Will you be obsolete in a tech-filled future?

Are you worried about having a job in the future? Or at least worried about how you will fit into the chaos and noise of the modern world?

We are living through a transformative time, filled with amazing (and sometimes scary) advances in technology. There are new humanoid robots, artificial intelligence software beating world champions at creative games, and 3D printers that can create human tissue!

My hope is that reading this will provide some context to these changes and ultimately suggest actions you can take to adapt to this new world.

You are about to read a summary of Venkatesh Rao’s Breaking Smart, a wide-ranging exploration of how technology is changing the world. I summarized his — much longer, more detailed, and awesome — posts so I could share some of the choicest nuggets with you.

Software, the third great wave

Software is the third member of an elite group with just other members: money and the written word. Each of these “general purpose technologies” transformed the world in their own unique ways. Almost everyone uses these general purpose technologies every hour of their lives, except when we’re asleep.

Software’s growing dominance is an opportunity for working professionals and for anyone who will eventually end up trying to create anything valuable. We have the chance to Break Smart — that is, join the ranks of these early software masters who are shaping the future.

The most interesting aspect of software “eating the world” is how subtle the effects have been in some cases. Even now, 25 years after software’s emergence as a world-changing phenomenon, we barely understand (and often cannot measure) the many ways life is changing around us.

Moore’s Law (the doubling of semiconductor cost-performance every 18–24 months) has unlocked a new world. Computers can run faster and cheaper with each passing year. Occasionally we reach a threshold and new categories of products emerge.

In 2007 we saw the first smartphones, which now number in the billions. Then we started storing all our data in cloud infrastructure, and borrowing extra processing power when needed. And now broadband access is increasingly available around the world. This is a suite of incredible technological tools, and it’s now available to billions of people.

As the costs and required expertise for technological development dropped, new frontiers opened up to explore. One such area is the Internet of Things (IoT), a loose collection of innovations embedding smart sensors into our physical environment. The economic potential of IoT is measured in trillions of dollars.

Remember this formula for yourself: smartphones + cheap cloud storage and processing + broadband access = limitless tools for people who know how to use them.

Why? Because software makes things cheaper and easier. That lets it transform every area of our lives, although some things change faster than others.

Consider ride-sharing (e.g. Uber and Lyft). Software is making it easier for people to offer themselves as drivers, which makes it cheaper for other people to get from Point A to Point B. As these types of software-driven behaviors and companies evolve, they create secondary effects that ultimately change the relationship between people and cars. The car becomes just another tool, while the phone replaces it as the 21st century symbol of freedom.

Imagine these same forces playing out in every industry: education; manufacturing; agriculture; aviation; hospitality . . .

Money and written language were both big deals, but software will dwarf them. It’s more flexible and powerful, yet we continue to underestimate it’s impact.

And why don’t we notice it? It turns out there are three reasons we ignore transformative technologies, and one more crucial reason why software is hidden from view.

  1. We think geometrically. With any exponentially changing phenomenon, we overestimate its importance in the short term, but then underestimate its importance in the long term. We do this all the time, most commonly with household finances.
  2. There is an installation phase followed by a deployment phase. When the foundation of anything is being laid, it is hard for us to see. Then there is a deployment phase. Innovative people start working on lots of consumer-focused applications “on top” of the foundation. Things change very rapidly, making many of us nervous. It’s a period marked by uncertainty and dystopian fears.
  3. Changes driven by software are disguised. We read a lot about the stuff that is easier to make as a result of advances in software. Think drones, 3D printers, genome sequencing, et cetera. All these changes are made possible by software.
  4. Most importantly, software development and innovative products are mostly driven by young people. That’s the exact opposite of previous eras where the older generations controlled all the key institutions around the world.

Opt Out to Break Smart

Many youth are opting out of traditional Industrial Age institutions in favor of software-enabled organizations and behaviors. This lets them avoid participating in — and also competing directly with — the “old school”.

This global phenomenon is characterized by a hacker mentality. Hackers use an explosive blend of creative problem solving and rapid experimentation, all powered by digital communities that rely on software. And this suite of tools is pretty much free.

Youth hacking is sort of good. Huge amounts of energy is placed into economic disruption rather than direct political confrontation. So the world isn’t burning down just yet.

Youth hacking is also sort of bad, too. The main victim of these disruptive activities is the average American. The pillars of life that in 100 years took us from being farmers to being astronauts — accruing credentials, taking on debt early in life, and long-term allegiance to one company — are no longer sustainable for the majority of the workforce.

Globalization is putting even more pressure on American companies. They have been forced to evolve beyond centralized production with “worker bees” to these super-lean teams with specialized capabilities that contract out the boring stuff.

All of us have experienced the stress and strain of living in the period of change. A lot of us feel like we’re being left behind.

One way to understand this shift is the fable of Prometheus. He stole fire from the gods for human use, empowering us to become more godlike. It’s a frequently used metaphor for technological progress. The traditional folks develop something new but cannot see its full potential. Rebellious youth then adapt it to their own ends, tilting the balance of power.

This ties back to the title of the series. Breaking Smart is the decision to join the ranks of those humans using fire (that is, software). If you don’t, you’ll cling to the last era until evaporates completely, leaving you with nothing.

There is only one way institutions will evolve to meet today’s challenges. The people who comprise these institutions will break smart, catalyzing the evolution internally.

That leaves me wondering what happens when a team of people does break smart. What happens? No one knows.

It may be worth considering that “it’s easier to invent the future than to predict it”, quoting Alan Kay.

And inventing the future is what people are doing all over the world. They are working in small teams that are optimized to solve tough problems in a software-powered world.

Too much size and things start to slow down.

Elements of the Future

As major problems are solved in this newer team-based approach, the world will change. There are four likely ways the future will be different than many of us think:

  1. The U.S. will stay on top. While it has plenty of problems, American culture is the best positioned to ride the “teams of hackers” wave. Silicon Valley will export its culture across the globe.
  2. Small teams will drive most of the changes, and ultimately define the contours of future societies. Loose collaboration among these small teams will allow them to grow.
  3. There will be no societal utopia or collapse. Instead the gradual increase in quality of life will continue for ever-larger numbers of people.
  4. The cost of solving problems will drop like crazy. Cheap — even free — solutions will displace older expensive ones, especially in regulated industries such as education, healthcare, and energy.

This messy process will clunk along, allowing more and more folks to increase their well-being. Unfortunately, this doesn’t address what people will actually be doing in the future.

Work will also be changing in ways we can’t predict.

The “what we do” will be less important than the “how we do it”. Work will become more creative and collaborative, and therefore more fulfilling. The boring, repetitive (i.e. unfulfilling) stuff will be outsourced to machines.

Already, workers are starting to break smart. They are experimenting, adapting, and learning over time thanks to feedback-rich and risk-tolerant environments. Work in the future won’t be as cutthroat as the on-demand contracting world, or as stifling as the corporate world.

This opens up a debate on the approach that people should take toward making a living.

Purist & Pragmatist

The evolution of web browsers illustrates the difference between a strict approach (Purist) and an adaptive one (Pragmatist). The Mosaic browser triggered an explosion of pragmatic browsers. These replaced the earlier attempts at purist systems (e.g. Xanadu) for navigating the Internet.

Pragmatists are inclusive by nature. Their approach tends to facilitate rapid adoption and development.

Purists dominated when computers were first developed, but have been steadily losing ground. Programming a computer used to be a manual task (think punch cards and ENIAC). Being creative cost too much time and money, so people planned everything out to the last detail. As computers became cheaper and programming became easier, a hacking culture (the Pragmatists) naturally emerged at the campuses that were part of the early computing revolution.

Hacking is all about being hands-on. The emphasis is on trial-and-error, not complicated architectures that take months or years to develop. At its core, hacking is a pragmatic activity.

Purist efforts, on the other hand, are centralized and hierarchical. They are led by governments and large businesses. They are focused on long-term, expensive programs. They work in limited circumstances but don’t transition well to new environments.

A key characteristic of any Purist effort is that someone can claim to be “in charge” of the whole thing. The inclusiveness of Pragmatists, by contrast, has resulted in movements such as open source and co-creation.

Computer programming has steadily tilted away from a Purist approach. Pragmatists dominate in software — that’s the essence of Agile Development — and in every industry where software is used extensively.

And software is going . . . pretty much everywhere. We just have a hard time noticing it. Every area is infected. It’s just a matter of time . . .

The easiest way to see which approach works — Purist or Pragmatist — is to look at the results. Where do we see most of the majority of delays, failures, cost over-runs, et cetera? In the overly planned, Purist style.

Healthcare.gov anyone?

Purists want everything to fit into a simplified model. What does not conform easily is discarded, creating a falsely simplified perspective. The Purist model, while aesthetic, is not robust enough to deal with the dynamism of today’s world. Even worse, it causes all kinds of unintended consequences.

Pleasantville? Not so much.

The Pragmatist approach embraces reality’s flaws. Each inefficiency is an opportunity for creative problem solving. And every problem solved creates value. We’ve seen that the cost of collaborating is vanishing, so it makes sense that the Pragmatist mentality grows in popularity every day.

Purists have tried to respond. When possible, planners have improved the top-down approach by involving citizens. This retards an already slow process, adding cost, complexity, and opportunities for corrupt practices. Consider the California high-speed rail project as an example, which is both over-budget and behind schedule.

The truth is, people don’t really know how to manage the explosion of complexity in the world. Each Purist attempt to contain and explain phenomena has failed.

What’s working is the Pragmatist mentality. It’s captured in the Manifesto for Agile Software Development, and can be summarized as “rough consensus and running code”. Just go with what works and don’t worry too much about some grand organizing vision to explain precisely why it works.

Rather than explain the world, just try to work with it.

Software Artists

Remember we are in the middle of a unique time. Computers are becoming cheaper to purchase and use, cloud computing is unlocking storage and processing on demand, and broadband access is creeping across the world.

And why are these three trends so important? What is so special about software that lets break all (or at least most) of the Purist rules? In other words, “Why does software tend to make long-term planning a bad idea?

First off, software is more like paper than steel. It’s a creative medium. You need to use it liberally, not horde it.

People who work with software are therefore more like prolific artists than structural engineers. Software is effectively free to create and run, so it is best used when someone has a mindset of abundance. It’s the optimistic fuel that powers places like Silicon Valley.

Abundance is what unleashes the willingness to try a lot of different things. Many of us see that as wasteful, so we don’t (or can’t) act that way. We prioritize the long-term vision, not the sloppy experimentation we need to do today to keep things moving along.

This Purist approach doesn’t work anymore because those experiments are precisely what lead us to the most valuable aspects of an idea as it evolves.

With everyone pursuing their own ends in the software universe, collaboration can be difficult. People often do not agree, and in those cases one group will split away. And they can do that, because building their alternative is effectively free.

Don’t like my idea? I’ll build and test it somewhere else. If I’m wrong, I’m wrong. But if I’m right . . .

Obviously there are some criteria for discussion in software-powered teams. Group need to be able to assess the value of different options. They use fertility and freedom as the key metrics. In other words, people are looking for the area of greatest possibilities where they can push significant capabilities into the hands of the user.

Most of us are not comfortable doing this. We don’t naturally think in terms of abundance. Instead we like certainty, plans, and (especially) profit — all as soon as possible. We will rally only those people who agree with us, or are too afraid to argue. We will ignore information that contradicts us, delaying difficult decisions. These fragile visions will crumble. Politics ensues.

We can’t help ourselves.

Beta

The goods news is that software lets us try a different way. The way of the Pragmatist. The approach looks something like this:

  1. Recruit folks based on optimistic assumptions about the future.
  2. Get started quickly — don’t overplan.
  3. Watch for information about what’s working best.
  4. Keep next steps clear in any debate about the future.
  5. Pay attention to how the software is actually being used/adapted.
  6. Throw energy and capital behind the most successful experiments.

Lather, rinse, repeat!

This uncomfortable process never really stops. It’s the embodiment of the concept of the perpetual beta.

A beta is not an unfinished product, as the phrase was understood in the past. A beta is actually a high-functioning product that allows for experimentation within the product itself.

Continuous, purposeful experiments let the product expand in a natural and cost-effective way. People will work directly (i.e. employees and contractors you have to pay) and indirectly (i.e. developers that you don’t have to pay) on the product.

New uses are discovered, often without you having to lift a finger!

In beta, a product is only as good as its ability to grow, change, and adapt. These internal experiments expose hidden risks, allowing the product to “self-heal” in a way that isn’t possible in top-down projects.

This is why you constantly have to update the applications on your smartphone. Each release is actually a blend of three different things:

  1. new experiments
  2. fixes to previous experiments
  3. removal of experiments that didn’t work out as expected

Almost all major software companies use this approach, which is known popularly as release early, release often.

Frequent experimentation gives the product a long-term flexibility. Unlike the Purist approach, in this case the “vision” is a rough consensus, not a firm plan. Data from the experiments is constantly giving feedback about what’s (not) working.

Software developers tend to do this experimentation in the open, and sometimes for free. Github is the main example of how this style of collaboration works in practice, but there are others.

These resources for software developers emphasize the simple, the practical, and the powerful. In a world with lots of choices, that’s how you attract people to collaborate with you. You build your crew by pursuing the course of maximum potential value and interest.

Such a personal style of team formation requires a network of trusted collaborators, so developers often recruit friends. This builds momentum, but also limits the team to a relatively small number — maybe a dozen or so. This is the sweet spot for hard-charging teams, which explains Amazon’s two pizza rule.

Purists do the exact opposite. A top-down, planning-first project treats huge groups of developers like lego pieces to be removed and added at will. They are a commodity, not the living, breathing soul of the product.

No one is in charge of the Pragmatist approach that increasingly dominates the world of software development. That’s the main reason why so many traditional companies are threatened by it. You never know when a bunch of developers will leave a project, attracted to some new shiny effort that promises a challenge, recognition, money, equity, or some other sweetener.

This is very, very messy. Lots of organizations and people get left behind during these rapid, disruptive efforts. Software enables small teams to have huge impacts on the world.

Functionally, these small software-enabled teams are like insurgent groups. They build things that scale quickly, displacing legacy systems, institutions, roles . . .

The Times Are A Changin’

It should be clear to any of us now that rapid change is the new normal, and will not slow down any time soon. In fact, change is accelerating around the world, powered by technological advances in an ever-expanding frontier of amazing fields. Nanotechnology, augmented reality, bioinformatics, neuroscience, artificial intelligence, and on and on. Each step forward pushes the boundaries of what’s possible in the others.

Is all this rapid change good or bad? Well, that depends on how well we adopt these new technologies.

As humans, we tend to like what’s familiar. This is especially true of things that were already around when we were born (e.g. the car) or developed when we were relatively young (e.g. the microwave, cable TV, or the cell phone depending on your age).

Beyond that, we break into two camps:

  1. Change is bad
  2. Change is necessary

These are positions we take about technologies that are not yet considered a part of “the way things are.” For example, there probably aren’t many people arguing that airplanes were a terrible invention that should all be grounded and never flown again.

No, people get upset about technologies that are newer and still being absorbed by society. These technologies are scaling rapidly, causing all sorts of societal tensions. Specific groups tend to lose out, while the majority of the rest of people’s lives get a little (or a lot) better.

What follows is a firestorm of protests, arguments, regulations, press conferences, and other attempts to figure out what to do.

Uber illustrates this perfectly. Cab drivers (in particular their unions) hate Uber and other ride-sharing services, while almost everyone else quickly adjusts to using them.

The people fighting Uber argue on the grounds of morality and justice. “Uber is destroying an industry that many people need to feed their families”, they say. Here are examples from Brazil, Australia, and France. The problem is, we don’t all care that much about cab driver unions, or even much about cab drivers when we can save a few bucks.

The politics are dirty in these cases. Each side tries to use Uber as a chess piece in their political strategy. It’s all very “I win, you lose”. Zero sum, as they say.

We are already seeing that this isn’t the case in many cities. Things aren’t zero-sum. Everybody can win, once adjustments are made. People gravitate toward these new tech-powered options, building on top of them. Improving them. Using them to do new, important, valuable things. Then a sense of inevitability takes hold. Soon we can’t even imagine a world without a thing that didn’t exist ten years earlier.

Consumers benefit from this in a big way. Uber won’t make a lot of money compared to how much value it creates for millions of people every day. And Uber is okay with that, because its software allows it to do something amazing at a global scale while slicing off a tiny percentage.

And this is happening with lots of other stuff. This unexpected feedback and collective tinkering leads to ever-greater rapidity and scale of innovation. Energy is released in one area — thanks to improvements in some core activity — and then feeds into an adjacent area.

Lather, rinse, repeat. And the wheel of innovation spins faster.

It’s a virtuous cycle, and the exhaust is value. Value for you, and value for me. Value for an increasingly large share of the world’s population.

That doesn’t mean everything is going smoothly, of course. There are critics of this process. For disruptive technologies that occur during adulthood, people tend to respond with one of two attitudes: change is bad; or change is necessary.

Both are innovation killers.

Change is bad. These folks want to restrict or kill the flow of resources to particular types of innovation. If you believe innovation is good, then that is not good.

Change is necessary. These folks really want to redirect resources to their field of technological innovation. They believe in one particular type of new technology. The Next Big Thing. Anything else is a distraction, which obviously does not actually help foster broad innovation. This is also not good.

What both these groups want is a predictable game to play. They want a final result, something they can win (meaning others will lose). The problem is, that’s not how the game needs to be played anymore.

Now the world is approximating an infinite game where most — if not all — players can win. We’ve never played anything like this before, though, so we keep reverting back to traditional games. Games with which we’re comfortable.

Why do people do this?

Utopian Dreams

All of us have a sense of how the world works. Some of it is good, and some of it is bad. If you imagined the stuff you think is good, then expanded it to fill every corner of the world then you have a vision of utopia.

A utopia can be agrarian, a romantic interpretation of life as a subsistence farmer. You know, without the short life expectancy, outhouses, fetid water, lack of medicine, or back-breaking labor. Alternatively, a utopia could be a house in the suburbs with 2.4 kids and a white picket fence.

A utopia is an ideal life. Groups of like-minded people will agree on the broad contours of a utopia. Sometimes that’s a political party, a nation, a company, or a terrorist group.

A utopia is all about the way things should be. Anything that deviates from the utopia is therefore bad. Actually, more than bad.

Corrupt.

Technology, especially new technology, needs to serve the utopia. If it doesn’t support the ideal then it’s bad, a decline from the perfect and stable society.

The more resources controlled by people with a shared utopian vision, the more they are able to mess with the world. Resources and people can be mobilized for long periods of time, warping the economy so that it only supports a narrow set of goals.

If you don’t happen to benefit from this particular utopia, then too bad. One man’s utopia is another man’s dystopia.

The best historical example of a nation pursuing an ideal is the Soviet Union, although both China’s and America’s military industrial complex illustrate this process nicely. The “in crowd” does well — for a time, anyway — while everyone else fights for the scraps.

Fortunately, software came along a few decades ago to save us from ourselves.

Small teams can use software to experiment quickly and cheaply, then pour resources into the most promising opportunities. This is much more interesting and productive than a top-down economy controlled by elites to fulfill their vision for the future.

Without a stranglehold on resources, utopian visions fall apart. The lid comes off, leading to an explosion of experimentation in work, play, family . . . pretty much all aspects of life.

We’re in the middle of such a period right now. This is a pretty overwhelming experience for anyone, but it’s particularly bad for the elites who have to watch their dreams crumble around them.

This wasn’t a part of the plan!

Of course, new technology-enabled experiments don’t always undermine the dominant utopian vision. And if a technology — or technology-enabled product or service — supports the utopia, then the elites are fine with it.

But that’s a big “if”.

Most advances using software are made without regard to the elites. These random advances are coming faster and faster. Elites are having a hard time keeping track of everything that’s going on, let alone evaluating and selectively supporting the things they like.

And then there’s the rest of us.

The Little Guy

We all live in this messy, evolving world too. We are making do as best we can. Some of us are adapting faster than others. These people are showcasing new lifestyles, behaviors, and values that will be widely adopted as new technologies change . . . well, pretty much everything.

Think back to the bad old days of subsistence farming — let’s say 1870 in the United States. Starting mostly in New England and the Midwest, people started working in industrial and service sector jobs.

These jobs seemed weird at first. They were certainly different from what the farmers were doing, anyway. Fast forward fifty years and lots of people had these jobs, then another fifty years and almost no one worked in agriculture anymore!

https://www.minnpost.com/macro-micro-minnesota/2012/02/history-lessons-understanding-decline-manufacturing

These transitions are messy. All of us get anxious. What will I be doing for work in ten years? Five years? Next year?

No one is more concerned than the elites who are losing their control of society. To them, these changes are signs of decline. That’s how they experience it. Their values are becoming obsolete. Think about how much money was made (and lost) by old school plantation farmers. Then by manufacturers. Then by banks. And now by startups.

At this point of disruption, elites try to rally people in one of two ways:

  1. Retreat to some imaginary past
  2. Entice people with a new utopia vision

Either way, these efforts are meant to re-simplify things and let them assert control again. Then get back to what they love: planning.

http://moviepilot.com/posts/2761192

There is another group out there, though. A force that may bring balance.

These people are embracing new technologies. They see the promise of a bright future, and will work their assess off to get in on the action. And they may shock you a little bit.

In case you haven’t been paying attention, there is an explosion of human creativity — and freakiness — out there. From insane soccer/football skills to awesome dance moves. From gnarly tattoos to body modifications. From parkour acrobatics to ridiculous festivals. And let’s not forget the fifth world on Reddit and the rise of the otherkin.

Many of us see all this stuff and shake our heads. It’s impressive, or unsettling, or just plain weird. At the very least, it’s not normal.

Traditionally, experts and cultural commentators would try to categorize and assess these lifestyles. They ask “How well does this new behavior fit into our worldview?” and judge the value accordingly. Something is good if it fits in. Something is bad if it doesn’t.

That’s an easy way to think of a changing world. Easy and sloppy.

These new, hyper-specialized pursuits can be seen as moral progress, powered by recent technology strides. The emergence of software-driven companies and industries lets people live productively in an ever-wider spectrum of economic activities. There are more viable opportunities for all of us with every passing day, whether we recognize it or not.

Many of these emerging roles seem strange. You can make money renting out rooms on Airbnb, or sell stuff on Etsy, or be a Lyft driver, or deliver food working for DoorDash, or consult for companies halfway around the world using nothing more than email and Skype.

All this diversity, enabled by technology. Specifically, software.

This process is actually accelerating. The increasing fragmentation of people’s activities leads to even greater advances in software. Specialized work, specialized software, more specialized work, more specialized software. It’s another virtuous cycle, with society diversifying as a result.

This takes us back to an earlier statement. Software is taking its rightful place next to language and money. Software is emerging as the third universal medium.

Abundance, Thy Name is Software

Everywhere software goes, it helps change the mindset of people from zero-sum — combative and potentially violent — to non zero-sum — collaborative and mutually beneficial. Like language and money, software lets us disagree without fighting.

Software-enabled activities are closest thing we have to superpowers. When we embrace them, we can do amazing things. We ignore them at our peril, or at least our irrelevance.

Power is shifting toward those who embrace software. More wealth is created and we are increasingly capable of solving problems without appealing to coercion (i.e. the government). We are all better off from the perspective of material wealth, but it’s hard to tell that to the people are losing their ability to shape the world.

Information and collaboration — Pragmastist tools — are replacing top-down — Purist — systems for ensuring basic safety and tolerance. Economic possibilities are expanding at a dizzying rate. Sounds like everything is all good, right?

Right?

Well, there are obviously many groups that aren’t unhappy with this explosion of creativity. Cultural fragmentation loosens their grip on the world. Elites are threatened by the exploration of areas they previously determined to be “off-limits”. Small groups of people — powered by software — are starting to explore all the stuff that has been swept under the rug.

And some of that stuff under the rug is pretty ugly.

We see a lot of craziness out there, reminders of human indecency. And in our weaker moments we wish for a past that never was. A world of white picket fences and uncomplicated marriages and stable careers. The Leave it to Beaver world that existed in America’s imagination for about a decade.

The future seems scary and ambiguous compared to this happy scene. Our fake sense of the past contrasts sharply with the explosion of lifestyles out there now. Progress feels . . . obscene somehow.

Here is a short list of some of the things that people wring their hands about:

  1. unemployment
  2. inequality
  3. climate change
  4. cybersecurity
  5. education
  6. cultural decline
  7. terrorism
  8. national competitiveness (any country, but especially the U.S.)

The main problem is that everything is interconnected. A discussion about one of these issues will inevitably tie in with another. Everything is going to hell, simultaneously.

Except that it’s not.

Let’s take a step back. Reality, while uncomfortable, is way better than we give it credit for. Technological progress allows us as a society to begin airing out — and addressing — the problems we ignored in earlier eras.

Coerced conformity did not really work for anyone, but it was the best option people had. Now things are different.

So of course everything seems worse temporarily. We are actually grappling now with a lot of things we hid from ourselves. Combine that with a “if it bleeds, it leads” media and we are guaranteed the wrong — maybe even the worst — impression of the world.

Here’s some things you probably didn’t know: the percentage of the global population living in extreme poverty is below 10% for the first time in history; in 2014 the U.S. had the highest high school graduation rate in its history; the number of women dying in childbirth is half of what it was 25 years ago; and on and on and on.

Not what you expected, is it?

The instruments are our disposal are working, even if it doesn’t feel like it after reading the news. Democracies with liberal values, well-regulated markets, technological innovation, and widespread entrepreneurship are doing amazing things.

Tackling all those gnarly problems on the above list requires us to rededicate ourselves to the stuff that’s working. We need to bust through the barriers in front of us, not shrink from them.

But how exactly are we supposed to do that with [insert excuse here]?

The answer every version of that question lies in the nature of our increasingly interconnected, software-enabled world.

A Global Team

First off, we need to acknowledge that our newly networked world of hardware and software is not a one-size-fits-all bandaid. Sometimes the logical, abstract, and quantitative can seem poorly suited to the tradeoffs we live with every day.

We are just fleshy organisms running around trying to make a living, after all. But that does not mean we stop asking the hard questions. In fact, those are the only kind of questions worth asking as we try to make our mark in the world.

And when you’re trying to do something that matters, you want to use the best tools. Well, software is a tool that gets better every day. And not just a little bit better, either. It gets a lot better. One simple example is the cost of starting a new business. Through a wide variety of free tools — all powered by software — you can do an incredible amount of work in very little time with a small team.

Don’t believe me? Check out over 300 of them.

Innovation happens based on the efforts of the small, creative teams who exploit software. That innovation increases productivity. And with increased productivity, people are free to explore new ways of living.

That’s progress, folks.

What do we know about this global network of creatives, linked together through technology? Primarily that this network is the realization of a very old human idea. Something very thoughtful people have discussed for a long time: a single, democratic planetary mind. Software has created a system that lets us directly influence and collaborate with people all around the world.

This global “mind” is a network. The network. We can build all kinds of amazing things on it. Think about Google, Facebook, Uber, Tencent, Alibaba . . . the list could go on practically forever. Huge, important companies that all share two things in common:

  1. They are built on tech
  2. They didn’t exist 20 years ago

The network that spawned these companies did not emerge in a vacuum. It’s replacing an earlier system. This older system was built slowly over last few millennia, and it was built to maximize stability and predictability.

You may recognize some of its most important parts: countries; governments; universities; and ideologies.

This older territorial system is becoming obsolete. The world has upgraded to a lightning fast network system that is ruthlessly focused on innovation and progress.

Networks require software. They are distributed systems, meaning there are lots of nodes operating pretty independently. These nodes orient on particular goals sometimes, a rapidly assembled coalition that can quickly do an incredible amount of work.

You have already read about a lot of the elements that power this process:

  1. High levels of trust
  2. Rapid assembly and disassembly of teams
  3. Breathtaking productivity

These small, temporary coalitions are almost magical in their impact on the world.

We are getting used to this style. The more comfortable we are, the better we get and the more people adopt it. That leads to even greater productivity, which funnels back into the system. Again, it’s a virtuous cycle. Software is the key to this networked approach. It lets us do incredible things in small groups, which in turn enables other small groups.

This cycle of accelerating innovation in a growing set of fields is hard to imagine, let alone describe. That’s why you’ve heard terms like “Internet of Things”, “Virtual Reality”, “Augmented Reality”, or “Mobile Web”. These are labels that journalists are trying to put onto a messy world to make it seem logical.

One of the weirdest parts of this phenomenon is how much it ignores hardware. Of course there is Moore’s Law improving the cost-performance of integrated circuits, but I bet most of us can’t name three companies working on the underlying technologies.

I’ll wait . . .

Contrast that with how many software companies you know. Google, Amazon, Facebook, LinkedIn, Microsoft, Uber, eBay — the list goes on.

Soft & Hard

Lots of cool stuff is happening with software. That’s because smart people are building cool stuff that lets other smart build on top of that cool stuff regardless what kind of hardware the stuff is using. Capabilities like virtualization and software-defined networks are the result.

This is awesome for you and me. Software — the bits — are actually more permanent than hardware — the atoms — on which previous generations had to rely. That seems weird, but think about it. You can change out computers and still keep your files. Why? Software.

As innovation continues, the lines between software and hardware are starting to get blurred. You can now recreate everything from blood vessels to destroyed artifacts. What’s a bit — software — versus an atom — hardware — in a world where one can turn into the other?

Unlike previous eras, the power to create is democratized to a large degree. That’s because software basically makes it free to replicate things. Your $500 smartphone (free with a monthly plan) has a better camera than the state-of-the-art studio cameras from ten years ago.

That’s pretty nuts.

The digital world is blending with the physical world in a way that we’ve never seen. The world is the internet. The internet is the world.

We’re not special, though. It’s not like people didn’t want this stuff in the past — it’s because these things just weren’t possible. Software’s revolutionary gift to humanity is the ability to insert non-zero-sum dynamics into our world at an unprecedented scale.

Now just about everyone can own the means of production because I can afford a smartphone, tablet, laptop, or desktop computer. And if I own one or all of them that doesn’t mean you can’t. Everyone wins, something that’s never been true before in human history.

In this new world we will see the rules change. Incredible new capabilities are testing societies around the world. We are being forced to adapt, and that is painful. If we can’t figure out how to solve our own problems now, we’re doomed.

So what exactly are our options for solving all these gnarly problems? To answer that, we need to deepen our understanding of how much the world is changing.

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The physical and the digital are coexisting awkwardly right now, like teenagers at a dance. The digital is so new, the physical doesn’t know how to respond. To make matters worse, these two layers are starkly different in the way they treat people, resources, and problems.

The traditional, physical world is based on scarcity. Everything is “I win, you lose” or vice versa. That logic requires that people and organizations try to expand the boundaries and depth of their influence.

No Problem

In the physical world, you need have goals. Even better, BHAGs. That requires the select-resource-solve — Purist — approach to problem-solving.

  1. Select some big problem
  2. Acquire some resources (probably way more than you really need)
  3. Attempt to solve the problem

That sounds fine, but it is incredibly restrictive and often inefficient. What solves a problem in one area may make things worse off somewhere else (think acid rain or ocean trash dumping).

The people trying to solve these problems weren’t stupid. They didn’t lack resources or experience. Their issued was a flawed premise — they were trying to solve a problem using an outdated approach.

In the “select-resource-solve” approach, changes or unexpected results are awful. Even good things, if unexpected, are treated like they’re bad. Such an approach is doomed to failure in our dynamic — frantic? — world.

The emerging digital world is based on abundance. Our early adopters, the Pragmatists who are adapting quickly to the digital world, don’t constrain themselves with scarcity. Instead, these folks like to tinker. They follow a much different three-step process: immerse-experiment-leverage. This methodology is optimized for a constantly changing world.

  1. Immerse yourself in the parts of the world that interest you
  2. Try small experiments to discover new opportunities that interest you and gain traction with others
  3. Leverage those opportunities by attracting people and resources to rapidly grow them

This process works because the cost of experimenting is low and the potential upside of a successful experiment is so high. This is a very open, social process. As we’ve already seen, Pragmatists share their ideas with others, early and often. That is how they evolve and scale them.

Fantastic new capabilities are an inevitable result of having enough smart people working on similar problems. Then can tinker for a long time without any apparent progress and then BOOM!

Some of these innovations turn into companies, while others diffuse into the digital world. In either case, these new digital capabilities from the “immerse-experiment-leverage” approach work much better than the solutions coming out of the “select-resource-solve” camp.

Instead of narrowly useful and expensive tools, Pragmatists produce broadly useful, cost-effective ones. That’s why the results are often adopted so quickly by so many people around the networked world.

One way to think about venture capitalists and angel investors is as the financiers of this growth process. They exist to pour fuel on the fire, to fan the flame until it’s sky high.

Too Little, Too Late

Many places around the world do not like digital “immerse-experiment-leverage” approach. Remember, the digital world threatens the elites who hold power because they cannot predict, let alone control, the results. These elites enact barriers to progress: regulations, tariffs, immigration visas, subsidies, and sometimes through plain old corruption.

But digital folks cannot be kept out forever. And when they get in, they make things better. The spread of smartphones is rapidly bringing everyone online. The more connected people there are, the greater the probability of a person or team coming up with yet another creative and unexpected solution with far-reaching consequences. We’re back to that virtuous cycle again, which is good news for everyone.

Everyone, that is, except for the elites who just can’t let go of the old world order. They are so entrenched that they can’t help it.

But how the heck did we get into this elite-dominated trap?

Basically, it would look like this: some group would emerge as a natural response to some problem. The group would collect resources, solve the problem, and then . . . stick around. Even though the problem no longer existed. This “winning” group — the new elites — didn’t want to let go. Instead these elites build up their little kingdom in three ways:

  1. they started to define boundaries
  2. they started take even more resources
  3. they created regulations you had to obey if you lived or worked inside their boundaries.

Of course, the group didn’t care at all what happened outside of its boundaries. Anyone falling outside of the winning group, or its boundaries, had to fight over the scraps.

C’est la vie.

The more of these “winning” groups there are and the more powerful they become, the harder it is to change the status quo. The boundaries of these groups function as roadblocks in the way of people who wanted to solve other problems. These groups now exist only to perpetuate themselves.

As the world filled up, the elites started bumping up against each other. With nowhere else to grow, they had to compete. Of course none of them were interested in giving up resources, so conflict ensued.

This is the twisted logic of an “I win, you lose” dynamic. The only way to get ahead is to take things from others, which end up costing you a lot in the process, too. Often the conflict is not just zero sum, it’s actually negative sum. Both sides end up worse off as a result.

Despite this history of conflict, we often defend the “winning” groups. We view them nostalgically, even romantically. We can’t imagine life without them. Here are a few examples:

  • governments of all kinds
  • K-12 education
  • health insurance companies
  • investment banks
  • pharmaceutical companies
  • telecommunication companies
  • energy utilities.

By defending their boundaries, these groups created a world of utopian islands in a dangerous ocean. The tension between the “winning” groups and everyone else increases constantly. The appearance of stability masks this crazy tension underneath the surface.

Seeds of Greatness

Fortunately the world started to wise up, starting slowly around 200 years ago. The beginnings of a new system emerged tentatively. You will recognize its two foundational ideas.

First, people are free. They — we — are not the property of elites to be used like pawns in some royal chess match. We can be employees but we cannot be slaves.

Second, ideas matter. They can and should be protected (by patenting an invention, for instance).

These concepts blended together in unexpected ways. The basic concept of freedom expanded from just “you can’t own me” to “I can do whatever I want to do”. People are figuring things out for themselves. The elites hold less sway with each passing day.

Fast forward 200 years and you can see the fruits of this new system. An ever-growing percentage of the world is effectively free to pursue whatever they want.

Networks thrive in this new system. People are coming together in groups and doing . . . whatever they feel like doing. That is a big break from previous eras when we didn’t have the option of self-determination.

As cool as that was, it was just the beginning. Things really took off in the 1990s. That is when personal computers became affordable. That’s important because these computers use software that lets groups create cool new stuff faster and cheaper. What used to take years and lots of money could be accomplished in a few weeks for almost nothing.

We can now see how much the world is changing as a result. The 2000s gave us the smartphone, cheap cloud storage and data, and an explosion of software. Now these things are rapidly spreading around the world.

The elites who used to run the world are no longer in control. The old system of borders, monopolies, regulations, and credentials is toppling. Instead, random collisions of networks of people and ideas are improving the world.

The traditional systems only worked with borders and restrictive rules, as we’ve discussed. You benefit as a part of the in crowd, but life sucks for everyone else. The pockets are utopia for a privileged few are unsustainable.

More and more people are living in a newer, much different environment: streams. Streams are dynamic places, full of constantly flowing information and opportunities. These streams are the context of our lives. They help us understand the world around us, which in turn influences our decisions and actions.

Big trading cities were the only examples of streams in the old world. That was the single place where you had a critical mass of folks wandering around, bumping into each other, exchanging crazy new ideas, and otherwise being creative and awesome.

Now there are digital streams. All the advances in information and communication technologies upgraded the old physical streams. Now people across the world can easily connect around a common interest and work together on promising experiments.

Digital streams are open and inclusive. Unlike the traditional systems, they do not care where you are. There is no “us” and no “them”. Instead the focus is on connections.

Connections matter because the value of digital streams is the unexpected collisions of new people and ideas from different networks. These collisions produce insights and suggest solutions that no one ever would have considered before.

Problems are solved faster, cheaper, and better as a result. That’s the value of streams.

Traditional systems do not like the random or unexpected. They prefer the fixed model — like a company’s organizational chart — where everything has a place and a function. Nothing new every happens.

Fixed systems do not encourage creativity or unplanned problem-solving, so they don’t deal well with rapid change. These systems are therefore not suited to the 21st century.

Digital streams are the exact opposite. Bring in as many people as possible who share interests and problems. Let them sort out the best ideas via experimentation. Solve problems and create wealth. Encourage and learn from others on their journey. Repeat.

People who embrace digital streams make work and play very hard to tell apart. They enjoy what they do, and push themselves even harder as a result.

This approach is the future. We need to embrace this model as quickly as possible.

Growing Pains

Transition is hard and scary, though. People worry about destroying the planet, building killer robots, or some gigantic global government that will make the Soviet Union look like a local PTA chapter.

Most of these concerns are unfounded. We worry because we are built to worry, especially when we don’t understand why things are happening in a certain way.

So let’s focus on what we know. What is certain is that the digital world will continue to innovate.

Small networked teams, operating outside of large organizations, will keep using software to stumble into new and interesting areas. When they find something useful, they will throw resources at it, developing groundbreaking technologies and businesses in the process.

Technologies and modes of work continue to adapt and change. Societies around the world are doing the same thing.

To you and me, this implies four very interesting “blurs”:

  1. Reality is blurring with fantasy
  2. Waste is blurring with wealth
  3. Technology is blurring with nature
  4. Work is blurring with play

The digital world is creating a planet-sized computer. This computer runs on a new “operating system” that is a new culture. This culture is exploring and popularizing values and lifestyles that fit into the digital world. Its fruits can be seen first in places like Silicon Valley.

We are perched between the old world and the new. It’s up to us whether we tackle an unknown future head-on, or turn back to a simpler time and hope someone else makes sure that we’re taken care of.

The choice is yours. Good luck!