Captured at San Francisco on 27 Feb 2022 by Om Malik

I recently sat down to talk with my friend Howard Lindzon on his podcast Panic with Friends to discuss the future of technology. Howard has shared the show notes on his blog. I wanted to draw out three core themes I addressed in my conversation, and they are all correlated. 

I have a long-standing approach to holistically understanding technologies and their impact. I look at pure technologies such as semiconductors & networks and think about their impact on products, behavior, and change. At the same time, I look at our behaviors today and how they disrupt the present technology ecosystems. 

Much of my current and future enthusiasm stems from exciting work underway in the semiconductor world, with Apple’s M1 being the most visible example of the possibilities unlocked by cheap computing, cheap GPU, and machine learning capabilities. It is not just Apple — the entire semiconductor ecosystem is experiencing change. 

*** 

Value (of technology), not valuations, matters most.

When we try to predict the future, we usually get it wrong. It is just so because we only have the present and past to use us as references. For example, when we think about web3, we look for analogs. “What’s the new Twitter?” without ever wondering do we even need a new Twitter. Or will there be something else that will help us replace it as a source of information? No one thought TikTok would be a competitor to Google Search, yet they are starting to become a threat. 

My approach to thinking about the future is simple: always try and find the inherent value in technology. It helps take a longer view and embrace change. Take the COVID-19 pandemic, for example. The traditional view is that companies like DoorDash and Zoom got a COVID bump, and their valuations went sky-high, then—poof. Then they came down to Earth when the world was ready to return to a world more like 2019.

There’s just one problem: technology only moves in one direction. There is no going back. It is not as if Zoom lost its value along with valuations. Who wouldn’t rather talk to a screen than fly five hours for a meeting? No matter how much we want to use the past as a reference point for the future, we have to override our biases and go where the value takes us. And where it takes us isn’t always where we might think.

I’ve previously written about my optimism about technology and its impact on society; that hasn’t changed. But rather than try to wind vane the tech sector by looking at stocks and startup valuations, there’s a fundamentally better approach to gauging the future. We have to consider what we know about the foundations of tech. And to me, that’s even more exciting than trying to guess what will be the next Twitter.

*** 

Processing Into a 3D World

Apple’s M1 chip is a game-changer, even if consumers haven’t yet figured out why. Most think: “Oh, great—a faster computer. That’s neat.” But look at the value underneath it. The M1 chip puts about 25% of the power of IBM’s original Watson supercomputer at your fingertips. Yes, that Watson. Or, as my friend Michael Driscoll astutely points out, “The line between localhost and cloud is blurring.”

Apple’s M1 is a proxy for a new generation of chip technologies that will reshape our computing experiences. Apple’s approach to silicon combines CPU, GPU, AI, and memory into a single entity for a powerful bitches brew with preternatural capabilities. It is an outcome of the smartphone revolution. 

We’re used to our computing experience being flat. Today, we look at a flat screen and interact with the data in two dimensions. Apps—for all their contribution to the mobile phone revolution—are still two-dimensional. But between the M1 and Moore’s Law, we’re moving into place to alter how we interact with data and information. We’re going 3D. 

By 3D, I don’t necessarily mean AR or VR. Those are ideas we can anticipate. But we’re thinking about the future here. Or rather, our interaction with data will be in three dimensions. What about the ideas we aren’t anticipating? 

I am excited because when I think about what M1 can do today, imagine what it can do to our computing experience in half a decade. Or in ten years? Computers would easily handle inputs beyond keyboard strokes and mouse clicks, and they could (more accurately) use lidars, cameras, and microphones to create maps of our surroundings. 

Cameras can interpret our gestures and facial expressions, and earphones with sensors can give more nuance to our gestures. Computers are merely augmenting our reality. It won’t be long before we have the processing power for holographic displays. Think Star Wars-type technology, not 2001: A Space Odessey.

This technology sets the foundation for a new interaction layer between humans and our machines. Whenever I think about the future of technology, I try to imagine it from the perspective of the next generation of users. Kids in the future are growing up interacting with machines. They swipe, they tap, and they use gestures. They talk to Alexa or Siri. They’re already training for a new way of computing. Most of us haven’t noticed that for them in the future, mouse and keyboard would not be as relevant as they’re to us old fogies. 

*** 

Authentication is the Value Store

If you have been a long-time reader, you know that I firmly believe that what technology giveth, technology taketh. Technology is not without its consequences. The rise of powerful chips, coupled with new forms of artificial intelligence approach to software and services, can do both good and ill. 

Think of what computers can already do: deep fakes, phishing scams, simulated voices, etc. Future machines and software would make these even more realistic and thus more harmful. In a world of cloud computers powered by ever-powerful chips creating uncanny deep fakes, authenticating who you are will become paramount. 

And this is where we would need the emergence of a new authentication layer, which is more robust than whatever we have. Regardless of what you might think of web3 mania, it will help create a new approach to identity and authentication. 

We need the authentication layer to distinguish between the artificial “us” and the real us. Mark Zuckerberg isn’t spending billions on the Metaverse for shits and giggles. The real value of Facebook will continue to be the “login,” which will eventually become the identity verification —that’s even more important than all the information they’ve gathered. 

What’s one thing you’ve barely noticed about living in the mobile phone world? How often do you “Login with Facebook” or “Login with Google” because it’s more convenient than setting up an account? There is a lot of value in whichever company makes authentication easy in this world. 

What if Apple offers a Metamask-like product as an authentication system and in-exchange charges a small subscription fee? I would happily pay for the convenience alone. Authentication and payments can be critical to a post-app store world. Facebook, too, is hoping to ride the payments and authentication gravy train to the future.) 

Talking about Facebook, let’s talk about Metaverse. Today, we mock it as a cartoony version of Zoom call. What if it is far bigger than that. Take Facebook out of the equation, and you start to see that we have rudimentary building blocks for the next version of the Internet. You can call it web3, but in reality, it will be the next version of the Internet. 

*** 

No Longer Living in the “America-First” World

My last point is about the changing nature of the network itself. When we are trying to predict the future, those of us who live in America often have an America-centric worldview. This isn’t without good reason. There was a time when the majority of relevant tech consumers lived here. 

For as long as I can remember, American technology habits did shape the world. Today, the biggest user base doesn’t live in the US. Billion-plus Indians do things differently. Ditto for China. Russia. Africa. These are giant markets, capable of dooming any technology that attempts a one-size-fits-all approach.

Whether it is their adaptation of drone deliveries, novel climate change ideas, or revolutionizing technologies (such as solar) by large-scale adoption, these big markets will define new behaviors, inspire new ideas, and spread technology-driven change. It might not be perfect or ideal, but we need change — especially in a world facing monumental challenges.

***

You can listen to my appearance on Panic with Friends with Howard Lindzon on Spotify, Apple, or here

Here are links to my two previous appearances on Panic with Friends.  

March 31, 2020: The Pandemic Editon

July 2nd, 2020: Are we there yet?

As the world around me has started to (pre-maturely regain normalcy), I have decided to deal with some of the to-do list items. The more I try to get things done, the more I realize that our “digital transition” is still in infancy, and any talk of a digital-first society is decidedly premature. 

Take, for example, medical care. Over the past few weeks, I have been grappling with some medical issues. I use UCSF for my core medical needs and have an excellent insurance plan. The medical provider uses an online portal to manage patient care and communications, but when it came to triaging my complications between three different specialists – the portal wasn’t much help. It took old-fashioned phone calls, voice mails, and phone calls – to finally resolve the matters and move forward. I will save you the details – because this isn’t a lament about the doctors. 

Instead, it is about the archaic nature of processes built into an institution built for a paper-first world. It has since added a digital veneer to it. The MyChart portal gives you an impression of being digital-first, but it doesn’t account for real-world situations. 

We have become so accustomed to new forms of communication and collaboration. Still, it is hard to do so in systems that have been architected on pylons from a different era. What happens when the world is video-call first, and the phone numbers go the way of the landline? How do medical institutions work with communication service providers to ensure that calls don’t end up in voice mails because we have stopped answering phones due to the crazy amount of spam calls? 

I compare that with my experience with something like One Medical, a for-profit company that offers primary care services and one’s ability to interact with the service almost entirely through its application. Given that it offers only a subset of medical services, it has been able to architect an experience that at least mimics how we experience the modern, consumer internet. 

And it is not just the medical system – even our civic services have been digitized by putting scaffolding over the aging processes. I had to get a passport renewed urgently. To get it done, I had to call multiple times before appearing in person. Without going into more details, the process was fraught with the friction of the past. 

We must look at how much of our past is defining our future. When I used to write about telecom and mobile, it was clear that most societies that didn’t have a “wireline” past embraced wireless and became mobile-first societies. China, India, and other emerging countries are good examples. Similarly, countries not hobbled by legacy wired networks embraced the fiber future. 

Something similar is happening across other aspects of our lives – banking, medicine, commerce, education, and everything else. Old processes conflict with the new behaviors of the post-internet society.

Let’s use online commerce as an example.

WHY AMAZON WINS

I am trying to shift as many of my dollars away from the big bad Amazon. I don’t mind paying a little extra if it means giving less to Bezos Inc. There is nothing I love more than supporting the little guys – the digital equivalent of mom-and-pop operations. And there are many more of them online these days. Shopify (and others) try to make buying from the little guys as easy as Amazon, but they are against a real behavioral barrier to entry.

I buy my tea from a New York family business called Harney & Sons. But when I buy something from them, it usually takes about five to six days to arrive in my mailbox. The same goes for my stationery retailer or from folks whose household items I prefer – they all have a “time overhead,” and speed costs much more than you realize.

This time won’t be a big deal in the ordinary course of business. Mail and packages used to take their sweet time to arrive before the Internet. However, after nearly a decade of Amazon Prime, I have become addicted to the convenience of a flat-price subscription delivering everything very quickly. Even with the recent price increase, $139 a year is cheaper than shipping one pays over the course of a year for non-Amazon retailers.

Amazon’s investment in its physical and last-mile infrastructure — its warehouses, Whole Foods, and its burgeoning fleet of trucks and planes — feeds us everything instantly and conveniently. If Shopify wants to beat Amazon, this is what it is really up against. This addiction to speed and convenience is new behavior, and as a result, every non-Amazon purchase’s time overhead has become a “time penalty.” 

It is why quitting Amazon (Prime) isn’t that easy. And it is not as if they will let you go quickly! 

As The Eagles song goes: 

‘We are programmed to receive.
You can check-out any time you like,
But you can never leave!’

Hotel California

PS: By the way, since writing In convenience we trust, I have cut my Amazon spending by half and shifted it to non-Amazon, non-Walmart retailers. Still, as I have said repeatedly, this is not an easy addiction to break.


Randomly:

For the longest time, I assumed that Frenemy was a word created by web writers to explain the inconvenient relationship between large technology companies such as Apple, Google, Qualcomm, and Facebook. Today I learned that this is a concept from the late 1800s. 

“A potent mixture of friend and enemy, this oxymoronic portmanteau first appeared in the English language in the late 1800s, albeit with a different spelling (“frienemy”),” writes Jody Gehrman, a fiction writer. “In recent decades the word has been dusted off, streamlined, and given new life. Fueled by the duplicity of social media—the ability to behave one-way IRL and wear another face online—the Frenemy appears in more guises than ever both in novels and in films.” 


March 21, 2022, San Francisco

In the late 1990s, when mobile chip behemoth Qualcomm still qualified as an upstart, I started writing about the mobile Internet. I dreamed of a mobile broadband revolution. It was when Japan and the now-forgotten iMode service enthralled the world. Imagining the future, I wrote enthusiastically about everyone — Ricochet, Nokia, Blackberry (when it only made pagers), Treo, Palm, and Windows CE devices.)

Intuitively, I knew that much like how when the (landline) phone network was decoupled from fixed connections, the always-on Internet, too, when set free from the fixed network, could profoundly impact society and its people. However, it was at the introduction of the iPhone launch in January 2007, it slowly dawned on me the world had changed. The future had arrived quietly, amidst a lot of skepticism. The magnitude of change was enough for me to overlook the launch of the Apple TV or dismiss the transition to the Intel processors. iPhone was all that was on my mind and how it would change the mobile landscape. In my blog post that day, I wrote:

That also might be the epitaph of the PC era. And it is sweet irony that the company that sparked off the desktop computing revolution is the one announcing its passing. Dropping Computer from its name is a sure sign that Apple, from this point forward, is a consumer electronics company, a mobile handset maker – one that also makes computer hardware and software as well.

Apple is making the phone do all things a computer does – surf, email, browse, iChat, music, and watch videos. Nary a keyboard or mouse insight, and everything running on OS-X. While I am not suggesting that this replaces our notebooks or desktops for crucial productivity tasks, the iPhone (if it lives up to its hype) is at least going to decrease our dependence on it.

iPhone & the End of PC Era

It wasn’t until six months later, at the WWDC, I finally came to grips with what Apple had unleased. Here is what I blogged:

  • A true web applications platform for the mobile
  • Break the Wireless Walled Gardens
  • Shift of control to the customers
  • Slow demise of subsidized, boring phones filled with bloat ware
  • Keep it simple or else

Looking back, the iPhone delivered on all those fronts, and in the process, has changed the mobile landscape.

***

The applications — essentially web services sliced and diced in special wrappers — have become the dominant form of our interactions with the modern Internet. A generation of mobile natives who have never dealt with flip phones and other devices sold by large phone companies don’t quite realize how terrible the mobile experience used to be before the iPhone showed up in our hands.

These were wireless walled gardens crammed with absolutely rotten apps, games, and everything from mobile backgrounds to ringtones. They were an opportunity for carriers to nickel-and-dime their customers and extracted mafia-like fees from startups.

Today, we take the “app store” for granted, but getting whatever app you want, whenever you want, wasn’t the case. And despite Apple’s draconian and confusing policies around the App Store, we as end customers are free to download pretty much whatever apps we want.

“The iPhone is doing to the mobile world, what the browser did to the wireline world.”

Juniper Networks founder Pradeep Sindhu in an interview.  

***

“iPhone changed in the industry in two fundamental ways – decoupling applications from the network (operators) and the user interface (ease of use),” points out Chetan Sharma, a mobile industry veteran who runs an eponymously named consulting group. Today, Apple and its 30-percent cut of the Apple store comes under criticism and legal challenges, but let’s not forget what life used to be before the iPhone came along.

Think about it this way, before iPhone, almost 90 percent of the industry revenue used to go to the telecom operators because they pretty much controlled every aspect of the ecosystem layers. From spectrum to network to applications to devices. — everything was controlled by the carriers.

In the US, for example, Verizon, Sprint, or AT&T decided what networking protocol — GSM or CDMA would be the dominant protocol. They decided what OS and phones could be sold to their network customers and available applications. And oh, everything was billed through their billing systems. That decoupling has reduced the carrier cut to somewhere between “20-30% depending on the geography,” Sharma points out.

***

In an article for the FastCompany magazine, I pointed out that iPhone (and its smartphone brethren) were part of an enormous change and brought a new Victorian age.

Today, it’s the increasing mobility of “computing engines,” the marriage of microprocessors and Internet ubiquity, that is poised to reimagine our society. More than a billion people bought smartphones last year—or to put it differently, we added 1.2 billion nodes to what was already the largest network ever built. Networks—social, neural, physical, metaphorical—enable connectedness, and connectedness changes everything. Networks compress distance and time, that concentration speeds up life, and that, in turn, creates sociological and economic change. 

And this age was catalyzed by the iPhone and what it brought to our fingertips. As I wrote in an earlier article:

iPhone had this one magical quality — touch, the most human of all senses — that made it the most personal of all computers. Think about it — we shake hands to confirm our relationship. We touch and hug to show our love. We caress to tell someone we care. So when we touch that phone, we don’t just touch a device and its screen, we make it part of ourselves. The internet is not a strange, cold, uncomfortable, cluttered space. That touch is what turns an inanimate object from metal and plastic to an extension of ourselves.

Fifteen years later, we have forgotten to appreciate how much the user interface and its simplicity changed the game and allowed application creativity to thrive and bring many billions of dollars to application developers. In a world controlled by carriers and their walled gardens, every single application and service you use daily wouldn’t either exist or thrive.

Instagram, Uber, DoorDash, Dropbox, and Facebook are all beneficiaries of the device initially dismissed by everyone from Nokia to Blackberry to Palm executives. For me, it was love at first byte, and it still is the phone I am happy to use — warts and all.

Every once in a while, a revolutionary product comes along that changes everything.

Steve Jobs when introducing the iPhone in 2007.

For once, Steve was under hyping what was to come!


My favorite articles (I have written) about the iPhone.

This week, Tim O’Reilly provided much-needed perspective in his essay “The End of Silicon Valley As We Know It.” If you can overlook the clickbait title, this essay is among the most valuable things you can read to understand our present and think about our future. While there has been much hoopla about folks leaving Silicon Valley, new distributed work philosophies, and other daily headlines, these are primarily distractions from a deeper, more profound change afoot in what we call Silicon Valley.

The Algorithmic Accountability Index: Ellery Roberts Biddle and Jie Zhang have created an accountability index for the algorithmic economy. They looked for companies’ answers to some fundamental questions about algorithms: How do you build and train them? What do they do? What standards guide these processes? An essential piece. 

How the race for autonomous cars started: We might be on the brink of the future where we all zoom around in self-driving cars and other autonomous vehicles. It is easy to forget that, 16 years ago, autonomous driving was a chaotic dream. In his new book, Driven: The Race to Create the Autonomous Car, Alex Davies chronicles what brought us to this moment. Wired magazine recently ran an excerpt, and you should check it out.

Did Tech prevent the World from a bigger meltdown?: While we have read many articles about technology becoming a dominant force in our lives during the pandemic, this article in Foreign Policy asks (and answers) the question from a different angle. I liked the nuanced argument, and that is why I recommend it for your weekend reading.

The cassette tape creator is dead: In time, what was a disruptive technology becomes a part of our life that we don’t even notice. One hundred billion units later, cassette tape is one of those technologies. It kicked off the ability to personalize the curation of music. You can draw a straight line between those tapes and Spotify playlists. Lou Ottens, the engineer who created the cassette tape, died recently. Ottens also helped create the compact disc, which ultimately killed the cassette tape. His obituary is a reminder that only very few are fortunate enough to create technology that touches everyone’s lives.

Not every brick and mortar retail chain selling goods that people can get more easily — even instantly — online gets the GameStop treatment. Some of them (most of them) just quietly fade. But that doesn’t mean they weren’t loved.

Younger generations might wonder why so many old farts are moaning about Fry’s Electronics shuttering. Isn’t it outdated? Hasn’t it been dying a slow death for a while? And the answer to such (snotty, if you ask me) questions is: Yes, of course!

Fry’s was built for a world that no longer exists. We live in a world where Amazon’s revenues ballooned 38% to $386 billion in the middle of the worst health crisis. We live in a world where stock markets value a food delivery company at roughly $55 billion. The elders are lamenting not the death of a store but the slow fading of Silicon Valley itself. 

“It looks like Fry’s is going the way of Netscape, SGI, and Sun Microsystems, and I for one, am pretty bummed,” wrote Mike Cassidy, about the slowly withering retail pioneer. “In fact, in many ways, it is more representative of the valley than any of the region’s famous start-ups.”

***

First, a bit of history!

In 1985, three Fry brothers, John, Randy, Dave, and Kathy Kolder, opened the first store in Sunnyvale, California. Retailing was in the Frys’ blood. Their dad, Charles, started Fry Food Stores. He sold the company for $14 million in 1972. He gave his boys a million each and sent them on their way. John went to Santa Clara University and majored in Mathematics. He was a good football player and a good student. In the end, he decided to do what he knew best: retail. 

In 1985, the personal computer was still young, but you could see the revolution was on the horizon. The center of gravity for this revolution was going to be Silicon Valley. It was the perfect place for an electronics megastore. The first Fry’s was opened in Sunnyvale and covered 20,000 square feet. At one time, Fry’s retailed over 50,000 electronics items within each store. They now call them big-box stores, and they dot the American landscape. But in 1985, it was a radical and bold idea. He also started selling shelf space to vendors, much as they did in supermarkets. It allowed Fry’s to make profits.


Fry's Electronics Photo courtesy of John Wall via Flickr under Creative Commons

Why did vendors pay for shelf space? Because Fry’s had foot traffic. Having learned all the tricks of the trade selling disposable goods at a food store, John knew that it was essential to get people into the store, even if it meant making, at best, no profit on fast-moving items like Coke and Playboy magazines. Get them into the store, and expect them to buy other things. As the son of a food market owner, he knew that you gotta move goods — and inventory kills.

We applaud fashion designers like Paul Smith for creating a unique look for their stores across the world, but this is one area where Fry’s innovated as well. Fry’s was ahead of the curve in their belief in experiential retail. Each store had its unique theme. Palo Alto store (my favorite) was straight out of the Old West. The store in Fremont had an 1893 World’s Fair theme. It was all kitsch, but it made visits even more memorable. And it attracted customers. 

Fry’s was an aggressive user of security cameras to prevent theft. You couldn’t get a quick refund out of them if you tried. The employees were not very knowledgeable. They were making a calculated bet that most people walking into an electronics store would know what the hell they wanted to buy. And for a long time, this bet paid off.

If you are a person of a certain age in Silicon Valley, you have a Fry’s story. I said hello to Andy Bechtolsheim while walking the aisles. And there were others. We have all hit up one of the Fry’s stores at an ungodly hour to find a component or just because we couldn’t sleep. During the internet bubble, I ended up in Fry’s Palo Alto store on a shopping spree with folks who would eventually become my sources. It was the only way for them to loosen up. 

*** 

Thirty-six years is a long time for any company to exist, especially for a retailer. A lot of the vendors who sold their products on the shelves of Fry’s are long gone. The name “Zoom” belonged to a modem maker back in the day. And how many people remember AST? Undeniably, Fry’s had a good run. But we can’t forget the ultimate truth: Change is constant. And these days, things change more quickly than ever before. No place exemplifies that reality quite like Silicon Valley. 

Fry’s came of an age when what we call “ the information technology industry” was still very young. The PC revolution had yet to turn Microsoft and Intel into leviathans. The client-server networking that would change work — and eventually the world — had yet to emerge from their creators’ minds. It was all so innocent, and everything was possible. Hell, no one quite knew what was possible. 

In 2003, Red Herring, a magazine I wrote for, shuttered its doors for good. In my eulogy for it, I pointed out that “Silicon Valley of the 1990s succeeded beyond its wildest dreams. If you pause and take the tally, the technology industry is now mainstream.” Time has only reinforced my core belief in the Internet’s inevitably — and by extension, the tyranny of what is known as the network effect. 

In retrospect, as is often the case, Fry’s death was inevitable. In Fry’s heyday, many of us built our own computers (or at least tinkered with them). We bought software and installed it. The struggle of being a lover of computers was what made it so special. Every year, however, computers became less cumbersome. 

The unrelenting nature of Moore’s Law and the amazing growth of the network have allowed technology to become not just mainstream but an integral part of our lives. Technology has become less tangible, existing mostly as an abstract. Fewer and fewer people buy hardware. We buy iPhones and Chromebooks. We don’t know how it all works. When they break, we don’t fix them ourselves. Someone else does it. Or we throw them away.  

We don’t quite realize it yet, but in 2020, thanks to the pandemic, we abstracted Silicon Valley itself. Amazon, Google, and Microsoft collectively had $115 billion in “cloud revenues” last year. Today’s entrepreneurs aren’t walking the aisles of Fry’s. Their world is that of complex algorithms, machine learning, and ways to generate demand using technology. 

From Lisbon, to London, to Bozeman, the future is being created everywhere now. Silicon Valley is becoming less of a place and more of a mindset. It’s a philosophy that can take root anywhere. The primary association with the word “Zoom” is no longer a brand of a modem. Suffice to say, it is a new era. And it seems that Fry’s is no longer needed.

*** 

The loss of this iconic store is a reminder that what once was a revolution is now part of our lives. I am glad that I got to experience it all, and I will cherish all those memories of that unique place we called Fry’s. 

February 25, 2021, San Francisco