Spencer Ante on Creative Capital and Disruptive Innovation

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Hi, this is Matt Devoe. Thanks for joining the Oodacast and today we have Spencer Ante with me who is the author, amongst other things, of what was one of my top 10 reads for 2022 Creative Capital. So looking forward to talking to you about the book. But before we dive into that, would love to hear about your background, you know, kind of from start to finish and then what led you to write the story.

Yeah, well first of all Matt, great to meet you and thank you for having me on the oodcast. Pleasure to be here. Yeah. So I have as we were talking a little bit before this, I have a, a bit of a non linear career. You know, always loved technology growing up as a kid and had an Apple II computer and it was playing around with it and co basic and things like that and that evolved into a fascination with business and entrepreneurship and I basically combined those things and ended up becoming a technology journalist in the beginning part of my career and I was going to grad school out in Berkeley and I fell into the whole dot com scene so really just opened my eyes to the sort of the potential of technology to change the world and it's been a wild ride ever since then. So I worked at places like I worked in the trade publications in the beginning like a PC world and launched some of their first original content websites. I actually was a co founder of the Webby Awards.

Oh nice.

Which is a funny little side story, but that was a spin off of the web magazine which I was a founding editor of and we'll be award still continues today, which is great. And then I kind of just went to work for traditional media after a stint@the street.com which is another startup. I worked at Netscape, I was there for a little bit but I went to work for BusinessWeek and I spent almost a decade at BusinessWeek and that was where I really kind of learned how to tell like high impact narrative driven stories, you know, long form journalism which is almost like an extinct species today. But, but it was a great, it was a great experience and I worked under this incredible editor named Steve shepherd who was one of my mentors and another amazing woman named Kathy Rebelo who built out the technology team at Business Week in like the early 2000s. And it was a tremendous group of talent and worked on a libra lot of different kinds of things. I, I, my first cover story ever was actually about Napster and that was a Heck of a story. And I did a lot of stuff on cyber security. And after 9 11, I actually did a bunch of work on counterterrorism. Things that kind of intersect with your world. But really the, the thread throughout my, My career as a journalist was covering innovation and entrepreneurship as sort of like the thing that was driving the economy. That led me to, like, the Wall street journal from 2010 to 2014, where I was a deputy bureau chief and overseeing, like, corporate coverage. And the wireless boom was happening, the iPhone, the whole, you know, all the explosion of mobile. So I saw a lot of different social media was. I covered Facebook in its early days, wrote a lot of critical stories about them, which is kind of funny. Also covered big tech like IBM, Verizon, so, like, a whole bunch of, like, interesting stories. And, you know, it was basically the tale of the last, you know, of the last 20 years of technology, you know, innovation. So it was, it was great, you know, and then I, you know, we can talk about the second part of my career, which is when I pivoted into communications and marketing. Yeah, if you want.

Yeah, yeah, no, I would love to. First off, you know, going back 20 years, what were some of the thematics that you remember that were kind of unique to covering the technology industry back then? What were the trends or thematics that made you realize that this was going to be, you know, the game changer that it developed into?

Yeah, there's been a. There's been a bunch of them. You know, I think the, I think the word disruption comes to mind, you know, in covering the disruption of the traditional media business was a big narrative. When I was working at Wired, this little magazine in California was basically challenging the status quo of, of. Of the, of the giants of the, of the, of New York, you know, and then it, you know, the interesting thing, I think the bigger trend was that all of a sudden, after the Netscape ipo, people realized that it wasn't just about, like, changing society, technology, and changing culture, but it was a way to make an enormous amount of money. And it became like this story of. The story migrated from one about culture and society to one about money. And so you had like, all the, all the IPOs that were happening, and that was, that was really interesting. And then, of course, you know, it's a very cyclical industry, so there's always like a boom and there's a bust. And I remember talking to Tom Perkins, who is one of the founders of Planet Perkins, and I remember he told me one day, we love Bubbles. And I was like, that's interesting. And let's talk about that. And basically he was talking about how, you know, bubbles kind of have a negative reputation among some investors, public market investors, because people buy things at inflated prices and then they go down later. But for venture capitalists, it's the best thing in the world because they could basically take these companies they've been building and nurturing for many years and release them to the public and capture an incredible return. Right. So they love bubbles. And then the other thing that I would say is after the bust, there's always like a rebirth, right? And it's always fascinating, I think, because I've been through a couple of these cycles now, to see the rebirth out of the ashes of the previous generation. And so social media, obviously coming out of the dot com bus was the thing that was re was born and provided a catalyst to trigger the next wave of innovation. Right. And now I think, fast forwarding to today, where tech is going through a major reset now. All the big tech companies have done layoffs. You know, there's a retrenchment in the industry and you already see the beginning of the rebirth now with now the, you know, the renaissance in AI, right. And sort of the launch of chat GPT and chatGPT being like the next big bang and showing like what could be, you know, another wave of massive innovation.

For sure. That's one that's fascinated me. We've done a lot here, talked about it a lot. OODA Loop as well. Just the disruptive potential. I always like those technologies that get released where it's like, you know, they're coming, but they come quicker than you anticipated. It's. That's a little bit disorienting, but it's also fascinating. And to me, ChatGPT fell into that spectrum. Another one for me was the DARPA Cyber Grand Challenge that they did at defcon. The finalists, where they basically had these competitive teams create AI systems that could replicate hackers that could go and break into systems and secure them, and they had them compete against each other. And I remember sitting in the audience and thinking, I knew this technology was coming, but I thought it would be in 10 years. So how does it change my framework if it's here now? I felt similar with ChatGPT. It's like I knew it was coming, but it came quicker than I expected. But outside of the generative AI space, where else do you think that we'll see that kind of rebirth? What industries are you excited about coming out of this kind of mini recession, full recession tbd recession. Love your thoughts on that as well.

Yeah. So I think another, to answer that question, I think I want to just go back and like touch on when you said the trends. And I think one of the major trends that came out of, I think the last 10 years is that technology, because of lowering costs and increasing levels of innovation around all these services, has essentially what Mark Andreessen said, software is eating the world. Right. Software and digital services are impacting virtually every other sector of society. Right. And it's not just like the, in the IT industry, like as a standalone factor. So when I look at that, I see a lot of really interesting things going on in particular in healthcare, the intersection of healthcare and technology. I also see a lot of interesting innovation in the intersection of technology and education, as well as creativity, that is generative AI. So I think those are some of the things that I get excited about when I look at sort of, you know, the next kind of areas of opportunity.

Yeah, yeah. And the creativity associated with the generative AI. When anybody questions that, I say go sit in the mid journey discord for a couple hours is crazy. The prompts that people produce and the art that comes out of it. I mean, it is. And that of course is the, the image generative AI, you know, vice the text base. But it's completely fascinating to me. Yeah, yeah. With the dolly or the mid journey. Or the mid journey to me is fascinating because you can watch the evolution of the prompts and you can see how that evolves, the end product. So it's just kind of fascinating to watch.

Yeah. And I think Fintech is obviously another like the intersection of financial services and technology.

Yeah.

Although it's crypto winter, you know, what I've observed over the years is that a lot of these, a lot of these things, a lot of these trends, they will, you know, they'll have that sort of, you know, hype, hype cycle. Right. Go through this hype cycle where it gets overhyped, essentially, which is what happened with crypto. And then it goes into the, you know, the trough of disillusionment. But actually the underlying technology continues to evolve and build. And it will, it will. It's hard to say like where it's going to land, but it will open up. It's not a fad. It's going to continue to open up opportunities that we can't even imagine, actually. And I think we saw that with the telecom bus, like the telecom boom and bust, like all this fiber was put into the ground that costs hundreds of billions of dollars and, and then companies basically overbuilt. They overhyped it. Right. But then a couple years later, social media was created and online video became a thing with YouTube. And so that dark fiber essentially created the infrastructure to support the next wave of innovation that, you know, drove the economy. So I'm looking to see something like that with fintech.

Yeah, no, I agree. I referred to the blockchain cryptocurrency environment as being in their period of creative destruction. The foundation is solid, but we needed to burn the house back down to the foundation and now we'll build up from there. So I'm very long on the opportunities associated with those technologies and their disruptive potential, near term and long term disruptive potential. But we did get out a little over the skis and attracted an interesting ecosystem of fraud and you know, a lot of speculation and part of that can be attributed to just being in a global pandemic and people being at home and wanting to be speculative and having the time to be speculative and.

Seeing that government pumping trillions of dollars.

Into the government pumping in trillions of dollars in the economy. But similar to, like you said, where the narrative changed in the early Silicon Valley days away from technology to being a narrative about this, you know, disproportionate wealth generation, I think that the narrative kind of changed in crypto as well from it's like, well, it's not a store of value, it's not a new financial ecosystem. It's, it's an opportunity system. Right. It's I gain this disproportionate wealth and now I think we've leveled that off.

Right.

Is good. Overall, I was still long. I'm a little biased because I mined Bitcoin in 2011. So I've been involved in the ecosystem for a while as a result of my Georgetown class. I wanted to talk to my Georgetown class about it and I said I'm not going to talk to them about something that I don't understand. And what better way to understand it than get your hands dirty?

So hopefully a couple of them bought bitcoin back then.

They did. I, I had a student who asked to do his semester project on bitcoin and there for my class was a graduate level class and so 50% of their grade was based on this final research report that they did. And he did his. So they work on it all semester. It's an iterative process. So he did it on bitcoin, got an A, I remember. Still connected, actually. Just chatted with him last week. And didn't think anything of it. And then it was like 2019 when it hit $20,000 Bitcoin. I got a message from him that said, hey, professor, just thought I'd let you know that, you know, that project I did in your class paid for the entirety of my Georgetown education. And I've got some money left over, so, you know, next time you're out my way, I would love to buy you a really nice steak dinner and, you know, glass of whiskey.

Well, there's some opportunity there.

Yeah, so that was, that was fun, you know, take my class and get your Georgetown education paper.

Yeah, that's your, that's your tagline.

Now I'm at Columbia, so I have to shift the marketing. So that's fascinating. I think we'll dig onto that a little bit as well when we talk about some of the topics that you covered around digital privacy and cyber security. But I would love to hear about the second phase of the career, that shift and then also writing the book.

Yeah, so maybe I'll just hit the book, because the book thing kind of leads to the second part. I've always been a student of history, and after covering tech for whatever, a decade and all these startups and talking to a lot of venture capitalists, I asked myself, where did this whole thing start? How did we get here? Because it's kind of amazing what's going on. And I started asking people that question, and a lot of people kept mentioning this guy that I never heard of called George Dorio. And I was like, okay, maybe I should look into this guy George Dorio. So I started poking around. And then I learned the more I started poking around on this guy, the more I kind of became obsessed with it, actually, because as a journalist, the best thing you want to find is an incredible story that hasn't been told. That's. That's to me, story gold. And that's what I found with him. There'd been some attempts to actually write his story before, but none of them actually came to fruition. So I, I kind of took it on as my personal mission to tell his story. And I ended up getting this contract from Harvard Business School Press to do it, which was great. And so basically took about two, two and a half years. I got a book leave from BusinessWeek, which was incredible to be able to do this. And I went on, I took a six month book leave, actually, which allowed me to finish my primary research, which included going to the Library of Congress in dc, going to France to visit his home and meet his relatives and his colleagues, many of who still lived in Paris, and then also hiring other research. Research assistants to investigate collections of archives at different libraries around the country. And then I. And then I took. That took about three months, and then I took another three months to essentially write the first draft. And then I went back to work. So, you know, that's what inspired me. And that's, you know, when you do a big project like that, it has to be passion because it's really hard to do these projects, and they take a lot of time and energy, and if you're not as passionate about it, you're not going to finish it. So when I was lucky, because a lot of the. It's like I talked. This was kind of a Greatest Generation story. A lot of the guys that he worked with were kind of World War II veterans or were born after that. And like, so a lot of these people aren't that I. A lot of people I interviewed are not even alive today. So that was another reason thing that inspired me was like capturing those stories of people before they passed away. And so, you know, that. That was the story of. Of what led me to write the book.

Yeah, well, let's use that as an opportunity to jump into the book. Obviously want people to read it, so you don't want to give them the intricate details. But why does Mr. Dorio deserve a book? What were his. What was his path through life that attracted your attention?

Yeah, I mean, he did a lot of interesting things. But the core reason that I argue that he deserves to be the subject of a book and as a giant in history, is because he was the first person to found like, an institutional venture capital firm. There had been like, privately, like, there being private venture capital funds before that, run typically by like, rich families like the Rockefellers or the Vanderbilts, but no one. And they would basically invest family money. No one had ever raised money from institutional institutions like pension funds and universities and taken that, took that money and used it as a fund to then invest in more companies.

So.

So he was the person who pioneered that. But more than that, what I learned was he kind of was the leader of what I call the social movement in the sense that I've studied the civil rights movement and other movements in US History. And there's. You need a charismatic leader to. To. To. To put a dent in the universe to. To affect social change. And so he was that charismatic leader who was very sort of public in his stance on what he was doing. Essentially the founding story was that all these leaders in the New England economy, like the president of mit, a senator from Vermont, other prominent individuals realized there was a gap. There was a gap in the economy, which was that young, growing businesses needed capital, but there was very few sources of money to fund these businesses and to help them grow them, because it wasn't happening from the banks. The banks were too conservative. So they saw this white space and they proposed the creation of this venture capital firm to fill it. And so Dorio did things like he held investor conferences. Like, it was basically like the first technology conferences where he would invite all the investors and prominent people in industry to come and. And see, like, all the amazing companies they were financing and helping to build. And that attracted a lot of attention. And there was many. Like, he was on the COVID of Business Week. There's a lot of stories written about him. He was also, like, a perfect. He was a professor at Harvard Business School. So he also taught thousands of students over the years, many of whom went on to become leaders in business and an entrepreneurial activity. And so he was basically like, as one person said, a lot of the ideas that were attributed to Peter Drucker, actually, Dorio had them first. He was a philosopher of management and the economy. And so you put all these things together, and it's just he was, you know, an under. Recognized figure in our history that I thought deserved to have his story told, and I was able to do it. Excellent.

No, and I'm appreciative because I had not heard of him until encountering your book. And I think I. I think I literally picked it up at a bookstore.

Right.

Like, the COVID caught my attention to give it a read and loved it. Loved his story. And I loved the. Again, it's that kind of disproportionate impact, right. That seemed to me the tale throughout his career as a professor, having this impact on kind of like the, you know, the new American management philosophy for business, World War II. I would love for you to touch upon a little bit kind of the role that he played there as well, because I think that was fascinating.

Yeah, that was another big discovery I made. He was the quartermaster general in the. In the army during World War II. And the quartermaster is basically responsible for providing all the equipment and gear for the soldiers. And so they realized the reason he got that job is because the military leadership realized they needed a guy who could bring people together and get done, right? Connecting American industry with the military and other like, scientific, technical innovators to. To create what needed to be created to. To sort of prepare and equip our soldiers with everything they needed to fight. So, as I say in the book, that's how he learned to become a venture capitalist. And that was really interesting to me that he essentially brought all these people together to invent things that had not been invented before. So, like, the signature achievement was that he brought people together to help invent bulletproof gear and equipment for soldiers, which was called Doron. And it was like, it was a type of plastic they created. And then because they were inspired by his last name, Doria, so they called it Duran, basically flak jackets for soldiers and also for pilots who were getting shot at by like, you know, you know, artillery on the ground. But he also invite. He invented a lot of other things. He invented sunscreen. They invented like, all the, the K rations, like, the, the food that they had to eat, like high energy, high, high, high nutritious, like food that could be just like, you know, sent out to the front lines really quickly. And, you know, that's what spurred him to. When the war ended, there was a recognition that technology times manpower was what won the war. And there was a recognition that America's technological and economic superiority was the. Was a real big factor in why, you know, we're obviously manifested by the atomic bomb as the sort of most obvious thing. But there was all these other inventions like radar and things. So they basically used that as inspiration. They. They dusted off the plan that they were going to. They were going to do venture capital before the war. Then the war happened, they dusted off the plan and they basically put it back on track. And they, they founded. It was called American Research and Development Corporation was the name of the venture capital firm ard, and it was founded in Boston after the war. And they raised. Interestingly, the first venture capital fund was $3.4 million. And over the course of 30, 40 years, they invested in hundreds of companies. The most prominent and the one that there's a whole chapter on us in the book, it was Digital Equipment Corporation, which I argued was the first home run in venture capital. And that's still the. The model of today is hitting. It's a, It's a. It's not a. It's not a business where you play for average. It's a power. It's a slugging game. Right? You need a couple big home runs to. To make it work. And they put $70,000 in digital equipment ended up being worth like $400 million when it went public in the late 50s. They kind of created the model for startup success. You know, because it was. Ken Olson was like the archetypical engineer who came out of the military. He worked at MIT Labs and they invented the, you know, these minicomputers which challenged the mainframes that were dominating the industry from IBM at the time. So, you know, incredible story and it, it sparked the creation of the entire Boston technology ecosystem, you know, and that continues to today. So, you know, a lot of good stories and you know, there was, you know, he wasn't a perfect person like everyone, like anyone else. He had a lot of, reminds me.

A little bit, you know, Steve Jobs type. Right. Like a little stubborn and set in his ways.

And a showman maybe.

Yeah, and a showman. So I definitely kind of got that vibe, you know, in, in reading the stories about the interactions and the meetings and you know, a little bit of the stubbornness as new models were trying to emerge in the ecosystem for certain. But definitely fascinating character and given. I just interviewed Sebastian Malaby, we just released it last week, you know, as the first kind of articulation of the power law. Right. That disproportionate return in a portfolio company that makes the fund, which is the kind of those grand slams that you're talking about. I seem to recall also the, in the World War II story that he played a role in kind of the supply chain and logistics aspects of it as well. Was that just based on his, his Harvard Business School kind of perspective on running a business?

Yeah, because, you know, the, this, the challenge of the war was very much one of logistics and manufacturing. He actually taught manufacturing at Harvard. So and he was on the boards of a lot of manufacturing companies. So he knew a lot about manufacturing and he knew how to like, for example, they had to make a lot of trucks. You know, that was one of the first challenges was like how do we manufacture some heavy duty trucks to get out into the, into the field. And so we had to collaborate with the auto automobile industry and you know, boots and boots. Like there was major scandals around boots during World War II because it was like the winners came and the soldiers were. It was like front page news for months. And there's a famous story in there how he basically stood up to like one of the. General Eisenhower to basically say, you know, we, we got to get our together to get these boots made and they weren't projecting like the supply and the demand was off because there was going to be another big push during the Battle of the Bulge. He kind of saw that coming and he basically cracked skulls to get, to get the Boots made and better boots made so soldiers wouldn't get frostbite. There's all these all sorts of crazy challenges, like we talk about, like supply chain challenges now, which we haven't seen in a while. But they needed rubber. There was a shortage of rubber to make tires for the trucks. So they had a rat. They had to basically impose like rationing and controls over rubber in order to like. And they had to build rubber plants around the world to get the materials to make the tires for the truck. So it's like, you know, it's kind of like running a startup, you know, it's like all these problems are popping up and you just got to solve them, you know? Yeah.

And I think that's The World War II stuff resonated with me. Like the invention stuff is interesting, right? And they always get drawn to, you know, stories around DARPA and other things being invented. But the supply chain and the logistics and the boots, you know, disintegrating off soldiers feet and kind of solving that.

Problem.

Was appealing as well because it was the application of his business knowledge and the background in manufacturing with what was a large supply chain kind of logistics manufacturing issue for World War II. And I don't want to read too much into the implied conclusion, but you know, what I got from his story was that it was impactful. It was made a difference in the European front with regards to America's capacity to, to fight that war.

It made a huge difference. And he was, he was actually recognized for his achievements. He won the Distinguished Service Medal, which is the highest military award for non combatants. And it cited his quote, his professional knowledge, aggressive leadership, foresight, untiring devotion to duty and executive ability, contributed in high degree to the development of new and improved quartermaster items. Then it says his outstanding accomplishments contributed greatly to the health and welfare of the military forces. So quite an achievement to be honored like that for sure. And he, you know, he, he liked to be referred to as General Doo throughout the rest life.

Excellent, but good for him. Well deserved. Right. So it's like, so that thematic, right, of disproportionate impact, right? He's a professor and he has this huge impact with all these students that go on to be kind of pioneers of American business. Goes Into World War II, comes a quartermaster general, has a disproportionate impact on our ability to fight the war, particularly in the European front, and then creates the first venture capital firm and has, you know, demonstrates the disproportionate impact there. So it's a lot of people would be happy with any one of those achievements in their life. It's fascinating around the story trifecta that he had the trifecta. Right. Which appealed to me in my career as an investor and an entrepreneur and a professor and my nexus with DoD where I mentioned you earlier, felt like it was almost like my spirit animal, you know. How did I not know that he existed previously? Is so inspirational that we hung a portrait of him on the wall here at the Startup studio.

Oh, that's so cool. He has a lot of great aphorisms too, which I always remember.

Yeah, yeah. I'll have to go and pull. I've got the book. I've got highlights in the book, you know. And of course that's where the Kindle version becomes a little easier because if I highlight something in the Kindle I can go to a webpage that shows me exactly what I highlighted and I can cut and paste it in my newsletter. It's a little more difficult than the.

Here's one of my favorites. He said if any information is to be exchanged over whiskey, let us get it rather than give it.

That's awesome.

Or actually a more. A more like high minded one. You will get nowhere if you do not inspire people. I think that's a great like that.

Is a great one.

And one more A real courageous man is a man who does something courageous when no one is watching him.

Yeah. Awesome. Yeah, like. Like three great kind of divergent messages there as well. Right. So which is fascinating. Well, highly recommend the book. You know. Of course we'll have the link to it in the show notes for the podcast and I loved it. It's a great read. It's a great story. Everyone should be familiar with it. I've given out probably half a dozen copies myself personally because it resonated with me and tell his story and now I'll tell it in even greater detail because I get your perspective. So thank you for that. I would love to chat though about some of the other areas that you've covered and then kind of the post book career as well. A couple of the thematics that resonated with me was you kind of early in award winning coverage around privacy in the digital age. So I'd love for you to kind of give some background into how you, you know, determined to cover that topic and what some of your thinking was on it.

Yeah, this is when I was at the Wall Street Journal and this was a team, a true team effort. I was just one person on a team and we conceived a series of Stories on privacy in the digital age. This is around 2011, 2012. You know, social media had exploded and it was just beginning to dawn on people that as, as some people say, like, if you don't know, if you don't know what's being sold, then you are the product. Right. And that's kind of like the, the premise of the online media and advertising market, which is, yeah, all these social media services are free, which is great, but in exchange for not paying for the service, you're actually, there's a cost. And the cost is you're giving your personal information and data over to the service to then use as, as marketing to sell the advertising.

Right.

And that's how these companies built their businesses. And still today, like are incredibly sick. Like Google and you know, Facebook and I mean they dominate the online advertising market. So but it wasn't clear to people what that cost was. And so we started digging into what was actually going on behind the browser, behind your, behind your phone, and what kind of data was being exchanged, what was being done with the data, how it was being monetized, whether some of this data exchange was actually lawful or not. And we did a whole series of stories around it and it was nominated for a Pulitzer Prize that year. And one of the stories I did actually was showing how the government was waking up to this as well and seeing that it was a problem. And basically I broke the news that the SEC was investigating Facebook for potential violations of privacy laws and that ultimately that, that that investigation was ultimately announced. And then that led to the consent degree, an agreement that Facebook struck with the FTC and the government to essentially agree to a new regulatory regime for how to manage personal data. You know, in hindsight was a step in the right direction, but I don't think it really had the impact that they wanted it to have. And so I think what ended up happening is that other governments actually took a more aggressive stance. In particular, the EU with the GDPR law that was written ended up being, has ended up being the actual gold standard for how to regulate the sort of management of personal data. And so now the US is looking to gdpr. It's actually like the inspiration for our laws.

Sure, yeah. Or aggregating into a consolidated privacy law, breach disclosure. Because we tend to be state level initiatives now.

So yeah, it's mostly. But there's always discussion of this federal privacy bill that may or may not happen.

Yeah, but I've been waiting, I've been waiting for a while for that one. Yeah, interesting. You know, one Topic that we've covered on the oodacast in the past is this concept of digital self sovereignty where the users start to take more direct ownership over their data and make deliberate decisions over what they share, who they share it with. And that the economics shift a little bit. Where, you know, I might, I might choose that I want to share information with Amazon because I get great recommendations from Amazon outside of the Amazon ecosystem. But for some other transactions, I might choose to pay for the service and keep my data private. Do you think that that's a model that that will eventually emerge? I know that it's. This topic is such a huge issue because there's a huge gravity component. Like it's very easy for the privacy rights to slip away. It's very hard to roll the ball back up the hill. So are there any, you know, have you looked at concepts of digital self sovereignty? Do you think that that's a reasonable model for the future or do you think there's just too many inhibitors to being able to get to something like that?

Yeah, it's a really good question. A couple thoughts on that. You know, I covered privacy for a long time actually even before the Wall Street Journal series. I used to write about online privacy back in the late 90s when I was working at Wired and there was like PGP and all these like new like encryption tools and whatever. So I think what I learned from covering the privacy is that privacy is one of those issues where people say they care about it a lot and complain about it, but they actually don't follow that up with action. Now I think that's partly because it's much easier to complain about something in general than to do something about like the problem. I also think people are generally lazy. But then the other thing I think is that there's no infrastructure or tools that they make it easy for people to manage their privacy. Okay. And that's obviously we're seeing improvements around that, but I think that's still a fundamental problem. Like getting your email encrypted was. It took almost like a freaking master's in computer engineering to do it in the late 90s. Right. But I think what's happened is that going back to gdpr, the principle of data self sovereignty is, is basically enshrined in the GDPR law. That's one of the, the foundational principles of it. So I think from that point of view the idea has actually been accepted by, by, you know, large, large governments. And I think that that's putting pressure on the US to sort of Adopt a similar model. But what's happened in the US typical to the US and the differences between the US and the Europe is that it's largely a self regulated environment. So companies are basically calling the shots, essentially for the most part. And what's happened is it's become a competitive issue between companies, how privacy is managed and messaged. And so the biggest change in online advertising actually in the last two years, three years, hasn't been driven by the government. It's been driven by Apple actually. And Apple's decision to essentially give the power of people controlling their data more explicitly back to people by asking them if they want to be tracked by applications. And before that it was an opt in environment where your data was automatically being captured and shared with all these companies. And that's one of the reasons that these online advertising and social media companies exploded, because they could capture all this data from apps.

Sure.

And from mobile apps and use it to target advertisements. Now when Apple did that, it completely disrupted the ecosystem and it has brought a lot of pain to social media companies like Meta and TikTok and Snap and to a lesser extent Google. And it's called signal loss. Right. So I think I don't like how Apple messaged that, to be honest with you, because I do think there is a value to sharing your information in terms of getting more relevant advertising delivered to the user that Apple hasn't acknowledged in the way it messages it. It just says do you want to be tracked or not? And it kind of gives an inherently negative spin on it. And I don't think that's actually appropriate. But again, it's a competitive issue because Apple is positioning itself as the defender of your privacy against these other companies that it alleges are, you know, the violators of your privacy and making money off of it. So it's, it's, it's pretty interesting to see the different approaches between the different countries and regions. And I think eventually they will converge, but it's going to take more time.

Yeah, interesting.

I don't know. What do you think?

Yeah, no, I mean, I like the direction that Apple's taking it. I think I would make the argument that the government is influencing the conversation. Just even with things like Roe v. Wade rollback and the privacy implications of that, where, you know, in some of these states you have women that are running mobile applications tracking their health that is subject to subpoena because maybe it's breaking a local or state law and that driving the realization that maybe I should own that data. You know, maybe I should pay for the app. And the data is. Mine is encrypted, and I can't be compelled to give the data up. Whereas a third party that's entrusted with that data can be compelled to give it up. That might be used to prosecute you for something that, you know, two years ago you wouldn't be prosecuted for. So I feel like that discrepancy between states in the laws and the way the data is being used is driving a little bit more citizen consideration around, you know, who owns my data, who gets access to it. Maybe it's still in the cloud, but encrypted. Right. Which is another thing that I like about the Apple model. You can now kind of take control of your own encryption in the cloud that carries with it a certain risk for the consumer too, because there's going to be a lot of people who screw that up and are, you know, unable to recover the data, the photos, the things that they want. But at least they're giving you the options where you can say, well, I want to encrypt this element of my data, but not that I don't care about the photos, but I care about my contacts and I care about my notes or, you know, whatever it may be. So it's, it's going to be interesting. You know, I think new models are always hard to absorb. I think the acceleration in AI will help with that as well. Because what I want, CHAT GPT is great. I love interacting with it. I've had a ton of fun, a ton of value creation from it. But what I really want is Chat GBT that knows my data and can answer my questions right. Like I want it to. I want to data mine my 30 years worth of research and correspondence and journal entries and, you know, all that stuff to, to give me answers to my own questions or in an environment that I control, to recognize things that might be useful to me. The example I always give is like the health application of it. Right. Like it's. If I'm able to aggregate my own data and do analysis on it, I might, that might determine that I have some sort of underlying health issue that's present in the data when it's aggregated together, but is not present in the individual transactions and the market is not incentivized to find that for me, but I'm incentivized to mine my own data that way.

Yeah, I think you put your finger on, like, what is emerging as one of the biggest question marks around generative AI, which is the issue of privacy and Property rights, you know, because, you know, as you all well know, like, the, the way these things work is they're basically scraping data off the public Internet.

Yeah.

But it's unclear like, you know, where what, where the data is coming from. And in some cases, and like, you know, some, some companies are starting to ban chat GPT because of the concerns around privacy, actually, because the, when you put in a prompt, it's not clear like where that information is going, who, how it's being used. And you know, imagine like if you were able to see the search queries at Google, like, would tell you an incredible amount about individuals and their, and their personal histories and whatever. So I think that has to be wrestled with. And, and the copyright issue is big too, because a lot of the information is being taken from databases that are behind firewalls somehow. And you know, the copyright owners want to be compensated, you know, so.

And that's an area where I feel like, you know, blockchain micropayments, you know, might play a role because I contemplated a while ago you might have the existence of something that, you know, I have a robots Txt that dictates, you know, a gentleman's agreement, if you will, of how that, whether that site can be scraped and archived in search engines. There might be the equivalent that is like an AI Txt that says, yes, you can scrape it, but it should be disclosed as a footnote if my data is used in the context of something that AI generates. Or I might say, you can scrape it, but here is my, you know, Bitcoin wallet address. And the cost to scrape and use my data in your model is X. And being able to get the content creators to derive some value from having their content go into these generative AI systems, because that's the other piece of it too. Right. Why is ChatGPT successful? Why is ChatGPT smart? Because we're smart. We are the training data. Our correspondence, our websites, our queries, our prompts, is the training data for it. Yet the value is being realized, you know, all within open AI or whatever the equivalent is, you know, depending on the solution.

So I feel like they're very flawed because there's a lot of misinformation out there.

Absolutely. Yeah, yeah. And you never know how it's gonna articulate. We did a proof of concept. My partner here is the former CTO from Defense Intelligence Agency, and through the GPT API, he created a site that had precursor prompts that basically would try and format the. The response to the question. The way that an analyst at the CIA would respond. So levels of confidence in the response, alternative hypotheses, indicators and warnings, you think about how it might be wrong. And it was fascinating to interact with that system and kind of see how it changed the feedback and almost the way you were inclined to make decisions based on it. I also had a friend who here was in the office and, you know, fed into the prompt. He's like. His name was Jason. He's like, jason communicates on a regular basis with people in Russia, you know, and he used his real name and he's like, based on this data and what else you know about Jason, what are the. What is the probability that he's a Russian spy? And it wrote back, there is a high probability that Jason is a Russian spy. And. And for like, all these reasons. And I was like, dude, you just created. You just created facts that got put into the system as part of a prompt. Right. That are going to inform future decisions. Right. So someday you can kind of envision this kind of like, perfect 1984 storm of that data where he's trying to get a security clearance or something, and it gets flagged, you know, some AI system flags and says, no, Jason is a Russian spy because he corresponds.

Yeah. Like what. What happens when they stick the. They sick the bots on chat GBT to, like, contaminate it? I mean, like, there's so many, like, unknowns, adversarial.

You know, kind of machine learning is a thing. Right. There are people who will develop training data with the intent of influencing the behavior of the language.

That's what Putin's thinking about right now.

That's what Putin is executing right now. I'm certain of it. Right. Like, I'm certain that there's content that is being created that is meant from a misinformation perspective to influence the responses of things, you know, like a chat GPT crazy. We know too much about how they think and what they've done in the past. The master of propaganda being happened. Yeah. So that's great. Enjoy that conversation. I do. As a curiosity, I want to talk about hackers and hacking as well and kind of your experience covering that space. But first off, as a huge fan of Wired magazine, and much to my wife's dismay, I maintain my original collection going.

I have some, too.

Yeah, yeah. Going back to issue one with Bruce Sterling. Yeah, I've seen the Future of War, which for me was incredibly inspirational, given that that was what I was kind of researching as well. What was it like to work at. At Wired magazine?

Oh, it was amazing. It was, it was a pirate ship, as they called it. Yeah, it was a pirate ship and Louis Rosetta was the, the captain of the ship and. Yeah, brilliant, brilliant guy. And they, it was a real magnet for talent. A lot of really interesting personalities were collected under one roof. You know, I, I studied magazine journalism in graduate school and one of my mentors was Clay Felker. And Clay Felker was the, the founding editor of New York magazine. And then he saw Wired and he was like, this is kind of like what we did. It was basically like a completely new take on, on the world that no one had seen before. And he called it point of view journalism. And his, one of his philosophies was that we live in a very tribal society and the, the job of the media is to kind of identify what these tribes are and serve them. Yeah. And there was an emerging tribe of digital pirates that Wired saw as a business opportunity. And you know, it was one of the, probably the most successful magazine in the 1990s. It ended up getting acquired by Cond Nast. So it was like validated or whatever, acknowledged by the east coast media lead as being important. But yeah, it was, it was, it was great. I made a lot of good friends and I'm still friends with a lot of these people.

Yeah, it was great. I mean, if you think about it, we talk about the, the data sovereignty, right? I mean, you had Wired magazine covering Haven Co and Sealand, you know, on the gunship platform off the coast of the UK with trying to build a data center that was not subject to any national laws. You have the cipher punks, you know, appearing on the COVID of the magazine, what, 15 plus years before something like Bitcoin would emerge. Right? Yeah.

My friend was the cyber rights editor, actually. He's one of my good friends, Todd Lapin. And that led me to. That we created, actually it was interesting. It was, it was the, it was, it showed the power of the Internet to be an activist force because Wired helped organize this basically defensive free speech on the Internet because of the Communications Decency act, which went all the way to the Supreme Court, which I covered. It was the landmark case that in trying the principle of free speech on the Internet and that grew out of like a lot of the cipher cypherpunks and cyber rights people and why.

And a lot of the early kind of cyber activism was happening back then as well. And we attributed it to like electronics disturbance theater and stuff like that. But the, the cda. Yeah, I mean, eff being formed as, you know, legit non profit confronting these issues. But I remember, you know, the, what we had, and I'm sure you covered this, was kind of this discrepancy in jurisdiction where I could be in California and the standards for community decency in California were different than they were in Tennessee. And you'd have a Tennessee prosecutor that would basically, you know, extend jurisdiction over the phone lines because a citizen in their state could connect to the system in California and download something that they deemed to be obscene from a pornographic perspective. And I remember that, you know, kicked off a whole series of, of activist discussion and the amplification of kind of cyber power from a kind of hacker activist perspective. So there's a great history there, you know, I think around the CDA and some of that, you know, cross, cross state prosecutions that were happening that were early influences to that hacktivist movement.

Yeah, I mean there's so many interesting things that came out of, out of that, that trial and it still lives on today, you know, with debates over like, should Internet service providers be treated.

As.

Neutral parties in discussion or like media companies that should be, you know, regulated for, held accountable for what they publish.

Yeah, it, I shared the story elsewhere, so I won't repeat it here, but the EFF in its early days had an influence on my career because with the Computers Freedom and Privacy Conference, I got a scholarship as a student to attend in Chicago that introduced me to a whole slew of people, including Bruce Sterling, you know, who had written the Hacker Crackdown and you know, I encountered in the elevator, told him I was a big fan and he's like, hey, you want to go get dinner? So, you know, I wind up with Bruce Sterling and Philip Zimmerman and you know, just kind of all these great, great folks that were there, you know, fascinating. And again, one of those time frames where, you know, you're having kind of this disproportionate aspect impact. I would say Wired magazine had a disproportionate impact on technology culture, you know, in that period. When did it start? 93, you know, diminished over time, but certainly in the 90s it had this incredibly disproportionate.

It was huge.

Yeah. So you also covered a topic, you know, kind of near and dear to me around hackers and hacking. So how did you get attracted to that storyline and, and kind of what was your involvement in covering the topic?

Yeah, you know, I, as a journalist I was always kind of drawn to the, a little bit to the dark side of what I called the web and understanding. You know, that there was, there was sort of like the public narrative of what the Internet was, but then there was this other side to it, which was less obvious to people, but was actually a pretty important part of the ecosystem, which was like, you know, the, you know, there was, you know, the white hats and the black hats. Like, you know, there's like the criminal element of cyber criminals, but then there was like, you know, the, the, the good hackers, right, who were actually helping advance technology and advanced society. And so I started, like, getting into that a little bit, and I went to DEFCON a couple times.

And what years did you go to DEFCON?

Oh, God, I went there. It was late 90s and early 2000s. I went like, twice.

Yeah. So Alexis park days.

Yeah, yeah. And I just kind of became fascinated with it. And there started to be a greater acknowledgment of, of the sort of impact of cyber crime. You had, like, companies starting to study it. Like, Verizon would put out this, like, threat investigation report every year. And then people just felt it on a personal level too, like all the, the scams that started popping up, like spear phishing, you know, social media engineering. So the favorite story I did on this was I was thinking about this at Business Week and I was like, wondering, like, you know, there was a, the most wanted list of criminals the FBI would put out every year. And I'm like, who are the most wanted cyber criminals? I'm like, I'm curious. Like, like publish that list. And they actually do that now. But, like, back then they didn't have it. But of course they had it behind the scenes. Right. And so I actually started looking into this and I, I, I spoke to a bunch of law enforcement officials within some three letter agencies. And I also kind of worked with some cyber security firms to basically explore the, the, the darknet. Right. And we, I gained access to some of these forums where stolen information was being openly sold and bought the card. The Carter Forums, shadow groups, like. And I was just like, fascinated by, like, how this was just kind of happening and open in the wide open, and people didn't even know about it. So I started looking into that. And through my, through my investigative work with the dark Web and my conversations with various officials, interestingly, like, the one thing I didn't realize at the time, which I later learned, was that one of the most important groups in going after cybercrime is actually the US Postal Service, because postal Inspect, there's postal inspectors, and they have jurisdiction over interstate wire fraud, and that gives them the ability to actually investigate cybercrime. So I actually got some of these guys to go on the record, and through these conversations, I was able to put together a story called Profiling the World's most Dangerous Cyber Criminals. And we literally. I was able to obtain photos of a lot of these people and, and basically tell their stories of. Not surprising, a lot of them were based in Russia and Eastern Europe.

Yeah.

And I'll never forget, before we were going to publication, you know, it was a, you know, Business Week, a very reputable publication. We had to run the story by these officials and the, the Department of Justice actually asked us to not publish the story because they said it would potentially jeopardize ongoing and current investigations against some of these people. So we had a call in the general council of McRoy Hill, which owned Business Week, and we had a big debate about this, and we eventually decided to move forward with publishing. But that was an interesting little, like, side tangent of, of the story of how that came to life. And one of the reasons we ended up going with it is because, because we had some of these officials on the record, we felt that that gave us the. A little bit of credibility to say, like, if some other people in the government agencies who are fully focused on this believe it's beneficial to go public with this information, then you probably should be too, you know. And so we, we went ahead and we did it.

If not, they should at least figure it out amongst themselves. Right. Like, you shouldn't be the mediator.

Yeah. I'm sure there were some screaming matches behind the scenes I never heard.

I'm sure. As well, what was your biggest takeaway from defcon? What did you enjoy or not enjoy about participating in that community?

Oh, it's just, you know, it kind of reminds me of Wired a little bit. It's a bunch of like, you know, misfits and outcasts and crazy people and like, incredibly intelligent individuals who kind of like on the, the edge of society. And, you know, it's always. I always thought it was fascinating to like, hang out in these communities, you know, and meet these people and, and all. And I love the, the public demonstration of the hacks was always one of my favorite parts of the conference. Yeah. But, you know, a lot of the, A lot of the, the most important work in, in the field is, Is talked about and shared and discussed at those conferences. So it was a very. It continues to be an incredibly important venue.

Yeah. Did you walk around the Alexis park pools at night interacting with people or.

You know, I didn't make it to the into that. If I had gone more times, I probably would have discovered that.

Yeah, yeah, yeah. That was the, the thing I always loved, especially that time frame in, in defcon history. The conference was large as a couple thousand people, maybe a few thousand people, but was still at the Alexis Park. So you didn't have any of these off site parties. So in the evenings, you know, until all hours of the night, you could just go outside and there was this big kind of multi pool system and it would just parties and people and you could, I could go walk and make the full circuit and by the end of the night see everybody that I wanted to run into, everybody that I want to have a drink with. Now that's a challenge, right? Like you're on text messaging, like where are you? You know, 30, 000 people there. So it definitely was for me I, I view that those Alexis park days as like, that was the, the core DEFCON experience. You know, it's still great. I still go, I still love the event. I bring my kids now. Kids have been three times. They all love it. So we're, you know, multi generational family.

It's fun for the whole family.

Fun for the whole family. It was, it was a different experience back then for certain. From a community perspective, you've been very gracious with your time. I got two more questions for you. One is post book, what are you up to? What do you spend your time doing now?

Yeah, so, you know, I left journalism in 2014 and I kind of pivoted into like, I wanted to get more involved in the business side of things because I had accomplished pretty much what I wanted to do as a journalist. So I ended up working for Edelman. Actually, it was the first job I had out of journalism. And I've kind of like just reinvented myself as, as, as a, you know, as a communications and marketing executive who is trying to use all these great technologies and tools that we've been talking about in the service of helping companies tell their stories and helping, you know, different kinds of organizations and companies to communicate more directly with stakeholders. Because that's one of the beauties of the Internet. Is it like it. On the one hand, it disrupted the old media model of having a very small group of people who controlled the means of distribution to communicate with the public. And it exploded it so that everyone could become basically a media company. So incredible power has been put into the hands of people to, to do that. And so yeah, I've held a series of interesting jobs at different agencies, building out editorial groups, kind of inventing new models around content marketing and using like, you know, owned media, so to speak to in concert with like social media, paid media and earned media, so to speak to, you know, get, get messaging out there, get stories out there, impact corporate reputation and, and actually drive help companies grow their business too. So that's been really fun. And my last job, I was actually head of Insights at Meta and I was basically within the global business marketing team and we were responsible for providing thought leadership for global business marketing and trying to help senior marketers at all the top brands in the world and small businesses to understand how Meta was trying to reposition itself as a more future forward company, more, more doubling down on innovation around the Metaverse and AI and other things like that. And we had a, we ran an external channel. It was originally called Facebook iq, but then it got rebranded into what we call metaphorsight. It still exists today. You could go there and, you know, published a bunch of interesting stories about like how technology is impacting society, culture, people. In fact, one of the things I'm most proud of is in the fall of 2021 we did a story called How AI is Elevating the Future of Creativity. And it was basically about what people today call generative AI. We called it creative AI because we noticed that there was a bunch of new tools or like an early version of Dall E was being developed. And what I loved about that story was that artists were actually driving the innovation. So artists were getting a hold of these like creative AI tools, generative AI tools, and they were using them to like develop new ways of expression. And so we talked about how AI, the traditional narrative around AI is that it's going to, it's going to be bad for humanity. But we kind of came to a counterintuitive conclusion which is that it's going to actually make us more human and elevate our creativity because it's going to allow us to do things that we couldn't do by ourselves and it's going to what we could augment human intelligence and creativity. So nice that's all come to fruition with ChatGPT. Yeah, and yeah, it was. I'm no longer working there, but now I'm kind of like looking at the next thing and like you taking on some consulting assignments and just getting involved in a lot of interesting projects. So, you know, this is one example that talking to you and.

Yeah, yeah, excellent. Yeah, I appreciate you taking the time. And the dynamic of social media is kind of Demonstrates is demonstrated by the fact that I wrote this, you know, top 10 books of 2022, something I've done for the past several years, is actually the most popular thing I write every year, which is good and bad. But I tagged you on Twitter. Right. And that was the catalyst for us being able to have this great conversation. So, I mean, that kind of shows the. The power of social media and the connectivity there. Last question. A little bit more of a fun one. What have you, you know, read recently or are reading or, you know, would recommend to the viewers? I always like to. To ask for a book recommendation. So what would be yours?

Yeah, I've read a couple interesting books lately, some of them more recent, some of them older. I just read that new book called the. The Chip War. Yeah, that's been a bestseller. I. I really enjoyed that, especially for, like. For people who don't know much about semiconductors and computer chips and how they actually become. I'm going back to. We were talking about Dorio. How they become actually the key weapon in not only in, like, economic affairs, but in the military. Sure. Semiconductors power all of our weapons. Right. Yeah. So there's an interesting. It's an interesting take on that. I also was able to read Shoe Dog, the memoir of which I really. I really love that book. And it was a quick, quick read too.

Yeah, that was on my top 10 list a couple years ago. Top. The Shoe Dog was On my top 10 list a couple years ago. It's a great book.

Yeah. And then there was one other one that I read that was pretty good. Give me one second. I'm looking at my shelf. Oh, yeah, I read. I like to read fiction, too. And I recently read a book by Dave Eggers called the Every, which is an interesting kind of fictional satire of big technology companies and the culture around that and the dynamics around working at these companies and how they impact society and how people perceive them. He's one of my favorite writers, Dave Eggers, and he's written. It's just a kind of a. He's written a couple books on this, on this theme, and that was the one I read. It's pretty good. Excellent.

Cool. I appreciate that. We'll link to all of those as well in the show. Notes make it easy for people to find them. Thank you so much for coming on and having this conversation. I mean, that we talked earlier about, you know, why do we do this and what led to it. And it's really just to meet fascinating people and have interesting conversations and for other people to derive value and insight from the conversations that we have. So I enjoyed this immensely. So I appreciate you coming on and chatting.

Yeah, man. Thank you for your time. It's been like a great conversation and it's. I'm so glad we got to meet and I know we'll stay connected. Absolutely. Thanks for listening to this. OODA Loop Production for the latest analysis on cybersecurity technology and global risks, please visit www.oodaloop.com.