Cannes Round-Up: Daniel Hodges: Getting Our Arms Around the AI Market

It's Machine Learning from ASSIST. It's a podcast where we think and dream about the future of AI, the talking internet, and how we're reshaping our culture. This chapter is an excerpt from our interviews at the 2018 Cannes Lions International Festival of Creativity. We went to Cannes to tap the brains and imaginations of an incredible gathering of leaders and innovators in technology, advertising, and brand communication. From our spot on the floating home of LivePerson, we were challenged, inspired, and learned a lot. Once again, all of us at Machine Yearning and Assist owe Rob Lucassio and his team at LivePerson a huge thanks. LivePerson took great care of us and are a true friend of the pod. Coming up, Shane Mac from Assist sits down with Daniel Hodges. Daniel's a pathfinder for brands, industries, and individuals who are weaving their way through this disruptive time. He thinks like an analyst but talks to you like a trusted friend. His view spans a wide range of technology verticals and his time in the field gives him a perspective we think you'll find particularly valuable. Enjoy.

Daniel, how are you?

I am well, and how are you?

I'm doing great, man. How many years have you been coming to Cannes?

Well, I've been coming since 2007 when I was with Nokia and we sponsored the event.

2007. What was happening in 2007?

You know, just the emergence of this new platform called mobile and smartphones.

What was the smartphone at the time? Because that was pre-iPhone launch, wasn't it? Or is that right when the iPhone launched?

No, it was pre-iPhone launch. It was the Nokia N95, which was like a box. So, uh, and it was very popular. It was our most popular handset in the world. Yeah.

What happened to Nokia?

You know, I think that the Nokia phone was a really good phone functionally. And the Apple was an inferior phone except for one thing, which was the user interface. And it was the user interface that sort of won. And I think Nokia was a little bit in denial when it came out, and by the time they got it together, it was too late.

What are you doing at Cannes this year? What brings you here?

You know, I come to Cannes every year to, to be exposed to the various, you know, creative leaders and technologies and the randomness of Cannes. So it's a, it's It's a place for me to get caught up and up to date on sort of what's going on in the marketplace. So I've taken clients here before, but this year I'm here really just trying to get to the bottom of what's going on in the market.

And so you said user interface, and that was what really defined the difference between the mobile device, right?

Right.

And now is the user interface going to be voice? Does it feel like it did in 2007?

You know, it's, it's interesting because there is currently a voice war on And, you know, Amazon has about 70% of the voice marketplace right now, and others are trying to catch up. So I think that, you know, Amazon with all of this data, and I mean, it's very possible that at some point Amazon will be sending you two boxes. One box will be what they think you need, and another box will be an empty box to return what you don't need.

That's interesting. My co-founder Robert said anticipation versus automation. And he said, whoever nails anticipation, is that kind of what you're talking about? Like, you're going to anticipate what I need so then when I go to Amazon, it actually is showing up at my door at the same time?

Yes, and I think you asked about the iPhone. What the iPhone did was the UI/UX eliminated friction and it eliminated clicks. And so what Amazon has done with voice is they've eliminated friction. And voice is, you know, it's a 200,000-year-old sort of phenomena out there. And so what they've been able to do is, you know, use voice and use their massive database and artificial intelligence to figure out what you might be interested in.

And what are the specific areas of voice that are really interesting to you?

What's interesting is that the dialogue for voice, the car is the next big commerce platform. With 90 minutes in a car, I mean, that's a That's a big deal.

Can you say— okay, so the car is the next commerce platform. Say more. What do you mean by that?

Well, I mean that when you look at some of the cars like the Byton, which is the Chinese car, you'll actually see the dashboard is sort of an interactive user interface LED screen, which is 8 feet long and 18 inches tall. And so you have the complete ability to order things, to look at things, to interact in your car for shopping, for banking, for almost anything. And that's, that's 5 years away. But, you know, 5 years can go pretty quickly.

Do we need a self-driving car to be able to be that distracted in our car, though? This sounds dangerous as hell.

Yes, you will need a— this is all part of the self-driving car phenomenon. But yeah, and that's part and parcel. So one innovation begets yet another innovation. So the self-driving car will create a whole new marketplace for commerce.

But let's talk about today when there's not a self-driving car. Is it gonna be— so if I'm a brand and I want to think about being in the car, are all the cars just gonna install Google Assistant, Alexa, Siri, and then I'm the driver and I decide which one I want to use? So I should just be on those platforms, or do I have to build for a car?

Interesting. That's a question that will be answered in the marketplace in the next few years. So I don't necessarily think there's an answer right, right this second.

Do you think that the assistants and the Alexas, etc., do you think they just are more specialized in their own thing? So for commerce, it makes sense. But for information, if Google Assistant's better, would I almost like I go to different URLs for websites? I go to amazon.com for commerce. I go to google.com for information. I go to nike.com to look at shoes.

Yeah.

Do you believe you're actually going to just talk to different assistants or voice agents for different things and they're going to be all in your car?

That's probably more like it because right now when you are looking for, let's say you're looking for a yacht in the South of France, you may probably start with Google and then you actually may go to Amazon at some point. So I think it can flow from one area to the next.

Interesting.

Yeah.

What's changed in the last 18 to 24 months in the narrative of AI?

It's gotten to the point where it's become in the consciousness of people. I mean, AI is not anything new. It's been around since 1500 BC, so it's not new. But it's the— what I attribute it to is removing friction. When you can remove friction from a marketplace, you get acceleration. And that's the story of Nokia. I mean, Nokia went from being a 45% market share to being out of business in 6 years because they, they missed that element of friction.

Tell us what you do.

So I work with I work with boards of directors and CEOs and CMOs, and I help them navigate all the change. So all the technological change that's going on and consumer behavior change, because I feel one of the big challenges is that the— I believe the brain has been rewired over the past 10 years. And it's when you've got people looking at their phones 300 times a day, it basically rewires the brain in causing attention spans to go from 13 to 6 seconds. And if you're a marketer today and you're using a 30-second commercial, good luck, because you only have about 6 seconds of attention span these days. So it's kind of a way to answer your question.

And rewiring my brain, can you say, like, do you believe that that is if it happened faster than ever before? Is it in the last 10 years because of mobile? Is it through just the really the computing age? Our brains are always, I think, being rewired, but is it just happening faster? Faster, is that what you're saying?

Well, it's happening faster and it's happening at scale because, you know, you've got billions of people with smartphones. And if you go back 11 years ago when Apple sold about 300,000 phones in 2007, it wasn't there. But now the price of smartphones has come down and anyone can do that. In fact, you know, governments like Dubai are basically running all of government on a smartphone. So, you know, a good analogy is think about when you ordered a taxi cab. About, let's say, 5 or 10 years ago, you call up a number and you'd wait maybe for about 5 or 10 minutes for someone to get back to you when a cab would be available. But now you order Uber, and if you don't get a response within 20 seconds, you're upset. And if the car can't be there for 5 minutes, you're even more upset. So what happened? And I think what happens is the behavior that's happening with Uber, that transcends itself to other. So people say, well, I can get a car in 5 minutes, why can't I get a dress in 5 minutes? And why can't I get a yacht in the South of France in 5 minutes? Why is it taking so long? So it's not necessarily something that is as different as ordering a cab can actually impact shopping because it's a consumer expectation that If I can get a car in 5 minutes, then why can't I get a suit in 5 minutes? So do we—

what, like, do we understand the implications of 3, 4 billion people's attention span getting cut in half? What's gonna happen with that?

You know, in human history, there are points where we sort of go ahead, using a Star Trek analogy, at like warp speed. And so we're in one of the We're one of these warp speed moments in human history and it's hard to fathom.

What are you waiting to see happen for brands, customers, technology? Like, what are you waiting to see?

Well, it's interesting 'cause in the US we had a presidential election and, you know, politics aside, one thing that we've seen with Donald Trump is that he has been able to get small groups simple direct messages and garnered billions of dollars in media attention. And so I think a lot of people will look at the marketing lessons of a Donald Trump and say, how is he being so impactful? And I think one of the reasons why he's being so impactful is he's a marketer who understands that attention spans are what they are and he's communicating in very succinct bullet points and he's very consistent. So his messages are designed for the world today, but he's also consistent. So he's Make America Great, and P&G was Ring Around the Collar. So it's only complicated if you're in the world working in the way it used to work 5 or 10 years ago. It still works because newspapers still work, although they're greatly diminished. But those that are being successful are understanding all these different things. It's about storytelling, context, community.

If I was the CEO of a large retail brand today, where would you tell me to go look?

I'd look at what Amazon is doing because Amazon at one of the retail conferences talked about the fact that they have a store and not everything's working out for them because it's hard to understand if you're reaching for the milk, is that your hand or is that my hand? And it's hard to understand, is that milk there or is that yogurt? A lot of, you know, I mean, a good example in the 20th century was Thomas Edison. Thomas Edison, he tried thousands of different experiments. And so to be innovative, you've gotta be willing to fail. And because in failure, you learn what works.

Is that something new about the AI space? Is that failure's a part of the entire thing?

It should be because not everything's gonna work.

So how do you cope with that as a CEO? If you're leading a big retail organization and the internet has always, you tested it and the webpage worked, but in this space Siri doesn't even work all the time, so your AI is not gonna work all the time either. How do I even think about that?

Well, there are a couple of ways. You do experiments and you learn, but also there are other companies that are doing this. So for example, sort of a different analogy, but if you look at supply chain, if you want to know like the best supply chain in the world, you would talk to Coca-Cola. Because, or if you want to know sort of the best practices in facial recognition, you talk to the casinos. So some of these technologies have, there are industries where things are very advanced and we don't have to spend 10 years of learning to do this. We can actually just go to some organization that's actually doing something like it and it may not be exactly our use case, but learn.

Thank you very much.

You're welcome. All right.

Thanks for listening. And thanks once again to the folks at LivePerson for their support in making the Machine Learning CAN episodes possible. Get in touch on Twitter @Assist. DMs are open. We're super interested to hear who you think should appear on the podcast. Machine Learning is made by Paul Ciuffo and Michael Elsesser for Limina House. Have a great day!