Facebook and Google’s ability to target specific markets completely upended the advertising world. They made it easy to surgically reach your target market.
Then came a wave of companies like Shopify and Etsy and Stripe and Square that made it easy to sell to your customers once you’ve reached them. Many of the hottest companies of the past decade have made it easy to sell to your market once you find them.
Then, 2020 happened:
According to most estimates, 2020 accelerated eCommerce by at least 5 years. One of the industries most affected by this shift has been insurance, with online transactions up around 50%.
Much of the effort right within the insurance industry is focused on making it easier to sell. As sales move online, insurance companies are scrambling to provide API’s that can connect to digital sales channels. This is effectively the same as Stripe developing the pipes to collect payment. The most forward-thinking companies have a goal of offering insurance-as-a-service. (This is, in fact, what Dais helps companies do.)
Insurance is right now having its Stripe moment right now, where the simple, basic ability to sell is becoming more common. It’s fairly easy to predict what happens next:
“Striping” insurance requires sellers of insurance to make it easy to he ability to share data across the supply chain, customize the customer experience (especially using data), and the ability to sell the right set of products in a targeted way.
The Insurance “Shopify Moment”
And as the infrastructure to support that begins to emerge, it’s bringing to light something else that is potentially even more interesting: the fact that the world is probably significantly under-insured, and there almost certainly going to be a large increase in the total amount of insurance per capita in the world.
If you’re not familiar with marketplaces like Shopify Etsy, they allow creators to make and sell whatever they want. And it has resulted in an explosion of niche products that would never have existed before. Many of these go on to sell millions of products.
Shopify-ing insurance means making easy to create new products. And significantly, on top of that, making it easy to combine and bundle them with both other insurance products, other financial products, and even other physical products.
As it becomes easier to make new insurance products, new types of products will be available to sell. Those companies that are able to sell differentiated, targeted, user-friendly products will dominate the markets they pursue.
New products also mean that overall customer lifetime value goes us. A home remodeling company will buy insurance against construction delays for the first time because they’ve never been offered it before. A food service delivery service will buy insurance against spoilage due to refrigeration failure for the first time because the product never existed before.
With digital scale, and partnerships to sell insurance through distributors, retailers, employers, and bundled with other products, there are going to be so many more at-bats to sell these differentiated products.
What’s even more interesting is that this is happening far faster due to the changes from 2020. Are you seeing this happen anywhere else?
I spent some time thinking about broader trends over the new year, and came up with some predictions for breakout technology in 2021. Writing always helps me clarify my thoughts, so thanks for reading and please let me know what you think!
A little enterprise-y probably but you get what you pay for. And a little surprise in the middle!
Obviously cryptocurrencies are mooning right now, which is going to throw more focus on not just Bitcoin and Ethereum but on blockchain technology in general. And it has come a long way since the last bull cycle.
Since the last parabolic rise in cryptocurrency in 2017, and the subsequent crash, blockchains sort of faded from the mainstream zeitgeist. But the use cases have evolved and the technology matured. And to this day, most people still know blockchain mostly as the thing that Bitcoin sits on top of, but blockchains now support an exploding shadow world of completely digital financial products.
Besides Bitcoin, which recently crossed half a trillion dollars in market cap, blockchains also power Ethereum, and some other blockchains such as Decred and Polkadot. Ethereum in particular has flourished as a hotbed of innovation for #DeFi (Decentralized Finance) which automates many of the functions of a traditional financial system but on a blockchain. People are using blockchains to create powerful incentive alignment systems. Blockchains make money programmable. And that is leading to a shadow reinvention of many of the structures that we’re used to, but with incentive-laden twists. You can now farm yields automatically, deposit money into smart contracts that provide liquidity in various asset classes, own a fractional share of a virtual hedge fund, and securitize just about anything into a tradable, liquid asset.
Going forward there’s a good chance that blockchains will revolutionize the way we think of ownership and require a new type of economy. You can already see it happening, as people are now comfortable with the idea of owning a fraction of a bitcoin and a fraction of DeFi entities which exist merely as smart contracts. Most central banks have already announced exploratory projects (at minimum) with digital currencies. And this will allow central banks to become involved in not just monetary but fiscal policy, surgically injecting stimulus into very specific parts of the economy. If everyone has a digital wallet, central banks will finally be able to deliver money directly to individuals. Bitcoin will likely become the best collateral in the world and Ethereum most likely the engine that the transaction layer runs on.
Artificial Intelligence (Guest post)
Artificial intelligence is still in its infancy, but the rate of development is stunning. As the Internet became a thing, it took decades for it to evolve into the ubiquitous technology that it is today. But as soon as it became possible to create machines that could learn from experience, progress exploded. AI now exists in almost every consumer product, and even the most common chatbots are good enough to make them useful.
There are a few different ways to measure AI’s progress. There’s progress in the technology itself, which has gotten much better at specific tasks. There’s progress in the number of things that AI can do, which has expanded rapidly. And there’s progress in the quality of AI, which is measured by how well AI does things that we used to think only humans could do.
As AI technology gets better, we’ll see it in more and more places. The more that AI is involved in our lives, the more we’ll be able to trust it to do things for us. The Internet of things will get smarter, and we’ll get better data from our devices. The data we get from our devices will help us make better decisions, and this will lead to more automated decision-making. The first areas to be automated will be simple, repetitive tasks, like customer service.
Ready for the surprise? The above paragraphs (everything under artificial intelligence up to this paragraph) were actually written by artificial intelligence. You can see a video of it being written below. (OpenAI’s GTP3 Da Vinci engine if you’re curious.) Unedited, straight from the mind of the machine. This technology is shockingly good now, and it will make a lot of jobs obsolete.
API’s have followed an adoption trajectory very much like Web sites. Initially they were incredibly expensive and only the biggest companies had them. After a while it became a requirement to be a respectable mid-sized company. Then smaller companies got on board, and now everyone has one.
API’s are very much the same way. The adoption curve of API’s provided by companies for consumption by the outside world is still nascent, but it enables everything else:
If your company has an API it can be used to build apps and share data with partners, its main use case today. But also…
If your company has an API it can support artificial intelligence “employees” for many if not most of the tasks that are staffed by cubicle farms of people today (zoom farms?)
If your company has an API it can participate in the blockchain economy through integrations with purpose-built blockchains and oracles (trusted data providers for blockchains)
And most importantly, API’s support cross-organization connected workflows, which are a necessity in the digitized post-COVID world. If you can’t talk to the outside world you cannot participate in the e-commerce and online economy, which may be the only economy functioning for the near future.
I already see a rush within the insurance industry to stand up API’s because the market is demanding flexibility and connectivity. From talking to folks in other industries it appears that the same thing is happening elsewhere as well.
That’s it, my guess for the tech that is set to break out this year. We’ll see how I do!
2020 was a rough year for everyone, even for those of us blessed to be able to work from home. Psychologically and emotionally, it’s easy to feel disconnected and lonely when you don’t see people outside your household for weeks and months on end. And this presents some unique challenges for maintaining culture and productivity, and keeping morale up in general.
When the pandemic hit in March and everyone in the world started working remotely, we were worried about how to keep people connected and plugged in. We had to adapt quickly to keep communication flowing and make sure that everyone felt connected and a part of the community that we somewhat lost when everyone stopped going into the office.
We developed a solution that has worked really well for us, and I’d like to share it. I hope you find it useful, but I’d love to hear if you’ve found other things that work as well.
The Solution: Monday Morning
Immediately after switching to full remote work, we switched up the cadence of company meetings. We went from an all hands once a month to two in the same week.
Every Monday morning at 9:30 we get everyone together (via Zoom) to kick off the week with a company-wide coffee hour.
In this meeting we go team-by-team over what we accomplished last week and our goals are for this week. And we check on what we actually got done last week compared to what we were planning to do:
This is just a simple Google sheets deck that we have all of the leaders of the company update on Friday afternoon, with one slide per team:
The whole meeting takes about 30 minutes, and it’s a great way to kick off the week. Everyone knows what’s happening around the company, including in all of the other teams. Everyone seems to like it, and there are some interesting byproducts:
Our short-term goal setting has gotten much better. Goals are set on a weekly basis, which has resulted in more accountability and velocity. Teams are looking at goals on a shorter time horizon now, which leads to more tangible outcomes every week.
Wins and losses come at the end of each and every week, which is very motivating if the team hits their goals, or if the team doesn’t hit their goals. Either way, the entire company sees it.
We’ve become much better at estimating how long it will take to do something. If you’re bad at estimating it can completely destroy morale and trust, this shorter-term focus has made the act of slicing up work into achievable chunks much more efficient.
The Solution: Friday Afternoon
On Friday afternoon there are two more things we do every single week.
At 1pm, after the leadership team updates the Monday morning deck, we meet as a group to review everyone’s updates together, ask questions, and talk about challenges. Some of the best discussions and collaboration happen during this meeting, and this is the main place and time where cross-team dependencies are often discovered and planned around. We also talk about wins, challenges, and collect shout-outs for people who have done outstanding work over the past week.
Then at 4:30pm, before everyone takes off for the weekend, we wrap up the week with our Friday Afternoon Happy Hour:
We try to keep happy hour fun and lighthearted. We celebrate wins, give shout-outs to people who did something extraordinary over the course of the week, and show the company any fun or funny things that happened during the course of the week. We try to leave some room for people to talk and have fun as well (we’ve had some GREAT Zoom backgrounds!), but generally we try to send people into the weekend on a high note.
These meetings have become routine for us now, and pretty much our entire company loves them. Our communication is better, teamwork is tighter, goal-setting is more accurate, and velocity is way higher.
Honestly I would have a hard time *not* having these meetings now. They’ve worked *so well* to create a tighter company all around that I don’t know that any set of in-person meetings could really replicate, let alone surpass, the results.
This may not work for everyone, but it works great for us, and I hope that at the very least this sparks some ideas for making your company more efficient and maintaining your culture during this–or any future–challenge to working together.
Historically the Insurance industry has been slow to innovate, but COVID flipped the script. The innovations that used to set companies apart (Api’s, quote-to-bind, marketing automation, etc.) are now business requirements, and innovation has moved into new areas.
The role of an insurance company is changing. Increasingly, insurance companies are in the business of collecting data about their policyholders and then distributing that data to multiple internal and external stakeholders. Internal stakeholders being actuaries, underwriters, and claims adjusters. External stakeholders being policyholders, agencies, regulators, and TPA’s.
It’s worth exploring what this means to companies and agencies. A focus on data distribution and coordination fundamentally changes the role of the insurance CIO/CTO. A role that has historically been focused on vendor selection and implementation projects is now forced to consider data flows and platform architecture, and it puts enterprise architecture at the center of the equation.
The toolbox for insurance companies going forward does not look like the enterprise architecture of yesterday.
The new toolbox
Instead of monolithic core systems that handle everything, CIO’s and CTO’s are increasingly looking outside of traditional vendors for key capabilities. The services in the toolbox for most insurance companies new include:
CRM — there’s always a source of truth for the customer, and the CRM is usually it.
Marketing automation — Hubspot and the like are often used for automated customer outreach, and sophisticated companies are using marketing automation for ALL services (including for claims and billing).
Quote-to-bind (that’s us!) — You need a way to turn traffic into policies with a great customer experience. Should be able to sell any product you have to any channel you want to leverage.
Agency management — agency codes and commission management.
Policy engine — your source of truth for the policy, usually lives inside of a policy system but in reality should be an independent service (stay tuned for some exciting news on this front).
Certificate management — getting policyholders and others the documentation they need.
Claims handling — the customer experience to make the best of a bad time for any policyholder.
Now there are a couple of additional items required which every company needs as well:
API’s — for any company with plans for digital distribution, this is a must. This is your technical front door to the rest of the world, and if it’s impossible to open or non-existent, you should not expect to get in.
Identity management and authentication — to connect all of these components, there is a layer of identity that every company has to own somehow. In order to create a cohesive user experience across all of the other services, this is key.
Analytics and data lake initiatives — with multiple services comes the challenge of bringing all of that data together in a usable format. This is they key to unlocking the latent potential in all of the data being collected. There are some incredible new tools.*
* This is especially interesting because there is so much room for disruption insurance that comes with free and open data flow.
The build-or-buy ship has sailed. Very few companies have an appetite for building large pieces of software internally, even fewer are successful at it. There are exceptions, but they are typically niche carriers or new MGA’s who are starting with a green field. Prebuilt components will provide richer data, a better experience, and infinitely faster time-to-market than something built in-house, when that’s possible.
Technical experts at carriers and agencies are being forced to quarterback a platform architecture and strategy, selecting and then connecting the dots.
BUT… can they?
A platform is the wiring for all of these capabilities. The identity management and authentication, authorization, and the data all make up the infrastructure, the substrate upon which microservices are wired together, and then user interfaces are placed on top of them.
Many companies now are focusing their technology groups on selecting these core components and then quarterbacking the process of plugging them in.
The most advanced companies, at least within insurance, are also developing some of their own specialized services–typically to support differentiation within their market niche.
Hopefully, if you’re in the insurance industry, you have a plan for this that you’re already executing on. If not, you should talk to somebody who’s already doing it.
But if you are, the future is exciting. This all leads to composable business models… up next!
Despite the pandemic, small commercial is incredibly hot right now. Most likely this is due to an increased focus on bringing offline processes online, and this is the lowest-hanging fruit available in the small commercial space.
This has been a busy sector of the commercial P&C market in the last 9 months. Let’s take a look and see what’s happening in this space.
Nobody wants to touch it
The key to small commercial profitability is that you can’t touch it much or it becomes unprofitable for a long time (because the premium is so low). So there’s a real advantage in being able to provide a great customer experience in a scalable way.
Some carriers are seeing success in setting up service centers for agents and retaining a few points in commission for the service. Some agents are automating it themselves.
Carrier portals left behind for API’s
The trend around five years ago was to set up a carrier portal, often focused on ease of use. There was a huge first mover advantage in this, and the carriers that were able to move first enjoy a stickiness that is almost impossible to replicate for newcomers.
The late adopting carriers who set up carrier portals later are finding that change management at agencies is hard and adoption of their carrier portals is harder still. Changing the behavior of CSR’s is incredibly difficult, and most agency CEO’s struggle to do it effectively.
The first movers are happy with the current situation, everyone else is now scrambling for a solution. And all roads lead to API’s to connect to digital distribution.
API’s becoming table stakes
Everyone is connecting to API’s. There are many companies out there who connect to API’s to provide what is effectively a comparative rating service to agents. Most notably, agency management system vendors. And when these agency management systems have the ability to connect natively, it will challenge the small commercial rating systems to provide value outside of simply a connection to get a quote.
Either way, it will be a race by the carriers to connect the distribution systems with the most flow to sustain growth. Industry API standards are sure to emerge, and carriers that can’t adapt quickly will see their premium volumes quickly dwindle.
Amidst the rush to automate everything, the best agencies are focusing on specialized programs based on unique data and strategic partnerships. They are being opportunistic and finding partners with large groups of policyholders, usually in a specific class, and creating a great customer experience specifically for them.
The most sophisticated agents are partnering with distributors, associations, retailers, and others to get access to proprietary flow as well as proprietary data sets (schedules, account history, activities, etc).
New MGA’s are dominating SEO and online marketing
The first movers in online marketing were, not surprisingly, startups. MGA’s and niche carriers have enormous head starts on traditional agents and carriers, and are making it difficult to compete on customer acquisition costs for new entrants and carriers.
Automation and API’s are slowly creeping up-market, into middle-market
Automation and API’s happened first in middle-market. Then they came for small commercial, and are eating it one class at a time in many carriers. Carriers that have already automated a BOP are moving to work comp, and those with automated work comp are automating commercial umbrella.
The march towards automation will continue until the simplest lines of business have all been automated, and this needs to be considered in every carrier’s strategic planning.
I’ve had the pleasure of being in a few different industries now: call centers, industrial machinery, and now insurance. It’s always interesting to try to observe not just the differences between them but also their similarities. Specifically, the similarities in how these different industries are incorporating data into their vertical stacks.
Within insurance, data has probably a more direct impact than any other I’ve seen because it’s based almost entirely on math, at the end of the day. You have to take in more than you pay out.
Here are a few areas where there is just so much potential for data in the insurance industry, and some interesting things different people are doing with it.
Using data to underwrite better
Boils down to taking more good risks than bad
classic data science application, write algorithms that are smarter
finding completely new sources to use such as drones, sensor data, and social media profiles
partnering with third parties who have exclusive access to useful data including personnel histories, vehicle location, business profitability, and more
Ultimately all of those come
sources of proprietary loss data
Lack of a process for figuring out how to use new data sets
Selling mattresses used to be an incredibly capital-intensive proposition. You needed real estate, a storefront, stock in the store and salespeople. Only a few chains of mattress stores and department stores sold them.
Then, the Internet happened.
When the now-giant mattress company Casper launched in 2014, they took advantage of the fact that a brick-and-mortar store is no longer required to sell to customers. A massive physical presence is no longer a requirement to compete in a market, meaning that Casper could immediately come in and compete with mattress and department stores, without the massive capital investment required to compete in the market with physical stores.
Today, six years later, they are the 7th largest mattress retailer in the country.
The Internet has been doing this for years — knocking down barriers to entry and letting innovation flourish. The tools that Casper used to break into the mattress market in a big way are available to everyone. And that’s the history of the Internet in a nutshell: it makes opportunities that were previously only available to few now available to many.
And it’s happening in insurance next.
The digital tools that used to only be available to VC-backed startups who invested millions to build them are becoming available to all agents. And it’s turning the insurance industry inside-out. The ripple effects will be felt for decades
To be clear, insurance agents are never going away. They are the experts who help the average person or business owner properly buy insurance. Most people wouldn’t make decisions on their investment portfolio any sooner than they would try to remove their own appendix. And insurance is the same way: it’s a complex product that requires training and experience to buy and sell intelligently.
The problem is that right now, most agents don’t have the technology to effectively meet the needs of consumers who are accustomed to delightful online experiences. They have the personal piece down pat, but this is only half the battle. The future requires a human touch augmented by technology to remove frustration, redundancy and unnecessary work from the process. The future is better.
The real threat is that the existing agency system is incapable of adapting fast enough, leaving insurtechs and direct-writing carriers to step in and take all of their customers. Agency independence dwindles, leaving customers with fewer choices and a poor customer experience.
Fortunately, the Internet is once again intervening.
Digital agencies are the wave of new technology-enabled insurance agents who have a digital customer experience and workflow to support their customers in the way they expect to be supported, while retaining that human element and expertise that is irreplaceable.
Digital agencies are freed to be more creative with their marketing and advertising, selling into specialized niches to deploy their expertise much more freely. They interact with connected carriers who make their products available to digital agencies to sell through their digital tools.
Digital agencies still have the same people who power the insurance industry today: producers, account managers, claims advocates. Only now, they are augmented by technology that helps them scale to more customers and more segments without missing a beat.
Digital agencies are universally connected to their policyholders and their carriers. This allows information to flow back and forth in real-time so that customers aren’t waiting on manual processes to complete to get the end result.
Digital agencies own the customer experience and are the face of insurance to the customer. They don’t hand off digital touchpoints to carriers or anyone else. They control their own destiny and their own customers.
Digital agencies optimize their book by up-selling, cross-selling, and interacting with their customers more regularly and in an automated way. They step in when and as-needed, and otherwise let their technology manage the day-to-day logistics.
What this means is that digital agencies are freed to do what they do best: sell insurance. Agents should be creative, thinking outside the box about new and better ways to reach their current and potential customers. They should be inventing new vertical specialization and sales programs and using that to drive their growth both internally and with their carriers.
This is literally happening right now. At the Internet of Insurance, we are bringing world-class technology to independent agencies, starting in Minnesota and Wisconsin. The type of technology that used to be only available to a handful of insurtechs is now available to Big I members in those two states and, soon, across all 50 states.
When the digital tools that used to cost VC-backed startups millions to build become available to every agency, what happens? Digital agencies and connected carriers create the ability to sell insurance cost-effectively, in differentiated ways, with a great customer experiences changing the insurance distribution landscape
I was in the car this morning listening to a BBC report that, for the first time in a long time, the mortality rate in the US went up instead of down. The average life expectancy actually got shorter this year. That’s scary, but it got me thinking about software and a trend that I’ve noticed. A trend that is going to separate the winners from the losers over the next five years.
There’s a clear line developing between the future haves and have-nots in the digital world. A line of thinking around where the value lies and what you can and cannot make money on.
Traditional software companies have focused almost exclusively on building software and charging for it. This is outdated thinking and looks to me a lot like painting a giant target on your forehead. Using this model today is like charting your course by looking in the rearview mirror. Meanwhile you don’t realize that you’re going off the road.
If you look at what the most forward-thinking companies are doing you can start to see glimpses of where the world is heading. Here’s a hint: they’re all giving their software away. Why? Because software doesn’t matter.
Have you been watching as tech giants who understand where things are going give away all of their best technology? Look at Google, who isn’t locking its AI technology, Tensorflow, away in a deep, dark vault — instead it’s giving it away. Same with Facebook, who gave away its React technology and looks to be headed in the same direction with its own AI stack, FBLearner.
Why? Because on a long enough timeline all technology becomes commoditized, and they know it.
The reality is that all of the supposedly “hard tech” is becoming more accessible by the day. Most if not all predictive algorithms are out there for anyone to use. Scalable architecture is getting easier to build every day. There’s really nothing you can’t do with open source technology now, the barriers to entry are dropping constantly. Some of the technology that’s out there right now for free just blows my mind. Tools like OpenAI Gym would have been sold for megabucks just two years ago. They’re free now.
So what does matter then? Where’s the real action?
The kingdoms of tomorrow will be built on an empire of data, and the land rush is happening in plain sight, right now, if you know where to look.
Most companies won’t come out and say that data is the most important thing, but actions speak louder than words. When IBM acquired weather.com and Merge Healthcare for multiple billions of dollars, many people were puzzled. There’s no obvious synergy there, the acquisitions happened because the value was in the data.
The most interesting companies today are working hard on giving away software that other companies charge tons of money for. Why? In order to get access to the data.
I agree that software is eating the world. But in the technology food chain, data eats software.
The really interesting dynamic here is that all of the software-driven startups are effectively creating a hit-list of areas where free technology can come in and take them out at the knees, undercutting them in order to get the data. I suspect we’ll see quite a bit of disruption to the status quo in the coming years, there are lots of companies out there who aren’t thinking about this correctly.
Warning: This is a post from way back in 2014 that I wanted to move to my new blog because people keep looking for it. It contains wild speculation. You have been warned!
Right now is an interesting moment in the history of civilization. In the past technology has molded itself to the needs of society, but we’ve passed that point. In the last 15 years we’ve started to see society molding itself to technology instead.
TL;DR Distributed proof of ownership, anonymity, crowdfunding, the subscription economy, and location-based services–taken together, at the intersections–are going to rock your world.
We’ve reached a saturation point where technology is so pervasive–mostly due to smartphones, little computers we carry around with us–that what used to be wild speculation now seems just around the corner. Society has pretty much absorbed the change inherent in a global network connecting every person to every other person, and the main behavioral changes can be summed up by looking at Facebook and Twitter. (Clearly business has been impacted substantially as well, but I’m talking mostly about changes to day to day life.)
Here are five technologies that seem poised to break out on the world in the next few years, and how they will change our lives. The most interesting aspect of these to me is how they interact when used together–the intersections of these disruptive technologies are where you can start really understanding how these will change the world in concrete ways. Like layer cakes, they get even more delicious when you eat them together.
1. Distributed Proof of Ownership
If you’ve followed Bitcoin , you know how disruptive this can be. (By the way, there’s nothing like an unauthorized demo to convince people of disruptive technology.) But Bitcoin is one implementation of a distributed proof of ownership protocol which results in the a blockchain: a distributed ledger that says who owns what.
That may sound boring, but think of all the intermediaries that exist today only because they’re a trusted third party for proving ownership: DNS registrars, stock exchanges, title registrations with governments, central banks, and so many more. Many of the most powerful organizations in the world exist because you need some way to prove who owns what.
Now you can start trying to wrap your head around what blockchains will do in the future when they’re used for more than just Bitcoin. To name a very specific example that you can look at today, Namecoin  is a new way to prove ownership of a domain name, which makes obsolete ICANN and domain registrars (at least, as they exist today). It’s still early, but more are on the way.
The Internet has never really been anonymous, as Edward Snowden recently showed us. But there are technologies emerging that make it anonymous. Tor  is the best known, but there are others as well such as I2P  that improve on Tor–a healthy sign for any new technology. These are still very cutting edge, which means they’re not usable by the average consumer and we haven’t truly seen their impact yet.
The change brought by online anonymity thus far has been very politically-oriented. It has allowed whistleblowers to anonymously share documents with reporters  and Wikileaks as well as let people anonymously buy drugs online.
The use of anonymity is spreading, and although I’m sure this will be fought tooth and nail by many lobbyists I don’t believe it can be stopped. It will be an interesting legal battle I’m sure, although I have no idea how you’d enforce any kind of illegality.
2.a. Distributed Proof of Ownership + Anonymity
Now that we have proof of ownership, and anonymity, you can own something anonymously. This is what has people concerned about Bitcoin–the fact that you can anonymously own lots of money. But when you extrapolate that out to everything else that you can now own anonymously, things get interesting.
You’ll be able to anonymously own stocks, cars, houses, and creative works. Obviously there will be a clash with some of the more highly regulated industries–for example anonymously owning a house is a long way off, but I can certainly forsee a time when you could anonymously own a copyright and even collect payment on it anonymously.
The concept of crowdfunding is still young. So far you’ve seen individual ideas being funded on Kickstarter, and to a smaller degree you’re seeing companies funded in this way as well on Angel List. But because it effectively breaks down large investments into smaller chunks, thus spreading the risk around, it completely changes the way an average person will start to think about risk. And it’s changing everything from investing to philanthropy (see Kiva). You’re even starting to see instances of crowdfunding medical treatements–talk about a different kind of healthcare system.
3.a. Crowdfunding + Distributed Proof of Ownership
Now things start getting interesting. You’re already seeing crowdfunding for ownership in limited doses such as the AngelList mentioned earlier. But that’s still a middle-man. Imagine instead that you could instantly buy shares in a company and those shares would be put in your ledger on the blockchain, and the money would flow straight to the company’s account. And dividends straight back to you. Or, for a more pedestrian example, you’d be able to quickly set up a timeshare by offering real estate as a crowdfunded project with the blockchain providing the record of ownership.
3.b. Crowdfunding + Anonymity
This is going to absolutely revolutionize fund raising. Money talks, and who you choose to donate money to says a lot about you. Many people who would otherwise donate to controversial movements and figures (think Wikileaks and Edward Snowden, for an immediate example) hesitate because of potential blowback in the form of ending up on a watch list and being patted down extra-vigorously every time they travel. Want to help fund the resistance in some other country? There you go.
3.c. Crowdfunding + Distributed Proof of Ownership + Anonymity
With this potent combination you could instantly own a tiny part of something without anyone else knowing. Want to silently take over a company? Anonymously buy up their stock. Want to buy an oil field in Iran without the government knowing? No problem.
This is more of a societal change enabled by technology, but it touches a lot of things. You’re starting to see people buy everything as a subscription from diapers to clothing. This is a big change in behavior and it has yet to touch a few important industries. For example, you’ll be able to subscribe to monthly dinner clubs and resort experiences.
4.a. Subscription Economy + Distributed Proof of Ownership
This is going to completely disrupt how debt works because it doesn’t require banks in order to break down large purchases into palatable chunks. People could easily own a small fraction of a house and create pools of ownership that allow people to buy things on a subscription basis. You could, for example, buy $500 worth of a house and then get $15 a month in return for a rental, or $5 a month in exchange for a small percentage of your ownership stake.
4.b. Subscription Economy + Anonymity
This might allow people to anonymously own something and sell portions of it on a monthly basis, just like a house. For example you could own a small percentage of a helicopter or tank that’s sold to one side of a civil war. Or, you could buy your drugs on a weekly or monthly basis.
4.c. Subscription Economy + Crowdfunding
People already make investments on a monthly basis, and have for a while. However, you could now directly fund small business’ cashflow in return for equity. This may result in companies making stock offerings on an as-needed basis to cover short-term funding gaps–in return for a high-risk investment you could get into the earliest stages of a company. Mutual funds and investment funds become very interesting in this context as they could easily turn into pure risk management vehicles.This combination is also interesting because if set up properly it could enable groups of people to jointly purchase something expensive (say, a group of patients with cancer to buy an MRI machine or a neighborhood to buy a truck) and make use of it on a periodic basis. Just like timeshares it would spread the cost around, but for other expensive items which aren’t used constantly.
5. Location Services
Apple once again (for the last time?) introduced a nascent technology to the general public when they unveiled iBeacon, an implementation of accurate, location-aware technology. I’m fascinated by this technology because of the new possibilities it opens up in meatspace (face-to-face) interactions. For example, I’m working on skunkworks project right now that would allow a restaurant to greet you by name and offer you your favorite cocktail when you walk in the door.
You’re just now starting to see the first public uses of this technology–it was recently used at the Superbowl, for example. I expect this one to take off quite soon.
I struggle to think of solid practical uses for this, but you could prove how much of the ownership of a (house, car, political party, senate) is present in any one location. Or, you could potentially pass ownership of something to someone just by knowing their location.
5.b. Location Services + Anonymity
If you thought Twitter was disruptive for organizing events in real-time, this should be really interesting. You could anonymously prove membership in an organization using distributed proof-of-ownership and conversely you could prove LACK of membership. Subverting movements like Occupy Wall Street by infiltrating them will become much more difficult.
5.c. Location Services + Subscription Economy
You could subscribe to either products, services, or experiences, and pick up your product from whichever supplier is nearest to you when it’s convenient. This would be very disruptive to delivery services in general. Subscribe to a daily cup of coffee and pick it up from whichever Starbucks you’re closest to. Or subscribe to a daily lunch and pick it up from a number of different restaurants you walk past.
Summary These are the five technologies that I believe have the most immediate potential to change our daily lives. I could easily add predictive data mining to this list but I’ll save that for another series of blog posts.