The Mobile Web: Are We Shutting Ourselves In?

I recently made the switch from iPhone to Android. It had been on the cards for a while but Apple’s decision to ban the last Bitcoin wallet from the App Store gave me the final push that I needed. It was a simple decision at the end of the day: my mobile simply couldn’t now do what I needed it to – and I’m delighted to say that the experience has been awesome so far.

Whilst going through the necessary admin to make the switch, I was struck by just how different the factors were that now influenced my choice of mobile. There were few similarities with those that had pushed me towards my original iPhone all those years before. My needs as a consumer have changed of course, but with the passage of time, my views on the technology ecosystem that surrounds us and upon which we increasingly depend in daily life have also matured.

Closed versus open systems

Like many, in the early days I was perfectly content to rely upon companies that built their foundations using the walled garden approach. These companies succeeded precisely because they had total control over all of the applications, content and media that lived within their software ecosystems. And in those days, the reality was that the capabilities offered by the early iPhone when it came to web-browsing were so far in advance of my Blackberry that there really wasn’t even a decision to make.

Yet with time, it’s become increasingly clear that by placing our sole reliance on a single centralised arbiter of quality, a gatekeeper who takes a cut from everyone that wants to participate in that closed platform, we’re often failing to ask ourselves a more important question – are the same barriers that help to maintain such quality actually restricting innovation from taking place?

The inevitable flow of the internet

The internet has an irresistible capacity to surface the things that are valuable to others, regardless of what that content is and whether it is being searched for by individuals or tribes of people united by a sole interest.

By its very nature, the internet allows people, ideas, content and programmes that deliver true value to gain traction online at scale in a way that an attempt carried out within the physical world could never match. With personal recommendations within social media acting as fuel for the mass curation of quality content, in combination with general advances in technology outside the walled gardens, it’s now time more than ever to think carefully about the system that we want to support over the longer term.

Because by choosing companies that ring-fence content on their platforms (whether that is iOS apps, Kindle books or other forms of Facebook-locked content), we are signalling by default that we accept the existence of these barriers to discovery. We trust others to make such decisions on our behalf and in so doing provide them with the power to determine what we consume in both thought and product. It’s almost a return back to the traditional single channel publishing model. And I’m far from convinced that this is the way forward.

Mobile web or mobile apps?

Interestingly, one of the first discussions I read on my new phone (via Twitter) was a debate on a related issue. In January 2014, the US hit a significant milestone as for the first time ever, more people accessed the web via mobile (55%) than on desktop computers (45%). On first glance, this simply reconfirms the projections that Benedict Evans and others have been making for a while about the fact that “mobile is eating the world”:-

But look more closely at that 55%. The stats show that 47% of that time is spent using apps on mobile devices, compared to just 8% of time being spent in mobile browsers. In his post ‘The decline of the mobile web’, Chris Dixon warns of damaging consequences if this trend continues.

So why is this a bad thing? Those figures suggest that people who go online using their mobiles tend to spend most of that time within a small number of popular apps (as opposed to using a mobile browser). And as people congregate in a relatively small number of apps, information tends to become stuck in silos that prevent it from flowing freely. What’s more, businesses are likely to allocate scarce resources to apps rather than mobile web in the future as they tend to view visitors in their app as more valuable than those on their mobile website. As the difference in experience becomes more pronounced over time, this could lead to poorer mobile web experiences overall which will in turn accelerate the move to apps.

Convenience for the customer comes at a cost. With both Apple and Google acting as gatekeepers to their respective app stores and charging a 30% tax, innovative new apps have to factor in that cost of getting through the doors before they can even be in with a chance of forcing their way onto the packed home screens of mobile users. Why would you even let a potential competitor through the gates?

Do apps prevent innovation?

Dixon has received both support and criticism in equal measure for this analysis. To be fair, the statistics do appear to artificially inflate mobile usage by including time spent by individuals playing mobile games online. John Gruber argues that the distinction between mobile webs and apps isn’t that clear in practice. In many cases, a user who relies on an app like Twitter will actually open web pages rendered in a web browser whilst still technically being within the app itself. And of course, Dixon’s criticism of apps ignores the fact that this format has enabled other types of innovation to thrive – think of the creation of a whole range of companies who are not reliant on the web-browser (WhatsApp, Instagram et al).

The debate reminds me of Tim Berners-Lee’s call for the defence of the Web a couple of years back. When he actually set this whole thing in motion some twenty-five years ago, the whole purpose of the web was to link interesting content together. The web’s core principles revolve around “a profound concept: that any person could share information with anyone else, anywhere”. Putting up barriers and closing platforms were certainly not concepts that he intended at least. Many of the same arguments were made in the Wired article ‘The Web Is Dead. Long Live The Internet’ which is well worth a read if only to see just how accurate those predictions from 2010 have turned out to be so far.

Will the walls of those gardens fall?

I’m convinced that decentralisation is one of the key themes for all our futures – of the internet and of every possible service that can be provided online. The network is gradually becoming stronger on a daily basis. So I find this reality impossible to reconcile with a picture of the world in which powerful companies continue to own such gateways in the same way as they do today. Even if we can become comfortable that the current system doesn’t in fact inhibit innovation, such convenience continues to impose a high cost – and at the very least, that cost is increasingly shaping up to be the personal data that we are leaving behind us in our wake as a society for powerful organisations to collect.

As we move into a world where the internet of things is increasingly becoming a reality, the same data that is being leaked today is going to be used to directly influence our everyday lives in the future, for all manner of reasons, from good (personalised healthcare) to bad (intrusive personalised marketing). After all, the data analysts of the future will know exactly what you did today and the restorative clean-up work that we need to carry out is becoming a bigger job with each passing day.

Control v The Rich Tapestry of Chaos?

For the most part, we as humans we have a fundamental desire to seek control and possession within society. But it’s worth remembering that this doesn’t have to be the future that we create for ourselves on the web. There will always be a place for order, quality and reliability. But those standards shouldn’t be pursued to the extent that the very pursuit of such ideals sterilises an otherwise fertile landscape in which innovative creations are possible only at the point when such constraints are relaxed.

You’ll forgive me the ramble, perhaps. Of course, the future of the internet is far more important than the simple removal of my Bitcoin wallet from the App Store. Yet the wonder of the internet is that it’s a technology that that facilitates activity at both an individual level and on a monumental scale – simultaneously.

So if something’s not working for you in your daily life, it’s time to change. Don’t just sit back and accept it. Think about the changes you’d like to see and, if necessary, go out and innovate. That’s both the power and responsibility that you hold in a modern digital society.

You don’t just owe it to yourself. You owe it to all of us.

photo credit: Mauer-betlehem via cc

Unleashing the Potential of Information

One blog I make a point of always reading is by John Battelle. I read his book ‘The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture‘ about the early days of Google a number of years ago and found it a fascinating read given his access to some of the internal workings of Google as the business grew.

Like many of my favourite bloggers, he tends
focus on some of the bigger tech trends that are taking place in society and his post earlier this week is no exception.

In a world in which most of the population tend to forget just how much data records our every move (whether we’re leaking it as we access web services via third party authentication log-ins or learning a coue of weeks later that it was stolen, a result of our own blind trust in services and businesses that are amateurish about securing it), he talks about the concept of potential and kinetic data.

It’s particularly interesting to me because he frames the difference as explaining how some of the fastest growing modern tech companies are experiencing explosive growth precisely because of the fact that they’ve worked out how to release that potential. If you can build a business that focuses in unlocking that potential, you’re onto something that’s really valuable.

So for example Airb’nb, Uber and Nest have each discovered ways to release data that existed in what were previously ‘dumb’ environments and brought them into the structure of the internet. By building businesses in this way, they have unlocked potential information about:

  • merchandise (Amazon, eBay)
  • spare bedrooms (Airbnb)
  • transportation systems (Uber)
  • our home environments (Nest)
  • real-world relationships (Facebook)

And of course another great example is Google itself – a business which discovered how to convert potential information (links on the web) into kinetic information (search).

You could argue that it’s a subtle distinction – but I feel that it’s a key one. We’re all guilty of speaking confidently about how Big Data will change everything but for the most part, organisations are still flailing around trying to record everything possible in the hope that this will become somehow useful in the future (hello NSA…).

But if you’re looking for business ideas and want to make a real difference, think about one area and focus in on how you make that leap on converting potential to kinetic information. You might just stumble across a huge idea for a business.

photo credit: jah~ cc

Security, Identity And The Relentless Pursuit Of Data

Listen up...Every single day, technology and our understanding of what might be possible advances a little further. After a slow start (in retrospect), we’re now picking up pace. Soon we’ll be breaking into a jog along the road towards exponential development (see Ray Kurzweil’s ‘The Law Of Accelerating Returns‘). Exciting times indeed. Yet increasingly I’m finding myself questioning how technology will impact on issues of security and identity.

Both topics are going to be of critical importance over the next couple of decades. I can see personal identity driving the rise of individual and surge pricing for example – a move to a world where everyone is charged a different price according to past behaviours. But before we even get to that stage, a number of fundamental questions still need to be answered.

It’s pretty much accepted that advances in technology have brought massive improvements in the quality of life for many. Although not yet for all. The developing world for example is really just getting started, with booming mobile phone adoption rates connecting millions to money and knowledge in a way that was previously impossible.

But while technology creates collective benefits that are often direct (new products and services), indirect (more efficient processes) or a combination of the two, we rarely spend any real time actually debating how to deal with the digital exhaust that each of us is, knowingly or otherwise, leaving in our wake.

Now the question of who should be able to access this trail of information – and for what purpose – is one that’s causing tension between various groups. The battle lines are being drawn today whilst most people remain blissfully unaware.

Gold rush for a new era?

There are many parallels today with the way that society has developed in the past. Whereas the majority simply watched as explorers and innovators rushed to acquire newly-discovered natural resources such as oil or gold in days gone by with little or no thought for the environmental consequences, we now see the same fervour from large businesses, governments and criminals, as access to personal data increasingly becomes their lifeblood.

Yet, unlike oil, this treasure is far less transient and limited. Once data is recorded, it does not tend to simply disappear, somehow self-destructing in a James Bond style. It doesn’t matter how effective we believe current laws are. The reality is that there can be no certainty about how our personal data will be used in the future by businesses and organisations that may not yet even exist in a society whose cultural norms continue to evolve.

And whilst there could be a real benefit from our historic data being used to more accurately diagnose our medical problems in the future, for example, few people would be overjoyed about mobile phone location data being used in the same way to justify an increase in health insurance premiums because the data shows that someone was a regular visitor to a fast food outlet ten years before.

Let Battle Commence…

One of the best articles that I read last year – full stop – was by security guru Bruce Schneier. He frames the battle that’s shaping up in the digital world brilliantly and I thoroughly recommend that you make the time to go and spend ten minutes reading it in full.

Despite becoming increasingly high-tech, Schneier sees modern society reverting to the feudal system that used to be common in the past. Skirmishes are becoming more frequent between two distinct camps:

  • The Nimble: small tech-savvy groups of individuals
  • The Powerful: governments or large businesses

The nimble respond quickly to advances in technology by adopting platforms that spread their messages efficiently. Yet, whilst it might take them longer to get started, the established government or large businesses will usually end up in a far stronger position of power over the masses – simply because networks tend to amplify existing power, of which they had plenty from Day One. As Schneier writes:

“So while the Syrian dissidents used Facebook to organise, the Syrian government used Facebook to identify dissidents to arrest”

The vast majority of the world are vassals who fall into neither camp. We believe that our safest option is to ally ourselves to our feudal lords in order to gain their protection. Yet, the reality is that our so-called free choice of ruler is increasingly an illusion. Most of us are becoming increasingly reliant on platforms and devices already owned by these powerful organisations who successfully attract the average user with the lure for convenient storage of all of our personal information in one single location. Just think of Facebook and its quarter of a trillion photographs.

Decentralisation and Transparency

History shows that a true feudal relationship involves rights and obligations that run both ways. Yet events of recent years (including Wikileaks, Snowden and PRISM) have shown that it is going to be exceptionally difficult for those in power to strike a balance between such rights and responsibilities.

In fact, it’s probably an impossible task for them to gain that necessary perspective by themselves. Technology amplifies the potential damage that could be caused by one individual and therefore centralised organisations in power feel compelled to seek increasingly draconian powers to prevent such risks, however remote.

It’s a concerning trend because as society moves increasingly towards a technology-driven distributed networks of individuals, this clash of interests can only become more frequent. Whether it is covert surveillance by governments or data collection by large organisations matters little.

Will society be content to let personal data be controlled by third parties in this way? One of the reasons that Bitcoin is so powerful is precisely because of the fact that it is decentralised, with no central point that can be attacked or influenced – whereas the accumulation of data (for which read: power) in centralised organisations looks to be hugely problematic over time.

A tipping point for public interest?

But we’re in the early stages of this cycle. Over the coming years, I think that the real backlash may come when the average ‘vassal’ starts to see more everyday items that are plugged into the Internet of Things that know precisely who you are and what you’ve done in the past. Will a line be crossed when a bus shelter reminds you of that TV program you watched on your mobile a couple of weeks before, for example?

Whether it will be too late at that stage to protect personal data is up for debate. Whether the nimble or the powerful end up ruling the world is still to be decided. But wherever we’re heading, the cost of starting to work on a solution now has to be significantly cheaper than simply waiting to fix the issue in the future once the data’s been released into the wild.

photo credit: communitiesuk via cc

Edinburgh’s First Bitcoin Meetup

Three weeks ago, I decided to arrange a meetup for people that were interested in Bitcoin. It’s no secret that I believe that the crypto-currency movement is going to have a huge year in 2014 as Bitcoin (in particular) accelerates from niche tech circles into the popular consciousness.

Unsurprisingly, most of the people that are into the subject tend to exist mainly online, whether in forums, podcasts or Reddit. But for me, that vital step into the mainstream will only come when people transact openly – and for that to happen, discussions need to take place face to face to let questions be asked, knowledge shared and – importantly – pique the interest of people who have only heard the often-sensationalised reporting in the press.

So I’m delighted to say that Edinburgh’s first Bitcoin Meetup at the Queens Arms last night was a huge success. Around thirty people turned up, all delighted to have the chance to speak about bitcoin and other alt-coins face-to-face. For me, it was confirmation of the fact that things are about to get really interesting, coming as it did on the day of the launch of a service to buy bitcoins directly around the UK from such trusted places as local newsagents, on top of the news that the UK’s first Bitcoin ATM has been installed.

Thanks to everyone who came along. Check out the Meetup page for details of the next one at the start of March. If you’re at all interested in coming along to hear more, I’ve no doubt that the group would make you welcome.

Thoughts on the Regulation of Bitcoin

Red Tape
How much red tape is too much when it comes to the regulation of Bitcoin?

As Bitcoin moves into the mainstream, the question of whether – and how – it should be regulated continues to loom large. It’s an issue that’s naturally divisive within parts of the community.

As a decentralised currency beyond the control of any country or organisation, Bitcoin has always held a certain appeal to those who hold certain ideologies or intend to subvert the system in some way. And it’s fair to say that neither radical libertarians wanting to stick it to the man nor criminal networks drawn (erroneously) to its anonymity tend to campaign for greater regulation.

But at the same time, regulation is for many in society inextricably bound up with legitimacy and, if handled correctly, could in fact provide important benefits that go far beyond simply clamping down on illegal activities like money laundering. The reason is simply that with regulation comes certainty – and with certainty, investors become more willing to part with the cash required to fund the development of Bitcoin businesses that will in turn make the ecosystem more user-friendly for the man on the street.

At least that’s the theory. Of course, the reality is that poorly crafted regulations, despite being imposed in order to prevent evil activities that may damage society, can also severely hamper innovation. Think of the torturous amount paperwork and delays involved in opening a bank account as they tick the boxes to ensure you’re not in fact Tony Soprano. Then add into the mix the fact that Bitcoin is a truly global technology and the likelihood is that entrepreneurs will vote with their feet to base businesses outside regions that place them at a competitive disadvantage and the issue becomes even more complex.

I watched the livestream of the first day of the New York Department of Financial Services Hearing into Virtual Currencies and I got a clear sense of the conflict that regulators face in a very complex debate that is increasingly being played out in public in different countries around the world. It’s too early to say which way popular opinion will go in the majority of countries but there’s a need for regulators (around the world) to really take on board that Bitcoin is far more than simply a gradual evolution of the existing financial system.

With the probable adoption of Bitcoin as a protocol on the internet and the emergence of programmable money, there are real risks if regulators fail to innovate their own processes in tandem. There’s a real tension here. It’s clear that forcing Bitcoin startups, most of whom have no more than a handful of employees, to comply with the same levels of regulation that apply to global multi-billion dollar banking behemoths is just not going to work. We’re talking about with technology startups here – they need to get into the marketplace as quickly as possible in order to see whether someone actually wants to buy what they’re selling and to iterate their business models accordingly. Technology startups cannot hang around for months on end for authorisations to roll in in the way that traditional financial services businesses could.

Fred Wilson gave short shrift to the Winklevoss suggestion that startups could perhaps hire specialist businesses to assist them in meeting any regulatory burden with the process, in much the same way that modern-day banks do. Doing this would simply reintroduce some of the cost that Bitcoin has removed straight back into the system. Fred is urging regulators to find a coding solution to help startups to meet any regulatory burden and to me, this just seems like an area with huge potential. If the regulators around the globe show leadership by building a system for this new world of financial services in which individuals can  log and prove their identity and status (in much the same way as people use the authorisation services of Facebook or Twitter to log into websites today, for example), we introduce even greater efficiencies into financial services and suddenly regulation gets a whole lot easier to achieve for small businesses.

There was plenty more discussed but I just want to wrap up with one final point. The hearings took place in the shadow of the two high profile arrests earlier in the week and so the tired comment about Bitcoin being used to facilitate illegal activities was raised once again. Those testifying at the hearing were in no doubt at all that this is increasingly an old story. As the ecosystem has grown, the composition of the community has changed significantly. Indeed Jeremy Liew testified that his personal research from around nine months ago had shown that Bitcoin was in fact only being used in around 0.5% of all transactions taking place on Silk Road at that time. As I’ve written about many times before, it remains an easy story for the media but entirely misleading.

Both the Bitcoin economy and the make-up of the community has developed hugely over the past couple of years and the reality is, I believe, far closer to Fred Wilson’s view that the Bitcoin ecosystem will have five distinct stages to its development:-

  1. The Academic Stage: the emergence of the community
  2. The Vice Stage: the use of Silk Road and reliance on anonymity
  3. The Speculative Stage: where we currently are, with huge price volatility
  4. The Transactional Stage: where merchants start to accept and the public start to use bitcoins generally
  5. The Programmable Money Stage: where we build upon the protocol and the whole system really starts to fly

So, let’s hope that the regulators get this right. Call me a pessimist but my instinct is they won’t – at least at first. But as everyone involved in the tech world knows, sometimes the best way to learn is to fail fast and come back quicker, this time with improvements. Let’s see whether they can learn from the technology industries that they’re having to engage with and continually refine their processes at pace. It’s not going to be easy. But it is going to be important.

Watch this space.

photo credit: communitiesuk via cc

Three Key Megatrends In Technology (And Society)

It’s not always that easy to see what’s ahead…

If you’re interested in technology, it’s very easy to be seduced by the hype that surrounds the new, shiny product or service that everyone’s talking about that month. And whilst that’s mostly harmless for the consumer, it can be fatal for a VC. Not only are the companies that you invest in risky but by paying above the odds, you now need your winners to succeed on an even greater scale to have a chance of repaying the people who trusted you with their cash.

So I always find it interesting to hear VC’s explain how they make the decisions about what to invest in given that they focus only on sectors that they believe have tremendous growth potential. Fred Wilson is both a top VC and daily blogger who’s particularly insightful and his recent talk at Le Web on three key megatrends in technology is no exception. You can check out the full talk in the video below.


You See Better From Further Out

Fred’s approach is to move one step back from focusing on so-called hot areas in general (such as machine learning and big data) to try to understand the bigger picture. Don’t attempt to guess which technology will be the most important. Look instead at how society is developing and the gaps that are being created. And it’s on this basis that he sees three ‘mega-trends’ driving business over the next few years.

1. Transition from bureaucratic hierarchies to technology-driven networks

Business traditionally functioned from the top down. Management orders filtered down the levels whilst customer feedback would usually go directly to front-line (and often junior) staff. When the system worked, that feedback would have to travel back up through the various layers until management made the decision about whether or not to make changes. Inefficient yes but justified by the high costs of communication.

But now these costs have plummeted, traditional hierarchies are being replaced by technology-driven networks. Think about the disruption to the newspaper industry: vast newsrooms with armies of reporters directed by a publisher with stories being edited to meet deadlines before the publication of a physical daily newspaper. Cue the entry of technology-driven networks (and the advent of Twitter and blogs in particular) and now everyone can be a reporter.

The crowd on each network determines what is popular (by retweets, follower count and the like) and the news that is relevant is delivered to us instantly via our mobiles. The same disruption can be seen in film/television (YouTube) and the music industry (Soundcloud).

Consumers now have the power to clearly signal what they want and find useful. But Fred believes we’re still in the early stages of this process which is only now starting to ripple through other industries like hotels (Airbnb, OneFineStay), creative industries (Kickstarter) and learning (Codecademy). Most industries will be affected by networks over the medium term.

2. Everything is being unbundled

It used to be expensive to get products and services to market. That cost meant that businesses tended to bundle things together that the customers had to pay for, even if they didn’t necessarily want the full selection (think of the Sunday papers with News, Holidays, Finance, Fashion, Classified Ads & Sports sections). Yet technology makes it cheap for new companies to be built to deliver single parts of these products, with the result often being that the bit you actually want is now both cheaper and of a higher quality.

Banking is a great example of an industry that’s being unbundled. It used to be very expensive to open and run a physical branch so the banks offered all types of products, including mortgages, credit cards, small business loans and working capital finance. Yet new businesses are now able to use networks of individuals to provide more efficient, specialised and more effective products – through peer to peer lending for example (Lending Club).

University education is another area where the high costs of traditional delivery – sourcing a building, lecturers, expensive academic books in libraries, face-to-face lectures – are being disrupted by MOOCs and mobile online learning platforms. The network model is also changing the face of research, both with the growth of Open Access publications and by enabling people to collaborate across different locations to enable researchers to share expensive, scarce research resources (such as expensive medical equipment).

3. We are all now a node on the network

The mobile phone has changed the game forever. Whilst those in the developed world still have the option of choosing to use a laptop or desktop rather than our phone, in the developing world, mobile has already won that race for dominance. With the cost of a desk computer too high in such countries for general adoption, people just moved straight to cheap (predominantly Android) smart phones. But regardless of the location, the result is that we are all now connected to each other all the time. Cue a wave of opportunities for businesses who are able to build upon that knowledge of people, locations and photographs across the network – in transport/logistics (Uber), payments (Dwolla, Square) and dating (Tinder).

Where The Three Collide

Fred goes on to identify four key sectors in which each of these three mega-trends are making their presence felt in particular:-


It’s obvious that we’re heading for major change in the world of money. I agree with Fred’s view that Bitcoin (or similar) is going to be responsible for so much more than just innovation in payments. It has the potential to become the financial and transactional protocol for the internet that has always been missing. As the standard way in which financial value is exchanged across the web and one that is entirely free from the control of any one party, money will be able to flow as freely and easily as content does today. As a protocol, it will also act as a foundation upon which entrepreneurs can build a whole variety of products and services.


Think of the growth of wearable technology with individuals wearing devices that can report back with details of their vital signs (Fitbit, Fuelband etc). In the future, some of this data will remain personal and private, some will be shared across networks and some will be exchanged solely between you and your doctor, caregiver or family member. Throw gamification into the mix (Fitocracy) and suddenly you’ve got a profound force for good with individuals making positive decisions about how to keep themselves fit and healthy.


When the industrial revolution arrived, the side-effect of such rapid development was the pollution that poured into our environment. By the time we realised and started the clean-up started, almost a century had passed and we faced a far harder task than it could have been had we dealt with it at the time.

Arguably we’re now facing exactly the same problem in the information age – only this time the pollution is data. Every digital activity we carry out leaves data exhaust which is, like it or not, letting other parties observe our activities. Fred’s view is similar to most people that I speak to: most of the time, he’s happy to let the government, Google, Facebook and others spy on him. However, sometimes the services that we’ve used end up recording our activities when we don’t want them to. Therefore, getting some control over this data leakage, both at an individual and a societal level is important.


Currently, many of us sign into services using our identities from other platforms (e.g. Facebook, Google, Twitter etc). Whilst it is extremely handy to use their authentication services, we are essentially giving these companies knowledge about everything that we do. Fred predicts the emergence of a standard protocol that will provide individuals with control over their own identity, trust and data which will be distributed (like Bitcoin, across many thousands of computers), free from any one party’s control and global.

Tick The Boxes

No matter whether you’re a VC, entrepreneur or just a citizen in the modern digital era, Fred’s talk provides plenty of food for thought. Using this framework provides a useful lens through which to watch just how the world will change in the next few years as a result of developments in the tech world.

We’re only just at the starting line: the pace of technological advancement can only accelerate from here on in as networks strengthen and the remaining friction that slows down the voluntary exchange of information between people anywhere across the world disappears completely. So if you’re looking to start up a new business or simply to future-proof the one you have, you could do far worse than take start to consider how to take account of all three.

photo credit: C.P.Storm via cc

Discussing Bitcoin On TV

It’s been a busy week after STV got in touch to ask me to comment on the news that the Brooklyn Cafe in Glasgow had become the first in Scotland to accept bitcoins in payment over the weekend. I gave a street interview for the 6pm News, and followed that up with a live studio appearance on Tuesday night – you can check it out below:-

Whilst there wasn’t enough time to go into any depth on the subject, I’m delighted to see Bitcoin continuing to push through into the mainstream public consciousness. I’ve been interested in the topic for a while now and I’m convinced that digital crypto-currency is here to stay. Whether Bitcoin or another of the alt-coins will be the ultimate winner here is unclear but moving to a digital currency provides such significant advances for us all in a world that has changed immeasurably over the last few decades that once you get your head around the basics, I find it hard to imagine any scenario in which it won’t become a necessity around the globe.

I have exactly the same feeling about this as I did when I came across the original incarnation of Napster around the turn of the century. Whilst it soon became clear that the obstacles to the development of the peer-to-peer sharing were going to be insurmountable for Napster itself as an organisation, it was abundantly clear to me (and many others, I should say) from the start that it would be impossible to suppress a technology that transferred content with such ease.

As history shows, peer-to-peer technology was forced to evolve under the shadow of various legal threats. End users found the immediate transfer of digital content too compelling to simply forget, despite the various legal issues. And it was precisely this perceived value that drove innovators to continue to evolve the solution until content was ultimately being transferred on a decentralised network using decentralised software, avoiding a central organisation which would always be vulnerable to attack. Existing businesses simply had to find a way to work within this new world or perish – a struggle too far for many layers of the traditional entertainment industry.

To me, Bitcoin – and more specifically digital currency – displays many of the same characteristics. Not simply in the way in which it relies on peer-to-peer technology but in the fact that it will continue to evolve. But in this case, it’s not ‘simply’ entertainment that’s ripe for disruption. The change that it’s driving will be felt far beyond the world of finance alone.

Bitcoin’s single most important innovation is also its greatest strength – the distributed public ledger. This is a record of every single transaction that takes place using bitcoins, confirmed every 10 minutes across all of the network’s computers. If you’re spending money, no longer do you need a trusted 3rd party (e.g. bank) to confirm (for a fee) to the seller that you actually have that money. If the network says you have 10 bitcoins, you’ve got 10 bitcoins. You can now rely on the network to prove that you have the money you say you have.

The benefits are just too powerful to ignore.

  • Instantaneous direct transfers between individuals or corporations anywhere in the world? Now you can trade not just with the 1 billion people who have access to bank accounts but with another 6.5 billion people who can’t currently access banking facilities. As the physical location of workers becomes less important in a digital economy, you can now employ that skilled individual from that far-off country whilst being secure in the knowledge that both sides can understand, trust and value the payment mechanism.
  • Providing a native payment protocol for the web? Pay directly online without going through the laborious process of first paying cash into a bank account and paying a high transaction fee. It also opens up the potential (via micro-billing etc) for businesses to charge users accurately for content consumption according to usage.
  • Developing a system of programmable money? The world of smart contracts now starts to become a reality. No more lawyers writing contracts to deal with holding money in escrow until certain actions are carried out by one party. No more expensive trips to court to seek damages because the transaction itself is structured to pay out damages automatically in certain situations.

These are just a few basic areas. The reality is that the list goes on and on. But despite its limitless potential, Bitcoin’s adoption faces clear barriers. The general public continue to read media reports that constantly refer to its current volatility as a currency and its use in facilitating otherwise illegal transactions. We’re so early in the cycle that people are focusing on the immediate financial gains (and losses) and not hearing just how important Bitcoin is going to be as a protocol (a method of exchanging data over a computer network) – which in itself is shaping up to be one of the most significant inventions since the advent of the internet itself.

The speed of development in the world of Bitcoin is fast but there’s still a timelag whilst we wait for enthusiasts and startups to develop the killer usability that will enable the average man in the street to both understand it and then to adopt it.

I honestly believe 2014 is the year that Bitcoin will explode into the mainstream in a way that seemed unlikely maybe 18 months ago. The current market cap of the Bitcoin economy is currently over £6.7 billion, HMRC are said to be looking to reclassify bitcoin in the UK soon, bitcoin ATM’s are spreading around the globe and businesses are slowly but surely introducing it as a payment option ( in the US being the highest profile retail organisation to do so so far).

To be clear, I don’t advocate piling your life savings into it. It’s currently risky as a short-term investment, driven by speculators and its success in maintaining its position as the number one digital currency is still uncertain. But, in my view, the benefits of crypto-currencies are just far too significant to disappear. The concept of decentralised finance is here to stay and the problems that it has been designed to solve only get more pressing with each day that passes. So please, if you are going to do one thing this year, do yourself a favour – read up about it, question it sure but above all try to understand what’s going on.

And, as ever, if you want to chat Bitcoin, get in touch!

A Deluge of Opinions On Uber’s Surge Pricing

Surging ocean waves
The storm continues online around Uber’s surge pricing model

As the weather starts to worsen for us Northern Hemisphere types, it’s been interesting to watch the debate develop around Uber‘s use of surge pricing during a particularly wintery snowy December weekend in New York.

Cards on the table, Uber fascinates me. Whilst I’m not quite as bullish in my assessment of their future as some who are confidently predicting that it’ll grow into a more significant company than Facebook, I’m convinced they’re on the cusp on something huge and far more important than simply providing high-end transport through a slick app that handles payment directly (see my previous post on the two-way feedback mechanism they employ for both drivers and riders). The moment they start to use that data to morph into more than simply transporting customers with high levels of disposable income, things could really start motoring (excuse the pun). To quote Shervin Pishever:

“Uber is building a digital mesh – a grid that goes over the cities. Once you have that grid running in everyone’s pockets, there is a lot of potential for what you can build as a platform”  

Like all modern businesses, there’s a potential goldmine of user data being generated. But it’s the current use of that data that’s the current hot topic. By using surge pricing, Uber relies on an algorithm that temporarily increases the price of a journey when the supply of cars gets tight. Relying on basic economics, a sharp increase in demand for rides (due to weather or infrequent events, such as New Years’ Eve) causes prices to spike upwards in order to entice more drivers out onto the roads to satisfy that demand.

It all sounds fine in principle, although there are plenty of suggestions about alternative models that Uber could be using. But the current problem is that every time they use surge pricing, Uber walks headlong into a customer backlash, fanned by the social media platforms that are so integral to the daily routines of their target customers. Many are now asking the question: is it worth making extra money out of your loyal customers during peak times if it means risking customer dissatisfaction over the longer term?

Of course, variable pricing as a concept is not new. Every time you fly, the chances are that you’ll end up sitting next to someone on the plane who paid a different price. Yet there are still a huge number of companies who leave their prices unchanged whilst supply and demand vary on a daily basis. Is it just the case that we as consumers need to catch up with dynamic pricing models as they become more common? To my mind, it’s not too far-fetched to imagine society moving towards an individual ‘e-bay on steroids’ style of commerce as we become increasingly connected and systems get better at accurately identifying demand.

But for that to happen, customers need to be comfortable about how the prices are being set. In Uber’s case, the app displays a clear message about the temporary price hike before any journey takes place. But it’s prompted a debate about how those prices are set – in this case, how transparent an algorithm can ever be that is used to identify high demand and power the price spikes. Once a company starts to build up significant data about you, it goes without saying trust becomes critical. What happens, for example, if a price rises simply because the data shows that the customer is a regular has always been happy to pay higher prices in the past?

Remember when Amazon tried charging a higher price to regular shoppers who hadn’t cleared their cookies back in 2000? Not their most popular move. Of course, there’s no evidence that this will be Uber’s chosen path. But in the wider scheme of things, it’s possible to see this question being asked more frequently as the market becomes increasingly frictionless, search more powerful and transactions faster to conclude digitally.

One thing that is certain is that Uber is a young business that is making enviable sums of cash. It’s clearly doing something very right by focusing on monetisation (as opposed to traction) far earlier than many other tech giants did at a similar stage. It’ll be interesting to see how it pans out over the longer term however as Uber becomes more ubiquitous.

photo credit: AGrinberg via cc

The Unstoppable Rise Of Bitcoin?

Bitcoin continues to make the headlines

If you’ve been following the news online, it’s unlikely that you’ve made it all the way to the end of this week and not heard the word ‘Bitcoin’ in one context or another. This week, on the heels of the first Congressional hearing into the digital currency, the value of Bitcoin broke the symbolic $1,000 mark for the first time (according to MTGox). I’ve written a brief introduction to Bitcoin before.

But, in amongst various press reports in which journalists continue to peddle the usual scare stories of bubbles being formed now as in days gone by in relation to such commodities as gold, land and tulips – and not entirely without justification I should add – I still think that the real significance of Bitcoin has again been for the most part entirely ignored.

I understand that the price volatility makes a good story. After all, who doesn’t like to hear such cautionary tales of modern-day foolishness as the one involving the guy whose hard drive containing $4 million in bitcoin is now buried somewhere in a Newport landfill site and no doubt continuing to appreciate in value.

But for me, Bitcoin isn’t simply an opportunity for us to gamble on making a quick buck by risking everything under the pretence of somehow being able to predict its future movements. It is far more important than that.

As Mike Hearn said earlier this week in a quote that I shared on Google+:

“It’s easy to forget that Bitcoin’s true value is not in an arbitrary exchange rate, but in its ability to enable new applications and services which aren’t possible with today’s payment networks.”

There’s a very important post by Albert Wenger of Union Square Ventures (‘Bitcoin As Protocol’) that sets this out far more eloquently than I can. In essence, Bitcoin has the potential act as the foundation upon which a whole range of significant innovations can be built over the coming years. As Albert points out, in the same way as a car driver doesn’t need to know how the car engine works – or a web surfer doesn’t need to understand how HTTP works – the important thing to take on board is that the introduction of an electronic public record of every financial transaction (in the form of the blockchain) in itself presents all manner of new possibilities.

It’s likely that the adoption of digital currency will lead to the creation of a whole new ecosystem for commerce and innovations in existing processes which has not only the potential to be significantly more efficient but importantly also lets us do things as a society that just aren’t currently possible.

If you’re with me so far, please do take a look at the talk that Mike Hearn gave at the Turing Festival earlier this year to get a sense of where this could lead in the next 50 years – truly mind-bending stuff:

Of course, I don’t know if it will be Bitcoin that wins the race. There are a range of other competing digital currencies that are vying for supremacy. But in my view there’s no doubt that we will reach that tipping point one day when a digital currency will be generally accepted (and not just by Edinburgh’s First Bitcoin Taxi, as I discovered this week). The potential benefits are just too good to be ignored. So please don’t fall for any of the red herrings around the unstable value, the facilitation of illegal activities or any similar superficialities. This is going to be far, far bigger.

photo credit: zcopley via cc

Is Technology Really Destroying Jobs?

Speeding Technology
Speeding Technology

If you’re reading this blog, the chances are that you’ve got at least a passing interest in technology. At the same time, you’re probably creating jobs for others as an entrepreneur or you’re an employee yourself. Either way, at some point, the question of whether technology could replace jobs – even yours – in the future has probably crossed your mind.

As I’ve mentioned before, the general public tends to overestimate the current ability of robots to rise up and consign mankind to the scrapheap. But clearly there’s still a tension here. After all, any time an industry is disrupted by the development of successful new technologies (think Skype, Netflix, Tata Nano etc), its always likely to result in job losses as the traditional big players struggle to keep up.

In the ideal world, everyone should ultimately win following advances in technology: the consumer gets cheaper, better services and products; the new business creates new jobs; and, as the technologies collide with mainstream demand, there’s an exodus of talent from the existing industries to the new exciting frontiers. The identity of the employer might change but, for the most part, everyone finds something to do and keeps working.

But does the evidence actually back this up?

Rising Productivity But A Slowdown In Employment Growth

Not according to Erik Brynjolfsson, a professor at MIT School of Management, and Andrew McAfee, associate director of the MIT Center for Digital Business at the Sloan School of Management. They argue that current developments in computer technology are destroying jobs more quickly than replacement roles are being created.

The US statistics seem to back this view up. Despite productivity and employment growth enjoying a very similar upwards trajectory ever since the Second World War, things changed abruptly in 2000 when productivity kept rising whilst the growth in employment stagnated.

So have we reached a tipping point in the continual development of new technology? Or is it pointless worrying since people have always found something else to do when faced with unemployment caused by technology in the past?

If we assume (perhaps naively) that the statistics are correct, we face a key question that economists know only too well the world over: can we honestly identify technology as being the main reason for this slowdown – or should we also be looking at the vast range of other macroeconomic factors?

The ‘Hollowing-Out’ Of The Middle Classes

I’m no economist. But putting aside the anecdotal scare stories in the popular press about the threat of faceless technological progress for a moment, the area that’s really of interest to me is how technology is affecting certain types of roles, such as clerical work and professional services. I’m not about to define the middle class here but if we’re looking at trends, it’s clear that computers are being used very effectively in certain areas of the workforce that share similar traits.

A report was released this week by the Oxford Martin Programme on the Impacts of Future Technology which shows that nearly half of US jobs could be at risk of computerisation, with transport, logistics and office roles being the areas most under threat. If you’ve got the time, you can get the full 72-page working paper at ‘The Future of Employment: How Susceptible Are Jobs To Computerisation?

Arguably, it’s those in the clerical and professional jobs that may have more to worry about as computers continue to improve their problem-solving abilities using a combination of artificial intelligence and big data. Take Watson, for example, IBM’s computer that beat the human contestants in a version of the TV show ‘Jeopardy!’ in 2011. That technology is now being directed towards a whole range of areas, including healthcare, customer service, investment advice and cooking.

So, for example, if you look at how Watson is being used in the field of medicine, the computer is now learning how to diagnose patients by combining its ability to assess vast amounts of medical data in conjunction with natural-language processing and analytics that are continually improving. It’s still early days but the potential for this scale of computing power are becoming clear.

How To Keep Your Job

Want to protect yourself? Current thinking is that you need a job further up the chain that requires you to use creative, social and problem-solving skills which will be far harder to automate over the next few years. In these areas, technology isn’t able to replace the individuals but is instead assisting them. Technology is used to enable the employee to do his or her work more effectively – think of the joiner who uses an electric drill to work more efficiently. He doesn’t get his P45 because the employer chooses to employe the drill instead.

An even more relevant example presents itself here when you start to think about the implications of the widespread adoption of technologies such as Google Glass in a work environment. It seems to be vital for employees to maintain a culture of curiosity whilst actively striving to become increasingly technologically literate if they want to continue to pay their bills.

Yet increasing number of people are still required to carry out low-skill jobs. Automation is just not very good yet at replacing janitors, home helps and restaurant workers, for example. Plus it’s important to remember that in many cases, technology is helping businesses not only to survive but also to expand quickly when they’re faced with a lack of available labour to employ to meet the growing demand for their new products and services.

Is It Just A Case Of Learning New Skills?

The reality is that many new technology companies are still heavily reliant on the humans behind the scenes. For example, Amazon might be increasingly dependent on Kiva to replace human warehouse staff with robots, but Kiva itself has a huge demand for new software engineers. The success of that business depends on finding talented individuals to constantly develop improved algorithms to ensure that the robots act more efficiently. Robots have never been good at dealing with change and uncertainty so if your job has that in droves, it’s safe to say that there could be a growing demand for your time.

The Autonomous Economy: Waiting In The Wings

But there’s (at least) one more significant factor that we need to consider when looking at how the development of technology in the modern era differs from the past. And that is quite simply that, in some areas, our economy is now developing without any direct involvement from humans.

Or, more accurately, more can now be done automatically by computers that are learning how to do things as a result of applying themselves to big data using new advances in artificial intelligence and smart analytics. According to W. Brian Arthur, a visiting researcher at the Xerox Palo Alto Research Center’s intelligence systems lab, means “digital processes talking to other digital processes and creating new processes”.

Result? We can do more with fewer people and some jobs become obsolete.

Here’s one of his examples. You no longer speak to humans as often when  you check in for a flight these days. Now you simply type your booking number into a machine in the airport. That one simple act sets in course a chain of events that involves many machines speaking to each other simultaneously about a huge range of topics without any human intervention (including flight status, your past history, security checks, seat choice, foreign immigration and, in some cases, making automatic decisions about weight distribution on the plane). Decisions are being made automatically in a way that was inconceivable before the networked internet age.

The Future?

Whether you believe in the argument that technology is destroying jobs or not, it does seem beyond question that income is moving gradually in favour of the so-called ‘tech-savvy’. The untapped potential of computer power, big data and individuals skilled in developing the sector is large enough to drive an exponential advance in digital technologies over the next few decades.

Whatever the eventual outcome, the one thing that’s clear is that change is a constant. The sooner we learn to continually recalibrate our expectations and skills, the more effectively each of us will be able to respond. In my view, anyway. After all, “anyone who claims they can reliably predict the future is a huckster with something to sell you – even if their product is only themselves”.

photo credit: Stuck in Customs via cc