Next things we are thinking about at betaworks

In a post two weeks ago, I outlined a human-first framework for development and startup creation. In this post, I want to summarize the emerging technologies we are focused on at betaworks. Most of these new technologies are end-user, consumer-focused, many of them are new interfaces — all of them have the potential to disrupt today’s incumbent platforms. As I described in the previous post, change usually happens fitfully — nothing, slowly, nothing, slowly, nothing, nothing, and then boom: change. 💧..💧..💧.💧💧💧..💦 ...🌊 A set of new technologies is emerging that will change the way we apply our machines and they have the potential to extend individual human needs and become bicycles for the mind.

The first half of this post outlines a set of foundational building blocks of change that we’re thinking a lot about right now. They include permissionless protocols, the blockchain, ML & AI, a new generation of devices and connectivity and the rise of a new connected mesh, cities. The second half lays out areas where we, at betaworks, see the most rapid innovation.

1. A distributed layer of trust

One of the key innovations that resulted in the Web was a permissionless layer to the network — in order to reach a web page or to create a page, you didn’t need the permission of a centralized authority. There are a set of technologies under development today that are building permissionless consensus systems that will let you trust someone on the network without the need for a centralized authority or a company — a Facebook or Apple or Amazon — to verify that user. Trust is a key component of both human and computer networks, and today networks are undergoing a step function in how trust occurs. Permissionless blockchain technology distributes trust among different parties by creating an economic game where it benefits parties who don’t know each other to cooperate and reach consensus on a transaction. It turns out that a peer-to-peer system that assumes no trust ends up achieving aggregate trust.

These permissionless, blockchain-based technologies are providing a whole new underpinning for transactions and for distributed applications such as commerce, signed digital assets, NFT’s, media attribution, immutable publishing, data markets, verification, and data verification. By reversing one of the key assumptions of digital media — infinite replicability — the blockchain and smart contracts have the potential to reshape much of what we do online. Web 1.0 and 2.0 drove down transaction and coordination costs inside and outside of firms; the blockchain has the potential to effectively drive it to zero for many segments of the economy.

Identity and privacy are finally becoming products. Distributed, secure identity, and privacy tools are starting to be rolled out — some are blockchain-based, and some are client-side, encrypted, and don’t require the blockchain. Productizing identity is important; the tight coupling of identity and your social graph is central to the lock-in that Facebook and other social messaging services have achieved. Distributing and productizing identity and privacy make sense for end-users; it’s a solution to the attention harvesting that has taken place over the last decade and it’s consistent with recent regulatory shifts (i.e. GDPR, the California Consumer Privacy act). It’s also a reaction to the hole we are feeling that exists in tech.

Paid is taking many forms today: subscription or paid access to single pieces of content, “support this” or contribute, “pay to have this created” (i.e. Kickstarter) or ICOs and community support via token ownership. The opportunity set is becoming rich, from video and paid podcasting to supporting and paying for media on an off-chain.

Trust is a broad topic. There is a lot of innovation around how trust happens online. A component of the broken relationships that users have with technology today relates to the governance of those companies — increasingly, users understand their lack of influence over how these platforms use, sell, or censor their data. Crypto and blockchain companies are innovating on the forefront of governance — this is one of the many aspects of this new, re-decentralized database technology that fascinates me. As the blockchain recreates much of the infrastructure of the web, at betaworks we see massive sets of opportunities around privacy, data controls, data storage, file management, fog computing, and new systems of distributed governance.

2. ML and human machine collaboration

With machine learning, the dividends of big data are resulting in a myriad of new startups and opportunities. Over the past two decades, data has become regnant — service after service has been designed as a means to acquire data, and we are now seeing innovation emerge on top of these data sets. This is a broad area that reaches into AI and automation. Let me focus on two subsets of data that relate to how ML is changing media.

First, consider the changes that have taken place in the field of computer vision. That branch of ML and narrow AI is exploding and over the past few years, we have started to see the potential for it to augment human vision. We are using computer vision to scan images in ways we could never do as humans, to see around corners and through walls.

Or take the example below of spatial audio mixing, where neural networks are been applied to video/audio streams and the sound is mapped to pixel regions. This example demonstrates a second-order innovation: beyond the automation of existing workflows, beyond doing what we do today but better or faster this innovation extends our human senses and abilities. You can get a sense of the potential it has to fundamentally alter the way visual and auditory media is captured, edited, distributed and played back.

And beyond media, computer vision and auditory mapping are replacing the need for iOT based sensors in a myriad of retail, industrial, and workplace use cases. ML will replace and augment humans. With AI data processing now doubling every 3.5 months, CV and the explanatory tools to help humans understand AI-based decision-making are going to create new markets and companies. As are the necessary explanatory tools for AI, CV, and ML.

3. Next gen mobile and compute

Starting this winter, our primary computing device, the phone, is going through a step function data platform change with the launch of 5G. It will take a while for the impact to be realized, but much of it will benefit users indirectly. With lower latency, more efficient power consumption, and better connectivity to the mesh of data and devices around them, speed will increase and the wireless co’s will market this as a step function in speed. Today, however, we are at a speed/price point where at times users are indifferent to whether they are connected via wifi or wireless. 5G will make this an afterthought. Speed aside, it’s the connection of other devices that I think will be most interesting. There are now 50M+ smart speakers in US homes and 50M+ smart watches and 30M+ smart headphones (Airpods) will be sold this year. AR and VR headsets are starting to hit the price point to drive consumer adoption and more than one fifth of vacuum cleaners in homes are connected. And coupled with this explosion of connected devices is a wave of enabled devices — plugs for your car or your home that can add smarts to a “dumb appliance”. As these new devices get connected, the next generation of technology interfaces is starting to emerge. It’s more auditory than expected, more embedded, more use specific, more real time, and much more spatial. And while today much of it is still phone-dependent, this will change. Similar to how the phone was initially tethered to the PC, over time these devices will become more independent and specific to their use and context, and the phone will become a legacy interface. This transition will take time, but it’s underway.

4. New cities

In 1800, 2% of the world’s population lived in cities. Today, it’s 55% worldwide and projected to be 70% by 2050, and here in the US, it’s already 82%. Cities have become vibrant, beating hotbeds of creativity, business creation, and economic growth. And technology in turn is changing almost everything about how cities operate. Over the past ten years, we have seen how everything changes when everybody is connected; the next shift will take place when everything is connected. When everything is connected, a mesh of services we can only imagine today will suddenly be available at scale. And this will happen first and foremost in cities.

Large global cities are becoming megacities and smaller cities are becoming connected clusters with enough mass and density to compete with the megacities. The pace of change in these cities is amazing. As I type, WeWork is about to become the largest private office tenant in Manhattan and their enterprise business is only three years old. By 2020, most urban-based companies will have some form of flex work solution. Uber, Juno, Lyft, Blade, Lime, and Bird are transforming how we get to and around cities. And once semi and autonomous hardware is in market, there will be another layer of transportation and data innovation. Coupled with this, services from Airbnb to Remote Year are changing how we live, work, and travel. Cities, technology, and the data that underpins them represent a whole swath of opportunities for startups — and startups are becoming vibrant participants of city life.

Startups in the coming decade will have a host of options, as different cities provide different services and infrastructure for innovation and startup communities. In turn, cities will have to compete for human capital and talent by investing in infrastructure, schools, and amenities. Infrastructure will count a lot and among this, wireless and 5G will drive a lot of the change in cities. I think one of the greatest changes that we’ll see as 5G rolls out next year is the acceleration of innovation within cities. Transportation, work, living, retail, education, healthcare … all of these businesses are transforming as cities evolve into data meshes that couldn’t have been imagined a few decades ago. Cities are transforming themselves before our eyes.

These foundational developments in frontier technology are fermenting innovation and creativity and creating new interfaces to technology. Here are areas where we expect to see the most intense innovation

i. New ways of living and working

Over the past ten years, we have seen a transformation in the way we live and work. Home services, home itself, delivery, last mile logistics, and iOT — that mesh of services that will emerge when everything is connected is going to change the way we live and work in these new smart cities. Over the next decade, it’s expected that the majority of the workforce will shift to freelance in the US; today in the US and Europe, 160M people, or about a quarter of the population, are freelance. And while some of this is not by choice, much of it is — research suggests that 70% of individuals are in the flexible economy by choice. Freelance, flexible work is attractive for many people across the population, including for new people coming into the workforce and for the elderly at the other end of the age spectrum. However, framing this simply as flexibility simplifies it and the issues. A whole category of innovation is emerging as “the future of work”. This is about falling coordination costs inside and outside of firms, changing organizational structures, changing workplaces, changing workflow, and changing tools of collaboration — from hot desks (i.e. Spacious) and hot experiences (Remote Year) to temporary community (TED) and hubs of builder talent (betaworks Studios), how we work, connect, and collaborate is evolving fast. In similar fashion, the type of talent and what we value in the workforce are also changing and becoming increasingly competitive.

Blend these shifts with the connected mesh of data that cities are becoming and you get a sense of the breadth of opportunities that are going to arise as all aspects of how, where, and with whom we work and live are reinvented.

ii. New generation, new tribes = new brands

Brands define generations. With the advent of new messaging and social channels, new brands are emerging — ones that go direct and reach a digital-first generation of users in the native channels they live in rather than those their parents lived in (linear tv, radio, and paper). Coupled with this shift in distribution is a cultural shift towards group identity and tribalism, which will continue to increase the depth of relationships new brands can form.

Examples of this spans categories and they are all strong brands — most are commerce with new, innovative ways of reaching customers and are values-driven that are clearly aligned with an identity or tribe. Many of them are using technology to provide more human, post-industrial interface to users. And cultural hubs — cities like New York — are the place that many of these startups will start in.

iii. Synthetic media

Synthetic media is the term we use at betaworks to describe algorithmically created or modified media. This is an emerging technology that belongs squarely in this post — it’s an opportunity since it will reshape how media is created, edited, and used, and it’s also an area of technology that involves risks and societal costs.

In the long term, synthetic media will merge with synthetic representations of self, replicating and reflecting us. I was talking with someone last week about an idea for a museum for dead people that has been rattling around in my brain for a few years. The idea is simply that there would be a physical space where you could visit people who used to live in that city or that place back in time. It would likely be done holographically or it could also be robotic. We, as a species, have been obsessed with both the replication and with the reflection of ourselves in technology. Very specific cues, in particular in the face and eyes, tell our brains that this is a “human” or a relatable “species” — you see this in art, comics and cartoons, toys, and robotics and holoforms. Take a look at how expressive the facial robot Takayuki Todo unveiled at SIGGRAPH 2018 seems. Remarkably, you can also see this in 16th century automatons (the example below is of a Spanish monk). We are seeing synthetic representations of people, celebrities, and synthetic “pets”. We are seeing fluid representations of self and expression in Lil Miquela or the uncanny valley in a recent fashion ad. This is a very human obsession; Frankenstein was the name of the creator, not the name of his creation.

As one of my partner at betaworks ventures wrote, it ranges from meme’ing to synthetic celebrities and it’s happening in text, audio, video, and even pose detection. And creativity aside, the cost of media production is going to plummet as GAN’s, ML, and other tools become embedded in the production and creation process of media. Moreover, these GANs are getting better fast.

The other side of this is equally fascinating and disturbing. Spend a few hours looking at deep fakes or consider how the genocide of Rohingyan refugees was fueled inside of Facebook groups, often with manipulated media. Or the recent murder in Chemnitz, the theories of Q-Anon, or research how the 15th and 16th century Church used automatons. The world of media, trust, and tribalism is going to get a lot more complicated in the coming years. When Vivian Schiller and I led a discussion/debate on the topic this summer at Studios, we wanted to dig into the complexity and explore both sides of this technology. We’re going to need tools and software to verify the veracity of all forms of media and the source data, whether their use be in the news, in news feeds, or in our courts.

iv. Participatory media, gaming, and live

Live and gaming are changing the social and the media landscape at a pace that few expected. Games now represent 78% of the total spend in app stores (iOS and Play), growing 20% in the first half of 2018. Add to that live participatory media and you have, by multiples, the largest and fastest growing segment of the media industry. Live is the next frontier of social — beyond photo sharing and news — as high value media becomes experience.

This July, the Durr Burger disappeared from inside the game of Fortnite and appeared in the desert about an hour and a half outside of Los Angeles… in real life. Someone with a few hundred Twitter followers saw this model hamburger in the desert and tweeted this image out; needless to say, the fans went nuts.

Games now look a lot like media, mainly because of live interactions, and esports and streaming could more than double the size of the gaming industry. And while it’s easy to write off the Durr Burger as marketing, it’s really an example of ‘archaeological’ storytelling — similar to SKAM Austin, it’s these multilayered stories, within games, within stories. As my other partner at betaworks ventures wrote, “we believe something big is happening at the intersection of television and gaming that is already reshaping media and culture… There is an inexorable trend of audiences moving beyond being just passive consumers of content and towards becoming active participants in their own right.” To this end, we just kicked off our latest thematic Camp at betaworks around Live.

v. New bundles and new forms of monetization: creative people, need to make money

In Web 1.0 and 2.0 advertising, attention harvesting was the dominant form of monetization. Bundles existed, but they were low down in the stack, usually at the device or connectivity level. This is now changing. As the cost of “free” has become apparent, people are starting to gravitate to paid and app level bundles. As I mentioned earlier paid is taking many forms today: subscription or paid access to single pieces of content, “support this” or contribute, “pay to have this created” (i.e. Kickstarter) or community support via token ownership. The opportunity set is becoming rich, from video and paid podcasting to supporting and paying for media on an off-chain. Matched with the proliferation of alternatives to how you pay, app level bundles are growing — some anchored in media, some in commerce or shipping, and some in social media or messaging. It’s still not clear today whether this diversity is liminal and what the primary hook will be to meta-aggregate these bundles.

This shift is important for many reasons, but what’s central to it is that the creative economy needs direct support and connection to their users and fans. The mediated systems of Web 2.0 haven’t supported creative people at any scale and we have to fix this. We have to fix it because a thriving culture demands it, and because as automation scales, we humans have to excel at what we can uniquely do. As Jaron Lanier and others have talked about, the subjective world is where humans are going to thrive versus our machines. We can choose a future that presupposes the disposability of our species or one that does not.

vi. Brain health

Over the past hundred years, we have done amazing things as a society to improve our physical health; the next frontier is the brain. Ranging from meditation and mind-workouts to microdosing and BMI’s, we are starting to learn about the workings of the most complex organ in our bodies and to develop basic literacy about what we need to do to protect our attention and brains. It’s impossible to understand what the attention landscape looked like a hundred years ago pre-mass media, or even really what it was like before the birth of the iPhone eleven years ago.

Somedays I walk down the street and see people who are moving through the city mediated by technology. The other morning I noticed a kid on a bike who was fiddling with his helmet. I thought he had a phone balanced inside his helmet and was adjusting it, but as I got closer I realized he was just adjusting his helmet. No phone, no device. However, something about it struck me as incongruous. After a bit, I realized how few kids I see struggling with the two modality of virtual and physical. It’s my generation who are fiddling with the devices; young people move with fluidity between the physical and the virtual. Maybe they have effectively hardwired this context switching, or maybe they are always in the virtual and IRL is just another representation. We are distracted from distraction by distraction. Our brains our changing and adapting to the data layer that surrounds us, and opportunities are starting to arise for people to build around this change in our brains. iOS 12 and Android Pie are finally providing tools for attention management—but the existing multitasked, notification-rich interface is likely too embedded to fix. The really interesting opportunities will be for startups to route around the device and give us tools that extend our attention, enable context switching, and create wheels figuratively for the mind.

Over the past twenty five years, we have connected our species and networked ourselves. Today, we have at our fingertips most all the information available in the world. The pace of Moore’s law as it applies to AI is now doubling every 3.5 months. The pace of storage and data growth continues on an exponential path and innovation is stacking on the network into layers that recursively build upon themselves. It’s just not possible for us to conceive fully of the pace of change we are living through and the impact technology is having. Yet as I touched on in the companion post, parts of tech are broken. As the innovation cycle starts again, new opportunities arise, and the next wave of innovation emerges, now is the time for us to think about what we want to change, what vision we aspire to, and what this advanced, technology-driven economy and culture we are building is.

I titled the other post “Bicycles for the Mind” because I believe we need to change how we build as much as what we build. And as we change the methods we use, we can measure impact. This new web contains frameworks to measure trust and embed costs to participants who fail to interoperate. It has embedded incentives for digital services to interoperate and distributed governance mechanisms that give creators and users controls. The re-decentralization movement contains potential for distributed accountability.

As we reinvent our society, capitalism, and liberal democratic values, I believe we need to reprioritize the human. The potential for technology to extend, improve, and lift the individual human experience is evident; it’s up to us to reach for it. Our age has the potential to herald a new enlightenment, a new form of humanism — the next big things all have the potential to be bicycles for the mind and to be designed as such.

Fare forward.

If you are a founder, building in any of these areas, we’d like to chat with you. Please contact our venture team here.

If you are interested in discussing these ideas, come to betaworks Studios where each week members are leading discussions on these topics. And thank you to the betaworks team for help developing and editing these ideas.