Transcript

Futurist Amy Webb: Trends are not enough

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0:53 Hey folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale summit. This may be our biggest stage yet. Reed Hastings, Meredith Whitaker, Van Jones, Amjad Masad, and more. Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great, We want you there with us too.

1:20 Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. So if my Eighty year old young father in law.

1:40 Is no longer going to Google. on a Google phone to search for things. I think that tells us that The world is changing. There's also the fact that open AI at this stage is Accumulating debt to a degree I've I don't think any of us have ever seen before.

1:57 I don't know about you, but the world is changing so fast from AI to global politics and beyond, it can feel impossible to keep up. But futurist Amy Webb says merely following trends is not enough. It's insufficient to stay atop of whatever is just around the corner. What matters now is understanding something much more complex. Something she calls convergences. So the result of the convergence is something that is net new that hasn't existed before. They're also the kind of things that like Leaders just miss. They miss because they are distracted by the shiny, and by the time that they realize that the shift has happened, it's typically too late.

2:45 This is Masters of Scale. I'm Jeff Berman, your host this week on the show, Amy Webb. She's an author, a futurist, and CEO of the Future Today Strategy Group. She's also a bit of a rock star at South by Southwest. But last week, for the first time in nearly 20 years, she didn't release a new trend report. In fact, she held a funeral for it. The Grim Reaper's Cloak and All. It's a bold act of creative destruction. Let's find out why she did it. Amy Webb, welcome back to Masters of Scale. Thank you.

3:22 That was like my favorite My favorite show that I did last year. Was that last year? I don't even remember. I think it was last year. It it feels like last year. Time's a flat circle now. Uh podcast hosts are not supposed to have favorites, Amy, but I have to confess I'm really thrilled to have you back. And I'm especially excited to have you back because For nearly two decades, you have published a trends report. That you have decided to no longer

3:47 Continue publishing? That's right. We have killed our baby, as it were. When you want me to tell you why? I wanna hear why. You know, everybody who's probably listening to this is either a leader or on track to be a leader in some kind of organization. And undoubtedly you have noticed that sometimes organizations

4:05 Stay on the same path when it's pretty clear that that path is going nowhere and the world around them is changing. And what they need to do is either adapt to that change or reinvent for that change. Because that change is inevitable. There were so many Fundamental changes happening.

4:24 That It seemed Inevitable that those changes would Coalesce. And sort of form new things, and it reminded me of Joseph Schumpeter.

4:33 And then I found this book, which I read. It's actually part two of a much bigger tome. It's Capitalism Can Capitalism Survive. It was written in the forties, so it's a it's it's heavy. But the third chapter is called The Process of Creative Destruction. Basically what he describes is Трудис конверженців диффер форси.

4:53 Typically. Technology focused, but others as well. The old structures are destroyed and something new hits and exists in its place. That is always happening in some way, but it's really intensified over the past few years in our case as an organization. It just did not make sense to continue publishing a gigantic static report.

5:18 And onstly last year. Was Uh sort of a grand finale. We published a thousand page report. We knew at that point that that was gonna be the last one. But because the world is changing so fast that as soon as a static report is published, it's basically It's not you know on trends, it's like not relevant anymore.

5:37 So we killed it, and we're replacing it with something else. We're still tracking trends. But as we've been telling people forever, these sort of trends alone, they are not enough. And It was time for us to take the brave step of destroying the thing that we're probably the most famous for. And start fresh. I've said for years and years like the trends alone aren't enough. And if you

6:00 Follow just that. In a vacuum and don't think about How does economics play a role, geopolitic, misinformation, people's thoughts and hopes and whatever. If you don't take all of those other things into consideration. You're watching the evolution of a technology that is divorced from how that technology shows up in the world. The heart and soul. Which is sort of a common problem in Silicon Valley. But you know what? But that Jeff, that's a really great point because this explains why.

6:31 If you go back in time to the original crop of location based social media apps, so that would have been Foursquare, Goala. Scavenger. Everybody got the trend wrong. The trend was not cool badges and people checking in, like That wasn't the trend. The trend was location based services baked into mobile and social networks

6:53 And this this is a whole point. People get sidetracked by what's trendy. And they don't track the stuff that matters. The stuff that matters are convergences. Can I just pause you and me w what do you mean by a convergence? A convergence Results when you've got multiple different trends.

7:10 Or a trend. Colliding with something bigger than the sum of their parts. So you know it's the trend plus Government intervention A war somewhere, you know, all of these other things.

7:23 And That results in a fundamental shift. That transforms potentially the technology itself, usually not, but but also markets, behaviors, it transforms industries. In a way that No single trend could do on its own. So those trends are little building blocks. The convergences.

7:42 Are what result. They redistribute power. They rewrite rules. They collapse markets. They start markets, they are king makers.

7:52 In a way they are the sort of fundamental representation of creative destruction. What's a convergence that you're focused on? The one that's gonna be immediately recognizable and felt is the post search internet. So

8:05 I think everybody at this stage knows that Google's not the only game in town anymore when you're looking for information. Oh my God, can I sidebar for just a second because my father in law is driving me crazy. Yes. My father in law First of all, let me say let me say this. You've the best father in law ever. I do. Greatest father in law ever. He is in his eighties, and I love the fact that he embraces new and emerging technology. However

8:31 The man has an Android, he's got one of the pixel phones. And Chat GPT has become his new best friend. So his entire univ like He doesn't search anything anymore. So if my Eighty year old young father in law. Is no longer going to Google.

8:50 On a Google phone to search for things, I think that tells us that The world is changing. What changes it from a trend to convergence. Right. So the result of a convergence is something that is net new that just hasn't existed before. And these are the kinds of things that will take shape over time. They're a long horizon, but they're also the kind of things that like Leaders just miss. They miss because they are distracted by the shiny. And by the time that they realize that this shift has happened, it's typically too late.

9:20 Yeah. I mean they're both distracted by the shiny and they're captive to old business models, right? I mean they're you know if you make so much money I mean Blockbuster Netflix is is a paradigmatic kind of good to great example here, but I double click on that business. But Hunter You just said something that

9:39 I wanna make sure everybody heard the business model. In so many companies. That we deal with The innovation happens like over here. And people come up with cool ideas. They c they do their

9:53 They're Tams, their SOMs, they've you know, here's what the market's gonna look like. And then А за компліт авторто. Is the business model innovation. And honestly, we've got CEOs, we've got leaders coming to us saying, help us figure out where our next billion dollar bet is. That's real, by the way, billion with a B. And where do we put our chips on the table? And you can't just like

10:14 You can't pivot every five seconds, and you can't you know, adopt every cool new thing that comes along the way. But if you are so rigid in your thinking You're gonna bleed the talent that you should want to keep. And they're gonna go elsewhere. Amy, we you know, past this prologue, we looked to history for examples of lessons both what to do and not to do. Is there an example from corporate history of where a company either saw convergence coming and and evolved its business as a consequence or didn't that is a a good lesson here?

10:44 I've got a great example for you and It is a news organization in Norway. Called Shipstead.

10:51 So it's okay if you've never heard of it. It is like one of the largest and most profitable to this day news organizations. And it is because they saw a convergence coming and were able to take action on it. in the right amount of time. So this was back in the nineties. Newspapers up until that point, pre-internet were uh the business model with subscriptions and advertisements. Ads overwhelmingly were what funded those news organizations, not the subscriptions. So they see the internet starting to launch. They see commercial applications. And Shib said did the one thing that every other news organization did not. And they said

11:29 We think this ad model is probably not gonna survive. Let's start Figuring out. what business models, what distribution, what a world looks like where we Don't just rely

11:42 on print ads, and we figure out a way To make what we're doing work in this new internet age. And it's not a story that most people outside of Scandinavia have ever heard of, but inside of Scandinavia, it's kind of a famous story, and in fact. Harvard was interested and published a whole case study about it. Which anybody can access online. So that's an example of

12:06 Again, where is the world going? Right. In that case, the world was going towards this new convergence of information and media and technology. Right, becoming the internet. Where will value be created? There'll be some new business model and some new advertising, something or another that's gonna migrate there. How will we participate?

12:26 We're gonna keep doing right now what we already know how to do, but we're gonna build before everybody else. We're gonna design, build, test, and ultimately deploy. A digital ad system. It was the first. So I think that's a great example of seeing that creative destruction. And taking action on it in the right amount of time. What are some of the other key convergences that you're pointing out in this new report? Yeah.

12:51 So this is gonna sound weird. This is programmable biology. So The components that make up this convergence. Uh Everything from artificial intelligence

13:02 Two Something called generative biology. What's generative biology? So you know what Gen AI is? So you you know, you you type uh you pick my hut my father in law's using generative AI for for all kinds of things. I wish he was not. So imagine.

13:18 That you wanted to create a new enzyme instead of a new cool picture or something, bioles has become Editable. Writable. Readable. Which means that we can design

13:33 Anything in the physical world in a way that we've never been able to before. The first thing that people usually think about is, Oh, cool, we'll have different medication. But actually, it it goes beyond drugs. If we could literally program biology to be responsive. That Fundamentally shifts.

13:50 Not just medicine, but also how do we like the entire built environment, how we You know, put together what what construction looks like, what concrete looks like. It also changes agriculture. Fundamentally. Um, it protects our climate change issues, it protects supply chain issues, it means a different approach to energy. It also means absolutely terrifying lethal bioweapons um that can be produced by people that maybe wouldn't have had the tools before.

14:17 We both have Maryland ties. I grew up there. You you live in Baltimore, if I remember correctly. Half the week. Half the week. Yeah, yeah. Governor West Moore picks up the phone calls you and says, Amy, I hear about these convergences as a governor of of a beloved state. Wh which convergence should I be thinking about? I would love for him to

14:37 To call me. I've got some thoughts on the on the great state of Maryland. I think this works for the state of Maryland, but but also everybody else. So You probably have heard about China's surveillance state. So China and I used to live in China. So there's something called a social credit score system. Everybody is very much watched.

14:55 The juries out on how people feel about being surveilled in the way that they are, but it is very much a top down. process. So it's decided at the highest level of government and then it is it trickles down and cascades and is is deployed and enforced. Okay. That's a example of a sort of Centralized

15:15 Wellian. reality that people are living in. What people don't recognize is that the same thing exists here. In Maryland. Іннайте стається інст.

15:27 The difference is it wasn't built by a single government. It's a corporate Panopticon. So if you're not familiar with the term panopticon It was a I think it was a seventeenth century concept for like a prison design in France.

15:42 But the idea was like everybody could be watched all the time to like There was like a central guard tower and the design was such that you could see all of the wings of the of the prison from the center spot. Right. That's right. Th there is a way to do that top down. So having like a physical structure. And I think China has built that sort of physical structure that is imbued with really powerful technology.

16:05 There is a version of that that exists, but instead of that central column. Imagine it being A billion censors in every single place around that that prison. Where everybody is constantly being watched all the time, but not by a d one entity, but by You know.

16:23 Millions of different entities. This is our reality. There is a corporate panopticon and We are all being ambiently surveilled all of the time. Now.

16:36 Most of the time you have no idea that's happening. And I would say a lot of the times it provides wonderful benefits that range from Loyalty points to uh Things at your grocery store, right? Or spam filters or or whatever else it might be. But The reality is

16:52 We don't know how to or why decisions are being made. What we are giving up for the convenience of Banking, of working, of socializing. That's what what is making all of this Possible.

17:05 So again As with every one of these convergences, they're not good or bad, they're not apocalyptic or utopian. They just are it's a new phenomenon. And we have to name the phenomenon because we have to engage now with it. And again, this is something that

17:20 Has existed and f just not to the scale. That it does today. Still ahead, more with futurist emi web on how leaders need to evolve their mindset to keep up with the pace of change. The Wired Newsroom is known for award winning reporting on how technology shapes our world.

17:40 On Wire's On Cany Valley, we take that curiosity even further. Each week, journalists from Wired break down the biggest stories in tech while speaking directly with the people building, challenging, and reshaping the future. Is the AI boom sustainable? How do you protect your privacy in an age of constant surveillance? Uncanny Valley tackles the questions driving today's tech debates and lighting up your group chats.

18:02 Listen to new episodes every Thursday. Wherever you get your podcasts. Humans will never be more intelligent than be two types of companies those are great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana Al Chayubi.

18:23 And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed the guests and topics are just as compelling and timely from Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada.

19:14 It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Welcome back to Masters of Scale. You can find this conversation and much more on our YouTube channel, and be sure to check out the link in the show notes to subscribe to our newsletter. your point, it's neither necessarily utopian nor dystopian. Given that it is in and of itself inherently not necessarily bad or good, and given that We are seeing as starkly as in the last

19:59 You know. I mean really in human history, but certainly since Milton Friedman Profit motive is driving everything. It is return for shareholders. Stakeholders are largely being ignored if they're not actually shareholders. What does this mean for how Corporations are run and governed.

20:18 in our country. That's a great question. I feel like Winners take all. Did you read that book from on Classic. It was a long enough time ago that It drove a conversation about

20:31 Stakeholder versus shareholder responsibility. And uh was a different way to approach profit. And I feel like That drove a lot of conversations for a long time. Well L Larry Fink wrote a celebrated piece about the importance of stakeholders. Yeah. Um winners take all was twenty eighteen. Yeah.

20:49 Yeah. Yeah, the pendulum has swung in in now a different direction. And I I don't think that is that means that everybody, every board member, every leader writ large is like screw ourselves. We're we're just in it for uh for to bump up share prices. But the but the reality is that L let me before I say what I'm about to say, which is gonna sound alarmist, let me preface this by saying I'm politically independent. I've done a lot of thinking over Decades about

21:16 The role that profit plays in our society. Also, like I said, I I lived in China, I lived in Japan. And I think we have hit a moment in the United States where we have sort of a form of capitalism that has gone almost to an extreme. level. And I actually think this is potentially damaging companies. So yes, there are societal implications and everything else, but I'm seeing

21:40 Smart leaders and like You know, pretty well run companies making some of the dumbest decisions. really stupid decisions. And it's either because they are desperately trying to improve bottom line so they can juice their share price. I mean it's almost this is part of like what happened in the 80s on the sort of Jack Walsh approach to uh and not not just him but others but this is different. This is making structural stupid short term structural decisions.

22:09 To get that margin. In some companies we deal with, there are literally numbers. You know, X percent. I'm not gonna say what they are because anybody listening. who is in in one of those companies will know who I'm talking about.

22:21 But it doesn't make any sense. Like it's a made up number. You know what I mean? But but what's happening is it's forcing everybody from leadership down to make decisions that are terrible, terrible for the company in the long term, good in the short term. Terrible in the long term. Terrible for the community. Террилф сосії. The thing that I'm having such a hard time with right now is

22:43 So we're all like we're balls out on AI, right? Just do all the R D, come up with all the cool stuff, and it'll be amazing. You know what China's doing? China is saying We're not gonna worry about innovation right now. We are gonna build infrastructure. So in a a by the time this

22:59 show comes out, China probably will have announced its next five year plan. And that next year five year plan is Funding A 10 year process to literally take 1.4 billion people and not just get them online in a meaningful way, but get the enti get get the entire society using AI automation Tools of the modern era the entire

23:25 Country. And they will very l that includes education, I mean that includes everything. What are we doing in the United States? Nothing. Sorry, but we're not. We are not there are too many pockets around the country where people you know people can't get online. We've got too many problems with our education system. We have no plan. We did not have a plan in the previous administration, the administration before that, this administration, there's no plan for any of this. And the result is

23:52 We are giving the rest of the world free RD. Yeah. Think think about how Jeff R companies are competing, they're competing on they're not competing on scale. They're competing on like who's got the coolest, shiniest stuff that we can market to get more people and investors and customers. Okay, that is that is short term thinking.

24:12 driven by this sort of unhinged capitalism that Again, I I think Our structures are okay in the US. I just think we've taken them to these extreme. proportions and not adjusted like not readjusted our priors. So it's gonna wind up happening is ten years from now

24:30 China's gonna leapfrog us. I'm sorry, but like like anybody can ar like I'm happy to argue with anybody all day long about this, but we are missing the structural components for success. And it's not it's very much in the US. It's not just us. Well, Nami, we're we're missing them in part because the incentives are misaligned, right? I mean, you get what you measure, you get what you incentivise, and by and large, CEOs and boards are incentivized on a quarter by quarter basis and maximizing returns. Hundred percent. And CEO turnover is the shortest like the The tenure is very, very short.

25:04 Goes back to what I said at the very beginning about creative destruction. Too many CEOs stayed in their roles for too long, and boards were afraid to mess with what works. And so there was, you know, the same is true of our government. We've had too many people in their jobs for too long and nobody made space for the next generation of people to come in. So that is definitely Part of it. But who are most like if you look at who a lot of the CEOs of companies are, not just publicly traded companies, but generally they're CFOs. No hate. For the for the finance people

25:34 But A C a chief financial officer represents stability. to boards, you know, they they you know, we'll get the next couple of quarters okay. And it's it's it's small C conservativism. I mean they are by nature conservative people. That's right. We need fresh people and young people who are interested in.

25:54 growth not for just businesses, but for like the place where we do the business, which is the country that we live in. And We are we are presenting zero reason for anybody to go into To government, not politics, but to go into government at this point, which is a shame. Yeah. Amy, some of what we've talked about, a lot of what we talked about sounds like science fiction. In fact, I reread uh nineteen eighty-four last year. I'd forgotten that Orwell divided the world into three superpowers, right? I mean, exactly what you're describing. I just finished rereading Fahrenheit four fifty one uh last week, two weeks ago. Why are you doing this to yourself? I d I don't know. I don't know. I read I honestly I do know. I do it

26:35 To help make sense of the world. And both fiction and nonfiction different ways help me with that. And you know, the amazing thing is Fahrenheit four fifty one was written in the ear nineteen fifties and it envisions like AirPods. It envisions AI uh driven robotic police dogs. I mean, it's it's extraordinarily prescient. Is there science fiction that you are turning to or that you have have revisited where you're going, Gosh, that is really an incredible imagination of of what's coming? So this is gonna sound kinda crazy. I avoid science fiction.

27:10 I have a hard time with a lot of science fiction. Because I see society being warned and then choosing to do the stupid thing, anyways. Now, that being said. There's a lot of wonderful science fiction and I do read every now and then. I think the better question is What's happening with science fiction writers and how are they able to

27:31 Imagine different futures. And the answer is productive wandering, like letting your mind wander productively. And in order for that to happen and and like allowing connections to be made, you have to come in with a lot of base knowledge, which means you have to ingest tons of different data from like so the fact that you're rereading those books, but you're also ingesting other days, that's actually great. Cause what that's allowing you to do is to make connections to what's happening now and giving you perspective and thinking about things.

27:59 So that is something that I do this but is what my company does with everybody everybody who works with me is that kind of person. My concern with Science fiction meeting reality, especially as it relates to AI, is that we're creating a world in which we can't allow our minds to get lost. You know, it's a little bit like GPS. People have forgotten how to orient themselves because we just follow the blue line. Same situation when it comes to ingesting data and thinking.

28:26 And sitting with that information and making those connections. What have we not talked about? That we should have talked about. I think a lot about If I was starting my company right now.

28:38 What would I do differently? And how would I operate differently? And the truth is My entire job is thinking about the future, and I'm the least patient person you will ever meet. I get irritated that I can't

28:50 I can't make change happen overnight, that things are happening too slowly, that we can't get something done fast enough. I was experimenting with Machine learning tools literally twenty years ago and building my own janky systems. To try to automate so I could go faster and do more, right? It's it's not about the speed of getting things done. I just I I want to accomplish more. And I cannot imagine

29:13 What it would be like to be starting off now. Because The difference between twenty years ago and today, twenty years ago, we didn't have the tools of automation, not like we do now. And Today

29:25 Everybody's got All of these tools. For automation. So all that's gonna do is exacerbate that feeling of like Bigger, better deal, I should I should exit faster. I we should be c you know, whatever. And that's just

29:38 На way the world operates. It's a mirage. Um, if I can bring it back to convergences, this is Partially why This report

29:47 took in a stupid number of human hours and we are not selling it, we are giving it away for free. All of this analysis, much harder to do than trends. The reason is because we're trying to get everybody to slow down. We're all living through this collective moment of creative destruction. And We ha we are we are tuning out at the very moment that we need to be tuning in. And allowing ourselves

30:11 To take a little bit of time to think through things. I know that Leaders of publicly traded companies are like Cool, but I've got a board meeting or I've got an investor day or whatever. And I know that people with startups are like awesome, but we're chasing whatever investment we can get right now. The world is not actually moving as fast as you feel like it is.

30:31 So I guess maybe the last thing that I would say is You kinda have to learn how to respond. Thoughtfully versus react in the moment. And that has never been more true than right now. Thanks to Amy Webb for joining us. Her analysis of where we are headed is unparalleled and invaluable in its insights.

30:53 In a moment where it feels nearly impossible to keep up, where the pace of change is head spinning, it is dizzying. Amy Web offers Signal. In the middle of so much noise. I come away from every conversation with Amy feeling more dialed in and more fired up for the future. I hope you do too.

31:15 Imy's new convergence outlook from the Future Today strategy group is available for free online. We've put a link in the show notes. We hope you'll check it out. I'm Jeff Berman. Thank you for listening. Masters of Scale is a Wait What original. Our executive producer is Eve Tro. Our senior producer is Trisha Bobida. Associate producer is Masha Makatanina. Senior talent executive is Stephanie Stern. Mixing and mastering by Aaron Bastanelli and Brian Pugh. Original music by Ryan Holliday. Our head of podcasts is Letal Mulad. Visit mastersofscale.com to find the transcript for this episode, and to subscribe to our newsletter. And please make sure.

32:12 to check out our YouTube channel.