Episode 137: Our Future with Technology [2/7 Series] with Steve Brown

Announcer:
This is The WealthAbility® Show with Tom Wheelwright. Way more money, way less taxes.

Tom Wheelwright:

Welcome to the Wealth Ability Show, where we're always discovering how to make way more money and pay way less taxes. Hi. This is Tom Wheelwright, your host, founder, and CEO of Wealth Ability. So we all know technology is important, we all have technology in our lives, but why is it so important that the government would actually incentivize technology? And what are those technologies down the road that our really strategic and they're going to change the future? And we have a very special guest with us today, Steve Brown, who is a futurist. He's an expert in technology with over 30 years of experience in technology. And Steve, it is absolutely a pleasure to have you on the Wealth Ability Show.

Steve Brown:

Pleasure to be here and I'm glad I've made it by hook or by crook. It almost didn't happen.

Tom Wheelwright:

I am so glad you made it. So if you would just give us a little of your background, Steve, because it's pretty impressive.

Steve Brown:

Sure. So I spent 30 years in tech, as you mentioned, a long time at Intel sort of during their heyday. So I had a lot of different positions with them. Everything from manufacturing through marketing and I rose to be the chief evangelist and futurist. So I spent my time thinking about the world 10 years out. So my brain is sort of trained to think about the world five to 10 years in the future and what people will be doing with technology. So how we can use technology to improve people's lives, to streamline businesses and so on.

After I'd had my time at Intel, I decided it would be fun to go on the speaking circuit and write a book. So I did that for five or six years and had a successful business talking to Fortune 100 businesses about where technology was going, what it meant for them to help them think through the strategic implications for their business. And then I got asked to go and spend a bit of time working with DeepMind. So DeepMind is, for those of you who don't know them, they are a British company but they are an alphabet company. So Google owns them wholly and they are an AI research company. So if you're hearing a lot about open AI in the press, they are kind of the counterbalance side of that with Google.

Although, the technology that Google has recently wheeled out, Bard is not based on DeepMind technology. DeepMind is also famous for creating a computer that was the first computer to beat a human being at the game of Go, so you may have heard about them that way as well. I'm now back in Portland, Oregon where I've lived for about almost 30 years now and figuring out what's next for me.

Tom Wheelwright:

Well that's awesome. So it's a pleasure to have you on the show. So in our last show we talked about business and business really the foundation for really all government incentives. Really all big wealth building is business. Technology is a natural next step because technology is what drives business. Technology has kind of become the foundation of business. And I know you talk a lot about how important technology is to business, but if we can, and we can step back a little bit and really look at are from a big picture standpoint, why have we come to rely so much on technology? Why has technology become so important in the lives of the everyday?

Steve Brown:

Because it's so powerful and it's transformational. And the difference in the way that a business can run with and without technology is the difference between winning and losing. And technology has always transformed our ability to get things done. I mean even simple technologies like a hammer, you can get a lot more done in a day working on a construction site with a hammer than without. It's a simple tool but it's technology. And so embracing technology is what gives businesses the edge over their competitors. And even you have access to the same technology, it comes down to who implements it and who makes the best use of that technology to gain the best advantage. It's as simple as that.

Tom Wheelwright:

Yeah. So speaking of that, so that kind of brings me back to the government actually highly incentivizes technology. I mean we know that Amazon and Tesla both didn't pay tax for years. They had a lot more capital as a result of that. We know that France for example, has incentivized its technology companies is South Africa has heavy tax incentives for technology. Why does the government get so involved? And we saw it in Operation Warp Speed with the vaccines. We get it for the vaccines, we got why they got involved there. But typically why do they generally stay involved? Because they seem to be so involved in encouraging technological development.

Steve Brown:

Yeah, I think it comes back to that old saying it's the economy, stupid. It is key to creating economic engines. Tesla is an economic engine that employs people and puts money into their communities. Governments are incentivized to make the economy go. And one of the ways you can turbocharge an economy is to invest in technology. I just came back, I lived in London for the last 18 months, earlier this week. And people are talking in parliament, in the British Parliament about we need a British GPT. So Chat GPT, this open AI platform that's got everybody's attention. Recently the British Parliament is talking about we don't want to get left behind as a country and we need to invest in the technology and build the hardware so that British businesses can be competitive in this next era of computing built around AI.

So it's a very common thing for governments to look at economic wealth generation, value generation through the lens of what are the technologies we need to invest in and what are the companies which are the crucibles where all of that ferment? How do we help them to be successful as quickly as possible?

Tom Wheelwright:

That's really interesting. I mean, I was just talking this morning with a friend of mine about when I fly these days, I'm pretty much flying on an Airbus. I'm flying on a French plane. I'm not flying on a Boeing plane. I'm flying on a French plane. So France has definitely, they put that money into Airbus and into that technology. And then we see the most recent tax bill in the U.S., the so-called Inflation Reduction Act. And we see now Tesla bringing their battery production into the U.S. because of the U.S. wants to be the ones building the batteries. So it does seem like there is a lot of competition for technology among different countries. So not just in general, not just among businesses, but among countries.

Steve Brown:

Well, yeah. And the current geopolitical climate where things are stressful let's say, and there's pressure. Russia and China are not necessarily our friends. Look at the semiconductor industry. They're trying to make sure that they reshore a lot of semiconductor manufacturing because it's crucial to some very complicated supply chains in the United States. And if you don't have components, I mean the car industry found this out during COVID. They couldn't get the components they needed and they had cars finished, but because they couldn't put the chips in them, they couldn't sell them. And so there's a big effort now to reshore manufacturing. And the government's been giving out incentives with CHIPS Act to make that happen because there's over reliance on TSMC who are largely based in Taiwan and this could be some stress there. So yeah, it's important as well for resilience and to be able to protect your supply chains and supply networks to make sure that you can continue to function.

Tom Wheelwright:

So here's a question for you. Why doesn't the government just do their own technology? Why is it that they rely so much on independent entrepreneurs and businesses to develop the technology?

Steve Brown:

Well, a cynical person would say, have you seen the government ever do anything on their own bits that's good? I mean the government can do that and they do do that. I mean places like DARPA have created incredible technology. And we have GPS on the internet thanks to the U.S. government, and that's changed the way that we live. But I mean there are smart people everywhere and in the system that we have people form into companies. And there are more smarter people outside the government, outside DARPA, than there are inside DARPA. So yes, fund DARPA and you get amazing things out of them like the internet and GPS. But if you also create incentives and support people in the companies, that's where you get the best bang for the buck.

Tom Wheelwright:

Yeah. And of course entrepreneurs, the job of an entrepreneur is to solve a problem. And you were with Intel quite a while ago. I'm sitting here in Phoenix, Arizona, so I'm obviously a big fan of Intel. Intel's had a big impact and they're building more chip manufacturers here as is Taiwan. So we do see a lot of that. I see it whenever I drive outside and it's certainly has played a big role. So you had this job as the futurist. So how do you describe that job? What does a futurist do?

Steve Brown:

Yeah, it's a good question. Some people think I would just go and sit in a dark room and smoke peyote and think amazing thoughts. I wish it was that. It is a discipline. It is a real job. It's not a made up job. Although there are some people I think sort of float around and call themselves futurists and they're just prognosticators. But it is a discipline of examining data and looking at the confluence of trends. So to be a good futurist, I think you have to be able to understand technology, just because as we started talking about it is such a powerful disruptor. It is a force that can change many things. So you have to understand technology, it's trajectories. When it's likely to go from a niche technology to something that's mainstream, what the price curves are going to be like so it can become affordable for more people and so on.

So understanding technology, understanding industries and how they work, what the ongoing forces are within those industries. Is there strong regulation like there is in healthcare. Are there other [inaudible 00:11:27]? Are there infrastructure challenges in transportation and so on. So understanding different industries and ecosystems and how they work. And then most importantly, understanding people. So when I was the futurist at Intel, my boss was a cultural anthropologist, Stanford PhD. And she taught me it all starts with people. You have to understand their motivations, their interests, their aspirations, what they're interested in and what they want to achieve ultimately with technology. What are their challenges in life? And they may not know that technology's a solution, but they can tell you what their challenges are.

And so it's a creative pursuit of combining an understanding of business technology trends and people. And I worked in a group of social scientists, ethnographers, cultural anthropologists. I'm not one of those people that sort of rubbed off on me and figuring out five or 10 years in the future, what technology will we have then what kind of challenges might people have then? And typically the same challenges that they have today. And how might business have shifted and how could you put those together creatively to solve problems?

So you really are asking two questions as a futurist. One, what's the future that we want to build? How do we want to get our hands dirty? What decisions are we going to make? What investments we're going to make to make something happen? What are we going to actually build? And then the second thing is, what's the future that we want to avoid? So it's really thinking through the potential consequences of technology. How could it be misused, how could it be hacked? How do we make sure that data privacy is maintained and so on? So it's really answering those two questions and doing it with a bunch of engineers and social scientists and figuring it out.

Tom Wheelwright:

Well, you bring up the point that technology is a two-edged sword, that it can lead to good things and it can lead to bad things. We've seen it just in the internet. It brings us good things, and the social media brings us some not so good things. It brings us bots, it brings us the ability to interfere, the ability to change people's minds and not always for the good. And it's interesting as you look at, you mentioned open AI, and you look at the kind of competing forces there because you have some of that team that appears to really want to make this just a big money maker. And then you have other people who've been involved in it like Elon Musk, who say, “No, no, no, this should just be open.” I mean, here's a guy who opened his Tesla technology to the world with without asking for anything in return. And so you do seem to have those two competing interests right there. How do you navigate that?

Steve Brown:

Yeah, I mean that's always the challenge. You want to do something amazing where you can actually have impact for people in the world. And that's where a lot of entrepreneurs get into it. It's like, “I want to solve that problem.” But in order to get the capital to solve that, to build the thing that you want to use to solve that problem, you have to find investors and investors want to be paid. So there's always that tension where you are trying to keep control of things and stay focused on your core purpose as why did you start up, but also make sure that you don't run out of cash so that you can't fulfill your purpose. So it's really walking that line very carefully. Sorry, there's a dog getting excited about a snow plow coming by outside. So that that's always been there.

I didn't mention in my self introduction, but I'm also co-founder of a startup focused on supply chain transparency and resilience. And that, getting that company stood up, our mission and everybody that's a founder in the company is passionate about the potential impact we can have, which is to empower consumers to know where their stuff came from and how it was made so they can make informed decisions about whether to buy this item or this item. Because this one was touched by people in a sweat shop and this one was a little more expensive, but it's cotton that was farmed organically and all the things. All the questions that we have that we can't answer and we rely on brands to tell us. So we have this passionate mission, but we have to try and figure out how to fund that. And so we have to make careful decisions about who our investors are and prioritize our tasks and build a roadmap, but always keep focused on our purpose, which is not to make money. Our purpose is to bring transparency of supply chains everywhere.

Tom Wheelwright:

Well and I think that's such an important just aspect of business. Are you about making money or are you about changing the world? Because certainly those who are really about changing the world, you think of a Steve Jobs, he clearly want to change the world or Elon Musk, they clearly want to change the world versus there are a lot of business owners who do just want to make money. And certainly that helps us decide what we want to do as business owners and we want to do as investors is what's our mission?

But we're seeing technology just continue to ramp up faster and faster. I think the world in general was taken by surprise by ChatGPT. I mean absolutely caught off guard that something this powerful was imminent. And everybody's saying, well AI's like years down the road, we're never going to get something that can actually do something that's useful. Right now it's just kind of machine learning, that's all it is and it's not something… And then we get ChatGPT, and all of a sudden we can write our term paper with ChatGPT. I'm convinced some of the novels I read were written by ChatGPT. But as it's passed.

Steve Brown:

The Amazon store is now being flooded with novels and things written by ChatGPT.

Tom Wheelwright:

I'm sure it is. I'm sure it is. I mean, you're a futurist, what do you see over the next 10 years and how is this accelerating? And then we'll get into how does business take advantage of and actually use it.

Steve Brown:

Yeah. So before we leap into that, I do want to say that it's okay to want to make money with your business, but that's sort of result [inaudible 00:18:05]-

Tom Wheelwright:

Agreed.

Steve Brown:

… execution against your purpose, not the be all end all. Okay. So ChatGPT, I think it didn't take me by surprise particularly. I mean that it happened when it did, yes. That it was released perhaps before it's ready, it shouldn't surprise me either. But I think it should have been kept in the lab a little longer. Where does it go next? I think it is a hint at the way we will live our lives and the way we will work in the future. Tools in the past they've been subordinate to us and we've learned to use them, whether that tool is a hammer, like I mentioned before, or PowerPoint or a spreadsheet. We learn to drive these tools. And when we stop driving them, they don't do anything. They just sit there and they are completely subordinate to us.

We are moving into an era of smart tools, which I think is the better name for that is assistance, which collaborate with us and they partner with us. And ChatGPT is going to seem pretty dumb compared to what we can expect perhaps five years from now, and certainly 10 years from now. Where I think we can all imagine that we will have our own personal assistant. And not only will that personal assistant be able to do all of the things that a human personal assistant might do for us today, but they'll be experts on everything we want them to be experts on. And they will be able to coach us to improve our performance. And we will think about ourselves, not just as us and what we can achieve as individuals, but in partnership with our assistant. And their job will be to elevate our performance. In part that's by offloading tasks that are low value, but also by working with us to help us be more successful at the high value work.

Tom Wheelwright:

So if you look at let's take our typical entrepreneur business owner, we're not engineers. We may not understand why the technology works the way it does. How are we going to get our arms around this? I mean, it took some of us old folks, took us a few years just to figure out how to use an iPhone. So how do you actually get so that you're using it, so you're comfortable with it because it is a complete… I mean, I know high school English teachers are going to be going crazy right now because they have completely changed the way they do assignments and the way they teach English with ChatGPT because there's no way they're ever going to be able to just say, go write a paper on this and know that it's not ChatGPT. So how do you think the average business owner deals with that?

Steve Brown:

For starters, read my book. Shameless plug. And I know this problem is there, that's why I wrote my book. And I'm not doing this as a shameless plug, but that's the answer.

Tom Wheelwright:

Just as a reminder, the book is The Innovation Ultimatum: Six-

Steve Brown:

The Innovative Ultimatum.

Tom Wheelwright:

… Six Strategic Technologies That Will Reshape Every Business in the 2020s.

Steve Brown:

Yeah. And I wrote it for business leaders who are faced with this exact problem. They are trying to run their business. And they know their business, what they don't know is the technology that's coming down the line. And it's not just my book, there are other books out there as well. But it's incumbent on business leaders to spend a percentage of their time and I'd recommend at least 1% of their time thinking about the future, learning about the future. And that means investing time to read books, to watch YouTube videos, whichever way you consume information best and go and learn about these technologies and their implications for you because they are profound. And it happens to us in the '80s when computers suddenly started being on people's desktops and we all had to learn to peck away at keyboards and Word Perfect at the time and Lotus 1, 2, 3, and how floppy discs worked. And we all had to learn that 40 years ago. Now we have to learn it again for the next generation. It's just the way it is.

Tom Wheelwright:

So you mentioned earlier about you had to understand technology, but you also had to understand people. For business, because we know it's all about people, because they're our customers, that it is about people how do you go about learning that side of things? How did you go about doing it?

Steve Brown:

So I was lucky enough to be in a team at Intel of about 80 ethnographers, anthropologists and social scientists who would actually go and spend time with people and ask them questions and learn about their lives. And so that's something I write about in the book a little bit is what are the six constants that drive people, their aspirations in life? There are lots of different models of ways of thinking about human behavior, but it really comes down to understanding human behaviors and aspirations. Maslow's hierarchy sort of gets at it, but it's a bit of a blunt instrument.

So once you get to that higher level of self-actualization, what is it people actually want with their lives? They want to be healthy and they want people around them to be healthy and well. They want to constantly learn and grow. They want to be productive and get things done. At appropriate times they want to be entertained. They want to be creative and feel creativity flow through them. And they want to be connected and be connected to the people that they love. They want to be connected to the people that they work with to be productive. They want to be connected to the brands that they care about. They want to be connected to the football team that they love. It's about connection. So those are the six things. That's the lens to which I look at people and think about what problems can I solve for them five years from now.

Tom Wheelwright:

Hey, if you like financial education the way I do, you're going to love Buck Joffrey's podcast. Buck's a friend of mine, he's a client of mine, he's a former board certified surgeon, and he's turned into a real estate professional. So he has this podcast that is geared towards high paid professionals. That's who he is geared towards. So if you're high paid professional, you're going, “Look, I'd like to do something different with my money than what I'm doing. I'd like to get financially educated, I'd like to take control of my money and my life and my taxes.” I would love to recommend Buck Joffrey's podcast, which is called Wealth Formula Podcast with Buck Joffrey. I hope you joined Buck on this adventure of a lifetime.

Interesting. So let's talk about those trends that you talk about in your book, the six technologies. What do you see as, not to give away your book, so we do want people to read it, but what do you see as those key technologies and what are they going to drive in the future of the business and why?

Steve Brown:

Oh, okay, so layers of questions for me. This is good.

Tom Wheelwright:

Yes.

Steve Brown:

So let's start with the Internet of Things and sensors. Not a new trend, been around for the last 10 years or so, some could argue last 30 years. But tiny computers that are connected with lots of sensors, you can embed in everything. So you can make your infrastructure smart. And businesses are using that to gain business intelligence, to manage their operations. Being able to track packages as they come through. A shipping network for example, being able to know where all your trucks are. Being able to monitor are those trucks needing maintenance. All these sensors can report data, gather data, and you can create a dashboard basically for your business that lets you get better insight into its operation, help it to run more smoothly. That's the basic idea of the Internet of Things.

I mean people are using for lots of other things as well. But that's the one I think business owners need to know is how can you use the Internet of Things and sensors to get eyes on your business so that you can manage it more effectively. So that's the first one. And I'm working my way up to the big one at the end, which is AI. So I'll come to that last. Next one is, well let's do blockchain next. So blockchain technologies also known as distributed ledger technologies, people may have heard of blockchain because it's the technology that underpins cryptocurrencies. One of the things I write to my book is cryptocurrencies are boring. Not interested in them. I don't see great utility in them, even though lot people do.

Tom Wheelwright:

They're just a token.

Steve Brown:

Right. So where it is interesting is in solving business problems. And one of the big business problems is getting eyes on your supply chain. Why is a blockchain needed? It's because it's a way of storing data immutably. So once you put data into a blockchain, think of it like a big filing cabinet, you can't change it. If you do change it, there's a record that you changed it. So it's a way of getting trusted data. It's going to change the way that people do transactions. Particularly I think as you look out over the next 10 years, you may see it change the mortgage business and financial transactions. But it's particularly interesting in supply chain. That's why my startup, the Providence Chain Network is using distributed ledger technology, not blockchains, but a version of it, distributed ledger technology to enable brands, to track where things came from through their supply chains and to do it in a way where they can guarantee the information when it was entered cannot be changed by anybody. So that's the next one.

Tom Wheelwright:

So I actually look at blockchain as triple entry accounting.

Steve Brown:

There you go, a ledger.

Tom Wheelwright:

Because basically you have your debit and credit, but then you have an auditor, which is basically every transaction audits every other transaction. So I actually think it as three-dimensional accounting and that that's really what blockchain is. And when you take accounting, before we had double entry accounting, we couldn't have a global economy. We have a global economy because we have double entry accounting. But now with the distributed ledger accounting, as you talk about in blockchain, now we can have a global economy that we can be sure of because you can't change it without seeing that it's been changed.

Steve Brown:

Yeah, it's a trustless technology. You don't need trust, it's just built in. You can trust it because it's automatic. So yeah, it's a beautiful way of describing it. I like that. Very good. Thank you. Yeah, I might steal that for you. It's a great way to describe the technology.

Tom Wheelwright:

Oh, go for it.

Steve Brown:

Thank you. So Internet of Things, blockchain, virtual reality and augmented reality. Virtual reality has some business applications, but it's mostly in training and simulation and design, architecture, those sorts of things. I think where it gets really interesting is when we finally get to the augmented reality that works, and that is a price point that everybody can enjoy it, particularly in the business context. And you've seen some things with HoloLens from Microsoft, they've got in the right direction, but we're not there yet. And we'll see if Apple ever comes out with something. But they have all the talent, they've been buying it up for years. Let's see if that [inaudible 00:30:17].

Tom Wheelwright:

So can we step back just a second, and make sure everybody understands what we're talking about? How do you define augmented reality?

Steve Brown:

Yeah, let's talk about the difference.

Tom Wheelwright:

How is that different from virtual reality?

Steve Brown:

Yeah, so in virtual reality, some of you may have tried it, you put on a helmet and suddenly you're cut off from the physical world around you and you are in an alternate reality. You might be in a video game, you could be looking around the streets of Paris. But you feel transported elsewhere and you are no longer connected to the world around you. You're physically there, but you can't see it. With augmented reality you are overlaying digital information in your field of view. So you can still see the world around you, but now there might be digital objects on the table around you. There might be information, there might be a monitor floating to your side, you could turn and look at. It's a way of blending the two worlds together.

And because it doesn't cut you off from the physical world, now it's useful in a business context. Because if I'm on a manufacturing line, I need to be able to see what I'm doing with my hands, but I may need lots of information and I don't want to have to put down tools and pick up a tablet, that sort of thing. I want it just floating right in front of my eyes. So there are all sorts of interesting applications in manufacturing, in healthcare, in education and you name it. When you think about what you're essentially doing is changing the display. For a long time, and since the beginning of computing displays are 2D, rectangular boxes.

Tom Wheelwright:

Right, physical.

Steve Brown:

Yeah. And this makes the whole world the canvas. So you can imagine being able to place objects around your house. You could have a little weather display that you can put wherever you want and it'll always be there. And you come back to that room and there'll be little weather display on the table giving you the information that you need right now. And as we start to get to those AI assistance, you want to be able to communicate information in a way that's visual. Because for most of us, that's our primary sense.

So augmented reality and AI assistants are a very interesting combination because if you have a worker who is, let's say a maintenance worker who's out to fix, it's 10 years from now, fix a robot. And it's a model of robot they're not familiar with. And they're a good tech, they know robots, but this model is new, they've not seen it before. Now they can consult their AI assistant and using augmented reality will show them open up this hatch, check these fuses, check these switches and guide them visually on what to do. What you've done there is create a hybrid worker. A combination of AI intelligence and knowledge, human intelligence and experience and dexterity and put those together to create one powerful worker. So that's why augmented reality is so interesting is the ability-

Tom Wheelwright:

Interesting.

Steve Brown:

… for an AI to show a human what to do.

Tom Wheelwright:

Wow, that's interesting. You wonder if those who are wanting to break into a safe might like that idea too.

Steve Brown:

Well [inaudible 00:33:40].

Tom Wheelwright:

Here's the safe and here's what you need to do in order to crack the code on the safe. So as we said, good and bad. All right, so we're up to augmented reality. What's next?

Steve Brown:

Where should we go next? Autonomous machines. So this is using artificial intelligence and sensing and machine vision to enable machines to have some level of autonomy. This is robots, autonomous vehicles and so on. I've probably done that one to death. We've talked about those a lot.

Tom Wheelwright:

Sure.

Steve Brown:

But being able to start thinking about delivery robots. And it's really being able to create much smarter robots that have human-like vision and ultimately human-like dexterity to be able to take on the jobs that we don't want to do. Picking fruit, for example, backbreaking work, very not very well paid. A robot, couldn't do that five years ago. Now you start to get robots that have the intelligence and the ability to sense and be able to pick a delicate fruit like a strawberry or a raspberry. And to be able to do that at a cost-effective rate. So that's where I think you'll see the autonomous machines coming into play is their ability to take on those roles where people just don't want to do those jobs anymore. Now we're short of 50,000 truck drivers in the U.S. right now.

Tom Wheelwright:

It would be nice not to have to worry about those shortages for sure.

Steve Brown:

Right. Yeah. So it's a way of augmenting the economy and filling those holes with a bit of technology.

Tom Wheelwright:

Okay, so what's next?

Steve Brown:

Well, we've done uh, uh, uh, uh. Let's do AI. So AI is the big one. That's the big daddy. It defines a second era of computing. The first year of computing was computer was something that you programmed and you put in input, operate in the program, and you've got output. AI is different. AI is different in that you train it, you don't program it and you give it inputs and outputs and it figures out a model, what's called a model itself. So for example, if I wanted to create an AI, just give you a simple example I use in a book, and this is one that's used often.

If I wanted to create an AI that's able to visually tell the difference between a picture of a cat and a dog, to program that in the traditional sense would be very difficult. You've got to analyze pixels in a photograph, you're figuring out, well do I look for pointy ears? Do I look for whiskers? It's quite difficult. With an AI, you show it lots and lots and lots of pictures of cats and dogs that are labeled. This is a cat, this is a dog. And the neural network in there, by being exposed to many of these examples trains itself. It learns. So when you show a new picture, it will tell you, oh this is a cat or this is a dog based on its experience and what it's been trained. So you're creating these models.

And why is that important? It's important because AI enables us. It's a tool to help us solve problems that we don't know how to solve ourselves. So we can show it the problem, give you enough examples, and it will then figure out how to solve that problem for us. That's oversimplified, but that's essentially why it's a big [inaudible 00:37:11].

Where's AI going next? Back in 2017, Google created this technology called Transformers and they initially developed it thinking it would help with language translation. And it did. When you translate a language and you can look at each word and as you go through each word, you translate that word for the word that's in there other language. But if anybody knows any languages, that doesn't work very well because you kind of need to know the context within that sentence of how that word is included.

And so you've created this transformer technology that could understand and look at the context of a whole sentence or a whole paragraph. And as it's doing the translation, bear in mind all of those, the context of the other words in the sentence. It turns out that that technology is also useful for doing all kinds of other things. And the large language models that power things like ChatGPT, Google Bard, the stuff coming out of DeepMind and many, many language startups that are out there, uses that transformer technology and that awareness of words in a sentence.

And it's essentially when you're talking to one of those things, it is a next word predictor. That's all it's doing is predicting the next word in the sentence. And so you ask it a question and it starts to look at its large language model and it's predicting. The same way when you go into the Google search bar and you might write what is the best, and it'll start to put predictions of what it thinks you might do the next words you type. It's like a version of that on steroids. So it's predicting words. And that turns out to give you these amazing results that feel like you're talking to a human where it's predicting what it should say next and uses this context of looking at all the question that you've asked it and all the data it knows to make these predictions. There's no intelligence behind these things. It just appears that way to us.

So artificial intelligence is great for optimizing, looking at the data that comes out of your business, looking for optimizations and finding patterns in data, lots of complex data that humans would never see. So that's a one application of AI. Another one is going to be in reimagining customer service. People are already looking to do that with ChatGPT and with sophisticated chatbots for a while. And I think it's also going to be useful in augmenting all of your staff, as I mentioned before, by pairing them with an assistant to help them do their job better. I'll give you an example.

There is a company called Harvey. Harvey just announced a big partnership with one of the world's biggest international law firms. It is an assistant for lawyers and it's based on ChatGPT technology, but trained on legal texts and it helps a lawyer to look through a long NDA or a contract and find problems with it or to allow the lawyer to ask questions of the chatbot to say, “Does this contract comply with California employment law?” And ChatGPT Harvey will figure that out and answer. So it's a natural language interface. And then Harvey may come back and say no, and lawyer can say, “Well rewrite it, rewrite that section so it's compliant with California law section,” whatever it might be. So there's this partnership between an AI and a worker and it's going to make those lawyers far more effective and it runs through multiple languages.

Tom Wheelwright:

Yeah. So let me ask you this question. So mean, Elon Musk has brought this up that there's some fear of what AI might do from a negative side. From a pure business side, how do you as a business owner have these technologies work for you instead of working against you? Because you're going to get left behind pretty quick it seems to me, if you're not using these technologies. I mean a law firm for example that uses that technology is going to be so far ahead from a law firm that is, I mean still reading paper.

Steve Brown:

Yeah. I mean same companies that had a typing pool versus ones that paid money to invest in putting word processes in everybody's desk, or putting email to get rid of the memos that people used to pass around in the mail room. Companies don't have any choice but to keep on that treadmill and embrace this technology because otherwise they won't be competitive. Now the tough thing is, well I don't know what the options are. I don't know who to partner with. It's tough, but I think it's a case of partner with good IT suppliers who can guide you through that. Get as smart as you can, read my book obviously, but get as smart as you can on these technologies. And when I wrote my book, I wanted to empower business leaders with what are the questions to ask when they talk to their IT providers or if they're big enough to have an IT department talk to their IT department and say, “I want this. Show me how I could do this.” Because it's really hard otherwise. And things are moving faster than ever

Tom Wheelwright:

Yeah. They are and a lot of people are going to get left behind for sure. I mean for example, let me take a very simple one, take bookkeepers. I see absolutely no reason for bookkeepers from a technology standpoint. You should be able to easily pull the information from the bank. It should connect with a general ledger system and it should produce the bookkeeping. You should not have to do any of that. So that manual type of data entry should be gone completely. And it should make us more productive, but only if we're willing to change what productivity means to us.

Steve Brown:

Yeah. And it requires business leaders to sort of dig deep, I think and be willing to embrace change, to imagine the possibilities. My consulting company I call Possibility & Purpose. And my premise is there's this huge landscape of possibility now and with technology, you can take your business in one of many different directions. See there's a landscape of possibility. How do you decide which way to go? Where should I be placing my bets? Where should invest in and where should I not? Because we have limited capital. And that's where I always encourage people, go back to your core purpose. If you haven't sketched out what your company's core purpose is, you need to go back to basics and really think that through because that will help you. As you try and navigate this landscape of possibility, it will help you to find your way through and help you make decisions about where you invest and why you don't because it's going to force you to stay true to fulfilling your core purpose.

Tom Wheelwright:

Okay. So I've got fulfilling your core purpose. What are two or three other things that you think every business owner should be looking at when it comes to technology right now?

Steve Brown:

Ooh. I mean certainly go look at your supply chain. How can you digitize your supply chain? Get eyes on that, make it more efficient, build resilience into your supply chain using digital supply chain technology. That's high up the list. And I think train your workers. Don't rely on yourself as a business leader to get smart in all of this stuff. Encourage all of your team to do that. I was consulting with a number of companies a few years ago and they would buy books not just for their leadership team but for everybody in the company because they said, “We need you all to understand this.”

Because when you are bringing change in, there's going to be change. Technology always brings change with it. That has impacts to people because it means they're going to have to do things in a different way. And if you want people to come along with you and embrace that change, even though people don't like giving up doing things the way they used to do them, the best way to do that is to bring them along and explain to them so that they understand, oh yeah, we have to things different or we are not going to be competitive as a company. And I see this technology coming down the pipeline here and train them on how to ride that technology rather than making them redundant and then having to let them go.

So I think it's about engaging your team early on in that conversation. Doing it in a way that's exciting because this is going to allow us to fulfill our purpose in a much more powerful way. It's going to let us serve customers in better ways. It's going to let us be more productive and you're going to do less boring work because of this. Get them on your side, get them excited. But be honest about the fact there will be change, there will be impact here, but we're working in partnership with you and we're going to walk through this together. And we're going to get as many of us through as the other side and we'll all be living more productive lives and we'll be enjoying our work more as a result of it. But you have to sell that. You have to tell them that story and mean.

Tom Wheelwright:

Yeah, I like that. What I'm hearing is that you see technology as a way to make people more productive, actually doing things that are more enjoyable. Doing things that are more useful than what they've been doing and taking the drudgery out of work because literally technology should be able to handle all, like you said, the tasks that we don't want to do. Technology ought to be able to handle all of those tasks so we have no more menial work going on. I mean that's a pretty big statement that you're saying that look, eventually there could be no menial tasks. They could all be purposeful tasks. Am I hearing that right?

Steve Brown:

Yeah. At least that's a goal to be heading towards. Yes. But it's not just that it also can make us feel more creative. Let me give you an example. So Autodesk in their design products, they put AI into that and a technological generative design. And what it does is, let's say you designed an industrial valve and it will then take that design of an industrial valve, then riff on it and create thousands of different options, and then put each of those options through simulation. And you can give it goals and say, “Well, I want to make this as light as I can. I want it to be physically strong. I want to reduce the cost of it.” It puts all those thousands variations through simulation and comes back to you and says, “The cheapest version is this one here. The one that's strongest is here, the one that's lightest weight is this one.” And it gives the designer choices. They're working in partnership with that AI.

Now, when Autodesk first started rolling that out with designers, they expected designers to say, “Well, it's making me more productive. I'm able to design more things in a day.” And it did. But what surprised Autodesk, I was talking to one of their VPs is a friend of mine a few years ago. What really shocked them is that every designer reported, it made them feel more creative because they could explore this wide creative space. Instead of being able to create [inaudible 00:49:24], they had the time to create two or three versions of something and see which one felt best. They could create hundreds or thousands and explore that design space and then go, “Well that was good. What if I change this?”

And they were riffing on the design that they hadn't generated on their own. The designs that they were coming up with were neither something that the AI could do on its own or that the human could do on its own. And so the two of them together would create this design and then use that to design more ideas and this creative explosion that came from it is something that I think we can all expect in the workplace in the future, working with his assistants. It will liberate us to not only offload the crappy tasks we don't want to do, but to make the high value creative tasks that we enjoy even more enjoyable.

Tom Wheelwright:

Well, that is, it's fascinating to think about. I think the important thing, or one of the important things to me is we can think of technology as a threat or as an opportunity. And it sounds like you're really focused on let's make it an opportunity because if we don't make an opportunity, by definition, it's going to be a threat.

Steve Brown:

We have a choice, yeah.

Tom Wheelwright:

We have a choice. We can look at it from the positive or from the negative. We can choose how we're going to react. Certainly true in my profession from the tax standpoint, I can see multiple uses here. I can see multiple opportunities. And I think that it's going to be an opportunity to really allow us to do things that I think are more enjoyable, that are more satisfying, that we go to back to the Maslow hierarchy of needs, a little more fulfilling and things will just continue to speed up. So once more, thank you Steve Brown. The book is The Innovation Ultimatum. Besides the book, where else could we go for more information from you, Steve?

Steve Brown:

I had a website, baldfuturist.com. There's not much up there at the moment because I just did this assignment in London, but that's where you can go. There'll be something there probably in the next couple of weeks.

Tom Wheelwright:

Awesome. Well, we're thrilled to have you Steve. Technology is fortunately, highly incentivized in the tax laws, so we do actually reduce our taxes when we get into technology, both when we buy it or when we create it ourselves. It certainly does produce more profits. It certainly has an opportunity to produce a lot more cash flow and just for everybody, we're going to continue this discussion next time. We're going to talk about real estate and the opportunities. And how does real estate interact with business and technology.

Because it is kind of a building block type of a situation. We start with business, we go to technology. Real estate is actually even in this day of working away, we're still working somewhere and so we are still somewhere physically and we will always be somewhere physically. I hope. I hope we will all be somewhere physically and it won't be all AI and the augmented reality won't take over the place. But thank you again, Steve. Thanks everyone for joining us. Just remember, when we do really learn this stuff, as Steve says, it's really learning about technology, understanding it, make sure your team understands it, make sure we understand how it's going to work to meet our goals. What we'll always end up with, of course, is way more money and way less tax. We'll see everybody next time.

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