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#431543 China Is an Entrepreneurial Hotbed That ...
Last week, Eric Schmidt, chairman of Alphabet, predicted that China will rapidly overtake the US in artificial intelligence…in as little as five years.
Last month, China announced plans to open a $10 billion quantum computing research center in 2020.
Bottom line, China is aggressively investing in exponential technologies, pursuing a bold goal of becoming the global AI superpower by 2030.
Based on what I’ve observed from China’s entrepreneurial scene, I believe they have a real shot of hitting that goal.
As I described in a previous tech blog, I recently traveled to China with a group of my Abundance 360 members, where I was hosted by my friend Kai-Fu Lee, the founder, chairman, and CEO of Sinovation Ventures.
On one of our first nights, Kai-Fu invited us to a special dinner at Da Dong Roast, which specializes in Peking duck, where we shared an 18-course meal.
The meal was amazing, and Kai-Fu’s dinner conversation provided us priceless insights on Chinese entrepreneurs.
Three topics opened my eyes. Here’s the wisdom I’d like to share with you.
1. The Entrepreneurial Culture in China
Chinese entrepreneurship has exploded onto the scene and changed significantly over the past 10 years.
In my opinion, one significant way that Chinese entrepreneurs vary from their American counterparts is in work ethic. The mantra I found in the startups I visited in Beijing and Shanghai was “9-9-6”—meaning the employees only needed to work from 9 am to 9 pm, 6 days a week.
Another concept Kai-Fu shared over dinner was the almost ‘dictatorial’ leadership of the founder/CEO. In China, it’s not uncommon for the Founder/CEO to own the majority of the company, or at least 30–40 percent. It’s also the case that what the CEO says is gospel. Period, no debate. There is no minority or dissenting opinion. When the CEO says “march,” the company asks, “which way?”
When Kai-Fu started Sinovation (his $1 billion+ venture fund), there were few active angel investors. Today, China has a rich ecosystem of angel, venture capital, and government-funded innovation parks.
As venture capital in China has evolved, so too has the mindset of the entrepreneur.
Kai -Fu recalled an early investment he made in which, after an unfortunate streak, the entrepreneur came to him, almost in tears, apologizing for losing his money and promising he would earn it back for him in another way. Kai-Fu comforted the entrepreneur and said there was no such need.
Only a few years later, the situation was vastly different. An entrepreneur who was going through a similar unfortunate streak came to Kai Fu and told him he only had $2 million left of his initial $12 million investment. He informed him he saw no value in returning the money and instead was going to take the last $2 million and use it as a final push to see if the company could succeed. He then promised Kai-Fu if he failed, he would remember what Kai-Fu did for him and, as such, possibly give Sinovation an opportunity to invest in him with his next company.
2. Chinese Companies Are No Longer Just ‘Copycats’
During dinner, Kai-Fu lamented that 10 years ago, it would be fair to call Chinese companies copycats of American companies. Five years ago, the claim would be controversial. Today, however, Kai-Fu is clear that claim is entirely false.
While smart Chinese startups will still look at what American companies are doing and build on trends, today it’s becoming a wise business practice for American tech giants to analyze Chinese companies. If you look at many new features of Facebook’s Messenger, it seems to very closely mirror TenCent’s WeChat.
Interestingly, tight government controls in China have actually spurred innovation. Take TV, for example, a highly regulated industry. Because of this regulation, most entertainment in China is consumed on the internet or by phone. Game shows, reality shows, and more will be entirely centered online.
Kai-Fu told us about one of his investments in a company that helps create Chinese singing sensations. They take girls in from a young age, school them, and regardless of talent, help build their presence and brand as singers. Once ready, these singers are pushed across all the available platforms, and superstars are born. The company recognizes its role in this superstar status, though, which is why it takes a 50 percent cut of all earnings.
This company is just one example of how Chinese entrepreneurs take advantage of China’s unique position, market, and culture.
3. China’s Artificial Intelligence Play
Kai-Fu wrapped up his talk with a brief introduction into the expansive AI industry in China. I previously discussed Face++, a Sinovation investment, which is creating radically efficient facial recognition technology. Face++ is light years ahead of anyone else globally at recognition in live videos. However, Face++ is just one of the incredible advances in AI coming out of China.
Baidu, one of China’s most valuable tech companies, started out as just a search company. However, they now run one of the country’s leading self-driving car programs.
Baidu’s goal is to create a software suite atop existing hardware that will control all self-driving aspects of a vehicle but also be able to provide additional services such as HD mapping and more.
Another interesting application came from another of Sinovation’s investments, Smart Finance Group (SFG). Given most payments are mobile (through WeChat or Alipay), only ~20 percent of the population in China have a credit history. This makes it very difficult for individuals in China to acquire a loan.
SFG’s mobile application takes in user data (as much as the user allows) and, based on the information provided, uses an AI agent to create a financial profile with the power to offer an instant loan. This loan can be deposited directly into their WeChat or Alipay account and is typically approved in minutes. Unlike American loan companies, they avoid default and long-term debt by only providing a one-month loan with 10% interest. Borrow $200, and you pay back $220 by the following month.
Artificial intelligence is exploding in China, and Kai-Fu believes it will touch every single industry.
The only constant is change, and the rate of change is constantly increasing.
In the next 10 years, we’ll see tremendous changes on the geopolitical front and the global entrepreneurial scene caused by technological empowerment.
China is an entrepreneurial hotbed that cannot be ignored. I’m monitoring it closely. Are you?
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Posted in Human Robots
#431427 Why the Best Healthcare Hacks Are the ...
Technology has the potential to solve some of our most intractable healthcare problems. In fact, it’s already doing so, with inventions getting us closer to a medical Tricorder, and progress toward 3D printed organs, and AIs that can do point-of-care diagnosis.
No doubt these applications of cutting-edge tech will continue to push the needle on progress in medicine, diagnosis, and treatment. But what if some of the healthcare hacks we need most aren’t high-tech at all?
According to Dr. Darshak Sanghavi, this is exactly the case. In a talk at Singularity University’s Exponential Medicine last week, Sanghavi told the audience, “We often think in extremely complex ways, but I think a lot of the improvements in health at scale can be done in an analog way.”
Sanghavi is the chief medical officer and senior vice president of translation at OptumLabs, and was previously director of preventive and population health at the Center for Medicare and Medicaid Innovation, where he oversaw the development of large pilot programs aimed at improving healthcare costs and quality.
“How can we improve health at scale, not for only a small number of people, but for entire populations?” Sanghavi asked. With programs that benefit a small group of people, he explained, what tends to happen is that the average health of a population improves, but the disparities across the group worsen.
“My mantra became, ‘The denominator is everybody,’” he said. He shared details of some low-tech but crucial fixes he believes could vastly benefit the US healthcare system.
1. Regulatory Hacking
Healthcare regulations are ultimately what drive many aspects of patient care, for better or worse. Worse because the mind-boggling complexity of regulations (exhibit A: the Affordable Care Act is reportedly about 20,000 pages long) can make it hard for people to get the care they need at a cost they can afford, but better because, as Sanghavi explained, tweaking these regulations in the right way can result in across-the-board improvements in a given population’s health.
An adjustment to Medicare hospitalization rules makes for a relevant example. The code was updated to state that if people who left the hospital were re-admitted within 30 days, that hospital had to pay a penalty. The result was hospitals taking more care to ensure patients were released not only in good health, but also with a solid understanding of what they had to do to take care of themselves going forward. “Here, arguably the writing of a few lines of regulatory code resulted in a remarkable decrease in 30-day re-admissions, and the savings of several billion dollars,” Sanghavi said.
2. Long-Term Focus
It’s easy to focus on healthcare hacks that have immediate, visible results—but what about fixes whose benefits take years to manifest? How can we motivate hospitals, regulators, and doctors to take action when they know they won’t see changes anytime soon?
“I call this the reality TV problem,” Sanghavi said. “Reality shows don’t really care about who’s the most talented recording artist—they care about getting the most viewers. That is exactly how we think about health care.”
Sanghavi’s team wanted to address this problem for heart attacks. They found they could reliably determine someone’s 10-year risk of having a heart attack based on a simple risk profile. Rather than monitoring patients’ cholesterol, blood pressure, weight, and other individual factors, the team took the average 10-year risk across entire provider panels, then made providers responsible for controlling those populations.
“Every percentage point you lower that risk, by hook or by crook, you get some people to stop smoking, you get some people on cholesterol medication. It’s patient-centered decision-making, and the provider then makes money. This is the world’s first predictive analytic model, at scale, that’s actually being paid for at scale,” he said.
3. Aligned Incentives
If hospitals are held accountable for the health of the communities they’re based in, those hospitals need to have the right incentives to follow through. “Hospitals have to spend money on community benefit, but linking that benefit to a meaningful population health metric can catalyze significant improvements,” Sanghavi said.
Darshak Sanghavi speaking at Singularity University’s 2017 Exponential Medicine Summit in San Diego, CA.
He used smoking cessation as an example. His team designed a program where hospitals were given a score (determined by the Centers for Disease Control and Prevention) based on the smoking rate in the counties where they’re located, then given monetary incentives to improve their score. Improving their score, in turn, resulted in better health for their communities, which meant fewer patients to treat for smoking-related health problems.
4. Social Determinants of Health
Social determinants of health include factors like housing, income, family, and food security. The answer to getting people to pay attention to these factors at scale, and creating aligned incentives, Sanghavi said, is “Very simple. We just have to measure it to start with, and measure it universally.”
His team was behind a $157 million pilot program called Accountable Health Communities that went live this year. The program requires all Medicare and Medicaid beneficiaries get screened for various social determinants of health. With all that data being collected, analysts can pinpoint local trends, then target funds to address the underlying problem, whether it’s job training, drug use, or nutritional education. “You’re then free to invest the dollars where they’re needed…this is how we can improve health at scale, with very simple changes in the incentive structures that are created,” he said.
5. ‘Securitizing’ Public Health
Sanghavi’s final point tied back to his discussion of aligning incentives. As misguided as it may seem, the reality is that financial incentives can make a huge difference in healthcare outcomes, from both a patient and a provider perspective.
Sanghavi’s team did an experiment in which they created outcome benchmarks for three major health problems that exist across geographically diverse areas: smoking, adolescent pregnancy, and binge drinking. The team proposed measuring the baseline of these issues then creating what they called a social impact bond. If communities were able to lower their frequency of these conditions by a given percent within a stated period of time, they’d get paid for it.
“What that did was essentially say, ‘you have a buyer for this outcome if you can achieve it,’” Sanghavi said. “And you can try to get there in any way you like.” The program is currently in CMS clearance.
AI and Robots Not Required
Using robots to perform surgery and artificial intelligence to diagnose disease will undoubtedly benefit doctors and patients around the US and the world. But Sanghavi’s talk made it clear that our healthcare system needs much more than this, and that improving population health on a large scale is really a low-tech project—one involving more regulatory and financial innovation than technological innovation.
“The things that get measured are the things that get changed,” he said. “If we choose the right outcomes to predict long-term benefit, and we pay for those outcomes, that’s the way to make progress.”
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Posted in Human Robots
#431412 3 Dangerous Ideas From Ray Kurzweil
Recently, I interviewed my friend Ray Kurzweil at the Googleplex for a 90-minute webinar on disruptive and dangerous ideas, a prelude to my fireside chat with Ray at Abundance 360 this January.
Ray is my friend and cofounder and chancellor of Singularity University. He is also an XPRIZE trustee, a director of engineering at Google, and one of the best predictors of our exponential future.
It’s my pleasure to share with you three compelling ideas that came from our conversation.
1. The nation-state will soon be irrelevant.
Historically, we humans don’t like change. We like waking up in the morning and knowing that the world is the same as the night before.
That’s one reason why government institutions exist: to stabilize society.
But how will this change in 20 or 30 years? What role will stabilizing institutions play in a world of continuous, accelerating change?
“Institutions stick around, but they change their role in our lives,” Ray explained. “They already have. The nation-state is not as profound as it was. Religion used to direct every aspect of your life, minute to minute. It’s still important in some ways, but it’s much less important, much less pervasive. [It] plays a much smaller role in most people’s lives than it did, and the same is true for governments.”
Ray continues: “We are fantastically interconnected already. Nation-states are not islands anymore. So we’re already much more of a global community. The generation growing up today really feels like world citizens much more than ever before, because they’re talking to people all over the world, and it’s not a novelty.”
I’ve previously shared my belief that national borders have become extremely porous, with ideas, people, capital, and technology rapidly flowing between nations. In decades past, your cultural identity was tied to your birthplace. In the decades ahead, your identify is more a function of many other external factors. If you love space, you’ll be connected with fellow space-cadets around the globe more than you’ll be tied to someone born next door.
2. We’ll hit longevity escape velocity before we realize we’ve hit it.
Ray and I share a passion for extending the healthy human lifespan.
I frequently discuss Ray’s concept of “longevity escape velocity”—the point at which, for every year that you’re alive, science is able to extend your life for more than a year.
Scientists are continually extending the human lifespan, helping us cure heart disease, cancer, and eventually, neurodegenerative disease. This will keep accelerating as technology improves.
During my discussion with Ray, I asked him when he expects we’ll reach “escape velocity…”
His answer? “I predict it’s likely just another 10 to 12 years before the general public will hit longevity escape velocity.”
“At that point, biotechnology is going to have taken over medicine,” Ray added. “The next decade is going to be a profound revolution.”
From there, Ray predicts that nanorobots will “basically finish the job of the immune system,” with the ability to seek and destroy cancerous cells and repair damaged organs.
As we head into this sci-fi-like future, your most important job for the next 15 years is to stay alive. “Wear your seatbelt until we get the self-driving cars going,” Ray jokes.
The implications to society will be profound. While the scarcity-minded in government will react saying, “Social Security will be destroyed,” the more abundance-minded will realize that extending a person’s productive earning life space from 65 to 75 or 85 years old would be a massive boon to GDP.
3. Technology will help us define and actualize human freedoms.
The third dangerous idea from my conversation with Ray is about how technology will enhance our humanity, not detract from it.
You may have heard critics complain that technology is making us less human and increasingly disconnected.
Ray and I share a slightly different viewpoint: that technology enables us to tap into the very essence of what it means to be human.
“I don’t think humans even have to be biological,” explained Ray. “I think humans are the species that changes who we are.”
Ray argues that this began when humans developed the earliest technologies—fire and stone tools. These tools gave people new capabilities and became extensions of our physical bodies.
At its base level, technology is the means by which we change our environment and change ourselves. This will continue, even as the technologies themselves evolve.
“People say, ‘Well, do I really want to become part machine?’ You’re not even going to notice it,” Ray says, “because it’s going to be a sensible thing to do at each point.”
Today, we take medicine to fight disease and maintain good health and would likely consider it irresponsible if someone refused to take a proven, life-saving medicine.
In the future, this will still happen—except the medicine might have nanobots that can target disease or will also improve your memory so you can recall things more easily.
And because this new medicine works so well for so many, public perception will change. Eventually, it will become the norm… as ubiquitous as penicillin and ibuprofen are today.
In this way, ingesting nanorobots, uploading your brain to the cloud, and using devices like smart contact lenses can help humans become, well, better at being human.
Ray sums it up: “We are the species that changes who we are to become smarter and more profound, more beautiful, more creative, more musical, funnier, sexier.”
Speaking of sexuality and beauty, Ray also sees technology expanding these concepts. “In virtual reality, you can be someone else. Right now, actually changing your gender in real reality is a pretty significant, profound process, but you could do it in virtual reality much more easily and you can be someone else. A couple could become each other and discover their relationship from the other’s perspective.”
In the 2030s, when Ray predicts sensor-laden nanorobots will be able to go inside the nervous system, virtual or augmented reality will become exceptionally realistic, enabling us to “be someone else and have other kinds of experiences.”
Why Dangerous Ideas Matter
Why is it so important to discuss dangerous ideas?
I often say that the day before something is a breakthrough, it’s a crazy idea.
By consuming and considering a steady diet of “crazy ideas,” you train yourself to think bigger and bolder, a critical requirement for making impact.
As humans, we are linear and scarcity-minded.
As entrepreneurs, we must think exponentially and abundantly.
At the end of the day, the formula for a true breakthrough is equal to “having a crazy idea” you believe in, plus the passion to pursue that idea against all naysayers and obstacles.
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Posted in Human Robots