I’m in America so in honour of my hosts I’ll skip the ‘u’ in labour for this post. Yesterday was Labor Day here which — because I had the day off — got me thinking about what work and labor mean today.
The nature of work and the way it’s organised are two of the biggest issues we face in the twenty-first century. Both are hugely intertwined with technology because very few jobs have been untouched by the information age and we’re now really starting to see changes in the way that work is organised, particularly because of the ubiquity of mobile phones.
This throws up some big questions about the negative impacts we’re seeing like conditions for workers in the gig economy, the debate about automation and the inequality created by tech companies themselves.
The gig economy companies know that they’re in the front line of the upcoming wave of regulation of tech companies that will almost certainly come. If that’s done well (big ‘if’ there) and we avoid monopolistic behaviour amongst the platforms I think things could improve.
Gavin Kelly has done a great corrective job on media hyperbole on how many jobs will disappear because of automation. It’s a risk of course but I agree with Gavin that it won’t happen as dramatically as some reports have said. There’s a big opportunity for automation to create better jobs if it’s done well.
Inequality is a much more difficult issue with no simple answer. I was struck by this graph which is an example of correlation rather than causation but striking nonetheless.
Fred Wilson has written about Union 2.0 and that’s an area I’m really interested in. At the moment though I’m not convinced that existing large unions are where the change is going to come from. They seem to feel they have a lot to lose and are unwilling to take big risks with new services. Ideally new unions should provide services for workers that have network effects.
I’m still to be convinced that UBI is an answer to rising inequality. I get the appeal of it but, as soon as you get into the detail, unintended consequences abound. I think the experiments in Oakland, Finland and Canada are great but I’m not sure they’ll give answers that are particularly transferrable.
At BGV we’ve been searching for and funding startups in ‘workertech’ for almost a year now and have found all kinds of interesting ideas. It’s been really great working with the Resolution Trust who care so much about the issue and have access to amazing data, particularly on the economics of modern work. It’s made me an optimist that things will change for the better as I’ve met so many people who want to make a difference in this arena but there’s still so much more to be done.
We’re staying with friends in San Francisco and this morning they made a Dutch Baby. Actually they also called it a German Pancake which gave me a bit more of a clue as to what it was but as it came out of the oven I realised it’s basically a Yorkshire Pudding. The main difference is that you eat it for breakfast with sweet things like fruit and maple syrup rather than for lunch with beef and gravy but it has the same ingredients and it definitely looks the same.
Googling the difference between them led me down a rabbit hole of finding out about the science of Yorkshire Puddings (sometimes I think most of the internet is people arguing about recipes). This includes an official press release (and recipe) from the Royal Society of Chemistry on the matter and this excellent article by J. Kenji López-Alt which tests some of the techniques people swear make a better pudding pretty scientifically. His conclusion is that the only one that makes a significant difference is leaving the batter to rest overnight.
I’m a terrible Go player. Perhaps that’s why I hadn’t quite understood AlphaGo until recently reading more about it in Erik Brynjolfsson and Andrew McAfee’s book Machine, Platform, Crowd.
Machines became better than humans at chess a while back as increasing computing power enabled Deep Blue and the like to calculate possible moves and rank whether they were likely to help the computer win. But there are more possible positions in Go than there are atoms in the universe. In fact there are enough possible positions for there to be a universe of atoms for every atom in the universe (that’s 10 to the power 82 in case you’re wondering).
Even today cracking that by brute force would require more computing power than we have available. But what I hadn’t understood was that the best human Go players don’t know why they’re so good.
“How do the top human Go players navigate this absurd complexity and make smart moves? Nobody knows — not even the players themselves. Go players learn a group of heuristics and tend to follow them. Beyond these rules of thumb, however top players are often at a loss to explain their own strategies. As Michael Redmond, one of the few Westerners to reach the game’s highest rank, explains, “I’ll see and move and be sure it’s the right one, bit won’t be able to tell you exactly how I know. I just see it.”
So programming a computer to play Go is tricky because we don’t know what to teach it. What AlphaGo did was teach itself. Back in the 1950s when the theoretical basis for artificial intelligence was being laid out there were two branches — one was rule-based (a bit like the way adults learn a new language) while the other was essentially statistical (like a child learning to talk by trying things over and over again). What AlphaGo shows is just how powerful this second version of AI has now become.
I’ve been thinking about Michael Young a lot recently. Not least because it’s all change at the Young Foundation with the appointment of Helen Goulden as Chief Executive there which is great news. But when we topped 90 ventures supported at Bethnal Green Ventures, I remembered that people say Michael helped to create that number of organisations.
Perhaps it’s easier these days to start a new venture as technology allows you to prototype and test services in a way that wasn’t possible for much of Michael’s life. According to one (tongue in cheek) account of Michael’s method, it doesn’t sound like it was too hard though:
“So here’s what you do: you spot a problem, imagine a solution and give it a working title. Then you write to everyone who might conceivably have an interest in it, and many who don’t; produce a paper taking in the resulting comments, without once losing sight of the original notion; form a steering committee; set up a charitable trust or a company limited by guarantee (preferably both); meet someone by chance on a train outside Basingstoke and invite him or her to become the unpaid director of the new organization; launch the new body at a press conference, couple this with an article in the Guardian, carpet-bomb the charitable foundations with grant applications, stick with the fledgling organisation for precisely as long as is necessary and then push it out of the crow’s nest to make room for the other six institutions which you are waiting to hatch that week.”
Michael was notoriously single-minded and tricky to work with but he always tried to make sure there was a strong link with the people who might benefit from the organisations he created. It was no accident that the Institute for Community Studies wasn’t an ivory towered university or shiny research park in the green belt, it was in Bethnal Green. Michael’s introduction to starting to work there always stays in my mind:
“The fog became thicker as I crossed the canal from Bow and by the time I left the housing office I could not see on the ground … I abandoned the old London taxi … and that was when the enquiry began. Waiting until I heard some steps, I put my first question: I asked the way to the nearest Tube station. ‘Search me, mate,’ came back the voice, curiously loud in the fog. Then a woman spoke from nearer me. ‘The Tube? Yes, dearie, you go straight on till you get to the traffic lights. You turn left and you’ll see it right in front of you. What a game, eh?’ With the help of other faceless friends, I felt my way, tapping my foot against the kerbstones as I went. I am still tapping. So I know when the enquiry began. What I am much less clear about is why. What brought me to the housing office? So far as I can remember, the point of departure for my journey into the fog was an interest in the social services, particularly in housing.”
I worry that it’s too easy for us at BGV to be disconnected from the people who benefit from the ventures we help get going. I spend a lot of time with the ventures we invest in but I know I should really be spending more time with the people who face the problems they’re trying to solve. That’s a bit harder in Bethnal Green than when Michael was based here. I’ve never seen a ‘pea-souper’ and while there is still a great deal of poverty, it’s becoming a very different place.
Michael made another contribution that is often misunderstood. He coined the term ‘meritocracy’ and his book ‘The Rise of the Meritocracy’ is a very strong part of the narrative in Europe and the US at the moment, and even more so in the tech industry. But Michael thought a pure meritocracy was an insidious thing. He abhorred the idea of a society based on a narrow notion of merit where the winners see their success as validating themselves (and not based on luck which is more often the case), and the failures of others as just being about their shortcomings rather than based on problems beyond their control.
We’ve been told we need to exercise more for years now, but finally it seems to be sinking in. While the stats for the proportion of people who are overweight or obese are still awful and the number of people who get little to no regular exercise are nothing to be proud about, there are more and more organisations catering to growing demand for physical activity.
Alongside teams we’ve worked with at BGV like GoodGym, Run an Empire and The Hard Yard, my favourite example is Parkrun. It’s been going since 2004 but has really started ramping up in the last few years and now operates in 15 countries with over a hundred thousand people all running a timed 5km on a Saturday morning just for fun.
To begin with we collated all results on paper and the finish tokens were washers from the local hardware store! But eventually we ramped up the technology, and so the parkrun registration and barcode result system was born.
It is a genius system — so simple but effective, which could be said of the design of the organisation as a whole. It’s completely reliant on volunteers and every Parkrun around the world has the same basic pattern. This leads to Parkrun tourism with people racing to see how many different runs they can do. I’ve got my eye on the busiest Parkrun in the world which is in North Beach in Durban, South Africa where they had over 2,000 runners last weekend.
I love going along to my local event in Mile End Park in London. There were over 400 people there this weekend and I don’t think that was just because the IAAF World Athletics Championships were taking place round the corner. There’s plenty of room to grow and I think we’ll see more and more organisations catering for the demand from people to get more active.
Alastair Darling was on the radio this week talking about how he got his first inkling of the financial crisis while on holiday in France. It was ten years ago and he’d walked into the local village to pick up some croissants and a copy of the FT and he read the news that BNP Paribas had frozen three funds with exposure to sub-prime mortgages. I was just looking back in my diary and it turns out I was on holiday in a French village as well — I have to admit that I didn’t read the FT and I had no suspicion of what was going to happen until many months later, but the crisis went on to have a big effect on everything around me.
I’ve just finished reading Ben Bernanke’s autobiography The Courage to Act and learned a huge amount about what happened and how central banking and financial regulation work. It’s not a short book and it does have quite a lot of detail about particular meetings and the way that decisions were made, but I loved all that. Bernanke took the job with a promise to make the Federal Reserve more transparent and he’s certainly done that by explaining its inner workings in this book.
Bernanke had a hard act to follow. Alan Greenspan had been Chairman of the Fed since the 1980s and was fairly universally respected. With hindsight of course he made some very big mistakes and allowed the buildup of toxic financial products that Bernanke had to help fix. Bernanke hints that Greenspan was a ‘bit of a character’ but doesn’t outright criticise him except to say that he resisted transparency in a way that Bernanke would then go on to reverse.
As Bernanke came to realise, 90% of his job was communication and giving other people confidence that everything would be ok and 10% actually involved action and doing things like providing money to stop ‘too interconnected to fail’ institutions from going under. Bernanke was very well prepared for what happened because of his academic career studying the Great Depression of the 20s and 30s.
One thing struck me about his approach though — underneath all the technical and political goings on he doesn’t mention ever personally questioning whether the American economy could fail. It wasn’t just that the stock market could crash — there were people who were worried that capitalism was teetering and it was time to get out. Bernanke never seems to have thought of that possibility though, which is telling.
The final section of the book contains his reflections on where we are now and he cites three reasons he’s optimistic about the future of the US. I’m guessing it was written before Trump came to power because all three reasons sound pretty flimsy now. The first is immigration, the second is technological innovation and the third is company building. I’m a huge fan of America but I wouldn’t hold out too much hope of those trends improving for the next four years.
It makes me really angry to see bad behaviour in the tech industry. Over the past year, there’s been seemingly unending stream of sexism, sexual harassment, bullying, and alleged fraud. Each time a new story comes out I want to scream — tech has so much potential but it will go to waste if people like this are allowed to shape the future of the industry.
One of the only good things to come out of the last couple of months is that a few investors in venture capital funds (normally known as Limited Partners or LPs) have spoken out in a way that I haven’t seen before. I was really heartened to see Mitch Kapor and Freada Kapor Klein take a stand — they did so with Uber (a direct investment) and then they did the same with 500 Startups (where they were LPs). It was the first time I think I’ve seen such a public, progressive, activist move from an LP — I think that’s a great sign and I wish more investors would do it. In general LPs don’t say anything about their investments, even to the extent of not really admitting where their money is invested, but venture capital is where the seeds of culture and behaviour are sown and LPs could have a huge influence.
We’re very lucky at Bethnal Green Ventures that all our LPs (Big Society Capital, Nesta and Nominet Trust) have invested in us because they want to see technology used for a positive social purpose and done so to the highest ethical standards. We’ve written it into our governing documents and they take a keen interest in all the decisions we make. We love having LPs who are there to keep us on our toes in terms of our mission and who will let us know very quickly if they feel we’re not living up to their expectations. Of course they’re ambitious for us financially as well.
I think this kind of tech for good LP should be the norm not the exception. Only that way will we change the tech industry down the line and break the biases and bad behaviour we’ve seen in the tech industry of late.
Before Vulcan became the birthplace of Mr Spock and a British bomber aircraft, but after it was the Roman god of fire and volcanoes, it was a non-existent planet.
The Hunt for Vulcan by Thomas Levenson is a great little book telling the story of how Newton’s theory led to its discovery and Einstein’s general theory of relativity led to its destruction.
Newton’s amazing work led to the discovery of a whole host of celestial objects as theorists looked at the trajectories of the existing planets and realised that to explain their paths through the sky there must be other bodies whose gravitational force was affecting them. The most famous example at the time was Neptune theorised by Urbain Le Verrier and then observed by astronomer Johann Gottfried Galle.
The progression of the planet Mercury made everybody at the time think that it too must have a hidden body affecting its orbit and many people claimed to have seen it. For over a hundred years astronomers searched for Vulcan — even naming the shy planet before they’d truly found it.
Ultimately though, it took Einstein to realise that Vulcan wasn’t just hiding, it didn’t exist. Newton’s theory only told us so much about the universe. The slight discrepancy in the progression of Mercury from Newton’s laws was actually a result of relativity not a hidden planet. The Hunt for Vulcan tells the story of how Einstein developed his theory and you can’t help but marvel at just how much of a one-off he was. In a few short years, Einstein completely changed science and our understanding of the universe and in so doing proved that Vulcan just didn’t exist.
I finished listening to the audiobook of Phil Knight’s autobiography Shoe Dog over the weekend. Knight is the co-founder of Nike and was in charge there for 40 years. It’s an amazing book — possibly one of the best business books I’ve ever read — there were so many moments when it could all have gone wrong and the key characters are amazing. I would love to find out more about Jeff Johnson who comes across as the creative genius of the bunch. He was employee number 1 and creator of the early shoes as well as the person who came up with the name Nike (the company was previously called Blue Ribband). These days Johnson apparently lives in the countryside with a giant library that he keeps open 24 hours for anybody to use. Knight — by his own admission — was a terrible manager in his early days but over time he grew as a CEO because he focused on culture rather than trying to manage everything himself.
Reading the book also took me back to my past and made me think about how much business has moved on in the last twenty years. When I was at university I was a campaigner. I was a member of People & Planet and was actively involved in campaigning about all kinds of environmental and human rights issues from supermarket policies towards Fairtrade, through to the university pension fund’s policies on ethical investment. Nike of course also came in for lots of flack from campaigners in the late 1990s and in the final chapter of the book Knight says the ‘sweatshop’ campaign was one of the most significant events in his career.
He took the allegations incredibly personally and reading the book and hearing the story of Nike you can tell why. Nike wasn’t just business for him or for the other key people in the company — it was their identity, their outlet, their personal mission to try and make a mark on the world. So when people started attacking the company he took it as a huge criticism of him as a person. He didn’t react well and now realises that his response — which was to become incredibly defensive — was the wrong one.
Eventually Nike took it as a lesson. They are now much more overt about trying to be a positive force in the world. As a publicly listed consumer-facing company they realised that to survive long term you need to acknowledge and address issues like that. Their supply chain still isn’t perfect but it is much better than it used to be. I think these days their big issue is how entwined they are in the grey areas of professional sport caused by the huge sums of money involved. Knight is out of the picture but it will be interesting to see how the culture he created deals with that.
I decided it was time to read a bit more about blockchain. First of all I went back to the original article about bitcoin written by the mystical Satoshi Nakamoto back in 2008. It’s a pretty easy read with only a smidgen of maths and you can see why it has spawned so much thinking and activity. While generally understated, it makes some big claims and has all the dog-whistle phrases for the crypto-anarchists and techno-libertarians out there.
But to go a bit deeper, I settled in with Don and Alex Tapscott’s book The Blockchain Revolution and overall I would say it’s a very good introduction. Alongside reading some more technical articles on the web and trying out some of the software for myself (it had moved on quite a bit from when I last tried it in 2013), it gave me a better idea of the potential for blockchain and what the pitfalls might be.
The book is fairly breathless on the opportunities. It runs through hundreds of potential applications — some of which exist and some of which are just on the drawing board at the moment. These range from land registries to international remittance platforms alongside banking and smart contracts. All fascinating stuff and a lot of the proposed applications land firmly in the tech for good camp.
But when I’ve then talked to people who know a lot more about these things than me, most have reservations. There are still huge barriers to adoption and blockchain becoming a truly trusted platform. The main one from the point of view of ‘blockchain for good’ is the fact that humans are involved along the way. Blockchain is a very clever technology but that doesn’t change the fact that things often need to be verified in the real world and the technology can’t yet do that in an unhackable way.
And that’s where I end up on blockchain. Lots of opportunity but it’s never going to do away with the need for institutions or understanding how real people think and behave — indeed, to argue that it will feels dangerous to me.