Master Disruption v2

Excited to announce that the new version of Master Disruption has launched.

Master Disruption is a tool that helps business leaders learn from digital disruptors. Technology focused, the app demystifies how disruptive thinking in areas like artificial intelligence and blockchain are being used to drive growth and innovation across multiple industries.

The app is currently being used by some great companies, if you'd like a trial then get in touch or visit the website to find out more.

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A world without teachers: YouTube, incentives and the problem with self-regulating platforms

Ally Law, a 20 year old YouTuber, breaks into the National Theatre (Link)

YouTube has been in the news a lot recently. Whether it’s Logan Paul filming a suicide victim in a Japanese forest or Ally Law breaking into the Celebrity Big Brother house, it’s undeniable that YouTube - along with many self-regulating platforms - has a significant problem. YouTube, and platforms like it, make more money if viewers are engaged for longer. The more eyeballs they control, the more ads they can sell. For top creators - typically young, creative and hungry for fame - this is important. View count and engagement are the critical metrics that can make the difference between a video with revenues of a few hundred dollars or many thousands: universal indifference or global fame.

Incentives & The rule of the playground

There is one deep fear among these young YouTubers: having a video demonetized. If YouTube believes, for any reason, that the content you’re producing is not advertiser friendly then it will demonetized your video and prevent you earning money from it. Reasons why a video will be demonetized include:

Discussion of controversial issues and sensitive events, harmful or dangerous acts .. [or] pranks involving sexual harassment or humiliation
Read the full list here

This content is allowed on YouTube, it just can’t be monetized by creators. The decisions about what is appropriate and what is not are taken initially by pieces of software and, if escalated, by YouTube’s (small) team of moderators. These moderators are judge and jury; though unlike most judges the moderators are incentivised to keep content monetized that’s performing well - it’s YouTube’s revenue after all (YouTube splits the ad revenue 40:60 with creators).

From a regulation standpoint the incentives are clear: create content that garners the most number of views, for the longest possible time, whilst staying within loose regulations that primarily include a prohibition on sexual content and swearing. Beyond that, anything goes and anything is permissible.

Think about the sort of events in your life that encourage people to linger and observe: traffic slowing to observe a traffic accident on the opposite side of the road, a fight breaking out on the adjacent platform, a child at school jumping from a roof. These forms of entertainment are some of the most unsophisticated but effective. In YouTube’s world this is even better: content like this crosses cultural boundaries, language and more.

The YouTuber Jake Paul's most popular videos

If you needed any indication as to what content performs the best, consider Jake Paul, Logan’s 21 year old brother and amasser of 13 million subscribers. Some of the most popular videos include: “I CHEATED ON MY WIFE PRANK (she freaked out)” with 21 million views, and “RANDOM TATTOO SPIN WHEEL GAME (You Spin It, You Get It…)” with 18 million views - described by Jake Paul as “ONE OF THE MOST SAVAGE THINGS WE'VE EVER DONE”. The content that thrives on YouTube is the same content that thrives in the playground: bullying and sensational. Unlike the playground though, in YouTube’s world there aren’t any teachers to regulate what goes on - Jake Paul’s bulling behaviour can continue long after school (and make him a millionaire at the same time).

And Jake Paul really is a bully. The Martinez Twins who used to live in the "Team 10" house with Jake Paul managed to leave and posted a video about the abuse they suffered. Paul left them afraid to sleep by insisting that they left their door open at night and "pranking" them awake with "funny things" like a tazer. This wasn't new to Jake Paul:

A world without teachers

In a sense this problem has existed in the media since its inception. The Daily Mail’s “side bar of shame” is but one example of a publication driven by sensation and views. The one difference is that mainstream media does have at least some regulation. YouTube’s chief business officer said today that YouTube was "different" from traditional media outlets as it doesn’t have the same "editorial hand”. This is absolutely not the case - a moderator making a decision to allow a piece of content based on guidelines is exactly the same decision making process as an editor in a traditional newspaper; the only difference is that YouTube refuses to take this heavy and important responsibility. Why? Because admitting that they're a publisher carries with it a huge cost. 300 hours of content are uploaded to YouTube every minute - 432,000 hours every day. If you assume moderators work an 8 hour day YouTube would need 54,000 moderators just to watch the content, let alone make any decisions. To put that in perspective, Alphabet - YouTube’s parent company - currently employs around 72,000 people globally.

This raises two fundamental questions:

1. Can AI seriously replace the moderation of human editors?

Platforms like YouTube argue that they don’t need a large army of moderators because AI can do the job for them. Any mistakes made so far are because the AI hasn’t been trained properly. In my view this fails to take into account the subjective and nuanced view of an editor - the decisions made often aren’t clear cut and can’t be based on previous data. Context is critical for decision making - racism or abuse might be subliminal - something a human can pick up on but a machine never could. If this is the case, is it acceptable for YouTube to leave 99% of content unwatched? Publishing what could be incendiary content in the dark and waiting for enough viewers to flag it.

2. Should YouTube be the arbiter of what is acceptable content?

YouTube has a clear motive: increase viewership whilst not going too far so that advertisers will stop advertising. However, publishers have responsibilities as members of society. The ideas, thoughts and content created by YouTube permeate the world. Free speech is guaranteed, of course, but if freedom of speech is YouTube’s defence then they must also bear the true responsibility of free speech. As Areeq Chowdhury the Chief Executive of WebRootsUK said recently:

"Freedom of speech doesn't mean you can simply say whatever the f*ck you want about something, without there being consequences."

Promoting content like Ally Law’s which involves breaking the law again and again is YouTube's responsibility too. It shouldn’t be possible for a platform that publishes videos that involve breaking the law to take absolutely no responsibility whatsoever. Tacit support is still support, and simply closing your eyes doesn’t remove your responsibility.


Tech companies are ripping society apart (and this is only the beginning)


We are in the grip of a technology revolution and, as many are quick to point out, we’ve been here before. The industrial revolution in the 1800s saw a fundamental shift in the way that society operated, but despite the disruption to traditional livelihoods broad ideas about capitalism and the economy remained true. This analogy is used to reassure anyone worried about robots taking jobs & technology companies running rampant. Society will adapt and things will return to some sort of equilibrium.

I believe that this view is misguided. There are elements of the current technology revolution that are leading us towards the most unequal dystopia imaginable. These aren’t unintended consequences that can be cleaned up later like the smog rising from industrial factories: these are paradigms embedded directly in the current technology revolution that, left unrestrained, will corrode the very fabric of society.

1. Today’s technology creates vast wealth for a tiny few

Technology’s aim is to reduce cost. A store front used to cost money; with the web it’s now free. A map used to cost money to print; now maps are available on your smartphone for free. This has two effects: creating more abundance for consumers, and more wealth for technology companies. An online shop is cheaper than a physical shop because an online shop employs no one and costs no rent. In addition to this, a physical shop can only service a few dozen customers whilst a digital shop can service millions. Essentially this means that for a lower cost a shop owner can generate many millions of times more revenue and profit - with very little associated costs.


As more and more jobs are replaced this shop analogy will hold true for every industry we interact with: abundance for many, profit for few. This has started happening already: since 2003 the top 1% of wage earners have seen their annual household income rocket in comparison with other groups. If this wasn’t bad enough each year we will see greater increases for a smaller percentage. 1% will become 0.9, 0.8 and so on until the cost base of operating most industries is so low that just a handful of people will be profiting.

2. Today’s technology replaces good jobs and replaces them with terrible & insecure jobs

As technology companies there is job growth in some areas. Amazon is now one of the largest employers in the US. This is a problem, though, as the vast majority of Amazon’s (and most technology company’s) jobs involve low skilled, low paid work, in Amazon’s case inside fulfilment centres. In early 2017 their CFO said that “The headcount [we’re adding] is predominant[ly] still the headcount in our fulfillment area.” As artificial intelligence capabilities increase these jobs will be replaced (one of the key problems now is that robots can’t grip very well) with equally low skilled jobs like cleaning and delivering, and in the meantime there is no opportunity for employees to move up within Amazon. There is a clear divide between the engineering class and the lower skilled work done by the vast majority of employees.

The fulfillment centre of the future

This is compounded by the fact that there is a clear divide among demographics: almost all of the high paid engineering work is done by white or asian middle and upper class men. Technology companies typically generate a tiny number of high skilled jobs that often go to well educated people from a privileged background. These high skilled jobs will stay but the low paid jobs will go. As low skilled worker’s wages stagnate because of an increase in supply due to automation more money will be freed up to pay high skilled engineers. Again, this is already happening: wage growth amongst the top 10% has increased substantially in recent years yet in the bottom 10% it has actually decreased.


3. Today’s Technology is almost impossible to tax

One would hope that the societal damage that is being caused by technology companies would be offset by an increase in tax payments. Ironically though technology companies pay even less then their historical counterparts.


Through a combination of tax loopholes (operating in the UK, based in Dublin, Luxembourg or similar) and writing off any profit as expansion cost whilst delivering the actual value through an increase in stock price, technology companies are simply not paying enough tax.

The disruption to society can be solved through retraining and reskilling but these initiatives cost vast amounts of money.

4. Workers can’t be protected from technology by traditional institutions


It used to be trade unions that lobbied for workers and protected them, to some extent, against the excesses of capitalism. Unions today are becoming more and more irrelevant. Many jobs today are insecure and irregular: people have portfolio careers and so don’t neatly fit into the union mould. Collective bargaining works less well when there’s an oversupply of people ready to pick up where you left off, and the lobbying power of technology companies in government prevents genuinely progressive legislation from being written.

There are signs that the traditional union model is being replaced by something more flexible but we’re still a long way off. While unions organise, technology companies have taken the initiative and offered readily available work - as long as workers accept the insecurity (often called “freedom” by tech companies).

What next?

Society gives business a licence to operate. A genuine conversation needs to be had about the impact of today’s technology on the society of the future. There are real dangers that left unregulated technology will push society to a point of no return, increasing radical and potentially unsavoury political actors to take advantage of this dissatisfaction. There is a chance to avert this nightmarish future, but we need to act now.


Bitcoin, the environment & Crypto Offseting

Bitcoin may be good at many things, but being a decent transactional currency isn’t one of them. As an ING economist argued today Bitcoin’s transaction fees and slow speeds mean that buying and selling things with the cryptocurrency simply isn’t realistic. Even the most vocal supporters of Bitcoin admit that it will never replace fiat currencies as ways to transact on a day to day basis. Instead, they argue, Bitcoin is really a ‘store of value,’ more similar to gold than the US dollar.

There is a problem with Bitcoin of a store of value, though. Whereas gold is a metal dug out of the ground, a Bitcoin is really a representation of an amount of past computing power. It takes a certain amount of energy to crack a computational puzzle and generate Bitcoin. It's easy in the beginning, but as more computers join the network the challenge gets harder and harder. These computations are also calculated every time a transaction is registered on the network.

Every 100 Bitcoin transactions can power a home for an entire year - and the amount of energy consumption increases every day.

To demonstrate just how damaging the environmental impacts of Bitcoin are, I created Crypto Offset - a website designed to help you calculate and then offset the damage done by holding crypto currency.

Despite Bitcoin’s idealist roots, it is substantially more environmentally damaging than all other world currencies put together. As it’s a decentralised network, and proof of work is central to how Bitcoin functions, it’s unlikely that this gas guzzling will stop any time soon. Hopefully future crypto currencies will take lessons from this and aim to reduce the environmental devastation of the technology.