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Speaker 1: Brought to you by Bank of America Merrill Lynch committed

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Speaker 1: to bringing higher finance to lower carbon named the most

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Speaker 1: innovative investment bank for climate change and sustainability by the banker.

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Speaker 1: That's the power of Global Connections. Bank of America North

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Speaker 1: America member f D I C. This is Masters in

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Speaker 1: Business with Barry Riddles on Bloomberg Radio. This week on

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Speaker 1: the podcast, I sit down with Professor Arun Sundarajan of

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Speaker 1: n y U Sterns School of Business. The professor is

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Speaker 1: a technologist and an economist and studies what we have

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Speaker 1: come to call the sharing economy. He likes to call

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Speaker 1: it crowdsourcing capitalism, and we look at a whole bunch

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Speaker 1: of different companies and platforms and technologies that are changing

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Speaker 1: the way people interact with each other. If you've ever

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Speaker 1: used Uber for a ride, if you've bought or sold

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Speaker 1: something on eBay or eggs List or or Etsy, if

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Speaker 1: you've stayed at an air b and B. There are

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Speaker 1: hundreds and hundreds of different companies, platforms, etcetera that allow

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Speaker 1: people to either monetize they're unused real estate, hardware, ortomobiles, whatever,

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Speaker 1: or other people to only purchase a fractional usage of it. UH.

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Speaker 1: The professor is is certainly well known amongst technology circles.

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Speaker 1: You might not have heard of him if you go

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Speaker 1: on YouTube and look at any of his presentations. They're

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Speaker 1: quite fascinating and they're always filled with these amazing tidbits.

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Speaker 1: I don't want to spoil anything from the actual podcast,

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Speaker 1: but I have to just share this one little data

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Speaker 1: point with you. In the United States, there are approximately

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Speaker 1: eighty million electric drills. I have one, actually I have

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Speaker 1: to the second one UH is out at the vacation house,

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Speaker 1: and the data point on those drills is quite amazing.

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Speaker 1: The average usage over the lifespan of that drill is

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Speaker 1: a mere thirteen minutes. Now, stop and think about it.

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Speaker 1: A decent drill you're paying a hundred or two hundred

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Speaker 1: dollars for and essentially you're barely using it. So a

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Speaker 1: platform that allows people to rent or loan or what

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Speaker 1: have you drills has a certain appeal because it you're

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Speaker 1: taking something that actually has a value on a cost

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Speaker 1: and you're recapturing some of that cost. On the other hand,

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Speaker 1: if you only need a drill for five minutes, why

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Speaker 1: do you want to spend two hundred dollars. That is

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Speaker 1: the essence of the sharing economy, whether it be a

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Speaker 1: spare room or a ride in someone's car, or rent

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Speaker 1: the runway, a a any sort of couture dress that

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Speaker 1: you don't want to spend five thousand dollars on to

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Speaker 1: wear just once. Uh. The professor not only thinks this

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Speaker 1: is the future of retail, but he thinks that's going

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Speaker 1: to have a very beneficial impact on people in the

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Speaker 1: bottom half of the economic strata in terms of income. So,

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Speaker 1: without any further ado, here is my conversation with Un Sundarajan.

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Speaker 1: This is Masters in Business with Barry Ridholes on Bloomberg Radio.

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Speaker 1: My special guest this week is Aurun Sundarajan. He is

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Speaker 1: a professor at n y U Stern School of Business

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Speaker 1: and is fascinated by how digital technology shapes the economy

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Speaker 1: and transforms our lives. His scholarly research analyzes what makes

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Speaker 1: the economics of technology, products and industries so unique. He

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Speaker 1: is a member of the World Economic Forums Global Council

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Speaker 1: on Technology Value and Policy, and he advises governments around

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Speaker 1: the world on digital regulation. He is also the author

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Speaker 1: of a new book called The Sharing Economy, The End

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Speaker 1: of Employment and the rise of crowd based Capitalism are

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Speaker 1: in Sundarajan. Welcome to Bloomberg. Thank you, Barry. I'm delighted

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Speaker 1: to be on your show. Well, it's a pleasure to

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Speaker 1: have you. I enjoyed the book very much and it

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Speaker 1: raised a whole lot of questions. Let's jump right into

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Speaker 1: this from a broad perspective, what exactly is the sharing economy? Well,

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Speaker 1: that's a great question to start with, because that's the

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Speaker 1: question that I hope to answer in the book. UM.

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Speaker 1: The label sharing economy can often be distracting because it

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Speaker 1: conjures up an image of something that it's not, which

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Speaker 1: is why I prefer the term crowd based capitalism. But

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Speaker 1: in the battle between what should we called the book

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Speaker 1: between me and my publisher, sharing economy one of a

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Speaker 1: crowd based capitalism um. So. I think of it as

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Speaker 1: a new way of organizing economic activity where we are

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Speaker 1: taking out a lot of what used to happen within

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Speaker 1: an organization and decentralizing it to a distributed crowd of providers.

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Speaker 1: So A, B and B hosts who are running their

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Speaker 1: small short term accommodation businesses through the platforms. Uber drivers

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Speaker 1: who are driving through the platform get around renters who

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Speaker 1: are running tiny car rental businesses, et C sellers, funding

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Speaker 1: circle lenders, and I expect that this model will sit

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Speaker 1: aside the traditional industrial capitalism model in the twenty one

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Speaker 1: century as one of the dominant ways in which we

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Speaker 1: organize economic activity. So what you're describing sounds very much

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Speaker 1: like what used to be called peer to peer or

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Speaker 1: many too many as opposed to a centralized distribution where

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Speaker 1: one company manufactured, they ship it, it goes to their stores,

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Speaker 1: and then consumers come and buy it. That model seems

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Speaker 1: to be challenged by let's call it, crowd based capitalists. Yes,

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Speaker 1: I think that peer to peer is certainly a precursor.

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Speaker 1: You might think of the eighteenth century economy as being

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Speaker 1: almost entirely peer to peer, the Adam Smith market economy

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Speaker 1: us individuals or small businesses sold to other individuals. And

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Speaker 1: then we saw a resurgence of some of that kind

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Speaker 1: of activity in the late nineties with eBay and with Craigslist.

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Speaker 1: But what's different about the sharing economy and crowd based

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Speaker 1: capitalism is two things. One is that it scales this

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Speaker 1: kind of activity to the point where the crowd based

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Speaker 1: alternative can be the largest provider in the industry. A

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Speaker 1: B and B is already the largest provider of short

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Speaker 1: term accommodation in the world. They have three times as

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Speaker 1: many listings as Marriott's Star would have rooms. If I

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Speaker 1: recall hearing one of your presentations, once you mentioned last

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Speaker 1: night a hundred and fifty thousand people stayed at an Airbnb.

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Speaker 1: Is that number still accurate? Well, that was probably a

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Speaker 1: couple of years ago. Um, that's amazing, that really is right.

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Speaker 1: I mean, they own no assets. This is entirely other

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Speaker 1: individuals running their businesses through the platform. So the ramifications

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Speaker 1: of this or are going to be significant. And you've

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Speaker 1: you've discussed the blurred lines between personal and professional, between

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Speaker 1: casual labor and someone who's working full time for someone else.

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Speaker 1: So how does this new change affect everything? What is

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Speaker 1: the ramifications of the way these digital technologies are going

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Speaker 1: to impact our lives? Um? See the blurring of lines

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Speaker 1: between personal and professional I think is central to a

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Speaker 1: lot of the challengers that the sharing economy has faced

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Speaker 1: in the last decade, because if you think about it,

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Speaker 1: there are lots of activities that fall under the personal umbrella. Naturally,

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Speaker 1: if you own a car, you've probably picked someone up

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Speaker 1: from the airport. Sure, you've probably cooked a meal for

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Speaker 1: someone at your and had them eat it at your home.

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Speaker 1: You've had house guests. You may have picked your friends

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Speaker 1: kids up from soccer practice. You may have lent money

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Speaker 1: to a friend. You didn't need any special permit for this.

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Speaker 1: This was all under the personal umbrella. And then you

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Speaker 1: had taxi drivers, you had professional bankers, you had restaurant owners,

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Speaker 1: you had bed breakfast owners who were on the professional

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Speaker 1: side and for whom all of the regulations were developed.

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Speaker 1: And so we're now entering an economy where these lines

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Speaker 1: between personal and professional up blurring, and so the regulatory

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Speaker 1: structures that we have developed to regulate, say accommodation or transportation,

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Speaker 1: which expect a full time professional provider on the supply side,

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Speaker 1: are being challenged because you've got people who are hosting

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Speaker 1: occasionally on a B and B, who are driving occasionally

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Speaker 1: for left, who have become little car rental businesses, who

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Speaker 1: have become little bankers. Here in New York City, there's

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Speaker 1: been a number of complaints from condos and co ops

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Speaker 1: about buildings originally not made for taking guests, And suddenly

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Speaker 1: you think you own a private co op in a

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Speaker 1: apartment building and you discover there's random strangers in your building.

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Speaker 1: How does an Airbnb deal with that? How does the

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Speaker 1: city of New York deal with that? Well? Um dealing

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Speaker 1: with the new world of short term accommodation I think

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Speaker 1: requires a fundamental rethinking of a lot of different dimensions

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Speaker 1: of regulation, because we are creating, in some sense, a

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Speaker 1: new form of mixed use real estate where the personal

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Speaker 1: home can also become a commercial, short term accommodation source

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Speaker 1: for people who are visiting the city. We're challenging ideas

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Speaker 1: of zoning, and we're challenging sort of this separation between

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Speaker 1: long term and short term accommodation. It's really a situation

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Speaker 1: where we have to think about how do we change

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Speaker 1: the laws in a way that accommodates this activity. Because

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Speaker 1: a lot of people want to host on a B

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Speaker 1: and B, A lot of guests want a B and B,

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Speaker 1: so society wants this service. What I think will happen

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Speaker 1: in the long run is a couple of things. One

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Speaker 1: is that we will in fact change the laws around

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Speaker 1: that prevent people from renting for less than thirty days

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Speaker 1: and go on. But I think but also going to

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Speaker 1: delegate a lot of the responsibility to partties other than

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Speaker 1: the government. I'm Barry Ridholts. You're listening to Masters in

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Speaker 1: Business on Bloomberg Radio. My special guest this week is

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Speaker 1: our on Sundarajan. He is a professor at n y

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Speaker 1: U Stern School of Business and is an expert in

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Speaker 1: digital technologies and sharing economy. So there are sort of

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Speaker 1: three levels of of sharing economies when it comes to accommodations.

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Speaker 1: On the high end, you have one fine Stay, which

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Speaker 1: is a way for people with lovely high end homes

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Speaker 1: or other properties to generate a little income with them.

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Speaker 1: You have Airbnb, which is pretty middle of the road.

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Speaker 1: It's way that anybody can rent out a room or

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Speaker 1: an apartment or what have you. And then I kind

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Speaker 1: of like CouchSurfing dot com, whose business model essentially, hey,

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Speaker 1: we have a couch for you to crash on and

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Speaker 1: no money exchange his hands. What is that business model?

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Speaker 1: How does that company that has venture investors, how do

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Speaker 1: they make money? Well, their revenue sources. The revenue sources

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Speaker 1: that couch surfing have are pretty limited. Um, they have

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Speaker 1: been making money for a while by charging people for

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Speaker 1: a verification service, where if you want to stay with

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Speaker 1: people who have been verified, then couch surfing gets a fee. UM.

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Speaker 1: They switched recently from disavowing advertising to adopting an advertising

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Speaker 1: business model. This is in the Google tradition of like,

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Speaker 1: you know, sort of going from anti advertising the pro

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Speaker 1: advertising um. But you know, I think focusing on the

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Speaker 1: revenue model of couch surfing UM takes us away from

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Speaker 1: what's fundamentally different about them. They haven't been set up

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Speaker 1: as a commercial business. They are a pure gift economy,

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Speaker 1: so it's really more of a social network than anything else. Really. Yeah,

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Speaker 1: I mean the typical couch surfing user when they go

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Speaker 1: to a new city, they're not saying where do I

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Speaker 1: find accommodation? They're saying, you know, where's the party? Or

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Speaker 1: you know, how do I meet the interesting people? And

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Speaker 1: the exchange of accommodation is sort of the gift that

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Speaker 1: cements the connection. It makes a lot of sense. And

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Speaker 1: there are some people who only seem to host others,

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Speaker 1: and there are other people who are traveling around the

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Speaker 1: country only. Couch surfing absolutely and ABNB in some ways

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Speaker 1: represents a middle ground between the commercial and the gift.

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Speaker 1: In that sense, I mean, it's decidedly commercial. You are pricing,

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Speaker 1: you are managing inventory. If you're a supplier. As a guest,

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Speaker 1: you are paying for something that is a service that

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Speaker 1: you're getting from the host. But there is also some

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Speaker 1: gift element and some sort of embracing of imperfection that

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Speaker 1: the guest experiences, where you don't expect all the towels

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Speaker 1: will be the same color and perfectly folded. Um. There's

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Speaker 1: a connection that forms with the host. Even if the

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Speaker 1: host is not there, you get to see how they

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Speaker 1: have made up their home. There's an intimacy associated with

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Speaker 1: staying at someone else's home. It's like a bend and breakfast.

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Speaker 1: And I was amused I learned in your book that

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Speaker 1: the name Airbnb came out from the idea of an

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Speaker 1: air mattress as as a place for people to to crash.

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Speaker 1: Let's let's shift away from a combination and talk a

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Speaker 1: little bit about travel. So uber has been a huge

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Speaker 1: success globally. Lift also has experienced a tremendous amount of growth. Um.

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Speaker 1: So here's the question, how much of this is a

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Speaker 1: function of the entrenched industries complacency. And let's be honest,

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Speaker 1: at least as a New Yorker who who here doesn't

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Speaker 1: eight taxis. There aren't enough of them. As soon as

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Speaker 1: it starts to ring, you can't get one, and heaven forbid,

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Speaker 1: if you want one during rush hours, some idiot has

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Speaker 1: decided that's when we're gonna do the shift change, and

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Speaker 1: there's no taxis available. So would Uber have been this

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Speaker 1: successful if you didn't have a complacent, dominant and trench business. Um.

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Speaker 1: I certainly think that the placency of the entrenched businesses

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Speaker 1: opened the door for Uber and left because the bar

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Speaker 1: was pretty low and it was easy to create a product,

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Speaker 1: a service that was dramatically superior. You know, I've lived

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Speaker 1: in New York for a long time and I've had

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Speaker 1: the same frustrations with the yellow cabs. But if you

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Speaker 1: think about the United States, New York has by far

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Speaker 1: the best taxi service in the country, really, and so

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Speaker 1: that that's horrible. Yeah, I know last Las Vegas maybe

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Speaker 1: comes close, but that's pretty much it. I mean, I

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Speaker 1: used to go to l A and I wouldn't know

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Speaker 1: how to get around without renting a car, and then

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Speaker 1: I'd be driving on the highway at sixty miles an

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Speaker 1: hour having not driven for three months. So you know,

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Speaker 1: that's how the door was open. But that's not going

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Speaker 1: to determine the long run success of the company's because

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Speaker 1: they're not really going after the taxi industry. They're going

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Speaker 1: after the automobile industry. They want to shift our spending

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Speaker 1: on buying new and used cars towards getting transportation on

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Speaker 1: demand as a service. So they're not going to the

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Speaker 1: eleven billion dollars we spend on taxi every year. They're

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Speaker 1: going after the one point two trillion dollars we spend

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Speaker 1: on buying new and used cars. So, so let's talk

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Speaker 1: about that for a moment. You discuss the importance of

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Speaker 1: idle capacity and share ability. So, and it's not just cars.

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Speaker 1: Let me throw a statistic out, and again this is

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Speaker 1: from an earlier presentation of yours. There are eighty million

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Speaker 1: power drills in the United States. Each drill is used

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Speaker 1: over the course of its total lifetime a grand total

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Speaker 1: of thirteen minutes. Yes, that seems like an enormous waste

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Speaker 1: of idle capacity. Absolutely, And I think that the sharing

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Speaker 1: economy sort of came to be because we decided that

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Speaker 1: there must be ways of tapping into capacity that is underutilized.

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Speaker 1: And once we got the smartphones, we were equipped with

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Speaker 1: the technology that allowed us, in some ways to think

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Speaker 1: about re engineering our consumption in the same way as

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Speaker 1: that the company sort of re engineered their businesses twenty

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Speaker 1: years ago when they got the PCs and the Internet

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Speaker 1: and the ethernet. UM. But and if you think about

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Speaker 1: the two industries we're talking about accommodation and transportation. UM.

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Speaker 1: Part of the reason why they're so visible is that

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Speaker 1: they reflect the two most valuable personal assets that the

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Speaker 1: average individual has, their home and their car. And so

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Speaker 1: we've managed to create sharing markets for these assets, even

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Speaker 1: though the transaction costs are still pretty high. It's been

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Speaker 1: harder to create markets for power drill rental, or for

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Speaker 1: vacuum cleaner rental, or for you know, tent rental. All

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Speaker 1: of these underutilized assets. What what about some of them?

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Speaker 1: The high end designer clothing. I know there's a number

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Speaker 1: of companies that rent high end dresses and I forgot

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Speaker 1: some of the names of Absolutely, there's rent the Runway.

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Speaker 1: It does this on demand as a business. There's another

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Speaker 1: one called Style and that I really like that does

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Speaker 1: this peer appear where you can sort of monetize your

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Speaker 1: wardrobe by renting things out? Um. The logistics are still

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Speaker 1: sort of the economics, the unit economics of the logistics

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Speaker 1: are still being worked out on that front um, but

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Speaker 1: I think that things are going to get a lot

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Speaker 1: easier once drone technologies take off and we have the

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Speaker 1: ability to sort of tap into you know, if an

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Speaker 1: object knows how much it's being used where it is

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Speaker 1: and can call on transport on demand, which will be

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Speaker 1: possible in about a decade um. You know, with drone

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Speaker 1: technology so far off in the future, not at all,

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Speaker 1: then we have the spectra of not just sort of

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Speaker 1: drones flying above, but carrying power drills. I'm very results

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Speaker 1: you're listening to Masters in Business on Bloomberg Radio. My

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Speaker 1: special guest today is Professor Arun Sundarajan. He is a

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Speaker 1: professor at n y U Sterns School of Business specializing

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Speaker 1: in the impact of digital technologies and how they shape

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Speaker 1: our economies. He is not only a member of the

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Speaker 1: World Economic Forums Global Agenda Council on Technowlogy, he is

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Speaker 1: also the author of a new book called The Sharing Economy,

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Speaker 1: The End of Employment and the Rise of crowd based Capitalism.

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Speaker 1: Let's jump right into the technology backdrop of of the

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Speaker 1: collaborative economy. Um, you've talked about the iPod as the

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Speaker 1: first successful mass market product that was developed for consumers

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Speaker 1: rather than businesses or governments. So what is the consumerization

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Speaker 1: of digital technology mean for us? Well, I think that

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Speaker 1: this was the consumerization of digital technology represented a radical

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Speaker 1: shift in the focus of the industry producing the technology.

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Speaker 1: Because if you think about the sixties, seventies, eighties, and nineties,

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Speaker 1: technology products were built for business or government and meaning

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Speaker 1: meaning computers, phones, all those various texts. Didn't consumers eventually

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Speaker 1: take advantage of those. They did, But if you think

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Speaker 1: about the primary focus of R and D in all

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Speaker 1: of the companies except Apple, the business was the primary focus.

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Speaker 1: The PC was built for business, and then a home

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Speaker 1: computer version was developed. The larger computers were built for business.

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Speaker 1: Software was built for business frames, databases, etcetera. That's that's

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Speaker 1: really very interesting. So and so there was a shift

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Speaker 1: in like you know, the late nineties, because computer technology

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Speaker 1: got cheap enough and fast enough that you could conceive

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Speaker 1: of mass market consumer products, and the iPod was the

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Speaker 1: first big one. But what this has done is that

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Speaker 1: it shifted the focus of the technology industry away from

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Speaker 1: businesses and to consumers. If you look at the big

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Speaker 1: innovations of the last ten years, social media, tablet, smartphones.

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Speaker 1: They were built for consumers and then adapted for businesses.

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Speaker 1: So so let's talk about you mentioned Apple. Let's let's

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Speaker 1: talk about from iPod to I phone. How much of

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Speaker 1: the sharing economy is really directly dependent on the iPhone

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Speaker 1: coming out and just upending the mobile phone market and

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Speaker 1: then everything else that that fouled from there. Is that

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Speaker 1: the prime enabler of all these technologies. Um, I think

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Speaker 1: that the iPhone or smartphones becoming mass market is one

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Speaker 1: of the enablers of a number of industries that have

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Speaker 1: been changed by the sharing economy. You can't imagine uber

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Speaker 1: without a g Press enabled smartphone or knows where you are,

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Speaker 1: knows where the car is yep. And there's a whole

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Speaker 1: bunch of labor markets that have become possible because you know,

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Speaker 1: if I have a smartphone, then I become a potential

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Speaker 1: source of labor to a market. They don't have to

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Speaker 1: equip me with one of those devices that the ups

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Speaker 1: drivers have. But I think that there was a broader

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Speaker 1: adoption of digital technology and a comfort level we got

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Speaker 1: using this technology and interacting with other people through an interface.

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Speaker 1: We digitized a lot of our social capital on networks

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Speaker 1: like Facebook and LinkedIn. Explain that because you you discuss

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Speaker 1: that frequently the what do you mean by we've digitized

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Speaker 1: our identity and we've digitized our our trust? Well, if

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Speaker 1: you think about pre two thousand five, we carried around

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Speaker 1: a driver's license, and this established through a government system

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Speaker 1: that you were who you said you were, and you

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Speaker 1: had a professional and a personal network that was known

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Speaker 1: to you, but wasn't translatable into information that could make

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Speaker 1: someone else who didn't know you trust you. So what

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Speaker 1: Facebook and LinkedIn now represent is a lot of connections

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Speaker 1: on Facebook and LinkedIn are meaningless, I agree, but a

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Speaker 1: lot of it represents real world social capital, professional capital

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Speaker 1: that you have built up over your lifetime that makes

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Speaker 1: you more credible as a trading partner. When someone says,

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Speaker 1: well should I rent my car to this person? Or

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Speaker 1: should I trust this person enough to sleep in their

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Speaker 1: spare bedroom, or should I sort of like you know,

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Speaker 1: borrow money from them? Should I lend them money? This

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Speaker 1: becomes part of a trust infrastructure. Along with tech oologies

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Speaker 1: that allow you to hold up your driver's license in

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Speaker 1: front of your webcam and have it verified. So you

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Speaker 1: referenced earlier Craigslist and alf Rowan Wikipedia, But one of

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Speaker 1: the earliest of the tech companies was eBay. And the

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Speaker 1: way eBay built in their trust verification is if you

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Speaker 1: want to buy something from someone and you say, oh,

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Speaker 1: this guy has a five star rating and there's ten

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Speaker 1: thousand transactions, they're fairly trustworthy. Is eBay the first entity

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Speaker 1: to digitize that trust factor. eBay was definitely the pioneer

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Speaker 1: in using these pure feedback systems or to create reputation

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Speaker 1: some ways. They created the equivalent of a digital institution.

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Speaker 1: You didn't have to have courts of law or contract.

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Speaker 1: You could just rely on the feedback. The thing with

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Speaker 1: eBay is that, um, the stakes were low receiving a

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Speaker 1: package from someone, or you need to get paid by someone.

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Speaker 1: The worst thing that happens is that you don't get

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Speaker 1: the product, the products broken, you don't get paid. These

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Speaker 1: are very different stakes from trusting someone enough to let

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Speaker 1: them into your apartment, trusting someone enough to get into

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Speaker 1: their car and be driven to another city. Um. And

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Speaker 1: so we needed the social capital and the identity to

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Speaker 1: come in and to pair up with the peer to

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Speaker 1: peer feedback systems, which all of the sharing economy platforms

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Speaker 1: use before we could see these high stakes activities emerge

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Speaker 1: and assume these sort of population scale businesses that we're

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Speaker 1: seeing today. I'm very hults. You're listening to Masters in

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Speaker 1: Business on Bloomberg Radio. My special guest today is Professor

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Speaker 1: Arun Sundarajan. He is a professor at n y U

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Speaker 1: Stern School of Business, an expert on digital technologies and

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Speaker 1: the sharing economy. Let's talk a little bit about crowdfunding

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Speaker 1: because there's some really interesting companies. Kickstarter, Kivalone Angel List

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Speaker 1: are the first three that come to mind. Let's start

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Speaker 1: with simply, what is crowd based capitalism. Well, crowd based

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Speaker 1: capitalism is my conception of a new model of how

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Speaker 1: we organize the world's economic activity. So if you apply

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Speaker 1: it to the funding space, what we're talking about is

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Speaker 1: shifting the way we finance things out of the hands

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Speaker 1: of an institution that gives you money. Could be a bank,

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Speaker 1: could be a venture capital fund fund, could be like

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Speaker 1: a foundation that is giving grants to support the building

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Speaker 1: of a theater, and shifting that towards a platform that

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Speaker 1: still collects all the information that you would give a

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Speaker 1: bank or a foundation or a VC but then gets

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Speaker 1: the financing through a distributed crowd of financiers, whether it's

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Speaker 1: um individuals buying equity in your company through angel list,

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Speaker 1: whether it's individuals contributing towards a loan that is then

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Speaker 1: given to you through funding circle, whether it's individuals who

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Speaker 1: are you know, becoming philanthropists through a platform like Kickstarter.

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Speaker 1: So angel list, I think is the easiest to understand.

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Speaker 1: There's a list of potential cl it needs to interview.

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Speaker 1: You could either invest in anyone or into a whole

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Speaker 1: group at once. That that follows the traditional angel investing model,

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Speaker 1: only minus the uh, the venture capitalists or the angels.

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Speaker 1: It's the crowdfunding. So I think most people get that.

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Speaker 1: Let's let's talk about Kickstarter a bit, because I think

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Speaker 1: Kickstarter sort of crosses the lines. We we've seen and

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Speaker 1: other similar groups to Kickstarter, there's a few of them.

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Speaker 1: We've seen people who have said I'm thinking about recording

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Speaker 1: an album I'm not, and people who are famous musicians.

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Speaker 1: If enough people say they're interested, if we raise fifty tho,

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Speaker 1: I'll record this album and they do. Or we want

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Speaker 1: to put on a play, we need this much money here.

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Speaker 1: My prior plays if you like to see me do

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Speaker 1: another one that makes perfect sense. And you're a contributor,

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Speaker 1: you're you don't get any of the upside of that,

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Speaker 1: but you helped bring something to light. But then there's

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Speaker 1: something like oculus left and I thought that was sort

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Speaker 1: of I thought that was sort of a great, great

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Speaker 1: situation and wrote about it. Look, it's clear the people

431
00:26:08,840 --> 00:26:13,080
Speaker 1: who were contributing to Kickstarter, no, they're not equity investors.

432
00:26:13,119 --> 00:26:15,439
Speaker 1: But you get a company that raises a couple of

433
00:26:15,480 --> 00:26:19,480
Speaker 1: million dollars and then turns around and sells himself to

434
00:26:20,280 --> 00:26:23,800
Speaker 1: Facebook for a couple of billion dollars. That sort of

435
00:26:23,880 --> 00:26:26,800
Speaker 1: leaves a bad taste in people's mouth. How do we

436
00:26:26,840 --> 00:26:31,520
Speaker 1: define what kickstarter is and how do we make sure

437
00:26:31,600 --> 00:26:34,919
Speaker 1: that we're not being taken advantage of if we like,

438
00:26:35,000 --> 00:26:37,719
Speaker 1: oh that's a cool idea, let's fund that, and and

439
00:26:37,720 --> 00:26:40,879
Speaker 1: then the founders cash out. Well, I think the Oculus

440
00:26:41,000 --> 00:26:45,480
Speaker 1: rift investment on Kickstarter happened at a time when kick

441
00:26:45,520 --> 00:26:47,880
Speaker 1: startle was a lot of different things to a lot

442
00:26:47,880 --> 00:26:52,280
Speaker 1: of different people. Um, they were a philanthropic crowdfunding platform.

443
00:26:52,440 --> 00:26:56,200
Speaker 1: They were a platform for demand generation where you say,

444
00:26:56,240 --> 00:26:59,639
Speaker 1: here's my product. If you sort of contribute to my campaign,

445
00:27:00,040 --> 00:27:03,480
Speaker 1: you will get one of the early instances of that product.

446
00:27:03,520 --> 00:27:06,280
Speaker 1: And so they were sort of estimating demand there, and

447
00:27:06,320 --> 00:27:09,919
Speaker 1: there were companies like Oculus that were getting off the ground. Um.

448
00:27:09,960 --> 00:27:12,399
Speaker 1: I don't think we're going to see another Oculus on

449
00:27:12,560 --> 00:27:16,000
Speaker 1: Kickstarter for two reasons. One is that for a company

450
00:27:16,119 --> 00:27:19,359
Speaker 1: like that, there are far better platforms today where you

451
00:27:19,359 --> 00:27:22,720
Speaker 1: actually do sell equity and you get access to a

452
00:27:22,840 --> 00:27:25,840
Speaker 1: much more sophisticated bunch of equity investors. Give us a

453
00:27:25,840 --> 00:27:28,920
Speaker 1: few examples of those platforms. Well, angel Lists is certainly

454
00:27:28,960 --> 00:27:31,840
Speaker 1: one of them. There's another one called circle up. Um.

455
00:27:31,840 --> 00:27:34,199
Speaker 1: I've been hearing a lot about one called we funder.

456
00:27:35,160 --> 00:27:38,359
Speaker 1: All of these are where you can become a tiny

457
00:27:38,480 --> 00:27:41,719
Speaker 1: venture capitalist by like you know, tapping into people who

458
00:27:41,800 --> 00:27:46,000
Speaker 1: are listing their businesses. Um. But Kickstarter has also shifted

459
00:27:46,040 --> 00:27:50,639
Speaker 1: direction and positioned themselves more squarely as a philanthropic site,

460
00:27:51,320 --> 00:27:55,560
Speaker 1: and so they're less likely to attract investors into the

461
00:27:55,600 --> 00:27:58,679
Speaker 1: next Oculus Rift. That's that's quite fast. And I mean,

462
00:27:58,680 --> 00:28:00,680
Speaker 1: if you ask me, I figure that the right thing

463
00:28:00,680 --> 00:28:02,679
Speaker 1: for Oculus Rift to have done would have been to

464
00:28:02,720 --> 00:28:04,639
Speaker 1: sort of give back some of the equity to all

465
00:28:04,680 --> 00:28:06,760
Speaker 1: of its early funders, even though they didn't have to.

466
00:28:07,160 --> 00:28:08,719
Speaker 1: I think that would have been that would have been

467
00:28:08,760 --> 00:28:11,080
Speaker 1: the right thing to do. Yeah, much nicer end to

468
00:28:11,280 --> 00:28:14,600
Speaker 1: end to that story, turns out that some folks are

469
00:28:14,640 --> 00:28:16,639
Speaker 1: nice than others. What are you gonna do? And and again,

470
00:28:16,840 --> 00:28:19,040
Speaker 1: they didn't do an oculus rift, didn't do anything wrong.

471
00:28:19,240 --> 00:28:22,440
Speaker 1: They never promised that they were going to actually give

472
00:28:22,720 --> 00:28:26,240
Speaker 1: capital back to people. But anytime there's a two billion

473
00:28:26,640 --> 00:28:30,800
Speaker 1: dollar windfall on a two million dollar investment, it's piggish

474
00:28:30,880 --> 00:28:34,080
Speaker 1: not to at least do something for the people who

475
00:28:34,119 --> 00:28:36,240
Speaker 1: got you off the ground with that. But that that's

476
00:28:36,280 --> 00:28:38,480
Speaker 1: just my perspective, and I think we're going to see

477
00:28:38,560 --> 00:28:41,520
Speaker 1: sort of a similar thing, a similar sentiment among the

478
00:28:41,560 --> 00:28:44,760
Speaker 1: providers and the sharing economy when Uber and Lyft and

479
00:28:45,080 --> 00:28:49,280
Speaker 1: b and Big Public because the providers on these platforms

480
00:28:49,320 --> 00:28:53,960
Speaker 1: on shareholders, especially the drivers or the host So what

481
00:28:54,120 --> 00:28:57,200
Speaker 1: have you? And didn't Etsy do something with some of

482
00:28:57,240 --> 00:29:00,760
Speaker 1: its early I may be misremembering this is either Etsy

483
00:29:00,920 --> 00:29:05,760
Speaker 1: or another um. Well, there's a new platform called Juno

484
00:29:06,000 --> 00:29:10,280
Speaker 1: that is an Uber competitor that has reserved fifty of

485
00:29:10,320 --> 00:29:14,640
Speaker 1: its equity for providers for drivers whoever the driver will

486
00:29:14,640 --> 00:29:18,400
Speaker 1: participate in the upside YEP, it's funny because you know

487
00:29:18,480 --> 00:29:22,200
Speaker 1: there's the old joke the second maskets the cheese. Uber

488
00:29:22,440 --> 00:29:25,160
Speaker 1: was the pioneer. They they did all the heavy lifting.

489
00:29:26,240 --> 00:29:28,239
Speaker 1: I wonder if someone else could come in and jiu

490
00:29:28,360 --> 00:29:32,160
Speaker 1: jitsu them with the technology. Hey, we're just like Uber,

491
00:29:32,280 --> 00:29:34,400
Speaker 1: only you get equity and when we go public, it's

492
00:29:34,440 --> 00:29:37,400
Speaker 1: part of yours. It seems like a really interesting twist

493
00:29:37,720 --> 00:29:41,360
Speaker 1: um on the model. It really is, And I think

494
00:29:41,400 --> 00:29:45,240
Speaker 1: it's compounded further by the fact that the relationship between

495
00:29:45,320 --> 00:29:49,080
Speaker 1: providers and platform is not employment, but it's more hands

496
00:29:49,120 --> 00:29:51,000
Speaker 1: a So there's nothing like a non compete. I mean,

497
00:29:51,000 --> 00:29:53,800
Speaker 1: you couldn't sort of build a Walmart next to Walmart

498
00:29:54,240 --> 00:29:56,600
Speaker 1: and steal all their um, you know, sort of well

499
00:29:56,680 --> 00:29:59,400
Speaker 1: qualified and highly screened workers. But you can do that

500
00:29:59,480 --> 00:30:02,760
Speaker 1: with Uber. So so let's talk about what you just reference,

501
00:30:02,920 --> 00:30:07,560
Speaker 1: the gig economy. So we have fifty three million freelance

502
00:30:07,600 --> 00:30:10,800
Speaker 1: workers here in the United States. Um, I think the

503
00:30:10,880 --> 00:30:13,400
Speaker 1: numbers are one in far one in four? Do it

504
00:30:13,520 --> 00:30:18,640
Speaker 1: for some supplemental income? Is this gonna ever replace full

505
00:30:18,680 --> 00:30:20,800
Speaker 1: time work or is this always going to be a

506
00:30:20,960 --> 00:30:24,320
Speaker 1: side gig um? I think it's gonna replace full time

507
00:30:24,400 --> 00:30:26,920
Speaker 1: work for a lot of the workforce over the next

508
00:30:27,000 --> 00:30:30,400
Speaker 1: couple of decades. Um. I think what we're gonna see

509
00:30:30,520 --> 00:30:33,080
Speaker 1: is a shift in the role of the individual in

510
00:30:33,120 --> 00:30:37,280
Speaker 1: the economy away from someone who provides talent and labor

511
00:30:37,440 --> 00:30:41,360
Speaker 1: for a wage and towards someone who runs a tiny

512
00:30:41,400 --> 00:30:44,960
Speaker 1: business through a platform in exchange for a share of

513
00:30:45,000 --> 00:30:47,880
Speaker 1: the revenue that the business generates. And you you called

514
00:30:47,920 --> 00:30:50,680
Speaker 1: this a micro business, yep, or I call these people

515
00:30:50,760 --> 00:30:54,920
Speaker 1: micro entrepreneurs, and you know, I think that that's really

516
00:30:55,000 --> 00:30:57,640
Speaker 1: the future of work because a lot of things that

517
00:30:57,760 --> 00:31:00,720
Speaker 1: are done by human labor today are going to be

518
00:31:00,800 --> 00:31:04,040
Speaker 1: done by machines in the future. Algorithms are reading everything

519
00:31:04,120 --> 00:31:08,560
Speaker 1: absolutely and um. We're also seeing the emergence at scale

520
00:31:08,680 --> 00:31:11,800
Speaker 1: of these crowd based capitalism platforms, both on the finance

521
00:31:11,840 --> 00:31:14,720
Speaker 1: side and on the sort of the real world services side.

522
00:31:15,040 --> 00:31:18,160
Speaker 1: I expect we'll see platforms like this in the energy sector.

523
00:31:18,320 --> 00:31:21,760
Speaker 1: Once battery technology gets good enough to store the solar

524
00:31:21,760 --> 00:31:24,800
Speaker 1: power that you generate, we'll see it emerge on the

525
00:31:24,840 --> 00:31:27,800
Speaker 1: low end or the easy end of healthcare, once trust

526
00:31:27,840 --> 00:31:30,200
Speaker 1: gets high enough that you can sort of go onto

527
00:31:30,200 --> 00:31:32,160
Speaker 1: the platform and get a registered nurse to come and

528
00:31:32,200 --> 00:31:35,160
Speaker 1: stitch up the finger that you cut cooking and so

529
00:31:35,280 --> 00:31:38,320
Speaker 1: at that point, and you know, I'm already seeing platforms

530
00:31:38,360 --> 00:31:43,640
Speaker 1: like this for accounting, for law, for architecture, forum sales,

531
00:31:43,760 --> 00:31:46,760
Speaker 1: for high end computer programming, where you can start to

532
00:31:46,920 --> 00:31:49,920
Speaker 1: run your own tiny business as an individual rather than

533
00:31:49,960 --> 00:31:53,320
Speaker 1: working for someone else. So it's definitely the work model

534
00:31:53,360 --> 00:31:56,000
Speaker 1: of the future. And we've really got to rethink our

535
00:31:56,200 --> 00:31:59,760
Speaker 1: education system in a way that prepares our kids for

536
00:31:59,840 --> 00:32:02,160
Speaker 1: this world of work where they're not going to be

537
00:32:02,240 --> 00:32:05,480
Speaker 1: joining a well structured job that gives them a career path,

538
00:32:05,760 --> 00:32:07,640
Speaker 1: but they're gonna have to make it up on their own.

539
00:32:08,040 --> 00:32:12,480
Speaker 1: It's ongoing skills and continuing to accumulate and improve them

540
00:32:12,560 --> 00:32:17,000
Speaker 1: in order to do those micro entrepreneurial tests. That that's

541
00:32:17,000 --> 00:32:20,800
Speaker 1: how fascinating. So all of this raises a fascinating question.

542
00:32:20,840 --> 00:32:25,560
Speaker 1: We we know GDP is not a terrific measure of

543
00:32:25,600 --> 00:32:29,760
Speaker 1: what the economy is totally producing. And then what's probably

544
00:32:30,000 --> 00:32:34,600
Speaker 1: my least favorite data point in terms of its accuracy

545
00:32:34,640 --> 00:32:37,880
Speaker 1: is the productivity numbers, which I think completely failed to

546
00:32:37,960 --> 00:32:41,560
Speaker 1: capture all of the impact of technology and how it

547
00:32:42,480 --> 00:32:44,520
Speaker 1: the fact that we have tens of millions of people

548
00:32:44,600 --> 00:32:48,280
Speaker 1: running micro businesses is not reflected in those data. So

549
00:32:48,720 --> 00:32:53,080
Speaker 1: two questions. First, are we no longer accurately measuring the

550
00:32:53,120 --> 00:32:57,120
Speaker 1: economy based on the changes in digital technology? And second,

551
00:32:57,680 --> 00:33:00,000
Speaker 1: how do we catch up? How can we accurately capture

552
00:33:00,000 --> 00:33:02,520
Speaker 1: of those metrics. Well, on the first point, I do

553
00:33:02,640 --> 00:33:05,480
Speaker 1: think that there is a growing gap between what the

554
00:33:05,520 --> 00:33:08,840
Speaker 1: government statistics say and what the state of the economy

555
00:33:08,920 --> 00:33:11,560
Speaker 1: really is in terms of the size of the economy,

556
00:33:11,560 --> 00:33:14,720
Speaker 1: in terms of the amount of employment, and in terms

557
00:33:14,720 --> 00:33:19,520
Speaker 1: of like the value creation from technological innovation. Um. You know,

558
00:33:19,560 --> 00:33:22,680
Speaker 1: the BLS has a tough job because, um they've got

559
00:33:22,680 --> 00:33:25,920
Speaker 1: to capture these changes in real time, in real time,

560
00:33:25,960 --> 00:33:29,280
Speaker 1: but they also need to maintain historical consistency because we

561
00:33:29,320 --> 00:33:30,800
Speaker 1: want to see trends, so they can't just sort of

562
00:33:30,840 --> 00:33:33,080
Speaker 1: throw out their survey and pull in a new one.

563
00:33:33,560 --> 00:33:36,160
Speaker 1: I do know that they worked over the summer and

564
00:33:36,240 --> 00:33:40,080
Speaker 1: adding new questions to the current Employment survey to try

565
00:33:40,120 --> 00:33:42,280
Speaker 1: and capture some of these effects, but I don't know

566
00:33:42,320 --> 00:33:45,680
Speaker 1: if they will be enough. They make these changes very

567
00:33:45,720 --> 00:33:50,440
Speaker 1: slowly over long periods of time. It's a real gradual shift,

568
00:33:50,600 --> 00:33:52,959
Speaker 1: and it's almost imperceptible, and by the time they make

569
00:33:53,040 --> 00:33:58,240
Speaker 1: the change, it's already having a substantial deviation from from

570
00:33:58,240 --> 00:34:00,560
Speaker 1: what they should be measured absolute Lee and I think

571
00:34:00,560 --> 00:34:03,040
Speaker 1: that the fundamental shift that we're going to see is

572
00:34:03,080 --> 00:34:08,920
Speaker 1: away from measuring employment by counting jobs and towards measuring

573
00:34:09,320 --> 00:34:13,480
Speaker 1: um activity by human beings in terms of the total

574
00:34:13,480 --> 00:34:16,880
Speaker 1: amount of work. We've been speaking with Professor are runs

575
00:34:16,960 --> 00:34:21,160
Speaker 1: Underajan of n y u Stern. If you enjoy this conversation,

576
00:34:21,239 --> 00:34:24,120
Speaker 1: be sure and stick around for our podcast extras, where

577
00:34:24,120 --> 00:34:27,759
Speaker 1: we keep the digital tape rolling and continue discussing all

578
00:34:27,880 --> 00:34:32,759
Speaker 1: things economic, finance and investing. You can check out my

579
00:34:32,880 --> 00:34:35,880
Speaker 1: daily column on Bloomberg View dot com or follow me

580
00:34:35,920 --> 00:34:40,320
Speaker 1: on Twitter at Rid Halts. We love your comments, feedback

581
00:34:40,400 --> 00:34:44,920
Speaker 1: and suggestions right to us at m IB podcast at

582
00:34:44,960 --> 00:34:48,960
Speaker 1: Bloomberg dot net. I'm Barry Ri Halts. You've been listening

583
00:34:49,000 --> 00:34:57,080
Speaker 1: to Masters in Business on Bloomberg Radio, brought to you

584
00:34:57,120 --> 00:35:00,560
Speaker 1: by Bank of America Merrill Lynch seeing what other have seen,

585
00:35:00,800 --> 00:35:04,319
Speaker 1: but uncovering what others may not. Global Research that helps

586
00:35:04,360 --> 00:35:08,280
Speaker 1: you harness disruption. Voted top global research firm five years running,

587
00:35:08,560 --> 00:35:12,640
Speaker 1: Merrill Lynch, Pierce, Finner and Smith Incorporated. Welcome to the podcast,

588
00:35:12,840 --> 00:35:14,839
Speaker 1: um Aaron, thank you so much for doing this. This

589
00:35:14,880 --> 00:35:17,520
Speaker 1: is really interesting. I enjoyed the book. I found it

590
00:35:17,560 --> 00:35:21,560
Speaker 1: to be an intriguing way to sort of reorganize in

591
00:35:21,600 --> 00:35:24,239
Speaker 1: my mind what's going on in the broader economy, and

592
00:35:24,239 --> 00:35:27,560
Speaker 1: and there's some really fascinating things in it. UM. Let's

593
00:35:27,600 --> 00:35:30,400
Speaker 1: talk about a few things that we missed during the

594
00:35:30,480 --> 00:35:34,200
Speaker 1: broadcast portion. There was something you had written early in

595
00:35:34,239 --> 00:35:40,000
Speaker 1: the book that I thought was interesting about three technological invariants.

596
00:35:40,160 --> 00:35:47,400
Speaker 1: I thought that was really intriguing digitalization, exponential growth, and modularity.

597
00:35:47,440 --> 00:35:50,560
Speaker 1: I think most listeners know what each of those three

598
00:35:50,600 --> 00:35:55,200
Speaker 1: things are. Why is that unique to technology and why

599
00:35:55,280 --> 00:35:59,719
Speaker 1: is it unvarying? Well, it's UM trying to come up

600
00:35:59,800 --> 00:36:04,040
Speaker 1: with three things that don't change about digital technology was

601
00:36:04,080 --> 00:36:07,840
Speaker 1: in response to the fact that so many things do

602
00:36:08,040 --> 00:36:11,440
Speaker 1: seem to change or digital technology, and so how do

603
00:36:11,480 --> 00:36:14,359
Speaker 1: you frame what the future is going to look like?

604
00:36:15,239 --> 00:36:18,239
Speaker 1: And so UM to me, these the combination of these

605
00:36:18,280 --> 00:36:22,279
Speaker 1: three things, like, you know, the digitization of information UM,

606
00:36:22,400 --> 00:36:26,600
Speaker 1: exponential growth in bandwidth and computing power and storage, and

607
00:36:26,680 --> 00:36:29,880
Speaker 1: the idea that you can call on the capabilities of

608
00:36:29,880 --> 00:36:34,000
Speaker 1: a digital machine through software UM and you don't have

609
00:36:34,040 --> 00:36:37,200
Speaker 1: to sort of rebuild the capabilities into a new machine

610
00:36:37,239 --> 00:36:39,399
Speaker 1: you can just call on it. All of these are

611
00:36:39,560 --> 00:36:42,680
Speaker 1: unique to digital technologies. There's what they sort of set

612
00:36:42,680 --> 00:36:45,720
Speaker 1: them apart from say the steam engine or the other

613
00:36:46,239 --> 00:36:49,560
Speaker 1: general purpose technologies in the past. And I think that

614
00:36:49,560 --> 00:36:53,879
Speaker 1: that's These are the three things that are causing um

615
00:36:54,040 --> 00:36:58,359
Speaker 1: the pace at which digital technology is changing the world.

616
00:36:58,600 --> 00:37:03,560
Speaker 1: The second derivative, the rate of change is accelerating and

617
00:37:03,600 --> 00:37:07,840
Speaker 1: accelerating in a in an ever faster mode. Yeah, in

618
00:37:07,719 --> 00:37:10,880
Speaker 1: in some ways, the consumerization of digital the fact that

619
00:37:10,920 --> 00:37:14,120
Speaker 1: we've got sort of handheld computers that we can use

620
00:37:14,160 --> 00:37:18,000
Speaker 1: and carry around with a morble portable. Yeah. And then

621
00:37:18,040 --> 00:37:21,480
Speaker 1: on top of that, the app economy has allowed for

622
00:37:21,800 --> 00:37:28,840
Speaker 1: these really specialty, narrow purpose driven products, and that continues

623
00:37:28,880 --> 00:37:32,840
Speaker 1: to explode because the digitization and the exponential growth or

624
00:37:32,840 --> 00:37:35,760
Speaker 1: what put the smartphone in your hand at an affordable price,

625
00:37:36,280 --> 00:37:39,160
Speaker 1: and it's what makes one be able to predict twenty

626
00:37:39,200 --> 00:37:42,040
Speaker 1: years ago that this is going to happen. And then

627
00:37:42,080 --> 00:37:45,000
Speaker 1: the modularity means that you don't have to build all

628
00:37:45,040 --> 00:37:47,920
Speaker 1: the capabilities into the phone when you buy it. You

629
00:37:47,960 --> 00:37:51,040
Speaker 1: can start to sort of download them and extend what

630
00:37:51,200 --> 00:37:54,120
Speaker 1: your phone does for you in a modular way. Over

631
00:37:54,239 --> 00:37:58,960
Speaker 1: time and well, and that basically is what's going to

632
00:37:59,000 --> 00:38:03,680
Speaker 1: be the ongoing development of information technology. Those three and

633
00:38:04,120 --> 00:38:07,279
Speaker 1: and this is gonna explode even further as three D

634
00:38:07,360 --> 00:38:10,480
Speaker 1: printing comes of age. So your reference that it's it's

635
00:38:10,560 --> 00:38:14,719
Speaker 1: the old format was reductive. You you know, I I

636
00:38:14,880 --> 00:38:18,720
Speaker 1: forgot whose quote I'm stealing. Um, maybe it was michel Angelo.

637
00:38:18,760 --> 00:38:21,520
Speaker 1: I start with a block of marble and take everything away.

638
00:38:21,600 --> 00:38:24,720
Speaker 1: That's not the final sculpture, which is a little glib.

639
00:38:25,520 --> 00:38:29,200
Speaker 1: But three D printing is the opposite. It's additive. You're

640
00:38:29,239 --> 00:38:32,480
Speaker 1: adding layer on top of layer, and it's the design

641
00:38:32,600 --> 00:38:36,759
Speaker 1: that matters, not not necessarily the physical skill and in

642
00:38:36,840 --> 00:38:41,080
Speaker 1: producing it. And so what happens because of additive manufacturing

643
00:38:41,200 --> 00:38:43,960
Speaker 1: is that you might start to see what happened to

644
00:38:44,000 --> 00:38:47,520
Speaker 1: the newspaper industry happened to other industries where, you know,

645
00:38:47,600 --> 00:38:51,960
Speaker 1: the newspaper industry also relied on the movement of physical goods.

646
00:38:52,320 --> 00:38:55,520
Speaker 1: The newspapers, the distribution networks. Music was the same thing,

647
00:38:55,560 --> 00:38:58,520
Speaker 1: the retailing channels. All of that went away when the

648
00:38:58,520 --> 00:39:03,960
Speaker 1: products became digitized. Now, if you're selling jewelry in ten years, um,

649
00:39:04,000 --> 00:39:06,920
Speaker 1: you may not need a physical distribution network. You may

650
00:39:07,000 --> 00:39:09,200
Speaker 1: just have to come up with the best designs because

651
00:39:09,200 --> 00:39:12,880
Speaker 1: everybody is printing the jewelry that they want and adapting

652
00:39:12,920 --> 00:39:15,720
Speaker 1: it on their home three D printers, So a whole

653
00:39:15,760 --> 00:39:19,920
Speaker 1: host of new products start to become purely digital in

654
00:39:20,040 --> 00:39:24,680
Speaker 1: terms of selling them, and the consumer by themselves sort

655
00:39:24,680 --> 00:39:27,960
Speaker 1: of renders the design into physical form in the same

656
00:39:28,000 --> 00:39:30,799
Speaker 1: way that we're rendering the news into something that we

657
00:39:30,800 --> 00:39:34,480
Speaker 1: could read, or rendering the music. So so h three

658
00:39:34,560 --> 00:39:38,600
Speaker 1: D printing. Has There been some nice three D printers,

659
00:39:38,640 --> 00:39:41,160
Speaker 1: but it's not the sort of thing. Just about every

660
00:39:41,200 --> 00:39:44,280
Speaker 1: house in the United States has refrigerator, has a television

661
00:39:44,320 --> 00:39:46,880
Speaker 1: as a washing machine, but not every house has a

662
00:39:46,920 --> 00:39:50,600
Speaker 1: digital printer, a three D digital printer. How far off

663
00:39:50,640 --> 00:39:52,959
Speaker 1: in the future is that and what does that mean

664
00:39:53,080 --> 00:39:58,040
Speaker 1: for consumption of future goods and physical retail stores. Well,

665
00:39:58,080 --> 00:40:00,640
Speaker 1: I think that it's about ten years in to the future.

666
00:40:00,719 --> 00:40:05,120
Speaker 1: On two fronts. Um you will probably have a sort

667
00:40:05,120 --> 00:40:08,040
Speaker 1: of a limited functionality three D printer in your own home,

668
00:40:08,920 --> 00:40:11,520
Speaker 1: but there will be a network of print shops in

669
00:40:11,560 --> 00:40:14,319
Speaker 1: your neighborhood that will start to play some of the

670
00:40:14,440 --> 00:40:17,640
Speaker 1: role that the local retailer plays. Where you know, you

671
00:40:17,680 --> 00:40:21,040
Speaker 1: may not you for the more complicated items that need

672
00:40:21,080 --> 00:40:22,440
Speaker 1: to be printed. You may not want to do it

673
00:40:22,480 --> 00:40:24,000
Speaker 1: at home, but you just sort of walk down the

674
00:40:24,000 --> 00:40:26,799
Speaker 1: street and you know, send your design to the three

675
00:40:26,840 --> 00:40:28,960
Speaker 1: D printing shop and then pick up the object and

676
00:40:29,000 --> 00:40:31,960
Speaker 1: bring it back. This. You know, this is one of

677
00:40:32,040 --> 00:40:35,919
Speaker 1: many forces that is going to change physical retailing over

678
00:40:35,960 --> 00:40:39,359
Speaker 1: the coming decade. UM And I assume you're not a

679
00:40:39,400 --> 00:40:44,680
Speaker 1: big investor in large retail shopping malls. No, I'm not

680
00:40:44,719 --> 00:40:46,840
Speaker 1: a big investor in shopping malls. I'm not an investor

681
00:40:46,880 --> 00:40:50,319
Speaker 1: in power companies either. Why is that that's interesting? Well,

682
00:40:50,360 --> 00:40:53,640
Speaker 1: I'm starting to see us getting close to a point

683
00:40:53,880 --> 00:40:58,920
Speaker 1: where there will be good enough battery technology for us

684
00:40:58,920 --> 00:41:02,360
Speaker 1: to start to think of the individual as the producer

685
00:41:02,440 --> 00:41:04,839
Speaker 1: of power for the neighborhood. I mean, there are some

686
00:41:04,880 --> 00:41:07,080
Speaker 1: people who have a lot of roof space and they

687
00:41:07,080 --> 00:41:09,839
Speaker 1: don't need as much power. There are other people who

688
00:41:09,880 --> 00:41:12,600
Speaker 1: need more power they don't have enough roof space. And so,

689
00:41:13,360 --> 00:41:16,840
Speaker 1: you know, solar power technology right now is a I

690
00:41:16,960 --> 00:41:21,200
Speaker 1: install it for myself now, once we have good battery

691
00:41:21,239 --> 00:41:25,799
Speaker 1: technology that can store the power um and ways in

692
00:41:25,840 --> 00:41:28,799
Speaker 1: which we can retransmit it to people in our neighborhoods,

693
00:41:28,800 --> 00:41:31,920
Speaker 1: either overrid or smart grid where that routes it and

694
00:41:32,000 --> 00:41:35,120
Speaker 1: knows who's supplying and who's consuming it. Yeah, that's one way.

695
00:41:35,160 --> 00:41:39,240
Speaker 1: Another way is to actually transport the batteries themselves, physical batteries,

696
00:41:39,239 --> 00:41:42,960
Speaker 1: the physical batteries. That happens when it's local. Then then

697
00:41:43,000 --> 00:41:46,840
Speaker 1: you start to sort of realize that the fundamental underlying

698
00:41:46,840 --> 00:41:52,240
Speaker 1: economics of producing solar power dramatically superior to the coal

699
00:41:52,360 --> 00:41:56,200
Speaker 1: and gas technologies because they're not mechanicals. You don't lose

700
00:41:56,239 --> 00:41:58,560
Speaker 1: so much of the power as you're generating it. But

701
00:41:58,640 --> 00:42:04,200
Speaker 1: there's still solar still relatively inefficient. The photovoltaic cells capture

702
00:42:04,239 --> 00:42:08,480
Speaker 1: a tiny percentage of the solar energy that hits it.

703
00:42:08,880 --> 00:42:11,520
Speaker 1: We lose some in transmission, we lose some in storage.

704
00:42:12,000 --> 00:42:15,480
Speaker 1: How far away is that technology from? How many years

705
00:42:15,480 --> 00:42:19,279
Speaker 1: away is technology from what you're describing a higher efficiency

706
00:42:19,400 --> 00:42:22,680
Speaker 1: photo vote ex l and a much lower loss and

707
00:42:22,840 --> 00:42:27,239
Speaker 1: much longer lasting battery for for the storage of that energy. Well,

708
00:42:27,320 --> 00:42:33,000
Speaker 1: both those technologies are progressing rapidly, the photovoltaic technology perhaps

709
00:42:33,000 --> 00:42:36,120
Speaker 1: sort of more rapidly. Um, But I think what the

710
00:42:36,160 --> 00:42:39,600
Speaker 1: real key missing piece of the infrastructure here is is

711
00:42:39,640 --> 00:42:42,520
Speaker 1: the storage technology where you don't sort of lose it,

712
00:42:42,680 --> 00:42:46,320
Speaker 1: use it or lose it um And once that happens,

713
00:42:46,360 --> 00:42:50,160
Speaker 1: the critical infrastructure won't be the distribution infrastructure of the

714
00:42:50,200 --> 00:42:53,600
Speaker 1: production infrastructure. It will be the platform that sort of

715
00:42:53,680 --> 00:42:57,799
Speaker 1: ties together all these generators of power individual generators of

716
00:42:57,840 --> 00:43:02,520
Speaker 1: power and creates a market where this becomes comparable to

717
00:43:02,560 --> 00:43:05,799
Speaker 1: getting your power from the power plant. And so I

718
00:43:05,840 --> 00:43:08,239
Speaker 1: think we're going to see the emergence of this more

719
00:43:08,360 --> 00:43:12,759
Speaker 1: rapidly in countries where the traditional power infrastructure isn't quite

720
00:43:12,760 --> 00:43:15,640
Speaker 1: as reliable as it is in the United States. And

721
00:43:15,680 --> 00:43:18,680
Speaker 1: that's those are the fringes where you will see these

722
00:43:18,880 --> 00:43:22,040
Speaker 1: energy platforms come of age more in emerging markets than

723
00:43:22,120 --> 00:43:25,879
Speaker 1: developed nations. Initially, Yeah, but then once these grow up

724
00:43:25,920 --> 00:43:28,879
Speaker 1: and mature there, then they will start to take on, like,

725
00:43:28,960 --> 00:43:31,239
Speaker 1: you know, sort of the traditional energy industry. You know,

726
00:43:31,239 --> 00:43:34,400
Speaker 1: it's funny when you look at the emerging markets. They

727
00:43:34,680 --> 00:43:38,280
Speaker 1: jumped over plane old telephone lines. They went right to mobile.

728
00:43:38,840 --> 00:43:41,239
Speaker 1: Why do we want to wire an entire country for

729
00:43:41,320 --> 00:43:44,719
Speaker 1: phone when they're playing all telephone service. When mobile is

730
00:43:44,760 --> 00:43:48,759
Speaker 1: here and it's relatively cheap, and we're gonna more or

731
00:43:48,840 --> 00:43:51,600
Speaker 1: less see the same thing in energy is that is

732
00:43:51,600 --> 00:43:55,120
Speaker 1: that the expectation absolutely I think that the you know,

733
00:43:55,160 --> 00:43:58,920
Speaker 1: sort of the future for a lot of emerging markets

734
00:43:59,320 --> 00:44:02,719
Speaker 1: that don't reliable power supply is going to be a

735
00:44:02,719 --> 00:44:06,560
Speaker 1: more advanced future than the present for us today. And

736
00:44:06,920 --> 00:44:09,720
Speaker 1: again during the broadcast portion, we were talking about uber

737
00:44:09,760 --> 00:44:12,480
Speaker 1: and we were talking about lift. We didn't talk about

738
00:44:12,600 --> 00:44:15,920
Speaker 1: the car rent. So those are driving services where someone

739
00:44:16,000 --> 00:44:20,000
Speaker 1: will drive you. But you tell told the story of

740
00:44:20,560 --> 00:44:22,600
Speaker 1: you know, you live in New York, you don't have

741
00:44:22,640 --> 00:44:25,200
Speaker 1: a car, and then here are all these cars that

742
00:44:25,280 --> 00:44:28,640
Speaker 1: spend twenty three hours a day sitting there doing nothing.

743
00:44:29,280 --> 00:44:31,920
Speaker 1: You just wanted to borrow a car, do something for

744
00:44:32,000 --> 00:44:34,520
Speaker 1: half hour, put it back and leave a leave a

745
00:44:34,560 --> 00:44:38,080
Speaker 1: twenty on the dashboard. There are a bunch of these

746
00:44:38,120 --> 00:44:44,400
Speaker 1: services from zip car to get around to drive e um.

747
00:44:44,520 --> 00:44:47,080
Speaker 1: How what is their future like and and are there

748
00:44:47,680 --> 00:44:50,640
Speaker 1: what does this mean for the future of ownership To

749
00:44:50,920 --> 00:44:54,600
Speaker 1: someone like me who grew up a car meant freedom.

750
00:44:55,040 --> 00:44:57,960
Speaker 1: Kids the current generation they don't perceive it that way.

751
00:44:57,960 --> 00:45:00,640
Speaker 1: They could always get a car from somewhere. Yeah. I mean,

752
00:45:00,680 --> 00:45:02,440
Speaker 1: you know, you look at the number of sixteen to

753
00:45:02,560 --> 00:45:05,720
Speaker 1: nineteen year roles who have driver's licenses in the United States.

754
00:45:06,040 --> 00:45:08,360
Speaker 1: I think back in the eighties, it was over eighty

755
00:45:08,360 --> 00:45:12,640
Speaker 1: five percent. Today it's under fifty. That's amazing. So so

756
00:45:12,840 --> 00:45:15,120
Speaker 1: some of them are just going to stick with Uber. Yeah,

757
00:45:15,239 --> 00:45:18,640
Speaker 1: and some of them, the half that has a license,

758
00:45:19,000 --> 00:45:20,839
Speaker 1: they don't need to buy a car, They could just

759
00:45:21,640 --> 00:45:25,080
Speaker 1: rent one on demand from one of these services. Absolutely because, um,

760
00:45:25,080 --> 00:45:28,120
Speaker 1: you know, that notion that your car defines who you are,

761
00:45:28,680 --> 00:45:31,080
Speaker 1: all of this work that the auto industry put into

762
00:45:31,120 --> 00:45:35,200
Speaker 1: sort of making it a lifestyle, um, that's starting to

763
00:45:35,560 --> 00:45:38,759
Speaker 1: wither away for two reasons. One is that you know,

764
00:45:38,800 --> 00:45:40,840
Speaker 1: you call an uber on demand or a lift on

765
00:45:40,880 --> 00:45:42,560
Speaker 1: demand when you need, you don't really care what the

766
00:45:42,560 --> 00:45:44,760
Speaker 1: brand of the car is. You don't send it away

767
00:45:44,760 --> 00:45:46,560
Speaker 1: saying I wanted a Cadillac and you send me a

768
00:45:46,640 --> 00:45:50,040
Speaker 1: Chevy Um. But it's also that that statement of identity

769
00:45:50,080 --> 00:45:53,120
Speaker 1: among the youth is more through the mobile phone, that

770
00:45:53,239 --> 00:45:57,360
Speaker 1: they own their Instagram, Snapchat, Facebook profile, and so the

771
00:45:57,480 --> 00:46:00,279
Speaker 1: role of the automobile and defining who you are your

772
00:46:00,360 --> 00:46:03,520
Speaker 1: peers has become a lot less. So these you know,

773
00:46:03,600 --> 00:46:06,400
Speaker 1: I think that there are great prospects for platforms like

774
00:46:06,440 --> 00:46:10,080
Speaker 1: get Around on Turo in the United States, Drive, which

775
00:46:10,120 --> 00:46:13,359
Speaker 1: is taking over different countries in Europe, there's one called

776
00:46:13,400 --> 00:46:16,120
Speaker 1: pp Douche, which is, um, you know, sort of the

777
00:46:16,160 --> 00:46:20,400
Speaker 1: largest peer to peer car rental platform in China. Um.

778
00:46:20,440 --> 00:46:24,160
Speaker 1: You know, in twenty years, we would have shifted automobile,

779
00:46:24,440 --> 00:46:27,279
Speaker 1: the automobile industry to a place where for a lot

780
00:46:27,320 --> 00:46:31,120
Speaker 1: of people, it's an on demand service where the car

781
00:46:31,200 --> 00:46:33,719
Speaker 1: without the steering wheel is coming to pick you up

782
00:46:33,880 --> 00:46:35,520
Speaker 1: and take you where you want to go. So at

783
00:46:35,520 --> 00:46:38,520
Speaker 1: a certain point it's not just drivers on demand, it's

784
00:46:38,600 --> 00:46:41,080
Speaker 1: autonomous drivers on the Yeah. I mean, you know, I

785
00:46:41,120 --> 00:46:43,320
Speaker 1: know that Uber projects that that future is going to

786
00:46:43,400 --> 00:46:46,360
Speaker 1: come in five years. I think that that's aggressive, ten years,

787
00:46:46,360 --> 00:46:49,719
Speaker 1: twenty years on that range. Yeah, it's um you know,

788
00:46:49,800 --> 00:46:52,240
Speaker 1: I think the path through which we'll see it emerge

789
00:46:52,280 --> 00:46:56,279
Speaker 1: initially is through the on demand platforms, because they can

790
00:46:56,360 --> 00:46:58,799
Speaker 1: vouch for the autonomous vehicles. They can say, listen, we'll

791
00:46:58,880 --> 00:47:01,200
Speaker 1: keep the speeds under two any we'll make sure they

792
00:47:01,239 --> 00:47:03,960
Speaker 1: don't drive in front of schools, and so they will

793
00:47:04,000 --> 00:47:08,440
Speaker 1: sort of introduce them before say Tesla has a car

794
00:47:08,520 --> 00:47:12,000
Speaker 1: without a steering wheel. I'm thinking long haul truckers are

795
00:47:12,040 --> 00:47:16,600
Speaker 1: probably the first place we see that really adapted because

796
00:47:16,680 --> 00:47:19,759
Speaker 1: it's mostly highway and it's really easy to keep that defined.

797
00:47:20,400 --> 00:47:23,759
Speaker 1: Local driving is a little more challenging. Absolutely. I think

798
00:47:23,880 --> 00:47:26,640
Speaker 1: Uber bought a sort of a long haul saw the

799
00:47:26,760 --> 00:47:31,080
Speaker 1: Less trucking company. It's kind of it's kind of fascinating. Um.

800
00:47:31,120 --> 00:47:33,880
Speaker 1: And then there was before we get to my favorite questions, Uh,

801
00:47:34,200 --> 00:47:40,680
Speaker 1: there was a company mentioned in the book, Feastly. What

802
00:47:40,880 --> 00:47:44,120
Speaker 1: is Feastly, Well, Feastly is one of a number of

803
00:47:44,160 --> 00:47:48,040
Speaker 1: platforms that allow you to convert your dining room into

804
00:47:48,239 --> 00:47:52,160
Speaker 1: a restaurant occasionally. So if you like to prepare food

805
00:47:52,280 --> 00:47:54,839
Speaker 1: and you're good at it, um, you prepare a meal

806
00:47:54,960 --> 00:47:58,440
Speaker 1: you listed on Feastly, and you know that, you say, well,

807
00:47:58,480 --> 00:48:00,880
Speaker 1: here's the menu, and it's forty five dollars a seat,

808
00:48:01,520 --> 00:48:04,520
Speaker 1: and people will either book the entire table or if

809
00:48:04,520 --> 00:48:06,000
Speaker 1: you're in a new city and you want to hang

810
00:48:06,000 --> 00:48:08,239
Speaker 1: out and sort of eat at someone's home with a

811
00:48:08,239 --> 00:48:11,680
Speaker 1: bunch of locals, that's the way to do it. How

812
00:48:11,840 --> 00:48:15,080
Speaker 1: widespread has that been in terms of being adopted. So

813
00:48:15,120 --> 00:48:18,480
Speaker 1: in other words, we've already done taxis, we've already done hotels.

814
00:48:18,560 --> 00:48:21,320
Speaker 1: Now we're looking at restaurants. Yep. I think that restaurants

815
00:48:21,320 --> 00:48:24,440
Speaker 1: are being challenged by you know, these supper clubs on

816
00:48:24,520 --> 00:48:27,200
Speaker 1: demand like Feastly. And there's another one called Eat with

817
00:48:28,160 --> 00:48:32,080
Speaker 1: um with Yep, and it's essentially just a supper club

818
00:48:32,120 --> 00:48:35,200
Speaker 1: on demand. Ye. People who enjoy cooking, people who enjoy

819
00:48:35,480 --> 00:48:38,439
Speaker 1: entertaining and serving. It's a way for them to meet

820
00:48:38,440 --> 00:48:40,719
Speaker 1: people and other people to get together. Yeah, there's also

821
00:48:40,719 --> 00:48:44,840
Speaker 1: a platform called Josephine, which is not um I feed

822
00:48:44,840 --> 00:48:46,840
Speaker 1: you in my home, but I prepare it in my

823
00:48:46,960 --> 00:48:49,399
Speaker 1: kitchen and send it to you. So this is sort

824
00:48:49,400 --> 00:48:53,520
Speaker 1: of the next generation of restaurants and seamless UM. All

825
00:48:53,520 --> 00:48:57,920
Speaker 1: of these platforms are starting to face regulatory pushback from

826
00:48:57,960 --> 00:49:00,640
Speaker 1: you know, the departments of Health. I mean you've been

827
00:49:00,680 --> 00:49:02,680
Speaker 1: in a number of New York City kitchens. I mean

828
00:49:02,719 --> 00:49:04,600
Speaker 1: none of our kitchens is going to sort of pass

829
00:49:04,719 --> 00:49:08,279
Speaker 1: the Department of Health inspection, right, So probably not. And

830
00:49:08,320 --> 00:49:11,280
Speaker 1: so although it used to be that have the restaurants

831
00:49:11,280 --> 00:49:14,640
Speaker 1: in New York before the abc D grades, a lot

832
00:49:14,640 --> 00:49:18,040
Speaker 1: of those restaurants didn't have the greatest kitchens. And as

833
00:49:18,120 --> 00:49:20,920
Speaker 1: much as the restaurant industry pushed back on those grades,

834
00:49:22,120 --> 00:49:24,120
Speaker 1: it's the healthiest has ever been to go out to

835
00:49:24,160 --> 00:49:28,520
Speaker 1: eat in terms of food poisoning and things along those lines.

836
00:49:28,680 --> 00:49:31,000
Speaker 1: And I think Yelp has played a role as well

837
00:49:31,040 --> 00:49:34,560
Speaker 1: in being able to sort of direct the government attention

838
00:49:34,680 --> 00:49:37,800
Speaker 1: to the restaurants that need it. You know, most city

839
00:49:37,840 --> 00:49:41,439
Speaker 1: governments actually have automated systems that mine Yelp and sort

840
00:49:41,480 --> 00:49:44,200
Speaker 1: of look for things like food railing. And I had

841
00:49:44,200 --> 00:49:49,200
Speaker 1: no idea, and I feel sick when those that word

842
00:49:49,320 --> 00:49:52,440
Speaker 1: will kick out something and or um, you know, just

843
00:49:52,520 --> 00:49:55,279
Speaker 1: that a bunch of keywords that signal that something needs

844
00:49:55,280 --> 00:49:57,160
Speaker 1: to be done, and then they send an inspector there.

845
00:49:57,320 --> 00:50:01,719
Speaker 1: That's fascinating, the interplay of of the ratings and social

846
00:50:02,000 --> 00:50:05,440
Speaker 1: with government, and I think that's the future of regulation

847
00:50:05,680 --> 00:50:09,840
Speaker 1: for this sort of more fluid sort of personal professional blurring,

848
00:50:10,440 --> 00:50:13,720
Speaker 1: you know, restaurant and food delivery industry where you can't

849
00:50:13,760 --> 00:50:16,440
Speaker 1: have government inspectors sort of doing all the work. If

850
00:50:16,480 --> 00:50:19,360
Speaker 1: you've got half a million people who are occasionally delivering food,

851
00:50:19,760 --> 00:50:23,279
Speaker 1: you need some sort of peer feedback system, maybe pere monitoring,

852
00:50:23,760 --> 00:50:26,360
Speaker 1: looking at the data on the platform and using the

853
00:50:26,400 --> 00:50:29,799
Speaker 1: government resources more judiciously. Mess up enough time, get a

854
00:50:29,800 --> 00:50:32,839
Speaker 1: bit enough rating in the government will will shut you down,

855
00:50:32,920 --> 00:50:35,160
Speaker 1: prevent you from doing this in the Yeah, and meanwhile

856
00:50:35,200 --> 00:50:37,680
Speaker 1: the platform will send an expert to you to sort

857
00:50:37,719 --> 00:50:41,280
Speaker 1: of help you sort of get up to speed and UM,

858
00:50:41,320 --> 00:50:43,319
Speaker 1: like you know, sort of get on board before the

859
00:50:43,400 --> 00:50:46,080
Speaker 1: need for like government intervention comes along. I know I

860
00:50:46,160 --> 00:50:48,359
Speaker 1: only have you for another ten or so minutes, so

861
00:50:48,480 --> 00:50:52,520
Speaker 1: let me jump into some of my favorite questions. You've

862
00:50:52,560 --> 00:50:54,680
Speaker 1: been at in h you for a while before that.

863
00:50:55,560 --> 00:50:58,319
Speaker 1: You are a couple of other schools. Who are some

864
00:50:58,400 --> 00:51:01,920
Speaker 1: of your early mentors who really influenced your the development

865
00:51:02,000 --> 00:51:06,200
Speaker 1: of your career, And you're thinking, well, Um, I'd have

866
00:51:06,280 --> 00:51:10,400
Speaker 1: to say that um, as a researcher, the person who

867
00:51:10,400 --> 00:51:13,279
Speaker 1: perhaps was the most influential to me is an economist

868
00:51:13,320 --> 00:51:17,520
Speaker 1: called Roy Radner. Um. He's like a world class economist.

869
00:51:17,600 --> 00:51:19,640
Speaker 1: I worked a lot with him right after joining n

870
00:51:19,800 --> 00:51:23,400
Speaker 1: y U, and he really shaped my thinking on two fronts.

871
00:51:23,480 --> 00:51:26,880
Speaker 1: One is what does it mean to ask an answer

872
00:51:27,000 --> 00:51:30,560
Speaker 1: questions that really matter, to not think of research as

873
00:51:30,600 --> 00:51:33,000
Speaker 1: sort of an end to itself, but a means to

874
00:51:33,200 --> 00:51:36,359
Speaker 1: understanding the world better. And I think he's also got

875
00:51:36,360 --> 00:51:42,200
Speaker 1: an approach to treating other human beings as equals that

876
00:51:42,440 --> 00:51:46,160
Speaker 1: is really remarkable and was very influential and sort of

877
00:51:46,160 --> 00:51:50,600
Speaker 1: how I interact with the world very interesting. Um, what

878
00:51:50,719 --> 00:51:55,760
Speaker 1: about other technologists venture capitalists, other folks like that. Who's

879
00:51:55,840 --> 00:51:58,920
Speaker 1: influenced your thought process when looking at some of these

880
00:51:59,520 --> 00:52:02,920
Speaker 1: luma rolls, new companies, new ideas in the in the

881
00:52:02,960 --> 00:52:06,279
Speaker 1: sharing economy, Well, um, if I look at the sort

882
00:52:06,280 --> 00:52:09,040
Speaker 1: of the most recent crop of UM, like, you know,

883
00:52:09,080 --> 00:52:13,120
Speaker 1: technology leaders. Um. I've been very impressed by the way A.

884
00:52:13,239 --> 00:52:16,560
Speaker 1: B and B is run. And I really think that

885
00:52:16,600 --> 00:52:20,200
Speaker 1: there's a lot of inspiring thought that has come out

886
00:52:20,239 --> 00:52:26,200
Speaker 1: of Brian Chesky, Jgba, and Nate the three co founders UM.

887
00:52:26,239 --> 00:52:30,200
Speaker 1: In particular sort of Brian's idea that, um, you know,

888
00:52:30,280 --> 00:52:34,319
Speaker 1: everything is a design problem that you know, you've got

889
00:52:34,320 --> 00:52:38,160
Speaker 1: to design the world that you want because otherwise someone

890
00:52:38,239 --> 00:52:41,080
Speaker 1: else is going to design it for you and you

891
00:52:41,120 --> 00:52:43,759
Speaker 1: may not like what you get, and so sort of

892
00:52:43,800 --> 00:52:47,319
Speaker 1: take control and design your own reality. I've read things

893
00:52:47,400 --> 00:52:49,960
Speaker 1: he's written about that and they're quite fascinating. Yeah, and

894
00:52:50,000 --> 00:52:52,400
Speaker 1: I think that that's core actually to why A. B

895
00:52:52,560 --> 00:52:55,840
Speaker 1: and B is successful, because the idea that you can

896
00:52:56,000 --> 00:52:59,640
Speaker 1: build a platform that will connect individuals with spare space

897
00:52:59,800 --> 00:53:02,600
Speaker 1: was to a new one. It was really the design

898
00:53:02,640 --> 00:53:05,840
Speaker 1: of the experience for both the person who's staying and

899
00:53:05,960 --> 00:53:10,040
Speaker 1: the person who is hosting and designing it carefully as

900
00:53:10,040 --> 00:53:13,239
Speaker 1: an experience that doesn't just work for someone renting out

901
00:53:13,239 --> 00:53:17,080
Speaker 1: a vacation property, but works for someone renting out their bedroom,

902
00:53:17,120 --> 00:53:19,759
Speaker 1: renting out their entire apartment. I mean this is this

903
00:53:19,840 --> 00:53:23,160
Speaker 1: is really a design accomplishment and not a technology accomplishment.

904
00:53:23,400 --> 00:53:25,560
Speaker 1: Very interesting. Let's let's talk a little bit about books.

905
00:53:25,560 --> 00:53:28,680
Speaker 1: What are some of your favorite books, be they fiction

906
00:53:28,800 --> 00:53:33,160
Speaker 1: or nonfiction and related to technology or or finance or

907
00:53:33,200 --> 00:53:36,839
Speaker 1: not so. Apart from Code and other laws of cyberspace,

908
00:53:36,880 --> 00:53:39,120
Speaker 1: another book that I've really been influenced by is a

909
00:53:39,120 --> 00:53:42,239
Speaker 1: book called Collapse by Jared Diamond. I think that it

910
00:53:42,320 --> 00:53:46,160
Speaker 1: sort of lays out this pattern of why civilizations rise

911
00:53:46,200 --> 00:53:50,000
Speaker 1: and fall in a way that was incredibly compelling through

912
00:53:50,280 --> 00:53:53,320
Speaker 1: sort of research that was done over thousands of years,

913
00:53:54,160 --> 00:53:58,000
Speaker 1: over a thousand year period um. I've personally been influenced

914
00:53:58,040 --> 00:54:01,520
Speaker 1: by this wonderful book called siddarth Uh by Herman Hess.

915
00:54:02,120 --> 00:54:04,640
Speaker 1: I think anybody who's a parent should read this book

916
00:54:04,680 --> 00:54:09,399
Speaker 1: because it's sort of defines what to expect um like,

917
00:54:09,440 --> 00:54:11,759
Speaker 1: you know, later in the process of parenting, and it's

918
00:54:11,800 --> 00:54:15,000
Speaker 1: just you know, it's a slim volume really sort of

919
00:54:15,080 --> 00:54:17,760
Speaker 1: changes the way that you think about the world. UM,

920
00:54:17,960 --> 00:54:22,480
Speaker 1: Jared Diamond had written a book what is it, um, Guns,

921
00:54:22,560 --> 00:54:25,359
Speaker 1: Germs and Steel. Is that I remember reading that for

922
00:54:25,400 --> 00:54:27,600
Speaker 1: a while ago and thinking it was fascinating. I haven't

923
00:54:27,640 --> 00:54:30,960
Speaker 1: read collaption. Collapse and the Third Chimpanzee are both like

924
00:54:31,040 --> 00:54:33,480
Speaker 1: really interesting. All we'll put we'll put that down on

925
00:54:33,520 --> 00:54:37,360
Speaker 1: our last third Chimpanzee. UM. So, since you started looking

926
00:54:37,360 --> 00:54:42,440
Speaker 1: at technology and the sharing economy, what's been the single

927
00:54:42,480 --> 00:54:47,480
Speaker 1: biggest change? What is what has altered this? Well? UM,

928
00:54:47,520 --> 00:54:50,160
Speaker 1: you know, I started programming when I was a teenager,

929
00:54:50,760 --> 00:54:54,240
Speaker 1: and so I used computers for many years before the Internet.

930
00:54:54,840 --> 00:54:56,839
Speaker 1: And so while this is a cliche to answer, it's

931
00:54:56,840 --> 00:55:01,200
Speaker 1: pretty clear that the commercialization of the Internet at has

932
00:55:01,239 --> 00:55:05,040
Speaker 1: been the single biggest technological shift that I've seen, like

933
00:55:05,120 --> 00:55:08,480
Speaker 1: you know, in my studying digital technology. I think the

934
00:55:08,520 --> 00:55:11,840
Speaker 1: consumerization of digital that we saw in the late nineties

935
00:55:12,280 --> 00:55:14,480
Speaker 1: is perhaps sort of like you know, the most significant

936
00:55:14,480 --> 00:55:18,920
Speaker 1: manifestation of this. UM. I'm expecting great things from the

937
00:55:18,920 --> 00:55:21,560
Speaker 1: blockchain and I think we're at I think a lot

938
00:55:21,560 --> 00:55:26,279
Speaker 1: of people are, and so far it's been unfulfilled promises.

939
00:55:26,440 --> 00:55:28,560
Speaker 1: Is that a fair statement? UM? I think that it's

940
00:55:28,640 --> 00:55:31,520
Speaker 1: really early days. UM. I put sort of where we

941
00:55:31,560 --> 00:55:34,520
Speaker 1: are with the block chain today as where we were

942
00:55:34,600 --> 00:55:39,200
Speaker 1: with the internet. Um in like this was like a

943
00:55:39,239 --> 00:55:42,479
Speaker 1: couple of years before the emergence of Netscape or any

944
00:55:42,520 --> 00:55:44,879
Speaker 1: of the browsers, before the world wide Once we got

945
00:55:44,880 --> 00:55:47,719
Speaker 1: to a graphical interface, suddenly everythink took off. And so

946
00:55:47,760 --> 00:55:49,640
Speaker 1: they're going to be layers built on top of the

947
00:55:49,640 --> 00:55:52,800
Speaker 1: blockchain that will suddenly bring it to life, and then

948
00:55:52,840 --> 00:55:55,719
Speaker 1: over the next decade it will start to change a

949
00:55:55,760 --> 00:55:59,960
Speaker 1: lot of businesses. I don't think it's gonna disintermediate as

950
00:56:00,080 --> 00:56:01,760
Speaker 1: much of a lot as a lot of other people

951
00:56:01,840 --> 00:56:03,680
Speaker 1: think it is, but I think it's going to be

952
00:56:03,719 --> 00:56:08,399
Speaker 1: a tremendous source of efficiency. So outside of your work,

953
00:56:08,520 --> 00:56:13,200
Speaker 1: what do you do to relax and kick back? Oh? Um,

954
00:56:13,239 --> 00:56:15,960
Speaker 1: you know a lot of different things. Um. I I

955
00:56:16,040 --> 00:56:20,280
Speaker 1: like to ski. UM. I like beaches. I like quiet beaches.

956
00:56:20,480 --> 00:56:24,320
Speaker 1: I try to travel too. I try to travel to

957
00:56:24,480 --> 00:56:28,600
Speaker 1: beaches that I don't know about as much as I can. UM.

958
00:56:28,640 --> 00:56:32,719
Speaker 1: I like to read. Um, I like parks. Um you

959
00:56:32,760 --> 00:56:35,880
Speaker 1: know I um you know, I do strength training in

960
00:56:35,920 --> 00:56:38,160
Speaker 1: the gym when I can. I sort of yeah. I

961
00:56:38,200 --> 00:56:43,520
Speaker 1: focus on movements that replicate what you do in everyday

962
00:56:43,560 --> 00:56:46,560
Speaker 1: life as opposed to machines, and so I would do

963
00:56:46,640 --> 00:56:49,600
Speaker 1: a dead lift or a squat over sort of machines

964
00:56:49,640 --> 00:56:53,520
Speaker 1: that isolate particular muscles. That's interesting that, by the way,

965
00:56:53,560 --> 00:56:56,480
Speaker 1: that is a question that has come to a come

966
00:56:56,520 --> 00:56:58,920
Speaker 1: to us from a reader who said, you ask all

967
00:56:58,920 --> 00:57:01,520
Speaker 1: these same questions of your guests at the end of

968
00:57:01,560 --> 00:57:04,040
Speaker 1: the interview, here's something that I'd really like to know.

969
00:57:04,160 --> 00:57:07,560
Speaker 1: And you're the second person we've we've worked that in with.

970
00:57:07,960 --> 00:57:11,640
Speaker 1: So so now we're down to my two favorite questions.

971
00:57:11,800 --> 00:57:14,960
Speaker 1: And you work with students, and many of whom are millennials.

972
00:57:15,600 --> 00:57:18,640
Speaker 1: What sort of advice would you give to a recent

973
00:57:18,720 --> 00:57:23,080
Speaker 1: college graduate or a millennial who wanted to go into

974
00:57:23,240 --> 00:57:29,600
Speaker 1: either technology or venture capital as a field. Well, the

975
00:57:29,640 --> 00:57:33,480
Speaker 1: one consistent piece of advice I give recent college college

976
00:57:33,520 --> 00:57:38,080
Speaker 1: graduates or millennials is to expect that the world of

977
00:57:38,120 --> 00:57:40,520
Speaker 1: work that they're going to be facing in twenty years

978
00:57:41,040 --> 00:57:45,120
Speaker 1: is very different from the world of work today. UM

979
00:57:45,240 --> 00:57:50,440
Speaker 1: STEM capabilities are going to matter less science, technology, engineering

980
00:57:50,440 --> 00:57:59,000
Speaker 1: and math and design, thinking, creativity, ent apprenticeship, um interpersonal interaction.

981
00:57:59,160 --> 00:58:01,400
Speaker 1: These are the skills that are going to matter more

982
00:58:02,240 --> 00:58:05,560
Speaker 1: UM and so think of your career as not working

983
00:58:05,680 --> 00:58:08,840
Speaker 1: for someone else, but as sort of defining your own

984
00:58:08,960 --> 00:58:13,520
Speaker 1: path and accumulate the skills for that. Um. For the

985
00:58:13,520 --> 00:58:16,520
Speaker 1: ones who want to go into venture capital, I tell

986
00:58:16,560 --> 00:58:18,760
Speaker 1: them that the only way to learn how to be

987
00:58:18,840 --> 00:58:22,720
Speaker 1: a venture capitalist is to do it. There are lots

988
00:58:22,720 --> 00:58:25,680
Speaker 1: of platforms that allow you to do it today. And

989
00:58:25,800 --> 00:58:29,200
Speaker 1: so you know, if you want to become an investment banker,

990
00:58:29,280 --> 00:58:31,040
Speaker 1: you try and join one of the big banks as

991
00:58:31,040 --> 00:58:34,480
Speaker 1: an associate, that isn't really the path in venture capital.

992
00:58:34,920 --> 00:58:38,000
Speaker 1: And so you know, if you really wanna either by

993
00:58:38,120 --> 00:58:42,360
Speaker 1: working for early stage companies or by investing yourself build

994
00:58:42,400 --> 00:58:44,920
Speaker 1: up a portfolio, if you want to be a venture capitalist.

995
00:58:45,320 --> 00:58:49,120
Speaker 1: Very interesting and our final question, what is it that

996
00:58:49,160 --> 00:58:53,240
Speaker 1: you know about technology in the rise of the new

997
00:58:53,320 --> 00:58:57,720
Speaker 1: digital sharing environment today that you wish you knew ten

998
00:58:57,800 --> 00:59:02,040
Speaker 1: or fifteen years ago. Well, Um, one of the things

999
00:59:02,080 --> 00:59:06,360
Speaker 1: I wish I had seen is, um, just how dramatic

1000
00:59:06,680 --> 00:59:10,840
Speaker 1: the consumerization of digital was going to be. Um, you know,

1001
00:59:10,920 --> 00:59:13,680
Speaker 1: back in two thousand, sort of looking on the horizon,

1002
00:59:13,800 --> 00:59:16,960
Speaker 1: seeing the iPod, UM, it wasn't as clear to me

1003
00:59:17,040 --> 00:59:20,440
Speaker 1: that we were going to see as rapid apace of

1004
00:59:20,520 --> 00:59:23,560
Speaker 1: consumer technology adoption and all of the changes that came

1005
00:59:23,600 --> 00:59:27,120
Speaker 1: with it, because had I seen that coming out of

1006
00:59:27,200 --> 00:59:29,440
Speaker 1: bought a ton of Apple stock at the time, because

1007
00:59:29,480 --> 00:59:31,280
Speaker 1: you know, they were really the only game in town

1008
00:59:31,320 --> 00:59:33,240
Speaker 1: at that point. I mean, you know, they had a

1009
00:59:33,280 --> 00:59:36,920
Speaker 1: tenure headstart over everybody else in terms of thinking about

1010
00:59:36,960 --> 00:59:40,320
Speaker 1: the consumer as you know, sort of the audience for

1011
00:59:40,400 --> 00:59:47,440
Speaker 1: technology products. Um, that's quite interesting. We've been speaking with

1012
00:59:47,480 --> 00:59:52,000
Speaker 1: Professor Arons UNDERAJN of n y u's Stern School of Business.

1013
00:59:52,720 --> 00:59:55,320
Speaker 1: If you enjoy this conversation, be sure and look up

1014
00:59:55,320 --> 00:59:57,760
Speaker 1: an Inch or down an Inch on iTunes and you

1015
00:59:57,760 --> 01:00:00,600
Speaker 1: could see the other hundred and nine in or so

1016
01:00:00,720 --> 01:00:04,160
Speaker 1: such conversations we've had over the past two years. I

1017
01:00:04,200 --> 01:00:07,320
Speaker 1: would be remiss if I did not thank Taylor Riggs,

1018
01:00:07,360 --> 01:00:11,880
Speaker 1: my booker, Charlie Volmer, our recording engineer, and Michael Batnick,

1019
01:00:12,240 --> 01:00:15,040
Speaker 1: our head of research, for helping to put together these

1020
01:00:15,080 --> 01:00:20,200
Speaker 1: interviews and podcasts. We love your comments, feedback and suggestions.

1021
01:00:20,320 --> 01:00:22,880
Speaker 1: Be sure and write to us at m I B

1022
01:00:23,240 --> 01:00:27,640
Speaker 1: podcast at Bloomberg dot net. I'm Barry Ridults. You've been

1023
01:00:27,680 --> 01:00:31,840
Speaker 1: listening to Masters in Business on Bloomberg Radio, brought to

1024
01:00:31,880 --> 01:00:35,000
Speaker 1: you by Bank of America. Merrill Lynch committed to bringing

1025
01:00:35,080 --> 01:00:38,640
Speaker 1: higher finance to lower carbon named the most innovative investment

1026
01:00:38,640 --> 01:00:42,240
Speaker 1: bank for climate change and sustainability by the Banker. That's

1027
01:00:42,280 --> 01:00:45,880
Speaker 1: the power of global connections. Bank of America North America

1028
01:00:46,000 --> 01:00:46,920
Speaker 1: member f d i C