Episode 15 - Industrial Entropy and the Turks! The Turks! The Mechanical Turks!

SHOW NOTES :

  • Industrial entropy 
  • Disassembly of the economy through software
  • Old line of multinational corp had employment curve--everyone from uneducated people through phd in company
  • New company just as big and powerful but less actors -- now create trading platforms
  • Offices are just empty -- less and less actual people
  • Distopian scifi mega-corp
  • P2P network now -- come together with a project, then disperse
  • Empowering for people with skills and ability to navigate and have work come to them, but who is being left behind?
  • Why is this happening?
  • Ronald Coase -- The Nature of the Firm
  • Let’s get geeky with economics
  • Now, software takes care of the “hidden costs” that Coase describes as the benefit of the firm in the 30s.
  • The firms that exist are the trading platforms -- they are invisible.  We feel like we are just connecting as human beings and they create the platform that the information flows.
  • Alexander Bard 
  • Netocrat vs Consumeriat
  • “Unless you have a digital footprint, you are excluded from certain conversations before you even open your mouth”
  • Boris Jabes - Meldium   
  • Gary Shteyngart - Super Sad True Love Story  
  • “If you don’t have a digital identity to go with your meat identity, in fact you don’t exist anymore”
  • Those that have given up in large enterprises, yet are constantly striving and want to do something bigger
  • “How to manufacture an engaged society?”
  • Nicole Mattos -  “Willing to Work but Too Tired to Hustle”
    • Community college students have problem because they have to be self marketers and a lot of them are really burnt out on trying to do that -- they just want a job they can go to and to do their ascribed responsibilities.  Historically that has been what a lot of people have done.
  • HIT and Amazon's Mechanical Turk 
  • Distopian future of “just give me work” work might rob people of the dignity and sense of accomplishment that helps the whole human thing
  • “Assembly line was just as bad, but at least it paid people well”
  • Precariat 
  • Digital Mentors -- Charisma Transfer Engine.  Find people that want to do more and back them online.
  • Attention Capital
  • Micro-Patronage.  “The Hunger Games for Twitter.”
  • How do you scale yourself?
  • “Be selfless with accessibility, but selfish with your time” - Brad Feld 

WORD OF THE WEEK : 

Hustle - to move or work in a quick and energetic way;

or, from urbandictionary: 

a) make money doing something slightly shady 
b) dance from the 70's

EVENTS : 

  • SXSW  - March 7-16, 2014 Austin, TX (POSSIBLY SEE KLINT AND CHRIS PRESENT)  
  • Cyborg Camp - MIT Media Lab - August 2014 - Boston, MA
  • Buddhist Geeks Conference - October 16-19 2014; Boulder, CO

FIND US / THANK YOU :

TRANSCRIPTION : 

Mindful Cyborgs, Contemplative living in the age of quantification, augmentation and acceleration, with your hosts, Chris Dancy and Klint Finley.

 

CD:    Welcome to Mindful Cyborgs, Episode 15. Is this 15, Klint?

KF:    Yes.

CD:    So, hanging out at the Defrag Conference here in Broomfield and we’ve seen a bunch of presenters so far and yesterday I got really excited during one of the presentations and Chris DeVore’s presentation really got me motivated. I said let’s make Chris our first guest for this show. So, welcome Chris.

CDV:    Thanks for having me. I appreciate it and thanks for coming to hear me talk. It was kind of a non-obvious topic “Industrial Entropy” so I wasn’t sure who’s going to show up for that one.

CD:    Yeah. So, tell us a little bit about industrial entropy. That’s big, heavy, lots of weight to that.

CDV:    I guess Defrag is a good place for a topic like that because I didn’t mean for it to be all highfalutin but I think I’ve been observing as a software entrepreneur and investor sort of what I would call the disassembly of the economy through software that bigger companies are being not intentionally but in fact they’re being taken apart by software whether it’s mobile devices or software as a service and I was sort of thinking about what are the implications of that for business and for culture and for society and then Eric Norlin asked me to come talk because I said I got to have to actually get my thoughts together and that’s what I put together, so.

CD:    One of the things I noticed was this concept where we had these - what you do call it? The old way of looking at stocks the 50 or the 5?

CDV:    The nifty 50, right.

CD:    Yes. So, I loved that. I think my father probably prescribed that but then you kind of segued into how now you’ve got these big companies and even though they don’t fit that same business model they’re using software kind of in that jiggery kind of way. So, I’m doing your complete talk a lot of disservice but I want you . . .

CDV:    No, no, it’s great and I think where I’d gone with it was there was an old line of kind of multinational corporation that in a way was very paternalistic in the sense from material sourcing through manufacturing through distribution that there was sort of an unemployment curve for everybody from uneducated people to PhD scientists and beyond and I think where we got to is there’s a new kind of corporation. Those corporations have been disassembled through software meaning sort of virtualized and chunked up and we have a new kind of company that is just as big and powerful but they really are essentially just creating trading platforms and then all of the workers that used to be inside the firm are now kind of these independent economic free agents and they’re using the trading platforms whether it’s Google or Airbnb or that kind of thing like they are nominally empowered as individual economic actors but they’re on their own, and the idea that the company has taken people out of the company. The company still exists but the people are gone.

CD:    Yeah, it’s weird. One of the things I’ve noticed personally as I moved through my career it’s just offices are just empty. The last 3 years I go to big companies of 10,000 or 5,000 we go just empty offices everywhere and I think some of those are kind of remote work from home and some of its software that’s pulled people apart, but I don’t know really what that means to culture. I know you kind of touched on culture at the end but I want to get over to Klint because Klint’s writing about some of this now too.

KF:    Yeah, one of the things I’ve been thinking about lately is that in the 80s there was dystopian sci-fi people would talk about the mega corporation and you would see these big conglomerates but now what seems to actually be taking over or becoming more prevalent or mega networks . . . so, Y Combinator is one example though. Maybe the founders [00:04:06] would be as well but Paul Graham has explicitly said that part of the point of Y Combinator is to be a distributed peer to peer replacement for the traditional company to give the members of it the benefits of being part of a large company without having to be part of the structure of a large company. Do you have any thoughts on that? Do you think that’s actually happening?

CDV:    I definitely do and I think this is where the pattern that I think is interesting and there’s a dark [00:04:31] that we’ll get to in a minute is, when everyone is responsible for their own career pathing, like no man is an island, right? We all need different mixes of skills and abilities and kind of promotional states to build an organization that’s capable of things that more than one human can do but this idea of going from hierarchies of organizations with organization design and managers and leadership into networks where you essentially have these flat as Paul says peer-to-peer networks of people that they collaborate in more dynamically as they come together around a project and then they disassembled and reassembled different products. I think that’s fundamentally true about the nature of work today.

    Even an enterprise work you might have a project manager but they’re going to hire this sort of coalition of vendors to come together to build a software or to ship certain kind of product and then when that’s over and they then ships over they’re going to disassemble and they’re going to reassemble very organically and I think it’s again very empowering for people who have the skills and ability to navigate and set their own career path and build their own digital identity and kind of how work come to them and be called in to these dynamic networks.

    The thing that I worry about is from a skilling standpoint who’s being left behind, who doesn’t have the ability to surf on this very organic dynamic networked economy and how do you make that economy as open or as porous as it can be so that people who are coming out of school right now it used to be they go to a career fair and they get a job. If those jobs don’t exist, what does exist and what are the gateways and points of access for people into the network at this point?

KF:    You might want to back up a little bit too and talk about why this is happening beyond just technology. I mean, just saying technology because you mentioned the reason for the old school firm was described by Ronald Coase. So, maybe you could talk a little bit about that and why the old fashioned Coasian firm is going away.

CDV:    Yeah. Not to get super geeky about economics but . . .

CD:    Be as geeky as you want.

CDV:    - will get as geeky as I want to be.

CD:    I think I’m excited.

CDV:    Ronald Coase is an economist and he wrote a deceptively simple paper in 1937 called “The Nature of the Firm” and I think it was the first time that economists had a kind of a theoretically satisfying reason for why the companies exist because in a pure efficient market view the economy should just be individual actors that are trading with each other really for what they need but essentially pursuing their own incentives and initiative and Coase’s argument was that there’s all these hidden costs to trading, that you have to find people to trade with, you have to strike a bargain with them, you have to believe that they’re trustworthy and all of the sort of frictional losses of free market trading the reason for them to organize is to essentially shortcut those frictional losses and align a group of people around a shared set of incentives and essentially make them more productive in aggregate than they would be as individual actors and that was why the firm arose in this sort of [00:07:24] and I think the argument that I was trying to make in the talk is that because so many of those points of friction in the economy about how do you find people to trade with, how do you trust them, how do you know that they’re going to fulfill their bargains.

    There are now software tools whether it’s social networks or electronic trading platforms or things like oDesk or even PayPal just sort of a way for people in a trustworthy way exchange money with each other, there are now software hacks that have removed a lot of the frictional sources that cause a firm to organize until I started asking myself the question if the hidden cost that Coase identified in his theoretical framework are no longer and that’s not really true like there’s still plenty of friction but let’s start with the given that there is no friction in free market trading, why do firms exist and what is the nature of those firms and that’s what sort of lead me to this idea these sort of the firms that exist are the trading platforms that’s what left and they are invisible and they’ve removed themselves from the picture so we feel like we’re just connecting with each other as human beings and yet the substrate for our interaction, the platform we’re interacting through is a company. It’s a powerful company and if that company goes and it has a lot of information about us as human beings, there is this sort of shadow presence in the economy that if you don’t think about it you think it’s all this kind of this happy flat networked humans connecting with humans but the digital substrate is incredibly powerful and it could be used in lots of not constructive ways.

CD:    I think it is, yeah. It seems in some way. We had Alexander Bard on our last show and he has this concept of the netocracy. Are you familiar with the netocracy?

CDV:    I think I have.

CD:    Okay. So, basically, it’s this uber digitally connected elite.

CDV:    Yeah, the digerati.

CD:    The digerati, right. The opposite of that was the consumeriat and the consumeriat are basically the people just on Facebook, going to porn sites and just literally just basically junk food and getting fat digitally. I want to go back to your point about students coming out of school there does seem and this is one of the things I obsess about in my mind. There does seem to be unless you have some type of portable blob that is you digitally, some footprint you are excluded from like certain conversations before you even open your mouth. What’s that all about? Do you see that?

CDV:    Oh yeah. There was a great talk given yesterday by a friend a guy named Boris Jabes who runs a company called Meldium which is sort of an identity and security company, but he was actually riffing on - I don’t know if you guys have read Gary Shteyngart’s novel “Super Sad True Love Story”.

CD:    Yeah.

CDV:    So, how much of that has come true which essentially we are human beings but we’ve left this digital crumb trail and that’s becoming more and more public and more and more visible and essentially if you don’t have a digital identity to go with your meat identity, in fact you don’t exist anymore. If haven’t created a digital avatar of yourself that people can touch and feel in a way frankly . . .

CD:    That way is what I think is the scary thing.

CDV:    And I think students you want to believe that people see you for who you are but increasingly they see you for what digital shadow you’ve wrapped around yourself.

CD:    Which is dangerous. I was with a 20 year old the other day, he just turned 20 and I watching him . . . I don’t spend time with lots of young people. I’m just busy and I don’t have children. I was watching him and I was asking him questions and I said to him, “Well, just look it up” and he goes “I really don’t Google stuff” and I said “Why not?” “Because most of my teenage years if I needed to know something somebody was just running for their phone to give me the information.” And I thought to myself, are we slowly creating a group of young people who they’re not tech savvy they’re tech dependent and they’ve got older people running around giving them the information as fast as they can.

CDV:    Right.

CD:    And that literally is removing them further from that breadcrumb trail you’re talking about but if in 10 years what type of atmosphere does that create which goes back to the other question I wanted to ask you, sorry, was in enterprises today, large enterprises, I spent a lot of time in them there seems to be people who just are devoid of like they’ve given up. They just, “I don’t know what I’m going to do. I’m going to do what my boss tells me to do. I’m going to go home and I’m not going to like worry about anything else” but then they’re constantly striving like “Oh, I want to do what you do” or “I want to be more connected” or “I want this and this and this” and they don’t know how to do both and do we have a lost generation below 20 and in their 40s right now?

CDV:    I think it’s a great question. A cynic or a kind of more dispassionate social critic would say, well, there have always been the creators and there’s always been consume and that’s just life and you’re going to have this bifurcation in the society of people who make and people who take and consume and I don’t think we have the luxury of just ascribing people to categories anymore because we’ve reached a point in the economy where everyone has to be at some level a maker because you have to make yourself.

    Fundamentally, you have to create an authentic identity in the world that allows you to connect in this organic networked way. If you don’t take responsibility for yourself, the world will not just invite you in. And I think how do you create a culture where everyone feels responsibility for their own career pathing doesn’t just say, “Well, I’ll just go get a job and I’ll just sort of follow along who my boss tells me.” I really struggle with how do you manufacture an engaged society where we’re all responsible for ourselves?

CD:    Manufacture an engaged society. I love that.

KF:    There was an article a month or two ago by a community college teacher named Nicole Mattos on Medium.com called “Willing to Work but Too Tired to Hustle” and she wrote about how so many of her community college students they range quite a bit in age people just out of high school or people going back to school and there’s a huge problem because they have to be salespeople of themselves like self-marketers and a lot of them are just really burned out on trying to do that. They do just want to have a job that they can go to and have a set of responsibilities and do those responsibilities and that’s historically what a large portion of the economy has done. You’re talking about manufacturing and engagement.

CD:    I love that.

KF:    Do you see any other paths that we could go on?

CDV:    I do although I don’t think they’re paths that are particularly appealing. If you think about the way and coming back to kind of this idea of this marketplace, software powered marketplaces, there are marketplaces that people can plug themselves into and have tasks assigned to them but Mechanical Turk is the most obvious one of these and oDesk would be a slightly more sophisticated kind of creative version of that is if you want to just have work come to you, you can sign up for one of these work marketplaces and you’ll have task come to you but they may not be tasks that you find super engaging.

    HIT is what Mechanical Turk calls it which is a Human Intelligence Task but these are nickel tasks, they’re micro tasks. So, everyone I think needs something that’s going to engage them intellectually. I think we all need to feel that our work is valued and productive and turning humans into machines, I think, that’s my word, my sort of dystopian fear is yes, there will be passive, give me work and I’ll do it kind of marketplaces but the kind of work and how micro the work will be will deprive people the sense of ownership and achievement and accomplishment that makes them human.

KF:    Well, the assembly line was potentially just as bad but it paid people well and that’s the other problem that we’re facing with things like Mechanical Turk there’s another new term that goes around a lot what we call the precariat, people who have completely precarious employment because they have no benefits, no vacation, no guarantee of how much their paycheck is going to be.

CDV:    And that’s life and that’s true.

CD:    Yes, exactly how I was in my twenties. That’s life.

CDV:    But I think it’s hard to underestimate the amount of anxiety that produces in people’s lives and anyone who’s an independent consultant you sort of have to make you what you kill and having to eat what you kill with a hunter or gatherer framework it is a way to live but it’s a very hard way to live because you always feel like you’re on the edge of not making it.

CD:    One of these newer skill sets and I don't know how to call this skill set and I’ve never said this out loud so why not today, is I was mentored a lot growing up. I’m 45. I’ve had a lot of really mentors who were very kind to me and told me to be kind to myself. The best advice was be kind to you, right? But digitally I’ve been trying to figure out how that works so I call it the charisma transfer engine and what I’ll do is I find people who want to do more and I can’t really back them in public so I’ll back them online in small ways. I’ll re-share what they did. I’ll engage them whereas normally my attention is so laser focused online. I’m very careful about a lot of . . . I can’t take to handle too much information but in some ways that’s the closest that I get to this manufactured engagement of loaning them for all intents and purposes attention capital. Have you thought about attention capital and how you can mentor someone in that space?

CDV:    It’s a great question. I think my work . . . I run [00:16:49] with my partner Andy and we also run and he leads the Techstars Seattle program. So, there is a lot of very hands-on and intensive mentorship with that and I think there are a lot of very light, light ways that people connect with each other in micro units and Twitter’s a great example which is like I have a lot of relationships, people I’ve never met in person that I know through Twitter and we have very productive but very kind of micro exchanges about if one of us tweet something or write something and we feel moved to respond or to engage and some of it’s just validation which is like, hey, that was cool like thank you for doing that, but I do think it’s an interesting way to think about is there a lighter way, more digital, more micro-tasked framework for this kind of human support -

CD:    Mentoring.

CDV:    - human mentorship which is less intensive and less face to face but is ultimately about . . . another thing, another pattern that I’m kind of leaning on now that triggered the thought is this idea of micro-lending which is sort of almost micro - what’s the right - kind of micro-patronage, if you will, where you find promising young people and almost like this will be a marketplace for promising young people that you can sort of make bets on in fact and this could get . . .

CD:    The hunger games for Twitter.

CDV:    Yeah, pretty ugly like this could turn pretty gross and this whole idea of like I’ll give you some money and I get 10% of your future earnings for life like the sharecropping of yourself but I do . . .

CD:    But that’s hot, that’s really hot.

CDV:    But I think there’s a way to frame it positively of giving people ways to touch more people’s lives in a constructive way both with money and with emotional support.

CD:    You bootstrap someone with a little bit of your attention capital.

CDV:    Yeah.

CD:    To me I never really shared that I do this but I do it constantly. I’ll take people who I believe have a future that would impact other people or you’d be nice to other people. I do have rules I don’t sell out. You look like a nice guy. I think you probably help people. You know what I mean?

CDV:    Yeah.

CD:    But when I don’t see that, it doesn’t matter. I don’t know really what that looks nice but your idea of taking a kid giving them almost like it was a startup some funds or outside of fund just some attention capital I think we’re there. I just don’t think we have the words for what we’re doing.

CDV:    Right. I was having a similar conversation with another guy . . . again, Defrag is a great show for people who haven’t come before because it is full of people who are again thinking deep thoughts about the intersection of society and technology but it’s how do you scale yourself. Leadership is how you scale yourself and mentorship is another way of scaling yourself which is people helped you and you want to get back but you can only give so much of yourself so many hours in a day so if the mission of a product design is helping leader scale themselves through technology that’s an interesting kind of product mandate to put out there and be like what would a product look like if its mandate wants to help leaders and mentor skill themselves through technology.

CD:    Was it you that said yesterday selfless with your time but selfish with . . .

CDV:    That’s Brad Feld. It sounds like Brad.

CD:    Yeah. I really liked that because I’m very selfless with access. That’s what it was selfless with access but I’m very selfish with my time which is almost kind of a strange . . . I feel like I understand what he’s saying.

CDV:    Yeah, and I think if I were to put it in words to make sense to me is if you don’t have a strong core, you can’t give but then you need to make sure you take care of your core so you have capacity to give.

CD:    That’s beautiful. Well, Chris, I’m going to say right now the highlight of the show is so far for me. The guy from Intel jumping tacks and that whole platform that was probably #2 but it was such a pleasure. I tweeted how straight you were making me sit and how fast my heart was beating because that’s the ultimate feedback I can give you other than great job.

CDV:    I honored that you asked me to talk. My reason for being here is try to touch people’s lives and if I did one at a time, right? Thank you.

CD:    It was wonderful. So, we’ll catch up with another guest in Mindful Cyborgs in a few minutes.

KF:    All right. Thanks a lot, Chris.

CDV:    Thank you, guys.