On this episode of the Rule Breaker Investing podcast, David Gardner interviews Kevin Kelly, co-founder of Wired and author of the book The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future. Kevin shares his thoughts on how AI will develop, why you shouldn't be afraid that it will eliminate tons of jobs, and why we need to get better at believing in the impossible.
David and Kevin also look at how the shift toward decentralizing organizations and the flow of information will change our lives; why access is becoming more important than ownership, and how that trend will extend beyond just digital goods like music and books; and what the most profitable companies of the future will be able to figure out and harness better than anyone else. Tune in to find out what Kevin has to say about these inevitable technologies, trends, and more.
A full transcript follows the video.
This video was recorded on Feb. 14, 2018.
David Gardner: Welcome back to Rule Breaker Investing. Happy Valentine's Day! There's not going to be a lot of love this show, although I do think you might love this show. It's a really special interview that I conducted a few days ago with Kevin Kelly, the co-founder of Wired and the author of the book The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future.
Of this interview it was said by a Motley Fool One member who watched it in video form later -- you're going to get to enjoy the entire thing this week -- "I'm trying to remember an interview that I've enjoyed more and I'm only coming up with that time I heard the Dalai Lama interviewed in Houston in the early '90s. I'll give the Dalai Lama the slight edge because, well, he's the Dalai Lama, but otherwise it's very, very close. Great work." That was my friend, Randy.
And what I can say about this interview is not only will it challenge your thoughts about where our future is headed, I think give you some good hope, maybe even some excitement, but also some good cautionary thinking, as well. Not only, I think, will you enjoy that, but I have to say Kevin is a charming and gracious man. In fact, he spent an hour or two after this interview at our event just hanging out with members, something you never expect an outside speaker to do at a conference. A real delight to meet for the first time, interview, and befriend Kevin Kelly, now clearly a friend of the Fool.
Well, as I mentioned, you're going to get the whole enchilada, but let me just pretend that not everybody thinks this is as compelling as an interview with the Dalai Lama, so in that case my producer, Rick Engdahl, has broken this up into kind of a normal-length format for this podcast. Maybe 35 to 45 minutes or so. We'll see.
But then for people who found this as enticing as I hope you might, we're going to have a Rule Breaker Investing Extra come out this weekend, which completes the interview and gives you some of the Q&A from the audience. So, without further ado, let's get started.
Well, this is a delight. A brief introduction. Kevin, you don't really need much introduction for a lot here in the crowd, but for many who will listen to this on my podcast, Kevin Kelly has written for The New York Times, The Economist, Science, Time, and The Wall Street Journal.
Back in 1985, he was involved with the launch of The Well, the pioneering online community, which I'd forgotten was sold to Salon. Then, later, Kevin helped launch Wired in 1993. Was its executive editor for its first seven years. His most recent book, the subject of today's conversation, is The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future.
Now, longtime technology journalist, David Pogue, had this to say about Kevin. You have to love this line. I'm sure you've heard this one before, Kevin, but this is a great line. "Anyone can claim to be a prophet, a fortune teller, or a futurist, and plenty of people do. What makes Kevin Kelly different is that he's right." He's currently the official senior maverick at Wired, so we have the senior maverick and the chief Rule Breaker at our company up here. Very, very subversive.
I think I'll always feel a decade behind you, Kevin. Certainly, a decade behind your thinking which you shared so beautifully in The Inevitable, but also in your actions and activities, because I think I first signed on to online bulletin boards in 1991. For you, 1981 when you first discovered the magic of a computer, because it wasn't just that it was a computer.
Kevin Kelly: That's right. Computers themselves really didn't do very much. They set up some things a little bit. They really entered our lives and transformed them when they were connected to the telephone. When they were connected to each other.
I had played around with the Apple IIe, and it was kind of cool, but when I discovered the modem and that there was this emerging continent on the other side of the wall plug, that was when these things became more organic for me. A little bit more human like. And I become much more interested. I was kind of a hippie, keeping technology away from me as much as possible, but this felt a little bit more Amish to me.
Gardner: Great line. Under the assumption that you are operating in the future -- which is not evenly distributed, as we've talked some about, that you're here, right now, Feb. 9, 9:56 Pacific -- that's where I am -- you're actually about 10 years ahead of us right now, so what I wanted to ask you is what have you already done today... that the rest of us won't be doing maybe, or routinely adopting, until 2028?
Kelly: That's a great question. One of the things that I do is spend a lot of time outside the U.S., and I think if I had to paint a picture of the future, it would probably be outside of the U.S. As you know, China is just accelerating to the future. It's almost breathtaking in the sense that it's restless.
What I did, today, was be part of China in terms of a teleconference call. I think that whatever picture we're going to paint in the next 20 [or] 30 years is that places like Asia are going to be a much bigger role in that future, both in designing it, as well as, of course, participating in it. A lot of what I'm doing, these days, is looking to Asia and saying, "What do you have in store for us?" because in some sense Asia is going to decide our future for us.
Gardner: I know after this event you are headed to...
Kelly: I'm headed to Dubai and Saudi Arabia as part of another project, but that's also part of this story of where the future is erupting. At Wired we used to take the Bill Gibson quote which says, "The future is already here -- it's just not evenly distributed," and we felt that our job was to go around the world and find those places where the future was already erupting and bring the news back.
And more and more I feel a lot of that future is erupting outside of the U.S. It's just partly mathematics -- 1.5 billion trainees, 1.5 billion Indians. You have three billion people and there's 300 million in America. People's assets and their abilities are evenly distributed. Opportunities are not, but the opportunities are beginning to become more evenly distributed around the world, and that means that just in terms of arithmetic, there's going to be more things happening elsewhere.
Gardner: I want to start thinking about your book, and I want to start with one of your quotes so that our Foolish audience here, our ship of Fools, can see how lucidly you write for those who haven't already seen it. How you're able to see the really big picture.
From your intro, Kevin, you wrote, "Change is inevitable. We now appreciate that everything is mutable and undergoing change, even though much of this alteration is imperceptible. The highest mountains are slowly wearing away under our feet, while every animal and plant species on the planet is morphing into something different in ultra-slow motion. Even the eternal shining sun is fading on an astronomical schedule, though we will be long gone when it does. Human culture, and biology too, are part of this imperceptible slide toward something new."
Picking up on that -- this sliding that's taking place -- you identify 12 ways that we're sliding, and I want to go through, for our time today, the first six. I would love to do all of them, but it's deep. Each of these chapters, or thoughts, is a whole conversation.
And they're not genomics, by the way, or autonomous vehicles, if that's what you think that Kevin is telling us that's going to shape our future. No doubt those things will. Or smartphones. But, nope, they're all verbs. They're actually present participles, as you take pains to point out, and it's always appreciated by a fellow English major. I'm no fellow.
But No. 1 is "becoming". By that you mean -- and here's a new word for many us -- we are in a protopia. Could you please explain?
Kelly: I would like just to make a little preamble about the title and the word "inevitable," because this is part of the story. Inevitable is a word that's kind of a red flag word that gets a lot of people uncomfortable, if not outraged, because I'm talking about some of the things in technology that are inevitable.
I meant it in kind of not the strong way that if we rewind the tape of life that everything will happen exactly the same again and we'd be right here where we are. I meant it in a looser way in the sense that if you could have imagined rain falling down to a valley, physics and mathematics says that the path of an individual drop going down is completely unpredictable. So, the specifics of the future are inherently unpredictable. We cannot predict them just because it's so complicated. That's kind of the theory of chaos.
But the theory also says that if you take enough of those drops there is a strange attractor. There are recurring patterns. So, even though we don't know the actual path of an individual drop, we know this direction, which is inevitable downward. It's going to go down. That direction is inevitable, even though the path is not. What I'm looking for are the gravities, the general trajectories of things, even though the specific company or product is inherently unpredictable. Is Apple going to go up or down? Is Apple going to be...? Who knows? We can't predict.
However, there are some larger-scale things that we can talk about that can be very valuable and maybe, in a certain sense, even more valuable than the particulars. Forty years ago, Gordon Moore came up with Moore's law, which says that every 18 months computer chips would get twice as fast and half as cheap.
If you really believed that 40 years ago -- that for four decades computers would become twice as fast, half as cheap -- you didn't need to know about IBM or Apple. You only needed to know about that to really make a fortune -- to change your political structure, to change education -- if you really believed that that would be enough of a direction that that was going to happen. I think understanding some of these long-term trends, which are inevitable, even though the specifics are not, is really useful.
Gardner: I'm so glad you led with that, and I really should have pointed that out, because that's the title of the book. We should start there, but you're right. You're eloquent about that, and so we now understand inevitability within an unpredictable, chaotic framework.
Kelly: Exactly. So, to the first one about "becoming", one of the things that's inevitable is that things are changing and, more importantly, the current regime, the current favorite programming language, the current dominant companies are ephemeral. They will change. They will go away. And all the things that you now are expert on won't be as important in 10 years or 20 years from now, and there will be new expertise needed. And while we tend to admire the young people because they are digital natives, 20 years from now they're not digital natives. They're going to be old-timers and geezers like us... and they're going to have to learn wholly new things.
What I'm proposing is that everybody is going to be a perpetual newbie. There are going to be newbies all the time. All your life you're going to be encountering new things you have to learn and, more importantly, things you have to unlearn. This stance of constantly being a newbie -- having to learn, acquiring the metaskill of learning how to learn -- is understanding that everything that we buy is also in that process of being upgraded all the time.
We're moving from things that are solid products to things that are services because they can be upgraded. Even a car, which we think of as a very physical noun, becomes a verb. In the process, though, at night your Tesla is upgrading itself. It's becoming a better car while it's sitting in your garage. And everything will acquire that sense of changing itself into something new and we have to get used to the fact that even the tool that we buy in a hardware store is going to have versions of itself.
Gardner: So, those of us who have some apps on our phone are reminded that we need to update that app. It's time for patch number 1.68. Those are coming more frequently. We have more apps. Some of us probably don't even want to tap that button or go in and update everything we need to, but increasingly they're just doing it on their own, anyway.
Kelly: Yes.
Gardner: So, things are just becoming.
Kelly: Yes, exactly. One of the marks of success in technology is when it becomes invisible. Think back to 150 years ago during the Industrial Revolution when motors came in. I have clipped an ad from an old Sears catalog that showed the "home motor." The home motor was a motor about this big. It weighed like 15 pounds. And the idea of the home motor was it was going to motorize everything in your household.
Well, motors succeeded not because they became bigger and bigger in the home, but because they became smaller and smaller to the point that they became invisible. You probably have hundreds of motors in your home that you don't even see and you're not aware of.
And computers are doing the same thing, where they at first were the big things that sat in front of us on our desk. Then they shrunk to something that sat on our lap. Then they copped into our pocket and the next thing is they're going to be against our skin. But we're going to become more and more invisible, and the same thing with upgrading, is that as it becomes more essential and pervasive, it basically will disappear from our awareness. That means it has succeeded.
Gardner: Chapter two, No. 2. "Cognifying." Cognifying. Largely about the spread of AI. You include a helpful comparison with electricity.
Kelly: Exactly. Our lives in general -- all the sense of progress and prosperity we've had -- has come because of basically the invention of one thing which I would call "artificial power." During the agricultural age and before, the only way you could make something -- whether a house, or clothes, or food -- was using the natural power of muscle, either your muscles or some animal muscles. That was the only source of power, was muscle power. Natural power.
The world was transformed when we invented artificial power -- which was tapping into water power, and steam power, coal power, oil power, nuclear power -- where we could harness multiple horses. When you push the button on your car and you drive down 60 miles per hour, you are summoning the power of 250 horses, that equivalent, to just speed down the highway or else to throw up a building like this. Or a city like this.
Everything in it is relying on this artificial power, which was then delivered to everybody over an electrical grid. And the farmer in Oklahoma did not have to make his own artificial power. He could just buy as much power. It became a commodity, a utility, that was distributed on the grid.
We're not going to do the same thing with artificial intelligence of adding artificial minds to that artificial muscle. And that artificial power -- this artificial intelligence -- is going to be distributed on a grid that we call "the cloud." Which means that anybody who wants AI or artificial cognition can purchase as much as you want. You don't have to make it yourself. You're just going to buy it on this cloud grid.
And right now, this minute, you can log on and can buy AI from Google, or Microsoft, or IBM, as much as you want. It's very cheap. And that's where we're going, so it's going to become a commodity, like electricity. And like electricity it's going to affect everything we do, just as artificial power has affected every regime from sports, food, fashion, education, military, religion.
The same thing with AI. It's going to affect everything. It's going to become a commodity -- a utility -- available to anybody. And like the first industrial revolution, it's going to make basically a second industrial revolution of the transformation that it's going to engender in our lives when we have the availability, 24 hours a day, seven days a week, of minds, that are not human minds -- they're alien minds -- working on something that we want to work on.
Gardner: And so just as a century ago you said you could do pretty well as an entrepreneur by saying it's the hand pump that you already know, but with electricity now it's going to be the product or service that you know, but with AI.
Kelly: Right. So the farmer, who has the grid coming to him, electrical, looks at the manual, muscle-powered pump and says, "I have an idea. Let me add artificial power to it and I'll make an electric pump." Now we're going to do it again and everybody who has an electric pump is going to say, "I have an idea. I'll buy the AI and I'll make it a smart pump." Just as the first industrial revolution was that mechanical pump made to automated multiplied by a million, we're going to do the same thing of adding smartness to everything that we make, some degree of it.
I've been talking about that for a very long time where we'll add little slivers of minute kinds of intelligence to our shoes. To the chair. To light bulbs. To clothing. To door knobs. And people would laugh and say, "Why would you put a computer into a door knob?" You can't stay at a hotel, today, without having to interface with the computer in a door knob. Part of what we want to do -- and what I suggest -- is that we have to get better at believing in the impossible.
Gardner: Before we move on to No. 3, I think we have to pay some lip service -- I'd like you to, of course -- to this notion that AI is going to doom us all and we should fight the machines before we get killed by AI. Do you believe this?
Kelly: No, I don't. I think AI is going to usher in the greatest level of prosperity -- and new jobs and new careers -- as we've ever seen before. One of the key things to understand about AI is it really is "AIs." It's plural. That there are many varieties of artificial intelligences, and our own intelligence is not a single dimension. We have a picture in our mind of a kind of loudness, where we have a little bit of intelligence like a rat, or some more in a monkey, and then there's the village idiot, and then there's us, and then there's the super AI geniuses.
But, in fact, that's a very incorrect view. Our own intelligence is a whole suite of different modes and nodes of cognition. We have perceptual pattern recognition, inductive reasoning, deductive reasoning, symbolic reasoning. We have emotional intelligence. We have long-term storage. We have many, many different types.
And we're going to engineer some of the varieties of intelligence to be superior to us in some dimensions, as we have already. Your calculator, whether it's on your phone or separate, is an arithmetic genius. It is so much smarter than you are in arithmetic. We're not freaked out because it can't do very much else. It's very limited.
But we're going to make other kinds of intelligences, and the best way to think of them is as alien intelligences. We can make AI be very creative. We've demonstrated that with the AlphaGo AI, which beat the best Go player in the world. And the third move of the third game was considered by all the experts to be utterly creative and brilliant. But also, they said that no human would ever do that, so it's an alien kind of creativity. And that's actually its benefit -- that it doesn't think like humans. That's why we want them to drive our cars, because we don't want them to drive like humans. We're terrible. Every year humans kill one million other humans, and yet, we're going to be upset when a robot kills another human on the road. It's like, "No, no. We want to be able to do that. It's our job."
So, these are alien intelligences and they're different. That's actually its benefit because in this world that we're entering into, the chief engine of innovation, wealth, and prosperity is being able to think different. And as we connect ourselves together -- seven billion people are connected 24 hours a day to each other -- it becomes increasingly difficult to think differently when you're connected to everybody else in the world all the time.
One of the things that AIs, because they think differently, are going to help us do is to continue to think differently. Garry Kasparov, the world's best chess player, lost to Deep Blue a decade ago, and he complained that it was unfair that he lost to an AI in the world chess match because the AI had a database of every single chess move that had ever been played in a championship.
He said, "If I was sitting next to that same database and playing the AI, I would have won." He might have, so he decided to make a new chess league where you could play as a human with a database or an AI. It's kind of like free martial arts -- any way you want. You could play as a human chess player, you could play as an AI, or you could play as a team of human plus AI.
Gardner: A centaur.
Kelly: He called it a centaur. He said it was a half. Half-half. And it turns out that today, in the last four years the best chess player on this planet is not an AI. It's not a human. It's a centaur. It's a team of AI plus humans. The U.S. military has adopted the same thing. When they're trying to fly drones and other things, the best pilot is not just an AI. It's not a human pilot. It's the centaur team of AI plus human. And in medical diagnostics, so far, the best diagnostic is not an AI and it's not a human. It's the team -- the centaurs of the human plus AI.
So, where we're going to be going to is working with these AIs. Every example we have of actual AIs and robots coming into the workplace has transformed jobs, but it really hasn't eliminated very many of them, because what it does is it takes all the tasks that we find repetitious; and where efficiency matters, it turns out that robots and AIs are really good with efficiency. What they're not very good at are things that are inefficient.
What are inefficient? Well, innovation is inherently inefficient. So is science. If you're a scientist claiming to be 100% efficient, that means you haven't learned anything at all. You can't do innovation unless you're making mistakes. Unless you have prototypes. Unless you have dead ends. Unless you're trying stuff that doesn't work. It's inherently inefficient. Science is inherently inefficient. Art is inherently inefficient. Social interactions are inefficient.
It turns out that what humans want to do are all the things that are inefficient, and as we start to do new things that we didn't imagine we needed, in the beginning they're full of inefficiency. As we do them more, we figure out what's efficient, and those are the tasks that we give to the AIs and the bots. So, in a certain sense, as we go through constantly inventing new things that we desire -- spending time with them and then eventually giving parts of those jobs to the AIs -- you could say in a certain sense that our job, as humans, is to invent jobs for the robots.
Gardner: No. 3 -- I love it. "Flowing." Flowing. So, you call the third phase of computing -- after first, desktop computing and then second, the digital age, the web -- the flows.
Kelly: There are several things. One of the greatest trends in the last 25-30 years has been a move from centralized organizations to decentralized organizations. To the ability of what they often call "flattening," where you don't need as many levels. There's less top-down control. And that's true for all kinds of human organizations and it's true for technology, too.
We had this idea of peer-to-peer, and Uber -- which I took over this morning -- being a prime example of that. Instead of having a taxi dispatcher deciding who's going to go, you have peer-to-peer. I need a ride, and some guy has a car, so we'll be matched up. That's this flattening, this flowing, and it's all made possible by the fact that we have this flow of information.
In the old days, if you were a general in the Army and you wanted to command 100,000 soldiers, the only way to do it was a top-down command structure. You wanted the people at the base to obey you because they didn't have any information. But in the world in which we have a lot of information, and information flows between things, it's better, actually, to have that peer-to-peer. It's much more adaptable and much more accurate, and there's a disadvantage to trying to command from the top.
The new technologies -- the flows of information that we have constantly -- has enabled us to have decentralized institutions and decentralized technologies. It's all been permitted, and we're going to keep going in that direction.
At first, it seems crazy. How could an encyclopedia that was written by anybody in the world and changeable at any time, how could that possibly be reliable? And it turns out that it was because it was easier to undo a vandal's change than it was to actually create it in the first place. It was easier to undo vandalism than to make vandalism. We see the effects to something like Wikipedia which was bottom-up, and Uber and other examples of peer-to-peer where you had the bottom doing everything and very little control.
There are several things to say about that. One is that having the bottom-up is not going to take us all the way that we want to go. We've learned that you can't have the ideal encyclopedia unless you have some top-down control, as well. You can't have a completely autonomous organization where everybody's on the bottom without some direction, but it can take you further than you thought you could go, and it's always the best place to begin.
The rule seems to be you can go further with the bottom only than you thought. Eventually you'll need some top-down control, and it's always the best place to begin. So, part of what we're seeing, again and again, is we're moving into the world where we're saying if we have a flow of information, and it's peer-to-peer and everybody has it, what can we do with just having very few layers of control? And the answer is you can probably go further than you think -- it's a great place to start -- but eventually you'll need some other levels to get all the way to where you want to go.
Gardner: No. 4. Something that you and I, when we were born -- you're a little older than me, but not that much older -- we thought of screens as televisions. These days, there's a whole generation that thinks of screens as something that you hold in your hand and you spend a lot of time with it. No. 4 is "screening." Kevin, you said first we were People of the Word, so oral history.
Kelly: People of the Book.
Gardner: Sorry. Well, no. You start with People of the Word.
Kelly: Word. OK, sorry.
Gardner: People of the Word. Oral history.
Kelly: Yes, yes.
Gardner: I've actually read Kevin's book more recently than he has. Then we became Gutenberg -- People of the Book.
Kelly: Right.
Gardner: And now we are People of the Screen.
Kelly: Yes.
Gardner: This is a compelling quote I just want you to speak to, and we need to keep go going; otherwise I'll never get to my other question. You wrote, "People of the Book reasonably fear," and we all start as People of the Book, "that books, and therefore classical reading and writing, will soon die as a cultural norm. The old way of reading -- not this new way -- had an essential hand in creating most of what we cherish about a modern society: literacy, rational thinking, science, fairness, rule of law." Where does that all go with No. 4, "screening?"
Kelly: You're right that the first phase is the oral culture, where we called people of the world an oral culture. There was a lot of resistance when writing came along, because the people who were really good at the oral realized that writing would wither people's memories. They used to be able to memorize immense, long ballads and sagas word-for-word perfectly, and once people started to write it they lost that. So, there was some resistance to the book when it came in.
Our civilization for hundreds of years has been centered around text. We have the Bible. Scriptures. We've got constitutions. We've got law. And author was actually the origin of "authority." We viewed the authors and the written word as authority.
We're now in this third phase of the screen being the center of culture. The little screens. The screens that we see. The Hollywood screens. And screens are very different. On paper, things are fixed. They're permanent. They're monumental. They're reliable. They're often precise. Black and white. Very, very clear. They're strung in a logical sentence.
On the screen, it's different. Things are flowing. We go back to the flows. They're becoming. They're always changing. You constantly update. You don't know if something is finished or done. It's never done. It's messy. It's open-ended. It's ephemeral. And there doesn't seem to be much authority. On the screens, for every fact there's a counter fact. For every truth, there's fake. For every expert there's an anti-expert, a counter expert. So, you have to kind of begin to assemble truth yourself. It's a different way of approaching truth.
We're moving into this realm of the visual world screen and what I call screen literacy. We need another literacy to understand it, just as we spent, everybody here, four or five years learning how to read and write. It was something we just didn't absorb by hanging around the books. We had to actually be taught how to do it. So, we may need to have a new screen literacy, a screen fluency to understand how to use that best.
There are still some innovations or inventions we don't have in the screening world that we have in the text world, so besides inventing writing and reading, it took many centuries to invent things like putting things in alphabetical order. Or an index in the back of a book.
Gardner: Page numbers.
Kelly: Page numbers. Footnotes. Summaries. Abstracts. There's all these things that we now take for granted that allow us to maximize what we get from text, and why it's the center of our culture, or has been, that we don't have, yet, in the screening world, so it's very hard to hyperlink or footnote something inside a moving image. It's very hard to summarize and abstract where the moving image is. And right now, we cannot search for all video like we can search for all words on Google, but someday soon we will be able to and when that comes, then we'll also cement the idea that the moving image will now become the center of our culture.
Gardner: No. 5 -- we're just going to do two more -- "accessing." You start off early, here, with, "Every year I own less of what I use. Possession is not as important to me as it once was. Accessing is more important than ever." What do you mean by accessing?
Kelly: This began with music where a lot of the issues of ownership were first brought to fore. In the digital realm, you can make a perfect copy of something for free, basically. It was what the economists called non-rival, meaning that I could make a perfect copy of something and you would still have the copy you had, so you could spread these.
That kind of ability to replicate meant that it was very easy to get something in the digital world and I could very quickly get or find any music that was ever made somewhere. And if that access to it -- if giving it -- could happen instantly anywhere in the world I wanted anytime, it became less and less vital to own it.
In fact, the owning of the music became a liability since I'd have to back it up. I'd have to secure it. I'd have to index it and catalog it. I'd have to upgrade it if it was software. And if I was just reaching for it and getting it anytime I wanted to, I didn't have to do any of those things.
So, there was this movement to not owning music. You subscribe to music. You subscribe to a library and you get whatever music you want anytime. The same thing happened with movies, where you don't buy a movie. You just subscribe to all movies and you'd access the movies when you wanted to. Same thing with software. Books. With Amazon Unlimited the same idea. You don't actually own them. You just borrow them. Anytime you want, you have access to them.
That was the digital realm, and the question was, "Well, that's true for the digital. Maybe you don't have to own things, but what about the physical world?" It turns out that if you can make an instant or rapid delivery of things -- if you could deliver something within 30 minutes or one-half hour -- that was almost like having instant access to it. In other words, if I could deliver to you the state-of-the-art camping equipment within one-half hour of you wanting it, that was probably faster than you could find it in your basement. That became instant access. It made camping equipment a service rather than a noun. The same general drift of things not being finished. It becomes the camping equipment service to you. You have access to it and you're going to get the latest and greatest camping equipment, not the five-year-old stuff you have in your basement.
And so the question was what else in the world can we move from a product that you had to buy to a service that you access. And again, going back to Uber and others is, well, physical things can also be delivered if they can be delivered really rapidly. Or the 3D printing phenomena. I don't believe the idea of people having 3D printers in their homes, but there might be local, neighborhood versions where something may be printed out and you go pick it up locally, or they would deliver it to you within 30 minutes. There is a movement away from the benefits of ownership being more seen as a liability to the benefits of accessing things becoming more important than owning them.
Gardner: You say in the book in that chapter, "The wealthiest and most disruptive organizations today are almost all multisided platforms -- Apple, Microsoft, Google, Facebook." Platforms, by your definition "offer stuff they do not create." Out of curiosity, Kevin, do you own any of those stocks?
Kelly: Well, the only investments we have are in large index funds... so much of my investments are in Wealthfront. Kind of doing the robo train. I might own it, but I don't know.
Gardner: I was just curious, since we have a crowd of investors. Well, you've been right about those. They're great companies. Let's just go to No. 6. This is a really interesting one. No. 6 kind of comes from accessing. There's some flow throughout your book. No. 6 is "sharing."
Sharing doesn't need any definition, but you go to a very interesting place in this chapter, describing yourself later in the book as having, for much of your life, subscribed to sort of a traditional American individualism -- and I would say that's the same of myself and probably many of us here. But you begin to talk about the power of socialism, but not with a capital "S." Not really. This is more of a trend toward Social. To the sharing economy. More sharing, kind of overlapping with our last trend, as I mentioned, accessing. Give us a little bit more about that. It's a very interesting thought.
Kelly: There's a whole discipline called the sharing economy -- and often the Airbnbs and the Ubers are included in that -- the idea that you're sharing your car, or you're sharing a room in your home. But I think it's much, much bigger and broader than that. When we start to talk about this thing, language becomes a problem because in a certain sense, the best word to describe a lot of this is socialization, socialism, social network, social media.
It's the word "social," which in American tradition has a kind of political baggage around it. It's sort of the wrong word to use, but it's actually the right word to use. This is not like a political thing. This is much more along the lines of seeing what this technology has done. It's mostly communication technology. It's permitting us to collaborate in many ways we could never collaborate before.
If you think about Uber, it's a kind of collaboration. It's taking ordinary people who have a car, and other people who need a ride, and it's allowed them to collaborate to deliver a ride. Or Airbnb. You're collaborating. This collaboration, this kind of sharing, is becoming embedded and we're kind of not even aware of it. Eventually it will have some social implications, but right now it's being enabled by technology.
And the message I wanted to suggest is that we're just at the beginning of this. We're just at the beginning of understanding the ways in which we can now collaborate in multiple-size groups over multiple distances in real time. I would make a prediction that in the next 10 to 20 years that we will witness the creation of a project where a million people are going to work together in real time to make something that was simply impossible to do in real life.
You just couldn't have that number of people together adjacent. You couldn't have them working together. But that's possible with these new technologies. That is the frontier that we're going into is collaborating in ways that we had not ever imagined at a scale in real time that we had never imagined. Again, Wikipedia is one example of that kind of collaboration.
Gardner: Where people work for free.
Kelly: Where people work for free. But that's not the real news. The real news is that you have a million people around the world working on something together that was not possible. They weren't doing it in real time, but that's the next step.
And so, companies will begin to harness more and more of that and businesses will begin to take advantage of this. It's a global platform. We're making a global machine. If you take up all the transistors, and all the chips, and all our phones, and all our devices -- they're all wired together -- it's like a big machine that we've made together. That is the platform that we're making and that is the frontier in the sharing world, where these technologies allow us to share work, share interests, share effort in a way...
Gardner: Share our own personal health data.
Kelly: Exactly, that's another example.
Gardner: Patients like me.
Kelly: That's right. Or genetics. You have your genes...
Gardner: 23andMe...
Kelly: ... you have your gene sequence and then you share that data, meeting people that are related to you. Finding out health issues. Finding out performance. Hints. All these things are multiple examples of how we're going to make both businesses and new cultural norms by sharing in ways that were not possible before.
Gardner: Here's a quote for all of us stock pickers. "We have barely begun to explore what kinds of amazing things a crowd can do. There must be two million different ways to crowdfund an idea, or to crowd organize it, or to crowd make it. There must be a million more new ways to share unexpected things in unexpected ways. In the next three decades, the greatest wealth and most interesting cultural innovations -- lie in this direction.
"The largest, fastest-growing, most profitable companies in 2050 will be companies that will have figured out how to harness aspects of sharing that are invisible and unappreciated today. Anything that can be shared -- thoughts, emotions, money, health, time -- will be shared in the right conditions, with the right benefits."
That's a lovely summation. He wrote it himself, so it's easy to quote Kevin back to Kevin.
Kelly: And let me just give you one business example very briefly, and it kind of goes to the idea of flowing in data.
Let's take two car companies. Ford has been around for hundreds of years. They have manufactured 100 million vehicles and they're worth $44 billion. Then there's Tesla. Everybody's heard about Tesla. They're struggling to make cars and they have barely made 200,000 cars. I think it's less than 200,000 cars. But their value, their cap is more than Ford.
And you say, "Why would that be?" Well, because in Ford, even though they've made 100 million vehicles, they have about zero knowledge about how individual owners use their car. They have zero miles of knowledge about how individual customers are using their cars. In fact, in most cases they don't even know who their customers are. They don't have any data about them.
Tesla, on the other hand, even though they have several orders of magnitude less vehicles sold, has 1.3 billion miles of user data. Of how their individual customers are using those cars in great detail, so they're basically a data company. They're basically a company that knows and is sharing, their customers are sharing their data of how they use things with that company. That's the value that we're getting, because they can actually customize a car to the individual rider. They can upgrade it. They can use that to make the cars better, etc. That's a case where sharing what you are using with the maker is really valuable.
Gardner: All right, we'll leave it right there for now. Thanks again to Kevin Kelly. Thank you for joining with me this week. Two housekeeping notes. The first is this interview continues. That's right. Coming out this weekend one of our Rule Breaker Investing Podcast Extras -- it will probably hit somewhere Saturday morning, or so, on the East Coast of the United States -- where I continue and finish that conversation with Kevin and we take some questions from the audience.
And then next week -- well, next week's podcast comes in two flavors. First, we're going to do Investment Lingo, Vol. II. We're going to go over some of the common terms that we use. We'll have some beginning terms, some intermediate terms, and perhaps an advanced term, as well. Something for everybody in next week's show. It's fun to go over the language of investing and get to know these concepts and get smarter as investors. That will be our goal.
We'll also be doing one of our five-stock sampler reviews. That's right. Do you remember Five Stocks the World Needs Right Now? Well, we'll see how much the world actually needed these stocks and how we've done with them. We'll check in on that next week, as well. In the meantime, Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at RBI.Fool.com.
