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Tom Goodwin talks about DIGITAL DARWINISM with Nikolas Badminton, Futurist Speaker

Tom Goodwin talks about DIGITAL DARWINISM with Nikolas Badminton, Futurist Speaker


(laid-back electronic music) Welcome to the
Exponential Minds Podcast. The research, development, launch, and growth of new technologies is creating incredible
momentum in the modern world. Join futurist Nikolas
Badminton as he talks with the innovators and
the exponential minds that are tackling some
of the biggest problems, and creating solutions that are propelling humanity to the next level. – Welcome to the latest episode of Exponential Minds Podcast. Today we’ve got Tom
Goodwin that’s come back to discuss his new
book, Digital Darwinism, Survival of the Fittest in the
Age of Business Disruption. Hi, Tom, how are you? – Hello, I’m good. Thanks for having me back on. – Yeah, you sent across this book, and I was having a read
through, and really interesting. Lots of perspectives, historically
what disruption has meant and what old business models meant, and what business models can think about. But can you tell us a little
bit about your motivations for writing the book, what
you’re trying to achieve, but also what the book’s trying to convey? – I’m very honest about the
way that I talk about my book, in that actually it was driven
not by some romantic idea that I had a book in me, but actually just ’cause I was really pissed off. I’m sort of generally quite frustrated with the level of discourse
that we have in this industry. I’m quite frustrated with
the kind of vague words that people throw around, like disruption, or re-imagination, or innovative. None of these things really mean anything, so increasingly over the last
sort of three to five years, I’ve just felt this kinda
tension build up inside me, and this need to sort of
get across a point of view. Not because I think I’m right, but because I think it’s useful to get provocation out there, and it’s useful to start
conversations about these issues. It’s useful to challenge thinking that I think has gone unchallenged so far. So I put together this book, not so much as a sort of manifesto like it sounds, but just more as a collection of thoughts about change in the modern world, with the intention of sparking some interesting conversations. So it’s designed to sort
of appeal to everyone from sort of students making their way through school or university, or their way through to
CEOs of large companies that might be feeling
like they’re doing enough, or might be feeling that they’re
confused about the world, and it’s there to sort of provide a level of guidance for them.
– This comes in as a very sort of grassroots intention
from the beginning. So it’s great from a
beginners perspective. It’s interesting to me that,
we talk about creativity, innovation, and
disruption, but I’d say 95% of the people that are out there, and not including you or I (laughs), but 95% of the people that are out there aren’t very creative or disruptive in the way that they even
talk about these things. You challenge in your
book a Christensen view, that ultimately he missed
what real disruption is in today’s world, and
he didn’t really talk about how companies disrupt from within, like Amazon and Google and whoever. Why do you think he missed what’s come to be in the world in 2018? Do you think it was an
old-school thing here? Do you think that he didn’t imagine the world as it’s become? – I mean, he’s clearly an
extremely impressive academic, and at the time of his
conception of the idea, he was looking back on historical data that was available to him,
and I think like anyone that wants to create quite
a neat and tidy theory, he looked at evidence that would support his point of view and he
discounted anything that wouldn’t. And the reality is that he
was thinking about disruption in a kind of pre-internet
era, when the success stories of that era, or companies
are extremely good at manufacturing hardware, extremely good at understanding the
technological process of making. But the reality is, in the modern world we have things like the
iPhone or WeWork or Tinder or Tesla or Facebook or Spotify or Twitch, any one of these new companies that’s actually accelerating
like no other company has ever accelerated before,
in terms of their user acquisition and growth and valuation. They all play by
completely different rules, and they use completely
different mechanisms to what he described. I just got slightly
frustrating with the fact that this theory wasn’t
particularly helpful, and it wasn’t really explaining
how reality is these days. So I just wanted to put
my new theory out there. – And you talk about risk
in it, as well, right? This is almost core to what disruption is, what’s your risk level, you sort of ask, and it seems like the
most innovative companies are becoming risk averse. And even someone, in the case of Facebook, of being persecuted
for having taken risks, even with our permission. So these risk levels,
when people are risky, you’ve got mainstream media and government that comes in heavy-handed, drag someone like Mark Zuckerberg up
in front of the Senate, and we’re just building a platform. We gave you the opportunity, you said yes. So what’s the problem? – I think you hit the nail on the head when you talk about risk there. At the end of the day, I
think we’re at a situation now where if you look at all the things that very large, somewhat
legacy style companies have, and if you look at all the
list of all the attributes that smaller, younger,
more nimble companies have, the main thing is just
an attitude towards risk, and an attitude towards
innovation and growth, where large companies
need to have incredible amounts of data at their disposal before they can take any
decisions at all, it’s seen. And the reality is that
looking at historical data does an extremely bad job
of presenting information which is useful for the
future, most of the time. So it’s companies that
are very much driven by passionate founders, who
are quite eccentric and strong, who compel their workforce
to take these leaps, to do things that have
never been done before, to challenge convention. It’s those companies that
are doing incredibly well. So the skill becomes how
do we get large companies to be more comfortable with risk, how do we get them to be more happy to live in a world of
ambiguity and failure. I’m not entirely sure
that that’s possible. One of the strange
conclusions that I came to as I was writing the
book is I just don’t know the big companies have
it within themselves to become the kind of entities which will eat their business. That for me is the most
profound and lingering question from the whole book is,
do these companies just have to start again, or
can they innovate their way to being what they need to become? – Yeah, it’s interesting. In recent years, I’ve
seen a couple of examples. Up in Canada, there’s
a company called Telus, and they’re one of the
largest cell phone providers, and they have this old
website infrastructure. And they kept trying to
reinvent and reinvent and they couldn’t do it, and
a friend of mine came in, Sean, and he came in and
he said, “You know what? “We’re just gonna start again.” They were like what? Yeah, we’re gonna have a team, and it’s gonna be multi-disciplinary. No, we’re not gonna have
agencies onsite and whatever, but we’re gonna take the
best people from the agencies and management consultancies, designers, and our internal team, and
he called it a tiger team. And he built this tiger team,
and they built a website without the restrictions of the old site. And suddenly, over time, they were getting huge amount of action. They moved it across all
the URLs and everything, just to the new site after
it went through beta. And then they realized that probably 75% of the existing site was absolute rubbish and doing nothing for their business. – Yeah, I think if you were to visualize most modern companies and legacy companies as sort of physical constructs, they would be buildings that
you wouldn’t wanna go in, ’cause they would be so
held together by super glue and gorilla tape, and they’d
have sort of patchworks and workaround port-a-cabins
where excess people work. They would be sort of physically ugly, and they just don’t work. I look at things like airlines
or car rental companies or hotels or media
companies, and increasingly, and I’m not trying to be
pessimistic about this, but I look at it and I do
think it would be better off just to pretty much start
the whole thing from scratch. A really interesting exercise would be to think about the level
of change that you need, and how existential
that change needs to be. Again, the case of Telus that
you’re talking about there, it’s not like they needed to
recreate all their cell towers. It’s not like they needed
to completely recreate their back-end infrastructure that is what the data sort of goes through, but they probably needed
to sort of rethink the products they sold, they probably need to rethink they keep data, like
who has access to that data. Even things like what
plans and what tariffs and what products and what customer service they offer people. For me, those kind of
questions are actually really, really important questions, but they’re very difficult questions for companies to ask themselves, because within it, there is a sort of tacit statement that somehow
people have messed up, and that somehow people haven’t been doing their job right, and actually, it’s just a reality is
that if you were to build something from scratch today,
it would look very different, because we’ve got different
tools at our disposal. – It can sometimes be as simple as having a new HQ built and moving in. I was just down in Santa Clara, and one of my friends works for Nvidia. Now, Nvidia started off
building the chip sets and the card sets for
computer gaming and whatever, and now they’re thrust
into this new world of AI and self-driving vehicles and whatever. Go to their new HQ. It’s huge, sort of almost
brutalist, modernist architecture. Clean lines, white walls,
no art on the walls. That was pretty funny. And they’re like oh, come over here. This is where we work. Why have you put cubes in your office? So the old world of working in the States was like you sit in a cube. And she goes oh yeah, no one sits there. No one sits there, everybody
works in the libraries, and all these (mumbles). We’re almost held captive
by this old-school thinking about even innovation in the world. It’s like, amazing new architecture, old way of working within. It’s kind of interesting. – I love that it’s a perfect metaphor, but also happens to be
a real-life situation of the need to kind of have innovation that’s very physical and very tangible, and very kind of viewable
from the outside, but then not actually having
enough commitment to it where it runs all the way through. And also this sort of
idea of muscle memory. It’s amazing how many people do their jobs based on never questioning
the way things are done, because they’ve always been done that way. You just see lots of sort
of stupid things done. Every company needs to have an app, and they don’t really necessarily think why they need one, and it’s this obsession with sort of saying yes to
every possible technique or tactic that people can use, because that means that
they can kinda blame someone later on because they weren’t the person to say no to things. Like you said before, I
think it all comes down to sort of risk, and it all comes down to the degree to which you’re happy to sort of make a declarative statement, even if it means taking
a risk at the same time. – It’s interesting, as well. There’s another sort of note that I made as I was reading through the book, and the thought which was like, the CEO, if you’re in a public company, has to go quarter to
quarter talking about profit and growth and vision and whatever, and that short-termism is almost like killing ambition in the new world. The average age of a
company in the S&P 500 is about 15 years now,
and it’s getting shorter. They’re thinking one
quarter maybe 18 months out, but if you look at Tesla or whatever, Tesla and Elon Musk is
looking to 2025, 2030, right? And people are taking his catty charisma and hyperbole in the leadership context as being a really positive thing, but when someone in a
more traditional industry tries that, they get absolutely
skewered in the markets. – It’s very unfair. I think SoftBank talked about
having a thousand-year plan. – Yeah, thousand year. – Always talking about the idea that you can’t judge quarter to quarter. But the reality is that most companies don’t have that luxury, because
they are publicly listed, and they are mainly,
they’re sort of a safeguard over shareholders’ wealth
more than anything else. So I think it’s an extremely
difficult situation. I work with some retailers
where they’re being asked to deliver profit growth, revenue growth, quarter on quarter, at the same time that they’re up against
companies that actually don’t have to make any money whatsoever, and as long as the kinda losses lead to user acquisition, everyone’s happy. So it’s massively unfair. But that is the reality of the world. So I think the solution
for me probably lies in this idea of, I think
like you said before, with the construction
of the new headquarters that you move into, you probably need to sort of run your business
and manage the profitability, but at the same time
create a separate entity which is going to be judged
more like those other startups, and get to a place where you’re able to sort of play both games
at the same time, I think. – Yeah, and the impatience
of people as well. I mean, I was just chatting. In the past couple of
weeks, I’ve managed to chat with one automotive association and one very large luxury
car manufacturer in China, and the automotive industry
is gonna be absolutely and fundamentally ripped apart. (laughs) By electric vehicles,
self-driving vehicles, on-demand vehicles,
ownership disappearing. Nobody knows what luxury looks like. Maybe luxury is gonna be being able to afford the special licenses for driving combustion-engine vehicles in 2065. I don’t know. You stand there and you tell them, and the head of this company in China, he looked at me and
goes, “So you’re saying “that the aftermath to
the self-driving cars “and electric vehicles is
almost going to disappear?” I said well, about 60 to 70% of revenues that you make from that could potentially disappear by 2030, 2035. He goes, “What can we do?” (laughs) And I said this: The future
isn’t convenient, right? I think Ford is a really
interesting company, and I’d like to know what you think, in terms of re-imagining who they are. They stopped selling cars and
they started selling Ford, and now they’ve just turned around, they said that they’re
gonna stop making cars. They’re gonna start just making hybrid versions of F-150s and Mustangs, and they’re gonna have electric vehicles, self-driving fleets, and
on-demand vehicle fleets. I mean, that’s wild in an
industry like that, right? – It’s absolutely wild, and
it was totally unexpected. I think when the press release went out, lots of people were clicking on it just to make sure it was actually
hosted on Ford’s website. (laughs) Not some kind of phishing
attempt or something. It’s very, very impressive to see. It’s a kind of horrible analogy, but I think for many
people, change is a bit like sort of tooth decay,
and I think some people like to sort of polish
their way out of it. Some people wanna have a filling. Some people wanna have kinda root canal, and some people just
realize that they need to sort of take the whole tooth out and have a sort of fake tooth. And it’s almost like the
people that do the most, but not quite enough, are the people that are probably the most screwed. So the people that have a deep root canal that doesn’t quite get all of the rot out actually have the kind of
pain and the inconvenience of all of the surgery
without any of the benefit. While the people that
sort of polished teeth, they’re sort of maybe in
denial about the whole thing. I think this, for me, from
Ford is a good example of a company really understanding
that putting a USB player in a power-charging mat in a
car is not gonna be enough. The creating a car for sort of millennials that look all trendy
is not gonna be enough. They actually need to
have a very, very, very sort of significant, sort
of existential question about the very purpose
that these companies serve. And again, rather than
sort of starting out with your core competency
of we’re good at doing this and let’s carry on doing it, it’s actually looking at how
the world’s going to change, and how they can apply
that core competency in a totally different
way, because it may just be that they become licenses of the designs, or it may be that they own
all the cars themselves and become people that kinda
rent out access to them. But no one wants to ask these questions, because they’re too sort of awkward, and they’re too challenging, and people would sort of rather go back to kind of discuss much more small details than enormous depth, because they feel sort of more comfortable in that area. – It almost feels like Ford’s
been watching Elon Musk and all of the chances he’s been taking. ‘Cause literally, I think the decision that they’ve just made is betting 75% of their business on red. Literally like, this has to be the future, and I think they’re absolutely right. I mean, when we think about disruption, we think about industries,
we think about huge players. A big player can redefine
an entire industry and all other players
have the follow them. And even small players that are willing to sort of have the strength. Tesla’s got a bigger market cap than Ford. And what was it? I was looking at this
the other day, Volkswagen makes more cars than Tesla in three days than Tesla makes in a year. And Volkswagen’s something
like eighth or ninth, in terms of market cap in the world. – Yeah, I mean it’s an
amazingly clear viewpoint into which the degree to
which stock market value is based on confidence in the future. – Yeah.
– Today. I mean, Tesla’s amazing
in that it’s either going to be one of the
greatest success stories the world has ever known,
and fill business textbooks, and whatever textbooks to come
for the next few centuries, or it’s gonna be this catastrophic failure of a company that sort
of promised far too much, and was actually sort of
built from far too little. I think at the moment I’m very
much in two minds about it, but as a demonstration of
the value of bold thinking, and as a signal to how
fast things can change, and how companies that don’t actually know anything about a particular sector, how they can flourish because
they don’t know that much. I think it’s absolutely fascinating. – Yeah, and really, I
mean, back into the book. You sort of said, chapter 11, a final focus on people, right? It’s like, we’ve gotta
come back to people. People talk about technology
and the shiny things, but we forget that the
creative problem solving, empathetic, connective things
that we are as human beings, in society as a whole
are the people that has to use with the companies
provide, you know? What do you mean when we’re talking about that final focus on people, and how important is the role of empathy in technology in the scheme of things? – I think empathy is probably
the most under-valued attribute in the entire world right now. The reality is that if
you’re highly empathetic, not only can you figure out how best to serve and delight people today, but it’s also a very strong tool when it comes to predicting a future. If you were highly empathetic, you’d realize that Segways
in their current form are never gonna take off. The curved TVs wouldn’t work,
’cause people like things that look nice in their living room. The 3D TVs weren’t gonna work, because people feel stupid
putting things on their faces. Empathy really is our guide to the current and to the future, and it helps us sort
of reorient businesses. It kinda frustrates me slightly when we talk about tech companies, ’cause I don’t think Uber’s a tech company or WeWork’s a tech
company, or even Facebook. The companies that know modern behaviors and they know modern
consumer expectations, and they know how technology
can become a toolkit in delighting people by orienting
themselves around people. So you can get off a plane in
Shanghai and order an Uber, and there’s no complications
to do with language or currencies, it just works. Whereas I think companies
from a bygone era, they very much focused
on their own processes. They’re effectively
factories to make something, and at the end of it, the consumer was just this sort of sucker that would end up buying the thing. But they were kind of irrelevant
for most of the process. And I think that really has to change. I think things like better
analytical software, I think things like
artificial intelligence. We’re gonna have this whole
toolkit available to us, which will be exciting,
but it all has to be used in respect and in service of people. – And when you come back and you’re saying one might argue that
this is most important time in civilization to be human, but is the future of disruption companies that actually teach us
to be more human, then? – I think so. Oh, we’re going into a huge area here about sort of humanity and
robotics and stuff like that. I think we’re at a very
interesting time with technology. I think there’s this sort of decision we have to make collectively, which is how much technology
do we want in our lives, and what is it to be human? And I think the more that
we see people like Google the other day having phone calls that were automated by robots, or the more that we see
chatbots dealing with people as if they’re not worthy
of human attention, the more we may have to realize that we may need to sort of
re-consider these boundaries, and reconsider what technology
and progress looks like. Because to some extent,
living an ultra-efficient life or high profitability and
creation of extra leisure time by using technology, to come extent, if we end up feeling less
human, then what was the point? Living is an inherently
inefficient thing to do. Become quite philosophical
and just think actually, it’s not really about
stripping out inefficiencies. It’s more about feeling alive and feeling a sense of meaning and purpose for life. – Yeah, I mean a friend of
mine, the futurist Thomas Frey, he says probably one of
the largest companies that is ever gonna exist in
the future doesn’t exist today, but it’s gonna be about education and preparing humans for this world that’s sort of careering
towards them, right? Excuse the pun, but it’s
like we’ve got this, I always talk about
humanity and technology. I always talk about humans
needing significance, and certainty, and variety,
connection, and love, and growth ,and contribution,
the things that we’ve had for thousands of years that
we’ll have going forward. Is there something that people
are missing in business? If you’re gonna say, if
you’re the CEO of a company and you’re sat there and
you’re watching your business being eaten by new competitors, and say you’re a business with a heritage, and you’ve got a good standing
from a brand perspective. What would be the one pc of
advice you’d give to them to start their thinking
in a new direction. – I mean, it’s actually the question that’s on the first page of my book, which is annoying and provocative, and appears unhelpful,
but it’s quite profound. And that’s just, how would
you set up your company if you were to set it up today? If you kind of put to one
side all of the things that you’ve learned, and all
the things you know don’t work, and all the technology
that you’ve invested in, and all the competitors that worry you. If you kinda put that to one side, sort of look out the
window and get all romantic and philosophical, and just think, how would you company look like? How would you make money from people? Who would you serve? What would the role in peoples’ lives be? If you sort of start from
that point of the role, and the value and how you exchange that, and then you sort of
work backwards from that, you may end up realizing that you need to be in a very different
business to where you are, and they need to structure
very differently. You need to employ
different types of people, you need to outsource different parts of the process to different companies. But there’s something that
people don’t like to do. It’s probably a good thing to
do on day one of a holiday, so you have a few days
to recover afterwards. – Yeah, and really this comes back to the idea of Digital Darwinism, survival of the fittest, and this is it. (laughs) Our children are
gonna put us out of business. I don’t actually think that’s
a terrible world to be in. – The analogy I used in
the book was the peloton in the Tour de France,
where I actually think to some extent companies have
their moment at the front, and they lead and they
sort of pave the way for something that’s slightly better and got a bit more energy behind. And the skill is making sure that all of your company is the peloton. So how do you have this
sort of thrusting dynamic of companies that just
continually reinvent themselves, versus companies that
lose out to other people. – Yeah, absolutely. (laughs) It’s really interesting. I grew up in the southwest of England, and there’s a company
called Westland Helicopters near where I grew up,
and it’s been bought out and I think it’s called Leonardo now. It was bought up Agusta. They started off making lawn mowers, and I think that it’s
almost like they realized at one point that you can
only sell so many lawn mowers. It was much more lucrative to actually turn the idea of making
blades into something that’s more practical,
from the perspective of saving lives or going to war, I guess. And to me, that’s the kind
of thing that hits home. There is reinvention all
around us, Netflix for example. Blockbuster didn’t do what Netflix did, but if Blockbuster had, Blockbuster would probably have won out, because Blockbuster had the absolute dominance in the market, right? It’s funny. Survival of the fittest,
Digital Darwinism. Tom, I’d like to say thank you very much. I wish you lots of luck with
selling tons of the book and chatting to more
people about provocative thoughts that you put in there. Do come back and I’d love
to have a chat with you in the future about, I don’t
know, I don’t know yet. We can work that out. – We’ll figure it out. It’s very nice to be back on your show, so thank you very much for having me. – Okay, thanks, Tom. (laid-back electronic music)

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