Episode  MSP74  Your Future: Disrupted.
Episode  MSP74  Your Future: Disrupted.
It’s the entrepreneurial equivalent of a middle finger. Disruption is more than a tech bro buzzword. It’s a destructive force that we’ll be paying the price of for generations to come.
Produced by Jeff Sandhu for BFM89.9
These shows are dictated to and transcribed by machines, and hurriedly edited by a human. Apologies for the typos and grammar flaws.
I’ve been away from MSP for the past few weeks. Because Matt decided that I needed some attitude adjustment.
However, while I was away our Inbox was flooded with complaints that the show was starting to sound like the BBC Shipping Forecast. So, who’s attitude do you think needed adjusting?
Of course, we wouldn’t want Matt to adjust his attitude or change anything up, which is why, on this week’s show, we’re talking about Disruption.
Are we looking at the effects of Disruption on our future?
· I actually wanted to call today’s show the search for a noun.
· But I knew that was essentially suicide in terms of SEO, unless we compensated by filling the introduction full of spam terms like size, money, crypto, wealthy, enrichment and pharmaceuticals.
You mean, you’d have had to do exactly what you just did?
· There, you see, I’m already being Disruptive.
· Mostly to the norms of taste and decency.
You sound as though you’re saying Disruptive with a capital D…
· Your ability to aurally process grammar, is extremely impressive.
· that’s aural with an au not an or, by the way.
· I’ve successfully wasted 103, no 105, no 107 words since you asked your first question.
· I’m Disrupting the show again.
· Have you noticed that Disruption always has a capital D?
· If you see it in a presentation, even in the middle of a sentence, it always seems to be capitalised.
· There’s this element of shoutiness about the word Disruption.
· It’s the entrepreneurial equivalent of a middle finger.
And you think that’s what Disruption – with a capital D – has become?
· Absolutely. On the one hand it’s a very arrogant response.
· On the other. It’s like a panic reaction
· it has this ‘rabbit in the headlights’ quality about.
· Somewhat lacking in specificity…
A bit like this show…
· Someone asks you what your company does or what’s unique about your product.
· And the only thing you can think to say about what you do is that it’s disruptive.
That’s what technology is about. Coming into an industry and upending it. Traversing the norms.
· There is an episode of how I met your mother where Barney insists that every night has to be legendary. With a capital L.
· After an exhausting week, his friend Ted points out that if every night is legendary, no night can be legendary.
· A legendary night is one that stands out. A night that is truly memorable.
· But if every night is legendary, then every night is normal and no one night is any more memorable than another.
· It’s the same with disruption. IF everything is constantly being disrupted then disruption is the status quo.
This seems to be turning into an episode of The Allusionist. And not for the first time.
· And that’s a bad thing? It’s one of the best podcasts of all time.
· It’s a really fun podcast about language and words and what those words tell us about society.
· We would be lucky to get an entrepreneurial middle finger from the great Helen Zaltzman.
· That’s kind of the thing, though.
· When you call your company, or your product, disruptive what you’re really saying is that the rules don’t apply to you.
· It doesn’t matter if those of the rules of grammar, the rule of law, or the rules of business.
· Or, as we’ll get to later, the rules of taxation and employment.
But the idea of disruption, the idea of coming in and shaking up industries. It can be beneficial…
· This is where I switch gears from grammar nut to someone who is desperately trying to remember what he was taught in his first year of undergraduate economics.
· Firstly, let’s not confuse disruption with innovation.
· Dan Lyon’s latest book, Lab Rats, is full of examples of companies that have tried to disrupt themselves with weird and unsuccessful self-help and management prophecies.
Maybe that’s your problem: you read books.
· Sometimes, it feels that way.
· We forget the influence that books, fiction above all, have on innovation.
· We live in a world of sci fi geeks who are trying to make the stories they read and saw as kids come true.
· If you want an idea of what the future might look like, then books by amazing writers and thinkers like Yuval Noah Hurari are going to be an enormous help to you.
· But books by writers like Philip K Dick, William Gibson, Margaret Atwood, Terry Pratchett, Iain M Banks, and hundreds of other incredibly complex, philosophical fiction writers will gives you an impression of what that future might actually look like.
· And how people behave and interact in those situations.
I get the innovation part, but where’s the disruption?
· Exactly. When we see disruption in these books, we see disaster and suffering.
· Innovation can lead to peace and war.
· But disruption rarely seems to lead to peaceful outcomes.
· Take ride hailing as an example.
Without naming any specific companies…
· I’m looking at the industry in general, so I’m not actually interested in particular companies.
· It’s pretty similar whether it’s cars or electric scooters or bicycles.
· Most of the cities these companies, or I guess apps as we tend to think about them, operate in already have taxi, mini-cab or limo operations.
Which in most places are highly regulated…
· Exactly. So the first thing they do is to declare themselves outsiders who are disrupting an industry.
· They exempt themselves from the rules that govern the industry.
· Different companies have a different relationship to tax, so I won’t tar them all with the same brush.
· But a lot of the disruptors locate their sales operations in low tax or no tax locations and then lay out a legal argument that they are an agent or an app so that no tax is owed.
· At the same time the people that work for them aren’t employees, they’re partners.
· And guess what, they’re self-employed and they have no labour rights.
· And their vehicles are leased from other 3rdparties with no links to the principals or the drivers.
So what we have isn’t so much disruption as distribution?
· Yes. It’s about cherry picking the profitable part of the business and getting rid of all those annoying balance sheet liabilities.
· And then it’s about a system of subsidies and price slashing – using money borrowed from investors – and pricing the existing players out of the markets they’ve dominated.
· This isn’t disruptions as much as It’s destruction. And it has the aim of leaving one company in a monopoly situation.
· That’s not what innovation is for. That’s not good for consumers.
· With my economics head-on, anytime we see monopoly power in most markets, it usually bodes ill for the people like us.
· Either we’re tied into restrictive terms and conditions.
· We’re forced to pay whatever prices they decide they can get away with.
· And unless lawmakers are strong and nimble enough to protect our rights from predatory companies – which we know they aren’t – then those costs of disruption are ultimately met by us, the customers.
We’re talking about it as a foregone conclusion, almost: is there any really proof that disruption works?
· That’s actually a really pertinent question.
· And the answer is that, by and large, we don’t know. Because most of these disruptive startups are still in the someone else’s money phase.
· They aren’t spending revenue. Quite the opposite. They’re spending borrowed and effectively donated money.
· We don’t know what will happen. Most of these companies are yet to demonstrate that their model works in the long run.
· That they can repay those investors. That they can turn a profit.
· At the same time regulators are finally coming down on them.
· Forcing them to adhere to the same rules as the existing players they’re trying to replace.
One thing I haven’t asked you: what does disruption mean to you?
· If I’m being really cruel, it means I’ve built an app.
· And that app allows me to do things with my phone that I used to do with my feet, or your hands or my computer.
· Don’t get me wrong. I’m not saying that these things are not worthwhile.
· I’m saying be honest about what you’re doing.
· Say, hey, I’ve been looking at the bivalve farm to table industry and I’ve got some exciting ideas that I think the current players have missed.
· What was it I saw on one of the crowdfunding sites recently?
· The World’s Most Advanced Travel Guitar Bag.
· Seriously. Your guitar case does not need a voice activated Bluetooth chip and a smartphone app.
· It does not need to cost as much as a guitar.
· That’s not disruption. It’s an app.
· One thing we do know is that the big successful tech companies by and large aren’t disruptors.
In what sense?
· Microsoft didn’t disrupt home computing, it defined it and connected us to the Internet.
· Apple isn’t so much an innovator as a skilled observer.
· It watches for trends and then comes in and does it better and at a much higher price than those first movers.
· Facebook gained popularity by giving people what they wanted and being very flexible in the way that it defined its core services.
It’s more about incorporation than pivoting?
· Yes and it would quietly drop the stuff that didn’t work without disrupting that sense of being on Facebook.
· As for Google, it was simply very very good at a time that most search engines weren’t.
· It was reliable and accurate.
· I don’t know where this idea that companies have to disrupt to be successful has come from.
· The companies I’ve just listed succeeded, at least in part, because they’re excellent at what they do.
When we come back. Mr Angry has a look at disrupted world of tomorrow.
Before the break we were talking about the role that disruption has – or maybe hasn’t – played in shaping our present. Now we get to the part of the show where we jump into Matt’s vision of the living hell that is our future.
What happens when the disruptors win?
· It’s the same as anything that comes from the leftfield and replaces the mainstream.
· It becomes the mainstream.
· That’s why I made the point about those big tech companies.
· They were and are innovators who joined the mainstream.
· Even companies like Amazon. Yes, its amazon.com side is disrupting retail.
· But its cloud storage is competing – very successfully – with google and dozens of other competitors.
· And that field, cloud computing, is highly competitive. Which benefits us all.
So we all get to live happily ever after?
· Yes. Generally, or theoretically at least, with competition and innovation we’re supposed to be the winners.
· A better world to live in. Better medicine. Better education. Cheaper food. Better nutrition and health outcomes.
· Income and job stability.
· Does that sound like the world we live in?
· No. it doesn’t.
· Because it’s our lives that are being disrupted.
It seems as though we’re already living in a disruptive era.
· This is normally where I’d ask you to insert an evil laugh sound clip because a) I’m cheesy and there is no b).
· But because you’re jet-lagged and I don’t want to make you do extra work, listeners can imagine the evil laugh of their choice and then we’ll carry on.
· Great laugh. We’re at the start of that disruptive era.
· Which Is good. Because we still have time to choose.
· We’re not on that path to damnation yet, no matter what it might look like when you look at your newsfeed.
But you’re here to tell us what that path to damnation might look like?
· It’s pretty much the only thing I’m good for.
· If I didn’t have this show as an outlet, I’d be the bug-eyed guy standing on the street corner wearing a sandwich board.
· Shouting the end is nigh. Four lighters for a pound.
· So I’m going to go full apocalyptic and add a proviso saying that I don’t think this is how we’ll end up.
Ok. Disrupt us.
· Where to begin. Ok. We know that quite a few of these disruptive companies like to employ as few people as possible.
· And automation and AI advances are making that ever easier.
· Organisations like the World Economic Forum point out that while technology may make some of us redundant, new technologies should arise that soak up that unemployment.
· What it doesn’t take into consideration is that today’s new tech employs far fewer people than the old versions of new tech.
· Which means that eventually we need a greater number of emerging industries to soak up each one we lose.
Does it really matter, as long as we have jobs?
· That’s why the nature of those jobs is so important.
· The gig economy was a media hot topic a couple of years ago.
· There were plenty of dire predictions about what would happen in a world of uncertainty.
· And now, we’re too busy talking about algorithms and fake news.
· But that gig economy threat hasn’t gone away.
· You have a bunch of companies committed to keeping the people that work for them off their employment rolls.
· So all the gains that workers made in the 20thcentury: unions, paid holidays, sick pay, overtime, a measure of job security and of course, redundancy and severance packages.
· We’re seeing those gains being eroded in the digital age.
Uncertainty isn’t new in employment…
· No, it isn’t. But it’s usually more present at the bottom end of the market, where workers are most vulnerable.
· Now we see that uncertainty creeping up the ladder.
· We see people higher up that employment curve, people in jobs and professions that were previously protected, who are now taking on second jobs.
· Because they want a new kitchen. Or because the kids are going off to university.
· Or they’re behind on the mortgage.
· A financial position that was probably unthinkable for them a few years ago.
Then there are the people whose only work is in the gig economy…
· Yeah. If you hail a rideshare with someone under the age of 25, ask them what their educational background is.
· It might surprise you.
· The same goes for that barista or checkout assistant.
· What’s none too slowly happening is that people are being disrupted out of good jobs with a future and prospects.
· And it’s also true – commercial companies don’t owe us those things – but governments that crave prosperity and stability do.
· And if there are no jobs, or only low paying jobs, then governments have to step in – as much as they are able – to make sure that their citizens can afford to live.
I think we’ve covered Universal Basic Income on the show a bunch of times already.
· Which is true. Fortunately we’re not covering it today.
· Because in a disruptive world it won’t exist.
· Countries can only pay a UBI if their citizens and the companies that operate in them pay taxes.
· Disruptors don’t like taxes.
· Sure they’ll send out press releases saying that they pay all applicable taxes in the jurisdictions in which they operate.
· Again, it’s true.
· But the larger story is the lengths they go to to structure those companies disruptively, so as to minimize those taxes.
· Which leaves us with countries with no workers and no tax base.
· So no to UBI, yes to Thunderdome and the last V8 Interceptor.
This is usually the part of the show where we have some kind of silver lining…
· Eh? You’ve been away too long. You’re getting your shows mixed up.
· The disruptors are building a world for themselves.
· The irony is that the superrich don’t spend much of what they make.
· So they won’t even support other.
· When you look at the lowest socio-economic groups, they spend 100% of their income. Often a lot more.
And as your income levels increase, you tend to save more…
· But by the time you have billions you’re generally spending a very small percentage of your wealth.
· And it grows much faster than you can spend what accrues.
· So as wealth is disrupted away from the poor, towards the rich, the more of it is actually removed from circulation.
· So you create all this incredible wealth and economies can actually contracts at the same time.
I’m sure some actual economists might disagree with your analysis…
· And it’s probably a mistake to call what I’m doing analysis.
· Economics is not a science. It’s not hard and fast.
· And I’m compacting all this horrible, terrible stuff into a commercial broadcast slot.
· And the fact that this is horrible and terrible is what gets me so angry about disruption as a concept.
· It’s extremely nihilistic. It’s nearly always negative.
· When someone says you’ve been disrupted, it sounds like you’ve been hit by a death ray, and all that’s left are the smoking ashes.
Let’s be clear though. This is just your vision of a disrupted future.
· I wish it was. Our more techie listeners probably know the name Douglas Rushkoff.
· Writer, academic. Graphic novelist and open source advocate.
· I think I mentioned this on one of our shows last year. An article he posted to Medium, called Survival of the Richest, which was then picked up by various news sites.
· He recounts the story of a talk he was invited to give at a private resort.
· Nothing unusual – that’s part of the way he earns a living – but when he got there, it was a group of 5 super wealthy guys and they didn’t want him to present.
· They wanted him to answer their questions.
Is that unusual?
· A little. I mean, you know from the talks you’re booked to do.
· Usually you’re asked to speak on a subject and you present to the room.
· This was way more intimate and the questions were strange and very precise.
· Where would be the best places to hide out after the collapse of society?
· What could they do to control their guards if money became worthless?
· How could they prevent those guards from killing them instead of keeping them alive and secure?
· But what seemed to strike Rushkoff was their certainty that this would happen.
· That collapse was inevitable.
· These men are the disruptors.
· Even in their minds, they know that disruption can only lead to one place.
· A place where the superrich act out their own version of the Walking Dead, and where we’re all cast as the zombies.
That’s your upside? A future where we starve to death or wear each other’s faces as masks?
· I know I’m laying it on a little bit thick.
· This show is one I’ve been thinking about for a few months but have been putting off because I knew I’d go grim.
· I mentioned The Allusionist earlier, it was the podcast’s most recent episode, The Future is Now?, that made me decide to press ahead.
· So if you want a more optimistic take on where disruption might lead us, look for The Allusionist with Helen Zaltzman in your favourite podcatcher.
· You see I even ended on a disruptive note: I told everyone to go search an app!