When you ask children what they want to be, many likely say YouTuber, Influencer, or some other variant of that theme.
Influence is a complicated thing. From an abstract perspective, it's the ability to affect someone else's behavior. A high schooler can influence their classmates. As entrepreneurs, we can influence our employees, our industry, and more. You can have immense influence over a small number of people or a little bit of influence over many people – both still count as "influence."
But, in this case, many of the most popular influencers aren't famous for changing the world; they are celebrities or just famous for being famous.
Below is a chart of the top 50 "influencers" by social media platform.
In the digital age, it's worth acknowledging social reach as power. People with a large platform have the opportunity to exert enormous influence – and it's why you often see the spread of misinformation reach far, fast.
It would be interesting to see how many of these people use their platforms to be a beacon to their followers (rather than a beacon to attract followers).
It would also be interesting to see how much (or little) engagement many of these "influencers" actually have with their followers (and how that level of engagement relates to the growth or decay of their followings).
While I assume that the readers of this post aren't in the business of being "Influencers," Most of us recognize the value of influence – and getting more of it.
As a result, it is probably worth thinking about influence as an asset. And now is time to think strategically about how to grow and use that asset better.
The top 100 companies account for over $31.7 trillion in market cap. Unsurprisingly the U.S. takes the largest portion of the pie, but China continues to make headway. Though, the U.S. still accounts for 65% of the total market cap value of the top 100 companies.
A lot of the staying power of the U.S. (and the fading of much of Europe) can be attributed to Tech and Retail giants like Apple and Walmart.
I'll be interested to see how the numbers change as both Tech and Retail continue to grow as industries. Will other countries find a way to compete, or will the U.S. extend their lead?
Thursday was Yom Kippur, the Day of Atonement and one of the High Holy Days in the Jewish religion.
As part of the holiday, participants read a list of sins (available here), apologize for those committed, and ask for forgiveness. Read the list … much has changed, apparently, human nature hasn't.
Even if you have managed to stay on the right side of the Ten Commandments and haven’t killed or stolen … you have most likely been frivolous, stubborn, hurtful, dismissive, or judgmental (I know I have …).
To help mark the importance of the day, participants read a poem called the Unetaneh Tokef. Below is a brief excerpt that captures the spirit.
Who will rest and who will wander, who will live in harmony and who will be harried, who will enjoy tranquillity and who will suffer, who will be impoverished and who will be enriched, who will be degraded and who will be exalted.
On one hand, you can read that and pray for Divine intervention (or perhaps favor) or you can recognize that we each have a choice about who we want to be, how we show up, and what we make things mean. Your choices about these things have very real power to create the experience and environment you will live in during the next year.
This year, the sermon at my local synagogue added an interesting idea. It discussed the Japanese art of Kintsugi. In Kintsugi, the Japanese mend broken pottery by gilding the fractures with gold, silver, or platinum. This treats the breaks and damage as an element that adds value and enhances the beauty of an object (preserving a part of its history) – rather than something that simply diminishes the object.
This concept is a great reminder as we unpack the "trauma" of COVID-19 and 2020 and move on both as individuals and as a society. Our steps backward are just as much a part of our journey as our steps forward. As you heal, it is also important to remember to heal the world around you as well. In the Jewish faith, that concept is called Tikkun Olam.
One of the themes of Yom Kippur is that you're only ever one good deed from tipping the scale towards good for yourself and others. As you recognize and repent for your sins, it's important to appreciate the good you did (and do) as well.
100 Days Left
There are just over 100 days before the start of 2022. Many will spend those 100 days stressing about the upcoming elections, grumbling about how 2020 sucked, and pretending it's the universe's fault they didn't accomplish what they set their mind to … yet, 100 days is enough time to sprint, to make a change, and to end the year on a high note.
There is plenty of time to make this your best year yet. What can you do? What will you do?
I hope you all experience growth in your mental state, your relationships, and your businesses.
Best wishes for a great day, and an even better year!
It's one of the few reports that I make sure to track every year. It does a good job of explaining what technologies are reaching maturity, and which technologies are being supported by the cultural zeitgeist.
Technology has become cultural. It influences almost every aspect of everyday life.
Identifying which technologies are making real waves (and will impact the world) can be a monumental task. Gartner's report is a great benchmark to compare reality against.
2021’s trends aren’t all that different from 2020 – but you can now find NFTs, digital humans, and physics-informed AI on the list. While there have been a lot of innovations, the industry movers have stayed the same – advanced AI and analytics, post-classical computing and communication, and the increasing ubiquity of technology (sensors, augmentation, IoT, etc.).
What's a "Hype Cycle"?
As technology advances, it is human nature to get excited about the possibilities and to get disappointed when those expectations aren't met.
At its core, the Hype Cycle tells us where in the product's timeline we are, and how long it will take the technology to hit maturity. It attempts to tell us which technologies will survive the hype and have the potential to become a part of our daily life.
Gartner's Hype Cycle Report is a considered analysis of market excitement, maturity, and the benefit of various technologies. It aggregates data and distills more than 2,000 technologies into a succinct and contextually understandable snapshot of where various emerging technologies sit in their hype cycle.
Peak of Inflated Expectations (Success stories through early publicity),
Trough of Disillusionment (waning interest),
Slope of Enlightenment (2nd & 3rd generation products appear), and
Plateau of Productivity (Mainstream adoption starts).
Understanding this hype cycle framework enables you to ask important questions like "How will these technologies impact my business?" and "Which technologies can I trust to stay relevant in 5 years?"
That being said – it's worth acknowledging that the hype cycle can't predict which technologies will survive the trough of disillusionment and which ones will fade into obscurity.
What's exciting this year?
Before I focus on this year, it's important to remember that in 2019 Gartner shifted towards introducing new technologies at the expense of technologies that would normally persist through multiple iterations of the cycle. This change is indicative of more innovation and more technologies being introduced than in the genesis of this report. Many of the technologies from the past couple of years (like Augmented Intelligence, 5G, biochips, the decentralized web, etc.) are represented within newer modalities or distinctions.
It's also worth noting the impact of the pandemic on the prevalent technologies.
Last year, the key technologies were bucketed into 5 major trends – but this year Gartner focused on 3 major themes.
Engineering Trust represents technologies that create the infrastructure of trusted businesses. The emphasis is on security, reliability, and repeatability of practices. Change is hard, and so is the integration of new technologies into existing businesses. That’s why it’s important to do it right the first time to prevent technologies from being cost centers. Sample technologies from this year’s hype cycle include real-time incident command centers, data fabric, and sovereign cloud. If I could include a technology not on the list – I’d heavily support the blockchain as an instrumental asset in this domain.
Accelerating Growth is the second theme, and it builds on top of “Engineering Trust”. Once you have a good business core you can focus on driving organizational and industrial growth. Last year, "composite architectures" was a trend that emphasized the shift to agile/responsive architectures and decentralization. This year, many of the technologies gaining attention are AI-driven tools that can be applied to improve and accelerate human-facing support. Think HR training, customer service, and onboarding. As a culture, we’ve become more comfortable with the ubiquity of AI and technology, and while there are still ethical and societal roadblocks, you can expect many new use-cases to show up sooner rather than later. Sample technologies from this year’s hype cycle include digital humans, industry cloud, and quantum machine learning. To see more of my thoughts on Accelerating Growth check out my article on “Turning Thoughts Into Things”.
Sculpting Change is the third theme and closes off what I believe is a very strong thematic year from Gartner. The nexus of this theme is that change is disruptive and that many of the technologies we will gravitate toward will be attempting to create order from the chaos. This is especially important in the context of rapid innovation, societal changes, and Covid-19. The emphasis of these technologies is on generalized and reliable technologies that are less brittle and specific than our current uses. AI is already a massively exciting space, but many of the use cases are too specific to be useful. Sample technologies include physics-informed AI, composable applications, and influence engineering.
If we compare this year’s list to last year, I think we’ve seen a massive increase in the maturity of “Digital Me”, the integration of technology with people in both reality and virtual reality. But, we’ve seen less progress on “Beyond Silicon” despite the massive chip shortage. It’s a space I’m hoping to see more improvement in, fast, to meet increasing demand.
Of course, I’m always most interested in the intersection of AI and other spaces. Last year, many of the emerging trends were AI-centric, and this year it feels as if AI has become the underpinning of broader trends. In my opinion, this points towards the increasing maturity and adoption of AI. Models are becoming more generalized, and able to attack more problems. They're becoming integrated with human behavior and even with humans.
As we reach new echelons of AI, it's likely that you'll see over-hype and short-term failures. As you reach for new heights, you often miss a rung on the ladder… but it doesn't mean you stop climbing. More importantly, it doesn't mean failure or even a lack of progress. Challenges and practical realities act as force functions that forge better, stronger, more resilient, and adaptable solutions that do what you wanted (or something better). It just takes longer than you initially wanted or hoped.
To paraphrase a quote I have up on the wall in my office from Rudiger Dornbusch … Things often take longer to happen than you think they will, and then they happen faster than you thought they could.
Many of these technologies have been hyped for years – but the hype cycle is different than the adoption cycle. We often overestimate a year and underestimate 10.
Which technologies do you think will survive the hype?
On September 11, 2001, 19 extremist Al Qaeda militants hijacked four airliners and carried out suicide attacks against targets in the United States. Nearly 3000 people were killed during the attacks.
Do you remember where you were when it happened?
For most Americans, it’s easy. That moment – and its ripples – are imprinted on our minds. For my son, Zach, it was in his 3rd-grade class. They wheeled in a TV on a cart for the students to watch. One of his classmate’s uncles was killed in the attack.
A colleague of mine was supposed to be in the tower that day but rescheduled a meeting for the following day – narrowly missing it.
And now 20 years have passed. So much has changed. So much has stayed the same. We’ve analyzed the events of that morning a thousand ways from different vantage points … and it’s still impossible to fully grasp the weight of the event.
It’s crazy to imagine that there are now full-fledged adults who have no memory of it.
And with that, Visual Capitalist put together a great chronology of the event.
As we honor those that gave their lives – or had them taken from them – it’s a powerful reminder.
I am writing this while flying back from watching a Cincinnati Reds game in their Owner’s Box.
It was a great experience – and reminded me of how much you can learn from watching what professional sports teams do.
Frankly, the whole business of professional sports fascinates me.
They have to do so many things right … just to compete. This includes how they build and manage their team, cultivate their brand, support their communities and causes … as well as how well they handle the practical realities of the logistical, operational, and financial challenges they deal with constantly.
It is more than a business. For the most successful, it is a mission or stewardship.
Personally, I pay attention to football more than other sports.
In 2017, I lightheartedly questioned the future of the NFL as a result of bad press around concussions, crimes, and more. I questioned it as a fan that's been a season ticket holder for as long as I can remember. My Dad and I had season tickets to the Eagles when I was young, and to the Patriots when I was a teenager. Recently, I’ve been a Cowboys season ticket holder for over 30 years. I questioned it knowing that the NFL wasn't really at risk. To support that assessment of the NFL’s stability, consider that (despite quarantine) the league-wise Season Ticket renewal rate is at 92%… equaling a 5-yr high.
Part of the stability stems from doing so many things right (or at least well). Which takes us back to the point that you can learn a lot from how sports teams thrive.
There's a lot to learn not only from the NFL's longevity, but from what it's like to be a part of a team, from the coaching, and the management side of things.
Some of these lessons stem back to youth football … which I’m reminded of each time I get to watch a Dallas Cowboys practice at The Star.
Think about it, even in middle school, the coaches have a game plan. There are team practices and individual drills. They have a depth chart, which lists the first, second, and third choice to fill certain roles. In short, they focus on the fundamentals in a way that most businesses don't.
The picture, below, is of my brother's high school team way back in 1989.
Is it possible that most businesses are less prepared to win than an 8th-grade football team? At first, that may sound like hyperbole, but if you think about it … it's likely true.
Losing to an 8th-Grade Team
Even middle school and high school teams have a playbook for offense, defense, and special teams. They scout opponents and create game plans. They think about how to improve and coach the team … and each player. They strategize and drill to perform well each game. Meanwhile, they also work to string together wins to achieve a higher goal.
Contrast that with many businesses.
Entrepreneurs often get myopic … they get focused on today (or survival), and they often lose sight of the bigger picture and how all the pieces fit together.
The amount of thought that goes into football – which is ultimately a game – is a valuable lesson for business.
If an 8th-grade football team is equivalent to a normal business, what would happen to a business that operated similar to an NFL team?
Practice Makes Perfect
How you do one thing is how you do everything. So, they try to do everything right.
Each time I've watched a Cowboys practice session, I've come away impressed by the amount of preparation, effort, and skill displayed.
During practice, there's a scheduled agenda. The practice is broken into chunks, and each chunk has a designed purpose and a desired intensity. There's a rhythm, even to the breaks.
Every minute is scripted. There's a long-term plan to handle the season … but, there was also a focus on the short-term details and their current opponent.
They alternate between individual and group drills. Moreover, the drills run fast … but for shorter time periods than you'd guess. It is bang-bang-bang – never longer than a millennial's attention span. And they move from drill to drill – working not just on plays, but the skillsets as well (where are you looking, which foot do you plant, how do you best use your hands, etc.).
They use advanced technology (including advanced player monitoring, biometric tracking, and medical recovery devices … but also things like robotic tackling dummies and virtual reality headsets).
They don't just film games, they film the practices … and each individual drill. Coaches and players get a cut of the film on their tablets as soon as they leave. It is a process of constant feedback, constant improvement, or constant renewal. Everything has the potential to be a lesson.
Beyond The Snap
The focus is not just internal, on the team. They focus on the competition as well. Before a game, the coaches prepare a game plan and have the team watch tape of their opponent in order to understand the tendencies and mentally prepare for what's going to happen.
During the game, changes in personnel groups and schemes keep competitors on their toes and allow the team to identify coverages and predict plays. If the offense realizes a play has been predicted, they call an audible based on what they see in front of them. Coaches from different hierarchies work in tandem to respond faster to new problems.
After the game, the film is reviewed in detail. Each person gets a grade on each play, and the coaches make notes for each person about what they did well and what they could do better.
Think about it … everyone knows what game they are playing … and for the most part, everybody understands the rules, and how to keep score (and even where they are in the standings). Even the coaches get feedback based on performance, and they look to others for guidance.
Imagine how easy that would be to do in business. Imagine how much better things could be if you did those things.
Recently, however, it seems that we are increasingly presented with issues divided into polar opposite points of view, with little to no tolerance for disagreement.
Nonetheless, not all topics need to be debated or negotiated.
Sometimes, a fact is a fact.
Hopefully, this video won't step on any toes – but if you're a "flat earther," I wouldn't watch.
Here's a clip from Behind The Curve (a documentary on the flat earth society) that I think perfectly shows confirmation bias.
Start with the evidence and then form a conclusion. Doing that in reverse doesn't tend to work out as well.
As a polite reminder, if a conspiracy relies on millions of people (as well as different countries and organizations) to all commit to the disinformation campaign … it's not likely true.
As Occam's razor states, the simplest explanation is often the correct one.
While the calculation is based on five factors, the primary conditions indicate a big disagreement about market conditions.
For example, two of the conditions are that a substantial number of stocks have to be at yearly highs, while a substantial number of stocks have to be at new annual lows. Ultimately, it is hard for those two conditions to be met in a short period of time unless there's uncertainty in the market. Moreover, after a rally, uncertainty is often a precursor to a decline.
In addition, technically (for the pattern to be complete), a second sighting of the five elements must occur within 36 days. Logically, lingering uncertainty is a momentum killer.
Should I Be Worried?
This week, Cumberland Advisors' shared the following from Art Cashin, Director of Floor Operations for UBS Financial Services at the New York Stock Exchange.
Art had this to say:
“I had told Carl Quintanilla on CNBC’s Squawk on the Street in an interview about 10:20 that I thought the chatroom bears were turning a bit more aggressive. Several were trying to point out that we had had two Hindenburg Omens in a row. In case you had forgotten, a Hindenburg Omen is rather arcane indicator that takes as a measurement the ratio or relationship between the new 52-week highs and the new 52-week lows. It is quite unusual to have two days back-to-back with new Hindenburg Omens.
Now, you have to be a little bit careful about the Hindenburg Omen because, over the last 35 or 40 years, we haven’t had a market ‘crash’ without the presence of the Hindenburg Omen, and that is what chatroom bears were pushing. You have to remember the other part of that, which is while there has always been a Hindenburg Omen before a crash, there has not been a crash after every Hindenburg Omen. To use a rather poor analogy, it is almost like saying, we have never had a flood without rain. But, then again, every time it rains, it doesn’t mean it is going to flood.
So, it was, nevertheless, an effective tool among the chatroom types just to make people nervous. I am not sure how many have bought into the Hindenburg aspect, but it was one of those ‘Wait a minute – should I be aggressive on the buy-side or should I wait and hold back here?’ I think it had some of that effect.” – Art Cashin
From my perspective, while this pattern may have correctly predicted every big stock market swoon of the past two decades (including the October 2008 decline), not every Hindenburg Omen has been followed by a crash. Resorting to a geometry analogy: All rectangles are squares, but not all squares are rectangles.
Times are strange – and there's reason to be wary of the markets, but indicators like this are a reason to be cautious, not a basis for trading decisions.
GPT-3 was released by OpenAI in 2020 – and was considered by many a huge jump in natural language processing.
GPT stands for Generative Pre-trained Transformer. It uses deep learning to generate text responses based on an input text. Even more simply, it's a bot that creates a quality of text so high that it can be difficult to tell whether it's written by a human or an AI.
GPT-3 is 100x bigger than any previous language AI model and comes pre-trained on 45TB of training text (499 billion words). It cost at least 4.6 million US dollars (some estimated as high as $12 million) to train on GPUs. The resulting model has 175 billion parameters. On top of that, it can be tuned to your specific use after the fact.
Practically, GPT-3 was a huge milestone. It represents a huge jump in NLP's capabilities and a massive increase in scale. That being said, there was a frenzy in the community that may not match the results. To the general public, it felt like a discontinuity; like a big jump toward general intelligence.
To me, and to others I know in the space, GPT-3 represents a preview of what's to come. It's a reminder that Artificial General Intelligence (AGI) is coming and that we need to be thinking about the rules of engagement and ethics of AI before we get there.
Especially with Musk unveiling his intention to build 'friendly' robots this week.
On the scale of AI's potential, GPT-3 was a relatively small step. It's profoundly intelligent in many ways – but it's also inconsistent and not cognitively concrete enough.
Take it from me, the fact that an algorithm can do something amazing isn't surprising to me anymore … but neither is the fact that an amazing algorithm can do stupid things more often than you'd suspect. It is all part of the promise and the peril of exponential technologies.
It's hard to measure the intelligence of tools like this because metrics like IQ don't work. Really it comes down to utility. Does it help you do things more efficiently, more effectively, or with more certainty?
For the most part, these tools are early. They show great promise, and they do a small subset set of things surprisingly well. If I think about them simply as a tool, a backstop, or a catalyst to get me moving when I'm stuck … the current set of tools is exciting. On the other hand, if you compare current tools to your fantasy of artificial general intelligence, there are a lot of things to be improved upon.
Clearly, we are making progress. Soon, GPT-4 will take us further. In the meantime, enjoy the progress and imagine what you will do with the capabilities, prototypes, products, and platforms you predict will exist for you soon.
Each year I look forward to Camp Kotok, or as I like to call it Economists in Nature. It's basically 5 days of canoeing, fishing, and dining with economists, wealth managers, traders, investors and more.
One of few chances for people from these backgrounds to come together and talk about the world, big trends, investing, economics, politics, and more … in an open and safe forum. The event goes by the Chatham House Rule – which basically means you can share the information you receive, but not who said it.
This year we talked about everything from China, digital currencies, the pandemic, and the state of markets.
Interestingly, for all the takeaways I could focus on, the main takeaway was uncertainty.
For all the intelligent and "in-the-know" people in the room, very few people had clear opinions of what was going to happen. There were too many variables at play, and while they posited a lot of potential paths, it feels like the general census was we're at a crossroads with many potential futures in front of us.
Despite the general uncertainty in the room, it wasn't fear-laden. The general mood was optimistic, and for the most part, everyone sees paths toward economic success post-COVID.
With that said, when and what "post-COVID" means is another issue.
One of the other key discussions that came up often was the new generation of workers and their changing relationship with work. It's plain to see the rate of quitting is higher, that wages are rising, and it's getting hard to fill minimum wage jobs. It's hard to get employees back in an office space, and many are willing to take pay cuts or switch to other companies to stay at home.
The long-term impact on our economy (and our culture) is yet to be seen.
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