Times Magazine wrote an interesting article “recently” on how technology — with its disruptive algorithms, is killing the traditional brick and mortar industry. Here’s how it looked:
Near the corner of Main and Walnut streets in the small town of Maynard, Mass., stands a massive complex of aged red-brick buildings. Within those walls, workers toiled amid clanging, churning machinery to produce carpets in the 1850s and Army blankets during two World Wars.
But today the sturdy, old facade houses an entirely different enterprise. The noisy machines and grease-stained factory floor have given way to offices where engineers huddle over glowing oscilloscopes ….”
Digital disruption owes a huge thanks to tech-driven algorithms; it created interesting tasks out of routine job!
That metamorphosis is symbolic of a sweeping transformation that is creating a New Economy. It is a two-tiered economy marked by swift change and stark contrasts. While traditional smokestack industries are reeling from foreign competition, surging high-technology companies are leading the world in innovation…
Yes — if you’ve been in the technology industry — you guessed it right by now: this was written 33 years ago, in 1983!
Disruptive algorithms for everyone!
Last year I was interviewed by a journalist about monopolies and how disruptive algorithms will eventually break away to create a new economy.
I explained about how today’s startups are creating breakthrough disruptive algorithms and creating absolutely new ways to dethrone the incumbents. They would eventually escape the realm of existing monopolies and create a new world of their own. (You can read the excerpt here.)
Recently, I was reading an interesting story about a firm that was founded by two geeks; they wanted to make as many disruptive algorithms available to the world. They wanted to empower developers to be able to use their algorithms within their own apps with less than 10 lines of code! Can you imagine?
I remember talking to Windows developers some 15 years ago and they boasted of a few hundred thousand lines of code and how each line was worth 100K dollars of revenues (back then). Well, Enter 2017 — A world that needs less and less of customer code and more and more of reusable code as building blocks. In today’s world the lesser lines of code you manage, the better!
This company has today some 800+ algorithms which you can use for free in your own apps. The company’s name was a no-brainer : Algorithmia. These guys have already raised 2.4M US Dollars last fall.
An algorithm — for those who are new to this terminology is, actually nothing more than an instance of logic written in software (code) to be effective to intended target computers to produce output from given input. For instance : A simple code – well not actually simple since a lot of research goes into it until it becomes commoditized and ends up in nifty code, with a sample input of a picture could give you a sample output of nudity. Take a look, you can play with this example on their site.
60 trillion dollars of world’s money is data…I’m not kidding!
We have huge amounts of data to manage as we move into new economy. We have to since the world is only going to produce gobs of data every second going forward. This will come from the infrastructure which will be built on the backbone of AI (Artificial Intelligence), VR (Virtual Reality), IoT and what have you.
Some argue that money too is actually nothing but collection of data. What you do with your dollars/euros/pounds is more important than that you are an account holder within a bank. Most banks don’t get it, believe me, they still don’t! This is problematic and spells doom for the current banking industry as we know it.
Take a look at the end of the post for a mother-of-all infographic on the world’s money (created by: Visual Capitalist)
So how are algorithms disrupting monopolies?
My talks with board members of both large and smaller, nimble banks and other services industry tells me one and only one thing : big banks are moving but smaller banks and non-banks are moving at the speed of light! And they better have algorithms under their feet to make them move even faster!
Take banking industry as an example: today there are 2.5 Billion unbanked people around the world and they will bank, but probably not with you since there is a startup with some simple yet intuitive algorithm that is bound to capture this marketplace before you!
Today, the fintech eco-system with firms like Square, Levelup are giving banks a run for their money. And they all have cool and nifty disruptive algorithms that learn as you, the customer, go along doing your thing.
In closing – alternative currencies are coming
Financial industry is heavily regulated and that makes it harder for startups to go for a full kill as that would be extremely inhibiting. But startups soon will find inroads to service customers wholly!
Alternative and full crypto-currencies are coming, I am pretty sure about it! And so is a need for a seamless omnichannel retailer experience in banking and all this is being measure in real-time in a nifty code we all have come to call an “algorithm”.
Disclaimer : Views are my own and should not be attributed to employer(s) who I work for. I have advised global VCs, P/E firms of tech investment and portfolio management some of them managing assets over $250 Billion. I advise startups actively to help develop algorithms in fintech, foodtech and healthtech.