Category Archives: Corporate Darwinism

The Long-Term Fallout from MAGA: One Canadian’s Perspective

The other day, an American friend asked how Canada was currently feeling about Trump and the whole MAGA thing. You may remember some months back a number of broadsides towards Canada from the president that seemingly came from nowhere -– Trump threatening/cajoling us to become the 51st state, on again-off again tariffs, continued assertions that the US does not need Canada for anything, completely unveiled threats towards us from Pete Hoekstra, the American Ambassador to Canada.

We took it personally. “Elbows up” became the Canadian rallying cry – a reference to protecting yourself in our beloved national sport – fighting along the boards balanced on frozen water while wearing sharp blades on your feet. Liquor stores had shelf after empty shelf that once were laden with California reds and Kentucky bourbon. Canadian trips to Disneyland and Las Vegas plummeted. Grocery stores started labeling products that (supposedly – which is another story) came from Canada. Canadian consumers and businesses scrambled to find Canadian substitutes for traditional American suppliers.

That was then. What about now?

Trump and the MAGA train have moved on to an endless list of other scandals and dumpster fires. I haven’t heard a whisper of the 51st state for a long time. While our trade war continues on, fueled by shots across the bow from both sides, I think it’s fair to say that we are now just lumped with every other country reeling from the daily bat-shit crazy barrage coming from Washington. Canadians are used to being ignored, for good or bad, so we’re back to situation normal – all F*$%ed up.

But have Canadians moved on? Have we dropped said elbows? The honest answer is – it’s complicated.

Predictably the patriotic fervor we had early this year has cooled off. California reds are back on the shelves. More Canadians are planning to visit Hawaii and Florida this winter. “Grown in the U.S.A.” stickers are back where they belong, in the produce bins at our grocery stores. When it comes to our American habit – it’s like the line from Brokeback Mountain – “We wish we knew how to quit you.”

Like all relationships, the one between the US and Canada is complex. It’s unrealistic to expect a heavily intertwined relationship like ours to disappear overnight. There are probably no two countries in the world more involved with each other’s business than we are. And that cuts both ways, despite what Mr. Trump says. We have been married to each other for a very long time. Even if we want to go through with it, a divorce is going to take some time.

The numbers from the first six months of our “Buy Canadian” campaign are in, and they are less than inspiring. According to StatsCan, 70% of Canadian businesses saw no increase in sales at all. Even with those that did, the impact was minimal and any gain was usually offset by other sales challenges.  

But if you dig a little deeper, there are signs that there might be more long-term damage done here than first meets the eye. In Canadian grocery stores over the past six months, sales of “Made in Canada” products are up 10% while U.S. made goods are down 9%. Those aren’t huge swings, but they have been sustained over 6 months, and in the words of one Canadian analyst speaking on CBC Radio, when something lasts for 6 months, “you’re moving from fad territory to trend territory.”

The dilemma facing Canadians is something called the “Attitude Behavior Gap” – the difference between what we want to do and what we are actually doing. Canadians – 85% of us anyway – want to buy Canadian rather than American, but it’s really hard to do that. Canadian goods are harder to find and typically cost more. It’s the reality of having a trading partner that outnumbers you both in market size and output by a factor of 10 to 1. If we want to have a Ceasar salad in December, we’re going to have to buy lettuce grown in the U.S.

But we are talking relationships here, so let’s relook at that 85% intention to “Buy Canadian” number again. That means that – 6 months after we were insulted – we still feel that a fundamental trust was irrevocably broken. We’re being pragmatic about it, but our intention is clear, we’re looking for alternatives to our past default behavior – buying American. When those alternatives make economic and behavioral sense to us, we’ll find other partners. That is what is happening in Canada right now.

Should Americans care? I believe so. Because I’m sure we’re not the only ones. The world is currently reeling from the sharp American pivot away from being a globally trusted partner. The short-term reality is that we will put up with it for now and pander to the Presidential powers that be, because we have to.

But we’re looking for options. Our dance card is suddenly wide open.

The Raging Ripple Effect of AirBNB

Ripple Effect: the continuing and spreading results of an event or action.

I’m pretty sure Brian Chesky and Joe Gebbia had no idea what they were unleashing when they decided to rent out an air mattress in the front room of their San Francisco apartment in the fall of 2007. The idea made all kinds of sense: there was not a hotel room to be had, there was a huge conference in town and they were perpetually short on their rent. It seemed like the perfect win-win – and, at first, it was.

But then came the Internet. AirBnB was born and would unleash unintended consequences that would change the face of tourism, up-end real estate markets and tear apart neighborhoods in cities around the world..

For the past two decades we have seen the impact of simple ideas that can scale massively thanks to the networked world we live in. In a physical world, there are real world factors that limit growth. Distribution, logistics, production, awareness – each of these critical requirements for growth are necessarily limited by geography and physical reality. 

But in a wired world, sometimes all you need is to provide an intermediary link between two pools of latent potential and the effect is the digital equivalent of an explosion. There is no physical friction to moderate the effect. That’s what AirBnB Did. Chesky and Gebbia’s simple idea became the connection between frustrated travellers who were tired of exorbitant hotel prices and millions of ordinary people who happened to have a spare bed. There was enormous potential on both sides and all AirBNB had to do was facilitate the connection.

AirBnB’s rise was meteoric. After Chesky and Gebbia’s initial brainstorm in 2007, they launched a website the next spring, in 2008. One year later there were hosts in 1700 cities in 100 different countries. Two years after that, AirBnB had hosted their 1 millionth guest and had over 120,000 listings. By 2020, the year Covid threw a pandemic sized spanner in the works of tourism, AirBnB had 5.6 million listings and was heading towards an IPO. 

Surprisingly, though, a global pandemic wasn’t the biggest problem facing AirBnB. There was a global backlash building that had nothing to do with Covid 19. AirBnB’s biggest problem was the unintended ripple effects of Chesky and Gebbia’s simple idea.

Up until the debut of the internet and the virtual rewiring of our world, new business ideas usually grew slowly enough for the world to react to their unintended consequences. As problems emerged, new legislation could be passed, new safeguards could be introduced and new guidelines could be put in place. But when AirBnB grew from a simple idea to a global juggernaut in a decade, things happened too quickly for the physical world to respond. Everything was accelerated: business growth, demand and the impact on both tourism and the communities those tourists were flocking to. 

Before we knew what was happening, tourism had exploded to unsustainable levels, real estate markets went haywire and entire communities were being gutted as their character changed from a traditional neighborhood to temporary housing for wave after wave of tourists. It’s only recently that many cities that were being threatened with the “AirBnB” effect responded with legislation that either banned or severely curtailed short term vacation rentals.

The question is, now that it’s been unleashed, can the damage done by AirBnB be undone? Real estate markets that were artificially fueled by sales to prospective short term rental hosts may eventually find a new equilibrium, but many formerly affordable listings could remain priced beyond the reach of first time home buyers. Will cities deluged by an onslaught of tourism ever regain the charm that made them favored destinations in the first place? Will neighbourhoods that were transformed by owners cashing in on the AirBnB boom ever regain their former character?

In our networked world, the ripples of unintended consequences spread quickly, but their effects may be with us forever.

Why I Hate Marketing

I have had a love-hate relationship with marketing for a long time now. And – I have to admit – lately the pendulum has swung a lot more to the hate side.

This may sound odd coming from someone who was a marketer for the almost all of his professional life. From the time I graduated from college until I retired, I was marketing in one form or the other. That span was almost 40 years. And for that time, I always felt the art of marketing lived very much in an ethical grey zone. When someone asked me to define marketing, I usually said something like this, “marketing is convincing people to buy something they want but probably don’t need.” And sometimes, marketing has to manufacture that “want” out of thin air.

When I switched from traditional marketing to search marketing almost 30 years ago, I felt it aligned a little better with my ethics. At least, with search marketing, the market has already held up their hand and said they wanted something. They had already signaled their intent. All I had to do is create the connection between that intent and what my clients offered. It was all very rational – I wasn’t messing with anyone’s emotions.

But as the ways we can communicate with prospects digitally has exploded, including through the cesspool we call social media, I have seen marketing slip further and further into an ethical quagmire. Emotional manipulation, false claims and games of bait and switch are now the norm rather than the exception in marketing.

Let me give you one example that I’ve run into repeatedly. The way we book a flight has changed dramatically in the last 25 years. It used to be that airline bookings always happened through an agent. But with the creation of online travel agents, travel search tools and direct booking with the airlines, the information asymmetry that had traditionally protected airline profit margins evaporated. Average fare prices plummeted and the airline profits suffered as a result.

Here in Canada, the two major airlines eventually responded to this threat by following the lead of European lo-cost carriers and introduced an elaborate bait and switch scheme. They introduced “ultra-basic” fares (the actual labels may vary) by stripping everything possible in the way of customer comfort from the logistical reality of getting one human body from point A to Point B. There are no carry-on bag allowances, no seat selection, no point collection, no flexibility in booking and no hope of getting a refund or flight credit if your plans change. To add insult to injury, you’re also shuttled into the very last boarding group and squeezed into the most undesirable seats on the plane. The airlines have done everything possible to let you know you are hanging on to the very bottom rung of their customer appreciation ladder.

Now, you may say that this is just another case of “caveat emptor” – it’s the buyer’s responsibility to know what they’re purchasing and set their expectations accordingly. These fares do give passengers the ability to book a bare-bones flight at a much lower cost. It’s just the airlines responding to a market need. And I might agree – if it weren’t for how these fares are used by the airline’s marketers.

With flight tracking tools, you can track flight prices for future trips. These tools will send you an alert when fares change substantially in either direction. This kind of information puts a lot of power in the hands of the customer, but airlines like WestJet and Air Canada use their “Bare Bones” basic fares to game this system.

While it is possible on some tracking tools like Google Flights to set your preferences to exclude “basic” fares, most users stick to the default settings that would include these loss-leader offerings. They then get alerts with what seem to be great deals on flights as the airlines introduce a never-ending stream of seat sales. The airlines know that by reducing the fares on a select few seats for a few days just enough to trigger an alert, they will get a rush of potential flyers that have used a tracker waiting for the right time to book.

As soon as you come to the airline site to book, you see that while a few seats at the lowest basic fare are on sale, the prices on the economy seats that most of us book haven’t budged. In fact, it seems to me that they’ve gone up substantially. On one recent search, the next price level for an economy seat was three times as much as the advertised ultra-basic fare. If you do happen to stick with booking the ultra-basic fare, you are asked multiple times if you’re sure you don’t want to upgrade? With one recent booking, I was asked no fewer than five times if I wanted to pay more before the purchase was complete.

This entire marketing approach feels uncomfortably close to gas lighting. Airline marketers have used every psychological trick in the book to lure you in and then convince you to spend much more than you originally intended. And this didn’t happen by accident. Those marketers sat down in a meeting (actually, probably several meetings) and deliberately plotted out – point by point – the best way to take advantage of their customers and squeeze more money from them. I know, because I’ve been in those meetings. And a lot of you reading this have been too.

 When I started marketing, the goal was to build a long-term mutually beneficial relationship with your customers. Today, much of what passes for marketing is more like preying on a vulnerable prospect in an emotionally abusive relationship.

And I don’t love that.

The Question We Need to Ask about AI

This past weekend I listened to a radio call-in show about AI. The question posed was this – are those using AI regularly achievers or cheaters? A good percentage of the conversation was focused on AI in education, especially those in post-secondary studies. Educators worried about being able to detect the use of AI to help complete coursework, such as the writing of papers. Many callers – all of which would probably be well north of 50 years old – bemoaned that fact that students today are not understanding the fundamental concepts they’re being presented because they’re using AI to complete assignments. A computer science teacher explained why he teaches obsolete coding to his students – it helps them to understand why they’re writing code at all. What is it they want to code to do? He can tell when his students are using AI because they submit examples of coding that are well beyond their abilities.

That, in a nutshell, sums up the problem with our current thinking about AI. Why are we worried about trying to detect the use of ChatGPT by a student who’s learning how to write computer code? Shouldn’t we be instead asking why we need humans to learn coding at all, when AI is better at it? Maybe it’s a toss-up right now, but it’s guaranteed not to stay that way for long. This isn’t about students using AI to “cheat.” This is about AI making humans obsolete.

As I was writing this, I happened across an essay by computer scientist Louis Rosenberg. He is worried that those in his circle, like the callers to the show I was listening too, “have never really considered what life will be like the day after an artificial general intelligence (AGI) is widely available that exceeds our own cognitive abilities.” Like I said, what we use AI for now it a poor indicator for what AI will be doing in the future.  To use an analogy I have used before, it’s like using a rocket to power your lawnmower.

But what will life be like when, in a somewhat chilling example put forward by Rosenberg, “I am standing alone in an elevator — just me and my phone — and the smartest one speeding between floors is the phone?”

It’s hard to wrap you mind around the possibilities. One of the callers to the show was a middle-aged man who was visually impaired. He talked about the difference it made to him when he got a pair of Meta Glasses last Christmas. Suddenly, his world opened up. He could make sure the pants and shirt he picked out to wear today were colors that matched. He could see if his recycling had been picked up before he made the long walk down the driveway to pick up the bin. He could cook for himself because the glasses could tell him what were in the boxes he took off his kitchen shelf. For him, AI gave him back his independence.

I personally believe we’re on the cusp of multiple AI revolutions. Healthcare will take a great leap forward when we lessen our requirements for expert advice coming from a human. In Canada, general practitioners are in desperately short supply. When you combine AI with the leaps being made by incorporating biomonitoring into wearable technology, I can’t imagine how great things would not be possible in terms of living longer, healthier lives. I hope the same is true for dealing with climate change, agricultural production and other existential problems we’re currently wrestling with.

But let’s back up to Rosenberg’s original question – what will life be like the day after AI exceeds our own abilities? The answer to that, I think, is dependent on who is in control of AI on the day before. The danger here is more than just humans becoming irrelevant. The danger is what humans are determining the future of direction of AI before AI takes over the steering wheel and determines its own future.

For the past 7 decades, the most pertinent question about our continued existence as a species has been this one, “Who is in charge of our combined nuclear arsenals?” But going forward, a more relevant question might be “who is setting the direction for AI?” Who is it that’s setting the rules, coming up with safeguards and determining what data the models are training on?  Who determines what tasks AI takes on? Here’s just one example. When does AI decide when the nuclear warheads are launched.

As I said, it’s hard to predict where AI will go. But I do know this. The general direction is already being determined. And we should all be asking, “By whom?”

Can Innovation Survive in Trump’s America?

If there was one thing that has sparked America’s success, it has been innovation. That has been the engine that has driven the U.S. forward for at least the last several decades. Yes, the U.S. has natural resources. Yes, at one time the U.S. led the world in manufacturing output. But in their pursuit of adding value to economic output to maximize profit, the U.S. has moved beyond resource extraction and manufacturing to the far-right end of the value chain, where the American economic engine relies heavily on innovation.

Donald Trump can talk all he wants about making America great again by bringing back manufacturing jobs that have migrated elsewhere in the world (a goal that many, including the Economic Policy Institute, feel is delusion, at least using Trump’s approach), but if innovation dies in the process, the U.S. loses. Game over. It’s innovation that now fuels the American Dream.

Given that, MAGA adherents should be careful what they wish for. The Great America they envision is a place where it may be impossible for that kind of innovation to survive.

World class innovation needs an ecosystem, where there is adequate funding for start-ups, a friendly regulatory framework, a robust research environment and an open-door policy for innovative immigrants from other countries – all of which the US has historically had in spades. And – theoretically at least – it’s an ecosystem that Trump is promising high tech and why the tech broligarchy has been quick to court him. But like so many things with Trump, the reality will fall far short of his promises. In fact, he will likely stop innovation in its tracks and send U.S. ingenuity reeling backwards.

Next to the regulatory and economic inputs required for innovation – and perhaps more important than both – the biggest requirement for innovation is an environment that fosters divergent thinking. Study after study has shown that innovation lives best in an environment that fosters collaboration, invites different perspectives and provides a safe space for experimentation. All those things can be found in exactly the opposite of the direction in which the U.S. is currently headed.

Each year, the World Intellectual Property Organization publishes their Global Innovation Index. In 2024, the U.S. was in third spot, behind Switzerland and Sweden. To understand how innovation flourishes, it’s worth looking at what the most innovative countries have in common. Of the top ten (the others are Singapore, the U.K., South Korea, Finland, Netherlands, Germany and Denmark), almost all score the highest marks from the Economist Democracy Index for the strength of their democracy. Singapore is still struggling towards full democracy, and the U.S. is now considered to be a “flawed democracy”, in real danger of becoming an authoritarian regime.

The European contenders also receive very high marks for their social values and enshrining personal rights and freedoms. Those are exactly the things currently being dismantled in America.

There is only one country which is defined as an authoritarian regime that made the top 25 of the Global Innovation Index. China sits in the 11th spot. This brings us to a good question, “Can innovation happen in an authoritarian regime?” The answer, I believe, is a qualified yes. But it’s innovation we may not recognize, and which may turn out to be a lot less attractive than we thought.

I happened to visit China right around the time that Google was trying to move into the huge Chinese Market. Their main competition was Baidu, the home-grown search engine. I was talking to a Google engineer about how they were competing with Baidu. He said it was almost impossible to match the speed at which they could roll out new features. The reason wasn’t that they were more innovative. It was because they innovated through brute force. They could throw hundreds of programmers at an issue and hard code it at the interface level, rather than take the Western approach of embedding core functionality in the base code in a more elegant and sustainable approach. The Chinese could afford to endlessly code and recode.

It’s Brute Force Innovation that you’ll find in authoritarian regimes and dictatorships. It’s what the Soviets used to compete in the space race. It’s what Nazi Germany used when they developed rocket science in a desperate bid to survive World War II. It is innovation dictated by the regime, innovating in prioritized areas by sheer force despite the fact that the typical underpinnings of innovation – creative freedom, divergent thinking, the security needed to experiment and fail – have been eliminated.

If you look at the playbook Trump seems to be following – akin to the one Victor Orbán used in Hungary (ranked 36th on the Global Innovation Index) or Putin’s Russia (ranked 59th) – there appears to be  little hope for the U.S. to retain its world dominance in innovation.

Will There Be a Big-Tech Reckoning?

Jeff Bezos, Mark Zuckerberg and Tim Cook must be thanking their lucky stars that Elon Musk is who he is. Musk is taking the brunt of any Anti-Trump backlash and seems to be relishing in it. Heaven only knows what is motivating Musk, but he is casting a smoke screen so wide and dense it’s obliterating the ass-kissing being done by the rest of the high-tech oligarchs.  In addition to Bezos, Zuckerberg and Cook, Microsoft’s Satya Nadella, Google’s Sundar Pichai and many other high-tech leaders have been making goo-goo eyes at Donald Trump.

Let’s start with Jeff Bezos. One assumes he is pandering to the president because his companies have government contracts worth billions. That pandering has included a pilgrimage to Trump’s Mar-a-Lago, a one million donation to his inauguration fund (which was streamed live on Amazon Prime), and green-lighting a documentary on Melania Trump. The Bezos-owned Washington Post declined from endorsing Kamala Harris as a presidential candidate, prompting some of its editorial staff to resign. At Amazon, the company has backed off some of its climate pledge commitments and started stripping Diversity, Equity and Inclusion programs from their HR handbook.

Mark Zuckerberg joined Trump supporting podcaster Joe Rogan for almost three hours to explain how they were realigning Facebook to be more Trump-friendly. This included canning their fact checkers and stopping policing of misinformation. During the interview, Zuckerberg took opportunities to slam media and the outgoing Biden administration for daring to question Facebook about misleading posts about Covid-19 vaccines. Zuckerberg, like Bezos, also donated $1 million to Trump’s inaugural fund and has rolled back DEI initiatives at Meta.

Tim Cook’s political back-bend had been a little more complicated. On the face of it, Apple’s announcement that it would be investing more than $500 billion in the U.S. and creating thousands of new jobs certainly sounds like a massive kiss to the Trumpian posterior but if you dig through the details, it’s really just putting a new spin on commitments Apple already made to support their development of Apple’s AI. And in many cases, the capital investment isn’t even coming from Apple. For instance, that new A.I. server manufacturing plant in Houston that was part of the announcement? That plant is actually being built by Apple partner Foxconn, not Apple.

As far as the rest of the Big Tech cabal, including Microsoft, Google and OpenAI, their new alignment with Trump is not surprising. Trump is promising to make the U.S. the undisputed leader in A.I. One would also imagine he would be more inclined than the Democrats to look the other way when it comes to things like anti-trust investigations and enforcement. So Big-Tech’s deferment to Trump is both entirely predictable and completely self-serving. I’m also guessing that all of them think they’re smarter than Trump and his administration, providing them a strategic opportunity to play Trump like a fiddle while pursuing their long-term corporate goals free from any governmental oversight or resistance. All evidence to date shows that they’re probably not mistaken in that assumption.

But all this comes at what cost? This could play out one of two ways. First, what happens if these High-Tech Frat Rat’s bets are wrong? There is an anti-Trump, anti-MAGA revolt building. Who knows what will happen, but in politically unprecedented times like this one has to consider every scenario, no matter how outrageous they may seem. One scenario is a significant percentage of Republicans decide their political future (and, hopefully, the future of the US as a democracy also factors into their thinking) is better off without a Donald Trump in it and start the wheels turning to remove him from power. If this is the case, things are going to get really, really nasty. There is going to be recrimination and finger pointing everywhere. And some of those fingers are going to be pointed at the big tech leaders who scrapped the ground bowing to Trump’s bluster and bullying.

Will that translate into a backlash against high-tech? I really am not sure. To date, these companies have been remarkably adept at sluffing off blame. IF MAGA ends up going down in flames, will Big Tech even get singed as they warm their hands at Donald Trump’s own bonfire of his vanities? Will we care about Big Tech’s obsequiousness when it comes time to order something from Amazon or get a new iPhone?

Probably not.  

But the other scenario is even more frightening: Trump stays in power and Big Tech is free to do whatever they hell they want. Based on what you know about Elon Musk, Mark Zuckerberg, Jeff Bezos and the rest, are you willing to let them be the sole architects of your future? Their about-face on Trump has shown that they will always, always, always place profitability above their personal ethics.

The Relationship Between Young(er) People and Capitalism: It’s Complicated

If you, like me, spend any time hanging out with Millennials or Gen Z’s, you’ll know that capitalism is not their favorite thing. That’s fair enough. I have my own qualms with capitalism.

But with capitalism, like most things, it’s not really what you say about it that counts. It’s what you do about it. And for all of us, Millennials and Gen Z included, we can talk all we want, but until we stop buying, nothing is going to change. And – based on a 2019 study from Epsilon – Gen Z and Millennials are outspending Baby Boomers in just about every consumer category.

Say all the nasty stuff you want about capitalism and our consumption obsessed society, but the truth is – buying shit is a hard habit to break

It’s not that hard to trace how attitudes towards capitalism have shifted over the generations that have been born since World War II, at least in North America. For four decades after the war, capitalism was generally thought to be a good thing, if only because it was juxtaposed against the bogeyman of socialism. Success was defined by working hard to get ahead, which led to all good things: buying a house and paying off the mortgage, having two vehicles in the garage and having a kitchen full of gleaming appliances. The capitalist era peaked in the 1980s: during the reign of Ronald Reagan in the US and the UK’s Margaret Thatcher.

But then the cracks of capitalism began to show. We began to realize the Earth wasn’t immune to being relentlessly plundered. We started to see the fabric of society showing wear and tear from being constantly pulled by conspicuous consumerism. With the end of the Cold War, the rhetoric against socialism began to be dialed down. Generations who grew up during this period had – understandably – a more nuanced view towards capitalism.

Our values and ethics are essentially formed during the first two decades of our lives. They come in part from our parents and in part from others in our generational cohort. But a critical factor in forming those values is also the environment we grow up in. And for those growing up since World War II, media has been a big part of that environment. We are – in part – formed by what we see on our various screens and feeds. Prior to 1980, you could generally count on bad guys in media being Communists or Nazis. But somewhere mid-decade, CEOs of large corporations and other Ultra-Capitalists started popping up as the villains.

I remember what the journalist James Fallows once said when I met him at a conference in communist China. I was asking how China managed to maintain the precarious balance between a regime based on Communist ideals and a society that embraced rampant entrepreneurialism. He said that as long as each generation believed that their position tomorrow would be better than it was yesterday, they would keep embracing the systems of today.

I think the same is true for generational attitudes towards capitalism. If we believed it was a road to a better future, we embraced it. But as soon as it looked like it might lead to diminishing returns, attitudes shifted. A recent article in The Washington Post detailed the many, many reasons why Americans under 40 are so disillusioned about capitalism. Most of it relates back to the same reason Fallows gave – they don’t trust that capitalism is the best road to a more promising tomorrow.

And this is where it gets messy with Millennials and Gen Z. If they grew up in the developed world, they grew up in a largely capitalistic society. Pretty much everything they understand about their environment and world has been formed, rightly or wrongly, by capitalism. And that makes it difficult to try to cherry-pick your way through an increasingly problematic relationship with something that is all you’ve ever known.

Let’s take their relationship with consumer brands, for example. Somehow, Millennials and Gen Z have managed the nifty trick of separating branding and capitalism. This is, of course, a convenient illusion. Brands are inextricably tied to capitalism. And Millennials and Gen Z are just as strongly tied to their favorite brands.

 According to a 2018 study from Ipsos, 57% of Millennials in the US always try to buy branded products. In fact, Millennials are more likely than Baby Boomers to say they rely on the brands they trust. This also extends to new brand offerings. A whopping 84% of Millennials are more likely to trust a new product from a brand they already know.

But – you may counter – it all depends on what the brand stands for. If it is a “green” brand that aligns with the values of Gen X and Millennials, then a brand may actually be anti-capitalistic.  

It’s a nice thought, but the Ipsos survey doesn’t support it. Only 12% of Millennials said they would choose a product or service because of a company’s responsible behavior and only 16% would boycott a product based on irresponsible corporate behavior. These numbers are about the same through every generational cohort, including Gen X and Baby Boomers.

I won’t even delve into the thorny subject of “greenwashing” and the massive gap between what a brand says they do in their marketing and what they actually do in the real world. No one has defined what we mean by a “ethical corporation” and until someone does and puts some quantifiable targets around it, companies are free to say whatever they want when it comes to sustainability and ethical behavior.

This same general disconnect between capitalism and marketing extends to advertising. The Ipsos study shows that – across all types of media – Millennials pay more attention to advertising than Baby Boomers and Gen X. And Millennials are also more likely to share their consumer opinions online than Boomers and Gen X. They may not like capitalism and consumerism, but they are still buying lots of stuff and talking about it.

The only power we have to fight the toxic effects of capitalism is with our wallets. Once something becomes unprofitable, it will disappear. But – as every generation is finding out – ethical consumerism is a lot easier said than done.

No News is Not Good News

Kelowna, the city I live in – with a population of about 250,000 – just ran its last locally produced TV news show. That marks the end of a 67-year streak. Our local station, CHBC – first signed on the air on September 21, 1957.

That streak was not without some hiccups. There have been a number of ownership changes. The trend in those transitions was away from local ownership towards huge nation spanning media conglomerates. In 2009, when the station became part of the Global network, the intention was to shut down the local station and run everything out of CHAN, the Vancouver Global operation. We kicked up a Kelowna fuss and convinced Global to at least keep a local news presence in the community. But – as it turned out – that was just buying us some time. 15 years later, the plug was finally pulled.

In that time, my city has also essentially lost its daily newspaper, which is a mere ghost of its former self; an anemic online version and a printed paper which is little more than a wrapper for a bunch of grocery flyers.  The tri weekly paper has suffered a similar fate. Radio stations have gutted their local news teams. The biggest news team in the region works for a local news portal. They are young and eager, but few of them are trained journalists.

CHBC started as an extension of local radio. At the time it was launched, only 500 households in the city had a TV set. Broadcasting was “over the air” and I live in a very mountainous location, so it was impossible to watch TV prior to the station signing on. 

Given that the first TV stations only signed on in Canada in 1952 (CBFT in Montreal and CBLT in Toronto), it’s rather amazing to think that my little town (population 10,000 at the time) had its own station just 5 years later. Part of the rapid roll out of TV in Canada was to prevent cultural colonization from the rapidly expanding American TV industry. Our federal government pushed hard to have Canadian programming available from coast to coast.

For the decades that followed, it was local news that defined communities. Local was granular and immediately relevant in a way networks news couldn’t be. It gave you what you needed to know to knowingly participate in local democracy.

For that alone, CHBC News will be missed here in Kelowna.

This story probably resonates with all of you. The death of local journalism is not unique to my city. I have just learned that I probably will be living in a news desert soon.  The  importance of local news is enshrined in the very definition of a news desert:

“a community, either rural or urban, with limited access to the sort of credible and comprehensive news and information that feeds democracy at the grassroots level.”

The death of local news was recently discussed at the Canadian Association of Journalists Annual conference in Toronto. There, April Lindgren, a professor at Toronto Metropolitan University’s School of Journalism and the principal investigator of the Local News Research Project, said this:

“I think one of the things .. people don’t think about in terms of the mechanics of the role of local news in a community is the role that it plays in equipping people to participate in decision-making.”

We need local news. A recent study by Resonate said that Americans trust Local News more than any other source. And not just by a little margin. By a lot. The next closest answer was a full 15 percentage points behind.

But there are two existential problems that are pushing local news to the brink of an extinction event. First of all, most local news outlets were swallowed up into corporate mass media conglomerates over the past 3 or 4 decades. And secondly, the business model for local news has disappeared. Local advertising dollars have migrated to other platforms. So the fate of local news had become a P&L decision.

That’s what it was for CHBC. It’s owned by Corus entertainment. Corus owns the Global Network (15 stations), 39 radio stations, 33 specialty TV channels and a bunch of other media miscellanea.  

Oh, did I mention that Corus is also bleeding cash at a fatal rate? On the heels of an announced $770 Million loss (CDN) it cut 25% of its workforce. That was the death knell for CHBC. It didn’t have a hope in hell.

Local news doesn’t have to die. It just has to find another way to live. Like so much of our media environment, basing survival on advertising revenue is a sure recipe for disaster. That’s why the Local News Research Project is floating ideas like supporting local news with philanthropy. I’m not sure that’s a viable or scalable answer.

I think a better idea might be to move local news to protected species status. If we recognize its importance to democracy, especially at local levels, then perhaps tax dollars should go to ensuring it’s survival.

The scenario of government supported local journalism brings up a philosophical debate that I have ignited in the past, when I talked about public broadcasting. It split my readers along national lines, with those from the US giving a thumbs down to the idea, and those from Australia, New Zealand and Canada receiving it more favorably.

Let’s see what happens this time.

OpenAI’s Q* – Why Should We Care?

OpenAI founder Sam Altman’s ouster and reinstatement has rolled through the typical news cycle and we’re now back to blissful ignorance. But I think this will be one of the sea-change moments; a tipping point that we’ll look back on in the future when AI has changed everything we thought we knew and we wonder, “how the hell did we let that happen?”

Sometimes I think that tech companies use acronyms and cryptic names for new technologies to allow them to sneak game changers in without setting off the alarm bells. Take OpenAI for example. How scary does Q-Star sound? It’s just one more vague label for something we really don’t understand.

 If I’m right, we do have to ask the question, “Who is keeping an eye on these things?”

This week I decided to dig into the whole Sam Altman firing/hiring episode a little more closely so I could understand if there’s anything I should be paying attention to. Granted, I know almost nothing about AI, so what follows if very much at the layperson level, but I think that’s probably true for the vast majority of us. I don’t run into AI engineers that often in my life.

So, should we care about what happened a few weeks ago at OpenAI? In a word – YES.

First of all, a little bit about the dynamics of what led to Altman’s original dismissal. OpenAI started with the best of altruistic intentions, to “to ensure that artificial general intelligence benefits all of humanity.”  That was an ideal – many would say a naïve ideal – that Altman and OpenAI’s founders imposed on themselves. As Google discovered with its “Don’t Be Evil” mantra, it’s really hard to be successful and idealistic at the same time. In our world, success is determined by profits, and idealism and profitability almost never play in the same sandbox. Google quietly watered the “Don’t be Evil” motto until it virtually disappeared in 2018.

OpenAI’s non-profit board was set up as a kind of Internal “kill switch” to prevent the development of technologies that could be dangerous to the human race. That theoretical structure was put to the test when the board received a letter this year from some senior researchers at the company warning of a new artificial intelligence discovery that might take AI past the threshold where it could be harmful to humans. The board then did was it was set up to do, firing Altman and board chairman Greg Brockman and putting the brakes on the potentially dangerous technology. Then, Big Brother Microsoft (who has invested $13 billion in OpenAI) stepped in and suddenly Altman was back. (Note – for a far more thorough and fascinating look at OpenAI’s unique structure and the endemic problems with it, read through Alberto Romero’s series of thoughtful posts.)

There were probably two things behind Altman’s ouster: the potential capabilities of a new development called Q-Star and a fear that it would follow OpenAI’s previous path of throwing it out there to the world, without considering potential consequences. So, why is Q-Star so troubling?

Q-Star could be a major step closer to AI which can rationalize and plan. This moves us closer to the overall goal of artificial general Intelligence (AGI), the holy grail for every AI developer, including OpenAI. Artificial general intelligence, as per OpenAI’s own definition, are “AI systems that are generally smarter than humans.” Q-Star, through its ability to tackle grade school math problems, showed the promise of being artificial intelligence that could plan and reason. And that is an important tipping point, because something that can rationalize and plan pushes us forever past the boundary of a tool under human control. It’s technology that thinks for itself.

Why should this worry us? It should worry us because of Herbert Simon’s concept of “bounded rationality”, which explains that we humans are incapable of pure rationality. At some point we stop thinking endlessly about a question and come up with an answer that’s “good enough”. And we do this because of limited processing power. Emotions take over and make the decision for us.

But AGI throws those limits away. It can process exponentially more data at a rate we can’t possibly match. If we’re looking at AI through Sam Altman’s rose-colored glasses, that should be a benefit. Wouldn’t it be better to have decisions made rationally, rather than emotionally? Shouldn’t that be a benefit to mankind?

But here’s the rub. Compassion is an emotion. Empathy is an emotion. Love is also an emotion. What kind of decisions do we come to if we strip that out of the algorithm, along with any type of human check and balance?

Here’s an example. Let’s say that at some point in the future an AGI superbrain is asked the question, “Is the presence of humans beneficial to the general well-being of the earth?”

I think you know what the rational answer to that is.

The Spark in the Jar: Jon Ive and Steve Jobs

I sold all my Apple stock shortly after Steve Jobs passed away. It was premature (which is another word for stupid). Apple stock is today worth about 10 times what I sold it for.

My reasoning was thus: Apple couldn’t function without Steve Jobs – not for long, anyway.

Well, 12 years later, it’s doing quite well, thank you. It has a stock price of almost $200 per share (as of the writing of this). Sales have never been stronger. While replacement CEO Tim Cook is no Steve Jobs, financially he has grown Apple into a monolithic force with a market capitalization of almost 3 trillion dollars. There is no other company even close to that.

Now, with the benefit of hindsight, I realize I underestimated Tim Cook. But I stand with my original instinct: whatever Apple was under Steve Jobs, it couldn’t survive without him. And to understand why, let’s take a quick look back.

Jobs was infamously ousted from Apple in 1985. He remained in “NeXTile” for 12 years, coming back in 1997 to lead Apple into what many believe was its Golden Era. He passed away in 2011.

In the 14 years Jobs led Apple in his second run, the stock price went from about 20 cents to about 12 dollars. That’s growth of about 6000%.  Steve Jobs brought Apple back from the brink of death. If it wasn’t for a lifeline thrown to it by its number one competitor, Microsoft, in 1997, Apple would be no more. As Jobs himself said, “Apple was in very serious trouble,” said Jobs. “And what was really clear was that if the game was a zero-sum game where for Apple to win, Microsoft had to lose, then Apple was going to lose.

But those growth numbers are a little misleading. For you to be one of the fastest growing companies in history, it helps when you start with a very, very small number. A share price of $0.20 is a very, very small number.

Much as everyone lauds Steve Jobs for the turnaround of Apple, I would argue that Tim Cooks performance is even more impressive. To say that Apple was already on a roll when Cook took over is an understatement. In 2011, Apple was going from success to success and could seem to do no wrong. That was one of the reasons I was pessimistic about its future. I thought it couldn’t sustain its run, especially when it came to introducing new products. How many Jobs inspired home runs could it possibly have in its pipeline?

But what Tim Cook was great at was logistics. He took that pipeline and managed to squeeze out another decade plus of value building thanks to what may be the best supply chain strategy in the world. Analysts have said that half of Apple’s 3 trillion dollars in value is directly attributable to that supply chain.

But when you squeeze every last inch of efficiency out of a supply chain, something has to give. And in this case, it may have been creativity.

The Job’s era Apple was a very rare and delicate thing in the corporate world: a leader who was uncompromising on user experience and a design team able to rise and meet the challenge. Was it dictorial? Absolutely. Was it magical? Almost always. It was like catching a spark in a jar.

That design team was headed by Jonathon Ive. And when you have a team that’s the absolute best in the world, you can put up with an asshole here and there, especially when that asshole keeps challenging you to be better.  And when you keep delivering.

The alchemy that made Apple spectacularly successful from 1996 to 2011 was a fragile thing. It wouldn’t take much to change the formula forever. For example, if you removed the catalyst – which was Steve Jobs – it couldn’t survive. But equally important to that formula was Jon Ive.

As David Price, the editor of Macworld said,

“What Ive brought to Apple was a coherent personal vision. That doesn’t mean Apple’s designs on his watch were always perfect, of course; there were plenty of missteps. In broader terms, his arch-minimalism could be frustrating for those who wanted more physical controls”

David Price, Macworld

Ive and Jobs were, by all accounts, inseparable. In a heartfelt tribute to Jobs published shortly after his passing, Ive remembered,

“We worked together for nearly 15 years. We had lunch together most days and spent our afternoons in the sanctuary of the design studio. Those were some of the happiest, most creative and joyful times of my life,” Ive wrote. “I loved how he saw the world. The way he thought was profoundly beautiful.”

Jon Ive

For Jobs and Ive – “Think Different” was both a manifesto and a mantra. That philosophy started a not-so-slow death the minute Jobs passed from this earth. Finally, in June 2019, Ive announced his departure “after years of frustration, seeing the company migrate from a design-centric entity to one that was more utilitarian.”

It seems that companies can excel at either creativity or execution. It’s very difficult – perhaps impossible – to do both. The Apple of Steve Jobs was the world’s most creative corporation. The Apple of Tim Cook is a world leader in execution. But for one to happen, the other had to make room. Today, Apple is trying to be creative by committee. Macworld’s David Price mourns the Apple that was, “Maybe Apple is no longer a company that focuses on individual personality, or indeed on thinking different. This week we also got the news that Ive’s replacement will not be replaced, with a core group of 20 designers instead reporting directly to the chief operating officer, who is no stranger to design and likely has his own ideas. If design by committee has been the de facto approach for the past four years, it’s now been made official.”

And committees always suck all the oxygen from the room. In that atmosphere, the spark that once was Apple inevitably had to go out.