It's clear that right now we are in a moment of upheaval and turbulence, that seems to have come upon us very quickly. Pretty much everyone I know has been wrestling to unpack this for the past several months. I've been trying my best to understand the worldview of Steve Bannon, who is clearly an ideological center of this administration. For those who've also been on that quest, I recommend an article from this week's Washington Post, Where did Steve Bannon get his worldview? From my book, written by historian Neil Howe. Howe, along with co-author William Strauss, in 1997 published The Fourth Turning: An American Prophecy - What the Cycles of History Tell Us About America's Next Rendezvous with Destiny. This book has been a major influence on Bannon, and the gist is that history is neither linear nor chaotic, but rather cyclical. From the article:
"We reject the deep premise of modern Western historians that social time is either linear (continuous progress or decline) or chaotic (too complex to reveal any direction). Instead we adopt the insight of nearly all traditional societies: that social time is a recurring cycle in which events become meaningful only to the extent that they are what philosopher Mircea Eliade calls “reenactments.” In cyclical space, once you strip away the extraneous accidents and technology, you are left with only a limited number of social moods, which tend to recur in a fixed order."
Strauss and Howe define 4 "turnings" of the cycle, each lasting roughly 20 years: first a "High", characterized by collective energy (think: post WWII boom), second an "Awakening" where the next generation seeks higher values (think: 60's counterculture and the civil rights movement); third, an "Unraveling", where institutions are distrusted and individualism is high (think: 1920s and 1990s), and finally a "Crisis", where "institutional life is reconstructed from the ground up", in response to a perceived existential threat. For those of us at USV, this general concept of cycles rings true. The firm's original investment thesis was deeply influenced by the work of economist Carlota Perez, and her theory of "technical revolutions" as described in the book Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Perez also describes a 4-part sub-cycle, with each overall "revolution" lasting roughly 80 years:
At USV, we spend a lot of time discussing this cycle, especially as it relates to the nature of the internet/tech market, and which parts are expanding and which parts are consolidating -- for example, we're clearly in the deployment phase with regards to the web platform and app ecosystem, while the blockchain may open the door to another market expansion. But the larger point here is that it absolutely feels like we are at a pivot point, one way or another -- a transition point in the cycle. My colleague Albert has chronicled this extensively on his blog and in his book World After Capital, where he argues that we are at the transition between the industrial era (where capital is scarce) and the information era (where attention is scarce). An important point that Carlota makes is that as each revolution sets in, it brings with it not only new technological underpinnings, but also a whole suite of cultural, legal and institutional changes:
"The new paradigm eventually becomes the new generalized ‘common sense’, which gradually finds itself embedded in social practice, legislation and other components of the institutional framework…”
Both Perez and Strauss/Howe note a period of "turbulence" between cycles -- and in the case of Strauss/Howe, this is more than just a momentary blip but rather the entire fourth "turning", which is crisis. This is the part that's so obviously scary -- of course, as the fundamental underpinning of the economy change, that changes everything, causing real trauma. Right now maybe that's expressed as immigration policy and nationalism, but really it's more about the impact of information technology on jobs and the economy. One thing I still don't have a clear read on is that Bannon's apparent effort to "deconstruct the administrative state" feels like an explicit attempt to hasten the development of the cycle, while the broader Trump campaign branding and agenda ("make America great again") feels like an attempt to slow down this transition, bring things back to how they were. It feels clear to me that the attempts to put the information era genie back in the bottle will be futile -- we have turned the corner to a global, connected world. But in the meantime, economic nationalism is a natural response to that, especially in lieu of a clear policy and political vision that embraces the connected world, but distributes the costs and benefits more equitably.
I have been thinking a lot lately about the increasing importance of the "public data layer" -- meaning, data that we will need ("we" applied broadly, meaning the general public, NGOs, government, scientists, journalists) to make sense of what's going on in and increasingly busy, but increasingly quantifiable world. First, some of the drivers here. In general, there is more data being generated than ever before, so much of which has a bearing on "public" issues. A few of the specific drivers include:
Increasing role of "platforms" in regulated spaces (transportation, health, finance, education, etc) -- these are enormous generators of data with direct and indirect bearing on public issues.
Sensors & IoT (publicly and privately owned) -- same as above.
Abundance of media -- as we have seen with the recent US election, the rise of social & independent media is democratizing but also problematic.
Personal health data -- the cost of gene sequencing is dropping like a rock, which will lead to an explosion of health data. This data will provide personal value but can also provide enormous societal value.
Why this will be important? Because all of these data have the potential to increase collective intelligence and societal knowledge. And more specifically, we have the potential to redesign the way we make policy and handle regulation given these inputs. If we do this right, we can get smarter at policymaking, and design regulatory systems that have both greater effectiveness and lower costs of implementation and compliance. So, what infrastructure will we need to handle and process all of this public data? This seems to be forming into a few broad categories:
Data pooling & analysis platforms -- tools and APIs that make sense of these data -- generic/foundational tools like Composable Analytics and Stae, and more specific, vertically-oriented projects & tools, like OpenTraffic and Aerostate.
"Regulation 2.0" platforms -- specifically designed to facilitate a data-driven policymaking and regulatory process -- for example, MeWe, Airmap, SeamlessGov.
Foundational and application-layer blockchains -- on the pure tech side, this is the most interesting area of development. Blockchains give us both public data access and data integrity in a way that's not been possible before. Much of the focus is still on "foundational" blockchains like Bitcoin, Ethereum, Tezos and Zcash, but eventually this technology will reach the application layer and we'll have more explicitly "public" applications. I also expect that Blockchains and Regulation 2.0 platforms will get ever closer and ultimately merge.
Mechanisms for identifying and amplifying truth -- this is a tough, but important one. We have two problems, in parallel: First, how to we discern truth from untruth? And second: how do we give truth the attention it needs to "win"? The big platforms like Facebook are experimenting with this now, and we'll likely see more tools and services that help with this.
That's the vision -- where it seems clear that we are heading, and where we need to head. So, the more important question is, how will we actually get there? A bunch of questions/thoughts on my mind are:
Broad vs narrow? Strikes me that we will see the most traction in narrow applications first -- the thin edge of the wedge, that solves a concrete problem. Also, the "personal data layer" hasn't arrived in one broad platform either.
Open standards + distribution magnets: dating back to my work around open transit data, a key learning was that open standards need distribution magnets. The thing that got transit agencies to publish data in the open GTFS format was Google Maps.
Portal access vs. real access -- the natural tendency of data owners is to offer access via siloes and portals (e.g., Uber Movement). This is something, but's not the real thing -- the more important question is how to get actual data moving.
Government isn't the only audience: public data is of course useful for policymaking and regulation, but it's equally important for scientific research and journalism. These areas could end up being the initial leaders.
That's it for now. More to come. For some more context on my thinking here, see Regulating with Data and Alternative Compliance.
People often ask me how I ended up working in venture capital, and more specifically in a role that deals with policy issues ("policy" broadly speaking, including public policy, legal, "trust & safety", content & community policy, etc.). Coming from a background as a hacker / entrepreneur with an urban planning degree, how I ended up here can be a little bit puzzling. The way I like to describe it is this: From the beginning, I've been fascinated with the "experience" of things -- the way things feel. Things meaning products, places, experiences etc. I've always been super attuned to the details that make something "feel great", and I'd say the overriding theme through everything I've done is the pursuit of the root cause of "great experiences". From there, I naturally have been drawn to design: the physical construction of things. I love to make and hack, and I geek out over the minor design details of lots of things, whether that's the seam placement on a car's body panels, or the design of a crosswalk, or the entrance to a building, or the buttery UI of an app. Design is the place where people meet experience. But over time, I came to realize something else: what we design and how we design it is not an island unto itself. It's shaped -- and enabled, and often constrained -- by the rules and policies that underly the design fabric. That's true for cars, parks, buildings, cities, websites, apps, social networks, and the internet. The underlying policy is the infrastructure upon which everything is built. This first really hit me, right after college (16 years ago now), when I was reading Cities Back from the Edge: New Life for Downtown, a book chronicling the revitalization of many smaller downtowns across America, written by my old friend Norman Mintz. Before I started the book, my main thinking was: "I want to be an architect, because architects design places". Norman had told me "you don't want to be an architect." But I didn't believe him. But I distinctly remember, about halfway through the book, having an a-ha moment, where I scrawled in the margin: "I don't want to be an architect! I want to do this!". Where this was engaging in the planning and community engagement process that ultimately shaped the design. It hit me that this is where the really transformative decisions happened. I spent the next three years at Project for Public Spaces, working on the design of public spaces across the US (including Times Square and Washington Square Park in NYC), with an emphasis on the community process that shaped the policies, that would shape the design, that would determine the experience. The goal was all about experience, but the guiding philosophy at PPS was that you got to great experience by engaging at the people/community/policy level, and letting the design grow from there. Being a hacker and builder, I've always been drawn to computers and the internet. During my 6 years leading the "labs" group at OpenPlans, a now-shuttered incubator for software and media businesses at the intersection of cities, data, and policy, I made a similar journey -- from experience, to design, to policy -- but this time focused on tech & data policy and the underpinnings of that other world we inhabit: the Internet. I started out building product -- head in the code, focused on the details -- and emerged focusing on issues like open data policy, open standards, and how we achieve an open, accessible, permissionless environment for innovation. The most satisfying achievement at OpenPlans was working with NYC's MTA (which operates the buses and subways) to overhaul their data access policies, and then helping to build the cities first real-time transit API. So the common thread is: great places (physical AND virtual) are a joy and a pleasure to inhabit. Creating them and cultivating them is an art, more than a science, and is a result of the Experience ↔ Design ↔ Policy dynamic. To apply this idea a little further to the web/tech world: I think of the "policy" layer as including public policy issues (like copyright law or telecom policy) which affect the entire ecosystem, but also -- and often, more importantly -- internal policy issues, like a company's mission/values, community policies, data/privacy policies, API policies, relationship to adjacent open source communities, etc. These are the foundation upon which a company (or community, in the case of a cryptocurrency) are built, and the more thoughtfully and purposefully designed these are, the easier time the company/community will have in making hard decisions down the road. So if you think of companies like Kickstarter, or Etsy, or DuckDuckGo (all USV portfolio companies), they've invested considerable effort into their policy foundations. But it's not just "feel good" or "fuzzy bunny", mission-driven companies that this applies to. USV portfolio company Cloudflare announced yesterday that they've been fighting a National Security Letter from the FBI, under gag order, since 2013, in order to protect their users' data, reinforcing their longstanding commitment to their users. This **very hard** decision was borne directly from the hard work they did at the founding of the company, to ground their activities (and the subsequent design of their product, and the experience they provide to their users) in foundational policy decisions. Or look at all the trouble that Twitter has been having recently combating the abuse problem. Or Facebook with the fake news problem. Policy in the spotlight, with a huge impact on product, design and experience. Or look at the internal turmoil with the Bitcoin and Ethereum communities over the past 12 months as they've dealt with very difficult technical / political decisions. Lucky for us, there is so much innovation in this space, and every new cryptocurrency that launches is learning from these examples -- take Tezos, an emerging cryptocurrency that explicitly ships with mechanisms to handle future governance issues (democracy, coded). So I guess the purpose of this post is to draw that through line, from Experience, to Design, to Policy, and show how it actually shapes nearly everything we encounter every day. What a profound and exciting challenge.