Oliver Rees

24 posts

When technology alone isn’t the right answer

car
Sheelah Kolhatkar ends her brilliant profile of Dara Khosrowshahi - Uber’s newly appointed CEO - with a quote from the head of Uber’s autonomous driving unit, Eric Meyhofer. “The problem,” Meyhofer says “is, if someone builds [autonomous vehicles] and puts [them] on a ride-sharing network, their cost competitiveness will be stronger than ours. And if someone else does that, and we don’t have it, how long can we survive?” This quote implies a stark truth about Uber - as well as a lot of technology companies out there.

With Uber’s current cost base (their drivers), it is almost impossible for them to make a profit. The company lost $4.5 billion last year and is set to lose more this year. Subsidising rides grows the business but destroys any hope of profitability. Ride subsidies are such an established practice in the marketplace that if Uber was to reduce subsidies then one of their competitors would drop their prices and pick up users. Growth is god, and so the focus must be on acquisition. The self driving bet is really, then, an existential one for Uber. Cut out the cost base by replacing drivers with machines and they will create one of the most profitable companies on the planet. Fail, and they’ll have one of the most cited corporate disaster case studies ever written.

One of the key reasons Uber isn’t profitable is that human drivers cost so much. Classic tech management consultancy would tell us that this only leads to one strategic imperative: replace the drivers with machines as quickly as possible. A company like Facebook, for instance, is immensely profitable, raking in $4.3 billion in 2017. Why did Facebook profit while Uber lost billions? Facebook has minute staff costs: each extra Facebook user requires no new people, whilst each new Uber trip requires one more driver.

So far there’s nothing surprising here: the dream technology business has always been one that earns passive income - a technologist sets something up and it runs itself (perhaps with a core team of a few dozen), and quickly generates money beyond their wildest dreams. Yet in this pursuit of absolute automation something critical is lost. Rather than providing the best service, the company is motivated by providing the best technology. In an ideal world, Facebook’s ads would all be manually reviewed by a panel of well trained moderators. This would have prevented all the fake news and election manipulation scandals we’re now seeing play out. However, it would also mean that Facebook would be eternally loss making. Each extra ad would create an additional human cost, driving Facebook’s unit economics into the ground.

The obsession with technology only services is powering the world we see around us. Why bother to provide a better but more costly service with a dual human/machine combination where you could get 60% of the way (with some unintended consequences) and profit hugely? This battle is being fought fiercely in the education space already. All the evidence shows that smaller class sizes and more time with a human teacher increases attainment, but smaller classes are costly and resource intensive. Supply children with iPads and deliver them personalised, artificial intelligence powered, individual learning paths and you have suddenly slashed your costs.

This cannot be right. Humans enabled and empowered by machines will be the most effective option for almost any use case imaginable, yet tech entrepreneurs will always want to drive us closer to a digital only solution. Sometimes this might be the right option, but more often than not it’s a decision driven by investors, capital and, ultimately, profit.

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Storytelling in an infinite world

No Mans Sky

The universe is huge. Just a few days ago scientists discovered the most distant star ever, located 9 billion light years away from earth. Imagine travelling that far: along the way you’d probably come across some bizarre planets and incredible sights.

It is this premise that excited me about No Man’s Sky, a game released by a Guilford based games studio, Hello Games, in 2016. Perhaps like the universe itself, No Man’s Sky is procedurally generated by algorithms within the game. This means that you can explore planets that no one else has ever seen and interact with creatures that have never existed before. An infinite universe offers absolute freedom. Not constrained by a linear storyline or specific waypoints you can go wherever you like, and fly for billions of light years.

RedSpace

Despite attracting a huge amount of publicity before its release, the reaction to No Man’s Sky was divided. The problem - visible after just a few minutes of playing - is that infinity is pretty boring. New planets often take over ten minutes to discover; flying through desolate astroid fields and empty black space. When you arrive, the randomness of the world around you leaves it devoid of meaning. Perhaps the biggest criticism of No Man’s Sky is that after playing the game it’s difficult to know what to think. Am I deeply bored or eternally enchanted? Since the initial release each update of the game has attempted to constrain, rather than expand, the universe.

It might seem surprising that after creating an infinite universe the developers would attempt to shrink it. And yet the problem with No Man’s Sky is that it is just too infinite. John Yorke’s 2013 book “Into the Woods” describes how every good story essentially has the same, tight, linear structure. A character resolves their problems by stumbling into a frightening new world (“the woods”) - discovers what they’ve been missing - and then stumbles back to reality. The archetypal Into the Woods story is Alice in Wonderland. A girl goes down a rabbit hole, discovers something about herself, and then escapes to reality. Importantly, Alice wasn’t wasn’t stuck in Wonderland forever.

In No Man’s Sky your character is stuck in a far and distant world, forever, with nothing to resolve. The self-guided quest become aimless and deeply unsatisfying. Every new planet discovered creates more lethargy leading you to ask the question: why does my character exist in this universe? What am I trying to reach, and why am I gathering these resources?

These are important questions, though, and it may be that the greatest achievement of No Man’s Sky is a philosophical one. By playing the game you not only question the No Man’s Sky universe but the larger, real one around you. A good story - told though traditional or technological means - is attractive because it makes sense of the senselessness of the world around us. Randomness not only powers chance events in our own world, but also underpins the uninhabited spheres of rock and gas swirling around the universe, billions of light years away. Perhaps the No Man’s Sky universe lacks an overarching story because our own universe lacks one. But then again, it makes for a pretty unplayable experience too.

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Master Disruption v2

Master Disruption Header

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.

[LINK]

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

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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.

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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.

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