PALM DESERT, Calif.–Credit unions may frequently talk innovation, but they are by design not intended to change much. And yet CUs have still drawn more than 100-million people as members in the U.S. For one person who bills himself as a futurist and hacker–the challenge for CUs now lies in understanding what will be “compelling” to consumers moving forward.
In the meantime, many CU executives are going to have to come to grips with another development: “Excel users are going to be getting very uncomfortable.”
“Your jobs are to do things predictably, and do them well,” said Pablos Holman of Intellectual Ventures Lab in remarks to the California and Nevada leagues’ REACH Conference here. “But it means we need to think about what is our relationship going to be with change. What disruption means is our competitors changed faster than you. Someone will change the fastest; could be banks, could be credit unions.”
On its website Intellectual Ventures Laboratory said it “discovers, invents, and develops advanced technology solutions in a wide variety of fields. We focus on the very beginning stages of invention, validating a concept and refining the technology to demonstrate its potential for commercial or humanitarian use.”
Indeed, Holman offered far-ranging comments on the work he said the lab is involved in from developing new ways to use nuclear waste to ways to kill malaria-carrying lasers using lasers. In his own career, Holman said he spent much time hacking all kinds of technologies, including technologies.
His observations were often irreverent, thought provoking and funny.
“In big companies we used to have what we called R&D,” he said. “By the early 1980s we figured out they were getting their butts kicked every time by two guys in a garage. So we shut down all the R&D departments. Now the Fortune 1000 watch the start-ups and then we buy them. We replace R&D with M&A. That’s a functional way to have a relationship with R&D without being good at it yourself.”
While credit unions talk about entrepreneurial cultures, Holman observed, “You can’t do something unless you’re sure it’s going to work. If you’re in a startup and you try something and if it doesn’t work, you shut it down and do a new start-up. I’ve never been in a company that made money. That doesn’t make me a failure in Silicon Valley; that makes me desirable. You need to think, ‘How am I going to pave the way to find that innovation. A lot of times in this industry it’s about what does the user want? What is compelling to the user? That’s how you got your 100-million members.”
Among Holman’s other observations:
- Humans have only recently really prospered on Earth. “We overcame the obstacles that allowed us to really grow. But one things humans really good at is creating more problems.”
- “Hackers look at technology and ask, ‘What can I make this do.’ They take it apart and then figure out what can they build form the rubble. That discovery process of figuring out what’s possible is fundamental to innovation and invention. Without it, you won’t ever get anything new. You will never get anything new by reading the instructions.”
- “A Tesla is just an iPhone on wheels.”
- “Computers have made us all prescient about the future in some ways, because we know a lot about computers. We can look around and imagine where haven’t computers gone yet. You can see what are computers doing in other industries that haven’t affected us yet. “
- After giving a demonstration in how easy it is to open a standard lock, and suggesting that mobile devices will replace all locks, Holman described what he called the “USB switchblade.” He gives a USB to someone and, “while they’re printing my spreadsheet it’s making a handy back-up of everything on your computer (“So if you ever need it, I have a back up for you,” he joked). I like to print logos on these things and leave them laying around at conferences and see what falls into my lap.”
- Holman showed videos of tiny lasers zapping mosquitoes—saying the solution measures the wing beat frequency to sort mosquitoes from other bugs. “You can shoot as many mosquitoes as you want; not even PETA comes to save them,” observed Holman.
- The average smartphone has 115 gigaflops of computational power, said Holman. “That’s an obscene amount of computational ability, and we’re using it to make fart apps for the iPhone,” said Holman. “Our computational ability has far outstripped our imaginations. Now we have a surplus, and we’re trying to figure out what to do with it.”
- The good news? Credit unions are at least talking about big data. The bad news? They’re ill prepared for it. “Small data is dead,” said Holman. “Forget Excel, it’s not going to help you, it’s going to distract you. If you don’t delete it you should quit and hire your grandkid to take your job. Computational models allow us to test models of what might happen in the real world without testing it in the real world. This is what is going to happen in your business. This is what’s going to replace Excel, and you’re not doing to like it; it’s going to be very uncomfortable. When we talk about big data we’re talking about more data than you can fit in your head, more than you can fit in Excel.”
- * “What’s different about these computational models now is imagine a spreadsheet with seven-billion rows on it, one for every human being on earth,” continued Holman. “There is no summary anymore. I’ve got a row for you. I know you came into the credit union and got this account. I’m going to know what’s working for this member, and I’m going to plot an optimized marketing campaign for you, the individual. The reason this is scary is we flip our relationship with causation and correlation. Now when we flip a number you can go and figure out why. In big data, we lose it. The computer says this number changed, and it’s a better number, but we don’t know why. In a computational model it’s too complex to know why. And if it’s right, we build trust in it, but it’s pretty scary.”
The Lucky Unlucky
- Credit unions may do significant work in helping to lighten the challenges on the underserved. And yet they don’t have it so bad in the U.S., said Holman. “If you are in the bottom 99% in America, you are still in the top 14% globally. That’s pretty good. That’s like being a two-time lottery winner; first get to be a human, then you got to be an American. The cost of your phone is equivalent to the global median income, not for a person, for a whole family. What I think this means is that the world has kind of over-invested in us. I think it means we need to do what we are uniquely good for. What we are tying to do too often in Silicon Valley is we come up with apps to solve our own problems. But what’s important is solving a problem that you don’t have. You and I don’t really have problems. Problems that a billion people have are problems.”