Generative AI and the Future of Work

Thanks to DisruptHR for giving me five minutes to berate a senior team of HR professionals about how Generative AI will change everything. Have a look here and get back to me.

Argue. Criticize. Praise. But think about what I’m saying, please, it’s terribly important.

Trigger Warning

As you watch the chaos swirling around a bank run, have you been triggered? It’s easy to capitulate to gloomy forecasts on the VC industry in general. I want to remind all of you that VC industry is a robust national treasure. Like the entrepreneurs it serves, the VC industry is not fragile to brittle, and will continue to drive long-term macroeconomic growth in the U.S.

Feeling a little rattled today? Take heart. Think about two facts on the long-term health of our venture economy:

1 – Venture capital-backed companies account for 41% of total US market capitalization and 62% of US public companies’ R&D spending.

2 – Among public companies founded within the last fifty years, VC-backed companies account for half in number, three quarters by value, and more than 92% of R&D spending and patent value. Yes, you read correctly, over 90% of R&D spending comes from VC-backed companies.

America’s venture capital industry is one of our country’s greatest economic assets. Looking at total funding and funding per capita, it’s clear that America is the global leader in the industry. While deeply shocking, one bank failure does not indicate systemic weakness or decline. I hope recent events will solidify our resolve to remain at the forefront of the global VC industry.

Thanks to Will Gornall (Sauder School of Business) and Ilya A. Strebulaev (GSB, Stanford) for their research reminding us of the remarkable economic impact of venture capital.

A Load of BS

(A load of Behavioral Science, that is)

A recent conversation with Daniel Ross gave me a chance to share some of the most important patterns I’ve seen in 35 years of venture-building and innovation in Silicon Valley. Curious about my experience with astronauts, dairy-farm veterinarians, and African entrepreneurs? Have a listen on Daniel’s Substack platform.

Or you can listen on Spotify or Apple.

Tell me what interests you – or better yet, argue with me – and I’ll amplify some of the points in this blog.

#innovation #entrepreneurs #venturebuilding

Online Skill-Building Sessions that Don’t Suck

You’ve probably found Presentation 101 training isn’t enough when you’re crafting online interactive experiences with partners, colleagues and clients.

We built Mach49 initially to support intense, face-to-face teaming. You all know the basics of effective team activities: clear agenda, define goals, blah blah blah. However as we shift interactions online into focused 1-2 hour sessions, I’ve noted four success principles that weren’t obvious at first…


Attendees engage much better if they can choose their areas of focus. Rather than a canned exercise, it’s best to (a) provide multiple topic areas for attendees to select, and (b) allow groups to self-assemble around topic areas.


Looming deadlines are energizing! Exercise teams working remotely need clear (and near) deadlines to deliver output, and must understand exactly what result is expected. A digital timeclock is a big help.


Each team should expect to present their output to the entire group. No one wants to look like an unprepared donkey in front of the full audience, even on a screen.


Competition is helpful. Teams should understand that they’ll benefit if they provide great output. Figure out a motivating award. Examples are prizes, seed funding, and recognition from senior leadership.

You’ll need these trick to keep your audience engaged in the activities. Remember…ATTENTION IS THE SCARCEST RESOURCE IN 21st CENTURY BUSINESS.

Do you have a fifth principle to add? Something you’ve discovered since your world changed in early March? Let me know.

Foundational Technologies versus Disruptive Applications

Most of us are more interested in the business and social implications of exponentially advancing technology, rather than in the wonky details of the actual tech. With everyone braying about tech breakthroughs every day, how can you interpret what you hear? I’ve written about one lens to help you understand emerging technology – see my piece on Three Horizons – and here’s another framework I find useful.

I now realize I spent many years confusing Foundational Technologies with Disruptive Applications. Here’s an example: When NetScape created their first browser in 1994, I remember everyone talking breathlessly about TCP/IP, the fundamental protocol for internet communication. I failed to understand that TCP/IP was a Foundational Technology, poised to change the way we all live and work with a myriad of online experiences, whereas the NetScape Mosaic browser was one among many Disruptive Applications of TCP/IP.

Let’s have a look at some key distinctions:

Foundational Technologies…. Disruptive Applications….
Create new foundations for our economic, political and social systems.Usually begin in the commercial world, attacking a traditional business model with a lower-cost solution and overtaking incumbent firms quickly. 
Appear abstract and theoretical; Require background in science or technology to understand.Are communicated with a simple and clear business value proposition.
Take decades to seep into our business infrastructure.Emerge over years, never require decades.
Are adopted steadily and gradually. Disrupt existing industries with targeted, rapidly-growing ventures
Enable novel, complex systems.Enable transformative applications.

Here are a few examples:

We can count on government labs and large corporate R&D facilities to continue pumping out the basic research leading to Foundational Technologies. When it comes to Disruptive Applications, though, my money is on (1) startup entrepreneurs, and (2) big-companies intrapreneurs who are given the latitude to create bold new ventures. For example, global giant Schneider Electric recognized the incredible advance of renewable energy as a broad Foundational Technology. We worked with a small, nimble team from Schneider to build eIQ Mobility, a Disruptive Application for charging fleets of electric vehicles.

The next time you hear a breathless description of an emerging technology, try categorize it as a Foundational Technology, a Disruptive Application, or something in between. And, as always, talk to me. I’d like to know if you find this distinction helps you think about the unruly world of technology.

Groundhog Day

Feeling sorry for yourself after a week of Shelter In Place? No whining, please. The astronauts NASA plans to send to Mars will be sheltering in place for nine months in a cramped metal tube. Let’s see what we can learn from NASA’s plans.

NASA is just beginning to grapple with the emotional impact of long journeys through deep space. Often we can look to science fiction for inspiration, but we’ll get no help in this case. Science fiction writers use two tricks to skate around the thorny issue of long, long journeys through space:

Warp Drive: A convenient plot device for avoiding endless travel time

Hypersleep: The second sci-fi trick to cheat time

You may have heard about the physiological challenges of travel in deep space: Bone demineralization, radiation exposure, eyesight degradation. Barring the invention of a warp coil, astronauts transiting to Mars will face a slew of psychological challenges as well. Cramped, long-duration space travel could lead to fatigue, anxiety, decreased brain functioning….even psychotic breakdown.

How can NASA mission planners address some of the psychological risks of deep-space missions, long before we set out for Mars? For challenges like these, I always recommend finding analogous experiences to help find direction. Let’s see what we can learn from astronauts orbiting Earth on the International Space Station, as well as roughly analogous endeavors such as submarine missions or exploration of the poles.

Meaningful Work

Cultural anthropologist Jack Stuster pored over journals written by astronauts on the International Space Station. What made life difficult for the astronauts? The majority of frustrations came from workflow issues that are probably quite familiar to you: Insufficient time to complete tasks, poorly written instructions, conflicting leadership demands.

Stuster’s recommendations to NASA for maintaining emotional equilibrium during long space voyages will also sound familiar to you. Examples: Allow the astronauts to control their schedules if possible, design tasks to have tangible benefits, and distribute tedious work across all crew members. One interesting tidbit from his research: There’s evidence that the act of journaling was helpful, in and of itself.

Astronaut Sunita Williams keeping her journal (courtesy NASA)

Effective Leadership

When I asked my good friend Commander Noel Gonzalez to share with NASA his experience while undersea for months as Captain of the Navy submarine USS Cheyenne, he pointed immediately to leadership as key to maintaining morale (and sanity) of his crew. Beyond basic leadership strategies such as clear communication and effective delegation, Noel prides himself on his sensitivity to the intangibles on board his submarine: Mood, energy, tone.

From a very different vantage point, Organizational Psychologist Lacy Schmidt agrees. While studying the team climate at Antarctic Research Stations, she points to quality of leadership as a key influencer of group behavioral health. In particular, Schmidt highlights the importance of interpersonal interactions to influence others’ perceptions. Faced with the desolate environment of Antarctica (and, by extension, Mars) she states that “the objective characteristics of an extreme environment are less important than subjective perceptions of the environment in relation to performance“.

It’s incumbent on any leader to maintain the team’s morale, and it will be essential for future leaders of Mars missions to look after the crew’s emotional well-being en route to the red planet. I hope they’ll take leadership advice from submariners and antarctic explorers. Fostering teamwork and solidarity are critical to reduce conflicts and stress.

Antarctic research stations are a decent analog for Mars

Communications with Earth

In Jack Stuster’s review of astronaut journals, he found that communication with family and friends back on Earth was a welcome relief from the monotony of the space station environment, the lack of social variation, and the limited privacy. No surprise there, but here’s an interesting implication: Social connection, even with a long time delay, will help astronauts combat the third-quarter phenomenon which is consistent across all the missions I’ve mentioned. Whether you’re cooped up in a submarine or wintering over in Antarctica, there is a decline in performance during the third quarter of missions in isolated, confined, and extreme environments, regardless of actual mission duration.

And speaking of maintaining long-distance connections with family and friends…As long as we’re all sheltering in place, think about taking a cue from the astronauts. Set up video cocktail hours and video dance parties with your friends and family. We’re planning our second virtual cocktail party tonight, complete with online games.

VR-Enhanced Training and Entertainment

While underway to Mars, astronauts may leave the ship to enter an artificial environment using virtual reality headsets. You can imagine VR’s contribution to training. Astronauts have time to practice Mars surface operations while on the nine-month journey. Imagine maintaining certain high priority skills, like piloting the Space Exploration Vehicle across the Martian terrain. VR gear could also make it easier for astronauts to learn new skills such as geological investigations, or even how to conduct astronomical observations between Earth and Mars.

And if astronauts are bringing along VR gear for enhanced training, you can bet a holodeck application will be thrown in for some entertainment. Sign me up.

Talk to me….

I hope you’re inspired by NASA’s plans to visit Mars. Humans are built to explore, and Humanity’s aspirations to explore space will drive us toward unprecedented technological innovations that will undoubtedly benefit mankind in one way or another.

Talk to me. Inspiring? Thrilling? Wasteful? Gratuitous? As always, I welcome all comments. We all advance our thinking and ourselves through open-mindedness, humility, and tolerance for other points of view.

Heartland + Tech

The Bookings Institution argues that unbalanced growth in tech has contributed to a terrible political divide in our country that will only get worse.

The authors make a convincing case that the heartland needs growth centers to drive economic inclusion and socioeconomic mobility. Right now the mix is terrible: Top innovation metro areas in the US — Boston, San Francisco, San Jose, Seattle, and San Diego — accounted for more than 90% of the nation’s innovation-sector growth during the years 2005 to 2017.

My perspective: Keep the faith! Leaders like Carter Williams of iSelect Fund in St Louis are already demonstrating big successes in bringing innovation to the heartland.

Have a look at this short article and get back to me with your thoughts….

The case for growth centers: How to spread tech innovation across America


There’s a lot to like about living in Silicon Valley, working in emerging tech, and engaging with brilliant thinkers at places like Stanford. I’m lucky enough to live the global intellectual nexus of technology and entrepreneurship. But…(and you knew there was a “but” coming) I’m choking on the sheer number of “strategic technology frameworks” getting churned out, and I have a bad feeling that most were created by academics who have never created an innovative product or built a new venture.

There are a few frameworks I do find incredibly useful as I go about my day job, helping “intrapreneurs” create tech-enabled new ventures for big companies. Let me share one, and please weigh in with your favorites. Look for a few more in future posts.

No Borders – Only Horizons

Kudos to Baghai, Coley, and White for publishing their Horizon framework in 2000, in ‘The Alchemy of Growth’. By creating a taxonomy of three horizons, they gave corporate execs a practical way to think about technology and make intelligent decisions about strategy and execution for tech innovation programs. Here are the three horizons that help decision-makers to deliver on tech-enabled challenges:

  • Horizon 1: Extend Core Technologies, 1-2 years
    • Companies use existing tech to improve their business models and maximize their value and effectiveness in the short-term.
    • Big companies love Horizon 1, because they’re structured to deliver on core competencies and embrace incremental change.
  • Horizon 2: Develop New Opportunities, 2-5 years
    • Organizations invest in emerging technology to generate substantial value in the future, often around disruptive opportunities.
    • These programs extend a company’s business model and its core capabilities to entirely new customers, new markets, or both.
  • Horizon 3: Create Viable Future Visions, 5-10 years
    • Research programs and academic collaboration lead to the creation of entirely new capabilities and new businesses.
    • This is the realm of R&D labs in large organizations, and spooky organizations like DARPA.

So, why should you care about this? Because nearly all companies do a crappy job on Horizon 2, and tech-enabled Horizon 2 opportunities are key to your company’s survival. Have you noticed that certain initiatives in your organization, like implementing AI for predictive maintenance or adding IoT to your industrial processes, are always 2-4 years away, year after year? That’s because Horizon 2 programs defy corporate innovation processes and remain stubbornly out of reach for most organizations.

What processes work for successful Horizon 2 programs? I’ve been at this for 30 years and I’ve only seen one successful strategy for Horizon 2 programs: Create autonomous teams of entrepreneurial people, get them the hell out of the office, and lift corporate governance. In short, take a page from disruptive startups. None of these steps is easy, but Mach49 and other incubators area seeing remarkable results. In my career, external incubations are the first consistent path I’ve seen for huge organizations to create disruptive new ventures.

It’s been a pleasure to watch RWE, the massive German energy company, beat the odds and propel Horizon 2 initiatives forward through incubation. The leadership knew they could not keep pace with the market using internal processes, so they selected an entrepreneurially-minded employee, Sukhjinder Singh, to lead internal startup Thanks to Sukhjinder’s boundless energy and drive, Pear is embracing AI-enabled chatbots and natural language processing to extract value from energy data. RWE delivered a Horizon 2 program in record time, and had they employed their internal innovation methods, the new business would have been delivered…never.

Talk to me. Which tech innovation frameworks are helpful for you? I’ll share two more in future posts.

Credits and thank you to Baghai, Coley, and White for publishing their Horizon framework in 2000, in ‘The Alchemy of Growth

Tesla: straight-up vertical

Tesla Factory, Courtesy Agium

When my son brought home some fraternity brothers to our place in Mountain View this summer, they got away from the Peninsula and spent their time just where you’d expect: San Francisco, Oakland, and Santa Cruz. However I got some mileage by recommending the Tesla Factory Tour in Fremont.

One quick observation to share with you, after taking a tram through the second largest building in the world, 5.5 million square feet of frenetic robots working on a hellacious number of vehicles.

Tesla is incredibly proud of its heritage…

Tesla takes great pride in building on a legacy of older automotive infrastructure. The building was purchased from NUMMI, a joint venture between Toyota and General Motors, and they’re proud to upgrade it and keep it in operation. Our adorable tour guide swelled with pride as she told us how a massive stamping press was purchased from a truck manufacturer.

…but Tesla takes no pride in partnering.

We learned on the tour that Tesla builds damn near all the ingredients that go into their vehicles. Our guide talked about fabricating everything from seat fabrics to electrical connectors. Telsa’s approach is completely distinct from the car manufacturers I work with, who focus on drivetrain and assembly process.

On the tour, they made it clear that they had to integrate vertically because of their “first principles” approach: No one else had the required parts, systems, and services Tesla needed. Going the supplier route made no sense. Well, maybe. I think we’re seeing an uncompromising culture that prefers to build rather than buy.

We’ll see how Tesla manages its scale over the next few years. They’re done a remarkable job designing the “machine that creates the machine”, and the factory itself is a remarkable product. If Tesla can integrate value as competently as it integrates manufacturing, there will be no stopping them.

Have you taken the tour? I’d love to hear your observations.

Tesla factory, courtesy Wikipedia

Flying Taxis? I’m (slowly) turning into a believer

A recent Churchill Club event reminded me that EVTOLs (Electric Vertical Take-Off and Landing) vehicles continue to make progress here at a blistering pace, compared to other players in aviation. Startups like Kitty Hawk and Joby Aviation, as well as large firms like Airbus, are making impressive strides towards commercialization. I fully expect testing to be well underway by the early 2020s.

Joby Aviation is busy developing an air taxi

Flying electric vehicles are at an exciting inflection point I’ve seen again and again in the tech industry: The point Steven Johnson calls “The Adjacent Possible”. In Johnson’s awesome book (well worth your time), Where Good Ideas Come From: The Natural History of Innovation, he explains that most innovations are not sudden flashes of inspiration. “Adjacent Possible” innovations come from the combination of what’s already available (“spare parts”) in new and remarkable ways. Looks to me as thought we’re ready to watch a whole new EVTOL industry emerge from the marriage of what’s already available, like advanced lightweight materials, cutting-edge sensors, digital signal processors, and AI software.

Listening to the heavyweights speak about air taxis at the Churchill Club, three themes cut across all the perspectives. The “big three” challenges for EVTOL on everyone’s mind, in order of priority, are:

  • Safety, including security
  • Noise
  • Economics


Manufacturers make a pretty convincing case that EVTOL systems can be made safe if they are redundant from tip to tail. Everyone took pains to describe redundant, independant, parallel subsystems. For example, at the front end, multiple independent lift fans protect from motor failure or a bird strike. There are 2-4 independent controllers stuffed into these aircraft, wired in parallel. And it’s a really bad day if the vehicle loses power, so the battery system is divided into four separate sections for redundancy.

Security, particularly cybersecurity, is an issue with all autonomous vehicles. I’m glad they’re talking about it now. The best mitigation is for safety-critical systems in EVTOLs to be isolated from non-critical components and independent of connectivity to external networks.

Elroy Air’s delivery drone in flight

Noise Abatement

The industry needs to work more on this one and they know it. Reducing tip speed is the favored approach with larger, slower blades, but they’re doomed if the noise of EVTOLs drives everyone crazy. Some genius needs to come up with a disruptive solution like digital sound cancellation or soundproofing.


Autonomy is critical to providing an economically viable passenger experience. Even the most enthusiastic boosters of air taxis acknowledged that the cost of a pilot destroys the business viability. Autonomy means no pilot expense plus an available second seat, and at that point, the numbers start to look promising. Uber has done some careful financial work and they argue that air taxis could be comparable in cost to ground transportation once we see decent scale. If all this is interesting to you and you want to read one additional document, I highly recommend the Uber Elevate Whitepaper.

In the short term, autonomous systems will prove especially valuable for freight transport and delivery. I’m looking forward to seeing some of these players – Elroy, Joby, Kitty Hawk, Bell – get moving with freight transport in remote areas as a baby step to greatness.

What makes EVTOL hard?

Everyone agreed on this one: batteries. Storage tech is improving, energy density currently 250 watt-hours / kg, but still no where near the energy density of hydrocarbons. Many of the air taxi players talked about the need to design the aircraft around the batteries, cramming every bit of available space with chemical storage. They also pointed out that as we see larger and larger energy densities, explosion or fire risk increases.

What makes EVTOL easy?

I hadn’t thought about this, but compared to autonomous cars, there’s a much lower “obstacle density”. No curbs, no pedestrians, no stop signs. And the vehicles can all operate at different elevations depending on route. However, manufacturers mentioned that there’s also less data for the machine-learning systems, compared to the mountains of data gathered by autonomous cars.

Other Thoughts…

Ford and GM are “sitting ducks” to be disrupted by a company like Waymo. Similarly, the EVTOL entrepreneurs make a convincing case that Boeing and Airbus are sitting ducks for startups like Joby Aviation.

A great deal of existing work can be applied. From the autonomous vehicle industry, for example, it’s  possible to siphon off goodies such as V2V communication technologies, hardware tech like LIDAR, and machine-vision software stacks. Advances in materials science applied to larger aircraft, like carbon-fiber frames, can easily be applied to small EVTOLs.

Can EVTOLs be another “leapfrog” for developing countries? Might developing countries leapfrog over conventional transit infrastructure, like subways and freeways, and go straight to flying vehicles? I sure wouldn’t mind flying over the traffic nightmares in Mumbai. (I’ll wave.)

Talk to me. Are we on the cusp of something big, or have I been taken on a flight of fancy by wild-eyed futurists? As always, I’d love to hear from you.

Joby Air Taxi

Update from 10 June 2019: About a week after I finished this post, The Verge published a piece on giant cargo drones highlighting many of the same players. The Verge pointed out:

Amazon announced plans to drop packages at customers’ doorsAlphabet’s Wing got FAA approval to make deliveries in the US, and UPS said it was testing its own tech by delivering medical supplies to hospitals in Northern Virginia. But there are concerns about safety and how the Federal Aviation Administration will regulate them.