Dec 19, 2016

4 min read

Our Self-Service Future

Amazon Go is an exciting gamble by a company that is getting more and more right about breaking open new markets. Out of the “new” tech giants, many companies are struggling to pioneer projects too big for their available investment (Apple and self-driving cars), or too marginal for their resultant competitive position to justify the investment they are putting in (Facebook and VR). On the other hand, Amazon has been demonstrating the creativity to invest in right-sized ventures that are half-way between the future and today.

Looking at a project like Loon, I sense something out-of-touch with our everyday lives, and the everyday grind. I’m all for disruptive innovation over sustaining innovation, but too many moonshots are simply never-gonna-happen innovations. Thinking too big for too long can actually leave to a dearth of creativity. Creativity involves a balance between the abstract and the real. I think the reaction to a successful innovation is more like a light chuckle than a moment of awe.

We are at the moment where radical self-service technologies are obviously possible, but obviously incredibly difficult. Getting them into our street corners is a matter of the daily grind with palatable investment risk. The Second Wave of the Internet was about low-investment companies with high-impact. Today, a Third Wave innovation requires getting down-and-dirty with the real messy operations of the genuine economy. The first, and most obvious, work at-hand is doing something about our problematic service economy. Particularly, we have to get the human out of the loop in the provision of services.

Economic interactions will be more-and-more defined by an interaction between a human and a robot. This reality should be apparent to us all, but that’s also way too-many of our brightest are not effectively spending their brainpower on the problem. It’s not a surprising revelation to anyone, but that doesn’t change the fact that there’s so much work left to be done. There is a relatively intractable problem that we must solve to increase economic productivity in a per-person and per-hour sense. As our population ages, we spend more resources on the retirement years. As the standards of education increase meteorically, we spend less of our lives on producing directly. As we need and expect economic growth and international competitiveness, our only option is to do more in less time. There are 2 parts to this problem, increasing the time-efficiency of the laborers, and the time-efficiency of the consumer. Amazon Go addresses both of these components.

Capital investment must make up some of the difference, but on-net reasonable (though not extraordinary) can be obtained by restructuring interactions in the service economy. Put simply, we will be replicating the automation of factories with automation of Main Street.

A certain vision of the near future is emerging:

  • Transportation by self-driving taxis
  • Partial-to-full automation of store checkouts
  • Multiple-layer automation of the front-lines of health care
  • Replacement of many professional services with web services
  • AI performing sorting, stocking, and other basic tasks
  • Construction, farming, extraction industries becoming almost entirely devoid of the human element

For the extreme end-game, I would predict the end of all “direct” forms of work that we have historically known. This is more than a transformation from primary to secondary to tertiary economic activities. The human hand will be taken out of the picture aside from the act of consumption itself.

Putting aside the highly theoretical aspects for a minute, I want to reflect on the fact that current players in the market actually do not have a good sense of what constitutes a competitive edge in these innovations. In fact, I think that many people simply don’t understand automation in practice. A self-checkout is a great example of an area where people have virtually gone blind to the deficiencies of the system. Apple Pay is where buy-in was overly-necessary and where a superior system to the existing systems was not sufficiently established.

Small costs to consumer time add up, and shift behaviors, whether we recognize them or not. An extra few buttons to press, the time it takes for a card to process, the need for a employee assistant, and on and on, these all negatively impact the customer experience in a way that a robotized system doesn’t require in the first place. Amazon has realized that lock-in to payment processing options are so bad that the only decent option was to rethink a large swath of the entire checkout process and culture. Everything they presented differentiates from the other existing competitors.

This all goes back to the focus on the customer experience, and working back from there. For the coming self-service economy, it is our entire lives that we need to reflect on, and ask ourselves exactly what subtle pointless motions should be eliminated. In order for us, as citizens, to remain abreast of a fast changing technological world, we must take many of the route behaviors common to the 20th century and pass them off to robots.