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Welcome to the a 16z podcast. I'm Zoran. Today's episode is a conversation about four big trends in the tech World. Any one of these Trends would be notable on its own but we cover all four in this hallway style chat as a
Teensy General partner Chris Dixon talks with sep cam VAR professor of Media Arts and Sciences at MIT and now co-founder of cryptocurrency platforms cellco and de lawd Gil an investor and the co-founder of Health technology company color genomics and formerly at Twitter and Google. This is a wide-ranging survey of some of the major shifts in technology right now, but it's really a meta story of how Innovation happens, which is most definitely not in a straight line. So here are the Trends they cover crypto, of course Ai and machine learning including
Three you can also listen to or explainer episode on what type and what's real. They're on our show 16 minutes full-stack startups, which Chris first wrote about in 2014 and collaborative web collaborative Enterprise social including RTC or real-time communication within the browser, which is where the conversation Begins the first voice you'll hear is Chris followed by allowed talking about webrtc and then sep once the conversation turns to Krypto. So yes a lot first you and I were talking about this and I know you're very excited about it this kind of this feeling that there's a new
stack of web infrastructure things like video and audio collaborative video Nadia rather. We should have the infrastructure now that it works in a way that it had in the past and that's unlocking a whole new wave of interesting applications.
Keep are always looking for the next platform and what the next big platform shift is and I think it kind of may have snuck up on all of us in the form of webrtc and webgl and then related API companies providing sound or other things that have been built on top of by many other companies and I think
Shifted substantiate itself in two different ways and I almost call it the collaborative web and then separately the collaborative Enterprise and if you look back 10 years people kept talking about during the first social way everybody kept talking about how there's going to be a social Enterprise and how every it says product was going to be more social and collaborative and that largely failed and it feels like that shift is finally happening in part due to things like webgl you see figma for example is the first really strong example of a webgl enabled application allowing you to collaborate in real-time.
Two other people in parallel webrtc is really allowing for really interesting concurrent sessions around video. And so you're starting to see that in terms of a lot of products being built around Virtual Office rooms virtual conference rooms. And I really do think this is the moment where collaboration is finally being built into the Enterprise world and Enterprise products and then in parallel webgl and webrtc really seem to be enabling really interesting social experiments right now in terms of new social products. You have really amazing video and audio quality. So the time lag is gone to can do things like Clubhouse.
You see lots of interesting video experimentation. So you can see almost like degraded forms of you are other things happening in browser. So I just think now is a really exciting time of innovation around this new web stack
and to your point about sneaking up on us. We've obviously had the ability to have conference calls group audio for decades, right but like a clubhouse in fact that there's so little latency and you've got like the visual representation of the room means that to me. It's like if you remember the old days
in the conference calls how you always have people talking over each other partly because of the whatever 300 millisecond delay of it's remarkable how the conversation switches from person to person. So the latency is I mean, we've all known experience with this was Zoom, right? Like the fact that you doesn't stutter the fact that or very rarely does it somehow kind of crossed over this point of good
enough. We're finally hitting the point now where in terms of video quality and ability to stream concurrently across multiple users in terms of audio quality. We're hitting that point where the web and
Pressure is really supporting the ability to have extremely low latency.
You call a new platform and we've cited a few examples. But when you say platform, you said that means you need to be thousands of examples. Are you think it's gonna be a whole new wave that goes 5 to 10
years. I think like any quote unquote platform there going to be a handful of things that really matter that will really be the important things on it. And then a lot of things will be experiments that fail or don't work and I don't know ten years from now. What's going to be the main set of applications. I just think
It is a shift that enables a bunch of new applications to be built particularly their social or collaborative Enterprise one example that I think is worth noting in terms of what's coming due to webrtc is it's quite possible that if you look at virtual reality or VR the predominant use case in the near term actually shift to the browser. And so I think right now in order to experience VR you need a headset you need in some cases client software Etc. And so there's more obstacles and hurdles to be able to just participate and I think one of the things I found
Interesting about webrtc in webgl is the ability to send the create VR like experiences where you just drop in a URL and you can show up and so the big question in my mind is is Oculus almost like the desktop computer versus mobile devices where the desktop really helps you do powerful pass, but you can do a lot on your phone and it's sort of the mainstream use case for most of the internet today. So I think that's another thing that we'll see if it happens or doesn't happen over the next decade, but that may be one interesting long-term Trend to watch relative to webrtc.
And webgl, so it
looks like the next Trend crypto. We're all involved in is a lot of you invest in crypto step new co-founded a company fellow in crypto obviously spend most of my time vesting crypto. So can you tell us a little about why you're excited about it and the stuff you're working on. So I'll
start off with kind of a general principle that I think is true for all of the technologies that were talking about. There are certain class of technologies that increase the expressive range of a certain medium and when you increase the expressive range of
Him a lot of things pop up that were not possible before because you now are playing in the new design space the historical example that I always love to point to is in the eighteen hundreds. The invention of the metal Farrell in painting is the little piece between the paint brush and the paint brush handle and the collapsible easel those two things together allowed people to a ring their paintings outside and be start to paint.
With a new brush stroke that allowed them to quickly dab paint onto the canvas and those two ended up kind of giving rise to a form of painting that we now know as impressionism. And so it's interesting to think about it impressionism was a result of technological advances in painting and you see that same thing with the web and the internet in general there were technological advances in the medium of text. And so all of a sudden people could send text more quickly.
Anybody could be a broadcaster you could start putting text together with code to create different things and that vastly increase the expressive range of text in a way that led to all of these things that you could not predict in advance. So for example, in 94 95 when the web was starting to become popular one could not imagine that oh, well one day I'll be able to press a button and order my groceries on this and have my groceries come to me, you know, and
So I think those are really interesting from a broad-brush technological point of view. Why I'm excited about crypto is that crypto? Does this for money? It increases the expressive range of the technology that we know is money and that I think will follow a very similar to the internet, you know at the beginning kind of the internet you saw it allowed people to pass messages more quickly to one another across the distance in a way. That was just qualitatively
Print and fax and that is like the first thing that you started seeing with crypto and it has direct implications to things like remittances or banking the unbanked but then on top of that with second implication of the web was that anybody could become a broadcaster. I mean with YouTube anybody could have their own TV station and in the context of crypto, you have the same democratization but in financial services, and so you see this kind of rise in decentralized fine.
Nance or open finance and then third is most exciting is it allows money to become programmable in the same way that the internet allowed text to become programmable and that I think I mean we're seeing some early things today, but that's I think the aspect that we're still the earliest and it has the most legs and is the most powerful and the most difficult to predict at this stage since we're in such an early phase
my firm work for this is when there's a really big breakthrough technology.
there's two stages and the first stage you do things you already did but do them better and the second stage you do new things you never could do before and this goes back to the collaborative web stuff we're talking about before like in the first stage, you know, we're going to do better video conferencing right better audio conferencing and that will probably be a way of the last few years and then at some point people will sort of figure out the whole new set of things we've never done before like the analogy in the web right is the first year in the 90s people were just kind of like putting websites up there were
Basically one way they were like brochures and magazines. But then it took another decade to realize there's things you can just do that. You can never do before like social networking right like sort of it's a multi-way medium. Not a one-way medium, right? Yeah similar to the I think my understanding of the history of film like when film started off people they film plays right and then they realize you could do all these new kind of film native things. Right and I think crypto will be and thing you hear the mistake people make is they say, oh great. You can lower payment fees you can.
Then cross-border payments and all that is true. But that's only phase one right phase two is things we can't think of we can't even imagine if you finding to go back and you look at all the ads for mobile phones like for 10 years, right? No key and all these folks. They're all trying to convince people to use the mobile phones and is always stocks whether female like there's literally I think no person in history of that field that predicted, you know half the things that were using today. So I me that think that framework kind of applause
Whenever there's a really big breakthrough technology, yes takes a long time to really explore the new designs base. It was unlocked.
Yeah, and you know, I think one of the reasons for that is a lot of times the things that are new arise from the things that are old just at scale at quantity, you know, and that's actually really interesting because it helps give a framework for predicting things, you know, so you could imagine for example blogs were predictable from ziens before the internet.
but it would be qualitatively different because then you imagine what happens if there is like thousands and thousands of ziens and anybody could access those ziens and so on and so then that kind of starts the creative process
going and then I've been directly involved in this and the infrastructure stuff that people were working on it, but it was frankly a little academic until recently and so you need that the fact that the applications of taken off so much and it's made this scaling problem like a really really urgent issue I think will dramatically
Ali accelerate the pace of innovation on the infrastructure side ride like it's no longer academic. It's now like a very practical problem and it's a practical is real customers and people willing to pay money and the same feedback loop. You've seen I think throughout the history of computing were like the app developers on the first iPhone start pushing it to the Limit and that pushes Apple to go faster in the chip guys to go faster and just like the whole thing and then you get that beautiful flywheel that drives everything forward.
Right? And this is something that's been very much on our minds as we've been developing sell. Oh so basically
And when we started selling the composition that we were having was it's a blockchain reminded us that money is just a technology. And of course money has always been a technology. It's just hard to remember that is to technology because it's features haven't changed very much for the past 300 years. And as a technology is features can change and as the widely used technology is its features have an impact on the society that uses them. So I remember when the internet was first getting popular people who are like whoa like you could imagine putting the whole in
Encyclopedia on the internet and that was true, but it underestimated the true potentiality of the internet, which was that the encyclopedia would be part of a much richer much bigger information ecology. And so similarly I see the same thing happening in money and values National currencies will continue to exist and continue to be important but there will also be local currencies Regional currencies Global reference currencies store value currencies medium of exchange currencies functional.
And sees all interoperating with one another in a rich ecology not dissimilar to the internet. We now are starting to have the technology to implement these ideas at scale. But to do a number of these things, right? We needed some form of stabilization of the cryptocurrency. We needed some methods around identity. We needed advances in like client and so on and so that helped guide the infrastructure that we're building to enable this
it's going to be exciting here in crypto solos.
Has launched and is continuing to roll things out and a whole bunch of other exciting crypto projects. This is sort of all of the things that were kind of hatched back in 2017 and 16 17 18 kind of funny all coming out now and it should be really exciting.
It just seems like that next wave is starting up again to in terms of incrementally new things. Like Wi-Fi. I feel like just came out of nowhere for me at least inside think if we're going to see renewed enthusiasm I think in crypto and the reasonable near term.
So let's talk a little a I sort of the other. It's
And right now I feel like we have any one of these things would be a major Tech Trend and we have all of them going at the same time and say I don't personally work on it as a day job of follow it I guess is a hobbyist the big news being cheap et3, which is an algorithm that of open AI which has just shown kind of remarkable results with natural language processing and from what we can tell there's just no this is not going to be slowing down that kind of today that the more computers you throw at.
These kind of neural networks the smarter they get and at least at the moment. He's Justin's continue to scale at a pretty healthy rate. So we should see kind of more and more really interesting stuff. I think a lot of thing you follow this area pretty closely. How are you feeling by the way?
Yeah. I think JP T3 is almost like the starting shot for a whole new interesting are a natural language processing or natural language understanding this going to take a decade to play out and I think the historical antecedents are analogs are back.
In 2012, there is something known Alex net from this guy Ilya because that's key which was really the starting shot for Machine Vision in terms of a shift where you know, that was the first time where you really saw a big step up in performance for a while and that's really led to everything from face recognition on the iPhone to Machine Vision and Pharma similarly in 2013. Google switched to recurrent neural networks for speech recognition. And then later really did a lot of interesting things in deep reinforcement learning in that ended up becoming a multi-year precursor to what became things like Amazon.
An Alexa are echo or a lot of the really good speech recognition Technologies we have and now in 2020. I think similarly gp3 is a natural language analog to these two other key moments and machine learning based understanding of vision speech and now natural language actually think this may be one of the biggest shifts because if you think of how much of the world's information is embedded in text or how much we communicate and text. This is really the big Revolution and that includes things like Enterprise.
Give me processing if you move to natural language, you can start thinking about smart data entry all the robotic process automation. Suddenly becomes automated you can effectively have apis in some sense almost self construct on top of text in really interesting ways. There's things that are very Tactical for example in your email inbox. All the replies should be Auto generated and then issues be able to go through and approve them as a person. We're not there yet. Again. It's 10-year Journey. But you know, we'll see things like that will see legal documents just Auto marked up relative to what your company.
I would normally do companies of clarity or working on early versions of that if you're an author and have writer's block, maybe automatically you get prompted for three or four different next paragraphs to kick off how you should think about it or in the long run. Maybe there's a whole class of Auto fan fiction. So, you know, you really love the novel Twilight in a hundred different versions of Twilight are spawned so you don't have to wait for somebody to come up with 50 Shades of Grey it just Auto generates, you know,
multiple different interesting, you
know, fan fact stuff on the gaming side. I think you'll have non player.
All's NPCs that seem like real people and Health Care maybe have a mental health specialist who is really just a robot. I think this is a really exciting shift and it's going to take a long time to play out. But the technology is finally starting to show hints just like in 2012 Alex and it showed hints of what could happen in Machine Vision and in 2013 Google showed what could start happening in speech recognition, it feels like this is one of those steps. And so I think it's significant in terms of a starting shot. Although I think it's going to take a lot of time to play out. I'm really excited about the translation opportunities in
Particular the opportunities to translate English to machine understandable code
they've actually had demos of this with Judy three right where you describe something. It would actually write the code for it. I haven't personally tried it but it seems like they're not can demos. It really does kind of work.
Yeah, and you know almost is really straightforward to do that in the context of data structures. You could imagine translating a sentence into a data structure and is not a far step from doing that to natural language carrying of SQL and then it's not far step 4.
I took Auto generating code and so that's super exciting to me because you can imagine, you know, there are certain things that are straightforward to build if you know how to program and they should be straightforward to build a few don't but it takes kind of ad hoc interfacing to do. I mean creating a new ERC 20 token for example is a pretty straightforward programming tasks that I can see one that could that someone could use machine translation any of these
apologies, but you would be three in particular to start translating human text to commission text. Yeah to your point. I think the second that machines can really write and edit code and can spawn instances themselves and self-replicate at that point. I think we're really shifting from a technology to a life form. And I think at that point we really have this hyper evolutionary a new form of life that self-replicating self-editing and one of the interesting things is people always think that a true AGI or self intelligent agent will come out of a Google or Facebook or one of the major companies.
You know to put these threads together one could argue maybe where it's going to really emerge is on the blockchain where you have these really interesting human incentives and competition around something of real value. So you have sort of an optimization metric that's very crisp when you're competing to effectively complete Financial transactions or contracts and they're going to get more and more complicated. And so I think the merger of these two areas will someday happen and it's going to be fascinating to watch in terms of whether you have this sort of emergent system of self-replicating self-editing code with strong financial.
Incentives built into it. If you look at the biology side of things that replication plus mutability plus selection is really what drove the emergence of intelligence right? And so really The Selective function is you need to have a large enough number of different beings or entities. You need them to be able to change at some rate so that they start adapting to their environment or being selected for and then you need that selective pressure. And when you start having machines be able to edit themselves and to write themselves and to replicate themselves at scale.
You're both expanding the number of potential entities that are evolving. But you're also upping the clock rate. You're not waiting for a person to write something and test it and then iterate on it and then test it again and try and understand it and theorize and then write more code you just have systems that her replicating and changing themselves and imagine. If as a human you could edit your own DNA and changed her and features and experiment with that very rapidly. That's what's going to happen in the world of code. And so I think it's a long time.
Away, but once code can write itself. I think that's really when things kick off for the emergence of a true AGI based life form.
There's no reason this couldn't be applied for any kind of symbolic systems to mathematician, you know, the computer suggest five different proofs scientists and computer suggest five different theories or interpretations or whatever models or whatever. It might be and maybe in the near term it works alongside of human. Maybe at some point the machine gets so good. It doesn't need that and it's probably it's going back to the framework. I was suggesting earlier.
Stuff were describing falls in the category of sort of doing hissing things better. They'll probably be crazy new things that we can't even imagine right now, but some developer or entrepreneur will come up with
the analog. I've heard or the analogy. I've heard 4G P T3 is its kind of the clever student who didn't really study for the exam and half the time kind of bullshit and half the time knows that and to your point G PT 3 can write the next paragraph. The question is what does GPT 20 look like GPT 50, you know, as we iterate on these systems you suddenly have the thing that can really
Rewrite the fanfiction I will for Twilight so it'll be really fascinating to
watch. So the lesson we've talked about is what some people call full-stack startups which is sort of a new way to build startups which set my notes. It's a constantly very interested in but essentially the idea is whereas in the old days software startups mostly stuck to just building software more and more entrepreneurs are building companies that have better software enabled but also build core capabilities and other areas. So just as an example
Intact it used to be that the only kind of way you would go to market you build software and try to sell it to a bank or an existing financial institution. Now more and more you have these things like chime is an example of a online bank that just sort of bypass the Citibank and goes directly to Consumers. It's an app. You can download it like Robin Hood another good example instead of building software and selling it to Schwab. They just built software and built an app and went directly to the public. Right and this is happening as sort of a new I guess sort of design pattern for startup organizations. That's I think letting
Ting startups penetrate more and more deeply into industries that had previously kind of resisted software Innovation 702 topic you're interested in
I mean for the audience Chris
wrote a blog post called
full-stack startups back in 2015, which is I'd say must read it's one of the most concise and articulate descriptions of this phenomenon that I've ever read. I think basically kind of full-stack startups were later to emerge then pure software.
Ups for a variety of reasons mostly because there was a fair amount of low-hanging fruit in software itself and it is harder to do a full stack startup because you basically have to start to companies of the same time. I mean if you're starting a full stack Construction Company, you have to start construction company and software company at the same time and it's hard enough to start either and full disclosure. I am a co-founder of Mosaic which is a full stack construction company, so I'm biased here but
but once you're able to do that, if you're able to do that, then is allows something really powerful, which is it allows you to write software not just for existing processes, but it allows you to innovate on process at the same time as you innovate on software and very specifically it allows you to innovate on process in the way that software enables and so
In the same way for crypto kind of software increases the expressive range of a whole range of things and that expression of range allows new processes for things like building houses or selling eyeglasses or so on and it's really helpful to be able to have a really tight Loop between changing the process itself, which is not inherently software-based, but new software allows you to do that and then to iterate on the software.
Itself, and so that kind of opens up an area of innovation that is really difficult to do with either side of the stack alone. It seems like there's a lot of other places where that approach that you mentioned separately applies. I mean a company I could founded that you know, I haven't really been operation involved with for many years is color genomics and it's doing a large proportion of covid testing and a number different markets and a lot of the value I think of what the company does on top of just running vertically integrated lab and all the stuff around it is all the virtualized carrot.
Every men all the patient interactions doctor interactions Etc Beyond just take can you run a better lab? And so I think to your point that vertical integration is made a huge difference for our color as an example and similarly in real estate not just music, but it seems like open door which is literally going in and repainting the Interiors of houses if I zoom and things like that and is layering on mortgage and title and everything else to the home purchasing process. It seems like there's just an enormous amount of innovation in terms of the ability to build something. That's full stack. Yeah, you know
I mean, it's interesting. Like I've had a similar question a little more General from Chris the time you wrote that blog post which was like, you know, why is there not a flowering of full stack companies in the same way that there's a flowering whenever there's like a clear possibility of innovation. You not seeing as many full Tech startups as you are crypto. For example, I've come to two reasons. I imagine there's more but the first is that it is really difficult in either context either in the startup context.
Because it requires kind of an expertise in two very disparate areas as a start-up and I think the second thing is I think it's tantalizing to kind of take a big industry and say devil on some technology and it will become a full stack company, but I think you have to have a specific point of view around what the technology is and real innovation in that technology. And so I think for those two reasons, I think
It's just like the rewards are great. But the difficulty is hard, you know,
like Netflix is a really interesting example, right? So the Reed Hastings obviously a genius but his prior company Netflix was purify, which was a debugger. I mean, it's very very technical product. He's very much a computer scientist and then built, you know, now Netflix, right of course is doing all this original content is becoming more and more dominant in the movie industry. I don't know if you know this pattern of having a technologist.
You're out the other industry and that case Hollywood. I don't know if there are examples of the opposite happening of the Hollywood people thinking of the Technologies part, you know, so
yeah, and there's a few examples of Netflix to
sure and it's so hard and that company. I mean that's an amazing story just independently. They had to Pivot multiple times while being public so, you know, maybe he's our local entrepreneur. Yeah. I mean, maybe they're just so few people like him and Elon Musk and it's just such a hard thing to do and you know raising ton requires a ton of
capital and kind of you know Decades of work. So I think that might be why there's not more it's just really hard like I mean for us
the way we were able to do it is some on my co-founder PhD in computer science from MIT, but he also grew up in a construction family. So he had like a deep expertise in construction and deep expertise in computer science both from a young age. I think it's kind of notable or interesting that most of the examples I can think of a really successful false Tech startups are second time Founders. So with Mosaic, you know your calf.
Thunder obviously had an amazing background in terms of family construction and everything else. But the flip of it is use happened already started, you know companies before Elon Musk had had two successful outcomes before Reed Hastings and had a successful outcome before said almost feels like you need a stable Financial base plus enough know how in terms of building a company to begin with so that you can take on this extra challenge of doing a second piece of it. Now two steps Point around needing to build two companies at once.
Thanks Stephanie lawd. I was awesome.
