Welcome to Stuff I Thought About Last Week, a collection of topics on tech, innovation, science, the digital economic transition, the finance industry, vibes, and whatever else made me think last week. Please grab me on Twitter with any thoughts or feedback.

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In today’s post: wearable microgrids; AI for detecting heart conditions; vibes; the renaissance of channel surfing; making mRNA; the fallacy of reading human emotions; tricking our brains with color; labor shortages; income taxes should not exist; innovation vs. autocracies; and lots more below...

Stuff about Innovation and Technology
Deep Brew
Starbucks is attributing a portion of its digital sales growth to the use of Deep Brew, the company’s AI engine that leverages their app to make personalized offers and performs other tasks, like automating inventory management for their stores. The AI-assisted app may have helped boost average order size by 22% y/y with mobile orders representing 26% of the total in the quarter. The digital growth also increased rewards members by 18% to 23M. The software is even using a predictive model of vaccination rates around the globe to help anticipate demand changes by region as the economy reopens.

Laser-Slinging Weed Exterminators
Carbon Robotics' Autonomous Weeder uses 12 cameras and carbon dioxide lasers to kill 100,000 weeds per hour and can cover around 15-20 acres per day. The multi-hundred-thousand dollar robo-weeder has a 2-3 year payback period.

Sweat- and Motion-Powered Microgrid
I’m no fashion critic, but I could see an entire genre of fashion based on this wearable microgrid technology for powering small electronics: “Nanoengineers at the University of California San Diego have developed a ‘wearable microgrid’ that harvests and stores energy from the human body to power small electronics. It consists of three main parts: sweat-powered biofuel cells, motion-powered devices called triboelectric generators, and energy-storing supercapacitors. All parts are flexible, washable and can be screen printed onto clothing...The biofuel cells are equipped with enzymes that trigger a swapping of electrons between lactate and oxygen molecules in human sweat to generate electricity.” The research was published in Nature Communications.

AI Early Detects Atrial Fibrillation
Mayo is developing algorithms to detect A-fib, weak heart pump, pulmonary hypertension, and hypertrophic cardiomyopathy. Over the next decade, around 12.1M (one out of every 27) Americans could be affected by A-fib, an arrhythmia that can lead to heart attack/stroke. The Mayo algorithm is reportedly effective at finding 80% of people with A-fib, but scientists don’t yet know what the AI is detecting that indicates the elevated risk, as STAT reports. There is some controversy regarding increased diagnosis because not everyone with the condition needs to be treated, so the end result could be a lot of unnecessary medical interventions. I’d guess that there is also a risk of a worry-induced feedback loop, where increased monitoring of health conditions causes anxiety that causes health conditions (which has been seen in sleep tracking studies).

Immersive Zoom
Zoom launched Immersive View, a copycat of Microsoft Teams’ Together Mode, which allows you to see other meeting participants in a shared space (e.g., seated around a table or in an auditorium). These products are designed to reduce the dreaded video conference fatigue, but I am still looking forward to full AR/VR apps instead, which Microsoft is working on with their Mesh app for HoloLens (see #286).

“Chill Gen-Z Good Taste” Vibe
I enjoy Kyle Chayka’s essays, and the latest on vibes and TikTok in the New Yorker does not disappoint. “The word ‘vibe’ is short for vibration—something that resonates and echoes, suffusing a space.... What a haiku is to language, a vibe is to sensory perception: a concise assemblage of image, sound, and movement.” In the world of social media “‘vibe’ has come to mean something more like a moment of audiovisual eloquence, a ‘sympathetic resonance’ between a person and her environment” according to Robin James from U.N.C. Charlotte. Chayka’s view seems to point toward social media as a vibe engine, creating/feeding a mood we are seeking, which rubs off on our perception of the real world.

Play Anything
Netflix is launching Play Something, its latest effort to end the endless scroll of content, content everywhere, without a thing to watch. If you opt-in, the app will immediately choose something and start playing it, bypassing the decision fatigue and paradox of choice. You can “change the channel” by skipping ahead to the next suggestion, or you can go back. Netflix has wanted to add this feature for a decade, according to Cameron Johnson who oversees Netflix’s TV interface product innovation. So...it took them ten years to reinvent channel surfing? In #272, I covered Kyle Chayka’s excellent New Yorker piece on the rise of ambient TV: “Streaming wasn’t supposed to be a passive viewer experience: we pick what we want to watch, when we want to watch it. But the profusion of ambient shows turn streaming into a passive experience like cable, where we just leave it on and pay attention to it or not. Netflix produces ambient content intentionally, because that’s how some people use its service.” Netflix’s tagline for Play Something is: “Sometimes the best choice is not to choose”. I first wrote about this Netflix feature back in November (#270), and I still believe we will end up with many programmed channels of streaming shows, all curated by apps and by super curators (or digital DJs as we call them):
“I’ll contend that there is real value in programmed channels. Indeed, the popularity of programmed, ad-supported services, like Pluto TV, supports this idea. According to Netflix’s website in France: ‘many viewers like the idea of programming that doesn’t require them to choose what they are going to watch...Whether you are lacking inspiration or whether you are discovering Netflix for the first time, you could let yourself be guided for the first time without having to choose a particular title and let yourself be surprised by the diversity of Netflix’s library.’ I imagine that this will become the preferred way to consume Netflix, and they end up with multiple channels and ultimately need less library content to feed personal algorithms. That's basically what HBO was (and still is for folks with cable). Such a development would also be consistent with my ‘less is more’ hypothesis given the current abundance of mediocre scripted content.”
The problem is multiplying as all video is going streaming, so there is a real need for a layer of influencer VJs to program channels across the various apps. In the meantime, I will continue my practice of deleting my profiles in all the streaming apps every few months and creating new ones because I find all of the recommendation algorithms to be utter garbage.

Miscellaneous Stuff
Making mRNA
The NYT has a nice step-by-step walkthrough of the complicated process of making a mRNA vaccine. A lot of research went into figuring out and optimizing the mRNA design – both the sequence and lipid coating – such that cells would uptake the molecules and start producing the viral protein antigens, but the rest of the process is basically Molecular Biology 101, which is why scale-up has been so effective. (SITALWeek's editor fondly remembers the pungent smell of plasmid-producing E. coli cultures incubating in the warm-room shaker from her grad school days). That's not to say that all viruses will now fall before the mighty mRNA. We just so happened to know a lot about the structure and biology of SARS-CoV-2-like coronaviruses before the pandemic, and the viral spike protein encoded in the mRNA vaccine has proven (so far) to be a unique, high-fidelity immunogenic target.

Seasonal Flu Bypass
The flu moves from human to human in a similar way as SARS-CoV-2, so, given all our pandemic precautions, it should not come as a surprise that there was effectively no flu season over the last year. Flu deaths dropped to only 600 in the US, down from 22,000 for the 2019-2020 season and 34,000 for the season before that. The circulating strains at the end of each season help determine the vaccine formulae for the following season, but this year we don’t have much data. Could we significantly tamp down the flu in subsequent years if we maintain some modest vigilance with regard to masking up and social distancing?

Facial Emotion Recognition Fallacy
Using AI to read human emotions from faces continues to be a scam (previously covered in #217). This hasn’t stopped a variety of startups from claiming it’s legitimate science for job interviews, employee/driver monitoring, etc. Even Amazon, Microsoft, and IBM have bogus emotion recognition programs, and Apple recently acquired a company in the sector. As outlined in this informative article in The Atlantic, the entire idea goes back to the flawed premise from psychologist Paul Ekman in the 1960s: “if affects are an innate set of evolutionary responses, they would be universal and thus recognizable across cultures.” Neuroscientist Lisa Feldman Barrett (whose work we’ve taken a keen interest in – e.g., see #272) conducted a comprehensive review in 2019 of all of the studies based on this concept and found: “there is no reliable evidence that you can accurately predict someone’s emotional state in this manner.” Further, the study concludes: “It is not possible to confidently infer happiness from a smile, anger from a scowl, or sadness from a frown, as much of current technology tries to do when applying what are mistakenly believed to be the scientific facts.” The face, vocal intonation, and body language are not open books to be read by other people, AI, or even ourselves. The machinery of human feeling and intention is vastly too complex.

And yet, despite the facts, Microsoft is pushing forward with algorithmic detection of emotional states for AI-driven virtual psychotherapy. Remarkably, the researchers at Microsoft’s Human Understanding and Empathy group even reference Feldman Barrett’s paper, but then appear to entirely brush it off! Unfortunately, even among research scientists and academics, it's not uncommon to have an entire ecosystem unable to unmoor themselves from past mistakes. I think it is likely that, over time, AI can get better at reading emotions if it can take into account readings from your heart, skin, and brain and combine that with contextual awareness of the situation. But, even then, will it account for the impact on your mood from what you ate for breakfast last Tuesday? Conversely, I think we will be able to imbue AI bots with a discrete array of simulated human emotions (e.g., as with CGI characters); however, I doubt we will ever be able to accurately understand/mimic the full breadth and depth of multi-layered human emotional expression with today’s technology.

99 More Bits
Kevin Kelly is back with 99 more useful bits of advice following his popular list of 68 last year. Like before, Kelly mixes the philosophical: “Contemplating the weaknesses of others is easy; contemplating the weaknesses in yourself is hard, but it pays a much higher reward” with the practical: “If you think you saw a mouse, you did. And, if there is one, there are more.”

Color Script
Wired ran an excerpt on how Pixar manipulates viewers with color effects from the book Full Spectrum: How the Science of Color Made Us Modern. It’s a fascinating look at Pixar’s extraordinary efforts to evoke a particular emotional response from their audience. The technology continues to improve for projectors and TVs, and soon screens may be able to trick our brains into seeing colors that we would have no way of perceiving in the real world.

Stuff about Geopolitics, Economics, and the Finance Industry
Chit Chatting with Jon
Jon was on the Chit Chat Money podcast last week talking through our process at NZS Capital, his career journey, and semiconductors. Our thanks to Ryan and Brett for their high praise of Complexity Investing as “one of the seminal pieces for investors in the last decade”.

To the Burbs
As data start coming in from last year’s great migration, the WSJ analyzed change-of-address forms from the US Postal Service to track the exodus from cities. Most folks landed in the suburbs outside of big cities, with a 43% increase in this type of move vs. 2019. These suburb seekers were greater in number than the combination of people who moved to towns and smaller cities. The Northeastern US continued to lose people while the Southern and Western US saw gains. The move to the 'burbs was already underway, and it will pull some urban commerce habits with it (see 30 Something Sneaker Wave for more on Millennial demographics).

Labor Dearth Demands Immigration
Spurred by the section on labor in SITALWeek #292, I had several interesting conversations with readers regarding labor inflation and the missing workforce. We are all wondering if the current lack of labor has more to do with government payments or if the preexisting shift away from some labor-heavy jobs was accelerated by pandemic closures. The market clearing price to get people back to work continues to rise, but it could reverse this summer/fall when there is more economic motivation to go back to work (and when kids are back in school and households can return to dual income streams). I appreciate the arguments that people need to work their way up a ladder of wages, but it seems like the first step on that ladder could be a little higher. But, don’t tell that to Walmart, which is working hard to keep wages as low as possible. As I read about the paltry population growth in the 2020 Census – only 7.4% from 2010 to 2020 – and had some of these conversations this past week, a pretty clear conclusion emerges: we need a much more open and welcoming immigration policy. In the meantime, expect wage inflation and an increased emphasis on tech and automation.

Why Do We Still Have Income Taxes?
The amount of fiscal and monetary stimulus in the last year adds up to multiples of the typical annual tax collection in the United States, which was $3.6T in 2019. I know we had a sharp downturn and are experiencing rising inflation this year, but if we can shell out multiples of the annual tax receipts and not see significant impacts, why are we collecting taxes at all? Yes, I am being provocative here, and I understand where this takes the math on sovereign debt levels if we think about the world in terms of traditional (but wrong) economic theory. As an experiment I’d suggest we eliminate income tax completely (which might actually motivate some more people to return to work in this tight labor market!). The experiment could go further by subsidizing low earners (or raising minimum wages, etc.). I pulled together various thoughts on interest rates and inflation here, and I think it’s worth running the experiment of no income taxes to see whether or not the ongoing power of deflation from technology has created a goldilocks scenario. Of course, the consequence of low rates continues to be asset price bubbles, which I think can be treated with targeted policies and an increase in capital gains tax rates to target short-term speculation (but not long-term investing). It’s the Information Age! So, let's experiment with no taxes and generate some data for making better policy decisions. I don’t know what the answer is, but the experiment from the last year is thus far intriguing.

Democracy's Culture of Innovation
“The question is: In a democracy that’s such a genius as ours, can you get consensus in the timeframe that can compete with autocracy?” This comment from Biden was circulated prior to his addressing Congress last week, and it’s worth reflecting on. I frequently come across the following false narrative: the West should worry about China because top-down control can move faster and get more done while democracy remains in gridlock. Well, if gridlock means the incredible pace of innovation we’ve seen from Western companies over the last couple of centuries, accelerating in recent decades, then I’ll take gridlock. If gridlock means entrepreneurs can create value without facing house arrest and having their companies taken away from them, I’ll take gridlock. I think Biden frames the question correctly, but I don’t think the answer is more autocracy in the West, and I especially don’t like Biden using these philosophical arguments so that his team can act more like autocrats. One of the great advantages of gridlock (most of the time) is that innovation can happen before the government gets in its way (for more, see: Pace Layers: Tech Regulation). Back in SITALWeek #214 I wrote:
“Throughout human history, there has been a spectrum of freedom and equality: if you have 100% freedom, you tend to end up with extreme inequalities; if you have 100% equality, you tend to end up with very little freedom. Capitalism, on the one hand, has tended toward freedom, thus causing ever-rising inequality, while Communism strives for equality by suppressing freedom. There is some threading of the needle of equality and freedom that we still need to do as a global society, but for now the path isn’t yet clear. I’d suggest the ultimate tact to take for companies and investors struggling to make sense of the China situation is to support rising freedom over the long term.”
And in SITALWeek #226 I wrote:
“Innovation requires free expression of creativity without fear. For a period of time, China did allow Alibaba and Tencent to create monopolies and monopoly-like profit pools, which caused them to pull ahead of the Western Internet platforms in terms of innovation. But, then they reversed course as Jack Ma relinquished his control of Alibaba and the government took increased control of the sector through board seats, censorship, etc.”
It’s hard to have autocracy without fear and lies, and it’s impossible to have significant progressive innovation in a system based on fear and lies.

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Disclaimers:

The content of this newsletter is my personal opinion as of the date published and is subject to change without notice and may not reflect the opinion of NZS Capital, LLC.  This newsletter is simply an informal gathering of topics I’ve recently read and thought about. It generally covers topics related to the digitization of the global economy, technology and innovation, macro and geopolitics, as well as scientific progress, especially in the fields of cosmology and the brain. I will frequently state things in the newsletter that contradict my own views in order to be provocative. Often I try to make jokes, and they aren’t very funny – sorry. 

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