35.359 --> 0:23:37.840
<v Speaker 1>have any added value there, and then growth is going

0:23:37.880 --> 0:23:40.399
<v Speaker 1>to slow down, and this is going to show that

0:23:40.520 --> 0:23:44.919
<v Speaker 1>Metcalf's law is flawed. Clearly, the era of social media

0:23:44.960 --> 0:23:49.239
<v Speaker 1>has proved Krugman way wrong. People spend all day not

0:23:49.400 --> 0:23:52.760
<v Speaker 1>saying anything to each other, at least nothing of substance,

0:23:53.400 --> 0:23:57.760
<v Speaker 1>and it is going like gangbusters. Even as some platforms

0:23:57.800 --> 0:24:01.480
<v Speaker 1>are slowing down, others are picking up. Krugman and himself

0:24:01.480 --> 0:24:03.719
<v Speaker 1>had said that he was just trying to be provocative,

0:24:04.040 --> 0:24:06.679
<v Speaker 1>and sometimes when you do try to be provocative, you

0:24:06.760 --> 0:24:09.440
<v Speaker 1>end up just being very wrong, and he just happened

0:24:09.440 --> 0:24:13.720
<v Speaker 1>to be very very wrong about this. Now, sometimes we

0:24:13.760 --> 0:24:16.800
<v Speaker 1>get predictions of doom and gloom from someone who appears

0:24:16.800 --> 0:24:19.240
<v Speaker 1>to be driven by having a vested interest in a

0:24:19.359 --> 0:24:23.439
<v Speaker 1>competing technology. They say, oh, that technology is going to fail,

0:24:23.800 --> 0:24:28.000
<v Speaker 1>partly because they are supporting a different technology. There's a

0:24:28.080 --> 0:24:32.879
<v Speaker 1>quote frequently and also incorrectly attributed to a Hollywood movie

0:24:32.920 --> 0:24:35.720
<v Speaker 1>producer named Darryl F. Zanuk. He was one of the

0:24:35.760 --> 0:24:39.240
<v Speaker 1>folks responsible for creating the film company twentieth Century Pictures,

0:24:39.320 --> 0:24:42.240
<v Speaker 1>among a lot of other things. But the story goes

0:24:42.640 --> 0:24:49.160
<v Speaker 1>that Xanik famously and incorrectly dismissed the impact of television, saying, quote,

0:24:49.680 --> 0:24:53.040
<v Speaker 1>video isn't able to hold on to the market it captures.

0:24:53.240 --> 0:24:56.560
<v Speaker 1>After the first six months, people soon get tired of

0:24:56.600 --> 0:25:00.600
<v Speaker 1>staring at a plywood box every night. End quote. Now,

0:25:00.640 --> 0:25:05.800
<v Speaker 1>clearly the movie studios saw television as an existential threat.

0:25:05.840 --> 0:25:08.359
<v Speaker 1>I mean, why would people go to the cinema to

0:25:08.400 --> 0:25:11.720
<v Speaker 1>spend a few hours watching movies and cartoons and newsreels

0:25:12.000 --> 0:25:14.080
<v Speaker 1>if they could get access to many of those things

0:25:14.480 --> 0:25:17.399
<v Speaker 1>just from home through the television. For a while, film

0:25:17.440 --> 0:25:21.520
<v Speaker 1>studios saw television as being a true threat to their

0:25:21.640 --> 0:25:25.359
<v Speaker 1>very existence, at least until movie studios started to consolidate

0:25:25.400 --> 0:25:28.480
<v Speaker 1>with TV studios. So, of course it would be delicious

0:25:28.880 --> 0:25:31.720
<v Speaker 1>to point to a movie mogul who stuck his neck

0:25:31.720 --> 0:25:33.840
<v Speaker 1>out to proclaim that television would be no more than

0:25:33.840 --> 0:25:37.199
<v Speaker 1>a passing fad, only to be proven very wrong and

0:25:37.280 --> 0:25:42.359
<v Speaker 1>television would become an incredibly important component in communications. Now,

0:25:42.720 --> 0:25:46.520
<v Speaker 1>I'm not saying that no one at all ever made

0:25:47.080 --> 0:25:50.080
<v Speaker 1>these quotes apart from like like, I'm not saying they

0:25:50.119 --> 0:25:53.800
<v Speaker 1>were just invented, but it certainly doesn't appear to have

0:25:53.800 --> 0:25:56.680
<v Speaker 1>been Zanak. He is not the person who said these things.

0:25:57.640 --> 0:26:00.920
<v Speaker 1>The website quote investigator actually looked into this particular statement.

0:26:01.359 --> 0:26:06.119
<v Speaker 1>The earliest version they found from the statements about video

0:26:06.200 --> 0:26:09.040
<v Speaker 1>and the Plywood box actually came from a Wall Street

0:26:09.119 --> 0:26:13.560
<v Speaker 1>Journal article back in nineteen fifty one, and it appeared

0:26:13.560 --> 0:26:18.439
<v Speaker 1>as two separate statements from two different people. So the

0:26:18.520 --> 0:26:21.720
<v Speaker 1>video isn't able to hold onto the market it captures

0:26:21.760 --> 0:26:24.720
<v Speaker 1>after the first six months. Statement supposedly came from a

0:26:24.760 --> 0:26:28.679
<v Speaker 1>movie executive based out of New York. The phrase people

0:26:28.760 --> 0:26:31.600
<v Speaker 1>soon get tired of staring at plywood box every night

0:26:31.880 --> 0:26:35.280
<v Speaker 1>came from quote a San Franciscan end quote. In fact,

0:26:35.320 --> 0:26:37.840
<v Speaker 1>it doesn't even get specific enough to say it's a

0:26:37.880 --> 0:26:41.280
<v Speaker 1>movie executive in San Francisco, although we can assume that

0:26:41.400 --> 0:26:45.480
<v Speaker 1>was the case. However, either way, Xanik, the person who

0:26:45.520 --> 0:26:49.560
<v Speaker 1>often gets attributed with this these pair of quotes that

0:26:49.640 --> 0:26:52.879
<v Speaker 1>are combined into a single quote, he was based in Hollywood,

0:26:53.160 --> 0:26:58.000
<v Speaker 1>so presumably he was neither of the unnamed individuals who

0:26:58.040 --> 0:27:01.720
<v Speaker 1>provided the Wall Street Journal with these quotes. So Xanuuk

0:27:01.800 --> 0:27:05.520
<v Speaker 1>is in the clear. Still assuming the Wall Street Journal

0:27:05.560 --> 0:27:09.480
<v Speaker 1>reporter was not inventing quotations of a thin air, there

0:27:09.480 --> 0:27:12.840
<v Speaker 1>were two people in the movie business who were brazenly

0:27:12.880 --> 0:27:15.920
<v Speaker 1>predicting the downfall of television. Now, this was during a

0:27:16.000 --> 0:27:19.520
<v Speaker 1>time when movie theaters were starting to see a rise

0:27:19.560 --> 0:27:24.200
<v Speaker 1>in attendance. There had been multiple years of audience drop off,

0:27:24.640 --> 0:27:27.520
<v Speaker 1>so like four years in a row they saw smaller

0:27:27.640 --> 0:27:32.119
<v Speaker 1>audiences for movie theaters, and then things were picking up

0:27:32.119 --> 0:27:35.960
<v Speaker 1>in nineteen fifty one. So it's possible that movie executives

0:27:36.000 --> 0:27:39.080
<v Speaker 1>were chomping their cigars and saying, ha, TV took a

0:27:39.119 --> 0:27:42.040
<v Speaker 1>swing at us, but it's not staying around. Light my

0:27:42.119 --> 0:27:45.439
<v Speaker 1>cigar with another one hundred dollars bill or something. I

0:27:45.520 --> 0:27:49.560
<v Speaker 1>admittedly have a very cartoonish imagination. They probably weren't saying that,

0:27:49.680 --> 0:27:53.920
<v Speaker 1>but it does make it sound like movie executives were thinking, oh,

0:27:54.320 --> 0:27:59.000
<v Speaker 1>television took a temporary hit out of our business. But

0:27:59.320 --> 0:28:02.800
<v Speaker 1>as it turns out, people prefer their experience in the theaters,

0:28:02.720 --> 0:28:05.280
<v Speaker 1>TV is too expensive for the average person, etc. Etc.

0:28:06.080 --> 0:28:08.359
<v Speaker 1>And so now we're just dismissing it. And of course

0:28:08.359 --> 0:28:10.480
<v Speaker 1>it would turn out that television was not just a

0:28:10.480 --> 0:28:13.600
<v Speaker 1>passing fad, at least not a short one. You could

0:28:13.720 --> 0:28:16.560
<v Speaker 1>argue that maybe because of cord cutting and stuff, that

0:28:17.119 --> 0:28:21.399
<v Speaker 1>it was a very long passing fad, but certainly at

0:28:21.440 --> 0:28:23.560
<v Speaker 1>the time. It wasn't just a passing fad, and that

0:28:23.760 --> 0:28:26.560
<v Speaker 1>predicting that people would get tired of TV and come

0:28:26.600 --> 0:28:31.040
<v Speaker 1>back to the movie theaters was just an optimistic prediction

0:28:31.200 --> 0:28:34.480
<v Speaker 1>on behalf of the executives. Another example of someone making

0:28:34.480 --> 0:28:37.480
<v Speaker 1>a prediction when he had a vested interest in the

0:28:37.520 --> 0:28:42.800
<v Speaker 1>outcome is Steve Balmer, the former CEO of Microsoft. Balmer

0:28:42.880 --> 0:28:46.080
<v Speaker 1>was actually employee number thirty at Microsoft when he joined

0:28:46.080 --> 0:28:48.880
<v Speaker 1>in nineteen eighty, and he became CEO of the company

0:28:48.880 --> 0:28:52.040
<v Speaker 1>in two thousand. His presentations are the stuff of legend.

0:28:52.240 --> 0:28:54.960
<v Speaker 1>If you've not had the experience of digging up a

0:28:55.000 --> 0:28:59.200
<v Speaker 1>clip of Steve Balmer on stage at some event over

0:28:59.240 --> 0:29:02.040
<v Speaker 1>on YouTube, you need to give that a go. There

0:29:02.040 --> 0:29:05.520
<v Speaker 1>are a lot of different ones. The famous one is developers, Developers, Developers,

0:29:05.520 --> 0:29:08.680
<v Speaker 1>but that's just one. You know, you should check them out.

0:29:08.840 --> 0:29:10.760
<v Speaker 1>Just make sure your volume is turned down a bit,

0:29:10.800 --> 0:29:14.760
<v Speaker 1>because that dude loves dal and scream and intense is

0:29:14.800 --> 0:29:17.840
<v Speaker 1>a good way to describe him. Anyway. In two thousand

0:29:17.840 --> 0:29:21.520
<v Speaker 1>and seven, Balmer reacted to something that, unbeknownst to pretty

0:29:21.560 --> 0:29:24.000
<v Speaker 1>much everyone at the time, was actually going to lead

0:29:24.040 --> 0:29:27.200
<v Speaker 1>to enormous changes in the tech space. And that was

0:29:27.240 --> 0:29:31.960
<v Speaker 1>the debut of the Apple iPhone. Balmer said, quote, there's

0:29:32.080 --> 0:29:34.800
<v Speaker 1>no chance that the iPhone is going to get any

0:29:34.840 --> 0:29:39.280
<v Speaker 1>significant market share. No chance end quote, and he went

0:29:39.360 --> 0:29:42.360
<v Speaker 1>on to call the iPhone a quote five hundred dollars

0:29:42.360 --> 0:29:47.360
<v Speaker 1>subsidized item end quote. He predicted that Microsoft's software would

0:29:47.360 --> 0:29:49.840
<v Speaker 1>be in most phones on the market, and that while

0:29:49.880 --> 0:29:53.560
<v Speaker 1>Apple could make a lot of money selling phones, they

0:29:53.600 --> 0:29:56.040
<v Speaker 1>would not make up a significant amount of the market share.

0:29:56.080 --> 0:29:58.480
<v Speaker 1>They would maybe have two or three percent of the

0:29:58.480 --> 0:30:02.560
<v Speaker 1>market at best. So Microsoft strategy was a lot like

0:30:02.640 --> 0:30:04.960
<v Speaker 1>what we would see from Google a little later on,

0:30:05.360 --> 0:30:07.960
<v Speaker 1>which was to create the operating system in the software

0:30:08.160 --> 0:30:12.720
<v Speaker 1>for smartphones, but to leave the manufacturing to the handset companies.

0:30:13.320 --> 0:30:16.240
<v Speaker 1>Apple was taking an all in approach rather than licensing

0:30:16.280 --> 0:30:20.320
<v Speaker 1>software to businesses that made the hardware. Balmer was convinced

0:30:20.640 --> 0:30:22.840
<v Speaker 1>that was the bad way to go, that it made

0:30:22.840 --> 0:30:25.360
<v Speaker 1>way more sense to just focus on the software and

0:30:25.440 --> 0:30:28.080
<v Speaker 1>license it out to the hardware companies. But as it

0:30:28.120 --> 0:30:31.840
<v Speaker 1>turned out, Apple strategy worked like gangbusters. In two thousand

0:30:31.880 --> 0:30:35.520
<v Speaker 1>and seven, Apple sold around one point thirty nine million iPhones.

0:30:35.800 --> 0:30:37.760
<v Speaker 1>That was the year that they introduced it. They didn't

0:30:38.120 --> 0:30:40.600
<v Speaker 1>offer it for sale until the back half of the year.

0:30:41.160 --> 0:30:44.080
<v Speaker 1>In two thousand and eight, Apple sold eleven point three

0:30:44.200 --> 0:30:48.880
<v Speaker 1>six million iPhones, so more than around ten million more

0:30:48.880 --> 0:30:51.080
<v Speaker 1>than they had the year before. By the end of

0:30:51.080 --> 0:30:54.480
<v Speaker 1>the next year, that doubled again at around twenty point

0:30:54.560 --> 0:30:58.360
<v Speaker 1>seven three million units sold. In fact, Apple saw sales

0:30:58.440 --> 0:31:02.960
<v Speaker 1>numbers increase every year until you get to twenty sixteen,

0:31:03.280 --> 0:31:05.560
<v Speaker 1>because in twenty fifteen the company sold two hundred and

0:31:05.560 --> 0:31:09.200
<v Speaker 1>thirty one point two two million iPhones, and in twenty

0:31:09.240 --> 0:31:12.760
<v Speaker 1>sixteen it sold quote unquote only two hundred eleven point

0:31:12.760 --> 0:31:15.960
<v Speaker 1>one point eight million units, still more than two hundred

0:31:15.960 --> 0:31:18.600
<v Speaker 1>million units, but a drop of around twenty million. As

0:31:18.600 --> 0:31:22.280
<v Speaker 1>for Microsoft, the company pushed hard to try and establish

0:31:22.280 --> 0:31:25.880
<v Speaker 1>a foothold in smartphone operating systems, but it just never

0:31:25.920 --> 0:31:29.120
<v Speaker 1>really worked out for the company. Companies stopped making Windows

0:31:29.120 --> 0:31:33.160
<v Speaker 1>phone devices in twenty seventeen, and the company completely ended

0:31:33.200 --> 0:31:37.160
<v Speaker 1>support for the operating system in twenty twenty two. Okay,

0:31:37.320 --> 0:31:39.160
<v Speaker 1>we're going to take another quick break, but we still

0:31:39.200 --> 0:31:52.320
<v Speaker 1>have some more bad predictions to get through. We're back.

0:31:52.360 --> 0:31:54.280
<v Speaker 1>And just before the break, I was talking about Steve

0:31:54.320 --> 0:31:57.880
<v Speaker 1>Baumer dismissing the iPhone, and of course it turned out

0:31:57.920 --> 0:32:01.320
<v Speaker 1>that he was totally off. I mean, granted, it's not

0:32:01.360 --> 0:32:03.520
<v Speaker 1>like he could have said that the iPhone's going to

0:32:03.520 --> 0:32:06.440
<v Speaker 1>be a huge hit. He was leading a major competitor

0:32:06.480 --> 0:32:09.960
<v Speaker 1>to Apple at the time, So whether he believed that

0:32:10.000 --> 0:32:12.920
<v Speaker 1>the iPhone truly was just gonna be a failure or not,

0:32:13.040 --> 0:32:15.680
<v Speaker 1>I can't say, but I certainly don't think he could

0:32:15.680 --> 0:32:19.920
<v Speaker 1>have said anything different. Anyway, Apple also was not immune

0:32:20.160 --> 0:32:24.520
<v Speaker 1>to making bad predictions. Steve Jobs, a man through force

0:32:24.560 --> 0:32:28.000
<v Speaker 1>of personality and a famous intolerance for deviation from his vision,

0:32:28.720 --> 0:32:31.800
<v Speaker 1>returned to a struggling Apple in the nineteen nineties and

0:32:31.840 --> 0:32:33.640
<v Speaker 1>set it on a path to become a company that

0:32:33.760 --> 0:32:37.440
<v Speaker 1>is today worth more than two point eight trillion dollars

0:32:37.560 --> 0:32:41.080
<v Speaker 1>at the time of this recording. Anyway, back in two

0:32:41.120 --> 0:32:44.480
<v Speaker 1>thousand and three, Apple introduced the iTunes music store for

0:32:44.520 --> 0:32:46.840
<v Speaker 1>the first time. So the company had already introduced the

0:32:46.920 --> 0:32:50.000
<v Speaker 1>iPod a couple of years earlier, but now it was

0:32:50.040 --> 0:32:53.200
<v Speaker 1>introducing an online digital music store where you could buy

0:32:53.320 --> 0:32:57.000
<v Speaker 1>albums and tracks, either to port over to an iPod

0:32:57.520 --> 0:33:01.640
<v Speaker 1>or to listen from your computer. Job believed the customers

0:33:01.680 --> 0:33:06.080
<v Speaker 1>wanted to own their music. He was dismissive of the

0:33:06.080 --> 0:33:09.320
<v Speaker 1>business model that was being used by Rhapsody and by

0:33:09.400 --> 0:33:13.200
<v Speaker 1>press Play, both of which offered subscription services to customers

0:33:13.320 --> 0:33:15.960
<v Speaker 1>to get access to music. So you pay a certain

0:33:15.960 --> 0:33:18.200
<v Speaker 1>amount of money each month and then you're able to

0:33:18.360 --> 0:33:23.000
<v Speaker 1>listen to music that is covered by these different companies.

0:33:23.400 --> 0:33:27.520
<v Speaker 1>Jobs said, quote, we think subscriptions are the wrong path.

0:33:28.080 --> 0:33:30.320
<v Speaker 1>One of the reasons we think this is because people

0:33:30.360 --> 0:33:33.000
<v Speaker 1>bought their music for as long as we can remember.

0:33:33.360 --> 0:33:36.440
<v Speaker 1>We bought our music on LPs. We bought our music

0:33:36.520 --> 0:33:40.280
<v Speaker 1>on cassettes, we bought our music on CDs. And we

0:33:40.320 --> 0:33:43.160
<v Speaker 1>think people want to buy their music on the internet

0:33:43.400 --> 0:33:47.320
<v Speaker 1>by buying downloads, just like they bought LPs, just like

0:33:47.360 --> 0:33:51.120
<v Speaker 1>they bought cassettes, just like they bought CDs. They're used

0:33:51.280 --> 0:33:53.880
<v Speaker 1>to buying their music, and they're used to getting a

0:33:53.920 --> 0:33:56.840
<v Speaker 1>broad set of rights with it. When you own your music,

0:33:57.240 --> 0:34:00.560
<v Speaker 1>it never goes away. When you own your music, you

0:34:00.600 --> 0:34:03.160
<v Speaker 1>have a broad set of personal use rights. You can

0:34:03.200 --> 0:34:06.840
<v Speaker 1>listen to it however you want. End quote. And it's

0:34:06.840 --> 0:34:10.120
<v Speaker 1>not like Jobs was wrong, right. People do like to

0:34:10.239 --> 0:34:12.439
<v Speaker 1>own stuff. I think it's safe to say that most

0:34:12.440 --> 0:34:17.160
<v Speaker 1>people definitely prefer owning music to losing access to something

0:34:17.200 --> 0:34:21.279
<v Speaker 1>because a licensing deal has expired. I'm sure everyone out

0:34:21.320 --> 0:34:24.440
<v Speaker 1>there has had that experience where something that used to

0:34:24.440 --> 0:34:28.239
<v Speaker 1>be covered on one of the streaming services you either

0:34:28.320 --> 0:34:31.759
<v Speaker 1>listen to or watch or whatever goes away because a

0:34:31.840 --> 0:34:34.759
<v Speaker 1>licensing deal expired, or because the company that was in

0:34:34.840 --> 0:34:36.840
<v Speaker 1>charge of it decided to get rid of it because

0:34:37.000 --> 0:34:39.680
<v Speaker 1>of you know, sticky residual deals. I'm looking at you

0:34:40.320 --> 0:34:44.440
<v Speaker 1>Max and Zaslov, who would remove stuff so that he

0:34:44.480 --> 0:34:48.040
<v Speaker 1>wouldn't have to worry about paying residuals to people anyway,

0:34:48.080 --> 0:34:51.240
<v Speaker 1>we know that people prefer being able to access their stuff.

0:34:51.239 --> 0:34:53.800
<v Speaker 1>They hate it when the stuff goes away. But despite

0:34:53.840 --> 0:34:58.840
<v Speaker 1>all that, the subscription based business model has seen incredible success.

0:34:59.200 --> 0:35:01.919
<v Speaker 1>It's a very convene thing, like instead of buying track

0:35:01.960 --> 0:35:04.520
<v Speaker 1>by track or album by album, you get access to

0:35:04.600 --> 0:35:08.520
<v Speaker 1>a huge library of material. In fact, it was so

0:35:08.600 --> 0:35:12.680
<v Speaker 1>successful that Apple would introduce its own music subscription service

0:35:12.680 --> 0:35:16.640
<v Speaker 1>in twenty fifteen. Notably, Steve Jobs had passed away in

0:35:16.680 --> 0:35:21.279
<v Speaker 1>twenty eleven, so it didn't happen within his lifetime, and

0:35:21.320 --> 0:35:23.799
<v Speaker 1>he again he was famously dismissive of it when he

0:35:23.880 --> 0:35:28.120
<v Speaker 1>introduced the music store. But in twenty fifteen we got

0:35:28.160 --> 0:35:31.680
<v Speaker 1>Apple Music, which would expand to include not just music

0:35:31.719 --> 0:35:36.520
<v Speaker 1>tracks but also video. Oh. Also, journalists get stuff wrong

0:35:36.680 --> 0:35:40.279
<v Speaker 1>a lot too. Goodness knows, I've gotten a lot wrong.

0:35:40.320 --> 0:35:43.399
<v Speaker 1>Although I really shouldn't reference myself as a journalist. I'm

0:35:43.400 --> 0:35:46.600
<v Speaker 1>not really a journalist. I don't have those qualifications. But

0:35:47.200 --> 0:35:49.960
<v Speaker 1>David Pogue wrote a piece for The New York Times

0:35:49.960 --> 0:35:53.960
<v Speaker 1>about Apple in September two thousand and six. That piece

0:35:54.040 --> 0:35:57.560
<v Speaker 1>was called iPhone Rumors, and it starts off with quote,

0:35:57.920 --> 0:36:00.560
<v Speaker 1>Everyone's always asking me when Apple will come out with

0:36:00.600 --> 0:36:04.360
<v Speaker 1>a cell phone. My answer is probably never. End quote.

0:36:04.520 --> 0:36:08.200
<v Speaker 1>And of course Apple introduced the iPhone the very next year.

0:36:08.560 --> 0:36:10.560
<v Speaker 1>But if you read Poke's piece, he lays out some

0:36:10.600 --> 0:36:13.440
<v Speaker 1>really good arguments about why it would make sense to

0:36:13.480 --> 0:36:16.880
<v Speaker 1>be skeptical that Apple would release a phone. One of

0:36:16.920 --> 0:36:20.480
<v Speaker 1>his really big points is that telecommunications carriers, you know,

0:36:20.520 --> 0:36:24.200
<v Speaker 1>the companies that actually own the infrastructure that allows communication

0:36:24.239 --> 0:36:27.480
<v Speaker 1>across devices. You know your AT and t's, your Verizons,

0:36:27.480 --> 0:36:30.200
<v Speaker 1>et cetera, they have a lot of power when it

0:36:30.280 --> 0:36:34.520
<v Speaker 1>comes to hardware. The telecommunications companies can actually approve or

0:36:34.560 --> 0:36:39.440
<v Speaker 1>deny features on devices. Essentially, they do this by saying, Okay,

0:36:39.480 --> 0:36:41.719
<v Speaker 1>well we're not going to let your hardware work on

0:36:41.840 --> 0:36:46.120
<v Speaker 1>our network. If you include that feature, we don't want

0:36:46.160 --> 0:36:49.080
<v Speaker 1>to support that feature. We will not allow you to

0:36:49.200 --> 0:36:52.040
<v Speaker 1>use that device on our network if they don't like something.

0:36:52.320 --> 0:36:55.320
<v Speaker 1>So Pogue's point was that Apple was not the type

0:36:55.320 --> 0:36:59.160
<v Speaker 1>of company that would compromise or allow some other business

0:36:59.680 --> 0:37:03.520
<v Speaker 1>that little control into their processes, and that was reasonable,

0:37:03.600 --> 0:37:07.279
<v Speaker 1>Like you can't imagine Steve Jobs being told in no

0:37:07.440 --> 0:37:09.840
<v Speaker 1>uncertain terms like we're not going to allow that. You

0:37:09.960 --> 0:37:12.759
<v Speaker 1>have to design it this way. So it seemed to

0:37:12.800 --> 0:37:15.920
<v Speaker 1>be a reasonable conclusion to say that Apple was not

0:37:16.000 --> 0:37:17.719
<v Speaker 1>going to release a phone in the first place. But

0:37:17.760 --> 0:37:21.000
<v Speaker 1>as it turned out, Apple worked very closely with AT

0:37:21.120 --> 0:37:22.920
<v Speaker 1>and T for the launch of the iPhone. It was

0:37:22.960 --> 0:37:25.200
<v Speaker 1>an AT and T exclusive here in the United States

0:37:25.200 --> 0:37:27.840
<v Speaker 1>when it first launched. But common sense would have suggested

0:37:27.880 --> 0:37:30.400
<v Speaker 1>that Apple would not have managed such a relationship and

0:37:30.440 --> 0:37:33.359
<v Speaker 1>that the company would have instead focused on technologies where

0:37:33.400 --> 0:37:37.480
<v Speaker 1>it would maintain near total control of the user experience.

0:37:37.600 --> 0:37:41.280
<v Speaker 1>So you can understand why Pogue made that particular statement.

0:37:41.600 --> 0:37:45.560
<v Speaker 1>It just turned out to be completely wrong, but again,

0:37:45.640 --> 0:37:47.800
<v Speaker 1>just based on the information that was available, it was

0:37:47.800 --> 0:37:51.160
<v Speaker 1>an understandable one. So yeah, it is really fun to

0:37:51.239 --> 0:37:53.799
<v Speaker 1>go back over these kind of old statements and old

0:37:53.880 --> 0:37:57.200
<v Speaker 1>predictions and see with the benefit of hindsight how off

0:37:57.400 --> 0:37:59.560
<v Speaker 1>they were. Or at least it's fun to me, because

0:37:59.640 --> 0:38:03.040
<v Speaker 1>again I used to make predictions, and I was often

0:38:03.280 --> 0:38:05.799
<v Speaker 1>just as wrong, or sometimes far more wrong than any

0:38:05.840 --> 0:38:09.480
<v Speaker 1>of the examples I've cited here. I think that some

0:38:09.520 --> 0:38:13.560
<v Speaker 1>of y'all might even remember one of those I famously predicted.

0:38:13.920 --> 0:38:16.840
<v Speaker 1>I don't know, famous that's giving myself too much credit.

0:38:17.280 --> 0:38:22.120
<v Speaker 1>I very much predicted that the iPad was going to

0:38:22.120 --> 0:38:25.239
<v Speaker 1>be a flop. I could not see the iPad succeeding,

0:38:25.560 --> 0:38:29.280
<v Speaker 1>and that was because tablet computers had been around for ages.

0:38:29.800 --> 0:38:33.000
<v Speaker 1>Even touchscreen tablet computers had been around for quite some time,

0:38:33.320 --> 0:38:36.440
<v Speaker 1>but no one had managed to make one that appealed

0:38:36.800 --> 0:38:40.640
<v Speaker 1>to the broader consumer market. The tablet computers that were

0:38:40.680 --> 0:38:44.319
<v Speaker 1>in use were niche products. They were used in very

0:38:44.320 --> 0:38:48.080
<v Speaker 1>specific applications, like you had some in the sciences, you

0:38:48.160 --> 0:38:50.640
<v Speaker 1>had some in medicine, but you didn't really have a

0:38:50.680 --> 0:38:55.000
<v Speaker 1>consumer tablet that had seen great success. And I just

0:38:55.040 --> 0:38:59.200
<v Speaker 1>couldn't imagine people wanting something of that form. Factor too

0:38:59.200 --> 0:39:03.320
<v Speaker 1>big to be easily portable unless you're carrying a bag around,

0:39:04.280 --> 0:39:07.359
<v Speaker 1>too small and too limited to be really useful if

0:39:07.360 --> 0:39:10.520
<v Speaker 1>you wanted it for something like productivity, because typing on

0:39:10.560 --> 0:39:13.120
<v Speaker 1>a screen is far slower than typing on a keyboard.

0:39:13.360 --> 0:39:16.839
<v Speaker 1>So I just assumed that even Apple wouldn't be able

0:39:16.840 --> 0:39:21.040
<v Speaker 1>to make the tablet computer commercial success for the consumer market,

0:39:21.200 --> 0:39:26.360
<v Speaker 1>and I was totally wrong. I doubted Steve Jobs's marketing ability,

0:39:26.400 --> 0:39:30.880
<v Speaker 1>I doubted Apple's engineering and making a product that had

0:39:31.400 --> 0:39:36.640
<v Speaker 1>a very compelling user interface. And my prediction was one

0:39:36.719 --> 0:39:42.200
<v Speaker 1>hundred percent incorrect, and I own it. It was, you know,

0:39:42.440 --> 0:39:45.360
<v Speaker 1>I felt like I had based it on some solid ground,

0:39:45.560 --> 0:39:48.200
<v Speaker 1>but it all turned out to be quicksand I guess

0:39:48.520 --> 0:39:51.000
<v Speaker 1>so it can happen to anyone. I don't think I'll

0:39:51.040 --> 0:39:54.680
<v Speaker 1>be bringing the Predictions episodes back anytime soon. They would

0:39:54.719 --> 0:39:58.520
<v Speaker 1>cause me huge amounts of stress because it's hard, right.

0:39:59.160 --> 0:40:02.960
<v Speaker 1>It involves doing a lot of work to just look

0:40:03.000 --> 0:40:07.120
<v Speaker 1>at what is the current state of technology, and even

0:40:07.480 --> 0:40:10.720
<v Speaker 1>working from that, I have an incomplete picture, because obviously

0:40:10.760 --> 0:40:13.960
<v Speaker 1>there are people and companies working on things that are

0:40:14.000 --> 0:40:18.440
<v Speaker 1>not yet publicly known, and so I have an incomplete

0:40:18.520 --> 0:40:22.839
<v Speaker 1>picture from that respect, and basing predictions off of an

0:40:22.880 --> 0:40:26.239
<v Speaker 1>incomplete picture is even more shoddy than just you know,

0:40:26.920 --> 0:40:31.080
<v Speaker 1>having to concede that you can't anticipate the innovation that's

0:40:31.120 --> 0:40:33.600
<v Speaker 1>going to follow in the months ahead. So I don't

0:40:33.800 --> 0:40:36.880
<v Speaker 1>think i'll bring it back. We'll see. Maybe toward the

0:40:36.960 --> 0:40:38.560
<v Speaker 1>end of the year, I'll think, ah, heck, I'll give

0:40:38.560 --> 0:40:41.120
<v Speaker 1>it another shot, and I'll see if I can predict

0:40:41.520 --> 0:40:45.319
<v Speaker 1>what will happen in twenty twenty four. But honestly, when

0:40:45.360 --> 0:40:47.920
<v Speaker 1>I look back at the last like three years, when

0:40:47.960 --> 0:40:51.400
<v Speaker 1>I stopped doing predictions episodes, I see so many examples

0:40:51.440 --> 0:40:54.600
<v Speaker 1>of stuff I never would have predicted. I definitely wouldn't

0:40:54.640 --> 0:40:57.719
<v Speaker 1>have predicted Elon Musk purchasing Twitter, for example. That would

0:40:57.760 --> 0:41:01.480
<v Speaker 1>not have been on my list. I'm not sure that

0:41:01.520 --> 0:41:04.120
<v Speaker 1>I would have predicted. You know, everyone knows my opinion

0:41:04.160 --> 0:41:06.239
<v Speaker 1>of Elon Musk is pretty dodgy. But I don't think

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<v Speaker 1>I would have predicted that Elon Musk taking over Twitter

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<v Speaker 1>would lead to such a train wreck, a slow degrading

0:41:16.000 --> 0:41:19.040
<v Speaker 1>situation for Twitter at this point, as the company appears

0:41:19.080 --> 0:41:21.160
<v Speaker 1>to be falling apart. I don't know that I would

0:41:21.200 --> 0:41:26.600
<v Speaker 1>predicted that either. So yeah, we'll see. If I'm feeling

0:41:26.880 --> 0:41:29.920
<v Speaker 1>spunky at the end of the year, maybe I'll give

0:41:29.960 --> 0:41:33.879
<v Speaker 1>it another go, but it is interesting to keep an

0:41:33.880 --> 0:41:37.080
<v Speaker 1>eye out for these. Maybe I'll also do another episode

0:41:37.120 --> 0:41:41.600
<v Speaker 1>where I'll take good predictions, stuff that people thought was

0:41:41.640 --> 0:41:44.040
<v Speaker 1>coming across the horizon and it turned out they were,

0:41:44.480 --> 0:41:47.359
<v Speaker 1>you know, mostly right, or maybe completely right. That would

0:41:47.360 --> 0:41:49.000
<v Speaker 1>be fun too. It's fun to look at the ones

0:41:49.040 --> 0:41:51.440
<v Speaker 1>where we got it totally wrong because it kind of

0:41:51.440 --> 0:41:54.000
<v Speaker 1>brings a little humility into the situation. But once in

0:41:54.040 --> 0:41:56.759
<v Speaker 1>a while people will make a prediction and boy how

0:41:56.800 --> 0:41:59.680
<v Speaker 1>they they get it bang on the money. So maybe

0:41:59.680 --> 0:42:02.160
<v Speaker 1>I should try and do an episode it's based on

0:42:02.239 --> 0:42:05.799
<v Speaker 1>that too. In the meantime, I hope you are all

0:42:05.920 --> 0:42:09.640
<v Speaker 1>well and I will talk to you again really soon.

0:42:15.719 --> 0:42:20.360
<v Speaker 1>Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio,

0:42:20.680 --> 0:42:24.400
<v Speaker 1>visit the iHeartRadio app, Apple Podcasts, or wherever you listen

0:42:24.440 --> 0:42:29.040
<v Speaker 1>to your favorite shows.