 It's like awesome. It's quite a production. Yeah, yeah. So you and I met about four years ago for the first time at a cafe in New York. By that point in time, you'd been a successful investor across a bunch of industries, SNAP and media, and Stripe and Finance. You've been involved in Khan Academy in education. And had just written this piece for Hardware Business Review about the economies of unscale. And we had this whole conversation about unscaling and what that meant. And I thought it was fascinating enough to go and write pieces in Newsweek and then my column that I, and we kept talking about that over time. And I remember you said at some point, we should write a book about that. And I actually, I didn't think you were serious. But then again, I didn't know you well enough to know you don't say anything like that or you're serious. And this turned into a book that's coming out in March, called Unscaled. And the book takes you on a bit of a journey of describing how over the 20th century, we invented a bunch of technologies at the beginning of the 20th century that set up 100 years of scaling up, that economies of scale were the way to make a great business. So we built bigger hospitals. We built bigger companies. We built bigger governments. And your argument was that we're creating now this new burst of technologies that are taking that apart. So I think a great place to start is to have you explain a little bit more about what unscaling is and why that's been an important thing for you to use in your investing life. So I've been investing for about 15 years. When I first got into the venture business at the beginning of the century, a lot of software that we would fund was essentially in service of helping big companies become more efficient. The last century has been all about mass production, as Kevin was saying, as you're saying. And software was all about how do you make them more efficient? How do you get basic education, health care, finance, mobile phones into everybody's hands? It was all about building an egalitarian society. And no one dared to think about, well, how do you rethink education or how do you rethink health care or how do you rethink finance back then? Because these large companies had been around for decades and often centuries. And they had this thing called the economies of scale. 2011, I ended up moving to Silicon Valley to build our firm's business in the valley. And the big observation I made was entrepreneurs had just all of a sudden become a lot more audacious. It really was about how do you rethink education to teach social-emotional learning? And how do you really think about democratizing payments so everybody's got access to that? So all of a sudden, we were just sort of, how do you build an insurance company? Elon was building a car company. So I think that shift is what got us thinking about what led to this book. And the observation was not only are these entrepreneurs becoming audacious, they're actually succeeding pretty aggressively in taking share from these large companies. And that core advantage at level that playing field is what I call economies of unscale. And I think there's three specific things that go into this leveling of the playing field that has happened. One is, scale has gone from being a mode for large companies to essentially becoming a rentable utility. So every layer of, when you think about when you start a business, whether you need manufacturing, you need computing, you need distribution, you need access to consumers, for every one of those layers, every one of those capabilities, there's a platform you can use. And so all of a sudden, the founders could just focus on building the best products. And they could just rent all these other capabilities and be hyper-focused product teams essentially that were building the next generation companies. And I think the last thing that has led to this economies of unscale has been machine learning and AI. It really has been happening over the last 10 years. And it gives this constant feedback and iteration capability to customers, for founders to serve their customers that just leaves the incumbents in the dust. So as a result, what you have now is the entire economy is turning upside down on its head, and by industry, everything is being rewritten from the old incumbency. Yeah, and well, so let's talk about AI as a factor here for a second, because as someone who's written about technology history over the years, written books about that, this was an aspect of it that I thought was particularly interesting. We went back and we were saying that in the early 20th century, there was this sort of magic technology called electricity, which ended up flowing into everything that ended up getting created. And that was part of what made scale possible and all these technologies have followed. Your argument is that AI is today's electricity. Yeah, and I'm not the only one that has said that. But I think when you think about what has happened in the last decade, all the data that's being generated through our mobile phones and all the sensors that are getting connected in the physical world and so on, it has activated our ability to do AI. I mean, the core algorithms and the core ideas around AI have been around for decades. We just didn't have the data. And today, the large platform companies are all investing heavily in AI. And there's this whole dream about creating generalized AI that all of a sudden is going to be all things for all people and solve all kinds of problems. I think we're probably three, four, five decades away from that actually becoming a reality. But around small data sets, whether it's data sets around health care, specifically in a disease category, or whether it's data sets around how people learn on the web, AI and machine learning algorithms can help build expert systems that can build differentiated products. That is happening, and that is hyper-accelerating. I think that's been a core advantage that will continue to happen. I think in terms of generalized AI, there's been a lot that's been written about how scary that is. I'm actually glad that it's as far away as it is, because I think as an industry, we need to mature in how we think about using it as well. And over the next couple of decades, if we can do a good job of augmenting our professionals, whether it's our physicians, or our teachers, or our lawyers, who are all resource constrained and helping them do their job better, that's a great function for AI. And that's really where I think it's going to lead to meaningful value creation. So in the book, we not only are talking about this general idea, this general theory of on-scaling and all that, but actually go into sector by sector, how that's going to play out, how do you rethink health care, how do you rethink the finance industry, all those things. You're clearly using this as a lens as an investor, as a venture capitalist. Can you talk about that and how that informs your thinking? I think over the last six or seven years, most of my focus has been on doing two things. One is fine entrepreneurs that are trying to level the playing field for startups, for small businesses. And that's an example of that would be Stripe, which is in payments. I'm sure some of you are building on top of that as a payments platform. We've got this fantastic company called Gusto that is allowing small businesses have the same HR capabilities and sort of a people platform that large companies can invest in through large HR departments, on and on and on. We've really gone and said, how do we level the playing field around all these capabilities that small companies don't have the resources, both capital and mind share to be able to do. And the second has been entrepreneurs that are taking advantage of these kinds of platforms and reimagining fundamentally what the new product should be in these industries. So for example, we have this incredible founder we teamed up with to start this company called Livongo, which is focused on chronic care management. We've got 30 million people in the United States that have diabetes. There's 150 million in India. There's overall hundreds of millions of people with diabetes, about half a billion, around the globe. And diabetes is a problem that's really easy to manage if you actually think about it. It's just our health care system has been set up to handle it. And this founder came, took advantage of what we call unscaling. And he's all of a sudden got tens of thousands of people that manage their disease this way within a couple of years. And we think that can have a real impact. So it has been in hindsight, it has been the sort of the foundational lens that I've used to invest. Yeah, well, you know, I'm sure probably a lot of people in the audience know or have touched Khan Academy, right? And that's not a company, but yet again, it's a, I mean, it was a really cool example of unscaling education using and using AI. So can you describe that a little bit? From your eyes. Yeah, I'm sure a lot of you have heard Sal's story. It was, Sal was actually a college friend of mine, a longtime friend, and he was making these YouTube videos to teach his needs in math. And those videos got viewed by lots of other people because turned out the problem he was trying to solve was sort of relevant to all of humanity. And all of a sudden, this is a site that took off and to that there's over 100 million people that come to Khan Academy to learn different pieces of the curricula, whether it's mathematics or history and science and what have you. And I think that kind of example has sort of happened in pretty much every industry imaginable. And that's been, you know, all driven by taking advantage of these platforms. And, you know, we think it's only the beginning. I think it's gonna continue on for the next two decades. Yeah. Maybe one thing to talk about a little bit before we go into the next thing, that is in terms of this idea about renting platforms. Yeah. And that was such a turning point in the conversation about how to describe what we're describing. Just talk a little bit about that, what that really means and why that's so important. Look, the hallmark of great companies is their ability to focus. And if you take great founders and you say, not only are you already great at focusing and building fantastic products, you don't have to worry about anything else. You don't have to worry about how to clear the payroll department, you don't have to worry about how to figure out manufacturing. You don't have to worry about whether this is a product that's going to apply to 10 customers or 10 million customers. Just you want to solve a problem, you know, go rent the core platforms and start. And I think that has been liberating for founders because they get to do what they're great at, which is work on the problem that captivated them as opposed to necessarily dealing with the complexities of building a company. And I think that has been a core differentiator for entrepreneurs in this generation. You know, if you look at Airbnb and look at some of these companies and how fast they've scaled, it's mind boggling. But I think this is the reason. Yeah. Well, sir, you're working on something new, just basically taking that idea and applying it yourself. Can you describe that? Yeah, one of the areas that hasn't taken advantage of economies of unscale has largely been healthcare. In fact, as I've walked around Slush, I've talked to a lot of people here and it looks like even here in Finland, there's a talk of privatization of healthcare. So I do think this is a phenomenon that'll happen. In the US especially, where 20% of the GDP is healthcare cost, and we've spent billions of dollars over the last 15 years trying to digitize the healthcare system, there's massive amounts of technical debt. It hasn't been built with the same kind of open platforms as other industries have been made. And to the point where it's on the verge of bankruptcy. And I think one of the things that's captivating us is how do we use technology to actually make it a leverage point in changing the cost structure of the healthcare delivery system in the US. And so that's where we have started a new company and we're working with a few health systems. I mean, another area that I'm quite interested in right now is around blockchain. There's a bunch of companies here that sort of walked around and met in that area. And I think that's an important area too because in the world of level playing field, while these platforms that have been created, Facebook and Apple and Google and others for the last 15 years, while they've leveled the playing field, I think we're sort of going in the other direction almost, where there's so much concentration of power with these companies. And we think that decentralization of the internet is an important theme. So we are meeting with lots of founders that are starting to think about, how do you build core internet infrastructure that's decentralized so that there's true level playing field for businesses that start in the next generation. So those are the two areas I've spent all my time thinking about this year. Well, so you brought that up. Let's talk about what's, because the situation that we now face with the Googles and the Facebooks and the giant monopolies is actually a spin out of this whole long-scaling situation that we've been describing. So what's the danger there? What's the problem you see and what's the solution? Yeah, we're sort of in an interesting spot. I think everybody here has seen what's happened with Facebook and the elections and the open internet. And the fact that our society really isn't designed for an open internet system given the biases and discrimination that we actively try to subside. And I think you've also seen today as companies come in and talk to us, one of the questions you're always worried about is is Amazon working on this? So all of a sudden you've got these platforms that are with tremendous power in terms of A, how and what kinds of companies can proliferate on top of them and then B, if those companies have interesting markets, will these classrooms get into themselves? So there's monopolistic implications. And sort of having a framework for how to think about that and how to manage that is going to be really important. Because all the talk in DC right now is about, especially with this whole populist movement that we've been going through, has been all about these technology platforms and their role going forward. And so what you don't want is government coming in and regulating, because that never helps. If you go back 100 years and when the government regulated all the electric utilities, look what happened. We created climate change. I mean, that completely destroyed that sector's ability to innovate. And I think if the same happens here, it will cause another set of problems. I am very concerned about how do we self-regulate, how do we implement algorithmic accountability and how AI is being used by these platforms and also by emerging companies so that we're not going down this path of regulation. And we're not creating monopolies that are making the level playing field go away. Something that we worked so hard to create. So you brought up climate change. Let's go there for a second. Because one of the sectors we address in the book is energy, which is, generally speaking, immune to the powers of technology to really change the way we're dealing with that. But you're making the argument that unscaling actually will be able to have an impact on the energy industry. And we can see a very different energy future because of it. Can you describe that? Yeah, I think a lot of technology has been created over the last decade in the what was called the clean tech sector, with solar power and smart grid technologies and a bunch of other solutions. And I think the idea that you can now put a power plant on top of your roof and you can use it to also charge your vehicle. So all of a sudden, transportation is actually an app on top of your power plant. I think that's an interesting way to sort of unscale from building these large power plants and the sort of mass transportation. Just since I do think this sector is poised for unscaling, regulation gets in the way. Utilities aren't set up to be able to do this. They're not set up to embrace these kinds of new technologies that create issues around reliability and resiliency in the grid. So there's problems to solve. But I do think over the next decade, that is a sector that will tremendously change. It has to. It has to for our planet's sake. Now, what's happening also is part of an explanation for there's disruption around the world, right? There's political disruption. There's there's a lot of unease in a sense. And you think it's in part because of because unscaling is driving so much change. And is there is there an aspect of that that can actually derail or stop this? Yeah, I mean, again, to me, the more we make decisions in software, you know, the role of governing isn't just by being. I'm just going to give the US example for a second. It isn't just being done in DC. It's being done in these technology platforms, right? And Facebook gets to decide which piece of news who's seeing and sort of has an impact on elections, for example. So and how do we know the right thing is being done or not? Now, these companies are starting to address this. It's not that they were ill intentioned. So, you know, the idea of an open Internet is a very seductive one. And I think we're just seeing that, you know, it's got a set of issues that you have to then solve by leveraging AI and sort of sort of these principles of transparency. But I think that we just have to see that maturation through and how we use these platforms, how we actually exist online as a society. And, you know, nothing that can't be solved. And I do think these companies are well intentioned to solve, but it's going to take some time. I think it's, we're definitely in the middle of that maturation process. Now, the, this previous couple of generations of technology when those things have, you know, have blossomed, Silicon Valley, where you're based, has captured a great deal of the value of all of that. Do you think as this next generation and AI and everything's mature, is it going to be Silicon Valley again that takes all of that? Yeah, and one of the reasons I'm tears is to just understand what's happening here in Europe. And, you know, when I think about the fact that all the tools are available to everybody across the world, the type of entrepreneur that goes and disrupts and becomes successful at the next problem is the entrepreneur that has empathy for that problem. I call it the empathetic entrepreneur. And when you think about it, you know, for Sal sitting in Silicon Valley and creating videos for his niece, which was, happened to be a global problem, made sense. For Mark sitting in Silicon Valley and sharing photos and that becoming Facebook made sense. But I don't think somebody there is going to figure out how to finish healthcare system should evolve. I think it's going to be somebody here who figures that and it's going to be the same in every country as through these industries on scale in different parts of the world. So I'm a big believer that while the low-hanging fruit, you know, has been picked off by Silicon Valley over the first decade of this cycle, which to me is another couple of decades, I think this is only going to progress and this is going to be a much more of a global opportunity. And we think about that for our own business thing, but we can only be investing in Silicon Valley either. And as I mentioned, that's why I'm here to understand how and when do we prepare ourselves to take advantage of that opportunity for our investors as well. Well, so we only have maybe like a minute or so left, but we wanted to get to the topic of responsible innovation, which is something that has been really high on your mind. You've talked about that. Yeah, I mean, there was this, for the last decade, it's all about move fast and break things, right? And I think that works when you're iterating games and that works when you're building, you know, things for entertainment and music and so on. When you start, but when you start thinking about actually taking care of that diabetic or teaching somebody how to learn and be successful in the 21st century or manage their personal finance, I think this whole mindset of move fast and break things isn't the right mindset. And I think as you use more and more machine learning and AI, having that transparency and how you're helping make those decisions for those products is also an important piece. So one of the things I would encourage all of you is learn from the mistakes that have been made over the last decade, a lot of them in Silicon Valley. And, you know, as these companies are, you know, learning to fix those, I think we don't have to repeat those in other parts of the world. I think we should build these next generation businesses with great transparency and care for the customers given the importance of the products we're now starting to build as a technology industry. Well, awesome, I think we're out of time and it's been awesome to be here at Slush. Yeah, great to do this, yeah. Thanks everyone, thank you very much.