The Transformation of the Digital World

Posted October 4, 2018

In this episode Frank is joined by Kara Swisher, the Executive Editor of Recode. They discuss the unintended consequences of digitization, inclusion in the digital economy, and how change is the only constant.


Frank:   Hey everybody. Welcome to another edition of Digital Identity 360. We’re honored to have Kara Swisher with us today. Kara’s at our Digital Identity Summit and did a fantastic keynote for us. And so Kara, thank you very much.

Kara:   Thank you.

Frank:   And really just spend a few minutes contributing some of the topics that you discussed. One of the ones that I thought was really interesting is the tsunami of things that tech companies aren’t considering as it relates to the digital world. Why don’t you suss it out a little bit?

Kara:   Well we call them unintended consequences. But I think they probably should’ve understood them before they happened. I think what’s happened is there’s all these consequences of what they build, which has been amazing. And they’ve been pretty sloppy in how they’ve rolled it out and they pulled the money in and they’ve taken all the wealth from it, and yet didn’t take care of the body politic. I don’t know how else to say it. They just didn’t. They were very lazy and sloppy and that’s why we’ve got what we’ve got.

Frank:   And you’ve got a bunch of people now that are living those consequences. Like one of the interesting things that you’ve mentioned in the speech was how do you retool these people? The landscape is strewn with people now that are going to be out of the orbit.

Kara:   Or will be.

Frank:   Will be, right? And in short order. I mean what do you do with these people proactively to make sure they can participate in the digital economy?

Kara:   Well it’s kind of… it’s really interesting. I think about that a lot. You have to have the government coming into thinking really hard and intelligently about how to educate people and knowing where jobs are going. But you have to have a public/private partnership in this. The companies really have to understand what there needs are. What they’re going to have. I think the idea of the modern company it’s not over but it’s changing in a way that I think people have not fully grasped. And when you’re going to have multiple jobs over your career, where you’re going to have to change all the time be constantly retooled how do we structure an education system like that. And that’s what’s hard. The way we do it now is for an era that has passed a long time ago.

Frank:   It’s so interesting, Kara. Because we live in a valley that is unfortunately disruptive all the time and people have to retool constantly. But if you’re in Ohio or in the Midwest or in the South, then you’ve had the same job. Their skill set forever. This is unbelievably disruptive, this digital transformation happens.

Kara:   It is but it doesn’t matter if it is what it is. I think when people suddenly they had high ways or suddenly they had telephones or suddenly everything changes almost constantly. Think about it. Back in the farming to manufacturing shift, everybody farmed. And then they didn’t. And what it has is enormous political and social repercussions that we haven’t understood and it’s happening at such a fast pace and a highly political environment. It’s really problematic for our country when we think about that. If you think political discourse is problematic now when this starts to happen. And the economy’s going crazy right now in a good way. But it’s not going to… when these shifts start to really happen.

Frank:   The social unrest element will be significant.

Kara:   Oh certainly. Because it’ll be non-understandable and people will be left behind.

Frank:   Yeah. One of the interesting things that was brought up in the Q and A session after, and thank you for that, was this idea of identity spoofing. I mean and the fact that you said something interesting. Companies have a responsibility to know. I mean they use technologies like ours. Our technology is to try and figure it out. But you really need to know your customer.

Kara:   Yes.

Frank:   Right? And not just for selling them something but something that was interesting for me, Kara, is in content.

Kara:   What’s fake. What’s not fake.

Frank:   Right. Let’s protect content. If content is real that’s one thing. But you have this kind of self… this kind of churning of information that people then begin to adopt and believe and react to.

Kara:   Right. And it can move very quickly. And then be disputed really quickly but it still gets around. It just goes around the world. A gossip used to go around the world in a certain amount of time. Now it goes around in these cycles that are so fast. Just think of political means. Like I don’t know was last week that this happened and that week. And so everything’s speeding up in this way more by this social media. And at the same time the downgrading of intelligence goes further and further down. And so keeping up with this. So one of the things these companies have to do is keep their platforms clean. You have to know who the bots are, get rid of fake accounts, get rid of fake news. I mean they should’ve been doing this for a long time. And now it’s incomprehensible. It’s like that plastic floating in the ocean that they’re trying to clean up. What are you going to do?

Frank:   Exactly.

Kara:   It’s like what do you do? It’s really an iceberg of plastic. So they have a boom they’re going to push now to see if they can clean up the plastic in five years. But that’s the kind of mess it is.

Frank:   It’s interesting because I think that takes incredible leadership especially in situations where you’re monetizing those fake accounts.

Kara:   Yes.

Frank:   Where you’re benefiting commercially from the fact that they’re not really real but what do you care because.

Kara:   It was growth at all costs and I think that’s what they were doing. They were being sloppy because growth at all costs was the thing and so they allowed these fake accounts. They allowed this fake news. I just did a really interesting interview with one of the lawyers, top lawyers who worked for Google and Twitter. And the thing she was saying is when they started say Google and Search they had authenticity. They had relevance. They had breadth and stuff like that. And then it shifted to things that would be engagement. So it was things that would get people using it more. And they shifted the pillars of what people want and that’s what they kept doing. And now maybe the pillars have to shift again that these companies are built around. And it should be context, accuracy, authenticity of who you are. And that may be what they need to build. But they haven’t been doing this. They have another set of criteria they’ve been building their business on because it’s good for their business. It generates income. But that’s easy money for them that they’ve got.

Frank:   Low hanging fruit.

Kara:   In the meantime they ruin the regular industry.

Frank:   Sure. Interesting point that Kathryn Petralia from Kabbage brought up on how anonymity on the internet and digital identities democratize decision making and remove prejudice from the equation. Maybe speak a little bit to how that is real. Prejudice is really real in credit decisions, financial products and how this anonymity could be helpful if used the right way. Do you think that’s true?

Kara:   Sometimes. I think there’s some ideas that you should do jobs in an anonymous way. Blind job interviewing when people are not given as much data about people’s names or what they look like they make very different decisions. It’s an interesting concept and it should work. It should work because everybody brings their different biases to what they’re doing and then you get the best qualified person. And there’s all kinds of efforts by a lot of companies to try to do this again in recruiting and other things. But those are exactly the kind of things that we should be trying to figure out how to get rid of inherent bias that exists in everybody.

Frank:   It’s interesting. One of the things that we focus on as an industry is financial inclusion because as you said as we’re getting ready the example of the Syrian girl who might be the next neurologist or doctor that cures cancer or who knows. The idea that how do you create these mechanisms that don’t bring geographical biases and poverty biases and say look a micro-loan could change this person’s life and in some way really profoundly affect the world.

Kara:   Well, the internet was supposed to reach everybody. That’s what it was thought to have done. Everybody can now get knowledge from anywhere across the world and be connected to the world. And what it’s degenerated into is a lot of noise, a lot of political discord, a lot of pointless apps that are silly. But it still has that profound idea of uniting the world in some way or being able to give a little girl in Syria access at the same level that some kid in Boston has it.

Frank:   Absolutely. I have the distinct privilege this time at this Summit of having my millennial son here. He’s a marketing guy in the area. And after your presentation walked out and said, “That was awesome.” And he said very thought provoking. For a 20 year old guy, it’s very interesting. So thank you. I think the stuff we heard today was I think very compelling. It certainly should help us form our opinions of as you and I discussed in the Q and A how we staff boards and executive staffs to include diversity, to insure we have that differing opinion. Those kinds of things.

Kara:   There’s never been such a wealth creation in such a short amount of time if you think about it. And so you have at the very top of our society and at the very, very top people who have made obscene amounts of money and then a group of people at the top that loves the future and wants to lean into it. Then you have at the very bottom a group of people that are mired in educational problems, drug addiction problems, inability to change. And then you have everyone in the middle who really is worried about the future and yet understands they need to lean into it but understand there’s kind of problems. And I think it’s really important for the top groups to be pulling people up to that… to be pulling people up so that that group that pull the rest of the people up.

Frank:   Responsibility of leadership, right?

Kara:   Yes, exactly. And I use the expression, it’s not a Spiderman one, it’s actually from Voltaire. Which with great power comes great responsibility. I always say this in every speech and I say it because they like spider man. The tech people like Spiderman, but I’m like you really do have to take the responsibility for the power you’ve been given. And what they’ve tried to do is pretend they don’t have power. And they do. And they have to recognize and understand what that entails. And if they can’t do it, get out of the way and let someone else.

Frank:   Your Patagonia example I think is salient. I mean there’s an example where it’s so counterintuitive. And yet what you do is you create this community that likes the brand even more. But she’s taking some bold steps. She’s decided who she is. I think that is one of the most. Sales have increased four fold. But it makes sense though because they are what they are. And I think a lot of brands… it’ll be interesting to see what happens with Nike around this. But then again of course everyone thought it was worse than it was because all the videos of people burning their shoes which… is that was really happened? Or do people like it better? Do you know what I mean? It’ll be really interesting things as these companies start to define themselves. But to me the great companies we want to say this is who I am. This is what we stand for.

Frank:   Stay true to that mission.

Kara:   Yeah. Absolutely.

Frank:   Everybody thank you so much to Kara Swisher from Recode. Thank you Kara for the Summit, for this podcast. And we’re certainly huge fans and delighted to have you in person.

Kara:   Thank you.

Frank:   So thank you very much.

Kara:   You’re welcome. Thank you.

Frank:   Pleasure. Thank you.

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