shift 2020 Brain Food Newsletter #4

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Welcome to shift 2020 Brain Food #4. It’s quite challenging to keep a strict rhythm in writing a weekly newsletter due to my variable working schedule. Also, apparently the readers statistics seem to be influenced by the time I send it out. This made me think to ask you, the reader, what is your favourite time during the week to receive Brain Food? I created a simple Google Form to let you input which time of the week you prefer to read this newsletter. Check out this link to mark your choice.

In this newsletter, I focus quite a bit on the social consequences of technological progress, a topic I believe, concerns us all. It becomes more apparent that technology disruption is not only about innovation but as well the ability for people and society to adapt to change and new economic realities. Every generation has to deal with new economic progress and its consequences. Being connected globally doesn’t mean that progress and change will be equal in different parts of the world. For example, recent research from McKinsey Global Institute shows the shifting locus of economic dynamism from the West to emerging markets with startling new facts, noting that by 2025 a single regional city in China – Tianjin – will have a GDP equal to that of the entire country of Sweden; and that, in decades ahead, half of the world’s economic growth will come from 440 cities that most executives today would be hard-pressed to locate on a map

The sharing economy has its up- & downsides, depending how you view the world. Look at the protests in France against Uber last week, the city of Paris confronting Airbnb’s rapid growth. The EU/IMF/Greek system failure is going into dramatic proportions now that Greece failed to repay the IMF, becoming more of a fight between democracy, and a broken political and economic system. A British shoe seller setup a crowdfunding campaign on Indiegogo as an act of solidarity with the Greek people and raises + €800.000 Euro (as of this moment of publication) in two days crashing the Indiegogo platform a couple of times due to its popularity. A new sign of how things might work in the future?

More interesting reading and links on Artificial Intelligence and Startup Culture in this edition as well.

Let me know if you enjoyed reading this newsletter and which sections you like the most by simply replying to this email or to send me your feedback, tips & links to add or simply start a conversation.

Enjoy!

REMINDER

Here’s a reminder to book your seat for the IoT Shifts Transformation Retreat, a brand new, ground-breaking two-day custom designed workshop at a beautiful luxury 5-star resort in Spain on October 16th to 18th, 2015. Book your tickets before summer as we have few tickets left and you don’t want to come back from holidays with no seats left to attend.

Designed and led by myself, and Innovation Philosopher Humberto Schwab, the IoT Shifts Transformation Retreat, (#ISTR), will give you exclusive industry insights which shall empower you to use the IoT (Internet of Things) as a source of competitive advantage for profitable, sustainable, and equitable growth.

Over the two days you will have group and individual coaching sessions, exploring how to transform your company, brand or project’s productivity, using new approaches to business agility and innovation within the IoT framework.

Share your challenges and experiences with other business and industry leaders, professionals and disrupters from a vast range of diverse backgrounds – using the proven disciplined method of Socratic Design.

SHARING ECONOMY

Trends Show Crowdfunding To Surpass VC In 2016
The crowdfunding industry is on track to account for more funding than venture capital by 2016, according to a recent report by Massolution. Just five years ago there was a relatively small market of early adopters crowdfunding online to the tune of a reported $880 million in 2010. Fast-forward to today and we saw $16 billion crowdfunded in 2014, with 2015 estimated to grow to over $34 billion. In comparison, the VC industry invests an average of $30 billion each year. Meanwhile, the crowdfunding industry is doubling or more, every year, and is spread across several types of funding models including rewards, donation, equity, and debt/lending.

Airbnb and Uber’s sharing economy is one route to dotcommunism by Paul Mason.
“Peer-to-peer platforms have changed the game. Make them cheap or free, and it would be way of reinventing the economy to deliver participation and choice alongside social justice. And, beyond the issues of consent, it poses two challenges. First, however brilliant these new models are, they cannot produce exponential growth. It is technology in the service of squeezing out the final drops of value from something, rather than infinite expansion.”

Paris Confronts Airbnb’s Rapid Growth
City of Light brags about Airbnb but ramps up inspections of listings, as residents turn to tourist rentals. The San Francisco-based home-sharing firm now generates more than half its revenue in Europe, after opening a flurry of offices and successfully promoting itself as a peer-to-peer tourism alternative. But it faces opposition from some hotel groups and local authorities, threatening the ambitious profit projections of a firm investors are set to value at $24 billion.

The Servitude Bubble by Umair Haque
Tech isn’t really making a “sharing” economy. So what is it making?

“The Servitude Bubble is creating “jobs”, sure — but only of the lowest kind: low-end, deskilled, dead-end, go-nowhere “service” jobs — that don’t only crush your soul, damage your psyche, and break your spirit — but waste your potential. Not “service” as in doctors and therapists— “service” as in pedicurists, trash-pickers, and dog-walkers. And so, on balance, it deskills and impoverishes human potential — it doesn’t expand and enrich it. The Servitude Bubble is made of stuff which, en masse, wastes, decimates, and demolishes the thing which counts most: human potential.”

Airbnb Is an Ally to Cities, Not an Adversary by Arun Sundararajan
“Involving these local collectives empowers groups of residents to choose solutions suited to their specific community, while isolating the impact of new rules to the people actually affected by the underlying issue. Perhaps, over time, this will lead to some buildings and communities becoming Airbnb-free, while others can advertise themselves as “Airbnb-friendly,” a grassroots alternative to zoning better suited for an economy in which the lines between personal and commercial are increasingly blurred.”

How Everyone Gets the ‘Sharing’ Economy Wrong
Uber isn’t the Uber for rides—it’s the Uber for low-wage jobs

“The only way forward is something that has gotten far too little attention, called “dependent contractors.” In contrast with independent contractors, dependent contractors work for a single firm with considerable control over their work—as in, Lyft or Uber or Postmates or Instacart or any of a hundred other companies like them. This category doesn’t exist in current U.S. law, but it does exist in countries such as Germany, where dependent contractors get more protections than freelancers but are still distinct from full-time employees.”

It’s good to share: The triple economic win.
Car sharing is a growth business – the number of people involved increased by 50% worldwide in 2013, with the US and Germany the forefront in terms of the number of car sharing club members. But similar businesses are being set up all over the world – including in China and Malaysia, suggesting huge growth potential.

SOCIETY
Why Don’t the Poor Rise Up? by Thomas B. Edsall
“There are legitimate grounds for grievance. For those in the bottom quintile, household income in inflation-adjusted dollars has dropped sharply, from $13,787 in 2000 to $11,651 in 2013. According to the Census Bureau, 64 million Americans currently live in the bottom quintile.

Still, it’s possible that poverty is less gruelling than in the past, for several reasons. First, although incomes have declined, the cost of many goods – televisions, computers, air-conditioners, household appliances, cell phones – has fallen, leaving the bottom quintile less deprived than simple income figures might reflect. Second, people nowadays marry and have children later in life than in the past, postponing some financial demands to better earning years. Third, some economists contend that commonly used inflation measures result in excessively high estimates of the real-world cost of goods for consumers, thus making living conditions less dire than they might otherwise be.

But there is another reason that there has not been broad public insurrection.

Society has drastically changed since the high-water mark of the 1930s and 1960s when collective movements captured the public imagination. Now, there is an inexorable pressure on individuals to, in effect, fly solo. There is very little social support for class-based protest – what used to be called solidarity.”

ECB / IMF / GREECE SYSTEM FAILURE

The Greek referendum gives the European Union a chance to restate its commitment to the values of the enlightenment – equality, justice, and solidarity – and to the principles of democracy on which its legitimacy rests. The place where democracy was born gives Europe the opportunity to recommit to its ideals in the 21st century.

Why I support the Greek Bailout Campaign on Indiegogo (my personal opinion)

It becomes more apparent that the whole Greek Bailout situation is about the fight between democracy, and a broken political and economic system.

From The Guardian article by Aditya Chakrabortty:

“That battle – between what people want and what their rulers force down their throats supposedly for their own good – can be glimpsed at every dramatic moment in Greece’s recent history. (…)

Economics and finance are just technicalities in this argument, which is really between people and a cruelly unworkable version of capitalism. That’s the real theme of the vote, whatever the briefings from Brussels and the latest developments out of Athens. The shutdown of the banks is certainly striking. But the golden rule of capital controls is that they primarily hurt people with hardly any capital. (…)

The Greeks you see on TV traipsing between empty cashpoints are pensioners, blue-collar workers, and anxious teachers. The big money pulled much of its cash out of Greek banks ages ago.” (…)

Lately, I have read a lot of insulting comments full of misinformation and blaming attacks on the Greek people regarding their economic situation. What many people don’t seem to understand is that Tsipras’ government is only trying to change a dramatic situation for its people.

The real damage was already done historically, and peeked with an agreed bailout 5 years ago by the financial institutions, a wild and free real estate market driven towards a bubble and bad government management (backing those two trends). Many normal middle class people were advised to buy houses (at peak price), then lost their job or saw their salary lowered by 30%. The result was that obviously many “middle-class” people lost their houses or could not pay their loans back with such cuts into their normal income. Would you?

Similar situations can be seen in Spain. If you talk to the Greek people, they are already 5 years paying back and are just being fed up by having to pay back the banks (FYI 90% of the money going to Greece actually never arrives on their accounts as its just interest payback to the banks). And the results show that this strategy has not worked at all. The economy has shrunk by 26%; unemployment has risen to 27%, youth unemployment to 60% and, the debt-to-GDP ratio jumped from 120% to 180%. The economic catastrophe has led to a humanitarian crisis, with more than 3 million people on or below the poverty line.

What system is it you want to believe in if they took away your house (but still need to pay back the interest!) and lower your income for the last 5 years, and now they’re asking to cut your pension?

Putting all the blame on the Greek people and its government is just not right. What this situation shows is that we need to start thinking on new economic systems if the current one cannot back its middle class and poorer citizens anymore. It’s time to also look at the EU bank shareholders who have been cashing in huge dividends after having being bailed out themselves by most EU citizens who never got a cut out of the profits. Why no one is looking in that direction. Have we forgotten already?

“And if the Greeks choose between a slow death and stepping into an abyss, I might be tempted to take the second. The rest of us should support them. Their battle – people versus an impossibilist capitalism – is ours too.”

That’s why I decided to support the Greek Bailout Fund on Indiegogo.

When I contributed to the campaign yesterday morning, the ticker was just over €20.000, at mid-day today the campaign raised +€800.000 with a couple more days to go.

For me, my contribution is more symbolic then effective at this stage. It’s not ideal but it is a sign that crowdfunding could lead to new forms of capital participation and decision on which governmental projects to fund, instead of letting the decisions taken by an elite class, more and more alienated by what’s happening in the streets.

Further related reading on this topic:

Where did the Greek bailout money go? (must read to understand the absurdness of the situation)

Greece’s empty atms show the surprising power of cash—even in 2015

The complete history of the Greek debt drama in charts

Greece’s ancient mythology says we are all responsible for the fate of modern Europe

Greece: risks for the Eurozone are mainly political rather than economic

Should Apple buy Greece? (not silly at all)

Greek entrepreneurs rally together to help Greece’s startups through the financial crisis

STARTUP CULTURE

Don’t Fuck Up the Culture by Brian Chesky
Great insight by Peter Thiel to the CEO of Airbnb.

“On Monday, October 21, 2013, I sent this letter to our entire team at Airbnb. I have decided to publish this in the event it is helpful to entrepreneurs building their cultures.”

London’s diversity is one of the strongest attributes of its tech ecosystem
The multiculturalism the capital offers is a key differentiator to almost any other global tech hub – we must embrace it.

Report Ranks New York, London, Helsinki Top Cities For Pro-Startup Policymaking
A study of the quality of policymaking in 40 cities around the world, considering how supportive city governments are to entrepreneurs and tech startups, has ranked New York at the top of its ‘innovation friendly’ index, followed by London, Helsinki, Barcelona and Amsterdam. So Big Apple aside, the report suggests city policymakers across Europe are getting their grove on when it comes to digital thinking.

This is not a typo: Only 3% of Americans are legally allowed to invest in start-ups
“Of the richest venture capitalists, all are worth more than $1 billion, and all are men. The majority of these have invested in Groupon, LinkedIn, Skype, YouTube, Paypal, Facebook and others. Chances are, you are legally barred from joining their exclusive investors’ club.

More than 97% of Americans cannot invest in the latest startups, nor profit from their meteoric rises. For example, Kickstarter and other crowdfunding platforms like Indiegogo and Rockethub do not allow “supporters” to own part of the organizations featured on the site, even though their donations are financial investments in those advertising funds or projects. That’s why most crowd funding platforms reward their supporters with goodies (a first run of a manufactured product, say, or thank you cards).

Under US law, only “accredited investors” are legally allowed to invest and own a stake in a start-up.”

Crystal Balls vs. Calculators by Josh Kopelman
“There’s been a lot of conversation about the state of our industry lately. Some people caution that we’re in a “risk bubble” while others argue that we’re not. Still others declare that something is “rotting under Silicon Valley.”

At First Round, when asked if we’re in a bubble, our answer is, “We don’t know.” We don’t have a crystal ball. But we do have a calculator.”

AI

Were All Those Rainbow Profile Photos Another Facebook Study?
The social network learns more about its users than they might realize. Facebook, you may have noticed, turned into a rainbow-drenched spectacle following the Supreme Court’s decision Friday that same-sex marriage is a Constitutional right.

By overlaying their profile photos with a rainbow filter, Facebook users began celebrating in a way we haven’t seen since March 2013, when 3 million people changed their profile images to a red equals sign—the logo of the Human Rights Campaign—as a way to support marriage equality. This time, Facebook provided a simple way to turn profile photos rainbow-colored. More than 1 million people changed their profile in the first few hours, according to the Facebook spokesperson William Nevius, and the number continues to grow.

Computers Are Getting a Dose of Common Sense
A startup called MetaMind has developed a new, improved algorithm for processing language. MetaMind’s approach combines two forms of memory with an advanced neural network fed large quantities of annotated text. The first is a kind of database of concepts and facts; the other is short-term, or “episodic.” When asked a question, the system, which the company calls a dynamic memory network, will search for relevant patterns in the text that it has learned from; after finding associations, it will use its episodic memory to return to the question and look for further, more abstract patterns. This enables it to answer questions that require connecting several pieces of information.

How Bots Took Over Twitter
For the past year, Twitter has been plagued by stories of its decline — stories that got fresh momentum with the company’s latest quarterly report and the exit of CEO Dick Costolo. In their explanations for why Twitter ain’t what it used to be, critics often cite the proliferation of spam accounts: robots that exist purely for the sake of padding out follower numbers and hijacking hashtags.

Facebook’s new AI can paint, but Google’s knows how to party
Facebook and Google are building enormous neural networks—artificial brains—that can instantly recognize faces, cars, buildings, and other objects in digital photos. But that’s not all these brains can do.

They can recognize the spoken word, translate from one language to another, target ads, or teach a robot to screw a cap onto a bottle. And if you turn these brains upside down, you can teach them not just to recognize images, but create images—in rather intriguing (and sometimes disturbing) ways.

Artificial intelligence startup DigitalGenius raises $3M to help companies automate customer service
Artificial intelligence (AI) startup DigitalGenius has announced its first venture capital funding, nabbing $3 million in a round led by Metamorphic Ventures, with participation from Lerer Hippeau Ventures, Lowercase Capital, RRE Ventures, Lumia Capital, and a handful of “strategic” angel investors.

The New York-based company’s platform automates question-and-answer conversations, perfect for companies that want to offer a text-based customer support service without requiring actual people. Tapping a multitude of data sources, DigitalGenius’ technology uses machine learning and natural language processing (NLP) that tries to replicate “friendly” human-like attributes.

Google’s artificial-intelligence bot says the purpose of living is ‘to live forever’
This week, Google released a research paper chronicling one of its latest forays into artificial intelligence. Researchers at the company programmed an advanced type of “chatbot” that learns how to respond in conversations based on examples from a training set of dialogue. And the bot doesn’t just answer by spitting out canned answers in response to certain words; it can form new answers from new questions.

BOOKS

Our Final Invention: Artificial Intelligence and the End of the Human Era (2013)
A non-fiction book by American author James Barrat. The book discusses the potential benefits and possible risks of human-level or super-human artificial intelligence. Those purported risks include extermination of the human race.

No Ordinary Disruption: The Four Global Forces Breaking All the Trends
Based on years of research by the directors of the McKinsey Global Institute, No Ordinary Disruption: The Four Forces Breaking all the Trends is a timely and important analysis of how we need to reset our intuition as a result of four forces colliding and transforming the global economy: the rise of emerging markets, the accelerating impact of technology on the natural forces of market competition, an aging world population, and accelerating flows of trade, capital and people.

That’s it for this week. Feel free to pass this newsletter around to your friends and colleagues interested. You can subscribe (or unsubscribe) here.

Read the previous editions of this newsletter here.

Be kind to yourself and your loved ones.

Have a great rest of the week and weekend!

Rudy

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