As the seismic impact of Britains’s vote to leave the European Union rocks the political and financial world, the long term impact is still unclear. But it’s likely that the creation of a new political divide could have incessant repercussions around the world. What does it mean for globalization, and for U.S. presidential candidate, Hillary Clinton?
I was invited to take part in a live discussion on the BBC World Service last night with Simon Long, Banyan columnist for The Economist in Singapore; and Diana Furchtgott-Roth, director of Economics21 in New York.
I see Brexit as part of a larger trend: a widespread shift to nationalism and anti-globalization. It could be the beginning of the end of capitalism as we know it – the majority of Britons have voted against the status quo. Globalization is NOT working for them. In the US, it’s a big wake up call to establishment politics here. Hillary Clinton and the Democratic party need to take note.
BBC host, Fergus Nicholl led a lively discussion on the pros and cons of the Brexit vote. Here is a transcript of the globalization discussion (edited for length and clarity). Listen to the entire podcast at the BBC(Globalization focus starts at 38:38) or below:
Robert Hormats (former Under Secretary for Economic Growth for President Obama and Vice Chairman of Kissinger Associates) explained the U.S perspective:
Robert Hormats: We have a great stake in the global economic system…the global economy has a big effect on our own economy, as it does on other countries’ economies and if we give up that leadership or turn inward, it will hurt our economy…
Laura Trevelyan (BBC Correspondent, Washington D.C.):What can be done to restore economic stability?
Robert Hormats: I think it’s very important that political leaders try to help people who do not feel that they’ve benefited from globalization or from technology, to feel more included, to listen to those people. If these people feel more confident about their own lives, they’ll feel more confident about the global economy…We need to make sure the global economic system works effectively and that is now in jeopardy.
Diana Furchtgott-Roth: I’m fully in favor of globalization, but it doesn’t have to mean that Brussels can control what kind of vacuum cleaner you can buy…The EU has become too intrusive. And that’s why the majority of people voted to leave… not having to do with globalization but intrusion in everyday life…
Fergus Nicholl: Simon, take us into Asia with this issue of globalization…
Simon Long: It’s not just that people are uncomfortable with globalization, they’re uncomfortable with some of the byproducts: increased inequality, entrenched elites making decisions for them. And in that context this (Brexit) vote has resonated in some parts of Asia as a revolt against doing what you’re told is best for you. It’s a phenomenon one’s seen in elections in Indonesia in 2014…in the Philippines with the election of Rodrigo Duterte on an explicitly anti-elite, anti-establishment platform. It’s part of an anti-globalization trend…a general revolt by the people who feel excluded from the elites.
Fergus Nicholl: Alison, you’ve got friends and family back home in Scotland. I wonder how they’ve been reacting over the last few days…
Alison van Diggelen: It looks to me like another referendum on Scottish independence is almost inevitable. I’ve heard anecdotally that some Scots who voted “No” to independence in 2014 are now inclined to vote “Yes” – they don’t want to be part of what they see as an isolationist, xenophobic “little England” mentality.
I see Brexit as part of a larger trend: a widespread shift to nationalism and anti-globalization. It could be the beginning of the end of capitalism as we know it – the majority of Britons have voted against the status quo. Globalization is NOT working for them. In the US, it’s a big wake up call to establishment politics here. Hillary Clinton and the Democratic party need to take note of it and start doing more to address the people who’re not benefiting from globalization and doing something to help them.
Fergus Nicholl: Simon, that’s a very bleak message: a sense of fundamental danger to the global financial system?
Simon Long: I think it’s justified. What we have seen is a big step back to the international order of the past 40-50 years. It does reflect a sense of resentment, not just in the UK, against the EU, but felt around the world, against the current economic system. If one looks at pioneering trade agreements, for example, The Trans-Pacific Partnership, it’s hard to find any country where that’s a popular idea: people think it’s either nothing to do with them or is against their interest. The popular mood has disassociated itself from what governments are doing in globalization.
This week, artificial intelligence (AI) reached a significant milestone. For the first time, Google’s DeepMind unit beat the legendary champion of Go, a highly complex board game. Machines are now being built with self-learning mechanisms that simulate the neural network of the human brain. What does this mean for the future of AI and its ability to replace humans in the workplace? The future just got closer.
Sebastian Thrun is well known for being a pioneer in artificial intelligence and autonomous cars, but is now laser focused on making sure online education bridges the skills gap, via his company, Udacity. Here’s what he said recently about AI:
“Udacity is my response to the development of AI. The mission I have to educate everybody is really an attempt to delay what AI will eventually do to us, because I honestly believe people should have a chance.” Sebastian Thrun*
I sat down with Thrun at the company’s headquarters in Silicon Valley to explore his grand vision and audacious promises. Last year, Udacity raised $105 million in venture funding, based on a valuation of $1 billion. Is this another overpriced Silicon Valley unicorn or is the value justified?
First, a little back story: In 2012, Thrun was astounded at the massive number of people signing up for his Stanford AI course online course: 160,000 in all, mostly from outside the United States. He quickly realized that online education has the potential to make learning affordable and reach millions globally.
“Nothing has more potential to unlock a billion more brains to solve the world’s biggest problems,” wrote Tom Friedman in 2013. But of course, his and Thrun’s rosy predictions couldn’t happen overnight. The online learning business had some serious teething problems with high drop out rates, and dismal failure rates. But today, the future of online education is looking brighter.
There are now countless online education companies globally. The big three are: Coursera (a Stanford startup) which now boasts 15 million students; EdX (affiliated with MIT and Harvard) with over 5 million users; and Udacity, 4 million.
Since Udacity’s high profile failure at San Jose State, the company has refocused its online courses and recently partnered with Google, AT&T and Amazon to design “nanodegrees” tailored to the needs of tech companies. Thrun is so bullish about the market value of these 4-12 month nanodegrees, which offer project based learning, that he’s offering a money-back job guarantee.
“For certain Nanodegree programs we’re offering all your tuition back unless we or you find yourself a job within the first 6 months of graduation. For the student, the education is basically free. … These are jobs that pay $80,000 or more, maybe $120,000 in Silicon Valley. With the first month’s salary they can recoup all tuition or we just pay them tuition back…“ Sebastian Thrun, CEO Udacity
Here are more highlights from my conversation with Sebastian Thrun:
On Redefining Education
I think education has to shrink: We have to stop thinking of education as a four or six year investment you can only afford once in your life. We have think of education as a lifelong thing, to shrink the size of our degrees and make education a daily habit, the same way we brush our teeth every day. We have to redefine what education really means.
On Access to Education
Elite colleges like Stanford are extremely inaccessible. They’re failing in their mission to provide access. The Udacity recipe is exactly the opposite – we want to reach everyone and have no admission hurdle. We want to be able to educate people. We do this today in Ghana, in Sub Saharan Africa, in Bangladesh, in China, around the world. If we do this, we can have a substantial impact on the world’s GDP because so much talent is under utilized because of lack of education. If we give people in Syria the same chances as kids in America have, it’s going to be spectacular.
On Persuading Skeptics
The question is still open how much a nanodegree will become gold standard…this takes time. But some companies earmark jobs specifically for us, give us preferential treatment. Google even invites the top nanodegree finishers on campus in Mountain View to meet their recruiters, which they don’t do with other universities….
And others are still skeptical. People are hired on conventional credentials and many of our students are career shifters. They don’t have the 20 years of history that a seasoned person has.
Last year, Marchisio got a promoted from customer service to “web solutions” engineering at Google after completing Udacity’s nanodegree. She said of her 6-month intensive program: “It’s industry relevant, fun…maybe I’m just a nerd but I really enjoy spending my weekends working through programming materials.”
Marchisio adds, “I’d guess there are more women in a Udacity program than there would be in an academic course…an online environment feels more safe…less social pressure. You can try things on your own, make mistakes and not feel embarrassed about it.”
On Udacity’s China Expansion
China has 20 million college students. It’s huge. It has a thriving new middle class and can’t keep up with brick and mortar university buildup to meet the demands of these people.
I want to go there and tell them look: You can become a Silicon Valley trained Android iOS engineer, a data scientist, a cyber security engineer, even a self driving car engineer for almost no money in about half a year.
Note: Udacity currently has an office in China and plans to roll out its learning platform, by replicating Google tools and building its own server farm in the second quarter of 2016.
On his Moonshot, 50 Year Vision
Conventional degrees will be gone. We’ll abandon the idea of education first, and then work.
I see people starting work straight out of high school and bringing experiences, deficiencies, desires back into education. We’ll have a life where education and work is on all the time. The old fashioned – you get born, ed, work, retire and die is obsolete. We have to do all these things at the same time, with the exception of death of course!
We have to learn to play, to get educated. Wehave think of life as a process, not as an accomplishment, but have a growth mindset for our lives. That will be the case because 50 years from now, things will be moving so insanely fast that to stay current, a college education will expire faster than its course.
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In conclusion, it looks like Udacity has found a sustainable business model by focusing on the IT job market. The company currently has about 11,000 students enrolled in its nanodegree programs, each paying approximately $200/month, producing an estimated annual revenue of over $26 million. If Thrun can continue to drive rapid growth, compete effectively against the growing competition and replicate the company’s current success as it expands in China, then perhaps that $1 billion valuation doesn’t look quite so make-believe.
*Interesting to note that although Thrun offers online education as a way to “delay” the massive job losses that AI will eventually produce, Udacity’s top listed nanodegree is…you guessed it: machine learning. Otherwise known as AI.
Fadell learned to say “no” more than “yes” while working at Apple and he found creative ways to “disappear” when Jobs was in “one of his moods.”
But in 10 years of working with Steve Jobs, the Apple cofounder often revealed his softer side. For example, when Fadell became a father for the first time, Jobs took him for a walk and advised him not to over-schedule his child.
“Make sure they’re bored sometimes,” said Jobs.
What did he mean?
Fadell explains: Kids need the time to find themselves…be creative, and solve problems.
Although critics say he micromanages his teams, Fadell sees himself as a mentor (see more below).
On Google Glass
Glass is definitely a side project for Fadell…he checks in with his Glass design team sporadically. He’s still CEO of Nest and that remains his primary focus, since, as he underlines, “it’s actually shipping product.” He’s laser focused on making sure it’s being done right (see Leadership below).
On Tech Security
Fadell reckons people today are obsessed with tech security and that in reality “nothing is secure…people in the security business are stirring up the shit.”
On Moving Meditation
Fadell starts his work day at 5:30 am and does what he calls a “moving meditation,” be that running, or yoga (one hour, three times a week). That gives him time to problem solve and prepare for his “roller coaster” day of “back-to-back” meetings.
I challenged him to demonstrate one of his favorite poses: the Vriksasana, or tree pose and as you can see…he likes a good challenge.
For non-yogis out there, it’s a great pose for increasing balance, focus, and memory. It also strengthens your feet, ankles and knees.
The main event at the salon was an excellent fireside chat between Fadell and Kevin Surace, SVForum board member and serial entrepreneur. I’ll post a link to the video here, when it’s available.
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Here are some of the highlights of that conversation and my observations:
On Leadership
Make sure your projects don’t take over 18 months to ship, otherwise “it’s impossible to keep your team together,” says Fadell.
Although Fadell has lost several key members of Nest recently, he insists that his young team “need mentored to grow into the next leaders in Silicon Valley.” He says that those who walk out the door are examples of “the Tinder generation.”
Like Steve Jobs, Fadell has a reputation for being an intense leader, a micromanager or even a bully.
As Ben Austen so eloquently describes in Wired, “Steve Jobs has become a Rorschach test, a screen onto which entrepreneurs and executives can project a justification of their own lives: choices they would have made anyway, difficult traits they already possess.”
Perhaps Fadell needs to do a little more yoga and a little less yelling?
Larry Page vs Steve Jobs
Fadell characterizes his new Google boss, Larry Page as “an incredible scientist” who respects products and likes deep research to push the limits of technology. By contrast, he found Steve Jobs more focused on marketing, “more business, less science” and says he often took, or even “stole ownership of ideas.”
On Failure
Fadell says before joining Apple, he’d had 10 years of failure, at General Magic and other enterprises. In 1998 he was a DJ in his spare time, and founded a hardware startup for music collections. He made about 80 pitches to VCs without success. It was the intense fear of failure that helped him stay strong in negotiations with Steve Jobs. He agreed to work on what would become the iPod, only after Jobs assured him, “if you can build it, we’ll put every marketing dollar into this.” And of course, the rest is history.
Should tech companies build cars?
Fadell gives this question a resounding “YES!” He describes a recent meeting with some members of the board at Ford, “I could see fear in their eyes,” he says.
He views cars – especially self-driving cars – as “lots of computer with a little bit of car,” and says that car companies “need to do a 180 and compete with computers on wheels.”
Last night, Elon Musk’s SpaceX achieved a spectacular milestone in the history of space travel: its Falcon 9 rocket launched 11 satellites into orbit, performed a spin and landed back on earth, six miles from where it launched. Why is this ultimate recycling feat so consequential?
Quite simply, this could revolutionize space travel as we know it today.
During our in-depth 2013 interview, an emotional Elon Musk told me of his disappointment at the progress of space exploration and his ultimate goal: to make human life multi-planetary. He explained that if he could “show the way” by making rockets as reusable as airplanes, this would:
1. dramatically reduce the cost of space travel
2. re-energize support for NASA’s mission
3. increase NASA’s budget
and “then we could resume the journey”…to Mars and beyond. Watch the interview, starting at 35:00
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The back story of SpaceX
“I always thought that we’d make much more progress in space…and it just didn’t happen…it was really disappointing, so I was really quite bothered by it. So when we went to the moon, we were supposed to have a base on the moon, we were supposed to send people to Mars and that stuff just didn’t happen. We went backwards. I thought, well maybe it’s a question of there not being enough intention or ‘will’ to do this. This was a wrong assumption. That’s the reason for the greenhouse idea…if there could be a small philanthropic mission to Mars…a small greenhouse with seeds and dehydrated nutrients, you’d have this great shot of a little greenhouse with little green plants on a red background. I thought that would get people excited…you have to imagine the money shot. I thought this would result in a bigger budget for NASA and then we could resume the journey…”
On negotiations with the Russian military to buy two ICBMs
“They just thought I was crazy…I had three quite interesting trips to Russia to try to negotiate purchase of two Russian ICBMs…minus the nukes…I slightly got the feeling that was on the table, which was very alarming. Those were very weird meetings with the Russian military…’remarkably capitalist’ was my impression (of the Russians).”
Why he chose to create his own rocket company, SpaceX
“I came to the conclusion that my initial premise was wrong that in fact that there’s a great deal of will, there’s not such a shortage. But people don’t think there’s a way. And if people thought there was a way or something that wouldn’t break the federal budget, then people would support it. The United States is a distillation of the human spirit of exploration. People came here from other places…people need to believe that it’s possible, so I thought it’s a question of showing people that there’s a way…There wasn’t really a good reason for rockets to be so expensive. If one could make them reusable, like airplanes then the cost of rocketry (and space travel) would drop dramatically.”
Last night, the long awaited Tesla Model X was launched and Elon Musk took great pleasure in underlining its clean air qualities. Musk reiterated the mission of Tesla: to accelerate the advent of sustainable transport and show that any car can go electric. But he couldn’t contain a smile, as he talked about air quality and referred to “recent events” i.e. the VW DieselGate scandal.
Musk showed off the SUV’s giant air filter (10 times the size of a typical one) and said:
“Recent events have illustrated the importance of air safety…(in the Model X) you can have air quality levels comparable to a hospital operating room.”
Musk then got somber, put on his superhero hat and showed the massive crowd estimates of how air quality can reduce life expectancy in some of the world’s most polluted cities: Beijing, 22 months; Los Angeles, 8 months and Paris, 7 months.
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According to Musk, using the high quality “X-size” air filter plus a smaller one (still larger than an average car’s air filter) gives the Model X a 700 fold improvement in city smog filtering. The company claims it’s also 300 times better at filtering bacteria, 500 times better at filtering allergens, and 800 times better at filtering viruses.
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But the biggest cheer of all came when Musk made this surprise announcement:
“If there’s ever an apocalyptic scenario, you just press the bio-weapon defence button – this is a real button.”
I asked George Blankenship, former VP at Tesla, about Tesla’s clean air focus.
“Who else is going to think in that magnitude with something as normal as an air filter? These are the kinds of things that Elon pushes to the limit and delivers products that no one else can deliver. The reason he’s doing it is to save the planet. It’s all about the survival of this planet and the atmosphere.” George Blankenship
We discussed how VW’s emissions cheating scandal might impact electric car makers like Tesla.
“It’s unfortunate that others feel they have to do things like that in order to compete. It’s the absolute opposite of what Tesla does…they find a solution. It reinforces that innovative companies that come up with a solution that others don’t…there’s a reward for it: 5 star crash ratings, cleaner air than a surgical room. That’s what innovative companies do as opposed to companies that try to figure out how to bend the rules to get an advantage.” George Blankenship
After a thorough tour of the Model X features, including the elegant falcon wings, Elon delivered keys to some of the first Model X buyers. This time round, Elon beat his friend, and first Model S owner, Steve Jurvetson and got the number one Tesla Model X. There’s definitely admiration, perhaps a little envy, captured in my photo below.
Update: Jurvetson told me this morning that Elon had a check made out in advance at an early Tesla Board meeting, to make sure he secured the first Model X.
Read more about Tesla and Elon Musk at Fresh Dialogues
Here are more highlights from my conversation with Sebastian Thrun:
On Working with Steve Jobs
On Moving Meditation
