Chapter 26


THE ORACLE

Paul Saffo


THE SCOUT (Stewart Brand): Nobody in the business gives better quote than Saffo. Every journalist who calls him gets someone who is familiar with the news flash of the day and its deeper significance. Paul speaks with succinct eloquence.

Paul Saffo is director of the Institute for the Future, a twenty-nine-year-old research and forecasting foundation located in Menlo Park, California.


"For most of this century we have viewed communications as a conduit, a pipe between physical locations on the planet. What's happened now is that the conduit has become so big and interesting that communication has become more than a conduit, it has become a destination in its own right‹what in the vernacular is called cyberspace."

"This is interesting stuff, Paul," I said. We were having dinner with John Markoff, Cliff Stoll, Stewart Brand, and Howard Rheingold at City of Paris restaurant in San Francisco. Paul Saffo is a rapid-fire quote machine, a walking-talking sound bite, an instant headline for the next journalist who calls looking for an expert opinion for tomorrow morning's story. He's good.

Paul is also Silicon Valley's resident intellectual. He's the big-picture guy who articulates the trends. He is preoccupied by the long-range implications of the information revolution for business and society. Paul is a senior member of the Institute for the Future, a nonprofit think tank that consults to a wide range of business and government entities, including telecommunications and consumer companies.

In between bites of steak au poivre, Paul predicted that the dance between laser-enabled conduit and processor-enabled computing power will continue over the next couple of years. Just as the processor shaped the last decade, the device shaping this decade is the communications laser, and it is the advent of ever cheaper, more powerful lasers that is setting the stage for an access revolution. Each new processor advance‹each new version of the Intel chip, the Motorola RISC chip‹will create new communications demand, and each new communications advance will create a greater demand for more powerful processors. How does this change in the relationship between communications and processing change our lives? "Content is the second most stupid term used today in the information revolution," Paul said. "The first most stupid, of course, is information. I agree with Jaron Lanier, who says that information is nothing more than alienated experience. Content evokes this notion of denatured, indifferent, unchanging information that is somehow a commodity. That may be what content is, but this business is not about selling commodities."

According to Paul, content is about selling unique things. It is about understanding. It is about things that touch and change people's lives. "The scarce resource in this business is not content, but context," he continues. We have this hangover from the bad old days when there was a shortage of conduit and content. Now that content is hyperabundant, it is essentially valueless. The thing that people will charge monopoly rents for is not content but context, the sense-making ability to take this ocean of information and turn it into something useful that actually touches and changes our lives‹and entertains us."

Paul gives talks that verge on performance art. He is in great demand as a consultant for companies in a myriad of businesses that want to zero in on the future. He may deny the efficacy of "convergence" between media, technology, and publishing companies, but he is convergence personified. As Stewart Alsop says, "Paul is a connections guy: he knows how to connect things up, he knows how to connect people up, and he knows how to connect ideas. He's a human switch."

"Paul, it's time to write a book," I said, after absorbing his soliloquy, which was impressive both in its intelligence and in the confident manner of its delivery. "I am writing a book John, and I have an agent and a publisher." he replied somewhat testily. "Don't you remember when I came to your office five years ago? You turned me down flat."

I had completely forgotten. "Of course, I turned you down," I said, winging it. "You weren't Paul Saffo five years ago, and it was four years before the Internet hit big. The future's more interesting now than it was in the past. So are you."

Paul Saffo is "The Oracle."

THE ORACLE (Paul Saffo): Without a doubt, the main event of this decade is laser-enabled access. First there was access to information by individuals, but now, and much more important, a new kind of access is emerging: instead of people accessing information, we are moving into a world defined by people accessing people in information-rich environments. The fact that the Web exists is proof of that trend. But social spaces like MUDs (multiple user dimensions) will be the next big thing.

It is important in this revolution to be constantly on guard against developing hazy utopian notions that our lives are somehow going to be better. The Internet, at the moment, feels democratic and open, and everybody is accessible, but it is certain that as the Internet matures, walls and blocks and passwords and exclusion zones are going to arise, and people are going to create elite environments that others are not allowed into. At the other extreme, people are going to be talking closely with others whom they should not be talking with. It is not always a good idea to put an extreme fundamentalist into the same space with someone holding the opposite views. You will not have constructive communications. This stuff is not utopian. It is social dynamite. It is tremendously unpredictable. Most of the benefits will be positive but there will be negative impact.

Repurposing is a disastrously oversimplified concept. At its best, repurposing amounts to nothing more than intellectual strip-mining of an old medium, in a desperate attempt to beat one's way into a new medium, to figure out the formula that will cause people to get excited about it. We tried to repurpose old radio shows into television, but this wasn't enough to excite consumers. Television took off when we created new content designed with the subtleties of the emerging medium in mind. The same will be true this time around. There is something larger than repurposing afoot, and that is how you take old stories, old ideas, old themes, and breathe new life into them. The stories that may have the biggest life in the new medium may be the stories that weren't the biggest hits in the old medium because they were told slightly ahead of their time or told in media that didn't quite make sense for the story. So you have to hoard all that old stuff‹there are diamonds hidden in these huge intellectual tailings of information.

One would not even recognize the diamond in the tailings if one looked today. It's a good idea to hold on to intellectual property, but I wouldn't rush to get it typed up to dump onto the Internet, or even put into digital form, until I had a sense of which parts are going to be worthwhile. Otherwise, you might end up with the intellectual equivalent of having put everything on microfilm in the 1960s because you thought libraries were going to buy it. Just as one would be embarrassed to have a warehouse full of microfilm canisters today, the same may prove to be true of digital technologies. Putting intellectual property into digital form is not what's critical.

The one thing about intellectual property that will not change is the complete chaos of intellectual property laws. Our intellectual property system, copyrights and trademarks and patents, traces its origins back several centuries and is held together with the equivalent of baling wire and duct tape. The temptation for lawyers and politicians when faced with rapid change is to create a new system that throws out all those old things. Lawyers do an even worse job when they try to create a legal regime that anticipates something not quite here yet than when they try to codify after the fact. So, God save us if lawyers and legislatures manage to do that, because the system has a regenerative, self-healing quality. We will figure out the proper legal regimes as the environment continues to evolve.

The revolution afoot today is the ultimate fantasy for writers who have harbored grudges against those folks who stand between the writer and the reader. Without a doubt, new communications technology will be used to disintermediate some of those players, at least in the short run. It will be at least as big as the advent of desktop publishing in the mid-'80s. The Web today is like desktop publishing. It is a way for writers and other creative types to cost-effectively reach ever smaller audiences with specialized information. A small number of people out of the large number of people trying to do this will actually find a way to make a steady living at it.

But you will not disintermediate all the middle people in this business: digital technologies make it ever cheaper to be a middle person in this process. It may be that we all end up being middle players and the notion of disintermediation proves to be largely a phantom.

Just how big this revolution is depends on your time frame. If you are looking at a one-year period, the advent of the Web over the last twelve months is not a terribly big deal. If you look at twenty to thirty years, the events of the last three years probably are comparable to the advent of the printing press, encompassing the advent of the PC, the invention of the Internet, the growth of global nets. If you look over a hundred-year period, it is as big as the events swirling around the Renaissance from about 1428 to 1515.

To understand what this means for culture, you have to ask the question: Is this a big revolution or not? Humans are fascinated with change. But amid all the change going on, the things that don't change, the constants, are vastly greater than the things that are changing. Even in periods of rapid change, it is the constants and the continuity that set the stage for innovation. Culturally, this is the latest step in a long cultural, intellectual tradition of taking raw untamed technologies and turning them into compelling media that touch and change our lives. That's a slow evolutionary process. More precisely, it is like a process of punctuated equilibria, as the evolutionary biologists would say, where you have periods of fairly rapid change followed by periods of consolidation. We happen to be in a period of very rapid change. The consequence, as Professor Tony Oettinger said more than twenty years ago, is that the microprocessor is the solvent leaching the glue out of our social institutions. The consequence is a fundamental rebalancing of social contracts, business structures, organizational structures. Everything is up for grabs, but is not all going to change at once, and if we all live our lives one day at a time, it is all very manageable.

The impact of digital technology on commerce, buying and selling, hanging out, socializing, money, all those things, is still barely under way. We are taking one more step in the process of a steady abstraction of what we mean by money. Once upon a time, we bartered, trading actual physical objects; then somewhere in the Fertile Crescent someone had the idea of using symbols to represent those physical objects so you didn't have to carry a sheep in your pocket every time you wanted to do business. There has been a steady process of abstraction from coinage to paper currency. The most interesting step happened in the hill towns of northern Italy, where the right combination of technologies and social needs, trade with the east and across the Mediterranean, conspired to set the stage for modern commerce as we have known it for the last four hundred years.

The signs of it are all around us today. All the modern words of commerce‹credit, discount, value‹have Latin roots. All came from northern Italy. Italy was so much the center of it then that Herr Fugger, the head of the most powerful financial house in all of Europe, sent his son to Italy to be educated. If you read passages from books of the time, you'll notice astonishing echoes of today's issues. We worry about how we move money safely over the Internet. The same thing happened back then in Italy. There are wonderful records of correspondence between people who were setting up triangular trade of sheep and sheepskin and tanning materials with Egypt and Tunis and into Italy. It's exactly the same process. We are going to go through the same confusion in terms of value. Back then, lot of people got rich and a lot of people lost their shirts. If I were a businessman trying to get on with my job today in an industry touched by electronic commerce, I would feel a bit like John Jacob Astor, who was reported to have remarked while sitting at the bar of the SS Titanic, "You know, I asked for ice, but this is ridiculous." There is enormous opportunity here, but it is also going to be enormously disruptive for people trying to get on with business.

We are seeing old businesses being changed in subtle ways by the Internet. The first businesses that are really going to take off in this world are the catalog companies, for the simple reason that the World Wide Web is a perfect way to do catalogs once you solve the problem of the cost and awkwardness of the machines people use to do the accessing.

There is an important subtext here. The notion of buying and selling things in a digital age evokes visions of people in some celestial casino trading information, but what this really comes down to is a more efficient way to buy and sell stuff and move stuff around the planet. In the end, if it doesn't lead to getting a better stereo system or a fancier car or a better household appliance, it will not last for long.

I am uneasy about all the executives who are betting on digital convergence, for the simple reason that digital convergence is not happening. We are seeing convergence certainly at a narrow technical level. There are processors in everything, and the communications laser is making bandwidth ubiquitous. But convergence at a broader technical level seems to be leading to something quite the opposite, which is digital divergence. If you look across the patterns of industries today, there is a unifying theme. The core businesses of television, Hollywood, consumer electronics, the personal-computer industry, and the consumer electronics industry are imploding. In the personal-computer industry, PCs are mere commodities being sold at commodity prices. The people who are winning are the ones who can commoditize their products. The ones who are losing are the ones who sell unique products, like Apple. The core business of consumer electronics‹TV, VCRs‹is flat, with no prospect of growth. It is clear that the core businesses are in trouble, but interesting things are happening at the margins. As the industries are dying out, they are also overlapping, and what seem to be the margins are actually the centers of entirely new industries that will shape change in our world twenty years from now.

In evolution, species often get very large just before they become extinct. As I look at executives wheeling and dealing and making their companies bigger, on the one hand it looks like they are leveraging scale to take advantage of ever larger global opportunities. On the other hand, it looks like they are once-fierce competitors huddling together for comfort as the world crashes in around them. For big businesses today, to make it into the environment that will exist twenty years from now, gathering their resources together to find a way to leverage them as best as possible is the only way to go, but in the end leverage will be how to turn those large companies into small companies that are in the position to take advantage of the emerging opportunities at the start of the next decade.

Jaron Lanier's observations about sedimentation and the dangers of picking the wrong standards are extraordinarily profound. We look at this stuff as bright and shiny and new, but it is clear that some day it will be old and it will hang around far longer than anyone wishes. We will be stuck with DOS and Windows for longer than anyone would want. Ted Nelson, paraphrasing Lord Acton's phrase of a hundred years ago, observed about Microsoft that all power corrupts and obsolete power corrupts obsoletely. In our rush to standardize, my fear is that we are going to end up settling on standards that will come back to haunt us in the future. We are performing a great unwitting experiment on ourselves by introducing all this digital technology into our lives. Where it ends up is anyone's guess. But, wherever we end up, we are in for a fascinating and utterly surprising ride.


THE GADFLY (John C. Dvorak): Saffo is a futurist and, like all the rest of them, is wrong most of the time.

THE GENIUS (W. Daniel Hillis): Saffo is the Alvin Toffler of his generation.

THE CATALYST (Linda Stone): Paul is a futurist and a presentist, too, because he understands what's going on in the present, and can describe it, and can help clarify it for everybody. Sometimes understanding the present is more helpful than going into the future.

THE SCRIBE (John Markoff): Saffo is the industry's dancing bear. He has the ability to conceptualize ideas and articulate them better than anybody I've seen. Paul gave me the best pull quote of my career. It was in a Sunday "Week in Review" piece on "Net Sex," and his quote was, "There's a lot of heavy clicking going on out there."

THE SEER (David Bunnell): Paul Saffo is really on top of the futurist thing. He is the only one in this profession who actually knows what he is talking about and has the capacity to not let his ego dictate his conclusions. He is hard to pigeon hole.

THE IDEALIST (Denise Caruso):
Paul Saffo is quicker with a quote than anyone I've ever known in my life. He is a fountain of the most arcane, yet somehow appropriate, information. And he is as allergic to hype and puffery as I am, though he's much more polite when he calls people on it.

THE STATESMAN (Steve Case): Paul Saffo is very bright and a terrific speaker, and has a unique ability to capture the essence of what's happening in an engaging sound-bite.

THE IMPRESARIO (Richard Saul Wurman): He gently slides past all of us astonishing connections, whether from the medieval soothsayers or the inarticulate predictors of today. Everybody's choice as a speaker and as an observer. Paul's middle name should be homework.

 


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Excerpted from Digerati: Encounters with the Cyber Elite by John Brockman (HardWired Books, 1996) . Copyright © 1996 by John Brockman. All rights reserved.