Capitalism Is Dead: Long Live Capitalism

you right so welcome everybody thank you very much for coming and getting into our little hoarder house here I was briefly introduced but suffice it to say I'm part of the team at fabric Ventures so especially thankful for you all joining us and especially thankful because of course I stand between you and lunch I think else is never between me and lunch is also important so but I think we have like about about 25 minutes so a lot of you probably think that already kind of the Internet in the web has at a pretty fundamental impact on your lives but you know we would suggest that fabric that actually you ain't seen nothing yet and the impact of this next phase is going to have a fundamental impact across politics across your personal life the very fabric indeed of society and that one way of thinking about that is to follow the money as the age old saying goes and to look at how capitalism is going to be impacted by this next wave and and understand some of or share some of our thinking and in that space so this is a little piece of art that actually was constructed in honor of the dreamers in the States those folks who were brought to the United States as a children and there might have had or might still have their kind of fortunes dashed by kind of a very jagged sharpie signature at any point in time oh sorry someone who's appearing on my screen they're playing with it and you know I think what it represents is that what is that the very core of being human is that that desire to dream and and indeed I've been messing around trying to build and back companies in the technology space for the last 25 years and dreaming of doing that at the 10 years before that and started in fact with my first company with with my brother Charlie and you know we can all think of the things of which we dream we think of you know happiness of course and fun and we think of sustainable a future for the planet fairness amongst our kind of you know fellow women and men but you know the truth is and we can actually tether those to the UN sustainability goals and I've sort of got my badge but the truth is that you know whether or not that's achievable is down to the individual and you know the end of the individual is the unit at which sort of everything occurs it is important that we embrace the the power of the individual the diversity the individual the ability of the individual to know what it that woman or man is up to and to it to masker the risks involved in that even in in this particular instance and but I think it goes beyond that that it is the the voice of that kind of sovereign individual that can actually animate beings and can restructure the tyrannical order of the world when that becomes necessary so pretty critical but it is also true that collectively you know we can achieve a lot more that if we come together in companies of women and men that that can be more effective and so it came to pass in 1494 I believe that Luca Petrelli published a book called Samadhi arithmetic er which is this book here which captured the extremely interesting topic of double entry bookkeeping for the first time along with other principles of the firm and of companies and so this is seen by many is the kind of advent of capitalism and actually if you care to kind of also enjoy it in capitalism of another form I think tomorrow in fact you can buy a copy of this book in an auction at Christie's for a couple of million dollars some you know get there quick so you can get your phones out and put in a sort of a remote bed with Bitcoin prob I mean probably Christie's are pretty advanced so then the next thing that happened there was a gentleman called jean-baptiste says who actually encapsulated the primacy of markets in a book he published in 1803 and that these markets should remain free and unfettered and you could get to the end of the last century and there are few of us in this room who would remember quite distinctly when Francis Fukuyama pronounced the the end of history with the the victory of Western liberal democracy and capitalism over at least the Soviet Communist Empire and so we should be enjoying this very extreme form of capitalism that we all live within we should be enjoying the fact that you know almost half of our world's population lives with under the benevolent Dominion of Emperor Jacques and and Facebook we should also be enjoying the fact that half of the purchases that go on take place online pass through this sort of trumped up bookstore we should be also enjoying the fact that essentially every single thought that we have almost because we believe perhaps not always justifiably that what we type into Google is not you know being observed you know whether that is a whim or a fear or personal insecurity or even a potentially malevolent intent you know that's all goes into Google and we should be enjoying that but do we do we feel like this is the future of which we dreamed is it not true that we're all feel a little bit like we have become the product ourselves that we have given up our data and become enslaved to these these networks or indeed if we're not the product ourselves where we're being co-opted to purchase products often plastic products that we shouldn't be buying this is perhaps not the future that we were all after on top of that there's another wave going on targeted by this gentleman andrew yang who identified in what he believes was the kind of fundamental reason that the current president was elected that is to say there could of hollowing out of jobs within middle america initially through the automation of you know you know manual tasks but you know obviously as we know and we can probably see in many stages here in these few days is moving up into repetitive tasks through you know from knowledge workers and will very soon of course encompass evens very specialized skills so from kind of white-collar jobs even to gold collar jobs and I think what is already happening there I don't think this is even a phrase but this call them steel collar jobs jobs that could never have been done by people but are now being done by if you will machines so this is a very big issue and I think maybe even the biggest issue is that and it's been oft referred to as it could have an echo chamber that when we find ourselves in a situation where our emotions are so distorted by the the everyday experiences we have in our kind of digital realm that we're not actually in a good position to even judge whether or not we're being deceived and dragged in the wrong direction well reason has perhaps even left us and many people who otherwise are sort of civilized and well intended get dragged into wasting time on Instagram and show ponying around or you know suffer your real fear from the prospect of opening their inbox and looking at the emails that are attacking them there so it's it's it's it's wrong at a pretty fundamental level so that's fine and well and good but why is it that we might be at some kind of tipping point in this so look I don't want to be too trite and to bash Zog that's not what I'm here to do he's done an incredible job in all sorts of amazing ways of building a company that has benefited a lot of people you know but it is true that he's now being dragged up in front of Congress that is true that the antitrust authorities are looking at not just his company but many of the tech Titans to address what's going on here is it to a monopolistic it is true that finally we're seeing GDP our within Europe protecting you citizens wherever they are in the digital sphere and around the world and of course in terms of hacks and the danger to our kind of personal and private data that's become so frequent is to become a little bit boring and and and normalized but you know fundamentally there's an extreme form of capitalism here that is evolved that needs temporary not throwing out but but tempering and to fight some of those self reinforcing effect so dreams are good dreams have led us here but how can we rethink than where which we organize ourselves to in pursuit of those dreams perhaps to do a slightly better job so let's cast our minds back a little bit a little bit I don't think any of us quite remember here there could be some combination of Glastonbury and Burning Man or that kind of if we can't cast our minds back a little bit sort of paler Paleolithic you know hunter-gatherer I could have times in that that village or that tribe there were a couple of characteristics on a point to well first of all folks didn't specialize particularly they've covered a number of different bases you are fishing you're hunting you are gathering you were protecting you were laying the fight there were many things you had to do you were small a small unit and it was a very agile organization if opportunities came up or challenges you just reorganized to address them rapidly and you trusted everybody in that village very implicitly now we moved then into cities and at city scale it was possible for the economies or the economics rather to work for specialization and it became necessary at that scale also for there to be intermediaries to be third parties the you relied upon to trust to in order turn to interact and transact with other people in that city this was driven by technological advances obviously like transport and etc etc but and that concept of a city in those trusted third parties was further magnified by the advent of the Internet but what we really ended up with was a global city with all of the benefits but all of the downsides of that in addition and so what we believe is that you know how we organize ourselves is also another defining characteristic of us as a species and that whilst web 1 and web 2 has magnified and scaled up the city to the globe what web 3 can do and I've actually added here a fourth wave of computing and honor of some of the really fantastic presentations that have taken place over the last couple of days on so the core technologies around this what this face can do can help us organize in a different way and actually move from a situation where we have to explicitly engineer trust between parties to one where we can implicitly trust any participants in a network returning us to some of those benefits of agility that we had in the in the village there therefore constructing this global village so that sounds good but I think it goes importantly beyond that because at the heart of that move towards web 3 is not just that ability to organize you know through that in those implicit trust bonds but it's also that you create this new human centric personal identity that you can carry with you and what we believe that will help unlock is the vast quantity of data that is now being produced in this new wave of computing so in fact the the quantity of data that's being produced is way outstripping our ability to find you know not just a bunch of data it's all about big data but it's about the right data at the right time for a specific problem and the right level of currency data you know it decays it has a half-life and so we think those technologies is going to help us significantly we're tackling that and you might ask well you know why does that matter well if you could organize yourself and you've got the right data that you can access and algorithms can access you can hopefully build we can hopefully build a whole suite of much more human centric computing services but services because we're happy to give up more of our data because that can be used more effectively to deliver those services to them we're going to come to some examples so with that ability to have implicit trust with a bit the ability actually to represent ownership of this pretty much every type through tokens with the ability to actually transact using inter air Internet sovereign money sort of super low friction and digital money that is native to this new economy and with the ability to use all of those together to provide incentives and to coordinate people at scale that's how we're going to deliver on these very human this next wave of human centric services so where are we with all of that so Bitcoin I guess was more than an experiment more than a proof-of-concept it seems to have found a position as a store of value that continues to unfold so that certainly at least on Twitter the source of much debate and then we saw the advent of the etherium and aetherium whoa what more shoutouts we could have a few people to take sides or just whoop aetherium has gone out there and created this generalized platform for executing these these smart contracts and seems to be finding perhaps in particular traction or our decentralized and open finance in itself a very exciting and powerful application and then we we believe we can entering this next phase where there are a lot of very significant projects you know cosmos Paul Godard all got very many projects coming live on the etherium main net and other of relatives to both Bitcoin and the theorem and complements to them that are coming live very significant pieces of engineering that you know weren't dreamt up during the ico craze and people have hired away and throwing together a bit of Python and some visual basic or something people have been working on these you know the fundamental inventions in computer science coupled with many years of development and those are going live now and then on top of that you've actually got you know the interest of I mean Facebook creating its own cryptocurrency you've got Apple introducing much better better crypto primitives too it's you know ir s– capabilities that are develop a toolkit and it's you know respecting the importance of privacy around sign in through its Apple ID initiative and then you've also got players like Samsung making it possible to handle private keys in your phone so we think these are these are very significant steps they're gonna lead to the next next wave of about applications but you could say that look whilst the total sort of Fang them whatever acronym you want to use a market cap of that those tech titans is many many trillions at this point in time we've only got a quarter of a trillion to play with and and to repeat something that might never get set on the stage a year ago which is kind of more or less the price we've actually returned to as well that's a year ago on the on the on the slide there or the market capitalization rather the price I should say it takes more than a quarter of a trillion to change the world and so there needs to be more vested interest in this in this economy so it's it's it is only that much at the moment so is the problem the applications so other people have been talking very eloquently about all the different applications throughout the day and in these days you know and I've already mentioned open finance and we think that is a super exciting and critical one you know within the developed world but also within very much within the developing world providing access let's leave aside developer tools and infrastructure clearly we can all you know pay ourselves to build make the building blocks and make the you know picks and shovels to build this next wave that's kind of a truism but the there are other areas around autonomous vehicles there are very critical areas about sharing data around healthcare for pharmaceutical companies that are very exciting just reef jiggling that a little bit and the thing to observe in all of those it's there if you have a situation where there was a lot of data that is owned by many people in a kind of long tail of network participants and hitherto it has been impossible to coordinate them or encourage them to get them feel comfortable with sharing that to tackle really complex problems like you know researching the correct diagnosis for or correct treatment for cancer and then diagnosing people at scale that is a you know absolutely concrete example or we have people in the audience tackling the issues with supply chains you know encouraging a more efficient and sustainable supply chain by getting enterprises to share more of their their private or you know commercially confidential data in the right way so if it has that characteristic then there's a trillion dollar opportunity out there we would argue so what is it going to take to break some of this web to hegemony you know when you're thinking about a start-up it's important to reflect on the fact that this stuff doesn't happen by accident we all suffer from rose tinted spectacles we kind of look back and go and you know it just happened but what what actually happens is that and often as a fabulous of course I even tell that narrative they say yeah we worked it out no problem but actually people look through my number of different options of ways to unseat the incumbent you know is it through using regulation you know is it through just going directly out them with a better mousetrap is it somehow kind of stealthily coming in for example building an ID for gaming and then somehow that becomes the new social network or finance platform and there are new areas and then there's you know new value propositions that sit entirely in the crypto ecosphere that are probably a way of you know building something that will unseat the existing players but it's tough and so I think it's actually instructed to think back to what this looked like during the web to low phase and there were similar struggles so who knows John Durr a good smattering so arguably a reasonably successful venture capitalist who was on the board of many famous companies and there was one particular company that you've probably heard of that in the first four years of his existence when it was hemorrhaging cash and it was just actually you know only 20% of the revenue of it's sort of one of his closest competitors and hadn't worked out hadn't cracked the code on its business model and go to market he was saying this is pretty bleak and they might have to pull the plug and go a different direction so that was between 98 and 2002 for Google but yet obviously you come 2015 it had transformed itself and in fact from 98 to 2002 it went from from that terrible situation you could argue within the space of two years from 2002 to 2004 five there abouts to thirty two billion dollars in market capitalization so you know before it happens it's much harder to see SAS who recognizes this little logo which company yeah Salesforce so when those guys started out and they just could have created a kind of cloud-based what's a cloud context manager for sale sales reps which is kind of the all the product was initially people liked the UI is terrible and it is totally can uh neck anomic trying to build all of the infrastructure to deliver a SAS product this is never gonna work but lo and behold you know 15 20 years later actually 25 percent of enterprise revenues for enterprise software is delete comes by virtue of subscriptions for SAS software so it's totally over tenant I'm sure that's continuing to accelerate at the rate of which you see – scary who's gonna get into a stranger's car I like my lot my old kind of diesel guzzling noisy you know taxi cab whether you love them or hate them obviously if we race forward to now we've got close to a hundred billion dollars unless it's gone down of market cap between sort of uber and lyft and would we would argue at least maybe the expense of shareholders for the moment fantastic service for people so it can be very hard to see these disruptions before they happen another example mentioned before is this trumped-up bookstore that was how Amazon began this you know not only is this a pretty awful UI by today's standards it's interesting to be reminded of that but it you know they were taking on very established booksellers with all of the physical distribution for books which are not tremendously high margin it seemed like a pretty bad idea but there was an innovation that meant that now we probably have about a thousand billion reasons to kind of be like Jeff Bezos so you know it's about 900 billion the market capital bit shy of a trillion but we'll forgive him that and and he's and if that little blip on the left by the way that was you can all see that was the dot-com boom and and so that is the kind of full gamut of the the share price of Amazon but one crucial thing he did in setting expectations early in front of tackle this very complex task was to was to say to his shareholders that I am gonna take the profits and reinvest them in building this network that and by doing that ultimately I'm gonna I'm gonna succeed and so if you expect to be able to shout at me or you know deliver dividends in any way like the short term you're gonna be disappointed to see probably want to get off this train so that was a very successful thing he did there and that little trick that way of getting everybody to share more kind of you know equally in the kind of future of a complex network like that is actually at the heart of the way in which these new token economies are being built and so on a slide you can see a number of the ways in which economic models have been built around this web 3 wave of computing some of them are still you know straightforward revenue models where you tax volatility for example or charge for you know different services but many people are now working very hard on what would be a whole kind of like genealogy of different token models that they're combining in order to tackle these very complex networking problems and one in particular I wanted to dis quickly focus on because this is at the harder the question of whether or not we can do better than today's form of capitalism is the work token so that's a token where you would buy as an investor or owned as a supplier into one of these networks and by virtue of that ownership you would have the permission it's like a work permit visa taxi medallion for participating in work within that network and an example of what that might be would be video transcoding so is it anyone got any idea how this video is getting to the people who are watching at all I don't know how many people are watching it but hopefully there are many all over the world live streaming so that's done through video transcoding and you know one way of you know that network when it's been built needed funding and so let's just think for a moment about what kind of funding mechanism we would want to build that network you know would we want one that in terms of information you get it kind of every now and then on a monthly basis what do we want one where we could get it on a real-time basis would we want one where you know the governance was actually delegated to a group of possibly unrepresentative people or or would we actually like to be stakeholders ourselves within the whole thing would we like for this to be an instrument that was locked down at the beginning and extremely hard to change would we like it to be fully programmable and customizable for what it is you're wanting to do would you like it to be multiple stake you want to organize everybody and give them an incentive to participate in this network or do you know we want to be just the investors or do you want to involve suppliers and and potentially even users as well the philosophy behind these things do we want them to be a situation where you have that division fundamentally between shareholders and and everybody else are them and ask mentality or is it one for mutual benefit if you will I kind of move towards modern mutualization despite the efforts of the unions we have and even the efforts of people building building societies capitalism has managed to stomp on a lot of that I think we can do better and then ultimately do we want to have just simple caryn mechanisms or could we have a little balance of carrot and stick that's essentially meaning that people who own a token that is native to a network have some skin in the game so they they have to think how to be honorable stakeholders and participants in that network so there's a comparison and on the left you've got a description of an equity share and you know on the right you have the description of work token a summary and you know we have we see already and we can see how all of the great characteristics of equity can be retained but some better characteristics can now be programmed if you will within work tokens and we can tackle these problems and those are two concrete examples there's a very strong player in the centralized transcoding market and there's a protagonist in the decentralized transcoding market live pit and that is a that is not investment advice so it's getting hot in here as predicted what we're saying here is that that this is an opportunity it's a time for the pendulum to swing back from extreme forms of capitalism and a central control and authority to something that is more decentralized in its organizational structure and allows for more emergent forms of creativity and governance that comes from the individuals because ultimately that's the the way in which we're going to succeed in what a likely to be can continue to be turbulent times and round about the time the patrol II was writing his book some idea out of meta ger another chap called Leonardo was coming up with this very balanced human being please forgive the fact that he's male and naked but this very balanced citizen this Renaissance citizen and vitruvian man and we think that we we can move forward from here and ultimately end up with a kind of more balanced society and citizenship for Vitruvian crypto citizen around education voting around a form of modern mutualization or collective capitalism around an involvement in in your own personal health and the collective health health of society and one that if we work hard at it that even if there is automation we see a way around us and certain types of jobs go away there can be a safety net created through the sharing of our data and a data dividend and maybe even a universal basic income as Andrew yang would like to propose thank you very much [Applause] you

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