The San Francisco Bay Area based writer Larry Downes is the author of five books including this year’s bestselling Pivot To The Future. He’s probably best known, however, for his first book, Unleashing The Killer App, which, in 1998, sold 200,000 copies and was one of the first big hits about the internet. So to begin our conversation, I asked Larry what today, 20 years after the publication of his iconic book, is the new killer app.
Hope you enjoyed this week’s episode with Larry Downes, you can find out more about him here:
Find his Books here:
Pivot to the Future - Discovering Value and Creating Growth in a Disrupted World
Big Bang Disruption - Strategy in the Age of Devastating Innovation
The Laws of Disruption - Harnessing the New Forces that Govern Life and Business in the Digital Age
Unleashing the Killer App - Digital Strategies for Market Dominance
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Produced by Jason Sanderson - Podcast Tech
[00:01:50] So it's hard to imagine a time when there were no textbooks. But back in 1998 people didn't read books about technology until a man called Larry Downes wrote something called Killer App Larry. Today in 2019 more than 20 years after killer app. What is that killer app.
[00:02:11] Well it may become more literal than we expected. I mean 20 years ago when I started writing on this stuff. Course everything was bright and rosy and tech's future was unlimited. Now of course we're entering. I don't know it's the terrible twos or middle age or something but obviously this is a period when tech is getting a lot more scrutiny and a lot more criticism and frankly some of it's deserved some of it isn't.
[00:02:32] Your new book pivot to the future best seller suggests that the way to quote unquote pivot to the future is not through government intervention not through regulation is that fair. You've always argued I think through your career that innovation is best realized through the market rather than through government.
[00:02:50] Yeah I mean it really has to be for better or for worse. The reality is of course and this hasn't changed in the last 20 years. But technology improves at a very fast pace. You know we can more or less say Moore's Law is the driving force of that change. And that means that we get better faster cheaper smaller use elected less electricity and all the tech that we've worked with in these last 20 years. The market is by no means perfect and we certainly talk about places where it's broken down. But the reality is that governments by design move very slowly and very incrementally. It's just a terrible fit for trying to regulate change when something is changing right under your feet even as you're signing the legislation.
[00:03:29] Mark Zuckerberg of course famously said move fast and break things and that's exactly why he and his fellow entrepreneurs instead of Kim Valley have done. But the fact they've broken things means that government has to act don't they.
[00:03:40] Well it depends on who's going to come around and fix it. So what I think has been operating more or less successfully for this last period is that shirt companies have broken things the tech has broken things are broken markets they've broken industries they've broken consumer relationships but then another generation of tech comes along and makes it better. And as long as we have that kind of a model then the breakage is actually for the good. As I said before though we've now reached this kind of middle age or the terrible twos of tech and some of the things that have broken haven't been fixed by another generation of entrepreneurs and it's certainly appropriate for regulators and government to step in. Then we get to the problem of did they know how.
[00:04:19] Well let's use the example of Facebook. Several guests in this show suggested that Facebook is a huge problem and that it needs to be actively regulated. Other examples of innovators fixing the problems of Facebook. The problems of privacy and monopoly and fake news.
[00:04:38] Well yeah but I guess it depends on what problem is that you're pointing out. And by the way and I'm no apologist for Facebook I think the company has made terrible mistakes and they've compounded those mistakes by apologizing and then not fixing the things that have already gone wrong and then continue to do more things wrong. They've really made it a very difficult environment frankly for startups and other tech companies as a result and a lot of the scrutiny the tech is getting is because of some things that Facebook has done. But how do you fix them. Well you know big story the last six months or so has been we have to break them up. Got lots of candidates on the campaign trail in the U.S. saying the solution to the monopoly of Facebook. I'm not sure what it's a monopoly of by the way but the solution is to break them up. And yet if the problem is that they have too much of our information or are they not very transparent about how they use it or not response about how they use it breaking the company into component parts does nothing to solve that problem. Antitrust is a convenient tool to use but it's a bludgeon. It's not a scalpel. And many of the problems you're describing a lot of the problems that we've had because of criminal enterprises who have gotten a hold of information and made bad use of it. Antitrust is not going to fix that problem.
[00:05:49] Lara it's not just Facebook that is being accused of being a monopolist and a legal monopolist it's also Google and Amazon are you suggesting that Amazon and Google shouldn't be investigated on the antitrust front are you suggesting that the Europeans have led us up a blind alley.
[00:06:05] Well antitrust is very different in the US and in Europe and always has been the problem here in the U.S. is we have the regulators and the candidates just you know they want to investigate it all they just break things and see what happens. Well the problem is that the way antitrust has worked in particular in this country for at least the last 20 years is you don't have a case unless consumers are being harmed and consumers are not being harmed if prices aren't going up as a result of these behaviors. Course most of the products and services we're talking about from the companies you mentioned are free. So prices clearly aren't going up. In the case of Amazon the complaint is that they charge too little and that as a result they're putting other businesses at a disadvantage. Antitrust is not set up to solve that and it's amazing to me. To hear these candidates all talking many of them are you know members of Congress. Now none of them have proposed any legislation to change how antitrust works. They're not proposing new standards or things that are specific for the information economy or for tech companies. They want to apply the current law but the current law does does not serve the purposes that they're using it for.
[00:07:10] So are you suggesting there is nothing valuable about a new school of academics particularly within American universities who are trying to rethink antitrust law.
[00:07:19] Yeah I don't think there academics at all. I think there are advocates some dandies their propaganda as their polemicist. They have no legal case to make. They have no legislation to propose. They just don't like the outcome and they're trying to sort of force fit one body of law that's very well established that has been really quite stable for the last 100 years. They last 20 years to work as a solution that it just isn't set up to provide.
[00:07:43] What about privacy Larry. There's more and more concern about the information that these big tech companies know about us. The big data revolution seems to be one that Shoshana Zubkov at least previous guest on this show described as surveillance capitalism. Is that another bogus issue.
[00:08:01] It's not a bogus issue. No I don't think so at all. I think again there are definitely problems of transparency there are definitely problems of unequal exchange. I mean we give the information in exchange for lower prices or for free services. That's worked quite well. But it may be that that exchange is out of balance. But the general idea that information is a good it is something that has value that I think is fundamentally correct. And it's a question of responsible use. And in fact we have situations where it's not being used responsibly. Frankly we already have laws in place both in the U.S. and the EU that could be enforced much more intelligently much more vigorously. Solve a lot of these problems. But to say that many of the specific examples that come up when I talk to legislators they talk about Cambridge analytics. They talk about the Equifax breach. These are criminal enterprises not the companies themselves that did the actual harm. These are problems of security these are problems of encryption. These are problems where criminal law needs to be enforced and again where criminal law does exist. It's largely an enforcement problem and I think for some companies some very bad actors who just aren't being responsible are you've had a longtime column in The Washington Post.
[00:09:14] You've also held positions at Georgetown University so you know how D.C.. Yeah unfortunately has the guy shifted our Elizabeth Warren and Bernie Sanders and even Trump's view of Silicon Valley is that the future has the global regulatory landscape changed dramatically at least the political perception of it.
[00:09:35] Well those are two very different questions so I'll answer them because they have two different answers I think yes the attitude towards tech has certainly shifted the last couple of years it's gone from rosy projections and happiness and sunshine and so on to very dark things. And there's reason for that. I mean it's not just orchestrated by the anti Googles or anti Facebook and anti Amazons of the world. I agree. I don't know that the extent of the backlash is proportionate but yes definitely. We've reached a point where now there are social problems that need to be addressed. But the second part of your question is has the regulatory landscape changed. No. Certainly the Europeans have been more aggressive about enforcing things. But in the United States we have not passed one new law. And I would predict that as a longtime Washington server we will have no privacy law legislation we will have no cybersecurity legislation. We will have no legislation of any kind. Antitrust anything having to do with tech. Nothing will pass before the 2020 election. Do you celebrate that. I celebrate it but probably not as enthusiastically as I would have five or 10 years ago. Why. Well as I say five or 10 years ago I think the problems were pretty modest and the capacity of government to do something about them was very slim. I still think the latter is true I don't think we have any expertise in Congress is certainly in the regulatory agencies very little expertise so some ways if they did do something they would probably make things worse. But my hesitation about being as enthusiastic as I once was is yes I think now there are some genuine problems in which smart regulation. But more importantly smart enforcement could be helpful. We just don't have the capacity to do that in our current system.
[00:11:16] Larry you've always been very good at understanding or forecasting the political consequences of new technology. Are the technologies now on the horizon particularly A.I. but deep fake technology. Block chain technology. Are those technologies going to change the rules of the game or are they just version 2.0 of the Internet.
[00:11:39] Well we could add to that list things like you know algorithms. That's of course part of A.I. and machine learning and a couple others. You know virtual reality robotics. There are definitely. Sort of what might think of and we talk about in the book as kind of the next generation of disruptors coming they will have a profound impact on industry structure and ecosystems and as a result the SDL have significant social consequences and as a result of that obviously they will merge into the political in ways that I think is difficult to predict. But there's no doubt the sort of awareness of tech and its impact on society is not going away it will get more intense and eventually we may actually get new ways of regulating it smart ways and enforcing those regulations. Or maybe we'll just get a lot of bad laws.
[00:12:24] Well let me suggest a couple of areas where I would guess at least a regulatory response will become unavoidable if certain things. The first is A.I. and jobs if it becomes increasingly clear that you know whatever economists are predicting 20 30 40 percent of jobs are lost through A.I. and then not being replaced then presumably there has to be an enormous regulatory response. And I think the second areas in terms of deep faith if we do indeed have technology which will mean that it will be impossible technologically at least to distinguish between fake and truth then once again it becomes almost unavoidable that government steps in. Yeah that's a question I'm curious as to your response because you've always been quite skeptical as you've already indicated about the role of government when it comes to tech.
[00:13:14] Yeah. So first of all I am not convinced that A.I. will have that code if it does. But if it does then we're kind of back to the sort of the 19th century the Industrial Revolution automation in the last century. Obviously you know there are huge fears about what it would do. And there were government responses essentially creating a social safety net particularly for kind of not the next generation of workers because they'll find things to do. But as for the current generation of workers it's always been about something like guaranteed minimum income yeah or Social Security you could actually live on and health care that's actually works that I think makes sense to talk about and probably you know there's a dividend from the productivity gains that would pay for. But effectively early retirement for a generation of workers who aren't able to adapt. I think that's the worst case scenario I think the younger generation no matter how bad the displacement is they would be able to and where they can always drive boobies or though in the future no one will be driving noob is really right. Well if we're lucky no one will be driving I mean this country we have 40 50 thousand deaths a year from all of them. A driver error. Human beings are terrible drivers. I would be delighted if we could get all human drivers off the road as soon as possible.
[00:14:26] But there's some astonishing number about the number of white males employed in the driving business. Yeah.
[00:14:32] You know honestly they cannot be retrained to be programmers. That's a delusion in that we had this before professions you know elevator operators switchboard operators when certain things are automated you do have a generation of workers who are retired early and the real question for society is to support them or do you not support them and the risk obviously is it's a big enough group and you don't support them then you risk revolutionary change social revolution violent or otherwise. We've got a long history of that in the last thousand years.
[00:15:02] So Larry let's pivot to the future. The title of your new book What needs to happen to avoid those violent consequences given that these technologies at least in the long run are pretty inevitable.
[00:15:14] Well obviously the most important thing to happen is that we dial back the rhetoric of hatred and revulsion at tech but aren't you exaggerating that. No no. Where's the evidence. What's the evidence did you watch any of the debates sort of first set of debates when they should be talking about immigration and foreign policy and things that the government is actively screwing up. It's much easier to say Amazon is ruining business in America. It isn't. And it's obviously a pleasant distraction because it's easier to do that than to talk about the real problems. But all right. So let's put that aside so we don't necessarily agree on toning back the rhetoric but I think the real problem is government has no expertise to regulate new technologies especially disruptive ones especially ones that are changing quickly in the United States for many many years we had something called the Office of Technology Assessment that was a neutral nonpartisan group that informed Congress about technology change. Newt Gingrich sort of wiped it out during his Contract with America. There's been talks about bringing it back and it was extremely useful. That's just a starting point we need something like that because you know we still have hearings is even the most recent hearings about Facebook members of Congress you know with no seeming sense of embarrassment asking questions that made clear they didn't know what the difference was between Facebook and Google and Apple and Amazon. As long as they're not being given any kind of education on tech how could we possibly expect them to do an effective job regulating it whether they do it or not.
[00:16:42] Haven't the Europeans done that isn't Margaret Vestager whether or not you approve of some of her regulatory policies hasn't she. Educated to self about to look.
[00:16:52] I'm very skeptical view of the EU's actions in the last 10 years it's very convenient that the EU zone economy has no successful technology entrepreneurs no companies in the top 30 whatever list you want to look at. In one sense you know my view of what they have done. It's really a kind of information trade war where they're singling out U.S. companies because they can't figure out any way to do anything on their own that's successful. They dress it up in the language of antitrust and consumer protection and privacy. But I think this is just protectionism at its most naked form isn't one solution to the problem of the techno illiteracy of politicians in Washington DC.
[00:17:32] Isn't it becoming must a moral responsibility of entrepreneurs in Silicon Valley to go into politics. They clearly understand technology.
[00:17:40] Well you know I think a simpler solution is just generational. Obviously of course governments turn over very slowly. But sooner or later and it may be unfortunately too late in some ways. But we have a next generation of people coming into govern particularly into the civil service thank God. That's what actually gets anything done. Who will be technologically literate who will have grown up with it who will understand its pluses and minuses. That's really our best hope is just to get those people in as soon as possible and get the illiterates out as soon as possible.
[00:18:09] I know you're not a huge fan Larry of Donald Trump. I never said anything one way or the other. Well you're probably less hostile than some of our other friends in the Bay Area. But what's your take from the tech point of view of his presidency so far has he done anything. He has.
[00:18:26] It's a mixed bag. To be honest his administration I don't know about him personally I'd rather talk about the administration. But you know they've done some good things in terms of getting the U.S. ready for next generation mobile technology for example 5G. They've done some missteps on that front as well so as you say it's it's a mixed bag and I think a lot of what they haven't done. Certainly the antitrust division has been very poorly behaved in terms of how it's looked at some of the mergers that are the natural result of some of this disruption but they haven't been successful so right they tried to block AT&T Time Warner but they didn't succeed on some of these other mergers. They've kind of sent very mixed signals but so far they haven't crushed anything that would actually have been ultimately very helpful for future tech and future entrepreneurship in the US. So yeah I give it a B minus maybe a C plus depending on where you're talking you're a tough grader.
[00:19:18] That's not a bad grade for me. What did you give Obama. Well I would give it a much higher grade. Honest what did he achieve that the Trump people have.
[00:19:26] Well I think there was the environment I think about from the Silicon Valley and the venture capital standpoint is is there an environment where you're comfortable investing in very frankly risky investments. And obviously the Obama administration was unbridled enthusiasm for tech. And of course there were many many you know Google ears and others in the administration whether or not they actually kind of you could tack a list of things that they accomplished what they certainly did was made it clear that they were pro tech and from an investor standpoint that was really what was most important. And I think most helpful now I don't think we have anything near that clarity. And if I were an investor and I was starting to think about a I or block chain or virtual reality I would be asking myself can I really trust that this open innovation environment is permission less innovation is Adam theory calls it. Is that going to persist in time for me to make good on these investments.
[00:20:19] When historians look back at the Trump presidency one of the things of course they will comment on is Trump's use of Twitter. What do you make of that in terms of the history of the presidency.
[00:20:30] This is a question I mean of course there've been a lot of innovative presidents in terms of how they communicate. I'm sure people thought FDR using the radio to talk directly to Americans that was quite revolutionary quite disruptive at the time the Kennedy Nixon debates when they were on television. That was again using new media to change the nature of the interaction between the executive branch and people. Certainly Obama now Trump have pushed that into the next generation of technologies. But I see it as entirely consistent. Again it's not without that. People were worried then about you would misuse television or misused radio. I think you'd have the same concerns about using social media. And I think there are legitimate concerns.
[00:21:11] Do you think we can ever go back to a world where presidents use Twitter in a kind of edited way rather than in the the intuitive spontaneous way that Trump uses it.
[00:21:23] Well see once we've embraced a communication technology the real question is what's the next technology and how will it be used by a future presidents. Does anything come off to Twitter. Oh sure not the end of the world. No. You know we already have you know Instagram and Snapchat and which are profoundly different. They're just more visual. You say that is it more visual is not something that's profoundly different. I think visual is profoundly different than text. I realizes two writers sitting here we shouldn't say that but we have to. Acknowledged that that is a big difference.
[00:21:51] Well spoken as an author. Larry as I suggested at the beginning of this conversation you've been in this game for a while. You wrote killer app the first big book about tech in 1998. Looking back over the last 21 22 years what's changed from your point of view as an author writing about technology.
[00:22:11] Well obviously the access to audience is really been the big change when I wrote my first couple of books. You know you go to a bookstore and you would buy business books and I would be hired as a speaker to go to talk to user group meetings or industry groups about what is the Internet and what does it mean to you why you should be involved with it or why you should care about it. Obviously now the books are much more marginalized. It's much smaller section of the bookstore dealing with the business and tech.
[00:22:38] Your last book sold more than 20000 copies it was a best seller. It's pretty impressive. Yeah.
[00:22:43] Bleep I have no complaints. I'm delighted to have loyal readers who follow me from book to book. But obviously where I get my most interaction with people is no longer sort of a book every three or four years or in your case every couple years. It's much more immediate. It's you know there's the articles as the blog post is the podcasts. That's great. You can talk about things where your research is ongoing you don't have to wait the whole long cycle cause publishing hasn't gotten any faster even though everything else has.
[00:23:11] So I'm glad that I have more outlets because the publishing industry have a future an appropriate question on top.
[00:23:17] Yeah I always think so. I mean I always tell publishers whether it's newspapers or books or magazines. One thing that they always underappreciated is the value of their brand and how people accept understand that if it's a Harvard Business Review Press or if it's a Penguin Portfolio whatever the imprint is that signals quite a bit and really you know very few publishers have understood that that's what their value added is. They see it more in the mechanics of where the ones with relationships with the supply chain or with the production process. That's all the part that's that's really trivial or becomes less important. But the brand is what will persist and the ones that figure that out will survive.
[00:23:55] Larry they're going to be people listening to this who want to write a book I haven't written one before they have an idea about tech about non-fiction world about the relationship between technology and politics about antitrust or A.I. should they stop thinking about that is it an insane dream now to want to be a non-fiction author. Well depends on what you want to achieve by it. If you want to make a living. You want could aim for yourself as you've done.
[00:24:21] Yeah well I wouldn't start with a book if that's your goal is to as you say make a living and make a name for yourself. There are much more immediate ways to do it. So I would think more about writing columns on medium and other kinds of self publishing platforms. Podcasting Instagram's we know we all know that YouTube stars are now making millions and millions of dollars. I was more photogenic many up more than you would think. But you know I'm not as photogenic as you are so that's not really an option for me.
[00:24:49] You're also a keen observer of the media industry itself. It's changed dramatically over the last 20 years. How do you expect it to change over the next 10 years.
[00:24:58] You know I have an article coming out soon on this I've done a lot of research over the last couple of years on this partly in the work I'm doing with the Aspen Institute communications and Society program and my thesis is that the answer really depends on the demographic.
[00:25:12] So what baby boomers will want from media what Gen Xers will want. What millennials will want. It's very very different. And if you're a media company First of all you know sky's the limit in terms of opportunity that tech makes it easy to do all kinds of experiments and is king and other web content. The bottom line is always content is king whether that's professionally produced content or whether that's more amateur content or whether it's self produced content in the case of Snapchat and Instagram that really again depends on what demographic you're trying to reach and is the subscription model the future. Some version of it I think you know advertising won't go away and that's a good thing. We've gotten a lot of benefit from the exchange of tension for content or for subsidized or free content but subscriptions whether they're bundles skinny bundles individual channels individual programming individual authors subscription is also a great way and we're seeing a lot of really interesting experiments you know about Patreon is a great example of this. I watch a lot of YouTube hours and other sort of video producers who get themselves produced by having people commit to funding them like patrons of the arts in the old days monthly you know ten dollars five dollars you get enough of those people together through the platform like patron and you can actually make a living doing exactly the kind of writing and producing that you want to do and you don't have to worry about subscriptions you'd have to worry about channeling and so on so forth. It's a great model too.
[00:26:38] So a more intimate relationship between the creator and their audience.
[00:26:42] Yeah. You know we're getting much more narrow audience but much more loyal audience so if I'm really interested in a. Geller critic who writes about the history of film an interesting way that might not be a huge audience but if we're very fanatically devoted to that particular content producer it's a model that works for everybody.
[00:27:02] And finally Larry how does 5G change all this. Is it just more of the same just more horsepower or does it represent a fundamental shift in the nature of the entertainment economy.
[00:27:13] A little both. I mean 5G obviously is going to be you know in some ways it's the next generation of mobile technology. We're already moving very rapidly towards everything being mobile rather than wired and we're more mobile people. So certainly every producer every distributor expects that their content in the future will be watched much more on mobile devices than on television sets sitting in their home 5G she's gonna make a lot of things possible terms of interaction virtual reality that we can't do with networks today. In that sense it'll be revolutionary in other senses it's more of the same as you say it's faster it's better it's cheaper once it's in place it can make things possible and make things cheaper which is always a good thing.