Research: How the Pros Do It - David Mattin

0:00Hi, on the 5th and 6th of June 2024, I'll be speaking at the largest AI event in Asia, Super AI in Singapore at the iconic Marina Bay Sands. Alongside brilliant minds like Edward Snowden, Benedict Devin and Balaji Srinivasan, I'll be on a stage exploring the extraordinary potential of AI and the profound change it represents, not just for financial markets, but also for the world as we know it. With over 5 ,000 attendees and over 150 side events, Singapore will become a vibrant hub for a full week from the 3rd and 9th of June. Visit superai.com to register and join me with 20 % off tickets using the code realvision.

0:44Use the link in the description and I'll see you there. It's going to be incredible.

0:56Hey, everybody. I'm Samuel Burke. Welcome to a special edition of this special series we have this week called Research, How the Pros Do It. Joining me on this edition is David Matten, the brain, along with Rao Powell behind The Exponentialist. Hey, David, how are you doing? Hey, Samuel. I'm good. How are you? Nice. I mean, the weather sucks here in London, but that's nothing new. So you and I will just power through the clouds and gray and see light in the technology. Before I get to your story, David, I just want to do a kind of recap of what we've seen this week. I've been watching every edition of this special series, and it's been really fascinating to see the contrast between folks.

1:36What stood out to me with Peter Bukvar and Brett Donnelly was finding out who you are as you do research. Trying to emulate somebody else really has a ceiling and you can't go too far with that as you try to build your framework. It was really interesting for me hearing Peter Bukvar talking about his struggles between great information, which he feels he's quite strong at, and the challenge of time horizons, which is something that we emphasize over and over again here at Real Vision. Obviously, with Tony Greer and Jared Dillion, it was quite tradery. If you're really interested in the trades, they both have the trader background.

2:15So it featured much heavier than it will today in this edition when you're really quite the futurist, David. And then Gio Chen, looking at his perspective through a family office, going from the banking world to the family office world, managing his own family's wealth, and really figuring out how he was going to get that high value research, not with the endless budget that he used to have at a bank, but really just allocating 2 % of what he does to that and making sure that it was paying the research pays dividends for him. And Paul Hodges, I thought was fascinating, planning with geopolitics, calling a Trump win, and how much that played.

2:55So quite different what we'll do with you, but we do want to get your frameworks, David. But before we get there, just give us a little bit of a backstory as it kind of lays the foundation for the type of research that you do that we're going to discuss today. Yeah, so really my deeper background lies in essentially speaking to leaders inside large organizations, working with them, consulting with them on emerging technologies, where they're taking us, what it all means, and crucially for these people inside these organizations, how they should respond, how they can innovate. These are leaders, and sometimes they're responsible for the foresight function themselves.

3:39Sometimes they're more kind of hands-on, they're product designers, they're marketers sometimes, and often it's these days it's the c-suite because i'm getting old now um and they are just like looking out to a world that appears intensely chaotic uh all these emerging technologies are happening and they just want to know like what should we do you know how can we sort the signal from the noise what should we really be focusing on and how can we respond to it and then you go on a journey of thinking about, you know, what are the crucial technologies in your space? How are they evolving? And then crucially, how is that going to change the behaviors and the expectations of the people you're trying to serve?

4:26You know, and I spend a lot of time talking to these people and stressing to them that in the end, this is what we're really interested in here is human beings. And we want to understand how these technologies and emerging technologies are going to fall into the lives of people, how they're going to use them, what they're going to mean for the customers you're trying to serve, the clients you're trying to serve. That's the deeper background that my research grows out of. These days, as Real Vision people well know, I spend probably more of my time immersed in deep research and writing for the newsletters I write, and of course, crucially, for the exponentialist.

5:09So more and more my life is actually, yes, still speaking to people in organizations, but pouring that research into, you know, deeply researched essays and videos and all the rest of it that help the good people of Real Vision on their journey, which is just amazing. And exactly what you just laid out there is what makes the Exponentialist so fascinating and really the true value add there. The fact that so many big, important companies go to you for this type of information, and now you're distilling similar type of information for the Real Vision community. If you're not already subscribing to The Exponentialist, you can head over to realvision.com slash The Exponentialist.

5:51It's actually available with a$1 ,000 discount right now. We're going to air this interview both on the Real Vision platform, but also on YouTube, because this type of research is so fundamental for anybody who's investing. So this is really part of our core commitment to democratizing finance. So I just want to jump in. And you've laid this out quite clearly, David. There are really three core pillars that underpin your research. So if we jump into the first part, which are these overarching frameworks and mental models you have, take us through that. Yeah, so I guess the top of the funnel of my research process is just a number of big overarching frameworks and mental models that I use to structure my thinking and my view of what is out there.

6:42Because, you know, as you said, at the top of the show, people are coming to me as a kind of futurist, you know, I have a troubled relationship with that word, because people associate kind of mystical crystal ball gazing sort of powers with that. What I'm really trying to do is look out to the now, you know, what's really at the bleeding edge now, what's at the cutting edge now. And make sense of it and draw connections between it, the fundamental challenge we all feel when we try to do that is at an incredible pace of change. You know, there's so much happening and just incredible volume of change.

7:17So you look out to the world and your first view of it is essentially of chaos. The way you have to deal with that and that you inevitably end up dealing with that is to put mental models and frameworks in place that structure your view of this apparent chaos and allow you to discern sort of deep underlying patterns in it. The fundamental, one of the fundamental models that I've always brought, and this really grows out of my consulting with large organizations, is this idea of the collision between a changing world and fundamental human needs. Fundamental human needs like value, security, convenience, status, the quest for meaning.

8:04When people start to think about emerging technologies, they get very hung up on the technologies themselves, on what's changing. And you talk to them about, or they'll come to you and say, oh, AI is a technology trend. What should I do about AI? Just thinking about AI, for example, in isolation doesn't really advance us very far, it's much more powerful to think about how will this emerging technology AI collide with fundamental unchanging human needs? How will it unlock new ways to serve those human needs? Because when that happens, that's when you see new human behaviors and mindsets and expectations emerging at scale.

8:48So I am constantly, as I'm looking out there, looking to

8:58emerging, bliding with human needs and unlocking manifestations of human needs in new ways. I'll give you an example. Here's a really powerful example, I think. You know, for the last decade or more, I've been talking to clients about a trend called virtual companions. And this was about saying, AI is going to unlock new ways to serve, not just human needs around functionality and transaction and information, but higher order human needs around social connection, happiness, meaning, even intimacy. And 10, 12 years ago, when I would talk to banks about this, people in the audience would laugh. They'd think I was insane.

9:39But you could see the early signs of it happening then. You could see AI starting to interact with these human needs in really unexpected, interesting ways. 10 years on, we're in the middle of this incredible generative AI moment. Facebook's become meta. Meta has just announced a whole load of AI-fueled, essentially, virtual companions, companions to talk to, to chat to, to be your friend. It's becoming mainstream. You see how applying that very, very simple framework. You know, it's far from rocket science. That's the power of it. Anyone can do it. But applying framework way back when really allowed you to discern an emerging technology trend that just wasn't on the radar of very many people.

10:31We're going to take a quick break and be right back with more of the day's top analysis on the Real Vision daily briefing. Join over 5 ,000 attendees for the largest AI event in Asia at Super AI Singapore, June 5th and 6th, 2024. Raoul Pal, Benedict Evans, Balaji Srinivasan, Edward Snowden, and over 150 others will join the industry's most influential to explore and unveil the next wave of transformative AI technologies. Singapore will become a vibrant AI hub for a week from June 3rd through June 9th with over 150 side events that will make for unparalleled networking opportunities. Visit www.realvision.com forward slash super AI for 20 % off tickets with the code realvision or click below.

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12:26And I think we're just having a little bit of, I can hear you quite clearly, but if you're seeing a little bit of glitch from David's camera, you're not the only one, but I think we've got you. I mean, it's interesting. You gave a really tangible example there, and we've seen that growth, especially with Meta. David, I'm just curious of an example then that doesn't work because on the surface, you're kind of technology meets human need, but so often there are things that we didn't know that we needed until we have them. I I mean, I'm thinking of the iPad, for example. I really thought when I was reporting on that, coming to the marketplace, how much do people need it?

13:00And then it seemed like they did. So you've got a tangible example there of how AI could work as a companion. What's an example where it doesn't meet that framework where you see AI and you say, no, that's really not a human need? yeah i mean when you're thinking about this framework of the collision of of of emerging technology technologies and human needs it allows you to spot powerful new directions um it doesn't allow you to uh to spot specific manifestations of those new directions and know whether they're going to be successful or not so so again sort of way back when i mean this goes sort of 15, 20 years back, really, you know, I was talking then about how the internet is going to unlock all kinds of new manifestations of the deep human need that is social connection.

13:55And essentially, back then, you were seeing very early manifestations of what became, you know, the titanic social phenomenon that is social media. But it didn't make it possible to pick which specific social media companies are going to succeed and which are not. You know, MySpace fell by the wayside. Facebook became a global titan. And that's very much to do with highly context dependent differences and operational differences and competencies just inside the organization. You know, so what I'm looking for are deep, underlying, powerful technological directions of travel. No one really can tell you, you know, 20 years out, 10 years out, okay, which specific company is the next iPhone and which is not.

14:53Yes, they're riding a powerful trend. Are they going to have the perfect product? Are they going to step to customers in the right way? All of that is highly context dependent. And you talk about these virtual spaces for human expression, not just human communication. Give us some examples there. You've talked a lot about NFTs, but where you see that type of framework moving and affecting your research.

15:23Yeah, I mean, this is another example of how powerful the human needs and change framework can be. because another trend, you know, I've been talking about for over a decade now was a trend that back in the day we called the virtual experience economy. And this was about saying that virtual worlds, you know, internet worlds you can step inside will become domains of human expression and places where people go to transact with one another or just to hang out with one another, where they want to express themselves, where they want to make art. You know, again, 10, 15 years ago, that seemed a very odd set of ideas.

16:06But you could see very early signs. I mean, everyone remembers, for example, the video game Second Life, which kind of fell by the wayside. But you could see how these immersive virtual worlds that you can step inside were unlocking new ways to serve these deep underlying human needs. the search for meaning, status, hanging out with your friends, expressing yourself. And now look, I mean, we had this metaverse explosion in 2021. There was a lot of hype around it. But you can see how these virtual worlds are becoming new domains of self-expression, new places where people are going to transact.

16:46NFTs are going to be a huge part of that because they allow you to essentially create digital art and own it and sell it to others. So again, it's just an indication of how seeing emerging technologies through the lens of fundamental human needs empowers you to see deep underlying new directions of travel. And it's interesting how much you value human emotion, because I think that's one of the things that people scoff at the most in many different sectors, especially online. I remember when people kind of said, well, who are you talking to online? And we're talking about the AOL instant messenger days, the ICQ, and how it was kind of the butt of jokes.

17:24And certainly nobody's laughing now. Everybody's trying to capitalize on it. I'm interested to dive a little bit deeper and find out what is on your radar right now, the type of tech trends that you're tracking and you see emerging now that you're writing about in The Exponentialist. Yeah, I mean, it's funny you talk about, I mean, and I said earlier about being laughed that. I mean, when you're trying to live 5, 10, 15 years in the future, and you're talking to people about it, it's that constant battle of getting people to go to places that they feel uncomfortable with, and places that even seem to them sometimes somewhat ludicrous, and ask them to think about, to just take a different perspective on it and think about what it would look like if this did become a true social phenomenon at scale.

18:14And once social media was of that ilk, and once the idea of AI companions that people would kind of chat to and tell their problems to and hang out with was of that ilk, now we see them really emerging into the mainstream. So yeah, it's that it's, but you can use this framework as well to develop, you know, not to do stock picking, like you said at the beginning, that's not really who I am, but to develop deep underlying theses about technology investment, powerful new currents, powerful new technology themes that you can then focus your investment towards and start to drill down on. So now, yeah, I mean, the technology trends talking to leaders about now, simulations are a huge part of it.

19:06We're seeing the combination of AI, you know, being able to crunch huge amounts of data and sophisticated immersive virtual worlds come together to allow us to create next generation, highly sophisticated simulations of reality. And that's going to unlock all kinds of new possibilities. You know, we're going to be able to simulate physical spaces. I mean, I wrote a lot about this in last month's Exponentialist, especially with relevance to NVIDIA, who are a huge player here. Simulate physical spaces in new ways that allow us really powerful, actionable, new insight on how those physical spaces work and what's going on in them.

19:50We're also going to start to be able to simulate human society. So we're going to be able to simulate human behavior at scale. So I'm talking to leaders inside organizations about how they're going to be able to simulate customer behavior and social behavior in all kinds of really powerful, interesting new ways. And essentially test kind of product launches, test marketing strategies inside really sophisticated simulations with millions of sophisticated, sorry, millions of simulated people inside them. That is game changing for things like market research, product testing and iteration and all the rest of it.

20:28So simulations are a huge technology trend that I'm talking about. And of course, we're in the middle of a machine intelligence explosion. AI is going to massively disrupt education and learning, which is just an unfathomably large sort of multi-trillion dollar, multi-billion dollar industry that doesn't stop with people once they've left college because large organizations are ever more conscious of the need to keep training and educating their knowledge workers through the arc of their career now. And you're going to see, you know, so you're going to see large language models trained on incredible amounts of domain specific data, who then become, who are then given a human avatar and become superstar teachers for a specific industry.

21:22So just as we're going to see, virtual companions for consumers. We're going to see superstar AI virtual teachers for healthcare, for banking, for retail, and all the rest of it. Those are two really powerful trends that are hugely on my mind right now. It's really interesting how that dovetails. I was just listening to an expert in longevity talking about how our society is really not structured for longevity. People are retiring too early just because they can, whereas they'd be really good to keep in the labor force to help train next generations. And to your point, we only go to university once in a career, usually maybe twice, but given the longevity, the increasing longevity of humans, that we will need these types of courses over and over again, maybe at three pivotal points in our career if we don't want people to retire too early.

22:14I want to go into some of the frameworks that you have specifically on the exponentialists. I know one of them that plays heavily is Metcalfe's law. So just to just really distill that for us, how that plays out for those of us who are subscribing to the exponentialist. Yeah, I mean, that's a hugely powerful one for that underlies the exponentialist. And it's essentially about looking for looking for or it's essentially about really looking for exponential curves. It's about looking for network effects, platforms and technologies and even individual businesses and products that exhibit really powerful network effects and just become exponentially more valuable and powerful and useful to their users as the number of users grow.

23:06Because when you get that kind of network effect, you get runaway exponentials. You know, you see it happening with crypto. You see it. You saw it happen with social networking and with the sort of Internet more broadly. You know, as the user base grows, the power and the value of the network grows exponentially. And so you always want to be on the lookout for those kinds of exponential network effects and where they're starting to take root now. You know, like we're always saying in the exponentialist, we humans are not built to understand or to perceive very easily exponentials, you know, because when you have an exponential growth effect, the growth at the beginning for a long time just looks extremely slow.

23:57You know, it really looks as though nothing much is happening, certainly nothing much exciting. And then you get this explosion, what appears to be this explosion. It's been an exponential all along, but then you suddenly really start to notice it. And then as soon as you've noticed it, it's going insane. So you're always looking. And of course, crypto is the most exciting example of that happening right now. You know, we all know that browse are a deep underlying belief. And of course, I agree that we're seeing just an incredibly powerful network effect when it comes to crypto, the crypto universe, to Bitcoin, to Ethereum, and so on.

24:42So I'm always on the lookout for that kind of exponential network effect. We're going to take another quick break and be right back with more of the day's top analysis on the Real Vision daily briefing. All of us together are living through the death of an old world and the birth of a new one. This is a fourth turning, but this is not the fourth turning of demographics or politics. This is the birth of the new technological age. This new world has a world of 3D printed rockets, crypto payments in space, discussions on the rights for humanoid robots, machine intelligence that may outperform our own, simulated worlds where autonomous AI agents write code for other autonomous AI agents.

25:26It's a world full of opportunity and full of difficulty too. You see, we are living history, and it's happening much, much faster than any of us can comprehend. This is Reed's Law, Metcalfe's Law Squared. Humanity has never gone through anything like this. But we have to comprehend and understand what is happening. It is into this world that The Exponentialist is born. The Exponentialist is a new service from me, Raoul Pal, and David Matin, author of New World, Same Heulens. It's an almanac of the fastest period of change ever witnessed in the human history. A period of excitement, exhilaration, difficulty and terror.

26:09And the exponentialist really is for humans first and investors second. Yes, the opportunities are enormous all round. To find out more and get our special launch pricing, go to realvision.com forward slash the future. and then you you have this tsunami of information coming at us coming at you and one thing that you focus on is the mental models that you can use to structure that tsunami of information tell us how that works yeah i mean it's you know it's like it's like the um the human needs and fund sorry the emerging technologies and fundamental human needs mental model. And after a while, those become sort of almost subconscious.

26:58And you're looking out to as many examples and data points and as much information as you possibly can. And you're applying those mental models pretty much almost unconsciously. And when something is relevant to one of those models, it pings, you know, you notice it, oh, there's an exponential network effect. Oh, that example is an indication that this emerging technology, you know, AI or simulations or robotics is unlocking a new way to serve a fundamental human need in a really powerful way. Those mental models just give you some approach to how do I sort the wheat from the chaff? How do I sort the signal from the noise.

27:43Otherwise, you're just overwhelmed by information. I mean, another one that deeply underpins the exponentialist is this idea that the exponential age is in its deepest sense characterized by a merging of the realm of information and the realm of physical reality, this deep merging of the realm of atoms and the realm of bits. And I'm always looking for examples of technologies that are bringing digital information into the physical world around us. Because I think that is a deep, deep underlying trend that is shaping exponential age. That's another mental model that is just there in my subconscious, structuring my view of what's going on out there.