In this #mtpcon London+EMEA keynote, entrepreneur, investor, and author of Exponential, Azeem Azhar, describes how technological innovations bring exponential change across the cultural, social, and economic landscapes, and how, as product people must take responsibility for tomorrow’s new principals.
Watch this video or read on for key highlights from the talk.
- Technological innovations drive cultural, social, and economic shift
- Today is a period of dramatic acceleration. Innovations are adopted, adapted, and made more-affordable faster
- Today’s exponential technologies create tomorrow’s market leaders
- Societal impacts need to be recognised as this exponential age ushers in principles of commonality, flexibility, and resilience
Azeem begins by describing how product people “sometimes lose track of the relationship between the technologies and the products we build, and the impact that they have on society.” Showing two maps of London, from 95 and 120 years ago, he explains how the landscape was irrevocably changed due to the impacts of three key things:
- The telephone
- The internal combustion engine
“These changes are not just about those technologies,” he explains. “They are about changes in the political economy — there are changes in the way we work there changes in the way we relate to each other.”
A period of acceleration
Today, says Azeem, is a “period of acceleration”, graphing the time it takes for products to reach 75% market penetration, and illustrating that “the rate with which we can develop and deploy new products and innovations into the market” is faster than ever before.
In one example Azeem compares the meteoric rise of Bitcoin to that of the mobile phone, and separately the internet, illustrating how today’s technology becomes general-purpose much quicker. “Acceleration’s also about the reality of business and revenue growth,” he says, plotting Bytedance (developer of TikTok) profits against Facebook, (with the former’s hockey-stick like growth curve steeper than the latter’s), before jokingly comparing the acceleration of achievements of Hopin — a company that attained a half-billion-dollar valuation within 18 months — against his personal project of writing his book Exponential.
“Exponential technologies” he says, are those stemming from an initial technological advancement of high initial cost, introducing a market-shifting improvement or potential improvement, which leads to new learnings and iterations, with a resultant “tremendous deflation in cost and price”. One example is Moore’s Law, which stated that the number of transistors on a microchip would double every two years, while the cost of a computer would half. He explains this is more of a curve that can be used in forecasting — showing how advancements will develop and add more value while becoming more affordable — for example, in 1958 a transistor cost $1000 each, whereas today they cost hundredths of millionths of $1 and offer better performance.
He points to 3 sectors experiencing exponential growth:
- Biology: Sequencing the first human genome cost $1bn whereas today it costs less than $1000, leading to new products, areas of research, and an entirely new industry with “an intersection between biology and engineering”. Today the cost of exercises like cell reprogramming falls 50% year-on-year.
- Energy: Renewable energy has also become exponentially affordable, to the point where in “2017 it was cheaper to generate electricity from solar power than it would have been to use a new fossil fuel plant”. Electric car adoption is also surging — in Norway in 2016, only one in five cars was electric, and today it’s 9/10. Batteries additionally have followed an exponential trend declining in price by 20% every year.
- Manufacturing: 3D printing has yet to become a fully adopted general-purpose technology but it’s something that should be expected, like with computing. While it’s predominantly used in automotive and aerospace and medical devices “its performance is improving on a price-performance basis at around 29% per annum”.
Product people are the main drivers of exponential technologies and are able to optimise processes as they iterate while benefiting from the way markets change around them. Azeem describes how the following factors may influence exponential change:
- Complimentary businesses: New technical capabilities bring opportunity into markets, leading to the “arrival of complementary business” and competition, further securing a product’s market penetration with increased adoption.
- Learning curve/learning rate: With each exponential advancement, the time taken to learn and iterate is reduced, meaning improvements can be made faster and with communities growing around industries and feeding back data, knowledge is more accessible than ever.
- Componentisation and combination: Processes are accelerated as they’re automated, better understood in combination, and manufactured in more-scalable ways.
- Scale: The scale of the development process and user-base will also impact the learnings which can be taken from every iteration, meaning as scale increases so does the chance of meaningful growth opportunities.
Finally, Azeem describes how breakthrough technologies of the past created generational principles, like “the way we managed our companies, linear value chains, hierarchical organisation, the way companies competed, battling over market share the way employment arrangements work, the kinds of skills you needed, even the geopolitics of trade”. The exponential technologies are displacing principals of old as they introduce things like gig platforms, algorithmic management and cause an “exponential gap” between high paid and low paid earners.
Azeem explains today’s new principles as priorities of commonality, flexibility, and resilience, things which we, as product people, must take responsibility for, understanding the changes we’re initiating and looking at these exponential changes critically. “We must prepare for new socio-economic order, we must prepare for a shift for the exponential age of values — we must make sure they serve us. Where old principles of efficiency and growth existed, today commonality, flexibility and resilience are taking their place.”
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