This episode is hosted by Boundaryless Conversation Podcast host Simone Cicero with co-host, Stina Heikkilä.

The following is a semi-automatically generated transcript which has not been thoroughly revised by the podcast host or by the guest. Please check with us before using any quotations from this transcript. Thank you.

Simone Cicero:
So James, thanks very much for joining us today talking about, essentially exploring with you how we can imagine the future of marketplaces and platforms to play out. And especially, the first factor of the conversation that I would like to share with you is essentially asking your impression in terms of new spaces and new parts of the economy where these model of marketplaces and platforms will likely play out in the future. So what are the new, I would say also the low hanging fruits for this way of organising to be, you know, what are the new frontiers where these new ways of organising are going to play out in the short and mid term?

James Currier:
You know, I think, I think that the best way to think about it is really to set your mind to the idea that it’s going to play out in every aspect of society and that’s government, that’s environmental, that’s social, that’s a marketplaces, transactions, labour markets, education. Anything that we care about anything that forms societies is going to be digitised, is going to be touched by the efficiency that these interfaces bring. And therefore understanding how they work and why they work is critical to almost any job that we have, no matter where we sit in the economy, and I think while that will be, you know, it’ll play out in different places at different times. I think taking that approach and that attitude to realising it’s going to touch everything, I think is the best way to begin the experiment of trying to understand what’s about to happen over the next 20 years.

Simone Cicero:
And what makes it so, I would say so potentially widespread from your point of view. Is it just efficiency? Is it some specific, let’s say, aspect of organising markets and platforms that will make it the model for the 21st century?

James Currier:
I think it’s the universality of the interfaces and just the data collection. If you look at how the world works, before how the world worked before the internet, it did not appear to be driven by math. But in fact, if you look more deeply, you will see that it was driven by math, it just we couldn’t watch the math happening. But now with the Internet, and the mobile phones and all the technologies that allow us to collect the data, we can now collect the math, we can collect the data as things are happening among people, between people within a person, and we can actually start to model it and see it. What we’ve seen in the last 25 years where the internet is just the beginning of that process, and I think actually will accelerate has more and more people get comfortable with using the devices to generate data, then using the devices to look at the data in real time, aggregate the data and then send it out marketplaces and networks, like Facebook and LinkedIn and eBay and what not are just the beginning. The most obvious interfaces to this type of data, the most obvious ways of revealing the math underlying all the things that we do in life, starting with, you know, buying and selling things or connecting with people and sharing photos, but the universality of the technology will touch everything.

Simone Cicero:
Very interesting. And, you know, some questions came up quite, quite obviously, when we talk about data and you know, for example, this presentation that Benedict Evans just shared at the World Economic Forum a few months ago and it was a starter also for this conversation about regulation. And you know, this speculation that the next paradigm shift that is essentially what you just said, so that the internet penetrating every aspect of our life, and therefore, all this capability to generate data and insights. But you know, my question for you is not just about the data itself, no, that is normally, especially here in Europe we are we are used to this idea of regulation intervening, let’s say to protect data, but also the insights that data can generate. So what are the let’s say the constituencies and the entities that are entitled in this perspective to, let’s say, act on the insights that data are going to make possible, are going to generate. So how do you see this interplay between, let’s say, institutions and companies in this perspective?

James Currier:
Yeah, it’s a very interesting question. The interplay broadly I think a guy named Neil Ferguson obviously has written a beautiful book called “The square and the tower” in which he discusses the difference between hierarchical structures and network structures. And as the technology seeks to create networks the hierarchies that exists today that are intended to protect people, whether it’s governments or educational institutions or churches, the hierarchical institutions are going to essentially fight back against the open field network availability of all the data. And that interplay will be an ongoing battle between the two forces. Ultimately, the network will win because it is math based because it is technology based. It’ll just take time. The hierarchies that we have in place today, I think, will slow it down. And we can as members of the society vote to slow down the progress of widespread adoption, but I think, you know, the next hundred years you’re going to see that it’s a sort of an extremely moves toward more transparency and more data collection, more data analysis, easier insights and you know, That may not necessarily mean that we live better lives, or happier lives or but but it is, I think, I think history will show that just like industrialisation has now, you know touched the whole globe, you’ll see the same thing happen with information technology as to who gets to decide that’s going to be decided on a weekly and monthly and yearly basis by each of the countries by each of the politics. But, but I think we know the general direction where it’s all going.

Simone Cicero:
That’s super interesting, especially when you embrace this perspective, know that what you said. And so then let me jump into a, maybe a bit of a specific question. So, when, especially if we embrace this as, let’s say century perspective, so my question is, do you see it these models somehow play out as a new institutional forms. So for example, when you think about how citizens or other new players can, let’s say organise the economy and the economic activity in ways that are may be different from what normally a startup or a corporate would do. So do you see this, you know, math based database model, somehow empowering new forms of institutions to organise civic society. And another question on top of this, all these infrastructures and technologies that we need for data and for connectivity, how do you see them, you know, evolving in this perspective?

James Currier:
Yeah, I do, I do think that we’re going to see new institutions develop and the these new institutions I think will be, will be driven by the same thing that drives most great new institutions, which is charismatic leaders, combined with network effects. So you can imagine a charismatic leader, building a network, and trust and technology to help protect people, for privacy reasons. And then whether it’s like a Wikipedia or an Electronic Frontier Foundation, you will see these new forms emerged around individuals, as long as those individuals also then build the platform to have network effects so that the system has steam power. You know, then the success of them will be determined ad hoc, it’ll be determined in the moment, I think, you know, we’ve seen the emergence recently of one called Libra, where David Marcus in the Facebook group pulled together a community to try to build a global currency. And the government’s appear at this time to have prevented it. The hierarchies, the existing hierarchies have positioned themselves and made demands so far that the Libra system won’t be nearly what it could have been. And is essentially defeated. We’ll see how that plays out over the next year or two. But, you know, these sorts of, you know, extra governmental, or non corporate entities like Libra will start to emerge and some will succeed and most will fail, just like with most startups, but you know, it’s going to come down to the entrepreneurs leading them the design of their products, and the timing, just like it does for any sort of startup. But I look at that as sort of a, you know, a cultural entrepreneur, David, even though that was a currency I saw Libra more as a cultural entrepreneurship attempt. And I think we’ll start to see more and more of those.

Simone Cicero:
Very interesting. And, you know, basically, if I think about an investor, like you, investing in startups, somehow it’s a role that needs to play out in a fairly, I would say, institutional and traditional context. Let’s say, well, instead, when you talk about how this may play out, I get this idea that these new institutions can sometimes play out in contrasts to the incumbents, and also generating these frictions with the incumbents. So when you think about this new space of new institutional platforms that maybe provide also different services, and I’m also interested in understanding from you, where do you see these new services coming up? So I was talking about for example, how we produce energy or how we organise education, that kind of stuff, and you know, this friction between the establishment, let’s say the 20th century establishment and institutions and these new institutions coming up. What frictions can we see and what is this new space developing?

James Currier:
Yeah, so I don’t have a, I don’t have nearly the crystal ball, I guess my comment about this would be that over the years, I’ve learned that it’s very hard to predict a lot of these things. And therefore what we should do instead is build systems that allow for rapid iteration and experimentation that allow for rapid starts and ends without friction. You know, as an American, and when I look over at the European markets, this is one of the challenges I see the European markets have, is that people want a little more stability. They want a little more rationality. They want explanations, they want to think it through and, and the speed with which you can try a new idea and have it die is much faster in the US and it’s even faster in China. And I think long term, the systems that will work better are the ones that allow for this rapid iteration because we don’t know where all these things are coming from, when will the educational systems be willing to be disrupted? You know, people’s trust in the status orientation of a Harvard or Princeton or Yale is very strong. Yet in the last three years, people that that system has been cracking it might be time for ISAs — income sharing agreements — and new forms of education and human capital development to emerge in a space that has been static for generations. People have been trying to upend education for 50 years in the United States with no real success is the time now hard to say. But I think we should keep trying. And we should try these small experiments like we’re seeing with companies like Lambda school and we’re seeing with ISA marketplaces and whatnot. That’s just an example. That’s just one vertical which is education. And, and so, you know, the friction is going to come from people staying relevant and people getting their salaries. So if you live in Washington DC, or if you live in Paris, and your income comes from your hierarchy that has been designed for the systems to continue to function, the way they function, then it’s in your interest to maintain the status quo. And essentially, to join with your coworkers in fighting whatever is trying to emerge next, whatever new experiment there is. And, you know, that’s your role in the economy based on where you sit. I think there’s a wonderful phrase which is where you stand on any subject is based on where you sit, meaning where your seat is where you get your income. And so the friction is going to be between where people are getting their income today and where it’s going to be coming later. And the friction is going to be between those people who are listened to today, those people who are influential, those people who get invited to the cocktail parties into the black tie affairs and are allowed to give speeches in front of people because of where they sit, versus the new people coming up, who are going to be listened to and be influential, using new networks or new marketplaces of ideas. And that’s where the friction is going to come is, is those in power, those in money, those in status, not wanting to cede that status, that money that influence to new systems, new marketplaces, new market networks, new networks, new forms of technology and expression. You’r seeing that on YouTube with the youtubers, you know, starting to get traction up against Hollywood, you’re starting to see that with, you know, the right wing media in the United States fighting the traditional, somewhat left wing, main media outlets. So you’re going to continue to see those frictions as people fight for position in society.

Stina Heikkila:
Very interesting. So, I would like to just follow up with a question on that. And because surely the education system as it is today is quite poorly equipped to shape individuals to fight in and sort of get on in this world. So what are some of the key skills and competences that you see that people entering, you know, their kind of career at this stage? What would they need?

James Currier:
So i’m very biased on this. And so take what I say with a grain of salt. But you know, I grew up in Boston, and the United States, which is quite similar in many ways to London. It is one of the most European type of cities that we have. And I ended up going to the educational universities of that area. Once called Exeter and others Princeton and I went to Harvard Business School. These are very traditional institutions, high end status, high end tradition, part of the the establishment, if you will, I have chosen to move out to San Francisco 20 years ago, because I believe the way that the people think out here is actually the future. That what makes Silicon Valley Silicon Valley is a mindset. Its ways of thinking. And it is those ways of thinking I believe we should be teaching to people. Those ways of thinking are about iteration. Those ways of thinking about design, thinking about how you design something. Those ways of thinking are about tolerance for failure. Those ways of thinking are about non zero sum. Okay? This is a very foreign concept in most places in the world. But in Silicon Valley, we don’t believe in zero sum. We don’t think that there is a limited pie that has to be divided. We think that the pie is as big as we want to make it. You just invent something new. You invent a new way of generating wealth, you invent new products, you invent new institutions, you invent new language. Right, Buckminster Fuller, who I like to quote said, you cannot change complex structures and hierarchies from inside, you have to build something new and something better, something 10x better so that everyone moves to the new thing and the old thing melts away. And that mindset is very different from what we see on the East Coast, United States and what we see, particularly in Europe. And so I feel as if the educational institutions are not only teaching inefficiently, but they are teaching the wrong things. They’re teaching people the wrong ways of thinking simply by how they operate. An example is that the talk I give frequently out here is about speed. And about going quickly and about when you’re, when you’re innovating, when you’re trying to create something new in the world, when you’re doing a startup, the one attribute you have that other people don’t have is speed. And I use the x-wing fighters from Star Wars as the example. You know, going up against the Death Star, the only thing that excellent fighters had was speed and they had to use it to their advantage. It’s the same thing when you’re trying to do something interesting or new, is going fast. But the reason most people don’t go fast is because the educational institutions have taught us that things happen in an annual pace, maybe at a semesters pace. They have taught us to go so slowly, in our development between first grade and the last year of university. And so we emerge from that system, going at 1/20 or 1/30 of the speed that we could actually be moving at. But nobody is showing us the faster ways of doing it. And we don’t even realise we’re learning that speed bar. That we think that’s how quickly the world moves. We don’t realise that’s what’s being taught but that is the meta lesson of the way the educational system works. And that mindset tends to be reduced here in Silicon Valley more than any other place I’ve been in the world except for China, where I think they are even faster than we are here. And so I think that the the educational institutions, as we all know, are teaching the wrong things. And they’re teaching them poorly. But they are still in place because of status. They are still in place because of branding and because of signalling. And those things are much more difficult to create. We could create better curriculum, we could create faster curriculum, we could create better than teach better mindsets, and Stanford is teaching better mindsets, but it’s very hard to replace these status structures within our our overall societies. And that’s what’s really causing us to claim these ancient institutions, which are serving us so badly.

Simone Cicero:
Stina, I have a question. I don’t know if you have. Do you have a follow up consideration?

Stina Heikkila:
No, I think I really resonate. I mean I come from, I studied at University of Cambridge, I’ve been through the UN and the OECD. So I think there’s a lot what you say there that is about, you know, holding on to, to certain structures sort of, you know, also legacy what you have created, it’s very hard to let go.

James Currier:
It’s very hard to let go. I mean, we we started a homeschool for my children here in the United States. And I learned a great deal from that, because after a year, we stopped it. And the main issue for most education for particularly for young children is this idea that by doing something different than what they had, they are risking their children’s futures. And then when you look at university, the universities don’t want to change because it would make the professor’s irrelevant. It would make their tenure worthless. It would end their relevance if we were to actually open the system up. And the same is true for the OECD and the UN, which is it is the system, the network of the people, which is the value, not the individuals, and therefore all the individuals in order to preserve their income and their status, seek to maintain the whole of the network, the UN network, the OECD network, the Belgium network. And these are the mechanisms, the network mechanisms that we can see and we can actually measure them to see how resistant a hierarchy is to innovation.

Simone Cicero:
James, I have a question on China, because I had the chance to work with Chinese companies in the last year, I’ve been working a lot with Haier group and I have a question for you. We spoke about, you know, considering China even faster than the US. And you seem to praise at this attribute. So my question is, what is your impression about why China is so fast? And why in China there is not this resistance between the deep state, let’s say, and the innovators? While maybe, you know, from a traditional perspective, one would think that bureaucracy in China or the deep state in China would be more, I would say, even more having a bigger footprint on the economy and on innovation. So what is your impression about this?

James Currier:
Yeah, so, the deep state, the state in China. Look, I’m not an expert. I moved to China in 1993 because I believe that China would return to its place ruling the world if you will. And I wanted to participate in the rise of China and learn Chinese and, you know, bridge Western thinking with Eastern thinking. And so I did live there for a year and a half in Hong Kong and Beijing and I studied there. But that doesn’t make me an expert. What my feeling is that, you know, the Chinese culture, very much admires entrepreneurship. And therefore, there isn’t this sense that entrepreneurs are taking jobs from somebody else, but rather that entrepreneurs are doing a good thing, entrepreneurs are moving people forward, creating something new and that’s their right, that’s their responsibility, and that’s good generally for society. You know, there’s a sense I think more in Europe but partly in the US as well that, you know, too much change is hurtful. And that there’s human suffering that comes along with innovation with disruption. And that government’s job, particularly in France is to reduce the pace of change so that there is less suffering. And that mindset you see in the unions in Europe with all the protesting and the strikes and, and in Spain and France, and particularly you see, the citizens themselves have this mindset, they have this mental pattern, that the government should be doing something for them. And in a way that China, Chinese don’t have that. It’s funny, they are so happy to, you know, have the government avoid them, that they’re very happy just to go off and try to make money. And they don’t necessarily expect the government to do something for them. They kind of think about what they need to do for the government. And so it frees them up to move much quicker.These mental models, and I think the European mental models are the opposite. They are the opposite and then they produce the opposite activity, which is to slow down innovation. But I can’t profess to be a real expert in the cultural or structural differences that produce it. But what I will tell you is, I don’t think it’s structural. I think there’s a mistake that a lot of academicians make. A lot of government people make, and particularly a lot of Europeans make where they think it’s about the government or it’s about policy. And I’m here to tell you that I don’t believe that, I believe it’s about mental models and about psychology. That’s what Silicon Valley is people say, well, Silicon Valley has universities and venture capitalists and this and that and the other thing, but that’s not true. All that stuff is there because Silicon Valley has a particular mindset. Silicon Valley as a set of mental patterns. That’s where it comes from.

Simone Cicero:
Yeah, that’s, that’s interesting, because — sorry for interrupting you — but just offering you this reflection that, you know, you seem to put Silicon Valley in China, for example, as hotbeds of innovation while what, you know, you also mentioned that instead the European tendency to resist to creative destruction. Well, if I think about the welfare, for example, in the US and China, it’s totally different. While maybe there are more parallels in terms of entrepreneurial mindset. So it’s really a mindset thing.

James Currier:
Yes, it’s very much of a mindset thing. And you know, I had a brilliant lunch with a group of people from Switzerland who came and asked me to explain the innovation engine of Silicon Valley, so that they could bring it back to Switzerland. And I gave them an hour long lecture on it, and then we sat we had lunch and I was trying to help them understand how we did it and what I realised in the conversation is that Switzerland doesn’t need Silicon Valley’s type of innovation. Switzerland has its own form of wealth creation, which is incremental, not creative destruction. And it works just great for them. Ours works great for us, theirs works great for them. They don’t need to adopt ours. And, and I was, even though they had come thinking they wanted to learn something, I realised you don’t need to learn anything, you guys are doing great on your own. There are many sets of mental models which can work. But they have to be self consistent. And so if we are looking for more great leaps forward, if you will, if we’re looking for more innovation, more creative destruction, then there are certain mental models which we need for that. But if we’re gonna, if we’re gonna, you know, have more incremental change, then there’s certain models that work for that. And look, you know what I would I rather live in, in Europe or in China, I’d rather live in Europe. The living is better. Do we have a better lifestyle? Yes. So it’s not that China is better, it’s just that they’re better and faster at innovation. And it might be that in the end, China is a miserable place to live. And all the humans will be miserable and polluted. So I’m not advocating for China I’m just noticing the difference in speed. And I’m noticing where the networks are coming from, where the innovations are coming from, that the rest of us are all dancing on. I mean, we are all now nodes on Facebook. We are all now nodes on Alibaba. I’d rather be Alibaba or Facebook than I would to be a node on the network. You know?

Simone Cicero:
James after this, you know, more system framing of innovation and geopolitics from our geo-cultures, let’s say, one question I would like to explore with you is more about really, where we see and how we see this market networks and network based models play out in the next decade. And that’s a lot of talking about the interplay and relationship between the big players like the GAFAs, you know, the Googles and Facebooks, and the Apples and so on, and the platforms, the marketplaces that somehow are emerging on top of these enabling platforms, at least this is the consideration that for example, as emerged lately from the presentation and the insights that Ben Evans and also Ben Thompson been exploring lately. So my question for you is, how do you see the future of marketplaces playing out? Is it more a future of niche marketplaces that are going to expand more vertically, let’s say, or do you see so also the chance to, you know, to see new or horizontal marketplaces emerge and somehow reduce the impact and importance of these institutional and infrastructural players?

James Currier:
It’s a good question. I think that these infrastructural players will continue to be very important and will continue to grow. And I also think that the niche marketplaces will come on as they can better serve their niches and their will very specialised language, their specialised profiles, specialised financial services attached to them, that a large platform won’t be able to address. Nevertheless, because so much of the economy is moving in this direction, I believe both GAFA and the existing platforms, as well as the new companies are going to continue to grow dramatically over the next 10–20 years. So both will happen.

Simone Cicero:
So we’re going to transform massively the economy through this pattern and what do you see in terms of big tech? For example, technological shifts, or social shifts that may transform the very idea of markets and platforms? For example, you know, I’m going to mention few technologies, but just you know, just to give you an idea of what I’m thinking about, you know, AI or maybe the blockchain or other technologies that are even all the risk factors like for example, I don’t know, the new attention to sustainability and climate change. So how are these social technical trends going to impact the landscape of platforms and marketplaces?

James Currier:
Yeah, so I think that AI will be sprinkled into everything. And I don’t, we aren’t making investments in pure AI companies, because we think it’s going to be sprinkled in different places. And that largely, it’s going to end up benefiting the existing incumbents. Okay. That’s why Google is open sourcing so much of their research, because ultimately it’s all going to come back to them. The bigger, the more digitised, everything becomes the more Google benefits. So, in terms of blockchain, you know, it’s hard to say at this point where those applications are going to end up being useful. You know, currency has for the last, you know, 12 years been the major application of it. And yet, it hasn’t really grown in a long time. And all the new efforts like Libra and others are being stymied by the hierarchies of who need to defend their turf. So it’ll be interesting to see if that turns into much of anything. The other problem with blockchain just so you’ll know is it is attracted sort of the most unsavoury types of characters. So again, getting back to culture, getting back to mindset, a mental models, the types of people who are attracted to the easy money of crypto and blockchain have really kind of poisoned the well. And there are some incredible PhDs and brilliant minds who are working on it as well. But they’re attracted to it mostly because it’s so complex. And it’s a great place for their incredible brains to make things as complex and detailed as possible. And we have not yet emerged to the other side of that, where it becomes simple and usable. And in fact, many of the people working on developing much of the blockchain infrastructure, want it to stay complex because again, that allows them to maintain their status and their position in the systems as the only one who understands what’s going on. So there’s sort of a disincentive to really make it simple. We’ve seen that play out repeatedly. So I’m a little bit skeptical and have been for a while of the ability for blockchain to transform everything other than currencies. And now recently, I’m becoming more skeptical of it in currencies because the hierarchies are now understanding the threat to them and are aligned and organised to fight it. So we’ll see how that plays out. In terms of, you know, what, what is going to be changing about, about these networks and marketplaces and market networks? What all the technology does is drive transparency, it drives our access to more data. This has two, in my mind, one really positive impact and two negative impacts on society. The positive impact, of course, is efficiency. I can now find the right product or the right service for the lowest price that I couldn’t find before. This is great. This is wonderful. It enables all sorts of magical experiences to happen like Uber and Lyft and whatnot. The negatives that people don’t talk about as much are the fact that in most human labour markets, there is a power law. So for instance, in the United States, I believe the statistics are that 7% of the residential real estate brokers, broker over 85% of all the transactions in the United States. That’s a big market. That’s a small number of people. We think that there are, let’s say 1.5 million people who are employed as residential real estate brokers in the US, but the fact is only 7% of them are doing well. The others don’t have the talent. They don’t have the attractiveness, they don’t have the networks, they don’t have the energy, the confidence to do well in that job. The internet and these marketplaces make this more clear. The Internet in these marketplaces drive the power law to be more extreme than it has been in the past, which means that it’s going to hurt the middle class dramatically. Because now I can go find the best real estate broker in my region. Not a pretty good one, or a good enough one. I can find the best Baker, of croissants, not a pretty good one, I can, etc, etc. That’s an extreme example. But you see my point, that in many markets, the transparency of data is going to drive a steeper power law so that the winners win more and the people who are behind get further behind. And sometimes we call that preferred attachment within the network. Sometimes we call that the Matthew effect. In fact, this is such an annoying fact of, of life, that it was mentioned six times in the Bible, starting in the book of Matthew. That’s why it’s known as the Matthew effect. They were really wrestling with it when they were writing the Bible that this was true that those ahead got more ahead and those behind got further behind. And the internet is making that more and more true, which makes it difficult for many people to stay relevant to the economy, stay relevant in conversations because if I want to have a conversation about a subject now I don’t have to turn to my local professor, I can now go online and engage with the very, very best Professor on a particular subject, and she will get all of the attention, she will get more and more of the attention. So this transparency leads to power laws, power laws lead to difficulty for the middle class and the lower classes to stay relevant. Very difficult, and then it will allocate money accordingly. So this is a big concern that I’ve had for a long time and we’re starting to see it play out. The antidote to that is to build systems of education, and systems of help that are digital, that are inexpensive, to help those people stay relevant. And this has been something I’ve been thinking about since 1991. When I first realised what the internet was going to do, and how it was going to impact society. And we are starting to see that with, you know, the way that a company like Zillow or Trulia treats its brokers or the way that, you know, these new schools are popping up to give people new and advanced skills and social media or advanced skills and coding or Photoshop or whatever, to help them stay ahead of these power laws, which are gutting some of these industries. The second problem that I see society getting from these new marketplaces and networks, is that the transparency drives fear because I can see what’s coming. I can fear it, because I can see how someone else thinks differently than I do. I fear it. And the whole system is triggering a lot of overthinking and a lot of fear that we just didn’t used to have because we couldn’t see it .We couldn’t touch the thinking or we couldn’t touch the numbers. And now that we can, we see our own failings, where we see someone else doing better than us, where we see someone else expressing a way of thinking about gun control or about taxation in a way that’s different from ours. It triggers our amygdalas. It triggers our fear centres, and that is causing us to behave in ways that are ultimately self defeating. Because we live in fear rather than living in hope. And that’s making it more likely to authoritarians rise. And we’re seeing this across the globe. Is this only coming from social media? Is this only coming from marketplaces? I don’t know. But I sure know it has a big impact on the mental models that people are living with these days.

Stina Heikkila:
Thank you, I have a follow up question on this transparency, because when you say that one positive thing is that it drives efficiency, do you also see that with more transparency you can create a sort of Race to the Top when it comes to, for instance, environmental and social impact? That is not only sort of market share, but also the quality of your offerings.

James Currier:
Yes. When I say the power law, that’s what I’m driving at that the people with the best ideas or the best talent will rise to the top. And the systems will elevate them to be even more on top and more on top. Yeah, that’s that’s exactly and, and what you’re what I guess your point is that you could use the same mechanisms to help us solve problems as well. Exactly. Yeah. Yeah, I think I think that the same mechanism can be used to help us solve problems. But generally so far has not been. Yeah, in fact, the transparency causing fear is causing us to do the opposite. When you can see in the United States we are going backwards in terms of environmental protection. We’re going backwards in terms of, you know, sort of civics. We’re going backwards in terms of how our government runs. It’s, it’s being dismantled in the name of fear.

Simone Cicero:
James — sorry a question on this specifically — because it also connects with another topic that I wanted to explore quickly with you. Do you see these let’s say these dynamics, driving towards polarisation and power laws and I would say and inequality somehow being generated just by the technological nature of the internet, so this capability to create transparency and data and interconnectedness? Or it’s also a matter of the, let’s say, traditional choices that are behind the creation of a company? So I’m thinking of, for example, this movement that you probably familiar with, around the platform cooperatives and new potential ways of governance for platforms that are more, I would say, protecting and respectful for the workers, for example, that can actually give rights or maybe also some access to revenues, to the workers, the gig workers. So do you see any potential in this new you know, new ways of thinking about platforms in more democratic more accessible, more participatory ways?

James Currier:
I do. I see a lot of potential in them, and it’s just one of them is going to have to succeed and then drag the whole system with it. Right? I mean, we’ve been talking about another example would be when you take a company public in the United States, it’s typically done through the old hierarchies. And we’ve been talking about having open and direct IPOs since the early 90s. And there was a big movement in the 1998 99 period, and then again, in 2000, Google almost went a direct listing. And in the last second, the hierarchies flew all the investment bankers from New York out to San Francisco. And they all lived for months in the hotels around the Google headquarters to influence Larry and Sergey to not do a direct listing, because that would have undermined their franchise. And in the end, they convinced them not to do a direct listing. And that delayed a more promising way, a more democratic way, of doing things for 16 years. And so, I believe there’s a lot of potential in these new models. But we need charismatic leaders to do it once or twice to show us how it’s done. So that it becomes the new standard. Someone has to have a breakthrough, because otherwise, the preferred attachment will continue to go to those who do not.

Simone Cicero:
So it will be we will need a big, you know, like a big platform coop making the rounds and and, you know, great success and, you know, to somehow drive a new cultural shift towards these new patterns.

James Currier:
That seems to be the pattern of how these things change. Yes.

Simone Cicero:
Well, James, in terms of spaces, I would say, the hot spaces where you are lately, where do you see these patterns, these ways of organising, playing out in the in the short term? So let’s look more into the short term now. So where do you see the market networks and platforms moving? What new spaces? What new consumer spaces or business spaces or, or you know, institutional space?

James Currier:
Yeah. So, broadly speaking, we see the human capital I think being transformed over the next 10 years, I think people are finally ready for it. That’s my guess. You know, the labour market, and there’s a number of segments within human capital. One, I would say we have labour marketplaces with the staffing model, which is where it’s recurring, something like Upwork where you’re paying them on a weekly or a daily or a monthly basis, and there are some successes there, although it has been hard to find really breakout companies in that space. Then there’s placement marketplaces, things like Incredible Health, hire.com where these companies, these platforms are getting paid $5,000 $7,000 $35,000 to place a new worker in a new job. That’s a second area that we’re investing quite a lot in. And then then there’s the ISAs and the whole educational change. So ISAs, these income sharing agreements have been quite popular in Europe for a long time, but are just now getting to the United States. And the two things that the ISAs do is it allows for people to be retrained quickly and it causes the educational institution itself to lower its costs and increase its efficacy in terms of employability and this the ISA and the new form of financing helps to speed up the development of more of these, these educational institutions to give people the skills they need. And as the world moves to digital, most of the high paying interesting jobs are digital. And so people want to be retrained, the companies trying to hire digital people want to have them trained. And so it’s all working now. It’s much like, you know, in the 1920s and 30s, learning to weld, you know, or learning drive a forklift, right? These these were the plentiful jobs at the age of industrialization, and people needed to be trained on them rather than taking care of horses. And so we see a big a big shift taking place there around ISAs in education. And then of course, the fourth one is around market networks, where you have professionals who are not looking for a job who are not being rented out as staffing and are not re educating themselves, but you know, they’re professionals and travel around legal or an architecture or interior design, these professionals whose jobs are still needed and being paid for, they need a place for their profile, they need a place for their network. They need a place for landing and landing their next revenue, and then coordinating with other people that they coordinate with. We’ve given a term to this five years ago called market networks. And we see these and we’ve invested in companies doing it in law, and in travel, and in residential real estate, in commercial real estate, you know,in media production, architecture, consulting, interior design. Many, many of these verticals are places we’ve already invested in and will continue to invest in, because we think that nearly all independent professionals and their clients will start to conduct their business through the market network of their industry. So you’re going to end up with verticals, in particular industries, helping to coordinate these professional services types of activities. So those are the four sort of human capital areas we see and ones we’re investing in the near term.

Simone Cicero:
Super, very interesting. And instead if I ask you to share your impressions towards what are the major risk factors that you see potentially playing out in the in the coming decade in terms of impacts on the economy, but I would say on this understanding of the economy that seems like emerging from your words, so this powerfully digitally powered economy, where everybody is connected, that you can leverage on your talent and institutions become less relevant and enterpreneurship is becoming more important. So what do you see what are the major risk factors that you see potentially playing out?

James Currier:
Ah, it’s interesting, I don’t often think about that. I always look at the opportunity to move forward. Look, I think that some people are not going to have the personality to manage their own career very well. Some, you know, there are not so many people that are extroverted, that are confident, that are physically healthy, and these systems because they drive the power law will benefit the more fit people. And it will disadvantage the less fit people. And so that I think is a big challenge. I think the the second thing we need to be careful of is that as these networks and these platforms become more powerful, they don’t suck all of the value into the centre. You know, they can take, you know, I remember when when Android launched, they said oh, Apple is taking 30% of your revenue for having your app on their platform, we will only take 10%. But then after, you know, seven years, they said, okay, great, we’ll go up to 30%. Now too, because once you get the network effect in place, it’s really hard to just to displace you. And then you can pretty much charge whatever you want. So I think we’re going to have challenges with these network effect businesses drawing all of the value into the centre and leaving the edges of the network, the edges, the nodes on the edge of the network with very little, just because of the math. And that’s why those are the types of businesses we invest in. I mean, we’re trying to make good investments. And that means that we want our businesses to become very valuable. And to become very valuable, you want to build a network effect and draw a lot of value into the centre. I think the businesses that will thrive for 20 or 40 or 50 years, we’ll be those that are led by management, which changed from being just returns focused to being more statesmen to be more states people, understanding the broader implications. And that, I think, is the mental shift that a guy like Mark Zuckerberg needs to make. He’s made some incredible changes in his own personality and his own maturity and his own growth over the last 15–20 years. Incredible. I mean, the guy’s remarkable. But there’s this last shift he needs to make to be a statesman and understand that he’s kind of running a nation and that he needs to treat it as such. And if he would take that perspective, I think it would be better for Facebook in the long term. And, and so that’s that’s another risk we have is that by their nature, these network effect businesses can draw too much of the value to themselves and make it very difficult for the people on the outside of the nodes on the on the edge of the network.

Simone Cicero:
That kind of describes, you know, this evolution towards more responsibility for platforms as they become so much important and even more important than traditional institutions that have regulated our society, you know, so I think it’s a very interesting note to end our conversation, which is now one hour long. So I, you know, unless you want to add something more, James that you believe is important for our listeners.

James Currier:
No, I think we’ve said a lot of good things. I mean, we continue to believe that these network and marketplace and market network approaches of digitising things are going to change all of the b2b marketplaces you know, we tried to do b2b marketplaces 20 years ago and it didn’t work. But I think it’s going to work this time. There was too much resistance from the hierarchies. And now I think it’s a new generation of people running the businesses that are more digitally savvy. And, and I think that it will happen this time, I think we’re going to see a lot of FinTech enabled marketplaces and, you know, those countries in those places with more open financial or more liberal, you know, financial rules and regulations are going to benefit as we add FinTech to pretty much everything I mean, you know, you know, Facebook is going to add FinTech to Messenger, and to WhatsApp and Facebook itself and every marketplace is going to add FinTech to it. You know, as people get on these market networks, you’re going to see new people emerge as leaders in their industries. You’re gonna see you know, you’re going to continue to see delivery and transportation transform. It’s only begun, I think. And we expect there to be a new thing called enterprise gateway marketplaces, which we’re going to be writing a blog post about soon. But the idea is that large corporations became large because the coordination costs were lower when someone was inside the organisation. But now that we have these marketplaces, and we have the internet and whatnot, coordination costs because of politics, and because of positioning, and because of regulation, and processes are more expensive inside the large corporations. And so you’re going to start to see large corporations turn outside for more and more of their operations. And you’re going to have gateway marketplaces that are going to allow these big companies to find the services they need outside the company and get things done cheaper and faster than by doing it inside the company, and that’s going to be a huge transformation over the next 15 years for large corporations in the hundreds of millions of people who work there. So those are some of the things we’re thinking about.

Simone Cicero:
Yeah, it’s gonna be really challenging for all kinds of incumbents apparently.

James Currier:
Well, they’re gonna fight it. They will fight all of it.

Simone Cicero:
James, thanks very much for your time. That was a such an insightful conversation and as I countless insights that we’re going to share with our listeners, so thanks very much again, and thanks for being a featured guest on our podcast.

James Currier:
Well, thank you so much