The Government Should Think More Like Jeff Bezos

Almost any time Jeff Bezos speaks he is able to deconstruct complex economic, business and management issues to their core principles, leaving those paying attention with invaluable nuggets of wisdom.  In a recent blog post, Bill Gurley of Benchmark Capital referenced  one of Bezos' best pieces of advice. The quote is as follows,

“I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time. … [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.” 

Invest in things that you know are not going to change in ten years.  I submit that this would be a very useful exercise for politicians to attempt as well.  Like in business, if you know what American's are still going to want 10 years from now you can invest heavily in those areas.  As a qualifier, I would add that the key word in this exercise is "invest," not "spend."

Below in no particular order a brief list of four things that will not change in America over the next 10 years and warrant significant investment. 

American's will want their children to receive and exceptional education.  This one is important for two reasons, 1) A democracy cannot function without a well-educated citizenry 2) As technology continues to eliminate jobs the US is going to need a greater percentage of skilled workers in order to retain its position as the world's strongest and most innovative nation.  This means reevaluating education from the ground up to ensure that all children have access to a world-class education regardless of class, gender, race, etc.  It means making sure that everyone has access to a college education at a reasonable cost and that the nature of education has to evolve with the times.  I would like to see computer science  become compulsory (like learning a new language) and for technology to facilitate a more personalized learning experience for students while making access to high-quality education more readily available.  

American's will still want to feel safe.  A strong national defense is one of the pillars our country was built on, and the government should invest heavily in ensuring that her citizens are protected from all threats, both foreign and domestic.  This means committing a significant amount of time and money to both our traditional armed forces as well as our nation's cyber defenses, which are quickly becoming the premiere battlefield globally.  It will require collaboration between the government and our nation's leading technologists and tech companies to ensure that our continued dominance in the 21st Century.  These parties are going to have to reconcile their differences and come to agreements about what types of policies are in America's best interest.  For the government that means a more transparent and less intrusive domestic surveillance policy and for tech companies and ordinary Americans it means understanding that we all have a reasonable expectation to privacy, not an absolute expectation.  

America will want to attract the world's brightest immigrants.  I think Paul Graham did an outstanding job of explaining why this is so important, but I will summarize here.  Paul argues that because the US only represents about 5% of the world's population it is reasonable to assume that 95% of the world's greatest scientists, engineers and entrepreneurs are born outside the US.  As technology continues to creep into the darkest corners of the world and billions of people come online it is in our best interest to be the place that any young, smart ambitious entrepreneur wants to live.  This is important because 1) Any current technology executive will tell you that there is a severe talent shortage, which is being magnified by an ineffective immigration policy and 2) Because in order for the US to remain a hub for innovation we need to attract as many high-quality thinkers 

American's will want an economy that is growing sustainably. This is one of the trickiest topics to discuss because not only does everyone and their mother have an opinion about  how to achieve sustainable growth, but the nature of work is undergoing a major transformation as software continues to eat the world.  Generally speaking I believe that if you attract the smartest people, create the right incentives and introduce a regulatory framework that makes starting and growing a business as easy as possible you will end up with a positive outcome over the long run.  

A Thought on China

I read an article last week that discussed how the Chinese Communist Party believes it has a responsibility to oversee and control education at the university level (a moral imperative).  It is another step in the wrong direction for a country who citizens are clearly looking for a more democratic government and greater protections of their free speech.  It's controls like this and others that will continue to make it very difficult for Chinese citizens to live up to their innovative potential, as they faced continued resistance from their government, including:

The story of Chinese growth over the past twenty years is one of the most astonishing economic triumphs in human history.  In a very short period of time, China has established itself as one of the world's greatest economies, creating hundreds of billions of dollars in new economic value and introducing nearly 700 million of its citizens to the internet.  Those citizens are now spending billion of dollars every year on goods and services and have the leverage to move China to a modern consumption based economy.

    As China continues to integrate itself into the global economy and as the explosion of the Chinese consumer continues it is going to be increasingly difficult for the Communist Party to reconcile these trends with their ideologies of ever-tightening government control.  Furthermore, as technology makes it way deeper into China and millions of new users gain access to the internet I suspect the government will find itself between a rock and a hard place.  Every step taken to further integrate itself globally will make it harder for the Chinese government to hide their policies restricting the rights of the citizens of a "free country".  Furthermore, as their role in the world grows they will simultaneously be inviting more criticism of those same policies.  The growth that they are so eager to sustain comes with expectations from other developed nations that their citizens have access to similar basic rights of any other free nation.  

    -With all that said I still expect to see China produce some of the most innovative companies of the 21st century, just don't expect them to gain control of the title "Most innovative country in the world" anytime soon.

    -I'm also excited to see how technology is leveraged by the Chinese to force change on their government.

    Exponential Growth

    The best parable for the power of exponential growth that I have come across is "The Legend of Paal Paysam."  The short of the story is that a king fancied himself a great chess player.  He challenged anyone he could to a chess match and said he would give the person who beat him any reward the victor could name.  Eventually a pilgrim did beat him and in return he humbly asked the king to put a single grain of rice on the first chess square and double it on every consequent one (1 grain on the first square, 2 on the second, 4 on the third, 8 on the fourth and so on). By the 20th square there would be 1,000,000 grains of rice.  By the time you get 1/2 way across the board you have accumulated nearly 3 billion grains of rice and on the 64th square you would get to 18,000,000,000,000,000,000 grains of rice (larger than Mt. Everest).   Rumor has it that the king had the pilgrim executed for humiliating him but that is neither here nor there.    

    Exponential growth is a term that gets tossed around a lot in the technology industry, its what every start-up CEO is looking for.  It's also a principle used to calculate population growth as well as the growth and spread of bacteria and viruses like AIDS.  What's fascinating is in all likelihood  we are only half way through the chess board.  Basically it took us 32 squares to get to 3 billion grains of rice but we will add another 3 billion in only 1 square.  Technological change is going to speed up and humanity as a whole is going to benefit from it.  How quickly are we going to progress when every human on earth has access to the internet?  How many more Steve Jobs, Bill Gates and Elon Musks are out there?

    One of the major questions we are all going to have to face is; how does the role of government have to change in the coming years if we are in fact just getting to the 2nd half of the chess board?  Government will always be playing catch-up to innovation and progress but what happens when changes are occurring so frequently and have such a large impact on society that government become powerless to adapt?