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The following is a conversation between Salim Ismail, Author of Exponential Organizations and Founder of ExO Works, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer.
Denver: Many people discuss the extraordinary change that is occurring in the world and that lays in front of us, brought about as a result of accelerating technologies: artificial intelligence, robotics, 3D printing, biotech, and a host of other things. But if your conversations are anything like mine, they’re a little scattered and all over the place.
What we could really use is someone to bring clarity to all of this. Well, there are few people, if any, that could bring the kind of clarity that we need any better than my next guest. He is Salim Ismail, the Founding Executive Director of Singularity University, the Lead Author of one of my favorite books of all time, Exponential Organizations, and most recently, the Founder of ExO Works. Good evening, Salim, and welcome to The Business of Giving!
Salim: Thank you very much! Looking forward to this.
Denver: We’ve lived in a world—and I certainly have been educated and trained for one—where the extrapolations have been linear and incremental and pretty predictable, all things considered. But you maintain that we have moved into one where those extrapolations are going to be exponential. Help us get our minds around that and the implications of it all.
Salim: So this distinction of linear to exponential is maybe the most important fundamental characteristic of transformation happening today. Very easily, if I take 30 linear steps, I’ll go one, two, three, four, and I’ll get to 30 meters, 30 yards down the street, and we can all predict really well where is one-third or two-thirds of the way in that progression. We’re very good at that. If I say “What’s 15% of 80?” people can figure that out– like that! But If I take 30 doubling steps – 2, 4, 8, 16, 32 – at step 30, I’ve gone a billion meters. I’m actually 26 times around the world, which is a bit further than 30 meters, and it’s very hard to gauge where is one-third or two-thirds of the way in that progression.
Ever since Gordon Moore made his predictions, and in fact before that, we’re seeing doubling patterns in computation where we’re doubling every 18 months the number of transistors that can go onto a chip. That doubling pattern that we’ve seen for 60 years now in computing – unfettered, by the way – continues to go. We’re now seeing that in about a dozen technologies: drones, bitcoin, neuroscience, 3D printing, biotech.
In neuroscience, the resolution at which we can image the brain is doubling every year. In drones, the range at which how far a drone can go with the same weight, et cetera, is doubling every nine months. And so if a drone can carry a 10-kilo package for 10 kilometers, in nine months, it’s carrying a 20-kilo package. And nine months later, it’s carrying a 40-kilo package, nine months later, 80 kilos…and the really key thing is this acceleration doesn’t stop. Once it becomes an information-based paradigm, that doubling pattern just continues and that’s really hard to get our heads around.
Denver: It sounds, from what you say, it kind of sneaks up on us, doesn’t it?
Salim: It totally sneaks up on you because for a long time it looks like zero. A really easy example is 3D printing. Lots of people are familiar with it and get excited by it. Very few people are aware that 3D printing is actually 33 years old. It is not new. But when it first came out, the price performance was terrible. You could print out like .001 widgets/hour. Two years later, it doubled to .002 widgets/hour. Two years later, 004…and for a long time it just looks like zero. Then it hit .1, .2, .4, .8, 1.6, 3.2, it starts really going nuts, and then we called it a Black Swan. So if you don’t spot these patterns early, they totally surprise you, disrupt you. However, if you can spot them early, it’s the biggest advantage you can possibly have.
Denver: Oh, I can imagine. So this disruption that we’re in right now, we probably think we’re in the middle innings, but you got us in the top or the first.
Salim: Just starting. Because we’re just starting—
Denver: National anthem just stopped.
Salim: Yes. It was just going. It’s just going.
Denver: One of them I know you’re captivated about, of these emerging technologies, is blockchain. A lot of people don’t know what blockchain is. Tell us about it and what it does.
Salim: The blockchain is the underlying protocol on which bitcoin layers. Bitcoin is the digital currency that is on top of this fundamental pattern. There’s a very, very fundamental shift that’s happened because of the blockchain, and I can take a minute to describe why this is so disruptive.
Denver: Yes, please.
Salim: What the blockchain allows you to do is decentralize authentication. There are lots of systems in the world– like voting systems and banks and others– where some of these, they’re a third-party saying “Yes, they have the right paperwork. They have the right age,” “Yes, we ratify you just deposited $1,000.” We trust our life savings to that authentication of a bank saying: “Yes, we agreed that you’ve just deposited $1,000.”
What the blockchain allows you to do is decentralize that. So you actually don’t need the third-party. Here’s the core problem that’s been solved. It’s an old computer science problem called the Byzantine Generals Problem. It’s the story of Constantinople in 1500s. There were eight generals circling the city and they’re trying to coordinate a siege. So they were sending messages around that circle like “Are you ready?” “How should we attack?” et cetera…except one out of the eight was a traitor. So they could send the wrong information, lose the element of surprise, send misinformation, et cetera.
In computer science terms, the generalized question has become: How do you send a secure, trusted, authenticated message across a network when you don’t trust the network? Very difficult problem. For 40 years, computer science PhDs have been trying to crack this problem unsuccessfully until the blockchain, and the blockchain magically, because of the way it’s architected and engineered, solves that problem. And so now I can send a message across the blockchain, whether it’s a currency transaction, a voting transaction, a multi-signatory contract, et cetera, and I know it can’t be double-entered, revoked. It’s authenticated, secured, and it will get to the other side. And that’s a magical thing in the digital world.
Denver: It sure is!
Salim: And so the internet, which has always been an open communications architecture in which we, with great difficulty, try to put in authentication and security… now we have that layer. And so the entire computing world and tech world is literally rolling over and jumping up, and there’s sparklers going up, “Oh my god, what does this mean?”
And I would put it like the internet in 1995. We’re just starting. We can’t even imagine what’s going to come before we know it’s going to be big.
Denver: Well, I actually understand what you’re saying, but I have a hunch if I were 10 years old, I’d understand it even better.
Salim: Yes, there is some bylaw that says you cannot program on the blockchain unless you’re below 20 years old.
The minimum definition is “I should be able to scale my organization 10 times faster, cheaper, better, smaller than my competitors in the same space,” and that qualifies you to be what we call an exponential organization.
Denver: I could imagine! Well, that takes us to your book. And let me give the full title of it, if I can. It’s Exponential Organizations: Why New Organizations are Ten Times Better, Faster, and Cheaper Than Yours (and what to do about it). So what is an exponential organization, and what makes one?
Salim: A good example is Uber or Airbnb. We have these new organizations. So for a while now, we’ve learned how to scale technology very well. I can go from zero to a million users pretty easily using Amazon cloud computing and other capabilities…except building the actual organizations is painfully incremental and linear, as many of your readers and listeners know. Well, except what these new exponential organizations have figured out. They figured out: How do you scale the org structure as fast as we can scale technology? The minimum definition is “I should be able to scale my organization 10 times faster, cheaper, better, smaller than my competitors in the same space,” and that qualifies you to be what we call an exponential organization.
Denver: What are some of the characteristics of one?
Salim: We’re tracking an index of about a hundred of these. There’s kind of 10 characteristics that we found. The first is that they all have what I call a massive, transformative purpose. Just like Google – organize the world’s information, or Uber – everybody’s private driver. It’s a tagline with a social purpose built in that acts kind of like the North Star and hints at the transformational problem that that organization wants to solve.
Then there’s a set of externalities that they’re using to keep a very small footprint but scale very, very quickly. So Uber doesn’t hire its own staff, TED uses community, Google uses algorithms, Airbnb is leveraging other people’s assets, and so on. So the two key things are you don’t hire workforce; you don’t try and own your own assets; you leverage off others.
A great example of a success story in this paradigm is TED. TED was a design conference 10 years ago… about a thousand people that are going to Monterey. Chris Anderson takes it over and he does three things: he establishes a huge purpose – “ideas worth spreading”; he allows anybody to go create a TEDx event; and he gives away all the TED talks for free. In 10 years, he’s created a global media brand. Nobody has ever, ever done that and the cost of doing so is pretty much zero. So you can take an existing capability, apply a set of techniques and blow it up to a global level. So that’s what we see happening.
I found that when you try disruptive innovation in any large organization, the immune system will attack you because all of our organizations are architected to resist change and withstand risk.
Denver: The old model would be to husband all of that; don’t let anybody have access, charge for everything. He opens it all up, and look at what happens. Let me ask you: You understand organizational dynamics so well. Why is it so difficult to disrupt a large legacy organization from the inside, even though they need to do it?
Salim: For a couple of years, I was the head of innovation at Yahoo! running their incubator. I found that when you try disruptive innovation in any large organization, the immune system will attack you because all of our organizations are architected to resist change and withstand risk. And yet now, that’s the higher-order bid.
So if you’re in the oil industry and you’ve been drilling oil and all your expertise is in engineering… and of scanning for new oil wells and figure out how to get it out of the ground, et cetera, when something like solar comes along, there’s like a wall of cognitive dissonance where people go “No, it’s not possible. I just don’t want to know,” et cetera. Solar may be the biggest geopolitical thing happening today because some of your listeners might—
Denver: Bigger than coal?
Salim: Infinitely! By a million times! Very, very dramatic. Because the solar cells are doubling in their price performance every 22 months, roughly over two years. At this pace, we will be able to deliver 100% of world energy supply with solar in 15 years—
Denver: That’s mind numbing.
Salim: –which is completely mind boggling, and nobody in that world wants to know. So they’ve been trying for many years to keep a lid on it, and now it’s out of the bag.
Denver: Well, when you finished your book, you were by the telephone one day, and it rang, and it was Procter & Gamble on the other end. What did they want?
Salim: They called and said, “Hey. We’ve read the book. It’s required reading across many parts of the company. We’d like to implement your ideas.” What typically happens with us, it takes about two and a half years for a C-suite of a big company to come through our program, to understand what we’re doing, read the book. We go and do a lecture there; they come and do a Silicon Valley tour. We bring our faculty over there. Finally, the company is really ready for a meaningful change, but that lapse time is a hell of a long time, too.
Denver: And a lot of things have changed in that time, too.
Salim: A ton of time and the opportunity cost is pretty much infinite. So I said, “Why don’t we shrink it to a 10-week period and run a 10-week sprint, and let’s see if we can move your culture and management two years ahead in 10 weeks?” So we crafted this program and ran it. It actually worked really, really well, so I formed a company around that. We’ve now done it five times, and we’re really excited about this because we think…my current thesis is every one of the Global 5000 has to go through this process.
So actually what we’re going to do next is document it and write a manual and open source it. I’ll just let anybody do it because we’ll never get to them, and yet the business world badly needs transformation.
Denver: You call it the ExO Sprint. You’ve done it with a couple of companies, you said. You’re also now looking at cities, correct?
Salim: Yes. We’ve taken the same approach and taken that “sprint approach” and applied it to the public sector. We find we can solve a problem facing a city for about one-tenth of the current cost. So, we’ve been working with the mayor of Medellín in Colombia. We’re about to sign a deal with a major American mayor on the future of transportation and we’re going to figure out: what’s the future of transportation in that city. Because the default is let’s put on more light rail or more metro systems or subway systems, which cost a bomb, and nobody is really using them, and so that’s the big challenge.
The poster child of this one is five years ago when the state of California announced a $70 billion high-speed rail to connect LA to Sacramento and San Francisco to Sacramento. We went nuts because “What the hell are you doing? This will be out of date before you lay the first rail because of autonomous cars and so on.” And their answer when we asked them the question, the department of transport was, “What autonomous cars?” And it just blew our minds that they had no idea about this. How could you not know about the technology that’s being built under your nose?
Denver: Right. That’s your industry. That’s what you do all day long!
Salim: Exactly! This was a huge wake-up call for me about how this works. Actually, Sonal Shah of the Beeck Center at Georgetown University clarified this for me. She said, “Salim, you have to remember. Most public policies are figured out and established defensively and reactively.” And how do we figure out how to get ahead of that? That’s one of the challenges, and that’s what we aim to do with this kind of an approach.
So we go into a city, we look at—let’s take transportation. We run that problem through four layers. The first is: What technologies are going to dramatically affect it? Because people forget that these new technologies are infinitely cheaper than the old ones, and that’s a fabulous kind of misconception to fix. The second is a design-thinking layer as to: how would you visualize, deploy it, et cetera. The third is a money layer: how would you fund it? Do you raise taxes? Do you pay per use? Do you use a toll system, et cetera? And the fourth is the most important: What regulatory/ legal issues, private or public safety issues would you need to solve to deploy that technology? And if you can figure that out while the technology is under development, then you hit the ground running.
Our first instinct is if we see something like drones… and the FA just does a blanket ban and then slowly opens the tap, then it will take like 20 years before you see the full benefits of drones. And that’s really a tragedy.
Denver: It’s that default response, it really is. That’s what they do. Don’t do it. It’s like the lawyers take over and say “Do not do anything.”
Salim: That’s right.
…transportation is going from a product to a service…and when you do that, you kind of totally take out the current crop. No car company will survive in 20 years because there won’t be need for any cars. Nobody will be buying cars.
Denver: Let me get one last thing on this business model that you’ve been talking about. We’re moving from an age of scarcity to one of untapped abundance. Explain that a little bit and how that’s going to change the business model going forward.
Salim: So a really obvious one is Uber. So today we have a product-centric industry where the car companies will sell you a car to get you where you get into your car and you take it from place to place. It’s the second most expensive acquisition in your life, and it depreciates the minute you buy it, and you use it 4% of the time. It’s the most horrible investment!
Denver: Sitting in the driveway all the time.
Salim: This is why all you see on TV today are car ads because they desperately need to push all those vehicles. Now, you have new technologies, location-based system, car sharing reputation-based system, online payment systems, GPS systems, all of that comes together and I can just say on my phone “Send me an Uber.” So transportation is going from a product to a service…and when you do that, you kind of totally take out the current crop. No car company will survive in 20 years because there won’t be need for any cars. Nobody will be buying cars. I have a 5-year-old son, and I’m pretty confident he will never own a driver’s license; he will never own a car. Teenagers in big cities already aren’t bothering to get driver’s licenses.
Denver: Absolutely! I’ve noted.
Salim: Meanwhile, the car companies are not looking at this. If you’re a car company executive, maybe you’re interested in the fact that nobody is getting a driver’s license. And so we’re striving to see those patterns. We’ve already seen this in the music industry where you had eight major music studios. We digitized music. Pretty much all eight disappeared and you end up with music as a service. I pay $10 a month to iTunes, and I get all the songs I could possibly want forever. That’s the paradigm shift. How do you get out of that and how do you make that transformation? Can you make that leap is the fundamental central business question today.
Denver: No question about it. It really gets down to leadership because I’ve got to tell you, my sense would be is that a lot of those executives at those car companies and other places are looking at how many years it is until retirement. They’re just trying to beat the clock and get out before this all happens. They’re not looking at it the way they should be looking at it in more places than we’d like to think.
Salim: I think that’s a very important insight. We’re seeing the short-term as—if I’m an executive on Wall Street, I’m focused on delivering quarterly returns. I’m not interested at looking at 2 years, 5 years, 10 years down the road. So we think we’ll see most of the Fortune 500 fall off a cliff as these new technologies hit, and we have no shareholder mechanisms to have them think on a long-term basis.
Denver: That’s right. Fascinating. Well, let’s turn our attention to the public sector and government specifically. I’ve heard you speak about democracy in this country and other places around the world and that it’s collapsing. Now, you’re not going to get too much pushback on that these days. But a part of that is because that system was created for a different age and a different time and a different place than today’s world. Share with us your thinking about that.
Salim: So important to note that I come from India originally and my family was very involved in the Independence Movement. My grandmothers both knew Gandhi and Nehru very well and so on. We’ve watched it as—it’s great that it’s a democracy. But in 60 years, no infrastructure has been laid down because a democracy tends to devolve to short-term, high-metabolism election cycles. Nobody is thinking about the 10-, 20-year needs of the country. So that’s one issue.
The second and maybe the most structurally fundamental one is that we invented representative democracies when information was scarce. It really hits, too, as an example of the scarcity to abundance paradigm. If you’re in Washington, D.C., you had no idea what was happening in California –the speed of a horse! So you had a representative come and say twice a year when Congress convened to say: “Here’s what my people are thinking, and I’ll vote representing the views of my people because it takes too long for them, and you don’t know what they’re thinking anyway.” Well, today, we have an abundance of information. I know what every single—we may not want to know, but I really know what every housewife in Wichita is thinking, and I don’t need a representative. And yet we have this problem.
And so, in that world where you have an abundance of information, it can get misused, misinterpreted or faked…
Democracy does not work in an abundance of information. It’s not designed for it.
Denver: We’re finding that out.
Salim: Democracy does not work in an abundance of information. It’s not designed for it. And so we have to figure out how this transitions to something else. We don’t know the answer because as Winston Churchill typically put it, “Democracy is the worst form of government, except for everything else.”
Denver: That’s exactly right. Are we’re thinking planned economies or things of that nature? What do you have in mind? We don’t know obviously.
Salim: At the very least, I could have an AI scour everybody’s Facebook feeds and Twitter feeds and figure out pretty quickly what should our trade policy be. I don’t need some elected representative giving me some sense of it, so I think some version of direct democracy where we have an instant pulse, et cetera. Now, it’s really important to note that we’ve gotten things as bad as we are. This country, the US, is not a functioning democracy of any kind.
Salim: Princeton did this fabulous study showing that there’s no amount of voter will that can result in legislation, which means it’s not working, and we’ve known this for a while. Maybe the most sad, difficult conversation I’ve had was a few years ago with George Shultz, former Secretary of State. I’ve said, “Look, you’ve been in public office for 40 years. How bad is it right now? Give us some perspective on this.” And he said, “I’ve never seen it like this in my 40 years of public office.” And I said, “Wow! So how do you get out of this? How do you fix this?” And he looked at me and said, “I have no idea.” And for a guy like that to have absolutely no idea how to fix it; it was really, really gut-wrenching.
We have about 20 Gutenberg moments hitting us today – drones, bitcoin, biotech, neuroscience, solar, et cetera. And if we can harness that acceleration…we end up with this really magical world.
Denver: It’s very disheartening that nobody even talks about it in government…what the world is going to look like in 10 or 20 years. I’d only think it’s just a decay of government itself. It’s the environment that government is existing in, with all those changes you just talked about. So, they’re completely out of alignment.
Salim: Yes. I think we have a fundamental failure of leadership in the world because we have a really magical future coming with technology. If you think about solar, yes, there’s going to be a pain in the oil industry, but the poorest countries in the world are the sunniest countries in the world. If I have lots of solar, then desalinization becomes easy, and I’ll have clean water everywhere. If I have lots of energy, then health care, education, all these paradigms become really easy globally. And so, we’re coming to this magical world and I call these the Gutenberg moments.
In the 15th century, the printing press changed the whole world. We have about 20 Gutenberg moments hitting us today – drones, bitcoin, biotech, neuroscience, solar, et cetera. And if we can harness that acceleration—this is where Pedro’s paradigm and Steven’s paradigm on abundance is so critical—we end up with this really magical world. So we have a choice today of either heading into like a Star Trek type of a world or a Mad Max type of world. Unfortunately, right now, our leadership is hurdling us down the Mad Max route, and we have to figure out as a global collective: How do we flip that switch and paint a different picture for the future?
Denver: And these 20 Gutenberg moments you talked about…there is really that 21st moment, which is the fact that they’re all happening at the same time. And that confluence is another exponential change in and of itself.
Salim: It’s kind of unbelievable, and it is actually all happening right now. I tried to live this myself. I actually drove my Tesla, and I drove it from Miami to Toronto last summer. I would get on the highway, I’d hit the autonomous car mode. The car basically drove itself. It was like having a private train. And because the charging stations are free, I went 2,500 miles with zero cost. It totally blew my mind. A few weeks ago, we came back down to Florida. I said to my wife, “You fly. I’ll take the car,” because it was such an enjoyable experience. And that really kind of wakes you up as to what is the future that’s actually coming and hitting us.
Denver: Well, the marginal cost is going to be zero in so many different things. Even energy is going to be like information over the internet; it’s just going to be transported to places that are dark if they need it.
Salim: There are two little great factoids. One is Chile, the country of Chile, is already generating so much solar, they’re giving it to its neighbors for free. And maybe the most ultimate of ironies, I just heard that the Kentucky Coal Museum is now using solar power on the roof to power the museum! I think that’s just a magical thing.
Denver: That’s great! You should get that information to Washington. Well, democracy is just one example. We’re looking at a whole bunch of our institutions, which civilization has been built upon, even as fundamental as marriage, and they’re all becoming somewhat irrelevant and unresponsive in this world. So let me ask you this: What happens? How do you see this unfolding? It sounds like “Strap it in; it’s some bumpy times ahead!”
Salim: I think we’re entering the most dangerous time because we’re hitting one of these inflection points in civilization where it could all go horribly wrong, or we could come out of it magically well. We are actually looking at existential threats today, but we are actually needing to turn over and transition and transform every institution that we use to run the world. You look at every one of them– democracy as we’ve mentioned– but our political systems, legal systems, health care systems, education systems, intellectual property – these were all designed for a world a couple of hundred years ago, not for today.
And I kind of jokingly talked about marriage. We invented marriage about 15,000 years ago and when it first surfaced as an institution, the average lifespan was about 25. So you got married, you had kids, and you died. It wasn’t designed for like 50-, 60-years duration. I call it state-sanctioned torture now. Let’s say we’re going to double human life in the next 20 years. So if we’re living to 140 years old, are you supposed to live with the same person for 100 years? That’s crazy talk! And how do you update that institution? In India, we have this fabulous immune system where we pass the Defensive Marriage Act for god’s sake. I mean, we really need to wake up.
…maybe the biggest insight I’ve ever had about human beings is that human beings would much, much rather be comfortable than happy.
…we’re comfortable with stuff that we know, et cetera, and yet what’s coming is so much more magical, we should be jumping with open arms to it and not try to shut it down!
Denver: Great example of the response you’re talking about. That’s what we do. That’s the first thing to do.
Salim: Yes, we do! That’s the immune system response. Or maybe the recent one that really drove me nuts was the fact that there’s a whole movement to protect the incandescent bulb and the sanctity of that. These new LED things are like way, way, way more efficient, et cetera, but we love this incandescent bulb because it’s been around for a couple of hundred years. And maybe the biggest insight I’ve ever had about human beings is that human beings would much, much rather be comfortable than happy. And we’re comfortable with stuff that we know, et cetera, and yet what’s coming is so much more magical, we should be jumping with open arms to it and not try to shut it down!
Denver: Good point. Tell us a little bit about Singularity University founded back in 2008. You were the founding executive director. What’s its mission? What’s its purpose?
Salim: It was Peter’s idea. Peter Diamandis is the head of XPRIZE Foundation. Peter read Ray’s book called The Singularity Is Near, and he created something—
Denver: That would be Ray Kurzweil?
Salim: Ray Kurzweil, who is probably the leading thinker in the world on accelerating technologies. Bill Gates just called him the smartest man alive, et cetera. Peter read his book and said, “Well, we should create an educational institution only focused on accelerating technologies.” And so we got 70 thought leaders together eight years ago in Silicon Valley, and we asked the question: Is it worth creating this kind of an institution?
It’s part academic, part think tank, part incubator. Our mission is: How can you possibly impact a billion people within 10 years using technologies because these new technologies can scale. And so if you have drones, and you can design a system where drones can carry packages and food around… and that could be used in developing countries for medicine and whatever, that truly transforms the planet. And actually that inspired, in part, the Amazon announcement.
So we have programs where students come in, they learn, they spend about half the time learning the basics of all of these technologies… and we teach the future. Most academics is thinking about the past – How did this model happen? How did this equation develop? We’re way more interested in where it’s going: What happens when we get to the $100 genome? Where are these technologies intersecting? Who are the thought leaders in the lab doing the most interesting work? What inflection point should you be looking out for that will indicate acceleration? And maybe most importantly, we do very active workshops on the moral and ethical thinking around these… and how do you need to do this. So we’ll have debates between our students on “Okay. What happens when an autonomous car is programmed the wrong way, and it hurdles into a group of kids? How do you deal with that? How would you deal with the legal issues coming from that? How do we formulate defensive systems to protect against that? Et cetera…”
And so this is the mandate that we have there, and we’ve been very happy with the outcome although I’m concerned we’re moving too slowly.
Denver: Figured you would be.
Salim: Well, we’ve got about maybe 20,000 alumni after eight years.
Denver: A hundred startups, maybe?
Salim: A hundred startups and they’re doing incredible things. One of them has launched a 3D printer up to the International Space Station. So if you can beam a design and print a screwdriver up there, you don’t need to carry it up or down, which is kind of an amazing thing. So there are a hundred of these out there.
For example, one of them has literarily solved superbugs. We have antibiotic-resistant bacteria for which we have no cure, and these guys have cured it. They fixed it. And as a side effect, turns out these guys can cure all allergies! And if you look at the aggregate effect of all of these solar and cancer treatments and whatever coming along, how can you not be optimistic about the future? Because it’s so incredible what’s about to happen.
And so we’ve been trying to train up global leadership on this. But again, I think we’re moving too slowly. I would hope after eight years, we would have 200,000 or 2 million graduates because if we want to really transform the planet, it’s going to take that scale of it.
Denver: Well, building on Singularity University, let’s stick with education for a minute. You talk about something that’s changed slowly or not at all over the course of a couple of centuries, that would be it! As a matter of fact, I know that the Singularity is having difficulty in getting accredited because you update your curriculum in real time. So tell us your thinking about where we are with education and how are we going to disrupt that seemingly undisruptable world?
Salim: So this is a great summary of everything that we’ve talked about today. We have education in a several hundred year paradigm. Our education systems pretty much globally are designed to take young kids, give them the requisite skills, train them up through their early 20s and have them ready for the existing job market…except we don’t know what a job looks like in five years. So what the hell are we teaching them?
Denver: Right. We’re not even actually teaching them for the jobs that exist today much less the ones that are…
Salim: Exactly. So that’s problem 1. Problem 2 is we do education on what John Hagel would call a “push basis.” You get kids into a classroom and you try and cram algebra into them. Mostly, they’re thinking about lunch. Our understanding of pedagogical techniques, neural retention, challenge-based learning is so much further ahead than before, yet we don’t use any of that.
Now, you try and update education – God help you. Because the teacher’s unions will attack you; the regulators will attack you; the textbook publishers will attack you, and Texas evangelicals seem to have some big say in the US on what happens. And so you get stuck, and nothing moves.
So the way to route around this—and I write about this in the book—is you don’t try and update the existing system. It’s too stuck and you’ll spend all of your time in—
Denver: Fool’s errand.
Salim: Well, you just spend a lot of—it’s very painful for everybody concerned. Nobody has any fun in that environment because you’re trying to fix it and you’re trying to push water uphill basically. What we do suggest is go set up new experiments on the edge of the existing system… like the Khan Academy or some of the online education courses or whatever, and then let those become the new gravity center. And don’t bring them into the existing system. Create completely new—
Denver: Interesting! The immune system will get them too quickly.
Salim: The immune system will kill them. Leave them out there, and then as they grow, whichever one succeeds, let that become the bedrock and the heart of it.
So for example, our kid is in a school that’s based on social constructivism, which is one of the leading paradigms of how do you do education. And the idea is don’t try and teach them mathematics and cram it down their throat early on. Have them learn social skills; have them learn interaction and collaboration– what are called 21st-century skills. So literally, he came home from school a couple of weeks ago and I said, “What did you learn in school today?” and he goes, “We learned how to control our impulsivity.” And I’m like, “Wow! Rock on! Just get right back there!” That’s freaking awesome!
Denver: Absolutely! A little emotional intelligence goes a long way!
Salim: Just awesome, right? And so when you can see these kids, and the school’s been going for about 30 years… you can see the graduates from it; it’s fabulous to see what’s happening. And the outcome is so incredibly magically positive that we should be updating all our education systems globally, and we’re pathetically bad at that.
Denver: On this show, Salim, we’ve discussed solutions to some of the world’s most complex social problems. So in this brave new world that you’ve just described so intelligently, how do you see us tackling things like poverty and famine and gender equity and things of that sort? Are we ready for a completely different approach? What do you think that approach might be?
Salim: So in the past, the magical thing and the reason we’re so optimistic about the world is that when you can—we believe technology is a major driver of progress in the world, maybe the only major driver of progress we’ve ever seen. But now that we have a dozen technologies accelerating, we get bubbly and excited about it. That’s why we tend to be so happy and excited about the world.
For example, we have very good evidence: when you give farmers cell phones, their income goes up because they can check market prices, et cetera. There’s a fabulous story of the tsunami hitting Indonesia a few years ago. It was a real tragedy on one level. All the radio control towers got wiped out; so there’s no ship to shore communication. And so the government gave cell phones to all the fishermen so they could text in if they saw another tsunami… and they could use that while they got the communications back online. Well, it turns out that their income increased 30% in a month, just because these guys are texting and saying: “What’s the market price? Should I come in and sell? Should I stay out and fish?”
Denver: Real time.
Salim: Just that. So the more we can deploy technology to the edges, the more magically things will happen. And therefore, now that you see drones, 3D printers, et cetera, and we get those into the hands of everybody in the world, we’re going to see magical things happen.
And you look at extreme poverty. Ninety-four percent of global population was under extreme poverty in the 1820s. Two hundred years later, we’re down to 9.4%.
Denver: That’s right. Most people think it’s gone up, and it’s been halved in the last 20 years, and nobody knows it.
Salim: Nobody knows it. Because good news doesn’t sell, right?
Denver: No, it doesn’t.
Salim: And this is maybe the biggest challenge, and Peter identifies this, and Steven identifies this in the book The Amygdala.
We are 10 times more likely to listen to bad news than good news.
Denver: The Amygdala. I remember. Steven was on the show. I remember very well.
Salim: We are 10 times more likely to listen to bad news than good news.
Denver: If it bleeds, it leads.
Salim: If it bleeds, it leads. This is why Fox News does very well. You watch Fox News, you’re pretty much going to die this week. If you’re really lucky, you’ll last till next week, but then you’re going to die next week. Peter calls CNN “the crisis news network.” And so they’re constantly tickling that amygdala.
But the world is an infinitely magically better place than we’ve ever had it and we don’t see that. And then we vote based on the negative, and then you end up with a mess that we have today with Brexit, et cetera. I’ve been saying for about five years that democracy is done. And unfortunately, we’re now seeing the outcomes of that.
Denver: No question about it. Well, we’ve talked about some of these Fortune 5000 companies, and particularly these legacy organizations and how they need to change if they’re going to be able to survive. But if there’s a group of organizations that’s lagging behind them by a decade or so, it’s going to be nonprofit organizations. They always are, and particularly some of the household names, the legacy organizations. What do they need to do in order to be able to survive this onslaught? Not only within their sector, but it sounds like to me, this disruption could be coming from anywhere.
Salim: Yes. I call this in the book the orthogonal effect of information… where disruption in one area totally affects you, and you don’t even notice it. My favorite story around that is if you own a car wash in Buenos Aires, it’s hard to think how you might disrupt a car wash because everybody wants to wash their cars, et cetera. These car washes have had 50% drop in revenues there because of increasing computing power. Our ability to know when it’s going to rain has increased by 50%. And when you know it’s going to rain, you don’t wash your car. And you can be the smartest car wash guy in the world, you will not see that coming. So that’s going to hit the nonprofit sector as well as the for-profit sector globally.
The big opportunity is that because these new technologies give us so much upside, the process we suggest is: (1) Update your leadership that we are in this new world (2) Go find out what technologies can radically change your future, and absolutely go after them. And because they cost literally almost nothing, many of these— what people don’t realize is that these new technologies– like artificial intelligence or drones or bitcoin or blockchain– are literally free. And you can implement them without a lot of cost. And so that is the most exciting thing possible.
In Silicon Valley, it used to cost about $20 million to build a software startup, and that’s down to about $50,000 today. So when you can do that, you have that many cracks at the piñata; you can try lots of different things, et cetera. So jumping on that acceleration will kind of give you a path to being very, very effective going forward. We’re talking about organizations like the UN, the United Way, and others about how can they transform their systems. And then most importantly, they have to solve their immune system problem. And so this is where I go back to that ExO Sprint process which we’re going to document and open source as I mentioned.
Denver: Well, you know a lot about nonprofits, I know. You were actually pretty integral here in New York City right after 9/11 with one of the ones that you started. Tell us a little bit about your journey. You grew up in India. You moved to Canada. Singularity is in California. You lived in eight countries for more than a year. How has that informed and guided the work that you do and the approach that you take to the different problems and challenges you encounter?
Salim: Well, for me, it’s been kind of bouncing from accident to accident. None of this was ever intended or planned. So we moved from India when I was 10. We got to Canada because my dad hates noise, dirt, pollution and corruption. India is not a great place to live, huh?
Denver: Bye bye India.
Salim: We got there, and I did my schooling in a university there, and I found Canada a little bit dull and boring and damn cold. So I moved to Europe for 10 years, and I transformed a lot of big companies there, a lot of French ones, which is why I’m bald. And you talk about difficult organizations, the French are pretty legendary. Actually, my favorite commentary is one of the big CEOs I talked to. I said, “Your people are a nightmare.” And he said, “Yeah. The problem with us French is the French will say: ‘It works in practice, but will it work in theory?’”
Denver: Oh, wow. That’s a bumper sticker. That’s unbelievable! What a great line.
Salim: And that totally, totally explains…and then it makes sense. Everything makes sense from there.
Denver: Once you figure that out.
Salim: Then you drink a lot of wine, and everything is okay. So I did that for a while, and then I got to New York City in ’99, 2000. I was the COO for a private equity business here and then started a couple of companies. One of them was like the predecessor of Twitter. We were a little early, so timing is everything in the technology world. We were 18 months too early, but that got me well-known even though the company failed.
I moved out to the West Coast and I ended up joining Yahoo! So I did that for a couple of years where I learned this immune system problem firsthand. And then I’d set up a relationship between Yahoo! and NASA. And one day, the NASA people said, “Hey. We’re helping launch The Singularity thing. Would you like to come along?” I had never heard of Ray Kurzweil or Peter Diamandis or the XPRIZE or The Singularity. Walked in totally blind, I asked a few too many questions. A few weeks later, Peter said, “Hey. Would you like to run it?” And so I remember getting home that day. My wife said, “How was your day?” And I said, “I think I’m a dean.” I don’t know how that happened.
Denver: Dean Ismail. “I got some students coming over tonight, honey.”
Salim: So a completely bizarre career hop. And maybe I hit—are you a familiar with the concept of peak oil?
Salim: About a few weeks ago, I think had a “peak Salim” because I did the closing keynote at the UN General Assembly to all the UN Ambassadors.
The Vatican has been around for a long time not by accident. Actually, I didn’t write this in the book, but they are maybe the original exponential organization. They have a massive purpose, which is God. They’re decentralized. They leverage community. They have lots of the characteristics that we look for in these companies and these organizations today…and for the first time ever in memory, we have a Pope that’s actually living the Body of Christ.
Denver: Oh, wow. And you’ve done the Vatican, too, so it’s all downhill from here.
Salim: It’s downhill from here. Yes. I mean, the Vatican. The Pope has the oldest immune system in the world.
Denver: He really does.
Salim: And for the first time in memory, he…
Denver: Can that be fixed?
Salim: It actually can. It can. The Vatican has been around for a long time not by accident. Actually, I didn’t write this in the book, but they are maybe the original exponential organization. They have a massive purpose, which is God. They’re decentralized. They leverage community. They have lots of the characteristics that we look for in these companies and these organizations today…and for the first time ever in memory, we have a Pope that’s actually living the Body of Christ. And so when you can see that, it’s incredibly inspiring. So we’re working with them on projects as to: “How would you scale the tenderness of the Pope?”
Denver: This future you described, very exhilarating…but, as you know, it’s quite unsettling to so many people. As a matter of fact, you said a moment ago people would rather be comfortable than they would rather be happy. This level of change is…you just can’t really comprehend it. But you also said you are optimistic. You’re an optimist. Tell us why you’re an optimist and share it with us.
Salim: So I said before that technology is a major driver of progress and now that we have a dozen technologies accelerating, we get very excited. So that’s one level of it. But let me give you a data-based evidentiary report for this. If you look at systems like Craigslist or eBay, on eBay, I can just as easily do a fraudulent transaction as a positive one. I can mask my e-mail address pretty well, sell you a MacBook that I don’t really have and collect the money and go off. So when you have this environment where I can do equally good or bad, sociologists and anthropologists have studied these systems, and they’ve asked the question: What’s the actual ratio? Because it should give us a pretty good indication of human nature. When I can equally do good or bad, what’s the actual ratio? And across all or many of these systems, it turns out to be consistently about 10,000 to one. So there’s about 10,000 positive transactions on eBay to every negative.
Now, if that’s the case, once we have new technologies like drones coming along, what we should be doing is saying: “Anybody do whatever the hell you like with drones!” We think we’ll see 10,000 positive use cases. And then let’s police the negative ones. Instead, what we do is “Stop the press; hold the press, stop everything…”
Denver: Right. And the negative guys are going to do it anyway.
Salim: And the negative guys, the bad actors, aren’t going to listen anyway. Just as an example, one of our alumni—he’s an American guy, but he’s out of the UK—he’s creating drones that take a tree seedling, a sapling. You wrap it in a hydrogel– the roots– and you shoot it down from a drone, and he can plant a billion trees a year with drones. When you see that, we should be freaking out! Everybody will go nuts, but we’ll figure it out. So I think that’s the massive opportunity.
By the way, we have a great precedent for this, which is autonomous cars. In 2010, I had Brad Templeton, who’s our autonomous car guru on stage, and I said, “When will we have the first licensed car working on the roads and operating?” And he said, “Look. The car is ready. Just to drive a car, you don’t need human intelligence. You need horse intelligence, and we’ve got that. But the insurance issues, the regulatory issues, the public safety, it will take—” 2018 was his guess.
And then in 2012, to our sheer surprise, Nevada authorizes autonomous cars. And then we thought, “Okay. It’s Nevada. They’ll authorize anything in Nevada, so that doesn’t really count.” But then because of that, Florida– with all the senior citizens, and if you could give them mobility, that’s pretty amazing! And now, Nevada is the leading place in the world for testing autonomous cars, and all R&D is done there. It’s created a ton of jobs. So you can use this kind of a regulatory environment as an economic development policy and rejuvenate parts or areas that were not possible before.
Denver: They got ahead of the curve!
Salim: They got ahead of the curve.
Denver: Absolutely. Let me close with this, Salim. You inhabit a world with a bunch of people who look at dying as a technical issue. So when we talk about this convergence of biotech and AI and neuroscience, it’s kind of fundamentally changing what life will become. How are you and others beginning to think about the meaning and the purpose of life?
Salim: So this is maybe the biggest central question facing us at a metaphysical and philosophical level… as we have AIs that could become smarter, or as we have life extension coming. In the aging world, there’s a concept called escape philosophy. So I have a friend with a kidney problem. They’re giving him drugs to fix, suppress his kidney, and solve it for the next two years because they know the medicine will be able to, in two years, solve it for another five years. So he doesn’t have to get a full cure. He just has to get to the next hop. And we call it escape philosophy.
There’s a point in time that we’ll hit where we’re increasing per year what your average lifespan is. So today, per calendar year, we’re adding about three months to your average lifespan. But over time, we’ll get to a point where we’re adding 13 months per calendar year. And when we hit that point, we’ll be able to live for an arbitrarily long period of time. Our assessment of that is not an “if,” it’s a “when,” and that point of time seems to be about 15 years from now. So in a couple of decades—
Denver: That’s not far.
Salim: It’s not that far—we’ll be able to live for an arbitrarily long period of time. Now, this is going to cause considerable challenges to our pension plans, retirement planning, employment benefits, the planet. I joked that many religions, they’re selling an afterlife as a business model. So how would you sell heaven when nobody is dying? That’s a challenge across the board.
Denver: That will probably be your next client– heaven.
Salim: And so we have to get our thinking around that, and we tend to be very excited about that. But the freak out factor —it’s just something we’ll never have seen as a civilization, or as a humanity, or as a world before. How will we deal with that? And that’s one of those Gutenberg moments.
Denver: Absolutely. Well, Salim Ismail, the Author of Exponential Organizations, the Founder of ExO Works and so much more, I want to thank you so much for being here this evening. You covered a lot! Where can listeners get more information on some of the things we talked about?
Salim: So we have a website called singularityhub.com that constantly streams out stories about some of this stuff so they can keep up to date. I did a TEDx talk called “Fixing Civilization” that’s up online.
Denver: Quite good!
Salim: Thank you very much. I’m on Twitter @SalimIsmail, and if you track some of that, you’ll get a pretty good stream of updates as to our world.
Denver: Thanks, Salim! It was a real pleasure to have you on the program.
Salim: Great to be here!
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