High-Impact Entrepreneurship

Salim Ismail on Singularity University [Transcript]

Endeavor is pleased to make public the following transcript from a presentation at the 2011 Endeavor Entrepreneur Summit in San Francisco. The event, which assembled over 450 entrepreneurs and global business leaders, featured dozens of entrepreneurship-related presentations by top CEOs and industry experts.

Overview: Salim Ismail, successful angel investor and entrepreneur, former vice president of Yahoo! and current executive director of Singularity University discusses what Singularity University is and does and how technology will radically change the future.

Bio: Salim is a successful angel investor and entrepreneur – his last company, Angstro, was acquired by Google in August 2010. He has operated seven early-stage companies and is a frequent speaker on internet technologies, private equity and entrepreneurship. For the last two years, Salim has been the Executive Director of Singularity University, which is training a new cadre of leaders to manage exponentially growing technologies. Prior to that, Salim was a Vice President at Yahoo! and the Head of Brickhouse, Yahoo!’s internal ‘ideas factory’ where game-changing ideas were brought in, built and launched. The unit analyzed thousands of ideas and launched four products during that year, the latest being Fire Eagle. He also serves as co-founder and Chairman of Confabb.com, co-founded PubSub Concepts and is also on the board of Breakthrough (www.breakthrough.tv), a global human rights organization focused on violence against women, racial justice, and immigrant rights. He Twitters his thoughts at @salimismail.

From the full remarks:

Salim: Singularity University is a nonprofit organization in Silicon Valley. We are a nonprofit and educational university founded by Google, Nokia, Kauffman Foundation, etc. And we basically pivot around the idea that computing is going up exponentially. You are familiar with Moore’s law, right? It shows that price performance of computing has been doubling every 18 months for 60 years. And this is driving a lot of the innovation and underpinning a lot of the destruction that is happening in the world today.

So for example, a $1,000 laptop ten years ago in 2001 had the computing power of the brain of an insect. Today, in a $1,000 laptop, we have the computing power of a mouse. So slightly better; quite a bit more complex. In ten years,we calculate that this $1,000 laptop will have the computing power of one human brain because we are doubling every 18 months. And by 2045, all 9 billion human brains’ combined computing power will be in a $1,000 laptop.

And the question is, what will we do with that kind of computing power? We have the viewpoint that we don’t know where technology is going, but that’s actually not true. I know exactly how big, how much computing power will be in this device in three years, in five years, ten years, twenty years. It’s been incredibly steady. What we have is a lack of imagination as to what we would do with that. So this laptop took the size of a room twenty years ago and cost a billion more. In twenty years, this will be the size of a blood cell and will cost the same. The question is what will we do with that.

Question: But even if it is so small, would people still buy something that tiny?

Salim: Yes. Because you could put it in your bloodstream. You could put it in your clothing. You could put it in your brain.

So we pivot around this idea that we have exponential growth. How many of you have heard of Ray Kurzweil? Ray Kurzweil is an inventor and a futurist. He invented the Kurzweil synthesizer and digital music came from that. He also invented optical character recognition and a bunch of technology over the years. And Ray found that more importantly than a great idea, the timing to the marketplace has to be correct. So he started trying to predict when technology would happen. And he started tracking the price performance of computing. He showed that the price performance of computing has been unbelievably steady for a hundred years, going back through vacuum tubes, transistors, integrated circuits now, etc.

And his question was, why is this curve so smooth? We have ups and downs in the industry, we have wars, we have recessions, and yet this price performance has been unbelievably steady. He studied this question for about twenty years and about five years ago he wrote this book called The Singularity is Near. And in the book he realizes that any domain or any discipline that becomes informationally handled, goes into exponential growth. For example, now that we’ve sequenced the human genome, medicine is essentially driven by that power. So Ray identified a set of technologies that are all very rapidly accelerating in their price performance. Nanotech, biotech, robotics, computing, medicine, energy.

Peter Diamandis is the other cofounder who runs the X PRIZE Foundation which gives large public prizes for breakthroughs in places where there are market failures. So they just did a 10 million dollar prize for the first car that would do 100 miles a gallon with no emissions. In total, 156 teams around the world competed for that prize and there were three winners. So they look for basically where there are stuck marketplaces where they can do a prize or a contest to recreate innovation in that area. Two and a half years ago there was a founding conference at NASA and we brought together 50 or 60 thought leaders from around Silicon Valley and we asked a question: Is it worth creating an educational institution focused on the fastest moving technologies in the world?

I was there because I was the head of innovation at Yahoo! and I ran their incubator. I set up a relationship between Yahoo! and NASA and they invited me to the conference. I had never heard of Ray and walked into the conference completely blind. There were two very important observations that came from this. The first is when Larry Page got up and said that if you’re bringing together top thinkers in the world in these areas, then focus on the biggest problems in the world. We don’t have enough smart people thinking about these issues. And the second observation, the one that really got me excited, was that if you look at some of our grand challenges, the financial crisis, climate change, pandemics, swine flue – these problems are rooted in exponential and accelerated factors. The spread of a pandemic is exponential. Our leadership around the world does not understand this phenomenon. Business or political.

Frankly, human beings don’t understand this concept of the exponential function. So if I take 30 steps linearly, I’m going to get to the other side there. And it’s pretty easy to visualize step 10 or step 20. If I take 30 steps and I double at every step, which is exponential growth, I get to a billion. Very big difference in outcome. It’s very hard to think that through. We are biologically linearly trained. If you ask the smartest people in the world where is something going, they will always make a linear projection. We are not used to thinking in an exponential way. So our viewpoint was, the next generation of leadership in the world, given that we have accelerating and disrupting problems, our next generation of leaders has to understand that better than the current leadership.

That’s essentially our mission statement. Arm them with where these technologies are going and point them to the biggest problems. Now the reason we focus on these technologies is that these technologies are all doubling in the price performance in anywhere from 18 to 25 months. So they can also scale to a global level. The rise of mobile phones is an example. If you built a solution on mobile phones ten years ago, you could ride that wave. Amazon or eBay or Google are all riding the Internet wave, which is doubling in a rapid way. The second reason is if we don’t solve some of these global challenges with technology then we end up in war. There are 70 armed conflicts in the world fighting over clean water today. Yet we are surrounded by water. So we have a technology problem there. War is a very expensive way of progressing humanity. So we think technology is a much better way for solving grand challenges.

Now if half of the world is linear and half of the world is exponential, that creates a huge disruption. We’re seeing that in the Middle East today where there were old regime structures and a new way of thinking about things and they don’t mesh. That’s usually stressful but it also provides a lot of opportunity. So we do two programs. We do a graduate studies program every summer. We bring together 80 of the top graduate students in the world. They come from 35 or 40 countries. We’re in session right now. They focus purely on how do we solve grand challenges. Now these 80 students in the summer program study five core technology tracks. We also study future studies and forecasting policy on ethics, finance, and entrepreneurship as management tracks. How do you spot an exponential trend? How do you measure it? What particular issues do you run into?

Are you familiar with 3D printing? 3D printing is actually one of these areas that is growing exponentially. They were tens of thousands of dollars. Today an $800 3D printer will print 70% of the parts for the next printer. What it means is that you can fabricate something incredibly complex and the complexity is free. Now stem cell researchers are using these 3D printers to spray layers cells one on top of the other and fabricating human organs. They are literally printing organs. They are very close to fully working prototypes. So you scan the organ and then you tell it to print it.
If you think about fabricating human organs, that one development has massive ethical issues and legal issues and regulatory issues. How do you manage that? What if someone hacks it? So we think a lot about how does any regulatory framework keep pace while technology is accelerating away from us.

We have a set of advisors that come and speak. Students get about 300 hours of lectures of 160 speakers. Then we have a track chair that is a global thought leader in that technology. So we are attracting all these people. What is attracting these people is that you can be a global expert in nanotech, but all the innovation is happening between the cracks, between nanotech and robotics or something else, and they get to explore these adjacencies with their peers.

Question: Do people come to you or do you recruit?

Salim: Both. Mostly they come to us. The good news for us is that we have way more demand than we can handle. It’s also a problem. The first year we had 40 students to pilot the program and we had 1,200 applications from 70 countries. Last year we grew it to 80 students which was kind of our full capacity. Last year we had 1,600 applicants from 85 countries. This year we had 2,000 applications from 109 countries for 80 places. What we are looking for in the students is someone who has done something entrepreneurial or leadership – built a company or built an NGO or ran an office, something with solid leadership experience, students that have done a masters or a PhD in one of the areas that we have studied, and then we look for people interested in solving global problems. That’s how we whittle it down.

To give you an example, Endeavor Entrepreneur Santiago Bilinkis, a recent graduate of the program, built and sold OfficeNet. One of our students from last summer works with nonprofits in Chile which works with 45 million people around South America. Our youngest student is a fellow from MIT who is doing his PhD at the age of 18. He is the youngest MIT PhD candidate ever. He started college courses when he was 8. You think he should be very socially awkward, but he is a perfectly nice guy.

What we try to do is bring them in for the ten weeks. In the first week we bring in the World Bank, the Clinton Foundation, and we talk about what are the characteristics of these problems. What’s been tried? What’s failed? What solutions look interesting? So the students have a deep understanding of those areas. They then get 300 hours of lectures from 160 speakers on what the future is of biotech, robotics, etc. What’s going to commercialize tomorrow. What’s different from other universities is we focus about 80% of curriculum on the future. Most universities focus on the past. We take that and we flip it the other way. Because leaders have to be able to project forward into the future. Most of the leaders in the world have no idea about 3D printing in the same way that most of the leaders had no idea about the power of the internet and mobile technology saving the Middle East. So they come through this and about halfway through the summer this set of 80 students is the smartest collective of people in the world about where these technologies are going because they have the breadth and the state of the art view because each of these technologies is moving incredibly fast.

One of our associate founders built and sold a company specializing in robotics and he came to our class and he learnt more about robotics than running his whole company. Supposedly he should be at the edge of his field but the world is moving so fast. The second half of the summer the students form teams around one of these grand challenges. Their objective is to come up with a product or service that impacts a billion people within ten years. At the end of the summer, we launch those. We launch NGOs, for-profits, research initiatives, each attempting to impact 1 billion people. So it forces them to think big.

So a couple of examples on what has come out of this. In the first year this team looked at the rise of 3D printing and robotics. They looked at the housing and construction industry and they noticed that the way we build houses today has not changed in five thousand years. So they devised a crane shaped mechanism, running on rails with a nozzle in the middle, and they will 3D print a house in about a day and a half. In concrete, or adobe, or sand. This means that they design of a house is soft. You can do it in your computer. We imagine that they can start printing furniture and other things with it and do all sorts of things. This might be hugely useful in Japan.

Another idea from last summer is this team that was focused on clean water. During one of these lectures, a new molecule was talked about. This synthetic molecule had one side effect of being very efficient at separating water from salt. So they asked the researcher if you could use it for desalinization. He said he had never thought about it. It was intended for some other purpose. They worked with him and they came up with a solution. They came up with this natural filter using this new molecule. At the end of the summer we bring back the World Bank and the other foundations and we ask them what they think of these solutions. How would you deploy them? They tend to agree that this could be the first ever low cost desalinization solution.

Another example. TechCrunch runs a conference called Disrupt, which happens in New York City. So our very first startup called GetAround won the top prize. What they do is peer to peer car sharing. You are familiar with Zipcar. Zipcar is great, but what these guys thought is you have all these 250 million private cars in the US. And they sit empty 95% of the time. Why not tap into that? So they used iPhone and GPS location based systems and a trust mechanism and say, “My car is here at the office from 9 to 5, if somebody wants to rent it, it is $15 an hour.” Somebody else can say that they want to use a car for lunch and apply. The other person can then look at their reputation and agree. Then that person can walk up to the car, unlock it and start it with the iPhone and walk away. Their key innovation is they invented a device that makes a car fully shareable for $150 dollars. They only have 2,000 cars signed up in the last month. So using a peer to peer solution, this is a huge possibility.

So we spun out four companies in the first year. We spun out ten companies last year. Our problem spaces this year are energy, poverty, global health, education, security and space. So the teams will each try to come up with a solution to impact this. One of the weird attributes of our model is that because biotech today, for example, is quite different from biotech a year ago, it means that every year we bring our entire faculty together and we revisit the entire curriculum. We have almost a real time curriculum development process. It’s because we have to.

We also run a one-week executive program for the existing leadership in the world. We do half days on each of the core technologies. It’s an hour on what is it, a second hour on what are the major breakthroughs we expect to see, and then two hours on what are the implications of this. We do that for half the week and each of the executives looks at their domain and then thinks about how all of this is going to affect their business. The metabolism of the world is increasing driven by these technologies. How do you make sure that your business is not wiped out because of some technology? So at the end of the week they present back to each other. We do this three or four times a year. We’ve had a lot of success.

Basically we bring these people in, we change their brains to start thinking in this doubling pattern and then we send them back to their home country. They have a new way of thinking then. I mentioned that we have a lot of applications. This is how we sort our applications. For all of the technologies that we have it ends up colored coded and sticky dots. So out of the 80 students, half of them have a deep technology background. 25% come from the developing world. 1/3 are women, etc.

Question: Is the executive program as difficult to get in to?

Salim: No. For the summer program you have about 1 out of 20 chance of getting in. For the executive program it is about 1 in 2. If you are doing this entrepreneurship stuff, you’ll get in. So Santiago, having built and sold some companies, having been chairman of Endeavor Argentina, we know that given exposure to these technologies, he will do something crazy.

So last year we did a pilot project with a university in Sao Paolo. We told them we were going to guarantee them one slot. We went out there and we said that one of you will get to study at SU this summer with the top minds in the world. So we ran a contest to come up with an idea that would impact a million people. At the end of it, 230 projects had been kicked off, each trying to impact a million people. So this year we finished running a dozen contests around the world. In Chile, Guatemala, Brazil, Russia, Spain, Israel, and Palestine. Same question. In Israel there were 80 projects that were conceived. When they finished the judging, there were six finalists. They brought fifteen judges together. I arrived in Israel to do the judging. They were the elite fifteen people in the country. The defense minister, the heads of the two universities, the billionaires, etc. I said, “Look, you don’t want fifteen judges. That’s too many. You want four or five judges.” They said they invited fifteen people because only four would come. OK — good problem to have. There were six finalists. The third place guy has been working in the desert and he has figured out how to get nanotechnology to get solar cells to 80% efficiency, which is near the theoretical limit. One of the judges says, if you can find a slot, I will pay for him to go. So he is here for the summer. Two other projects got term sheets from VCs just that night. Then one of the Israeli judges got up and said, “Do you have a contest in Palestine?” I said no. He said he would fund the contest in Palestine. So just imagine that an Israeli industrialist funds a Palestinian contest. So we ran the contest there and we now have a Palestinian student also. So this worked out very well.

So we are getting a lot of attention. I spoke with the State Department last year. We signed a deal with Shimon Peres. And we will be driving all of the innovation for the World Expo in Milan.

Question: Why is it called Singularity University?

Salim: So the name comes from a concept called the technological singularity, which was coined by a science fiction writer. A singularity is like a black hole, or the big bang. It’s a mathematical event and you can’t predict what’s happening past that mathematical event. So he coined this term called the technological singularity and the basic meaning is that machine intelligence is going up exponentially.

At this Summit, you all saw the IBM computer WATSON. Twenty years ago people said that could never be possible because it requires huge nuances in language. It cost them a billion dollars to do that, but the cost is coming down 50% every 6 months. So in a short amount of time, that could be in your iPhone and you could use that for medical diagnostics. 30% of all medical diagnostics is wrong. You go to your doctor and he is wrong 30% of the time. I’d much rather trust in AI in a computer. So it’s too difficult. What we are doing is thinking about one of these breakthrough ideas and then how do we implement it. So your question is how do you scale it? We don’t know.
I think what will start happening is that universities will start teaching this. That is starting to happen. Our traditional university model was created in the 1400s. Our existing university systems don’t do this. When you are doing graduate studies you are studying neuroscience and you study one dendrite for five years. What we are doing is taking these people with academic focus and lifting those abilities to the global technology. Da Vinci was the original cross disciplinary genius. What we are doing is bringing the most ambitious people, teaching them the latest technologies, and pointing them to the biggest problems.

The other things that we teach are standard entrepreneur things like taking risk. If you want to make a big impact, you have to take a big risk. And in many parts of the world, the cultural acceptance of risk is just not there. I spent five years restructuring large French companies. There is no concept of risk taking. So this is why we are based here.

So Santiago [Bilinkis], tell us for 30 seconds what your experiences were like last summer.

Santiago: It was an unreal experience. It is exactly as he told. The faculty was out of this world. My classmates were out of this world. Prior to Singularity University, I was running OfficeNet. Then I spent ten weeks dealing with the world’s biggest challenges, hearing about AI, biotech, nanotech and then I came back to my life. Sometimes when I go back to my notes and I start reading them, I think, what’s the dream? One of the challenges for me is how do I funnel that. When you go back, people think you are a lunatic. It took me a while to get to the point that my framework was clear enough and try to talk about the experience and convey the positive messages of all that I experienced.

Question: Is this the same for all the students? What happened to the graduates? What have they done?

Salim: 70 to 80 percent of them stay with the team project and keep working on it. When you expose someone like Santiago to a big problem, it’s hard to go back. So that is the infection.

Let me finish the singularity question because it is an important one. The technological singularity is a theoretical point in time when machine intelligence overtakes human intelligence. So it’s a point in time when our evolution moves from a biological evolution to a technological evolution. The two paths that that could take is you could end up in the Matrix or Skynet, like Terminator and the robot overlords take over the world. Or the other, which is more of what we are seeing, is that we are expanding ourselves as human beings; we are expanding the human experience. So for example, my communication, I don’t have a memory right now, my memory is in this device. All of us. We have laid off, unemployed neurons because our memories are here in this device. Our relationships are digital. Our communications are digital. So this theoretical point in time I don’t actually believe; I think it’s a spectrum. And I think we are rapidly digitizing the world without even realizing it. And this has huge consequences. We’ve lost the whole digital rights; the digital music patent is gone. The patent system is fundamentally broken. Privacy is washing away in front of our eyes. There are major societal pillars that are disappearing and there is no understanding of it and no discussion of it. So our next generation of leadership had better have a good view or at least have a discussion.

So for example, they are pretty confident that within 20 years we will break the aging barrier. Meaning that we will have people that can live for hundreds of years. Because we’ve figured out exactly how to shorten and lengthen telomeres. We are working on the technology to crack it. What happens when that happens? We have no discourse about it. So we talk about that. What happens when one group of people are living for several hundred years and in Africa people are living for thirty years? In fact we are the result of technological acceleration because a thousand years ago, the average lifespan was 25. Even in the 1920’s the average lifespan was 50 years old. Today it’s 78 or 80. And that is already growing exponentially. What happens when it becomes 160? What happens to healthcare costs? So your kids will need healthcare for potentially 100 years. It’s a big issue. We talk about and deal with these implications.

Santiago: Let me give an example of what this means for Argentina. Argentina is an agricultural country. A big, big chunk of our GDP is agricultural produce and meat exports. Now there is the capability to grow meat in the lab. It’s only 10 or 20 years away. We are going to look back and think about how we raised full cows to get a kilogram of filet mignon and how stupid is that we needed a full cow to eat filet mignon. So we will produce meat without having a cow as part of the process. 1 kilogram of meat requires 15,000 liters of water. It’s incredibly inefficient. It’s absurd, but that’s the way we do it today. Argentina is a very large flatland full of cows. The cow is going to be a wild animal in 20 years. What are we going to do with all that land? No one in Argentina is thinking about that. There is a big fight in the government for agricultural subsidies and tax protections. All that product is going to be gone in twenty years. And this is the core competency of the country.

Salim: I’ll give one other example, which is energy. We operate in a world today where we have energy scarcity. However, if you add up all the sunlight hitting the world and you compare that with all the energy and the fossil fuels we have in the world, guess how much sunlight that adds up to? Five days of sunlight. We have today 6,000 times more energy hitting the world than we will consume today. We don’t have a supply problem; we have a conversion problem. Now in the US, there is a horrible program around ethanol. If you try and grow corn based fuel, an acre of corn will produce 18 gallons of fuel. Terrible. They have bio algae that can output fuel and one acre of algae will produce 16,000 gallons of fuel. So if you put half a percent of the US land mass towards algae producing fuel, you don’t have an energy problem. That’s before you even hit solar. Solar energy is exponential. It is doubling in price performance every 22 months. So today, it’s 1.3 of the world’s energy supply, but it’s doubling. That means in 8 or 10 years, it’s producing 20 percent. In 12 years, it’s producing 80 percent. In 14 years, it’s producing 160 percent.

Question: How about fusion?

Salim: No. Solar is just a lot more manageable and easy. So Israel for example changed their energy policy after hearing what we are doing and went from nuclear to solar. So those are examples. The question is, if we can have energy abundance, then desalinization becomes easy. So all these things become possible.

One more point. I actually think there is an incredible opportunity in the developing countries. The US is in big trouble because the infrastructure and the politics here prevent it from doing anything radically interesting. Jordan is a green field area. So how can you leapfrog into a completely different world?

Question: What’s the profile of the people that come to you? I don’t want to come in here and drop my business. Or do I sell my business and come to you and start a new chapter in my life?

Salim: Yes. This is life changing, but this is not necessarily different from an MBA because what programs like that offer you is an education that gives you success in today’s world. Today’s world is out of date in 6 months. So what we are trying to do is give you the tools for success over a ten year or fifteen year period in this phenomenally disruptive world we are seeing today.

I’ll give you an example. I founded a company based on AI two years ago and our algorithms calculated in real time your social — all of your Facebook, Linkedin contacts. We delivered news on all the people you know. The computing power we needed to run our algorithms didn’t exist when we started the company. We basically had to expect watching these curves that this was going to be in place in 18 months and we were betting on it. 18 months later, the power was there, cloud computing had evolved, and that company got sold to Google about eight months ago. So the point there is if you are building a product today with today’s technology, you are very likely out of date by the time you get to market. Now if you are doing iris recognition, it would be useful to know what the massive dramatic changes in the gene structures in biotech, nanotech would be. All of that would be strategically useful for you. Now you might not want to come to the summer program, but you might want to come to the one week executive program.

Question: I am in the food industry and I think that the supply of food is becoming a big issue.

Salim: We are close to a technology that will allow you to grow food vertically on the walls, enough to feed a family of four. Think about agriculture. It’s flat and very wasteful. 80% of our water goes to agriculture and most of it runs off. If you had sensors at the plant level you could spray exactly the required amount of water on to the plant. You save 95% of clean water right there, which has a massive impact on our water supply.

So the other thing we are seeing, wherever there are centralized structures, they have totally given away to a flat structure. The media industry is completely disrupted today. There is a great slide of the guy on Twitter during Osama Bin Laden’s capture. There was a guy in Abbottabad who was tweeting away late at night and he tweets, “Big helicopter came by,” etc. And he is accidentally reporting the most secret mission in the world. So discovery is happening via people. That takes away game from the major media companies.

The money – many of you have heard of VidCon? The first peer-to-peer anonymous currency. No central government, no central bank. That’s going to cause havoc. I made a prediction a month ago that we would see virtual currencies competing against national currencies within 15 years. I think I’m wrong. I think we’ll see that in five years.

The one area that is freaking me out – and you might imagine it takes a lot to freak me out — is a new field called optogenetics. This is an intersection of optical physics, virology, and genetics. Scientists have developed a new kind of neuron, genetically engineered, that is very light sensitive. Using a virus to distribute the neuron in the localized area of the brain — in this case they use the area of the brain where compassion lives — they put an optical fiber into the head of the virus and they turn on the switch and all the neurons fire and the brain becomes super compassionate. So it’s already in mice. Today. We essentially have mind control. How do you manage that? How do you secure that? These are some of the questions we ask at Singularity.


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