The Age of Exponents

+ four dangerous words I've been told not to say...

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I’m about to say the four most dangerous words when thinking about the future... 

This time is different. 

Now, the danger comes when these words are spoken from a place of hubris. Wide-eyed optimism looks for confirmation bias at every turn. This creates a strong narrative in the mind, but most of the time the rhythms and cycles of history come out on top. That time really wasn’t different and life carries on to the same (or similar) beat.

I say “this time is different” because when I look at the world today I see the simultaneous unwinding of 70 years of institutions, policies, people, preferences, you name it coupled with the world entering the exponential age. We’re on the cusp of real, rapid change in, well, just about everything. It’s akin to the change the world experienced moving from agriculture to industry. 

This next seismic shift is going to be from human-powered labor to digital/machine-powered labor. 

This core feeling of rapid change is what I attempt to capture in my newsletter each week. The world is changing faster than ever. Innovation in one area begets innovation in a completely opposite part of the economy. And these innovations have real impacts on our world, exponential impacts. 

The internet in the 90s was supposed to change everything. It did, but it just took 25 years before that happened, and a massive hype cycle, bust, and valley of despair played out in between. Now, social media and the internet has woven its way into the daily fabric of our lives. 

Monetary and fiscal policy is entering a new era that even 15 years ago would’ve sounded ludicrous. We’re seeing the beginnings of coordinated policy from central banks across the world on stimulus payments and interest rates. 

Next, we’ll see programmable money meaning that the interest rates and taxes that I pay could be completely different than what you pay and it requires zero intervention from the IRS to coordinate because it’s programmed into my wallet. 

We’re seeing the convergence of innovation from multiple technologies creating a massive positive feedback loop supporting more growth and more innovation between each other. 

All of this, and so much more, is happening at a pace that’s near impossible to keep up with. But, I love playing in this future world of possibility, sussing out the wheat from the chaff, the signal from the noise. 

And, the one of the core themes of this disruption I’m seeing right now is something that’s fundamental to innovation and technology.

Technological innovation creates a larger variance of outcomes. There are fewer winners who win far bigger, and there are many many more losers who get nothing. And, this is a phenomenon that’s going to compound exponentially over the next 10-20 years. The winners will be like black holes sucking up the majority of the value and leaving nothing for everyone else.

The teams, companies, people, and countries (arguably most important one…) that compound the most exponential technologies together will come out on top. 

Let’s take autonomous driving as an example of how technology creates few, but massive winners and lots of losers. AS of today, 14 companies and 60+ individual car brands exist today. After autonomous driving reaches scale, there will likely only be 1-3 major companies that dominate what will become a multi-trillion dollar industry. What happens to 

And this same phenomenon will take place across most, if not all, traditional industries.

There will be massive creative destruction taking place at a scale that we’ve likely never seen. Jobs that we would never imagine could get replaced by AI and robots will transform, then completely disappear over the next 20 years (and if I’m being brutally honest with myself I’d say 10 years for many).

As an example, GPT-3 the AI program that creates natural-sounding human language (and was released in May 2020) has created an entire new type of business, the AI-driven copywriter. Now, what happens when AI-generated language can start taking away tasks and businesses for sales assistants, virtual assistants, copywriters, and other professions that use language to do their job? 

So, how does one survive in an exponential world? What are we looking for and how might it affect me? What is likely to happen as innovation expands at an exponential rate? 

These are questions that I am fascinated by, and will continue to keep attempting to answer each week with this newsletter.