Notes from Next: Economy Conference Day 2

You can find day 1 notes from the eariler post.

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

• Argues incentive structures in the stock market is broken
• Short term decisions to make the stock price high (e.g. stock buy back that will push the stock price up) are hurting us
• View that system is handed down by the haven ( not open to discussion). It is important to understand that market does not naturally solve the problems, and we pick it’s parameters, which decide who will prevail. Adam Smith talks about equal access to information, equal opportunity, and shared moral for capitalism to work. Goal of market design is to make those properties hold. Current system is not the only possible world.
• Private companies invest 2X more than public companies on people development

** Social security money in US is depleted by 2034

Financial system is broken

• about 60% of all money goes to lending
• Only about 15% get invested
• Economy built about 70% consumer spending
• Tickle down effect ( rich people make jobs) is not true
• For business to be possible, people needs money ( Learn from Ford)
• Only few people are part of financial discussions, this build a system that has no political will to change.

How to fix?

• Make dividends work ( not stock price)
• put incentives for good investments ( talked about Warren Buffet model)
• Look to do things well, not to optimise how we measure things
• Get companies to Invest on people

John Baptist III

• 10th generation virigina Furniture Factory owner ( 500m per year in sales)
• 2001 china joined WTO and prices dropped
• Wall Street wanted people to shutdown factories
• John’s company resisted was able to keep the company running

Source for the book “Factory Man” and a movie (https://www.amazon.com/Factory-Man-Furniture-Offshoring-American/dp/031623141X)

His comments

• You turn around with leadership — never ask anyone to do something that you are not willing to do
• When things are tough, talk to everyone and figure out the best path ( in Europe this is common)
• Never Lie
• Make labour a strength (e.g. you can make quality things). New model makes it a cost.
• Drive change. They love to tell what you cannot do, but look for what you can do, but others cannot (e.g. deliver the furniture in 7 days)
• Care for your team ( e.g. started a clinic when health costs where high)

Food App ( Matt Johnson)

• Food industry is big, but synonymous with minimum wage
• It is a informal economy
• Startup let you order a gourmet meal cheaply, and let cooks makes more money
• Automated food vs. quality + local touch
• Regulations are a complicated
• 20% of the company is given to cooks ( this is what Uber did not do)

Investment Ecosystem is changing

• Currently, message to companies is to grow big or go home
• People measure ambition by money you raise
• This has limit the focus to the next fundable milestone instead of building a great durable company
• Often founders taking too much money and then tanking a business which otherwise could have been valuable (e.g. Twitter, who was valued very high, but seem to stuck at 2B year revenue, http://www.wsj.com/articles/twitter-revenue-growth-dwindles-outlook-disappoints-1469564731)
• Even when they are successful, they give up too big a part of the company in the process
• We should come back to profitability, and goal should be to be profitable soon and build from there
• Example companies: Basecamp, Atlasssian, Wolfram, SaS Institute, Etsy

The Information (Jessica Lessin)

• Founded by former Wall Street journal reporter.
• It is a 400$/year per user subscription service, focus on quality and stories others does not cover and only cover a story if they can add value.
• Do not play the traffic game, but focus on quality and impact. No focus on advertisements, hence can ignore traffic.
• Only do two stories a day
• Create value from day one
• If you are good, readers come for you
• Self funded, have not taken investments => funded by customers. News is not a capital incentive business. Even if we have money, not easy to find great reporters
• Since it is subscription based, they knows lot of data about it users, and use that to find tune everything

http://fortune.com/2016/08/05/jessica-lessin-the-information/

Lola Travel, Paul English

• Lot of travel happen through an agent
• We built an App to do this well
• App ( bot conversation) interface+ NLP + AI + Travel agent Software
• Agent commission is payed based on the customer feedback
• Look at past travel and predict what you like
• Understand the values of the traveler (e.g. like to be insulated vs. experience where he visit)

References

• This Startup Is Bringing Travel Agents Back from the Grave, http://time.com/4336872/lola-travel-agents-app/
• Lola’s Booking Experiment Mixing Artificial Intelligence and Travel Agents Is Live, https://skift.com/2016/05/12/lolas-booking-experiment-mixing-artificial-intelligence-and-travel-agents-is-live/

Partners in Health| Paul Framer

• Free health service that make quality healthcare accessible to all ( main work in Hiti)
• We enrol patients ( e.g. get them to check on other patients)
• Try to work a system with health worker + google glass connected to IBM Wotson with a human expert available on demand

References

• https://en.wikipedia.org/wiki/Partners_In_Health
• https://en.wikipedia.org/wiki/Paul_Farmer

Bernie 2016 Campaign/ Ad-hoc activists Network ( Becky Bond)

Books: Rules for Revolutionaries, https://www.amazon.com/Rules-Revolutionaries-Capitalist-Manifesto-Marketing/dp/088730995X

• System that was behind Berine’s campaign
• Trying to open source networking
• Connect people to each other through Google Apps, Slack, FB, Trello etc
• Get 400–500 people in the same hall and get them to commit to each other, swap the phone numbers etc
• Send emails to keep things connected and to try to show the big picture
• Virtual call center that allowed volunteers to organize their own phone banks and call Bernie supporters in key states.

References

• http://www.bloomberg.com/politics/features/2016-02-24/behind-bernie-sanders-revolution-lies-a-meticulously-engineered-grassroots-network
• http://www.breitbart.com/2016-presidential-race/2016/04/25/meet-sanders-secret-organizing-weapon-worked-defeat-tea-party/
• https://newrepublic.com/article/135758/will-bernies-legacy-be

AI Lawyer/ Joshua Browder (DoNotPay)

• 19 years old
• Got the licence and end up with lot of parking tickets
• spend lot of times on how to defend parking tickets
• Built a decision tree around it and exposed it as a chat bot for free
• Bot asks questions and automatically fill a from to appeal the ticket
• Have saved over 5M$ worth of tickets
• Work on other areas like airline disruptions, evictions, repositions, trains, homelessness
• Legal advice for the poor

References

• Chatbot lawyer overturns 160,000 parking tickets in London and New York, https://www.theguardian.com/technology/2016/jun/28/chatbot-ai-lawyer-donotpay-parking-tickets-london-new-york
• Stanford student’s robot lawyer has beaten 160,000 parking tickets, http://www.washingtontimes.com/news/2016/jun/29/joshua-browder-stanford-students-robot-lawyer-has-/

David Kenny ( Head of IBM Wotson)

• Complex cancer case, Watson found the problem in 10 minute
• Bring down the cost, problem with lack of experts, bring it to more people, to poor
• Build a knowledge graph in deep professional feilds e.g. finical, regulation,
• UAE use Watson to help fill forms
• Check Watson to check regulation compliance, and some regulations do contradict each other 😃
• Mine the data to find patterns such as drugs or recipes

References

• http://www.forbes.com/sites/alexkonrad/2016/01/29/new-ibm-watson-chief-david-kenny-talks-his-plans-for-ai-as-a-service-and-the-weather-company-sale/#f924fe7f2cba
• http://fortune.com/david-kenny-ibm-watson/

Worksop about Education, Skills, Jobs, Regulations

Gig Economy

• Gig economy focus on low wage workers, next version of the contract labour
• Most not by choice
• They have to learn by themselves. We need more workers. Can technology help? e.g. training. Can we re-innovate of library as place of learning
• Support system for personal growth is missing
• Gig economy is often global. So outsourcing will happen
• Skill changes in gig economy are rapid. Main trait that is useful is willingness to learn
• Can government provide working places to people in gig economy?
• Weapons of math destruction ( bias in algorithms might affect some people a lot)

Other points

• Non profits often seen as gatekeeper, ask what can we do it help
• Often misunderstand requirements and solutions does not help. Must understand the context
• Can we make sure all level of people can do meaningful work? Can we not have different level jobs? perceived “bad jobs” are related to dignity
• Independent people get together and create a group, for dignity and help