Looking at the list, we see new editions like Clubhouse and Strava. Partially due to the quarantine, you're still seeing an increase in digital cash transfers with tools like Venmo, an increase in e-commerce shops like Shopify, and an increase in (you guessed it) collaboration tools like Zoom or Microsoft Teams.
Just to pick out some of the key figures in the chart this year.
Amazon users spend $283,000
6M people shop online
TikTok users watch 167M videos
and, Zoom hosts 856 minutes of webinars.
Before 2020, I already thought that big tech had a massive influence on our lives. Yet, somehow this past year has pushed their impact even higher.
One other thing this chart also helps put into perspective is the rapid rate of adoption. As you look at different year's charts, you can see how quickly apps have become part of the cultural zeitgeist.
How do you think these numbers will grow or change in 2022?
Rapid growth means little time to create adequate rules. Everyone’s jumping to own more data than the next and to protect their data from prying eyes.
The trading industry has undoubtedly experienced the rapid growth of data, but it’s pervasive in every industry – and in our personal lives as well.
Having basic data and basic analytics used to be enough, but the game is changing. Traders used to focus on price data, but now you’re seeing an influx of firms using alternative data sets to find an edge. If you’re using the same data sources as your competitors and competing on the same set of beliefs, it’s hard to find a sustainable advantage. Understanding the game they’re playing (and the strategies and rules they follow are important), but now that’s just the table stakes.
Figuring out where you can find extra insight, or make the invisible visible, creates a moat between you and your competition – and lets you play your own game.
I shot a video in 2019 about Data as fuel for your business. Check it out.
It is interesting to think about what’s driving the new world (of trading, technology, AI, etc.), and that often involves identifying what drove the old world. History has a way of repeating itself.
Before e-mails, fax machines were essential. Before cars, people were pleased with a horse and buggy.
These comparisons contextualize the importance of data in today’s new world of economics and commerce.
While not the best comparison, people often default to comparing data to oil.
Since the Industrial Revolution, petroleum has played a pivotal role in human advancement. It fueled (and still fuels) our creativity, technology advancements, and a variety of derivative products. There are direct competitors to fossil fuels that are gaining steam, but it’s more interesting to compare petroleum to data due to their parallels in effect on innovation.
The process of pumping crude oil out of the ground and transforming it into a finished product is far from simple, but anyone can understand the process at a high level. You have to locate a reservoir, drill, capture the resource, and then refine it for the desired product (e.g., heating oil, gasoline, asphalt, plastics, etc.). Then, you have to move it to where it’s needed.
The same is true for data.
You've got to figure out what data you might have, how it might be useful, you have to figure out how to refine it, clean it, fix it, curate it, transform it into something useful, and then how to deliver it to the people that need it in their business. And even if you've done this, you then have to make people aware that it's there, that it's changing, or how they might use it. For people who do it well, it's an incredible edge. – Howard Getson
Data can be seen as the fuel to the information economy and oil to the industrial economy. The amount of power someone has often correlates to their control of and access to resources … and diminishing or diluting those resources can lead to extreme consequences.
Why Data Is Better Than Oil
The analogy works, but it’s just that, an analogy. The more you analyze it, the more it falls apart. Unlike a finite resource (like oil), Data is all around us and increasing at an exponential rate. So the game is a little different:
Data is – ultimately – a renewable resource. It’s durable, it’s reusable, and it’s being produced faster than we can process it.
Because it’s not a scarce resource, there’s no urge to hoard it – you can use it, share it, transform it, infinitely knowing that it won’t diminish. Data is more valuable the more you use it.
As the world’s oil reserves dwindle (and renewable resources grow in popularity and effectiveness), the relative value of oil drops. It’s unlikely that will happen to Data.
Also, while data transport is essential, it’s not expensive in the same way that transporting oil is. In fact, it can be transported and replicated at light speed.
While petroleum can be transformed into many different products – the variety of data-related products and sources is basically infinite in comparison.
On Alternative Data
In the past, investors relied on information and experience from their real lives, from counterparties, and from fastidious attention to CNBC and stock tickers.
While the games, the rules, and the players have all changed, the goal hasn’t… more alpha … more money … more reliably.
Alternative data, to most, means tracking Twitter and Facebook sentiment, but confining your definition to that limits potential alpha.
New sources of data are being mined everywhere, and are letting investors understand trends “before they happen.”
For example, mobile devices, low-cost sensors, and a host of new technologies have led to an explosion of new potential data sources to use directly for predictive insight or indirectly to help improve models.
In addition, private company performance, logistics data, and satellite imagery are becoming popular data sets in a data scientist’s alpha creation toolbox.
There are often concerns about the cost and completeness of these datasets, but as we get better at creating and using them, both will improve.
It also doesn’t always have to be confidential or challenging to find information. Traders now have access to vast amounts of structured and unstructured data. An important source that many overlook is the data produced through their own process or the metadata from their own trades or transactions.
In the very near future, I expect these systems to be able to go out and search for different sources of information. It's almost like the algorithm becomes an omnivore. Instead of simply looking at market data or transactional data, or even metadata, it starts to look for connections or feedback loops that are profitable in sources of data that the human would never have thought of. – Howard Getson
In a word of caution, there are two common mistakes people make when making data-driven decisions. First, people often become slaves to the data, losing focus on the bigger picture. Second, even the most insightful data can’t predict black swans. It’s important to exercise caution.
The thing about “sustainable alpha” is that while one might be able to achieve it, you can’t expect to have it doing the same thing everyone else does (or by doing what you’ve always done).
Markets change, and what worked yesterday won’t necessarily work today or tomorrow. Trading is a zero-sum game, and as we move toward the future, this only gets more apparent.
The future of Data is bright, but it’s also littered with potential challenges. Privacy concerns and misuse of data have been hot button topics, as have fake news and the ability of systems to generate misleading data. In addition, as we gain access to more data, our ability to separate signal from noise becomes more important.
The question becomes, how do you capitalize on data, without becoming a victim to it?
I know I'm not the only one who feels like their phone is listening in to their conversations.
The ad suggestions are sometimes too on point – and even prophetic.
It can be a good thing – insofar as it gives you more personalized and relevant ads – but it can also be overly invasive.
With that, I have two charts for you today. One shows you how many cross-site trackers big companies are using to track you, and one shows you what sites allow the most cross-site trackers.
Unsurprisingly, Google and Facebook are doing most of the tracking. And the most popular tool they use is called DoubleClick. DoubleClick allows them to show you ads across multiple sites, and as often and for as long as they want.
For a different perspective about who's tracking you, here's a chart from PCMag and Surfshark showing which sites allow the most trackers.
For the past 80~ years, John D. Rockefeller was the undisputed richest person in history, but now Elon Musk is giving him a run for his money with a $340 billion net worth.
Many historians estimate Rockefellers' inflation-adjusted net worth to be around $340B, which would tie them.
While this is fun to look at, realistically, it's hard to get accurate numbers for many of these people. Think how much land Genghis Khan held or that Augustus Caeser essentially owned an entire empire. The calculations of their wealth are very subjective, and records from ancient eras are very scarce.
It is, however, surprising to see someone amass such personal wealth in an era with much more competition.
Do you think someone will surpass that wealth soon?
It is possible. How and why? Because we live in interesting times!
Freeing humans to do more has always been a boon to society. Electricity put a lot of people out of work … but, look what it made possible.
We'd be naive to think AI isn't going to influence the job market, but that doesn't mean you can't navigate that shift.
A Look At Industrial Revolutions
The Industrial Revolution has two phases: one material, the other social; one concerning the making of things, the other concerning the making of men. - Charles A. Beard
There are several turning points in our history where the world changed forever. Former paradigms and realities became relics of a bygone era.
Today, we're at another turning point.
Tomorrow's workforce will require different skills and face different challenges than we do today. You can consider this a Fourth Industrial Revolution. Compare today's changes to our previous industrial revolutions.
Third industrial revolution – The world wide web and computers connect the world together, heralding the digital age.
Each revolution shared multiple similarities. They were disruptive. They were centered on technological innovation. They created concatenating socio-cultural impact.
The fourth shares all the same hallmarks.
We're harnessing new technologies like AI, the IoT, renewable energy, and the blockchain. Automation will reach new levels in this revolution. But there also will be an explosion of new fields, new markets, and new necessary skillsets – it's going to impact the world as holistically as electricity did.
How will humans create value in an increasingly automated world?
I believe that, if managed well, the Fourth Industrial Revolution can bring a new cultural renaissance, which will make us feel part of something much larger than ourselves: a true global civilization. I believe the changes that will sweep through society can provide a more inclusive, sustainable and harmonious society. But it will not come easily. - Klaus Schwab
One of the distinctions I've recently made about the industrial revolutions is that for a long time, technology helped humans act like robots. Think about a plow and a farmer, or a seamstress and a sewing machine. After that, it helped robots try to act like humans, which you've seen more recently.
I believe we're at another inflection point, where new capabilities will free up humans to be more human and to pursue more of what they really want.
Robots can do many things, but they've yet to match the creativity and emotional insight of humanity. As automation spreads to more jobs, the need for management, creativity, and decision-making won't go anywhere … they may be bolstered by data analytics, but they won't disappear.
Our uniqueness and flexibility rightly protect our usefulness. AI and automation free us up to be our best selves and to explore new possibilities.
In 2017, I shot my first video with Alan Olsen. Alan is a wealth manager to the ultra-affluent. His American Dreams show is immensely popular with the High-Net-Worth demographic in Silicon Valley.
Alan's show is about finding your path in life, and what it takes to make businesses thrive through adversity and challenging times.
In my first video with him, we talked about defining a meaningful life. We started by talking about my career path from a young lawyer to spending over 25 years running tech companies … and the lessons learned along the way.
The main issue addressed during the video is how you can best get what you want as the world changes and forces like AI terraform the world and your role in it.
It's worth watching.
Ultimately, I believe AI is simply another vehicle freeing human nature. As AI does what humans used to … you have an opportunity to choose what to do with the freedom you get. Will you relax or lift your gaze to something better? The choice is yours.
Similarly, some will want to direct new AI capabilities towards things they want to monetize better. Others will want to weaponize AI. Still others will use it to spread peace and love.
You've seen it with nuclear power (and a host of other technological capabilities) … tools aren't good or bad in and of themselves – it is what people use those capabilities for that determines their impact.
Remote work has been increasingly popular because of the pandemic … but even as more people have vaccines, and some are even getting booster shots, the love for remote work stays.
I'll be honest … when I first saw this, I was like, "Retail's that low? That can't be right". But then I realized… I never really go to stores. What would I know?
Seeing the rise of remote work in Media & Tech is unsurprising. But, I will be curious to see what percentage of these businesses stay remote as we move further away from the "worst" of Covid-19.
As I mentioned in this video, hybrid solutions are the answer. There's too much benefit to the culture of companies that spend real time together in person. While I believe productivity can remain high at home or in the office, the sense of camaraderie is hard to sustain if you rarely see each other in real life.
That being said, employees are reporting being happier and more productive at home. Consequently, I wouldn't bet on the move back to the office happening quickly. Meanwhile, companies also are suffering through the "great resignation." Clearly, the game has changed – and so must their strategies and tactics.
The culture of work is in a massive period of transformation. Regardless of where your specific company or industry ends up, all businesses will have to increase the amount of employee care they provide. Just as the heart of AI is still human, so is the heart of our businesses.
You shouldn't be forced to take care of your employees … you should want to. This past year+ has been challenging for everyone, and it's important to keep that in mind as you make decisions.
People have enjoyed the freedom of working from home, and even as the world has gotten safer, it’s unlikely that it will ever get back to the old normal.
However, I’m not willing to give up on the office just yet.
There are benefits to being in the office –and benefits to working from home. Going forward, I suspect that many companies will adopt a hybrid home and office solution.
When my company was running out of my home, we had 20+ people there. But, because it was in the house and seemingly everything was so integrated with our daily lives, our culture reeked of “family.” We developed a closeness that’s hard to match otherwise.
As a company grows, it can be hard to maintain that sense of “family togetherness,” but it’s worth trying.
Culture is the engine behind great companies. As a result, if you let your culture die off, so will your future.
Technology marches on – and there are now more and better tools to foster the quality of remote work and remote teams. As a result, during COVID-19, I was impressed by how our team stepped up. Our tech teams started using discord servers to stay in touch better. We used Microsoft Teams for internal meetings and chats. We used Zoom for external meetings. We intentionally scheduled ‘fun’ activities to lighten the mood. And, of course, we made sure to check in on people more often.
Still, while running a high-performing company can be done remotely, I think it’s easier and better in person. As I mentioned in the video, our team is back in the office twice a week. We have better snacks, we cater in lunch, and we try to schedule important meetings on those days to maximize our team’s time in the office.
I’d love to know what you’re doing to focus on culture this year (and how you’re managing in-office vs. work-from-home with your team).
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