The future is exponential | Pascal Finette

Let's talk a bit about this exponential stuff we're talking about at Singularity University about. So if you think back to like your Math 101 class and classic exponential is a doubling every time period. When you draw it, it's this hockey stick curve. I saw that you have pitch practice after me. I'm pretty sure your revenue projection will look like this, right? It's a classic Silicon Valley revenue projection. It's like an exponential graph. Obviously, the most famous exponential is Moore's Law. So Gordon Moore, 50 years ago, formulated something called Moore's Law, which later became Moore's Law, where he said the number of transistors per square inch on an integrated circuit doubles every 2 years. What's interesting about Moore's Law, a lot of people miss— like, don't know this and misunderstand this. Moore's Law was actually an article Gordon Moore, the guy who invented or built Intel, wrote as a response to an observation of the past. So the original article which formed this, he looked at the last 10 years back 50 years ago and said, what we've seen is that the number of transistors per square inch per integrated— on an integrated circuit doubles every year. And I predict this to be true for the next 10 years. And then later this was adjusted to 2 years, so from 1 year to 2 years, and has been true for 50 years. What this looks like is this. So 1997, ASCII red was invented. ASCII red was the first computer to have 1 teraflops or break through the 1 teraflop computing barrier. So 1 trillion floating point operations per second. $55 million. This thing was the size of a tennis court and was used at the Sandia National Lab to do atomic weapons testing and climate modeling. Massive breakthrough for supercomputing. 9 years later, Sony brings out the PlayStation 3, $499, 2.1 teraflops. This is what computing looks like. So you go from something you use to calculate atomic weapons testing within 9 years to something you can buy at Best Buy to play atomic war on the planet. Right? You're surely familiar with Pi Zero. $5, came out about a year ago now. 191 megaflops, full-scale computer. Now for the price of a venti Starbucks latte, you get the compute power of 2 Cray-1, 2.5 Cray-1 supercomputers. The Cray-1 was released in the mid-'70s. Each of those Cray-1s has more compute power than NASA had, all of NASA together, to put the man on the moon. So now for the price of literally a cup of coffee, you get 2.5 times the compute power NASA had to put the man on the moon.

Used to.

Used to, yes. Back in the late '60s. Well, NASA hasn't put a man on the moon for a while. So we'll see about that. And then it goes super small. Like you take a— this here is a Freescale processor. This is a golf ball. This is a dimple in a golf ball. This is a processor. 2 millimeters by 1.6 millimeters has the raw compute power of an early-stage Pentium processor. There's an interesting piece in there, which is I tell this to my entrepreneurs all the time. Because this processor is super cheap, it's currently $0.75, it goes down in price. Everything, I can guarantee you, everything which has an electric cord attached to it will become smart. The reason for that is because you get it for free. Do I care about the smart toaster? No, I don't. Will I get it? Of course, because you get it for free. Also, this thing runs on the battery in a watch for about 2 years. Which means everything which doesn't have an electric cord will also become smart. If you go up to Napa where they grow wine here, they have something they call smart dust. They're $10 sensors. You throw them on the ground. They measure the soil— the water content in the soil. They form a mesh network, so talk to each other, and then talk to a cloud-based infrastructure and tell the vinter exactly when they have to water the vine to get the perfect result. They're $10. You throw them on the ground. They stay on the ground for 2 years. And after 2 years, you just plow them in the ground. You ignore them and just buy new ones. So I'm super, super bullish on 2 trends. The one is computers becoming extremely powerful. That's all the cloud computing you're seeing, like Amazon and Google Cloud. And computers becoming incredibly small and super cheap. The piece which is important to understand is that these exponential trends are also in other industries. just computers. So let me give you 2 examples. The first is this, DNA sequencing. Anyone doing synthetic biology here? Okay. So this is going to be the biggest revolution we've seen in mankind, bar none. Like the computer revolution was the first, this is the second. So DNA sequencing, reading DNA. The first time we did this for the full human genome, so like our genome, 1999, $2.7 billion, 7 years of effort. So 7 years, a research team did this. Spent $2.7 billion on a single genome, one genome. 2007, we did this the first time commercially. So a company came out and said, we're doing this as a service for the cheap price of only $350,000 and takes us a couple of months. 2014, a company out of San Diego called Illumina brought out a machine, looks like a big photocopier, does the whole thing for $1,000. This is the steepest price drop we've ever seen in any technology In the shortest amount of time. So within 15 years, literally, you go from something nation states can do it and only once because it's so expensive to your doctor can prescribe this. Now here's the thing I teach my entrepreneurs when I work with entrepreneurs. You always have to ask 2 questions in this context, 2 really important questions. The first is, where does this go? So you look at the plotting, you look at the curve and you ask yourself, okay, it's $1,000 today. Where is this in 2 years, 3 years, 5 years, 10 years from now? And the experts, like pretty much unison, will tell you that price will drop to pennies. Reading DNA will become free, very close to free, within 5 to 10 years. Then the second question you should ask yourself, great, what do I do with that? Now I can read the DNA for free, what is it I do with it? I can tell you what you do with it. One conceivable way to do this is this. Every time you flush the toilet in the future, your toilet will sequence your genome in your stool and give you a full health report. Sounds pretty crazy, right? This company, Toto, which is a Japanese toilet manufacturer, a very high-end toilet manufacturer, is working on this. There's a team inside of Toto which says, we're not in the business of making toilets and ceramics anymore. We're in the business of preventive healthcare. Here's the second one. Every single one of you is currently shedding cells. You are like losing hair follicles, skin cells, et cetera. You will leave this room and Tim and I will like hoover up and create a full genomic fingerprint of every single person in this room. Sounds crazy, huh? Well, this is a friend of mine, Heather Dewey Hockbord, an artist based in New York, and I'll let her tell you about her little art project.

Hi. Theoretically, we don't know yet how our DNA might be used against us in the future. New York artist Heather Dewey. One artist in New York is making 3D models of people's faces, people that she's never met.

She calls the project Stranger Visions.

The strangers are people whose genetic How much can I actually find out about you from something you may have accidentally left behind?

So this is happening today. And make no mistake, Heather knows her biology, right? So she's not like your average artist. She knows biology. But what she's doing is effectively she takes literally a cigarette butt, uses a technique which the FBI is using all the time to extract the DNA. She has got one of these Illumina machines in her basement. So she sequences the DNA, sends it off to a lab which is based in Israel, which is a very high-end, very advanced lab, which then basically gives her an idea of what the facial features look like. She then creates a 3D model, 3D prints it, puts it into an art gallery. So we're moving rapidly into a world which would— which looks dramatically different than the world we're living in today. So just be aware of this. And just be aware technology always has weird dark corners.

Yeah.

Another interesting one is this here. Cost of solar or energy conventional— in comparison to conventional energy. So photovoltaic cells, like solar energy. 1977, $80 per kilowatt hour. Extremely expensive. 10 years later, that price already dropped by a factor of 10 to about $10 per kilowatt hour. Still way, way, way expensive. In 2015, here in California, we were producing solar at the same price it costs us to produce conventional energies through coal, for example, 30 cents. A year later, we're producing energy in Dubai. They're building an 800-megawatt facility, a large facility. How much is that? facility for solar for $0.03 a kilowatt hour. When you plot this, you get to this. This is the price of solar. This is the number of— or the installed base of solar panels. Now again, like the interesting question becomes, where does this go and what do you do with it? Where it goes is energy will become free. Very conceivably in the next 5 to— in the next 10-ish years, 10 to probably 20 years, energy will become free. Now why is that important? I can tell you why it's important. It's important because we do this. We kill each other over energy because energy is something we consider a scarce resource, right? Oil is a scarce resource. Coal is a scarce resource. Whereas in reality, energy is actually abundantly available to us. If we were theoretically to build a solar panel this size and put it into sub-Saharan Africa, and notwithstanding that you need to transport the energy, that's a whole different story, that is enough to power all of our energy consumption's need For the whole world. Energy is absolutely abundantly available to us. Now, if you think about this, if you think about some of the world's biggest problems, say for example clean drinking water. Clean drinking water you can get out of the ocean using something called desalination, where you basically like evaporate the water. We can do this. It's just really expensive because we need a lot of energy. You need to boil the water. Now, if I have free energy, that problem has gone away.

Yeah.

The futurist Albert Allen Bartlett, who teach— taught— he's dead unfortunately now, but he taught in Boulder, said once that the greatest shortcoming of the human race is our inability to understand the exponential function. Let me explain this. We're calling this the linear exponential deception. Here's the challenge. As you grew up, as we all grew up as a species over the last 250,000 years, the observable universe the thing we see is linear. The day has 24 hours, the year has 365 days, seasons come and go in a very predictable cycle. Everything around us observable is linear. The thing which is not linear is cell growth, but we can't see cell growth unless, you know, we use a microscope. So we've been growing up in a world where we're really used and built Towards thinking about linear growth. Imagine 30 linear steps. So you take 30 steps. You've got a really good sense how far you get, right? It's like 30 steps, like for me, probably towards kind of like your terrace, roughly. So it's 30 meters, 30 yards, depending on your metric. Now imagine you take 30 exponential steps. How far do you get? Every step is twice as far. You go from 1, 2, 4, 8, 16, 32. The formula is, by the way, 2 to the power of 29. How far do you get? 2 to the 29th. Intuitively, gut feel, how far do you get?

1 trillion.

Sure, but how far is 1 trillion? Probably out of the— out of our solar system, maybe? Out of our solar system, probably a little. But you don't have a really good feel for it, right? Like, it's kind of a guessing game, right? By the way, it's a billion meters, not a trillion meters. So quite— not quite. It's 25 times around planet Earth. It's to the moon, back from the moon, and halfway to the moon again. You see an idea. It's like really hard for us to even like intuitively understand how far you get, right? Now if I like do the trick question, how far do you get with let's say 31 exponential steps? Right, you need to think about it, right?

1,000.

It's 50 times. It's a doubling. Of course. But it's hard, right? Intuitively it's really hard to understand. So here's what happens. Technology moves on this exponential curve. Like computers move on this curve, right? We know this from Moore's Law, 50 years. Your thinking is linear. In this curve now, you've got 3 interesting points. The first is this here. Because these exponential trends always start out really slowly, they're deceptive. Because they're deceptive, you expect technology to be better, and you're becoming disappointed. Anyone of you have used Google Glass? OK. What was your experience? It was nice, but it wasn't the best. The perfect experience.

Yes.

See, I was at Google when we released Google Glass. I was walking around on campus with Google Glass for 3 months. I can tell you, Google Glass is too expensive. Battery life is terrible. Functionality isn't great. You look like an idiot. So, right? So what happens is you're disappointed. The challenge is when you're disappointed, you're dismissing. The amount of people I had who like put on Google Glass and were like, yeah, this is not good. And then the conclusion was this will never be good. Was staggering, right? But technology gets slowly and gets slowly better. And then you come to this moment when Steve Jobs gets on stage and shows you the iPhone. I was at Moscone Center when Steve Jobs got on stage and showed the world the iPhone. And next to me— this is a true story— next to me sits this guy in this beautiful suit, like business guy, right? And we're watching like Steve doing his like, yeah, and one more thing, blah blah blah, right? And he pulls out his Nokia phone. Brand new Nokia phone and looks at it and says, shit. Because he understood, like, this is the moment when a phone exists not as a phone anymore. A phone is a computer. Like, everything has changed. Like, his $700 purchased phone, just like boom, gone. And then you come into chaos and amazement. This is where you can't even keep up with the change anymore. Can your smartphone penetration— today 7%— In 3 years, 90%. In 3 years, Kenya's all— every Kenyan is on the internet. That's chaos and amazement. The challenge is if you stay on this line, it's your path to doom. This is where you die. This is where you're— when you're Nokia. Nokia's last quarter revenue was $712 million in losses in 3 months. And they haven't produced a single phone. They were the king of the hill. They're gone. So here's your first kind of like summarization. As simple as this sounds, it's really profound. Once a technology becomes digitized, it turns or moves on an exponential curve. The biggest business opportunity you can find in life is if you find something which is analog and you can turn it into a digital good. Because you move it from like linear growth to exponential growth. Massive opportunities. This is the reason why everybody is so incredibly bullish about, for example, agricultural technology. Because that's a whole business which is analog to a large extent. If you turn that into digital, it turns into a gold mine.