November 16, 2016
10 takeaways from Web Summit 2016
Finsbury’s Yim Wong and Rebecca Fitchett are back from Lisbon with insights into the big trends at Web Summit, the "Davos of the tech world."
Having doubled in size and moved from Dublin this year, the event brought together leaders from organisations such as Cisco, Facebook, Nasdaq, Aviva, the EC as well as a host of startups, film stars, sporting figures, media and VCs. A total of 21 conferences and networking dinners were hosted to discuss a huge range of topics including tech revolution, artificial intelligence, machine learning, the future of business, innovation, and politics.
See below ten interesting viewpoints amongst many put forward at Web Summit.
1. Social media creates ‘filter bubbles’ which may have helped Trump to victory (and the UK to Brexit)
Facebook’s algorithms fed users commentary they already agreed with. Within the Facebook bubble, fake pro-Trump websites appeared genuine. And pollsters using social media to predict outcomes were duped because, in the end, they “couldn’t model emotion”. The Guardian’s Owen Jones expressed this view during the first Web Summit panel on Wednesday morning: “The Fallout from the US election”.
Later in the day the founder of 500 Startups, Dave McClure, added his own expletive-laden rant on the responsibility which the tech companies should bear (Mark Zuckerberg has dismissed the Facebook filter bubble theory as a “crazy idea”).
But of course Web Summit itself was a giant filter bubble, as demonstrated by the audience’s reaction to questions from Rohan Silva (David Cameron’s digital advisor and entrepreneur): “How many people think Brexit will be bad for Britain?” = 100% of hands up; “Who here is a Trump supporter?” = 0% of hands up.
2. Artificial Intelligence (AI) & Machine Learning will change the world for better and for worse
NB: AI is where humans programme computers to perform human-like tasks (recognising objects and sounds for instance). Machine Learning is a branch of AI where computers learn to perform new tasks solely on data, with no human involvement.
AI has enabled Google to create driverless cars, effective online search and a robot which has beaten the world’s best Go player. Facebook’s CTO, Mike Schroepfer explained that AI and Machine Learning are at the heart of his company’s long-term strategy – it is using it to interpret its vast data store and develop new products e.g. recognition of facial expressions and language which will help create more realistic VR avatars for Oculus Rift. But AI and Machine Learning bring huge challenges…
- They will increase inequality and eliminate millions of human jobs. In a poll of venture capitalists attending Web Summit, 93% saw governments as unprepared for the impact that AI would have on employment. Andrew McAfee, MIT professor and author of The Second Machine Age, and Gary Marcus from Geometric Intelligence foresee a fundamental problem for the future of the worker, meaning universal basic income might be needed: “I grew up in a culture where what you did as a job defined you as a person. A hundred years from now that won’t be possible. Due to machines there won’t be enough jobs to go around. We will need universal basic income.”
- The machines can learn bad stuff as well as good! “Garbage in, garbage out”, as the machine will base its learning on the data it is fed. When Microsoft’s chatbot Tay released on Twitter in March, it listened to the trolls and became a racist misogynist in less than 24 hours…
A rethink of ethics is required and regulation will struggle to keep up. Should machines have rights? When should machines be able to act on humans’ behalf?
3. Think virtual reality and augmented reality are just for entertainment? Time to play catch up
They are already being used in universities to teach chemistry students about molecules. In the future they will be used to train employees to use equipment and brands to engage with customers. Check out the very cool group VR project Field Trip to Mars by Framestore’s VR studio, and Project Sansar from Linden Labs, the creators of Second Life – from early 2017 anyone will be able to create their own VR world.
4. Content and distribution players merge as the media industry reacts to the dominance of Google and Facebook
Tectonic shifts are taking place in reaction to the duopely of Google and Facebook – which currently take about 85% of US advertising spend – according to the CEO of Bloomberg Media, Justin Smith. This can be seen in the merging of those who produce content with those who own the pipes (e.g. AT&T’s proposed merger with Time Warner) and also in increasingly common partnerships between traditional and social media companies. Bloomberg and Twitter formed a partnership to stream the presidential debates live, reaching 3-4 million people each time, which although a relatively small audience far surpassed viewership of Bloomberg’s linear TV channels.
In Justin’s view, only a couple of companies are well placed to invest and innovate in order to weather this period of disruption, and a few mega companies will come to dominate the large scale media model. Mike Perlis, CEO of Forbes, highlighted how it was using experiential techniques such as the ’30 under 30′ awards to modernise the brand, and simultaneously leveraging the brand in education, financial services and real estate (e.g. the Forbes Media Tower in the Philippines).
5. The tech sector is vibrant and there will be tech IPOs in the near future
There will be tech IPOs in the near future despite upheaval in the macroeconomy. The CEO of Nasdaq, Bob Greifield (who could hardly be pessimistic about IPOs…) put forward the view that the window is always open. Track record of growth is essential (although biotech is an exception where, because of the focus on pipeline, it is possible to IPO “the story”). Tech companies need to stay private long enough to create a track record of growth but not so long that their future growth trajectory slows down (typically 10 – 12 years).
Also, if tech companies are still testing their strategies (as is common) they are better off doing that while private in order to avoid the added accountability and reporting that being public brings. Public company valuations have an impact on private company valuations, and market volatility over the last two years has greatly increased the level of scrutiny of the fundamentals of growth stage companies. At seed stage, however, there has been no impact.
6. Technology sits at the heart of all businesses today, regardless of size and sector
It has moved from a back office function and cost centre to sitting firmly at the centre as a major enabler of business strategy. Startups and tech companies begin life this way, but big corporates are pivoting to place tech at the heart of their operations. This has led to companies changing the focus of their strategy to bring it into line with how the world has changed. Examples of this are Aviva and MetLife, two insurance companies making a clear move from a product strategy to a people-first strategy.
The question for big and legacy businesses, is how you bring people along with you. Aviva’s CIO, Monique Shivanandan told the story of taking her Board to Silicon Valley, on a “journey through the tech world”. They met first round startups as well as companies from Facebook and Amazon to Cisco and Dell. Her view was that showing other possibilities and the “destination” that she had been talking about for the company, was critical in turning skeptics into advocates and inspiring them along the way.
7. But it is failing to address social problems, some of which it is responsible for creating
Journalists noted during and after the conference that many of the most high profile technological developments, from crowdfunding and phone apps to virtual-reality headsets, enrich the lives of the better-off and well-educated.
Tech companies are focused on philanthropy around big issues such as climate change rather than figuring out how to combat the impact of technology on the labour market, as reported in the FT earlier this month.
A common theme of discussion during the event (including by journalists from an international financial broadsheet) was that Web Summit was an exciting melting pot of innovation and growth stories, however, there was almost no focus on how tech can propel social good and on how the community can bring people who are not “techhy”, along with us.
8. Data is now a valuable currency for all businesses, so we now need to address ethics and security
Data is becoming a valuable currency for all businesses, regardless of sector, and companies which can interpret and use that data will win. However, many companies collect data just because they can – which leads to big questions about ethics and security. Among the suggestions for improving the current system were, first, that companies should only collect and store data where there is a demonstrable business rationale – most currently do it just because they can. Second, it should only be collected on an opt-in basis with data subjects encouraged to cooperate by being brought into the value exchange e.g. they get a discounted phone bill if they agree to submit data.
9. Geek culture has become mainstream
It now just denotes a group of people passionate about their interests. There is a huge audience segment – predominantly male millennials – who are known to advertisers as “the lost boys” because they all use adblockers so can’t be reached. Frustratingly for the advertisers they are some of the most influential “taste makers” around, precisely because of their geeky passion for their interests. Alan Schaffer, CEO of Imgur, stressed the importance of creating content which engages these geeks (e.g. eBay did a video documenting all types of drones).
10. All countries will be digital
Cisco exec chairman, John Chambers, gave his views on digitisation, saying that “[Digitisation] is becoming mainstream. All startups will be digital, all countries and cities will be digital”. The next wave of job creation will come from startups. Cyberware will the future of conflict, with an increase in cyber attacks forming the basis of global warfare.