About this talk
More than ever, your network is the most valuable asset you have. So then why has “networking” become a dirty word? Why do we envision sleazy conference goers or slick salesmen when we think of networking?
In this talk, hacker and author Joshua Klein shares how technology and growing “black markets” are optimizing our world for relationships. But building authentic relationships takes work. As a result, we need to be generous with our talents and time and invest in those around us (and then they’ll invest in us). “Don’t be afraid of sharing,” says Klein, “my projects would not have existed if I didn’t shoot my mouth off at anyone who would listen.”
Josh Klein, Hacker & Author
Joshua Klein is an internationally known technology expert who studies systems, from computer networks and institutions to consumer hardware. His recent projects have included an acclaimed new television series on the history of innovation on the National Geographic Channel, called The Link, one of the most watched TED videos of all time (about a vending machine that train crows to exchange found coins for peanuts), and the development of a cell phone application to create a virtuous cycle of education and employment in South Africa.
Klein’s work has appeared in The New York Times, Wired, O Magazine, and The Harvard Business Review. He has made appearances on MSNBC, NPR, and has spoken at conferences from TED to Davos, and presented in front of organizations ranging from the State Department to the Young Presidents Organization Global Leadership Congress, to Microsoft to Amazon. He lives in New York City.
So, how many of you have been to events, maybe events like this, and had this experience. You meet somebody new. Hey, yeah, good to meet you, and I’m going to get a coffee. You know that one? You’ve seen that one, yes? Another one of my favorites is, Yeah, that’s really fascinating, what you’re saying. No, tell me more. No, I really like what you’re talking about. Hey, I’ll see you later. That one. Those are both offensive. Don’t do this, just in case you’re curious.
What’s interesting about that for me is that it’s given the term networking, and it’s made it kind of a dirty word. You know I mean? This idea that we’re all going to interact so that we can get maximum economic value out of each other. It’s not really how human beings work, yet it’s often used when you talk about networking. I think that’s especially ironic, because now more than eve, I believe your network has become the most valuable thing you have. More than your IP or your financial backing or anything else. And there are three really big trends that I think are making this so. So I wanted to talk about those from far future back to current day, and then talk a little bit about how we can use that to get the most out of our networks, which also means giving back to them.
So the first big trend is the black market. You weren’t expecting that, were you? The interesting thing for me about the black market is that when people think about the black market, they think of heroin or human trafficking and whatnot. Really– I don’t know why you people laugh about that– the black market is more about stuff like Girl Scout Cookies, right? Now, if you think about it, and I don’t know if you’ve get any Girl Scout people here in the audience– if so, I apologize– I know some of you don’t report all the income from the sale of those Cookies. And that’s part of the black market. So when you tip the pizza delivery guy or you pay your babysitter in cash, that’s all black market. And what that means is the black market’s a lot bigger than most people think it is, right? So to give you an idea, it’s about $10 trillion globally. That means it’s the second largest economy in the world. Part of the reason for that is that it exists wherever the traditional economy exists. So wherever you have a standard financial economy, there’s a shadow economy equivalent, allowing people to do things like sell Girl Scout Cookies. That shadow economy is so prevalent that in the US, one out of every $7 spent or earned every day is done on the black market. So you can imagine how it goes in the rest of the world, right? Because supposedly the US is a paragon of non-corruption and whatnot. The other thing that’s interesting is that this shadow economy is growing. By 2020, 2/3 of every working adult is going to do the majority of their transactions on the black market. Now, most of us don’t see that, because we’re the ones for whom the financial economy is supposedly working the best. That is kind of funny, actually, as a statement. So we don’t see it as much. But the rest of the world has to deal with a black market every day as a primary mechanism for moving goods and services or buying or selling. Now, what does have to do with networking? The black market is fundamentally a relationship economy. In a financial economy, you have a central authority, the bank or the state, that acts as the mediator of trust around whatever transactions you’re executing. But in the black market, you have to have some sort of trust with the person with whom you’re transacting. Now, that trust might be that that person will shoot you if you don’t deliver what you’re supposed to. This is still a method of trust, right? But it could also be something like everyone in your family throwing that if someone breaks a leg, they have some form of medical insurance. Or doing co-investing through the same mechanism. So that’s the first thing– the black market is huge, and it’s getting huger, or and it relies on relationships, which means your network. The second thing is something that I like to call code as culture. And by this I mean in the last 10, 15 years or so, we’ve seen an increasing number of technology platforms developed which are optimized for relationships, and this new approach towards software is very literally codifying a cultural dialogue. It’s changing how people think about fundamental aspects of our relationships to each other. So for example, these platforms are changing what this means, right? If you ask your great-grandmother what being a friend means and what it’s all about, and then you ask your 14-year-old niece, you’re going to get different answers, because your 14-year-old niece was more informed by these kinds of platforms than your grandmother was. So in a real way, it’s changing the cultural dialogue. Similarly, these platforms and technologies are changing what this means. These platforms and technologies are changing what this means. What’s interesting is that these platforms, which are becoming more and more standard all the time, are again optimized for relationships. Why is it that people like to shop on Etsy? You can get it cheaper on Walmart, right? But on Etsy, you’re interacting with another human being, which it turns out we like, for reasons that you can’t monetize very well. Why is Airbnb so popular? It’s because you want to know who’s going to stay in your bed when you’re not there. It turns out that matters. I didn’t think that one through ahead of time. So that’s the second thing. that we’re making all these new platforms which are. again, optimized for relationships. So the last point. And the one that for me. at least, ties this all together, is that this isn’t really. It’s mostly just this. Right now, this many of us aren’t online at all. What does that mean? Because the 65.7% of us that aren’t online yet are the same people for whom the black market is the primary market available. So the question for me is, as those people come online– which, by the way, is happening very soon– what are they going to look to do for commerce? How are they going to look to interact with other people? My question is, are they going to jump online and immediately go fill out a form to get a bank account, or are they going to start looking for ways to use their existing relationships? So those are the three trends. We have a huge number of people that are coming online that already know how to use relationships, and have optimized their own lives for them. We’ve got a lot of technologies which are very well-suited for them– not so much for us– and we’ve got an enormous global economy that most of us aren’t using, but which is really critical for everybody else. So times are a-changing, right? So I thought that I’d follow that up with some illuminating anecdotes, trying to explain how this is coming to pass now, and what kind of effect it’s having on us as entrepreneurs and creators. And the first thing that I wanted to talk about was this little project. So I do a lot of consulting to big companies and startups and small companies around technology, so every year I take a month and just get my head down and just code. I know there are technologists out there that don’t. I prefer to call them wankers, so I don’t want to be in that category. I prefer to actually have an idea of what’s happening. So this year, this last summer, I took a month off, and I started diving into some data analytics, because there are a lot of new software packages out there, and I thought it was pretty cool. It turns out it’s really, really hard. But also very, very cool. So I spent a couple weeks figuring stuff out and came up with an idea for a Networker dot co, which is a platform that analyzes all your email, figures out what you’re interested in right now, and figures out who you’ve fallen out of touch with but already have a relationship with that is relevant to that interest. So it lets you get back in touch with someone you already know. You don’t have to invent a new relationship. You can build on something you’ve already got. So I thought this was a brilliant idea. I was really excited about it. I spent a month working on it and totally failed to get it off the ground. I could not get everything together. But I was still really excited about the idea. So a couple weeks later, I was having lunch with a friend of mine, a guy who’s the head of Crush & Lovely, a design firm here in town. And I was talking with him about this platform and how cool it was and whatnot, and he said, well, what are you doing for the front end for this? I’m like, oh, no, I couldn’t get it all together. The front end’s the least of my worries. I can’t do the front end, I can’t get the data analytics, I don’t have legal. He’s like, well, dude, you’ve brought more business to us over the last five years or however long it’s been. You’ve come and consulted on our companies. You just took me out to lunch. Why don’t you let us do your front end for free? I was like, dude, well, that’s amazing. Thanks. I was super-flattered. But I felt kind of bad, because I knew I couldn’t pull off the platform. I had already moved onto another contract. It was kind of dead in the water. And he said, well, look, if it ever if you ever get off the ground, let us know. The offer stands. We really appreciate what you’ve done for us. And so I was like, that’s all right. That’s awesome. I feel good about that. So later that same day, I got a phone call from a friend of mine in San Francisco, a woman who is a lawyer who consults to a lot of startups out on that side of the country. And I’d helped her in the past to deal with some cybersecurity issues, since I have a previous life in that field. And she called me up because she had a client with a problem that she couldn’t really understand, and she asked if I could just help clarify what the technology in question did, and how it impacted this case. So we chatted for 45 minutes or so, and got to the part of the conversation where you’re kind of shooting the shit at the end of things before you hang up. And she said, well, what have you been working on? And I told her about Networker, I told her I was super-excited about it, and she said, that’s awesome. What are you doing about legal? And I said, I’m not doing anything about legal, because the project’s not happening. If I were, I’d hire you, but I can’t afford you. And she said, well, you just spent an hour solving my case for free. Why don’t you let me do all your legal? And I was like, OK. That’s cool. But I still can’t figure out the back end stuff. The data analytics are really complicated. The machine learning stuff– I can’t develop the algorithms on my own. Believe me, I tried for a month. I couldn’t quite get there. She’s like, look, Josh, you just wrote a book on the topic. Who do you know that does that? Which goes to show that you always teach what you need to learn, right? So I sat on that overnight, and the next day I woke up, and I sent an email to a guy whom I had met when I gave a speech for IBM, and it turns out he was the head of big data for IBM. And I got him on the phone and said, hey, Mike, look, here’s the deal, here’s the project. Someone’s volunteered to do the front end. Someone’s volunteered to do the legal side. Do you know anyone who’d be interested in helping me to develop the algorithms I need? And he started laughing. And he said, man, your timing is really good. I’m just about to launch a class at the University of North Carolina on this topic, and we need a project. [LAUGHTER] (joshua klein) Why don’t I just divide the class up into groups, and they can all compete to produce the best algorithm for your project? Would you mind if we did that? So I said yes. Now, I’m not saying that this is how all projects ever are going to work. There are still some problems. I still need some developers to help with the back end. But it’s a hell of a lot closer than it was when I basically said, all right, this project is dead in the water. And I think it’s a good illustration of the point that if you invest in your network, your network will in turn invest in you. When I sat down and had lunch with my friend Matt, I didn’t start out the conversation by saying, all right, offered 45 minutes of consulting, wasn’t like that. Basically, I helped out with my friends, and I worked on projects that I thought were interesting, and they did the same for me. So fast forward to today. I’ve been freelance for about nine years, and three weeks ago, I signed on as CTO of IMAX Labs, which is an incubator and accelerator, which is a big jump for me. It was not something that I felt very comfortable getting into. In fact, the first few times we did interviews, I said, hell, no. Sorry, guys. IMAX as a company has very deep but very narrow technology, which means that they realize that they need to innovate, and they need to find other platforms to work with. But the interesting bit is that because of where they sit in the entertainment ecosystem, they have some amazing relationships. And the more I started talking with them, the more it became clear to me that they recognized that what they had that was of value was their network. And they wanted me to come and figure out how to take that network and interface with the network of creative individual entrepreneurs, like me. What does it mean when a major multinational suddenly comes off its podium and says, we really want to play with you guys. Please. So that’s what I’m doing now. And I think that we’re going to see more of this as time goes on, because the people that are making a real change are folks like you, and the companies are now coming to your door, which I think is really interesting. So let’s talk about you for a minute. We’ve now had 14 minutes of talking about me. What can you do? This is the first thing that I think is really critical to keep in mind, and I feel like even though it seems obvious, it is often overlooked. Whatever you are creating is going to be used by human beings. And if you start that process with thinking about how and why, it will change the end result. And when I say how and why, I don’t just mean I’m making a widget. I hope people like it. But what’s the social interaction? What relationship are you hoping to engender? When Uber made their iPhone app, or their general phone app, they had a certain relationship in mind between the driver and the rider. Airbnb does the same thing. Friendster didn’t do this so well. So think about that first. The next thing is engage your customers as people. Now again, this seems totally obvious, but I talk to a lot of companies that lose sight of this very quickly, because they want to get lots of numbers, and they see their customers as wallets that are coming through the door. But it’s your customers that are going to be your next lead developer, your next investor, your next community manager, or a big proponent of your brand. They’re the ones that are going to tell you how and where and when and what you need to pivot on. They’re the ones that are going to tell you your key features that you need to lose, or the key features you need to add that you never thought of. The more you engage them and have a conversation with them, the more successful you’ll be, because they are your network. And then lastly, don’t be afraid of sharing. And again, this seems obvious, but you’d be shocked how often I run into people who say, I’ve got this awesome idea. Can you sign an NDA? A networker wouldn’t have existed today if I hadn’t been shooting my mouth off at anybody who would listen. Do that.
So let’s try this out. I’ve got this posit that your network is the most valuable thing that you have. So I’m going to inflict upon you a test to see if this is so. I’m going to count to three. At the end of that, I want you to turn around to the person behind you, give him a business card, shake his hand, commit to talking to him later during the break or whenever it is. Figure out who they are. And if it turns out that you then discover your next investor, your next partner, maybe if you just make a friend, let me know, because that’s your network. All right, one, two, three, go.