John Sculley @ Digital Money

Hi, I'm John Sculley. I'd like to share with you a few of the things that I'm thinking about as we begin CES 2017 and look forward to the coming year. One of the things that I learned in the early days when Steve Jobs was creating the first Macintosh: he said you've got to have a noble cause. Noble cause gives you a focus to the aspiration that you're trying to engage consumers with. Remember, the Macintosh was the first personal computer designed for non-technical people to be able to do incredibly creative things. And that was the noble cause of the Mac: to build a bicycle for the mind, as he described it, that would be able to electrify the imagination of non-technical people to be able to do things that they never dreamed was possible. It's that kind of aspiration that I think is still required. And you see it with some of the greatest companies. Facebook has a noble cause: that is to connect people with people. It's a simple statement, but it's a powerful way of expressing what's important. Google has a noble cause: and that is to give people the power to be able to search and to be able to navigate all the knowledge of the world. My company, which is called Land and Credit now, which is one of the really innovative new fintech companies, also has a noble cause. And our noble cause is to start with a big customer problem that needs to be solved. And that is consumer credit finance is incredibly challenging for the average person to be able to figure out: is there a way to improve my credit scores? It's often a pain point that can take months and months of frustration, and even then there's no assurance that you're going to be able to improve your credit score. What Land and Credit does is focus on that problem of this incredible pain point and then transforms it into a noble cause. And the noble cause is: how do we help middle-income people, many of whom have not seen any increase in their income in maybe 10 to 15 or 20 years, to enable them to have the power to be able to not only improve their credit scores but to expand their borrowing capacity, to be able to lower their borrowing rate, to be able to avoid the denial of being turned down for a credit card (which by the way, just by the very fact of that denial, lowers your credit score), and to be able to enable all kinds of new robo-advisory services and other things that are possible in the era of fintech. Now, there are really two different paths you can take in fintech. One is to say be an alternative to the traditional banking system. Peer-to-peer lending would be a good example of that. The other path is to work with the consumer banks. And that's the path that we take at Land and Credit, because the massive amounts of data that the consumer banks have, only a very, very small part of that data, maybe one percent, at most two percent of that data, is actually used. Let's call it the data exhaust, meaning that so much data is available, so little of it is actually put to work in some useful way, which is now becoming possible with machine learning. One of the things that I've learned about machine learning is first of all, you've got to have a massive amount of data. And then the machine learning technology uses smart algorithms to go in and look for patterns out of what otherwise might be chaos and unstructured data. And it goes pattern matching, which enables machine learning to get smarter and smarter. For all the time that I've been in the high-tech industry, this goes back to the early 1980s, it's been about programming computers to be able to do smart things. But now we're in an era where the computers can actually learn from each other. We can train the computer to learn; we don't just have the program alone. At Land and Credit, we have tried to elevate consumer credit finance to a higher level. The first generation consumer credit finance was largely creating websites that would enable people to go out and basically find a way to get into credit cards. These were lead generation services for selling credit cards. Well, what we're doing at Land and Credit, working with the largest consumer banks, is to say we can enable those bank partners to be able to offer a new generation of services, smart with machine learning, solving big problems, and ones which can enable a range of different types of services those banks want to have, at the same time substantially reduce the cost of doing business. It's all about smart data. So I think fintech is going to continue to become one of the greatest opportunities for innovation. There are going to be many fintech companies. In fact, if you look at the sector, there are probably 30 companies or more that have market values of over a billion dollars. This shows an industry that is way down the path of learning how to use innovative technology. Land and Credit is a company that I'm very proud to be part of. You're going to hear more about it here at CES 2017. And it's a real pleasure to be able to join you for a few minutes. But let me give you this one last perspective. Ten years ago, in 2007, two important events happened. One was that Kodak decided that they were in a marketing battle with Walmart with a single-use film camera, and they had to double down on their efforts to compete with that new product. This is the company that invented digital photography. It's the company that has one of the largest photo printing businesses. Very smart people. They understood that digital technology was going to become important sometime. But Kodak was a company, like many companies in 2007, that was living in linear time. Many things happen with months and days and weeks and years, and we have a predictable instinct of how time is measured. But in 2007, Steve Jobs took the iPod, put a phone chip in it, reconceptualized it with a large touchscreen, and he invented the iPhone. And the iPhone set an entirely new direction for technology, particularly for consumer technology. But the iPhone was not in linear time. The iPhone was to grow in exponential time. And that scaling of the iPhone meant that four years later, the iPhone became the defining product for a whole new era of consumer electronics and consumer communications and social media and all the things that we know shaped the world. Now, 10 years later, 2017, and what happened to Kodak? You know, four years later, Kodak filed for bankruptcy. Kodak continued to live in linear time. Apple with iPhone and Steve Jobs' vision was living in exponential time. So I should think of context for 2017. Whether it's fintech or health tech or media tech or marketing tech, whatever era of disruptive technology that you're looking at in individual markets, in all likelihood the measurement is going to be exponential time, not linear time. So as you listen to the different stories and look at the demos and have the conversations with many innovators here at CES 2017, think in terms of exponential time. Things start very quickly and then they can scale very rapidly. A good example happened back in July of 2016. If you go back a month earlier, you'll see that nobody had ever heard of Pokémon Go. But by the middle of July 2016, in one week, Pokémon Go actually had a higher audience than Twitter. You say, well, how is that possible with something that didn't exist a month earlier? And the answer is exponential time. Now, exponential time is shaping the world that we've created, that we work in, and that we build new innovations in. Have a great time at CES 2017, and I wish I could be there with you all.