Futurist Amy Webb: Trends are not enough

0:04So if my 80-year-old young father-in-law is no longer going to Google on a Google phone to search for things, I think that tells us that the world is changing. There's also the fact that open AI at this stage is accumulating debt to a degree I don't think any of us have ever seen before. I don't know about you, but the world is changing so fast from AI to global politics and beyond, it can feel impossible to keep up. But futurist Amy Webb says merely following trends is not enough. It's insufficient to stay atop of whatever is just around the corner. What matters now is understanding something much more complex, something she calls convergences.

0:49convergences. So the result of a convergence is something that is net new that hasn't existed before. They're also the kind of things that like leaders just miss. They miss because they are distracted by the shiny. And by the time that they realize that the shift has happened, it's typically too late.

1:13This is Masters of Scale. I'm Jeff Berman, your host this week on the show, Amy Webb. She's an author, a futurist, and CEO of the Future Today Strategy Group. She's also a bit of a rock star at South by Southwest. But last week, for the first time in nearly 20 years, she didn't release a new trend report. In fact, she held a funeral for it, the Grim Reaper's Cloak End All. It's a bold act of creative destruction. Let's find out why she did it.

1:46Amy Webb, welcome back to Masters of Scale. Thank you. That was like my favorite show that I did last year. Was that last year? I don't even remember. I think it was last year. It feels like last year. Time's a flat circle now. Podcast hosts are not supposed to have favorites, Amy, but I have to confess, I'm really thrilled to have you back. And I'm especially excited to have you back because for nearly two decades, you have published a trends report that you have decided to no longer continue publishing? That's right. We have killed our baby, as it were. Would you want me to tell you why? I want to hear why.

2:22You know, everybody who's probably listening to this is either a leader or on track to be a leader in some kind of organization. And undoubtedly, you have noticed that sometimes organizations stay on the same path when it's pretty clear that that path is going nowhere and the world around them is changing. And what they need to do is either adapt to that change or reinvent for that change, because that change is inevitable. There were so many fundamental changes happening that it seemed inevitable that those changes would coalesce and sort of form new things. And it reminded me of Josef Schumpeter.

3:01And then I found this book, which I read. It's actually part two of a much bigger tome. It's capitalism. Can capitalism survive? It was written in the 40s, so it's heavy. But the third chapter is called The Process of Creative Destruction. Basically, what he describes is through this convergence of different forces, typically technology focused, but others as well, the old structures are destroyed and something new hits and exists in its place. That is always happening in some way, but it's really intensified over the past few years, in our case as an organization, it just did not make sense to continue publishing a gigantic static report.

3:46And honestly, last year was sort of a grand finale. We published a thousand page report. We knew at that point that that was going to be the last one. But because the world is changing so fast that as soon as a static report is published, it's basically it's not, you know, on trends, it's like not relevant anymore. So we killed it and we are replacing it with something else. We're still tracking trends, but as we've been telling people forever, these sort of trends alone, they are not enough. And it was time for us to take the brave step of destroying the thing that we're probably the most famous for and start fresh.

4:24I've said for years and years, like the trends alone aren't enough. And if you follow just that in a vacuum and don't think about how does economics play a role, geopolitics, misinformation, people's thoughts and hopes and whatever, if you don't take all of those other things into consideration, you're watching the evolution of a technology that is divorced from how that technology shows up in the world. The heart and soul. Which is sort of a common problem in Silicon Valley. 100 percent. But you know what, Jeff, that's a really great point because this explains why if you go back in time to the original crop of location based social media apps, so that would have been Foursquare, Gowalla, Scavenger, everybody got the trend wrong.

5:10The trend was not cool badges and people checking in. Like, that wasn't the trend. The trend was location-based services baked into mobile and social networks. And this is the whole point. People get sidetracked by what's trendy, and they don't track the stuff that matters. The stuff that matters are convergences. Can I just pause you, Amy? What do you mean by a convergence? A convergence results when you've got multiple different trends or a trend colliding with something bigger than the sum of their parts. So, you know, it's the trend plus government intervention, a war somewhere, you know, all of these other things.

5:51And that results in a fundamental shift that transforms potentially the technology itself. Usually not, but also markets, behaviors. It transforms industries in a way that no single trend could do on its own. So those trends are little building blocks. The convergences are what result. They redistribute power. They rewrite rules. They collapse markets. They start markets. They are kingmakers. In a way, they are the sort of fundamental representation of creative destruction. What's a convergence that you're focused on? The one that's going to be immediately recognizable and felt is the post-search internet.

6:33So I think everybody at this stage knows that Google's not the only game in town anymore when you're looking for information. Oh my God, can I sidebar for just a second because my father-in-law's driving me crazy? My father-in-law, first of all, let me say, let me say this. You have the best father-in-law ever. I do. Greatest father-in-law ever. he is in his 80s, and I love the fact that he embraces new and emerging technology. However, the man has an Android, and he's got one of the Pixel phones, and ChatGPT has become his new best friend. So his entire universe, like, he doesn't search anything anymore.

7:11So if my 80-year-old young father-in-law is no longer going to Google on a Google phone to search for things, I think that tells us that the world is changing. What changes it from a trend to convergence? So the result of a convergence is something that is net new that hasn't existed before. And these are the kinds of things that will take shape over time. They're a long horizon. But they're also the kind of things that, like, leaders just miss. They miss because they are distracted by the shiny. And by the time that they realize that this shift has happened, it's typically too late. Yeah. I mean, they're both distracted by the shiny and they're captive to old business models, right?

7:55I mean, if you make so much money, I mean, Blockbuster, Netflix is a paradigmatic kind of good, great example here. Well, wait, can I just, can I double click on that business? So you just said something that I want to make sure everybody heard, the business model. in so many companies that we deal with, the innovation happens like over here and people come up with cool ideas. They do their TAMs, their SOAMs. They've, you know, here's what the market's going to look like. And then as a complete afterthought is the business model innovation. And honestly, we've got CEOs, we've got leaders coming to us saying, help us figure out where our next billion dollar bet is.

8:36That's real, by the way, billion with a B. And where do we put our chips on the table? And you can't just like, you can't pivot every five seconds and you can't, you know, adopt every cool new thing that comes along the way. But if you are so rigid in your thinking, you're going to bleed the talent that you should want to keep. And they're going to go elsewhere. Amy, we, you know, past this prologue, we look to history for examples of lessons, both what to do and not to do. Is there an example from corporate history of where a company either saw a convergence coming and evolved its business as a consequence or didn't that is a good lesson here?

9:12I've got a great example for you. And it is a news organization in Norway called Shibsted. So it's okay if you've never heard of it. It is like one of the largest and most profitable to this day. news organizations, and it is because they saw a convergence coming and were able to take action on it in the right amount of time. So this was back in the 90s. Newspapers up until that point, pre-internet, were the business model with subscriptions and advertisements. Ads overwhelmingly were what funded those news organizations, not the subscriptions. So they see the internet starting to launch. They see commercial applications.

9:51And Shibsad did the one thing that every other news organization did not. And they said, we think this ad model is probably not going to survive. Let's start figuring out what business models, what distribution, what a world looks like, where we don't just rely on print ads and we figure out a way to make what we're doing work in this new internet age. And it's not a story that most people outside of Scandinavia have ever heard of. But inside of Scandinavia, it's kind of a famous story. And in fact, Harvard was interested and published a whole case study about it, which anybody can access online.

10:32So that's an example of, again, where is the world going, right? In that case, the world was going towards this new convergence of information and media and technology, right, becoming the internet. Where will value be created? There'll be some new business model and some new advertising something or another that's going to migrate there. How will we participate? We're going to keep doing right now what we already know how to do, but we're going to build before everybody else. We're going to design, build, test, and ultimately deploy a digital ad system. It was the first. So I think that's a great example of seeing that creative destruction and taking action on it in the right amount of time.

11:14What are some of the other key convergences that you're pointing out in this new report? Yeah. So this is going to sound weird. This is programmable biology. So the components that make up this convergence are everything from artificial intelligence to something called generative biology. What's generative biology? So you know what Gen AI is? So you type, you pick my father-in-law using generative AI for all kinds of things. I wish he was not. So imagine that you wanted to create a new enzyme instead of a new cool picture or something. biology has become editable, writable, readable, which means that we can design anything in the physical world in a way that we've never been able to before.

12:05The first thing that people usually think about is, oh, cool, we'll have different medication. But actually, it goes beyond drugs. If we could literally program biology to be responsive, that fundamentally shifts not just medicine, but also how do we, like the entire built environment, how we put together what construction looks like, what concrete looks like. It also changes agriculture fundamentally. It protects our climate change issues. It protects supply chain issues. It means a different approach to energy. It also means absolutely terrifying lethal bioweapons that can be produced by people that maybe wouldn't have had the tools before.

12:45We both have Maryland ties. I grew up there. You live in Baltimore, if I remember. correctly? Half the week. Half the week. Yeah, yeah. Governor Wes Moore picks up the phone and calls you and says, Amy, I hear about these convergences. As a governor of a beloved state, which convergence should I be thinking about? I would love for him to call me. I've got some thoughts on the great state of Maryland. I think this works for the state of Maryland, but also everybody else. So you probably have heard about China's surveillance state. So China, and I used to live in China. So there's something called a social credit score system.

13:21Everybody is very much watched the juries out on how people feel about being surveilled in the way that they are, but it is very much a top-down process. So it's decided at the highest level of government and then it trickles down and cascades and is deployed and enforced. Okay, that's an example of a sort of centralized Orwellian reality that people are living in. What people don't recognize is that the same thing exists here in Maryland, in the United States, in the West. The difference is it wasn't built by a single government. It's a corporate panopticon. So if you're not familiar with the term panopticon, it was a, I think it was a 17th century concept for like a prison design in France.

14:11The idea was like everybody could be watched all the time to like double that and make sure. The central guard tower in the design was such that you could see all of the wings of the prison from the center spot. Right. That's right. There is a way to do that top down. So having like a physical structure. And I think China has built that sort of physical structure that is imbued with really powerful technology. There is a version of that that exists. But instead of that central column, imagine it being a billion censors in every single place around that prison where everybody is constantly being watched all the time, but not by one entity, but by, you know, millions of different entities.

14:53This is our reality. There is a corporate panopticon, and we are all being ambiently surveilled all of the time. Now, most of the time you have no idea that's happening. And I would say a lot of the times it provides wonderful benefits that range from loyalty points to things at your grocery store, right? Or spam filters or whatever else it might be. But the reality is we don't know how or why decisions are being made. what we are giving up for the convenience of banking, of working, of socializing. That's what is making all of this possible. So again, as with every one of these convergences, they're not good or bad.

15:37They're not apocalyptic or utopian. They just are. It's a new phenomenon. And we have to name the phenomenon because we have to engage now with it. And again, this is something that has existed, but just not to the scale that it does today. Still ahead, more with futurist Amy Webb on how leaders need to evolve their mindset to keep up with the pace of change. AI breakthroughs are quickly reshaping every industry around the world, healthcare, education, science, entertainment, and beyond. But true global scale only happens when the underlying infrastructure can maintain pace with the rapid speed of innovation.

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17:42Welcome back to Masters of Scale. You can find this conversation and much more on our YouTube channel. And be sure to check out the link in the show notes to subscribe to our newsletter. To your point, it's neither necessarily utopian nor dystopian. Given that it is in and of itself inherently not necessarily bad or good, And given that we are seeing as starkly as in the last, you know, I mean, really in human history, but certainly since Milton Friedman, profit motive is driving everything. It is return for shareholders. Stakeholders are largely being ignored if they're not actually shareholders.

18:21What does this mean for how corporations are run and governed in our country? That's a great question. I feel like Winners Take All, did you read that book from, what was that like? It was a long enough time ago that it drove a conversation about stakeholder versus shareholder responsibility and was a different way to approach profit. And I feel like that drove a lot of conversations for a long time. Well, Larry Fink wrote a celebrated piece about the importance of stakeholders. Yeah, Winners Take All was 2018. Okay, so almost 10 years ago. Yeah, yeah. You know, the pendulum has swung in now a different direction.

19:01And I don't think that is, that means that everybody, every board member, every leader writ large is like, screw our state. We're just in it for, to bump up share prices. But the reality is that, let me, before I say what I'm about to say, which is going to sound alarmist, let me preface this by saying I'm politically independent. I've done a lot of thinking over decades about the role that profit plays in our society. Also, like I said, I lived in China, I lived in Japan, and I think we have hit a moment in the United States where we have sort of a form of capitalism that has gone almost to an extreme level.

19:41And I actually think this is potentially damaging companies. So yes, there are societal implications and everything else. But I'm seeing smart leaders and like, you know, pretty well run companies making some of the dumbest decisions, really stupid decisions. And it's either because they are desperately trying to improve bottom line so they can juice their share price. It's almost this is part of like what happened in the 80s, the sort of Jack Walsh approach to and not just him, but others. But this is different. This is making structural, stupid, short-term structural decisions to get that margin to a point.

20:20Like in some companies we deal with, there are literally numbers, you know, X percent. I'm not going to say what they are because anybody listening who's in one of those companies will know who I'm talking about. But it doesn't make any sense. Like it's a made-up number. You know what I mean? But what's happening is it's forcing everybody from leadership down to make decisions that are terrible. Terrible for the company in the long term, good in the short term, terrible in the long term, terrible for the community, terrible for society. The thing that I'm having such a hard time with right now is, so we're all like we're balls out on AI, right?

20:55Just do all the R &D, come up with all the cool stuff, and it'll be amazing. You know what China's doing? China is saying, we're not going to worry about innovation right now. We are going to build infrastructure. So by the time this show comes out, China probably will have announced its next five-year plan. And that next five-year plan is funding a 10-year process to literally take 1.4 billion people and not just get them online in a meaningful way, but get the entire society using AI automation tools of the modern era, the entire country. country and they will very that includes education I mean that includes everything what are we doing in the United States nothing sorry but we're not we are not there are too many pockets around the country where people you know people can't get online we've got too many problems with our education system we have no plan we did not have a plan in the previous administration the administration before that this administration there's no plan for any of this and the result is we are giving the rest of the world free R &D.

22:06Think about how, Jeff, our companies are competing. They're competing on, they're not competing on scale. They're competing on like who's got the coolest, shiniest stuff that we can market to get more people and investors and customers. Okay. That is short-term thinking driven by this sort of unhinged capitalism that, again, I think our structures are okay in the U.S. I just think we've taken them to these extreme proportions and not adjusted, like not readjusted our priors. So what's going to wind up happening is 10 years from now, China's going to leapfrog us. I'm sorry, but like anybody can, like I'm happy to argue with anybody all day long about this, but we are missing the structural components for success.

22:49And it's not, it's very much in the U.S. It's not just us. Well, and Amy, we're missing them in part because the incentives are misaligned, right? I mean, you get what you measure, you get what you incentivize, and by and large, CEOs and boards are incentivized on a quarter-by-quarter basis and maximizing returns. 100%. And CEO turnover is the short, like the tenure is very, very short. And a part of that is, goes back to what I said at the very beginning about creative destruction. Too many CEOs stayed in their roles for too long, and boards were afraid to mess with what works. And so there was, you know, the same is true of our government.

23:23We've had too many people in their jobs for too long and nobody made space for the next generation of people to come in. So that is definitely part of it. But who are most like if you look at who a lot of the CEOs of companies are, not just publicly traded companies, but generally they're CFOs. No hate for the for the finance people. But a chief financial officer represents stability to boards. You know, we'll get the next couple of quarters okay. And it's small-c conservatism. I mean, they are by nature conservative people. That's right. We need fresh people and young people who are interested in growth, not for just businesses, but for like the place where we do the business, which is the country that we live in.

24:09And we are presenting zero reason for anybody to go into government, not politics, but to go into government at this point, which is a shame. Yeah. Amy, some of what we've talked about, a lot of what we've talked about, sounds like science fiction. In fact, I reread 1984 last year. I'd forgotten that Orwell divided the world into three superpowers, right? I mean, exactly what you're describing. I just finished rereading Fahrenheit 451 last week, two weeks ago. Why are you doing this to yourself? I don't know. I don't know. Honestly, I do know. I do it to help make sense of the world. And both fiction and nonfiction in different ways helped me with that.

24:48And, you know, the amazing thing is Fahrenheit 451 was written in the early 1950s, and it envisions like AirPods. It envisions AI-driven robotic police dogs. I mean, it's extraordinarily prescient. Is there science fiction that you are turning to or that you have revisited where you're going, gosh, that is really an incredible imagination of what's coming? So this is going to sound kind of crazy. I avoid science fiction. I have a hard time with a lot of science fiction because I see society being warned and then choosing to do the stupid thing anyways. Now, that being said, there's a lot of wonderful science fiction and I do read every now and then.

25:34I think the better question is, what's happening with science fiction writers and how are they able to imagine different futures? And the answer is productive wandering, like letting your mind wander productively. And in order for that to happen and like allowing connections to be made, you have to come in with a lot of base knowledge, which means you have to ingest tons of different data. So the fact that you're rereading those books, but you're also ingesting other days, that's actually great because what that's allowing you to do is to make connections to what's happening now and giving you perspective and thinking about things.

26:07So that is something that I do. This is what my company does. Everybody who works with me is that kind of person. My concern with science fiction meeting reality, especially as it relates to AI, is that we're creating a world in which we can't allow our minds to get lost. You know, it's a little bit like GPS. People have forgotten how to orient themselves because we just follow the blue line. Same situation when it comes to ingesting data and thinking and sitting with that information and making those connections. What have we not talked about that we should have talked about? I think a lot about if I was starting my company right now, what would I do differently?

26:48And how would I operate differently? and the truth is my entire job is thinking about the future and I'm the least patient person you will ever meet. I get irritated that I can't make change happen overnight, that things are happening too slowly, that we can't get something done fast enough. I was experimenting with machine learning tools literally 20 years ago and building my own janky systems to try to automate so I could go faster and do more, right? It's not about the speed of getting things done. I want to accomplish more. And I cannot imagine what it would be like to be starting off now, because the difference between 20 years ago and today, 20 years ago, we didn't have the tools of automation, not like we do now.