Paranoia & Love: A Discussion With Prof. Reichental

We had a fascinating one-hour-long conversation with professor Reichental, talking about what makes a piece of technology great, how to survive when you have too many things you want to do, and who should promote blockchain and crypto projects.

And I was so inspired by this talk that asked Jonathan to launch a series of Expert Takes for Cointelegraph, which (yes, it will be my answer to, “How did you spend your summer”) will see the light very soon.

Professor Jonathan Reichental is the incarnation of a tech man. One of the most competent opinion leaders in the innovation field of our times, he has managed to be successful as an advisor to business and governments, a professor in leading universities, a writer, the chief information officer of Palo Alto in Silicon Valley, an investor… the list continues.

Currently, he is deeply engaged in the blockchain community and also doing a lot of work in quantum computing. Just to illustrate his influence on modern leaders, it is enough to say that among Reichental’s subscribers on Twitter, you can find former United States President Barack Obama.

Only the Paranoid Survive (if they are in love with what they do)

Our discussion on technology started even before the first question of the interview, as we talked about the messenger we used for our call and how the dynamics of all these Skypes, WhatsApps, Zooms and others influence our lives.

Jonathan Reichental: I think it demonstrates something very interesting, which is: No product can ever be comfortable that it owns the market – it can never be confident. Andy Grove, who helped start Intel, he wrote a book about it A. S. Grove, “Only the Paranoid Survive”, 1996, saying, in business, you must be paranoid every day.

The point is, if I came to a group of investors and said, “Hey, I’m going to work on a new collaboration tool for voice over the internet, or video”, the answer they probably would give is, “That’s a ridiculous idea.” There’s, like, 20 solutions – plus, doesn’t Skype and Google Hangouts and two or three others own that market? And the proof is that now, if you build a superior product with a better experience, you can dominate; you can win back market share.

When you first read Reichental’s bio, you risk being overwhelmed by the amount of different projects he has successfully conducted and hobbies he follows. Urban development consultancy, quantum computing courses, music composition and playing guitar, blockchain promotion – this is an incomplete list of his summer’s to-do. So, my first question was basically about a paranoiac feature of Jonathan’s life: How does he combines so many interests and manage to be successful in all those areas?

JR: I’ve been lucky enough to be born into the beginning of the information age, when things were really getting going. I’ve not really known a world without tech and my first exposure to a computer was my older brother bringing one home when I was probably five or six years old – and then I got interested in the games myself and even programming.

And these were the days when you would buy a magazine, and the magazine would list the code, and then you type the code into your computer. There was no “online”, the best you could do was go to a store and buy a cassette – or later on, a disk – and then load the software. But there’s no hard drive, so every time you wanted to use it, you had to insert the disk and read the information off it.

My two big themes in the early part of my life were an interest in technology – computers and then my interest in writing music. It turns out, by the way, that a lot of musicians like computers. There’s something about how the brain functions and thinks about music and things like software engineering and problem solving.

I think the lesson that I learned, and what I share with people, is you should do what you love and hopefully, in most instances, if you love it, you’ll be better at it. And if you’re better at it, then you will be successful in some way.

It doesn’t apply to everything, of course, but just the idea that you wake up and you’re excited about what you’re doing is a tremendous motivator for practice, for learning – and that has happened to me now. I’m a couple of decades into my career. I’m more passionate and more energized by technology than ever before. So, long may it last.

And combining all the interests you love following is about good time-management?

JR: Do you use your time well every day? Not to get too philosophical, but the basis of that for me is making every day matter. Do you wake up and think this is gonna be my best day? I don’t know what’s happening tomorrow, but I know what’s happening right now. Part of it is that I know this life is short and unpredictable. So, I’m doing a lot of different things simply by managing my time and doing the things I love. And hopefully, they also impact others in a positive way.

Ab urbe condita… to the crazy times

One of the most exciting pages of Reichental’s biography is his seven-year adventure being the CIO of the city of Palo Alto, which has served as an incubator to companies such as Google, Facebook, Apple, SAP, PayPal, Pinterest, HP and Tesla, some of them headquartering there.

JR: I saw cities as a very complicated machine that ran on a whole series of technologies. And if you did it right, and you tweaked it, you reinvented it in areas. You could improve the lives of thousands of people and millions of people. And then eventually, as this movement continues, you can positively impact billions of people.

And there’s been nothing more dramatic than the impact of our cities on humanity in terms of a positive trajectory.

But was the geographical location key to the success of the companies mentioned above? Maybe not. We also had so many cases in history in which companies that constituted almost a monopoly on the market then almost disappeared (I won’t tell you which were my first three mobile phones, but all of them were of the same Finnish brand. And then something happened, and I am now using three different phones, none of them made in Scandinavia). So, what is necessary for a technology to be successful, and for a company to always be on the avantgarde of the tech development?

JR: Nobody knows the perfect answer to that question. In life, there is a certain element of things that you can control as an individual. And then there’s an awful lot that’s out of your control. And then there’s luck. Things that you can control are what you learn, the decisions you make, things that you can’t control is where you’re born, some of your biological faculties, and then luck is just luck, right?

Now, the question is what’s next. And to me, and I say this to all the companies I coach and all the leaders that I speak to, is what really matters is a great idea.

It might not be obvious to everybody what that great idea is and what makes a genius a genius is that you see something that others don’t see. And you have to have the conviction that what you’re doing will work even when others tell you you’re crazy.

So, if you are on the beginning of the process, if you’re an entrepreneur in the startup process, it’s a great time. What’s not as easy is when you are an incumbent – when you have an existing technology and you’re serving the marketplace. This is probably the most unpredictable time in history for you. If you look at the Fortune 2000, years ago these companies lasted for decades. And now the period of reinvention and disruption is displacing these companies very quickly.

I do speak to a lot of people who have ideas about what’s possible and what the market will accept that doesn’t seem rooted in a reality and that can be very hard for an entrepreneur – because the idea is their baby, and nobody likes their baby to be criticized.

So, what can be done to enable technology to be successful at that level is: to be paranoid and to be constantly scanning and reacting to the nature of the global marketplace and the emergence of disruptive technology. And that’s not something that is a passive activity that has to be active. You have to have people and skills and teams and investment in that to help you. You have to be prepared to quickly move into new markets or quickly reinvent your product based on the circumstances of the marketplace.

There isn’t a secret, here, to be revealed. The answer is that to build or to run a business today is more possible than ever before, but it’s also more complicated and riskier than in the past. Certainly because of the macro conditions are changing so quickly. And there’s no time to rest. Which is unfortunate. Makes us all a little crazy.

Best time for technologies vs. best technologies of all time

Okay, and so we learned that it is the best time to be a technologist (who would doubt that we live in the time Bitcoin was invented!) But how can we know that we have the best technologies around?

JR: The biggest mistake of history is someone saying “I think we’ve invented everything that can be invented.” Of course, every single time, it’s completely wrong.

In each of the prior three revolutions, the world changed dramatically. In the first revolution, you had steam power, that transformed transportation and manufacturing, which led to bigger cities and that whole set of laws and new norms that actually, on balance, improve things a lot. We had a second revolution that introduced electricity, and I don’t think anyone would ever doubt or underestimate the impact electricity has had on the world – to me, actually, that is the most important thing we humans have ever leveraged. And third, the information technology revolution: Our laptops, our smartphones and the internet have completely changed how our days go.

And this Fourth Industrial Revolution is, by far, potentially the greatest transformation that will happen on the physical, digital and biological side. Not only will all these bend up in ways that are hard to anticipate directionally, but when they intersect, that gets really interesting.

One of the characteristics of the Fourth Industrial Revolution is convergence. And this is a little bit of the cliche example, but you couldn’t have Uber 15 years ago, because you can’t just have Uber without smartphones, or without social computing, or Big Data, or AI or GPS, or online payment systems – they all have to exist. They all have to be really good and they have to work together. And when they all exist and they work together, you get a groundbreaking service like on-demand transportation.

And what we’re gonna see now in the Fourth Industrial Revolution is not only new technologies that are bigger in their impact and are adopted faster, but they are going to converge in ways that the outcomes are very hard to see.

How technologies are moving the world forward, and who is moving them

The biggest technological interests Reichental is working on right now are artificial intelligence, quantum computing and blockchain. What could happen when you converge all this?

JR: Actually, that’s a question I can ask a classroom of students. Hands are gonna go up and people have tons of ideas. But the real answer is: We don’t know. Because, if you look back at history, at no time when a new technology was introduced that had significance did we actually appreciate the impact it would have.

When electricity was first leveraged, no one was thinking this will eventually lead to smartphones. You could not connect 200 years ago with the early 21st century and say, “You know what? This is cool, this electricity. And we are gonna have smart smartphones in a couple of hundred years.”

The kind of innovation and transformation that’s going to occur is impossible to predict. And, you know, what’s really interesting: When it happens, it seems obvious.

So, really the best has yet to come. I don’t know how it’s going to impact us, but the best has yet to come.

But do the leverages for technologies change during time? Who is and who should be the biggest actor on the market nowadays in order to push technology to the mass adoption? 

JR: The broad answer is that there are all of them. There’s an important role for government, a very important role for the private sector, and for the academia community.

One of the ways to think about this question is: a national space program. To put a person on the moon in the 1960s was a phenomenal undertaking, but it cost a fortune and it required – when all was said and done – millions of people to make it happen. So, only nations could do that – and only a small set of nations. Now, fast-forward: Many more countries are involved in the space race, and the private sector is fully engaged. And so, as technology evolves, those that can participate changes.

Government has often a role when something is highly risky and expensive at the beginning. The private sector doesn’t necessarily like to or can do the expensive things and the highly risky things at the beginning. Government doesn’t need to be involved in innovation, and efforts that the private sector can do with less bureaucracy are done more quickly, and are more agile.

At the end of the day, the marketplace is a great mechanism for those who participate, and there’s an example: During the Obama years, the Obama administration made a big investment in solar. The government literally wrote a check to enable solar innovation – it didn’t work for a variety of reasons. However, the private sector started to invest in solar and it’s been significantly successful – and continues to be more successful.

Who is pushing blockchain development, and why it is different from crypto?

Reichental is specific about the distinction between blockchain and crypto: First, being “a platform technology that can be used in almost every domain”, the other being, “For the most part it is a unit of money or unit of value and has specific implications as a consequence of that.” But do the actors who run these shows differ?

JR: There’s an awful lot of innovation happening in the private sector on blockchain, and probably it’ll stay that way. If blockchain is used in a health care context, sure, there’s gonna be regulatory bodies and government. If blockchain is used as the back end of a customer-relationship management application, I don’t know if there is much role for the government on that. If you want to use blockchain for doing online voting or identity management, you’re going to have to get every stakeholder involved.

But I would say, for the most part, blockchain can be driven with impact and speed and consequence, too, through the private sector – and they’re going to have to just work with their partners as appropriate.

Crypto is more complicated, in my view. And rather than the sort of tokenization flavor, I’m more talking about crypto as it relates to being a unit of currency. I do think that that is a much more complicated partnership.

The banks and the financial institutions are not going anywhere. They’re changing, but they’re not going away. So, we’re going to have to all play nice together.

We have to work with the financial infrastructure globally, with governments, with regulatory bodies and with oversight organizations that ensure that people aren’t being ripped off every day.

Blockchain, just as a kind of base core fundamental technology, I think, has a lot of freedom in the private sector to run. And you can see the incredible ways it’s been used and the incredible innovations that are emerging because of that private sector use.

There is no “versus” in the technology-people relationship

And then we ended our technical talk on a very social note. We are two adults, who are excitedly working in tech, and everything is quite predictable as to how much work do we have in our respective work fields. But to what extent should we be worried about the younger generation’s preparation and which kind of capacities should they develop in order to not be replaced by robots?

JR: Children are remarkable – how, in those first few years, have they learned so quickly? My car, which is pretty moderate – I was carrying some friends and one of them had a child, and I have a little digital screen at the front, and they assume they could swipe it. But even though the car is relatively new, it was not a touch or swipe screen. Suddenly, these children are making assumptions about how they’re going to interact with the world.

There is going to be massive displacement of workers, no matter how optimistic I am about the emergence of new jobs, new opportunities, a new role for humans. The world is going to grow from about closing on 8 billion people right now to a peak we think will be about 11 billion. And a big chunk of that is going to be healthy young adults who want to work.

So, will those jobs be manual or routine? Probably not. The way the marketplace works is: If it’s easily repeatable and it can be made at lower costs with robots, it’s going to be – history shows that.

Which leads me to think kids need to be pretty good at technical skills, and the education they need has to be more sophisticated than it’s been. History was kind: If a kid wasn’t so good in school, there’s still plenty of work. We could still do work that didn’t require intense cerebral needs, but could be a manual in nature. And that’s completely fine. Everybody’s different and everybody has different desires.

But again, history shows us that education has created a better life for more people. And when education is more evenly distributed in a society, that society is more stable – It’s more free, more equal. And fortunately, technology is democratizing education.

So, it seems to me the best thing we can do is to ensure that more children in the world get educated. Our goal should be for all children to get educated, no doubt. They need access to technology to do that – not only to consume the education, but actually to write and demonstrate their skills with the technology. And then, probably, it should be more technical as time goes by, because that seems to me to be where humans will have the most value – at least, in the next few decades.

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