Episode  MSP55  Peak Tech
Episode  MSP55  PEAK TECH
Has the Silicon Valley Bubble burst? Is the Age of Technology at an end? Yes and not a chance, argues Matt.
These shows are dictated to and transcribed by machines, and hurriedly edited by a human. Apologies for the minor typos and grammar flaws.
Rejoice, rejoice. The age of technology is over. My lords and ladies, we give you the new age of the agrarian man. Yes, Kulturpop’s Matt Armitage is rereading Game of Thrones. But there’s hard news behind his offhand frippery. With the sharp decline of tech stocks this year, some pundits are declaring that the age of Silicon Valley is at an end.
Matt, would you like to explain?
· Good morrow. As you said, I am rereading GoT. I’ve just finished the first book for the second time.
· And the analogy may be more prescient that it sounds at first.
· What’s that quote by Queen Cersei in the first book (or series 1 if you’re a Tv fan)?
· When you play the game of thrones, you win or you die. There is no middle ground.
· That’s often the way it seems to be portrayed to us when we read market analysis or listen to news reports.
· We’ve had Apple becoming the first trillion dollar company with Amazon hot on its heels.
· And it’s always framed as being adversarial. That these companies are locked in some epic battle to be #1.
A bit like The Beatles and The Stones? Or Blur and Oasis?
· Or BTS and EXO for listeners want a more 2018 example.
· But yes. It assumes some existential battle is going on in technology industry.
· no one would bother to compare ExxonMobil and Hathaway Holdings, two other title contenders in the Top 10.
In case any of our listeners aren’t avid market watchers. Which tech companies are we talking about?
· Back in May this year, the world’s top 5 companies by market value were all tech companies.
· Apple, Amazon, Alphabet (Google), Microsoft, Facebook.
· And China’s Alibaba and Tencent Holdings also make it into that fabled top 10.
Why has 2018 not been a kind one for technology?
· Luckily I’m not an economic analyst.
· Markets have been pretty volatile globally this year,
· That’s affecting a lot of the top companies and not tech specifically.
· Politics has a lot to do with it, of course.
· Markets are reacting with jitters to political shocks and the unstable pronouncements of authoritarian leaders and governments across the globe.
· But there are more specific issues.
· Fake news has shattered confidence and hundreds of millions of dollars from the value of Facebook and, in part, Alphabet.
· Analysts are wondering whether demand for the latest generation of iphones will be sufficient to sustain Apple’s growth.
Is there a crisis of leadership in technology?
· That’s open to debate.
· I think so, but that’s an opinion, not fact.
· Listeners can go back to Episode 35 of this show, Visionary Deficit, where I talk about that in more detail.
· It doesn’t need repeating here.
How do we see that reflected in the way that tech companies are operating?
· You can certainly see the fallout.
· Amazon’s search for a new US location for its secondary headquarters has been received quite negatively and the company criticised for being high-handed and rather imperial.
· It’s seemed a bit like bidding for the Olympics or the football World Cup with US cities sitting up and begging for Amazon’s treats.
· Mark Zuckerberg and Twitter’s Jack Dorsey have not had a good time, either in the media or in front of lawmakers.
· Uber. That’s its own episode.
I know you’re going to mention Mr Mars…
· Elon Musk spent a chunk of the year railing against Tesla’s shareholders, cave rescuers and the sight of his own shadow.
· He was rather unceremoniously removed as Tesla CEO not so long ago, though he remains on the board as well as being a major shareholder.
· I don’t think we’re close to seeing him in any way chastened.
· Although, as we reported in Geeks a couple of weeks ago, he may have finally come up against a foe he can’t defeat:
· Mexico’s CRT, the body that regulates Tequila production, which has come out rather forcefully against Musk’s plans to produce Teslaquila.
Is that a view that’s reflected by market experts as well?
· About the tequila or tech companies in general?
· [Jeff answers]
· Some analysts are remarking that the new generation of tech companies has responded less forcefully than traditional companies.
· One reason may be the relative inexperience of a lot of the tech CEOs.
· We forget that the CEOs of massive corporations are generally veterans who’ve been blooded at many companies, often in more than one industry, and have been through these ebbs and flows countless times.
· In the tech sphere, the CEOs are often at the company they founded. A company that has bounded from start up to colossus in only a few short years.
· So we often hear the complaint that there are no adults in charge.
Which is fine when everything’s going well…
· But as we’ve seen over the last couple of years,
· …the tech industry is often a bit chaotic and incoherent when things aren’t going so well
· …structural issues are resolved too slowly, stakeholders aren’t respected, and they start to be hit from criticism from all sides.
Market fluctuations are a normal part of the business cycle. What’s different now?
· Like I said, I’m not a financial expert.
· But really, from what I can see, nothing.
· I think it’s more symptomatic of us falling out of love with silicon valley and technology in general.
So we haven’t reached peak technology?
· Not even close. Sure, I think there are some issues that we are coming to grips with.
· Earnings for a lot of tech companies are not always matching investor expectations.
· We have a lot of tech companies with multi billion dollar valuations – whether IPO’d or still held privately – that really don’t earn that much money.
· I’m going to talk about Tesla again, now.
Another hatchet job?
· No. Let’s be fair to the company.
· One of the things that for me, makes it so hard to reconcile it as an investment, is that I don’t think that Tesla is really a disruptor in the car industry.
· It’s actually tried to replicate a lot of the infrastructure of traditional car companies – especially when it comes to plant.
· And it’s nowhere near as able as those companies, who have had global operations for decades, to compete with their supply chains or economies of scale.
· Look at companies like Nissan and Renault, which is also having their own share price woes the past couple of weeks with their former CEO Carlos Ghosn.
· They can share parts across several different models of car in plants across the world.
· Which is common in the auto industry.
You think Tesla is really doing an incredibly difficult task in a hyper competitive industry?
· I couldn’t have phrased it better myself.
· I think Tesla has a good chance of succeeding if it can make it to the long term.
· It’s innovative and it has a good product.
· But cars are a long-term commitment for both consumer and manufacturer.
· And for the third party companies that provide fittings and fixtures.
· Unless you’re in the supercar category, where you’re buying for different reasons, most of us buy a car and expect to keep it for a few years.
· When we buy a car, unless you’re in the supercar category, most of us look for makers who have the infrastructure to maintain and service those cars: we’re looking for longevity.
And this is relevant to peak technology, how?
· I think that consumers and investors are starting to see tech companies in a different light.
· It used to be that the hot new tech company went public, those who were able to grab a chunk of that IPO flipped the shares and made a killing and then, in some cases, the company went on to become MySpace or Friendster.
· VCs don’t seem to be put off – because there are still massive rewards to reap.
· Especially when you get in early.
· But I do wonder whether we’re at the end of that period of firework IPOs.
· I think in future, we’ll see fewer companies listing on the basis of potential, and more on the basis of cash flow.
When we come back: is this the end of Silicon Valley?
Before the break, we were talking about the term peak technology and asking if we’ve reached the end of our tether.
Have you dreamed of the end of Silicon Valley?
· I have flown with the three-eyed raven over a ruined Silicon Valley.
· I have foreseen its charred remains, the flash fires that came from the energy company developing miniature supernovas jumping to the biofuel innovation lab in the lot next door.
· And the heap of molten metal resembling a jagged throne that the fires left behind.
· But my lucid dreams are not fact but I’m far from the only one thinking along these lines.
· The Economist featured a cover story about Silicon Valley’s demise in its September cover story.
· The story highlighted various reasons, ranging from the costs of living and bringing up a family, the high costs of hiring and retaining talent and the fact that digital infrastructure and collaborative tool make it easier to locate start-ups outside the Valley.
We addressed some of those issues in Episode 53 a couple of weeks ago.
· Quite right. So, no need to go off-piste and rehash them here.
· I will take a quick detour to bring up something I discussed with you in Geeks the last time we were here together.
The new Land Grant Act?
· That’s the one. A US congressman called Ro Khanna is proposing legislation that would set up high technology schools across America.
· And the idea is that that talent would help to drive new technology industries in the regions surrounding those schools.
· That way people don’t learn to code and immediately head out to California.
· It’s early days, but it could do more to revitalise America’s heartlands than any amount of cosmetic coal mine reopenings.
Let’s assume Silicon Valley falls out of favour. What replaces it?
· As Silicon Valley sinks, a new leviathan will rise.
· And if we go back to our discussion a couple of weeks ago, I think it might be those damnably delicious donuts agin.
· We’ll leave Silicon Valley for Sugar Mountain.
· Where baking innovation will help us to develop the donuts of our dreams.
· Forget the unicorns, we want donuts with horns.
· And sweet delicacies that will rain down on us the highest peaks of Sugar Mountain.
That’s Matt’s product placement for Krispy Kreme done for this week. Of course, we’re not going to replace a valley with a mountain.
· Which again sounds quite GOT-ish.
· Our love affair with technology may be over.
· That’s partly because what was once novel is now normal.
· We don’t swoon over products and announcements anymore.
· Partly because our phones and computers can do things that we once needed a whole bunch of other gizmos to do.
· Even those home control systems everyone is touting.
· Attach everything to your router and you can control it all with your phone, often by voice command.
We’re just not excited or wowed, anymore?
· We’ve become very matter of fact about it.
· Imagine someone in the 1990s – which already had the Internet – looking at the prospect of self-driving cars being on the road within a couple of years.
· It would be miraculous.
· You’d never get it off the newspaper covers.
· If you’re not sure what a newspaper is, please tweet Richard and he’ll explain it.
· To us, the idea of self-driving cars is such an inevitability that we sit here discussing whether autonomous cars are a good thing or not.
· The technology that – excuse the unintentional pun – the absolutely incredible and incomprehensible technology that drives it is something we take for granted.
· That’s what’s so mind blowing about our acceptance and trivialisation of technology and innovation..
· And we repeat that dozens of times a day.
· All these fantastic things that we don’t give a second thought to.
Where does this leave us in relation to Peak Technology?
· I don’t know. I’m kinda bored with it too.
· No, I’m not.
· The idea that we’ve reached peak technology is nonsense.
· As nonsense as the idea that was fashionable in the 1950s that we would soon know everything there was to know about science.
· Or earlier people thinking that the world was flat and the moon was made of cheese.
· Incidentally the Flat Earth International Conference was held a couple of weeks ago, with keynote speaker and corpse disrespecting YT star Logan Paul.
· Altho it’s possible that Paul was trolling them, especially as he struggled to maintain a tone of sincerity as he told a Daily Beast reporter that if the earth was round we’d be bearing shoes with curved soles.
This is another tangent…
· Actually, this one isn’t.
· It’s a cunningly placed analogy.
· We have all this incredible technology. You can take plane journeys that allow you to see the curvature of the earth.
· But that hasn’t stopped the flat earth become a viable conspiracy theory today.
· And when you look at most conspiracy theories, they are so easy to debunk with science and information.
· And I think this is part and parcel of this idea of peak technology
· If we still had the technology and knowledge we had in the 1950s, you’d be listening to this show on a valve-based radio and we would sound like we were speaking from inside a tin can, very very far away.
· You’d have a car with no air conditioning that broke down 3 times a day.
· There would only be three types of breakfast cereal!!!
· It would be like the dark ages.
· Where people communicate verbally instead of sending Whatsapps.
Which is your way of coming back to the idea that technology is the new normal?
· That’s why I’ve been talking about donuts for the last couple of shows.
· We have to find something to get excited about.
· It could be technology or science, or politics, or donuts or dairy free cheese.
· For a while we were really excited about space exploration.
· These days, the old guy bagging your groceries has been on a space mission.
· Video games consoles dominated the early 80s. And VHS recorders.
· Before Amazon made Seattle cool, grunge did.
And these things don’t stop just because our attention switches?
· Precisely. We’re still exploring the stars, even if it’s with probes more often than with manned missions.
· Although we’ll be talking more about Mars, Musk and manned space exploration in Geeks after the break.
· And I guess that very few people could tell you who is currently crewing the International Space Station, an engineering feat that is as close to a miracle that any of us will ever witness.
· Incidentally I took a space walk on the ISS this week. Thankfully it was only a VR simulation, because I ran out of oxygen and died.
· Look at Space invaders and PacMan and compare those games to something like Red Dead Redemption 2, a game that literally makes friends with you and then blows a hole in your head.
· Big deal if we’ve fallen out of love with Facebook and smartphones and TV streaming.
· We’ll find other things we love.
· And even though we don’t love them anymore, smartphones are still going to get better.
· Facebook will keep adding more and weirder buttons and tabs to its apps.
What do you think the next big thing will be?
· Who knows. We’re in a post-truth world where predictions have no meaning.
· Maybe the next wave will come out of SV or maybe it will come out of Land Grants and similar legislation worldwide.
· We’re on the verge of so-many mind-bending developments that it’s no surprise we’re switching off.
You think that some of the innovation is too big for us to comprehend?
· We genuinely have no idea what kind of future quantum computing could unlock for us.
· We talk about AI but the added boost to processing that QC offers might allow us to solve problems that have eluded us throughout history.
· It might help us to discover where in the universe we are most likely to find intelligent life.
· It could help us solve the common cold, or develop new gene technology tools.
· Our understanding of the world might be radically transformed,
· simply because we have the ability to compute tasks and theories that might have taken a human lifetime with the computers of only a few years ago.
· But QC and a lot of these new technologies challenge our ability to understand how they work.
· And that can be alienating.
The better technology gets, the less we like it?
· It sounds really odd when you say it out loud, but yes.
· Go back to QC.
· We’re talking about a machines that we can create, which is able to make use of a dimension that we can’t experience.
· It sounds like the most outlandish, Z-grade science fiction.
· But it’s a living reality.
· Technology like this may make our future – assuming that we have one and as long as we don’t blow ourselves up or destroy the planet before Amazon and Tesla have their Mars colonies ready – genuinely unforeseeable.
Because of the extra dimension?
· Yes that’s true. But no, that’s not what I meant.
· Because of the knowledge they uncover.
· Knowledge that may set our species off in new directions.
· And it’s the same story with AI.
· We’re building machines that process information and learn in ways that we can’t comprehend.
· So our knee-jerk reaction to this kind of development is one of fear or reservation.
· But that ability to think in new ways is a bit like quantum computing, it’s accessing a dimension of thought that we aren’t capable of.
· So, whether we are excited about it or not, these developments and discoveries are going to be transformational.
· Who cares if the companies controlling it have flamboyant figureheads like Elon Musk or not?
Couldn’t you argue that there’s less incentive to push technology if people aren’t as interested?
· You’re forgetting about the geeks.
· There were geeks and nerds on this planet long before being a nerdy geek was cool.
· We’ve had our time in the spotlight. It’s time to give the jocks and the popular kids a chance to shine.
· Most scientists and engineers and coders don’t get into it for the glamour.
· And those Hollywood Red Carpets won’t sizzle half as much once the pioneers of fecal transplants and gene transference tech stop turning up to premieres in their blinged out Maybachs.
· But they will continue to work and research and pioneer and discover.
· Physicists aren’t trying to figure out whether we can build Star Trek’s Warp Drives and Teleporters because they think we’ll find it cool.
· They do it because they think it’s cool.
· And frankly, they’ll carry on doing it for as long as there are new truths to discover.
What do you see as the Peak of technology?
· I don’t know if we’ll ever get there.
· It’s not a question of whether we find it interesting or engaging.
· In ten years time, every product may be a technology product in some way.
· We’re adding so-called smart characteristics to every conceivable product.
· We’re even making food proteins smarter. We’ve got a bunch of unbelievable new discoveries and innovations coming up in the Geeks segment, for example.
· And that’s just this week’s haul.
· Our food and drink are becoming technology products.
· Maybe in a few years we’ll have the geo-engineering technology to make the earth flat.
· Or at very least to make shoes with curved soles.
· This is a mountain that we keep on climbing, and every time we think we’re near the summit, we see that the real peak is over the next ridge.
· And while that frustrates some people, it’s a good thing.
· But that desire to search for those peaks, to gaze off into the distance and figure out how to reach those things is one of the most unbelievable and astonishing things about us as a species.