Transcript

[Intro music] 00:16 Paul Ford Hi, you’re listening to Track Changes, the podcast of Postlight, a digital products studio at 101 5th Avenue in New York City. My name is Paul Ford. I’m the co-founder of Postlight and the co-host of Track Changes.

Rich Ziade And I’m Rich Ziade, the other co-host and co-founder of Postlight. It’s been a great year for Track Changes, it’s been a great year for Postlight. I wanna keep this short, Paul, because this is — we’re reflecting now on 2017.

PF Yeah we’re gonna talk about — 2017 is over! And, in fact, it’s 2018 now [yeah]. Hmm. And so, as we’re recording this, we thought it would be very, very sensible to talk a little bit about what happened, and what we think about what happened over the last year, and talk a little bit about what we see coming down the pike.

RZ Perfect!

PF So, Rich, I heard through the grapevine of you across the table in the podcast studio that you have found an article about the big tech stories.

RZ It’s just the Tech News article.

PF Alright –

RZ I don’t — I mean this is just looking back at 2017.

PF Alright.

RZ Alright, so, item one: the iPhone X was revealed this year.

PF Alright, that’s really great.

RZ This is one of their top things.

PF Boy, that was a big deal, that was really cool. That notch in it.

RZ The notch in there.

PF They made the emoji –

RZ I mean there’s nothing to say here –

PF — the aniemoji.

RZ I feel like we could skip this nonsense.

PF No, I don’t think we should cuz, first of all, like oh my god. Oh my god! That Apple event was excruciating. Second of all, aniemoji –

RZ It was like three hours too.

1:37 PF It’s just Tim Cook in a shirt. I’m so tired of their shirts. Just put on a blazer.

RZ Well one of them, like, doesn’t tuck his shirt [nah nah]. He looks like a schlump but he’s worth half a billion dollars.

PF That’s literally Silicon Valley, right?

RZ It pisses me off. It’s like, “Oh look at me with my denim shirt like a schmuck.” Anyway, I got one, Paul! It’s alright. It recognizes my — the big feature is it recognizes my face.

PF How is that a feature?

RZ Well, I mean, you just look at the phone and it opens it up.

PF I recognize your face. It’s disappointing.

RZ I’ve tried this with other parts of my body.

PF Ah.

RZ It didn’t work.

PF Turn that away [RZ laughs]. I’m so tired of recognizing your face, I’m glad the phone does it. I bet your wife is too. I bet she’s like, “I’m glad that it knows who you are today.”

RZ By the way, this isn’t just gonna be a bunch of jokes. This is the same technology that was in the Microsoft Connect.

PF That’s true.

RZ And through happenstance we actually know one of the people who — that invented that technology that was licensed by Microsoft for the Connect. And they never owned it, Microsoft never acquired the tech.

PF Apple did.

RZ The day their licensing ended, Apple snatched up the tech.

PF Sure.

RZ Uh which was, whatever, a few years ago.

PF And that’s what’s in the notch on the top of the iPhone 10.

2:50 RZ That’s what’s in the notch of the iPhone 10 and I was talking to the person who was one of the inventors and he said he cannot believe that they got the processing power on a device that small and that can read that quickly. He’s like, “I’m blown away that they were able to do that.”

PF No, I think that’s real.

RZ It’s an engineering feat. You know the iPhone we can make fun all we want because it is fun to make fun of Apple.

PF No, no, it’s a flawless miracle of technology.

RZ Well they are at the front of technology and like just — just everything they do is –

PF The thing that they pull off is ridiculous.

RZ It’s kinda ridiculous. It’s exhausting but ridiculous [PF exhales heavily]. Next item: Bitcoin [PF grunts] and the cryptocurrency boom.

PF God I’m so tired. I’m really tired. Can we just — I’m just, I’m done.

RZ I wanna share like a –

PF I love this industry but I don’t think I loved it as much this last year.

RZ Do you own Bitcoin, Paul?

PF No.

RZ Do you want to own Bitcoin?

PF You know I [laughs] — I wrote about it years and years ago and I thought about it and I — like I knew about it very early days [yeah] and [you’d be wealthy] every now and then I think about that. But there’s — I know this one journalist who is immune to success. And he bought like 70 Bitcoins at a quarter each to write a story [oh no]. I checked in with him and I’m like, “What’s the story?” And he’s like, “Well, you know, the regular: I bought some pizzas, I got some mattresses.” [RZ laughs] And he’s like, “I still do have them.” And so he is probably worth like six hundred thousand dollars in Bitcoin at this point.

I think if you trace money back to its roots it’s goods and services, right? … So, I don’t understand where the dotted line goes from Bitcoin. It seems to go back to Bitcoin.

4:21 RZ He has all of them?

PF No, I mean, he probably — half of them or more are gone but it doesn’t matter. They’re worth twenty thousand each.

RZ Like right now it’s surpassed ten thousand dollars for a single one.

PF Right, so I mean this is someone who bought them at a quarter. He bought them when they were essentially free and he bought 70.

RZ I’m gonna make a confession. Ok, so at the beginning of 2017, a single Bitcoin was worth a thousand dollars. By November, it had surpassed ten thousand dollars [mm hmm]. So it’s increased ten fold.

PF Yeah, that’s not a bubble. Not at all. No, that is how things increase in value, especially fanciful, electricity backed nonsense money. That is really great.

RZ I’m not good with this stuff. I don’t understand — I think if you trace money back to its roots it’s goods and services, right? Like, the Saudis are wealthy not because of their services. They’re wealthy because of their goods that they trade on the markets, right?

PF Right.

RZ So I don’t understand where the dotted line goes from Bitcoin. It seems to go back to Bitcoin [it does]. The dotted line to Bitcoin goes back to Bitcoin. So I don’t know it seems insane to me but isn’t the whole world speculative, Paul?

“I think if you trace money back to its roots it’s goods and services, right? … So, I don’t understand where the dotted line goes from Bitcoin. It seems to go back to Bitcoin.”

PF Well we live in a kind of –

RZ Can we get philosophical for a second?

PF No, you know, when I was an editor I edited a cover story for a magazine about the bubble, just the bubble economy that we live in [mm hmm] and we live in an economy that favours bubbles.

RZ We’re an optimistic people.

PF We really are. And so –

RZ And that’s ok.

PF [Laughing] this is a bubble. I mean, c’mon.

RZ It looks like a bubble.

PF It takes like an entire aluminum smelting plant in China to process one transaction on wish.com with Bitcoin [yeah]. You know it’s just like at what point do you look at this and go, “Maybe this isn’t sustainable.”

RZ Right.

The Silicon Valley ethos around technology, if you talk to venture capital people they are very, very focused not necessarily on making amazing, awesome products…what they really wanna do is make the marketplace.

6:05 PF The Silicon Valley ethos around technology, if you talk to venture capital people they are very, very focused not necessarily on making amazing, awesome products. That’s a big part of what they do but what they really wanna do is make the marketplace. Google is a great search engine. Truly great. Probably the best in the world. However, where it really is as a marketplace for ad distribution.

RZ Right.

PF There’s a tension from search consumers on one side and there is demand from advertisers on the other and Google profits unbelievably. Same is true of Facebook. These are the reasons why these companies really matter. And increasingly, what I think, is that the ethos of this world around platforms and giant technology companies — like, I remember when Facebook bought WhatsApp, remember how much that was? 19 billion dollars.

RZ 16 billion.

PF 19 billion, I think it was like worth 21 when they finally bought it with the stock exchange or whatever.

RZ Right.

PF At that point, you gotta wonder, are they buying that with actual hard dollars? Kinda in reality, sure. They’re buying it with Facebook stock and they’re buying with dollars and there’s an evaluation. But it almost feels like they’re buying it with Facebook Future Attention Coins, right? Like, they’re going like, “Oh man, wow that thing’s really taken off.”

RZ Well it is. I mean it’s future value.

PF That’s right. At that scale, Microsoft, Apple, Facebook, Google, you’re talking about an internal economy that is similar almost to like a national economy, right? Where these different sections of these giant platform companies intersect and spend money. And so, to me, I look at the Blockchain and I look at Bitcoin as almost like the reason it’s so attractive to that part of the world and why they put so much money and energy behind it is that it promises, in the same way that like a great product promises an amazing marketplace where you can take a little tax off of every transaction, Bitcoin promises like a native currency for that universe.

8:07 RZ And that’s ok? Isn’t that what we do a lot of the time?

PF Oh dude, it’s a pickle. We’re in a pickle.

RZ We’re in a pickle with this stuff.

PF They believe –

RZ Can I? I wanna share an old phenomena. We’re gonna go back to the 1600s.

PF Oh! The tulips!

RZ The tulips.

PF You know apparently there’s a lot of talk now that the whole tulip thing was a little overblown. It was never that serious.

RZ I mean! [Sighs] you know, it’s late for that!

PF Well this is what’s funny –

RZ Isn’t is late for that?

PF Because everyone’s like, “Hey, it’s a bubble. What about the tulips?” And then the people who are defending the bubble are like, “Well, now, you know, [RZ laughs] the tulip thing was a little bit overblown.”

RZ Yeah, I mean, give me — let me see the references to the tulips.

PF There’s also been the, you know, the South Sea Islands, [right right right], the — but you know, I think even closer to home might be the complete implosion of the dot com economy.

RZ [Laughs] exactly! So, just to give people — you wanna give a quick summary?

PF Well, back in the day, in the 1600s, the Dutch uh went crazy for tulips [yes]. People just really got into tulips and thought they were cool, and different kinds of tulips, different colours of tulips –

RZ They are beautiful, by the way.

9:13 PF Beautiful flower. And then an enormous economy around tulips arose and tulips became worth zillions of gilder or whatever the heck it is [yes] and so it was a bubble.

RZ Like way beyond –

PF There’s a book that’s kind of a classic called, I think it’s Extraordinary Popular Delusions and the Madness of Crowds.

RZ This is a famous book.

PF It’s a famous book. It came out in like 1800s or early 1900s and it is about tulip mania, is sorta the keystone of the book, but it also, if I remember correctly, I haven’t read it in ten years, but it talks about the South Sea Island bubble. And there were all these like real estate speculation bubbles, things like that [mm hmm]. And the reality is though that everybody talks about, “Well maybe the tulips, maybe not the tulips -” But like we’re on the other end of the 2008 housing implosion. That was a bad one. And also the complete — like I remember having my entire career decimated by the first dot com implosion.

RZ Now I wanna walk through the bubble.

PF Oh boy. Ok.

RZ The tulip bubble.

PF Oh good!

RZ Here’s what it took to get one bulb of the tulip at the time was called the Viceroy. So, here we go, I’m gonna run down this list, it’s not any one of these, you have to add these up. “Two lasts of wheat, four lasts of rye, four fat oxen, eight fat swine, 12 fat sheep, two hogsheads of wine, four tonnes of beer, two tonnes of butter, one thousand pounds of cheese, a complete bed, a suit of clothes, and a silver drinking cup.”

PF Honestly many of our client contracts look a lot like that.

RZ [Laughs] this — I mean if there was ever a bubble here [right], Paul, I’d say it was viewed — you know what it was? It took on the characteristic of like a diamond.

PF Sure.

RZ Like just this rare –

PF Well, here’s the thing there’s a fundamental little mental trick there, right, which is like, “I need to get in now because it’s still happening.”

RZ Yes. Yes.

11:13 PF Right? And that is just — it’s actually that simple. Like it really is. It’s like, “I need to jump in now.”

If you can maintain scarcity that’s where value lies.

RZ Yeah. Look, if you can maintain scarcity that’s where value lies. I think what’s interesting here is that it’s fictional. You know what De Beers is?

PF Of course I do.

RZ Alright, De Beers is a very strange sort of colonial, commercial — when they found, and I think they’d found like tons of new mines, like diamond mines somewhere, they literally sent armies out there to slaughter everybody.

PF It’s not just that. Also if you, like even today, if you find a diamond in your backyard in South Africa, it belongs to De Beers. It’s colonialism as practice.

RZ Also, do you know what it takes to buy diamonds from De Beers?

PF No.

RZ It’s one of the strangest process — I saw a documentary about this. You literally go this building [mm hmm], you say, “Hey, I wanna buy diamonds,” and they probably know who you are and they know where you lie in terms of your purchasing value.

PF So this is not — I’m gonna buy wholesale. I’m not going to buy one for my wife.

RZ Exactly.

PF Yeah.

RZ Exactly you’re gonna buy a bunch of diamonds, right? So you go into a room and there’s nothing in the room except a window across from you [k] and it looks like a uh a betting window at the track [ok], and you come in and they either know you or they don’t. And you say, “Well, this is what I’m looking for.” Then they leave the room, on the other side, and they come back to show you the diamonds that they will make available to you [mm hmm]. There is no showroom. There is no sense of how many diamonds they have. It is, effectively, controlled scarcity [sure]. That’s all it is. You may come in and say, “I want ten thousand.” And they’re like, “Mm, we’re gonna give you three hundred and -”

PF This is how — that’s not good for the marketplace.

12:54 RZ “It’s not good for us. It’s not good for the marketplace.” It is a — I mean it is a relic of true colonial control [right] today. To this day, right? [Sure] And uh the whole world pretty much deals with it. And they’re British too. So everything sounds really nice and polite [oh yeah], even though there’s blood all over their hands.

PF Just brutal.

RZ Yeah. Should we close it with one more 2017 — this is an easy one: the influence of the US election by hackers and by Russia and –

PF This is a big deal, right? Because what we saw is that platforms can be consolidated to the point on the internet that they have massive, direct cultural power. And then you can feed that with complete garbage information that satisfies the users. So it’s like –

RZ And — yes. Yes.

This is a big deal, right? Because what we saw is that platforms can be consolidated to the point on the internet that they have massive, direct cultural power. And then you can feed that with complete garbage information that satisfies the users.

PF This the mental equivalent of imagine a pneumatic tube system that could deliver McDonald’s food to every house [yeah]. And you go in there and you go like, “You know what? We should roast chicken tonight or you know what we’re gonna do? Eggplant cuz we said we would do meatless Fridays.” And instead you just like –

RZ Continue to get –

PF Just fries! A fries hose.

RZ It just keeps coming’.

PF Yeah you go to the sink and it’s just filled with french fries [yeah]. And you’re like, “Well, you know what? Let’s have french fries tonight.”

RZ Let me dial up the analogy even more to an entire population that’s never smoked cigarettes or been addicted to nicotine. They start the process.

PF Oh yeah.

RZ And then it gets to the point where you don’t even need the pipe.

PF You get ’em free at the supermarket.

RZ To get you going.

PF And it’s not just — they give you a carton. So you’re like, “Oh hey, I’m gonna see what Suzy’s doing. Um you know I knew she was doing that pie baking contest.”

14:34 RZ And next thing you know you’re looking for cigarettes.

PF Yeah and no, the next thing you know Freedom Eagle is telling you that Hillary Clinton does blood libel. And you’re like, “Wow, boy, I never thought of her eating babies before but it’s here on the internet.”

RZ Yeah and uh –

PF And it’s — as silly as that makes it sounds and we’re overdramatizing it slightly. Millions and millions of people saw that stuff and went, “Hmm, that makes sense.”

RZ Yeah, exactly, exactly. There’s a vicious cycle here. It reinforces the viewpoints that have been established. It gets more and more outlandish and they just continue to –

PF This is — what it gets at and where it’s so tricky is it gets to the core product promise of these giant platforms which is that an advertiser can come to them and say, “I wanna reach an audience.” And they go, “Absolutely. We know how to reach people. We know how to influence them. They’re gonna click on your stuff. And you’re gonna get value back.” And they’ve been saying that for years and it actually has made them hundreds of billions of dollars [yeah], right?

RZ This is how the system works.

PF And then all of a sudden all this stuff happened and they’re like, “Wow, people don’t believe everything they read.” And –

RZ [Laughs] Let’s add this dimension to it. This wasn’t two campaigns at each other’s throats. This was a foreign actor getting in the mix.

PF Yeah and then you add that into it. You add Russia into it.

RZ I mean and then –

PF And we still don’t know what the hell happened, frankly. I mean we don’t have anything like clarity.

RZ No, there’s evidence that servers touched servers and all this, you know, computers were in the mix and we know the IPs are from here and all of this stuff but it all came at once, man. It was — the system was in place, the units that we came to understand as pages and newspapers were obliterated and replaced with these entirely disposal units of information –

16:25 PF I think there’s also — it just revealed how non-cunning we are. We have a CIA, we have a lot — we like to meddle as a country. We always have [mm hmm] and at the same time we kind of assume that deep down we’re on the up and up and we’re doing it for good reason.

RZ We’re also the best, accordingly. We’re the best at the tech [yeah and — ] and we’re decent people [chuckles].

PF And we got into this position in which they housed us. I mean they schooled us so hard.

RZ Absolutely.

PF You got people in essentially content factories putting like boob pictures aligned with, you know, Hillary Clinton shooting guns. I mean it’s just madness.

RZ Let me be an unapologetic patriot for a second.

PF Yeah.

RZ I got my ass kicked.

We’re two Mr. Digital Guys, and we went to war without knowing it, and we just got the crap kicked out of us.

PF Absolutely.

RZ I’m supposed to be the one that knows all the encryption stuff.

PF No we’re — we’re two Mr. Digital Guys and we went to war without knowing it and we just got the crap kicked out of us.

RZ Without a doubt and, you know, I think when you limit resources you get really, really creative [yeah] with your stuff. And –

PF Well this is the great thing, right? I think what happens it’s so cheap [yeah]. Like I think the Russians were — and other — North Korea has been kicking our ass in certain ways too. I think they got, they’re like, “Well, what can we do?”

RZ Yup, exactly.

PF “We can’t use nuclear weapons. That’s really bad. Let’s avoid that, at least so far.” Knock on wood. But boy, you know, actually with one relatively cheap cable modem line we can destabilize a giant global democracy.

17:54 RZ Also, I will give us some credit that we just — we accepted the kind of handshake pact amongst countries that you just don’t meddle. Um I just — even if we could do it and I think we could, obviously, do it.

PF Well, the tricky thing is when you look at the NSA, we were. Regardless of that, we were the ones who were supposed to be doing all the spying.

RZ Right. This wasn’t spying.

PF No, this was just — this was actual cyber warfare.

RZ There’s no spying here. It’s not like they were in my house. They just — it was just straight out, they just took the keys.

PF It was a global disinformation campaign focused at the 2016 election.

RZ Yeah and I’m curious to hear how we deal with this in the future.

PF Frankly, the thing is I don’t –

RZ I think it has to go outside of tech. I think it’s like, “Look, if you wanna part of the like family of nations, you do this and then, you know, sanctions and threats -” And I don’t think it’s gonna be tech. It can’t be tech.

PF I agree.

RZ It’s endless, right?

PF We’re in this chaotic situation in which the people who would set the policy, or succeeded partially because of this happening [yeah], so it’s an impossible situation. Anyway, I mean, look –

RZ That’s a big one to close on, Paul. We should go back to the iPhone X.

PF Just relax. We’ve got seven years to go, so we’re gonna pace it [RZ chuckles]. I don’t think people take that into –

RZ By the way Russia can’t hack the iPhone X. They tried.

PF So far.

RZ So far.

PF So that was 2017. Before we go, what’s one thing you wanna learn or do in 2018?

19:23 RZ Ooh. Like outside of tech?

PF Well, I mean, whatever. It could be whatever. People have come to know us a little bit on the podcast, let’s hold ourselves accountable.

RZ Like a good omelet.

PF Oh that’s a great one, actually.

RZ Like a good omelet. I’ve seen like the French do it –

PF Just like flip it over really fast –

RZ Not even a flip –

PF — it’s so crisp.

RZ — you sorta fold it –

PF It’s like halfway to crepe.

RZ You kinda fold and then you fold again and it’s just like there’s like a wet centre to it.

PF Yeah that’s hard to do. You know, for me, I feel um disconnected from the world of design at large. Like, not just UX.

RZ You can’t come back with that bullshit after I said a good omelet.

PF No, I don’t wanna make an omelet. I’m not gonna make an omelet. I mean I gotta go to the gym more. That’s on the docket.

RZ Ok.

PF Um but no I mean you know what it is? Like I wanna go — I need more museum time. That’s what I’m saying.

RZ Me too. That sounds great.

PF Last year I went down to the Library of Congress and did the tour [mm hmm] and it made me realize just how like how powerful it is to get connected to just sort of all the stuff [yeah]. Just the way it reframes your thinking. So that’s my goal.

RZ You really love that place. Well I mean –

PF It’s ok to love it.

20:33 RZ We’re in a great — we’re near Washington, DC, and we’re in a great museum town here in New York City. So we have no excuses [music fades in].

PF That’s exactly right. Well, look, let’s make 2018 good.

RZ That wasn’t a good technology year, man. We’ve got bullshit happening with Bitcoin, you’ve got Russia up my ass.

PF This was not a great tech year [phew!]. There wasn’t massive progress in any like –

RZ Like ’16 was just drones.

PF Yeah.

RZ Look at this nonsense.

PF Alright, look, let’s not go down that path.

RZ You wanna look ahead. Get in touch with Postlight [chuckles].

PF hello@postlight.com that’s our email address.

RZ We’re gonna put, promise we’re doing this, checkout the page on Track Changes connected with this podcast, there will be a spectacular omelet recipe in there.

PF Alright. Omelet.

RZ Everyone, have a lovely week. Hit us up on hello@postlight.com.

PF Let’s have a great 2018 together and one of the ways to do that is [chuckling] five stars on iTunes for Track Changes .

RZ Happy and healthy, y’all!

PF Alright, you don’t have to give us five stars. We hope you have a good 2018 no matter how many stars.

RZ No matter what [music ramps up to end].