Nick Laqua (Hong Kong, IT enterprise architecture & Artificial Intelligence)
In this episode of the Judgment Call Podcast Nick Laqua and I talk about:
- What made Nick venture from Germany to Australia and Hong Kong?
- How Hong Kong struggles to keep its identity after the recent absorption by China.
- How airlines deal with their aging IT infrastructure? And how Cathay Pacific in particular overcame these challenges.
- What role AI will play in the corporate environment.
- Is ‘Free Will’ real and how AI challenges that belief.
- and much more!
You can watch this episode on Youtube – The Judgment Call Podcast Episode #32 Nick Laqua (Hong Kong, IT enterprise architecture).
Nick Laqua is a technologist and specializes in IT enterprise architecture. After heading a team to change the enterprise architecture of Cathay Pacific he now works at Mox Bank Hong Kong.
You can reach Nick via LinkedIn.
Welcome to the Judgment Call Podcast, a podcast where I bring together some of the most curious minds on the planet, risk takers, adventurers, travelers, investors, entrepreneurs, and simply mindbogglers. To find all episodes of this show, simply go to Spotify, iTunes, or YouTube, or go to our website, judgmentcallpodcast.com. If you like this show, please consider leaving a review on iTunes or subscribe to us on YouTube. This episode of the Judgment Call Podcast is sponsored by Mighty Travels Premium. Full disclosure, this is my business. We do at Mighty Travels Premium is to find the airfare deals that you really want. Thousands of subscribers have saved up to 95% in the airfare. Those include $150 roundtrip tickets to Hawaii for many cities in the US, or $600 life lead tickets in business class from the US to Asia, or $100 business class life lead tickets from Africa roundtrip all the way to Asia. 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To get back to what you said about, you know, setting up meeting times, what I found with the podcast and that’s really surprising to me is that pretty much anyone I know from Germany and I kept inviting them on my network here on the podcast, they actually do once who flake at the last second, so literally they go through the whole process and we set up an appointment and we set up meeting and we talk about how to do this on Google Mead and they confirm everything, and then literally 10 minutes before the podcast, basically the only ones who did this were all Germans, people from India, people from anywhere on the planet, mostly from the US obviously, but it’s only the Germans who don’t cancel it all, right? That’s very unGerman, they don’t cancel, but they don’t initiate the call and they send me an email two days later and say, oh, by the way, sorry, I couldn’t make it, it could be reschedule, so which is very unGerman. So something is going on, but I don’t know, it’s virtual meetings or it’s the podcast thing, it just doesn’t work with people in Germany, I literally don’t know what it is. Okay, yeah, I mean, it’s gonna be Europeans because there are a bunch of people from France and it was never an issue. Yeah, because I already changed the date twice, I was obviously quite committed to not change it another time. Well, I realize you’re very busy, so that’s a given, anyways, we know each other for quite some time, so we worked together 20 years ago at a company called Neutron, which was basically my first startup, I guess it was also your first startup. And we worked together setting up the IT infrastructure, but also the development process for the company. And since then, you’ve done a couple of different things, so you, and that’s really interesting to me, you moved to Asia, you moved to Hong Kong, as far as I know, and then you also had a bunch of opportunities, I think you worked with Cathay before, and then there was another bank, I think you worked before, maybe I get this wrong, so hopefully you can clear this up. And obviously, I want you to eliminate that a little bit, and tell us a little more about it. And also, maybe while you do this, give me an idea on why you did this, right? What was the core motivation for you to kind of go out there different than the place you grew up, and I grew up in the same city, so far as I know, you both grew up in Dresden. What was kind of your motivation to go on that journey? Okay, so yeah, maybe to get this started, yes, as you said, right, like we both worked together, pretty exciting times, let me just recollect my thoughts. I guess my travel park started even earlier than Neutron, in university, I mean, everyone knows university life, right, like you try to mix your school endeavors with your non school endeavors, and at some stage I felt like something is missing, and I spent quite a lot of time trying to sort out how to spend some time outside, like abroad, hadn’t really traveled until then, that was like, and was that like 2000, or 1999? Yeah, those were the days, Meg, I know, I know, I know, actually, it’s 1999, even beyond even beyond today’s coming from East Germany, that’s, that was even more interesting times before then, but anyway, so I ended up in Malaysia and in the US for a year, which was before Neutron, and I guess when I came back from these two trips, so I went, as I said, Malaysia called the Lumpur half a year, did an intern job, and then in Cupertino in California, where I also spent half a year working for Infineon, and when I came back, my perspective had quite changed, so I came back, I was working here in the local Fab in Infineon, and I felt like I wanted to do something else, I got Jan, you remember Jan, Jan got me into Neutron? Yes, yes, yes, yes, of course, yeah, so and yeah, and that was like, besides the job that I have right now, probably the job that I enjoyed most in my life, and as you know, right, we had big plans, Neutron is obviously still existing, which means it has been quite sustainable and quite stable, but there was this whole opportunity of going abroad with Neutron itself, right, Singapore and so on, and but at some stage, I realized that I spent five years there, and I was like, okay, I had a lot of, there was a lot of stuff that came out for me, but I felt like it’s not going to be, let’s say, that kind of hockey stick that maybe people dreaming of or so, so I thought like, okay, well, how can I combine my hunger for travel with my life, right, with my plan, right, and my decision was to try to apply for skilled migration to Australia, so that I could combine like the professional side, not like a work and travel program for which I was a little bit too old, but then so yeah, so I ran through this process, which is very painful for like one and a half years or 15 months or something like that, and then eventually when the when the letter came through, what’s painful about it, about that? Is it the particular visa for Australia? I don’t know much about it. Yeah, so Australia, they are, obviously, they are quite restrictive in terms of their bonus as we know, but they’re also quite interested in getting skills in, but they make it, they make it relatively hard, right, so you have to run through a lot of screenings and you have to basically have to provide everything about your university life and what was before then, so as I said, it took like almost, yeah, 16, 17 months, right, as a long process, cost a lot of money and yeah, so I’m not enjoying these kind of processes, so, but anyway, eventually it came through and then I, and then I, yeah, I sorted everything out with Eckhart and then, which was my boss at that time, and then off I went, basically going to Australia, you said, I didn’t go straight to Hong Kong, actually, I did go to Hong Kong because I stopped on the way over in Hong Kong, which was, which was also quite interesting traveling around China for a while and Tibet and so on, but then eventually I made it to Australia, that was in 2005 and then I stayed there for two years, came back to Germany and then I actually went to Hong Kong for good, as you said, like starting to work for Cathay Pacific, the local airline, yeah, that’s kind of how it went, how I ended up here, where I’m still in, where I’m still in, yeah, well, we know Hong Kong has been kind of a hard spot politically the last couple of years, and it’s always been this, this lovely melting pot of British culture and Chinese culture, and I found it, it’s always super interesting to be in Hong Kong, but on the other hand, I always dreaded it because I had that impression that it’s just too overwhelming, like there’s too much going on, it’s like in New York City, but it’s a way less space, and it kind of overwhelmed me, and I felt stressed out just because I always had these layers, I’ve been flying on Cathay a lot, usually the destinations outside of Asia, but what happens, happened to me a lot is that I have 16 hours in Hong Kong, you know, you arrive from the west coast, you arrive at 6am, then you leave at midnight, I mean, you’re jet lagged, but not necessarily in a bad way, but I mean, I love going to Hong Kong, but I always felt like it’s a city that really, it takes everything you’ve got, and you are under more competitive pressure than pretty much anywhere else, that’s how I always felt, it’s kind of like in New York City, but it’s on steroids, depending probably on what you do specifically. How would you describe Hong Kong, how does it appear to you on an everyday basis? But that’s a big question, and first of all, what you say, I guess I can, I definitely know what you mean by what you say, because if I try to, I’ve been now in Hong Kong for 11 years, and of course, I think about that time quite often, and I try to remember how it was when I got here the first time, because my view has definitely changed, and I still remember, and I still cherish these first five days, when my girlfriend, now wife, and me were basically running through Hong Kong, and basically picking all of that stuff up that you just mentioned, whether it’s food, whether it’s shopping, whether it’s just the sheer amount of people, and the density, and so on, but of course now, after 11 years, I live on an island, so I’m actually, we keep saying we don’t live in Hong Kong, we live in Lentau, which is the biggest island in Hong Kong, and obviously my view has changed. Now you kind of know which places to avoid, when, where to go, where is it quiet, where is it not quiet, and so on, but I definitely agree with you, there’s quite a normal level of competition between Hong Kong and Singapore, here in, in the region, and a lot of my friends have either moved from Singapore to Hong Kong, or from Hong Kong to Singapore, it’s quite frequent, and I always say I would never ever do that, just because I find, personally, I find Singapore pretty boring, compared to Hong Kong, right, like this little edginess, dirtiness, and so on, I don’t think I see that in Singapore, and maybe you see in other Asian cities, but Hong Kong is pretty, Hong Kong is a pretty good mix of, of one hand high tech, shopping, marketing, all of this kind of stuff, right, like first world, but then also the, the Asian underbelly put it this way, so yeah, it takes a lot, it gives a lot. I, I fully agree, I always felt the Hong Kong is way more, it’s true to its heart, and it shows you more, like the US, I’ve always felt it’s a place that is very honest about what it, about what it wants to be, and it’s very often very dirty, and it’s not perfect, and it’s terrible infrastructure, and the buildings look like, well, an architect definitely didn’t have a hand in building them, and Singapore is the opposite, right, it’s like a state socialism that is actually taken off, and everything’s pretty manicured, and there’s plants that are perfectly straight, and it seems like whenever you come back, they just, they just grow even more straight, so it’s, there’s something about that randomness, and maybe even a little bit of crime that you get, obviously, like something is weird in Asia that you get so little crime, at some point, you know, you need, you need a little bit of crime that just makes things interesting, you need, nobody wants criminals that commit violent crimes, but there is a level of crime in terms of risk taking that is probably required for a society, and I always feel many places in Asia that, that it’s subdued so much, not Hong Kong, that’s certainly not the problem there, but it’s subdued so much, and I felt like the whole society, maybe, maybe it’s something I don’t see because I don’t have the eyes for it, maybe it does happen somewhere, but when I go through, say, many neighborhoods in Seoul and then talk to policemen, and they tell me they don’t have a weapon on the first place, and I said, well, that’s, you know, most of Europe doesn’t have weapons, but the last time they arrested someone is like three years ago, but these people are actually in the middle of that neighborhood, right, they’re not lazy and just don’t care, they’re not corrupt, it’s just, there’s nobody who commits a crime to, to even, to even arrest, so I always felt that’s, that’s a bit of a problem in Asia, and Hong Kong has steered away from this British heritage, British heritage. Hong Kong has changed to, we saw it as the last two years because it’s kind of been taken over by China, right, and we, from, from the US feel it’s like it was a straight takeover, right, you might see it differently as a local. What do you think happened with this so called takeover? Do you feel like things on the ground in Hong Kong are actually affected, or it is something that’s only, if you look at it from a state level, really makes a difference? It’s, yeah, I mean, let me, let me put it this way, for me personally, for me personally, Hong Kong, I know one country, two systems, that’s the, that’s the statement, right, but at the very end of the day, Hong Kong is part of China, right, so that’s, that basically was declared when, when, when the handover happened from, from, from the UK, from the British Empire to, to the, to China, right, and every, everyone knew that within 50 years time, Hong Kong would be fully embedded into China, right, and, and what’s now happening is kind of this clash, in my opinion, that clash of the government who, who wants to go along this line, right, and wants to see this line through, versus the, the people of Hong Kong, or like the, the, the population of Hong Kong, right, who is not, who is, I guess, sees themselves as still with the heritage, right, so, so it’s a, it’s a complicated topic because I feel, personally, I feel as a guest here, right, clearly, I don’t have not nearly as much insight into any of that than any other local, right, of course, you can feel the tension and you, you, you do, you do see it, but it’s, but yeah, it’s a, it’s a, it’s a topic where I feel like you, you cannot really win, no matter what you say, right, because I mean, we are both from East Germany, right, we, we know what some of these cultures are like, right, and we obviously fully appreciate what, I mean, I at least, and I guess you too, appreciate what happened when, when the reunification happened, and that feels like the basically kind of the process and reverse, and so I’m glad you say that, I’m glad you say that, I see it exactly the same way, and it, there is something, it’s a bit more subtle, I feel, than, than what we were used to when we were growing up with children in Eastern Germany was pretty much structured like the Soviet Union and had all its pros and cons, I consider, I saw more cons than pros, but you know, people might have a different opinion about that, I know my parents are more of the pros of Eastern Germany than the cons, which looking back really surprises me, but what, what I think happened with China is that it really pulled off this state sponsored corporate capitalism, and it seems to bear fruits, like it seems to actually create so much money and influence that it’s on the level that people were not expecting 20 years ago, and I think what people expected in 1997 is that, you know, by the time it’s 2047, then China is going to be basically looking like Taiwan and also is going to behave like Taiwan, so it’s going to be like any other democracy we knew or any other country that gets richer on an yearly basis, usually comes a democracy and kind of joins this club of democracies with similar opinions, and Germany obviously slightly different in France, but seen from a little bit further away, they all seem to have the same goal, so in order to make their citizens happy, something happened with China that this, and everyone expected this, it didn’t really work out that way, right, so it, it, it kind of found this is in between, but being on the communist side, but making as much money as anyone else, if not more, depending on, depending on what sector they went into, they still have trouble with semiconductors and certain industries that have, you know, a higher level of specialization, but this might be gone in a couple of years from now, and they might actually have an advantage there too, and I think this is why, why everyone is so freaking out right now, that you expect something to be, and for a while it really worked that way, and they say Hong Kong should have rebelled much earlier or much later, it kind of got the timing completely wrong, like all the protests, people saying this is something should have done early on, when, when China would still, was it not in the stronger position, and would it probably get them better protection for the independence, or much later, you know, maybe in 10, 15 years from now, when there’s, and, and maybe a different global viewpoint on China, so to speak, but I find it really interesting that, and that’s, I think one of the, the positives about China to an extent is that they, they solidified their political model, and created a very efficient economy, at least from the outside, right, we don’t know how sustainable it is, and it will be the same in 20 years from now, but it is pretty stunning that 20 years ago, the difference between Hong Kong and Shanghai was massive, right, it was really poor place, looked like a Soviet Union, and then there’s Hong Kong, which looked like, looked like Hong Kong, but now, unless you know the subtleties and you really are, I mean, there is still the service industry, but say outside the service industry, these two places look very, very similar, and that’s not an accident, right, it was designed Shanghai out of Hong Kong. Do you, do you feel like when you go to mainland China, does it, you feel a huge difference, or when you just cross the border, things are very similar to Hong Kong? I have to say that, that I haven’t, I haven’t really been traveling in, in China for quite a long time, so my last, my last trips to China were all for, for, for work, business wise, so basically like two days, typically into Shanghai, mostly into a town and so on, so I guess my, my, my, my comparison is a little bit rusty, but, but I think it is, it is, you’re right, it is definitely converging, if you look at just, if you are out on the street, right, and you look into, into shops and, and, and people and how everyone is dressed and how everyone behaves and so on, right, so yes, it’s definitely converging, obviously language is quite different, I, I’m quite embarrassed to say that I don’t really speak Chinese or Kanto, which is the local, the local language here in, in Hong Kong, so I, so that obviously makes things a little bit different when, when I go to China in terms of just communication and so on, but, but yeah, on the, on the surface, I, I think I, I concur with what you said, right, it is, it is coming together, especially Shanghai and Hong Kong. Yeah, this, I went to, 2019, I went to a couple of secondary cities in China, I went to Xin Nan and Fuzhou and Wuhan, obviously, and there was a couple of months before the alleged virus outbreak there, the first initial outbreak, and I thought these, these cities, minus the service industry, which doesn’t really exist, that means restaurants don’t really exist, they do exist, but it’s, it’s a very small selection of what would they offer. They are super modern cities, especially Wuhan, when you compare it to New York City, for instance, it’s, it’s, it puts New York City to shame, there’s, there’s amazing infrastructure, the, the, the way public infrastructure has been built up, but also roads have been built up, the, the way skyscrapers have been coming up, it’s pretty amazing, and they still have parks and it’s very pretty, so I was, I was duly impressed by, you know, Wuhan is still the secondary city, maybe it’s moving its status now, towards the primary city, so that’s pretty, pretty cool, it kind of looks like a Singapore, but little more gray skies, but even those weren’t that terrible when I went on, some of the air pollution has gotten much better, at least the last two years, and probably also now, so much stuff has been shut down. I want to move our topic a little bit, because I know, talking about China and the, the difference, the differences with Hong Kong can be very sensitive. When you joined Cathay, did you feel it was a, it was a Chinese organization, because it’s kind of half owned, or there’s a, there’s a big shareholder, which is China, or did you feel it was kind of an Australian organization, where it came from, right, the original founders were Australian, and then they came to Hong Kong, where did you feel was really the real DNA of the organization? Actually, I think the roots of, of Cathay, but maybe I’m really getting this wrong, are more like British, or let’s say, the way I felt when I came in, was definitely British, so there’s this big conglomerate called Squire, which basically has, they have the hands in, in everything, right, and Cathay is just one tiny little part of Squire, and Squire is, is located in London. So, so, yeah, definitely, I didn’t feel Cathay to be like a local Chinese company, but actually a Western company, so if you look at the, the management level that has changed by now, but back then, very European, typical, yeah, let’s say, white old guys, and they have their own kind of management training, kind of funnel, where people get in as, as, as graduates, and then they’re basically being trained to ultimately be general managers or vice presidents or whatever. And so there’s this extra training program, which also sounds very elite, schoolish, put it this way. So yeah, definitely not a local field from a management perspective, and the main language or the official language is English, lots of expat pilots who are very proud of the level of, of training and safety and so on, that, that, that Cathay applies in their programs, right? So yeah, I, I, I felt like it is like truly British UK heritage. Yeah, I just looked it up, and, you know, I’m, I’m, I’m cheating a little bit here. I looked at Wikipedia, and apparently one of the founder, founders was Australian, one was American, and they were originally headquartered in Shanghai for quite some time. All right. And it must have been in 1934, so that was pre World War II. So things were quite different at the part, at that point of time. But the biggest shareholder is Spire, as you said, and that is a British company. So I think that that might have moved, moved over time, which influence actually wrong. When you, when you got to Cathay, we, you know, I can, I know Cathay is one of my favorite airlines simply because of their excellent business class products, and also because they’re part of one world. So they, they relatively easy, easily accessible with the US based mileage programs, for instance. When you, when you first arrived at Cathay and looking at the IT infrastructure, what was like the, what was your role and what was like the first thing you noticed there? So, to, to, to provide some more context and background here. Sure. So at that time, at that time, I, as I briefly said before, my, my wife and myself, we had moved back to Germany after Australia. I got into consulting in Germany. That was around the, the financial crisis that was in 2008. So not a very good time to be working in consulting. And anyway, long, long story short was that our daughter was born, our first child was born. And I was kind of very keen to get out of this industry where you spend a lot of time in planes and you’re not always at home. And at the same time, we also, again, the travel bug, we decided that we would use the quite exhaustive or pretty good parental maternity leave regulations in Germany to actually spend four months going back to Australia with our three months or daughter and to basically drive around all over Western Australia. And in this context, I wanted to hook up with a friend who, who I used to work before with in, in, in, in Sydney. And, and he said to me, actually, we can’t catch up because he’s now in, in Hong Kong and he’s working for Catholic Pacific setting up an enterprise architecture team. So that’s my job. That’s what I do, architecture, which is essentially the kind of the macro structures of an IT system. And he was very keen to get me over to Hong Kong as part of this newly established team. And anyway, that’s ultimately what happened. We decided pretty quickly, did a quick visit here in Hong Kong, they actually flew us over being in airline, so we could look at everything. And then in 2010, I made the move in my, my family five months later. But anyway, the point is that I was coming in with this background of a big transformation project in, in, in Catholic Pacific. And this former colleague of mine was actually hired to drive part of it. So I felt quite, quite energized by, by this whole idea, right? I mean, it’s a, it’s a big company is like, I think 25,000 people or so, at least it used to be. And the IT department, 700 people, much, much bigger than what I had seen before. So every from every, I was, I was still relatively fresh and, and, and everything was pretty overwhelming, I have to say. I can imagine, but when you, when, the way I know IT infrastructure and you know, you remember that at the time that Neutron we sold a procurement software to tier one, tier two automotive suppliers, so those were the companies that would actually deliver systems to, to, to automobile, automotive manufacturers or we have so called in, in Germany. And what we realized is that it’s their IT infrastructure isn’t necessarily what you would expect, say, at Google. So things are a couple of years behind. Let’s put it this way. And when you think of airlines, we know that they have, they have integrated with GDS systems that are often 30, 40, 50 years old, then at some point they put a website there, which creates reservations and then interfaces with the GDS. We’re really, really, I’m trying to keep it really simple. It’s probably way more complicated. And then there’s a, there’s a ton of subsystems that came over the years that kind of were kept, kept alone and there was a, there was an interface, there was an API and at some point, you know, it has to be extended because you wanted to do a little more than what the initial interface suggested. So when I think of IT infrastructure, I think of a mess of tons of, tons of old software that partially is not even something you build or that’s, that’s, that’s completely in someone else’s hands. You can’t even, you don’t do much with that. It’s often my sense. It goes through computer structures, hosting structures that are much older than what you, what you would build today. And it seems from the outset, at least a complete mess. I noticed from American Airlines, who was the initial investors and saver of the reservation system. And then they kind of sold their stake, it went IPO and then they had trouble buying it back. What happens now, you make a reservation on the American Airlines and this for instance never tickets. It tickets 15 days later, they’re like, how is that even possible? So you, so you have something that should be working in real time because people want to fly, right? So they need it in order to fly and not store reservation, but it somehow never happens. I mean, it does eventually happen and there’s some kind of priority queues and it’s gotten really complicated. I always felt airlines are an extreme challenge because so much IT infrastructure was really old and the new airlines, the discount airlines, they mostly started in the late nineties and said, we throw all of this out. We basically don’t pay affiliates to travel agents. We don’t, we don’t work with any of the legacy systems. We just start afresh and have a website and just build a couple of backend systems. How did it work at Cathay already more modern? Yeah, you bring up a lot of old, old, old memories from, from that day when I joined actually, you’re absolutely right. Airlines are probably, if you compare it across industries, airlines are definitely and we’re definitely at the end of the train, let’s put it this way, right? So when I, when I actually joined Cathay, there are two, there are typically two main systems in an airline, right? That are basically the core systems that are basically critical, super critical, right? One is the reservation system where basically you put your bookings in, right? And then the other one is the departure control system, which is when you actually check in and then basically like, like, you know, the passenger lists are created and all of that. And obviously these two kind of systems, they are very intrinsically linked, but at the same time, they’re also, they’re also massive and old. And when I joined, we were still running these systems on the mainframe. So Cathay was still running on the mainframe, not even on Amadeus yet, right? As the largest media. In fact, one of the biggest projects that our team was responsible for amongst other teams was actually the migration to Amadeus from these mainframe systems, which I forgot the numbers, but it took like seven years or so for the reservation system. So you can imagine that’s like, that was the biggest ever IT project that Cathay and probably any kind of realignment who went through this process could ever do. And as you said, because it’s so essential and it’s so connected to everything, right? So that’s like a massive, massive integration kind of nightmare in terms of testing, in terms of third parties and so on, right? And obviously there are passengers on the other side, right? Like if that breaks down, then you have a lot of problems. So yeah, I mean, definitely. But again, right, this was the exciting part, right? To basically take something that is pretty much stuck in the old ages, especially if you come from a kind of software as a service company, like what we did before. And then to get into this, which is two levels of magnitude higher scale, but also two levels of magnitude older. So that’s, for me, I enjoy that kind of stuff. It’s all about complexity and basically getting into the depths of it and then solving it in a nice way. So yeah, that’s what I enjoy. I think society owes you because it sounds like something that definitely has to be done and a lot of airlines seem to push this out as much as they can. And I know that a couple of different airlines switched around from Sabertime to Deos. Maybe they had done this switch before, so they kind of knew what they were into and they know the APIs and all that was going on. But I remember Singapore Airlines, which has at least that image has very well run. And these switched to Amadeus or away from Amadeus, I think a few or five years ago, and it only took them a weekend, I mean, in order to go live, right? So they shut down everything for like a weekend and then you could make bookings again, which still sounds terrible. I remember the numbers before COVID hit the websites in the US, the airline websites, many of them would make about $100 million in sales every day. So we think of airlines, okay, they have big companies, but the numbers and the bookings involved are massive, right? So if you say $100, $200 is the average ticket, that’s a lot of individual transactions that you better not go wrong, right? And there’s payment systems in the background and there’s lots of different payment systems that Ellen’s always felt there, they need to know more about payment that seems, so they seem to be doing very much in cases that, you know, an online shop wouldn’t do what an Amazon probably doesn’t do. So there’s a lot of interconnected systems. And given that everyone is not local, right? So there is, you suddenly fly to Johannesburg and now you have to accept the primary payment mechanism in South Africa, or you have to know about South Africa, what’s the progress, right? So you don’t have it as easy as most online shops in the South of one country and they are on scale up. What was the biggest challenge with Cathay? So I assume you got this eventually done and you switched to two of my days. What was the biggest challenge that they had in their own system seen from an IT perspective? I think at the end of the day, what I think I came to realize is that the challenge, okay, maybe to answer this in two parts, they had, Cathay had traditionally come from a setup where there was no central IT, right? So essentially you had the different business units and they had, and I never experienced that, but they had their own little pockets of IT, right? And then they decided probably with some consultancy in the background, right, that sharing and pooling IT resources into a central IT department, right, would economically make sense for them, right? So the problem is now that because they had this very decentralized IT, but probably not the right governance controls in place, that was basically very messy, right? So you had like six, seven hundred applications, right? And everything was connected by either something which was sometimes a little bit more modern, but in a lot of cases, very, very old, right, like relics, like whatever, even using Excel fires as interface and things like that, right? So everything pretty much kind of kept together by Band Aid and by employees who really know how to work around the current system, right? And then suddenly you changed the organization structure and everything immediately becomes even worse, right, because now the wrong people are in the wrong place and so on, right? But so that was the challenge for us, this modernization, but since then I have obviously learned a lot in their job and now I believe that interestingly enough, the pendulum always swings back and forth, right? And now we know that technology, especially now in COVID days, technology is becoming even more pervasive than it ever was, right? So this whole idea, this whole notion of taking something as central as technology and putting this into one department in a company, right? And to say this is where technology is, right, is kind of really antiquated, right? So I believe that the biggest challenge in the long run, and not just for Tethy, but for many other companies, right, is that this central IT model that they actually moved into was already not the right model, right? Because it was actually treating IT again as a cost center, right? Which means it’s all about reducing costs, right, bringing it down, economies of scale, right? Rather than using it for whatever, firing off a lot of tests, a lot of experiments, doing a lot of marketing or whatever campaigns and so on, being agile, right, basically reacting to the customer, right? So that was not the right model for this. So and as I was in the cafe, I realized that there was quite a very, again, very typical disconnect between the people who are actually making the decisions at the top levels of the organization, which are typically business administration majors, MBAs and so on, right? And then you have people in technology who are not necessarily at the same levels, right? And decisions are not necessarily made in the right way. So that kind of, I would almost go as far in terms of saying, upris, right, where you had basically the top level and they were kind of residing in the penthouse and really coming down. I think that is the biggest real challenge for a lot of companies, not just Cafe, but that was also the problem at Cafe. I think that’s a really interesting point. There’s been this saying that software is eating the world and it initially happened to only a subset of companies and everyone else felt sheltered. As you say, you could put technology in a certain cost center, so it would be a part of the company that supported others, I think that was working and it was a good model for quite some time. But now we realize that technology can go even further and kind of change the whole process of how companies, consumers interact. We see this right now that we have so many banks in the U.S. and everyone has a mobile app. And I think Alcorn is really ahead of this curve. And it has a website and it feels like, why would you even need a branch? And that’s been going on for the last 10 years. But what’s really interesting, these companies like SoFi, they basically say, well, why do you even need any of the branches, right? So why do you even need a brand name, why don’t we just get a banking license and we are completely virtual. So we basically just exist in the cloud and then send people a Mastercard or a Visa card. And you see like, from a consumer’s point of view, you’re like, well, what is this kind of the same thing? Why do I need to switch? From a business point of view, these new banks have a very different cost structure. They only do what actually makes them money. So either it’s the origination of loans or it’s the origination of mortgages, whatever they really specialize in. And once they scale this up, they’re much cheaper, right? Because they don’t drag around all these other things, the people on the branches and the checks and whatever back office has been going on for decades in the banks. And I think you see this in the banks example that have been going digital a long time ago. It feels like even them, which have invested a lot of money, have trouble in keeping up. So Robinhood shows this money probably very, it’s a major app here that has no transaction fees. And it changed the industry. It probably doesn’t really have a business model, so it makes very little money, actually. But it seems to, it’s like the third or fourth generation of technology, because brokerages were kind of the first that actually went online, and it was a big deal, they lived into 2000 to have brokerage online and do a real fund. But they’ve added this another layer, and you feel like, well, this is the same thing. But then a year or two later, you feel like this mass migration has started to something where technology comes first. And I think this is something that’s surprising. And a lot of the, I’m curious about what you think there, especially also consumer tech, a lot of things that we predicted and we were hoping for in 2000, they didn’t actually happen. They happened, nothing happened, I felt like, in consumer adoption for quite some time. There were little pockets of adoptions, they email, a lot of dreams that we had, and as what the internet could do, they weren’t really adopted. And then the last five to 10 years, and there’s more consumer driven than driven by businesses, but certainly there’s overlap. I feel like these things suddenly came true, and it was kind of unexpected, like that it was this weird cycle that we were in in the 90s, this hype cycle of things that would happen right away, they completely didn’t happen, and then it just happened. And they happened even bigger than we could imagine in terms of how people accept the internet. And there’s certainly psychology to it, but I’m quite, well, I’m bad at making these predictions. I always think these things would happen much earlier, and I give up on them, and then they just happen anyways. So I feel like this is just, it’s very difficult to do on an emotional level, especially if you’re so involved with it, right? You want it to happen so much, but then it doesn’t happen, you give up on it, move on to the next thing, and then it actually happens. So that’s probably the curse of the early adopters. I think it’s funny you mentioned that I forgot who said it, but I do remember that quote, which says that humanity or basically us, we tend to overestimate the significance of something or a change in the short run, but we underestimate it in the long run. And if you think about it, that’s exactly what you’re saying, right? And it also is exactly what this infamous, famous Gardner hype cycle model that they made a lot of money from, which that actually reflects, right? Because if you look at the hype cycle, it basically goes up, then it comes down because certain things that don’t actually deserve the hype because they get overtaken by the next hype, they basically dump into this trough of disillusionment, and the ones that make it, such as the internet, obviously, they basically, they go strong, right? And they just continue until there’s the next S curve of innovation, right? So I think, I see what you’re saying, and I think it’s… But even knowing this thing, I think we all know that on a conscious level, but when you in it, and there’s certainly emotional basis, you feel like it’s very difficult to detach yourself from it. And the problem is, what we think about companies in 2000, most of them didn’t make it. But there’s a few who made it much bigger, but in 2000, it was possible to tell who the winners would be. 10 years later, we kind of knew. But that’s for as an investor, right? In that moment, when you need to make a decision, what are you betting on? Do you buy like an ETF, that’s for the whole industry, you buy some companies you have, you feel like actually going to work out. And that makes it really hard, right? We all know the end of the cycle, but detaching yourself from it and making good predictions, I think is really hard. Yeah, fair point. I guess, yeah, I don’t have a magic wand, other than maybe getting back to what I said before, that even though I’m a technologist through and through, I think, obviously, technology is actually not the whole thing. It’s actually funny. I’m thinking of doing a little bit of a change at work in my area, in my organization. So I’m at the moment at working on a little bit of a deck of a presentation, right? And one thing that I came across was a CNBC interview of Jeff Bezos from 1999. And maybe you’ve seen it because it’s actually pretty famous, right? And within this interview, he talks about customer obsession and he talks about technology and especially the internet, 1999, right? Like the big heyday and so on that you’re referring to. But the place he uses is internet, internet, right? He says, I don’t care about the internet, right? It’s not about the internet, right? It’s about the fact that there are eight or nine billion people in the world, right? I mean, that’s kind of my interpretation on top of what he said. And everyone is unique, right? And at the end of the day, if you don’t deliver value to people that they generally feel is giving them something rather than being pushed down their throats with spam messages and so on and so on, right? Then success, economic success will almost inevitably happen, right? So the reason that someone like Jeff Bezos and Amazon is so successful in my opinion is not because of technology, not at all, right? He would have been successful 30 years ago with whatever, right? Because it’s more about that he has some clarity without going into the repertoire. I’m taking a lot of things from him, even though I’m not necessarily, anyway, shouldn’t say that because I don’t know him personally. But from what I see at a business level, there are a lot of principles and thoughts that are really clear and that cut through the noise, especially Amazon being like one million people or something like that, right? Which means it’s all about scaling. So yeah, so at the end of the day, it’s not about technology, it’s about, in my opinion, it’s about the human element. And if you look at this, then I think you have a good shot in predicting maybe at least for the next three, four years, where certain companies will be going or not. Yeah, I think you onto something there and certainly that helps. The problem with looking back and learning from the past, and I’m still exploring that question, I’m very open to ideas there, there’s a lot of survivorship bias. And there’s this saying in the military, you’re finding the last war, you’re not finding the next war. Because the problem is we didn’t know that the parameters of the next war, right, that the last war was, so to speak, in Iraq, and then it was hot, there was a desert, and there were surgeons. But the next war might be, I don’t know, see, it’s Turkey or it’s China, very different terrain, very different people, it’s a state to work against. So that’s the hard part, right? We know what was worked out for the general, so to speak, in the last wars, economic or real wars. But their strength came out because they were in a certain environment. And if the environment changes, then the strength obviously will also change. So that’s the devil’s advocate part of this, right? It’s hard. And part of this podcast, what I’m doing is I had a bunch of venture capitalists, people who have really rich entrepreneurs on here, and you asked them about what is really that important thing where you feel that that really made a difference. And here’s the thing, there’s always a story to it. I think there’s a really valid and there are great stories, and I learned a lot from them. But on the other hand, they probably had 30 of those things ready to go at the time when they were starting their own through the business creation. And any of those couldn’t work out as spectacularly as they actually did. But the story, when you look at it retroactively, the story changes, right? It’s very difficult, even in your own mind, to keep these things apart. You might have a better hand on this. So just trying to get the message correct that you’re trying to say. So what you’re saying is that, are you saying that the complexity is that because the environment is constantly changing, right? Whatever you set up at a certain time point is not valid anymore at a later date, at like one or two years later, which means you can’t actually make, it’s hard to make success sustainable. Is that what you’re saying? That’s part of that. Yeah, but the other problem I have is that we have to survive survivors. So you’ve got to look at 300, we look at Jeff Bezos because he obviously worked out in any way imaginable. His business and his personal life worked out in any way imaginable. Are we looking at the 500 other people who basically were in the same position at Jeff Bezos at the same point, where they all had the same amount of funding, they had a similar business model, they wanted to do the same thing. Now, I really don’t know how many people had that idea and started an online bookstore, but let’s assume it was 50 or 100 people with equal amounts of funding, maybe more. So some of them succeeded something, and I think this is where the values come in. The Jeff Bezos definitely has that, you know, I’m not arguing against it. What I’m trying to say is how much of these values, and it goes back to the philosophers, right? If you go back to the Greek philosophers, how many of these values should we learn, which I think 100%, but how many do we actually apply in the current situation? Because only a certain amount of those will be valid, but we don’t know how it is to really play out, right? So there’s a lot of these other factors that become controlled that actually determine most of the entrepreneurial success. I think a lot of, again, obviously, we all bias, everyone is biased, and the views that I have are definitely also biased, but a lot of the recipe, I mean, there’s two sides to it, I think. On one hand, a lot of the recipes or a lot of the principles and so on, that especially Jeff Bezos has to take his example, is basically following, they are very public, right? This is not some secret source, right, that he hides in the cabinet and doesn’t tell anyone, right? Of course, that’s not possible, right? So on one hand, maybe he only gives us one side of the story. Yeah, maybe, but again, right? It’s a big company, right? And yeah, I personally don’t believe that I’m not a big fan of conspiracy theories. So I think it’s out there, but people, everyone has their own biases, and maybe people reject some of these ideas that they read because they’re not perceiving them themselves, right? Or they basically rule them out emotionally because it doesn’t align with their own internal value system and what they believe in, right? So that’s one side of the story, right? If you actually watch closely, if you are willing to unlearn, if you’re willing to challenge yourself, if you’re willing to play devil’s advocate, if you’re not just looking for one option, but maybe three options always, right? Then I guess your chances are going up, right? Then on the other hand, you can also take the other view and you can say success is a sequence of 10,000, 100,000, a million small, little, good decisions, right? In the same way that not being successful is also not, normally not due to one decision that you made wrongly, but many, many smaller decisions, right? So there’s also a little bit of luck in there, right, that you basically somehow make the right moves so that you achieve this constant, good decision making, right? And then at the end of the day, you end up in this kind of, I personally believe, in this virtuous cycle rather than this vicious cycle, right? Imagine I always have this analogy in my head, I’m a trail runner, I run a lot. So obviously when there’s no COVID, then I do a lot of races, like amateur races. And so everyone is starting together, right, like whatever, 500 people, 1,000 people, right? And then you have these rest stops, right, or these checkpoints, right? And the races that I do are quite long, so like 100 kilometers. And then you have like a checkpoint, let’s say every 10 kilometers, right? And sometimes in the maybe less professional races, the food is not running out, but it’s getting more scarce, right? The more people have made it through the checkpoint, right? Which means that the first one coming in naturally has the most choice, right? He can basically pick the best food. It’s not that limited, but you go with the flow, right? So which means that that first person can even accelerate more than the people following, right? Because they don’t get as much good stuff in, right? So basically, it’s kind of self accelerating, if you know what I mean, like system thinking and so on, right? And I think this is ultimately what you benefit from. Oh yeah, absolutely. I mean, this is very apparent on the internet, because once you have developed a mousetrap, you know, if more customers come into this mousetrap, there’s more you can obviously spend on marketing, because you have better numbers than anyone else, or you have lower transaction costs. So you have just lower costs per employee per transaction. So I think you’re absolutely correct there. There is a natural monopoly in all these things, and I like this running example, because it’s kind of not fair, right? So there’s an inbuilt advantage for the first one, and there’s VIP runners who probably have even better food and even better rest stops, and they might get a better system to warm themselves up. However it is, there is always a little advantage, and it scales up eventually, especially with the internet. I think this is where we see so little change in going on. Once a company gets somewhat critical mass, it’s kind of, nobody can compete with that. Like nobody can compete with Google and regular search, it’s just not possible, because they have so much data where users click on, you can make a better algorithm to find better search results, but it’s useless if you don’t have enough users, or you will always be second or third, then you will never probably reach the size of the audience. Even Microsoft, you know, it’s the only one left in the game, and I don’t think they’re very proud of what they have achieved so far. I want to continue a little bit with what’s going on in these big technology trends, and I know you’re a technologist. When you look at what’s going on in the field of AI, and we have Steven Schwartz on, who is a professor who started his own AI, Artificial Intelligence, started back in the 80s, a kind of tried to build it and gave up on it, realized this doesn’t really work, and now he sees a lot of his theories are actually coming back. And his point of view as well, this is still just statistics, there isn’t much to it. But on the other hand, we have people like Mark Sarofim on, who is spending basically every breaking moment trying to figure out how can we bring AI to the masses. How do you feel this field of artificial intelligence actually offer A in terms of what is the real potential and how it will be adopted, which is really difficult to predict obviously. And then is there like this end game that we all have in mind, you know, that there’s an artificial general intelligence, certainly not the end game, but this is like a major milestone, do you think that’s something we will see in the next 20 years, or do you think this whole, we’re in the middle of this hype cycle? So my view is pretty clear right now, and I would say that I’m definitely in the former camp, who basically says that what we are seeing today and what we’re calling AI is basically just statistics and this whole movement from the AI winter to the AI heyday, is in my opinion completely predicated on cloud and internet and the fact that there is just so vast computing power available, rather than in massive breakthrough in terms of algorithms or some kind of general intelligence. So that’s my view right now, in terms of the future, given that I have personally tried to move on from the pure technology level and knowing whatever Amazon products inside out and so on, which in my opinion is not the main thing, it’s just a means to an end. So to basically look at more this convergence between humanity and human organizational principles versus technology architecture, my entire system is predicated on the fact that the human being is always the master and the technology is always the tool and they’re basically constantly moving up with this standing on the shoulders of giants. So basically our tools are getting better and better and better, but everything is predicated on the fact that it’s always the human being who makes the decisions at the very end of the day and the AI is effectively however sophisticated it gets, is ultimately just a decision support system, maybe sometimes your butler, your agent, but the control always, always, always has to be with the human being and I personally feel that apart from the fact that we ever understand what conscience is, what consciousness is and what makes humans human, I definitely hope that we never get to the point where machines can be the same thing because I’m just scared of that. So I think that humanity as a society, which obviously over the long run is ultimately about survival, like surviving natural catastrophes like COVID and surviving other things, I hope that humanity will ultimately put a framework in place which controls that and which ensures in the same way how we control whatever atomic weapons as an example, how we control this because ultimately it’s powerful, but it’s also dangerous, but then on the other hand again, I don’t think that we have made massive moves towards this kind of general intelligence inflection point that some people are suggesting will happen at some stage. At the moment I don’t see it. I’m surprised you say that. I think you’re absolutely correct, there’s absolutely nothing, there is very little where we can say, will we be approached at the level of some artificial general intelligence, right? The definitions are quite all over the place there. I think what I found really interesting and that was just a side note is one of the, and I’ve quoted that before, one of the initial architects of GPT3 who was very surprised about what actually came out of it, right? So you train that model and they did GPT2 and then they just, they trained more data on it, but they were very surprised what came out of GPT3 and the way it makes, it’s obviously just statistics and that would be the criticism, but on the other hand, it gets a lot of things right in terms of what, which things should belong together, like they can write essays, they can preferably translate things, they can do computer code. It’s only 95% correct, so to speak, right, it is 5% and it might be the important 5%, it doesn’t get right. Anyways, when he was really surprised by how many use cases he found and how the people find the GPT3 and then he said, you know, what’s really missing is getting this to a wider model and eradicating the 5% errors and then he said, humans are perfect for that. So that’s why Google search engine is so good because they get all the search, this input from humans, what’s useful and what’s not, he’s like, there’s a really good chance that GPT5, which might happen in the next two years, feels to anyone on the other side would who doesn’t know that it’s an AGI, it feels like a real intelligent number, a few people will be able to distinguish that, they don’t have a chance to interact and say, okay, this is a real person, so they have to do it over, over say, a Google Meet and I saw something this morning where someone used an AI to literally just make YouTube videos about other topics, so it’s obviously a YouTuber and they made a use an AI to create new videos, but the same person talks for it, so it’s kind of like a Google Meet call, but it’s topics they never talked about, it’s the same voice, it’s different languages and like holy smokes, this is really cool, it’s obviously a custom application and you can’t just let it run, but it’s something that’s so close and I feel we’re going to be there relatively quickly that we can’t distinguish what’s real and what’s not, so what’s actually discovered, what’s thought out by human, which poetry is from a human, which novel is from a human and which is from a machine, and what they’re probably going to run into is how do we validate, you know, at one point it doesn’t actually matter, so if we say, okay, we’re worried about the machines, but in the end the machines don’t have the same problems we have, right, they don’t have the same moral issues, they don’t have the same issues to organize themselves, and I think the worry is that we are like the ends, you know, the machines are like the humans to an end, so they don’t really matter to, or ends don’t really matter to humans, but in the end, you know, they do to some extent, and maybe there isn’t much we can do to stop that technology, and I think regulating it will help, but it only works if it’s really expensive, so the nuclear energy weapons are really expensive, still somewhat expensive, so they’re relatively easy to control, because it needs to be a state actor or a fully autonomous to actually even get going at a big plant, so it’s pretty obvious what you do on satellite imagery, but with AI, someone spins up a cloud, a cluster, runs a couple of hundred computers, trains a good AI in China, nobody even notes, not even the Chinese state phone now, so it’s very difficult to control. I see what you’re saying, and of course there are certain things that come into my mind, like for instance the Turing test, where someone said long, long time ago, like if you pass this barrier, then this is basically proof for general intelligence, and if I’m not mistaken, that Turing test has already been passed by a machine, but then you can ask the question, where did this absolute statement come from? How did Turing know that this is actually general intelligence? Obviously it wasn’t, obviously it was the one test, so first of all, questioning that, second one, you said that deepfakes, that’s what you basically talked about just now. So actually, very good point, we talked about this the other day, and I think it is absolutely crucial given that the tools are getting so much better, but not with general intelligence, but just in what they can represent and how they can be rendered and so on, that they’re basically effectively fooling human beings, because how we are wired, we are not used to that. We are used to something that behaves and speaks and does things like this, is a human being. It’s not a dog, it’s not a rat, it’s not a computer, but that obviously is changing now, so I think what we definitely need as part of this whole regulation thing, and I don’t know how that’s going to happen, because I know what you’re saying about everything which is not regulated, which goes, when there’s money to be made, then obviously it’s going to happen. But this separation between clearly declaring something that is actually not genuinely human as it comes from a human, but has actually been fabricated, I don’t know how something like this would look like, but making it kind of discoverable or visible, that this is actually not human being. But the other thought that comes into my mind is, number one, if we say human beings are good at certain things, and obviously everyone is marveling and no one has yet understood the human brain and so on, and all of the things that we can do in extreme situations and so on, and that human beings do every day all over the world, and then you have machines which obviously do a lot of things that humans can’t do. So my question is, what is actually the big incentive to make a machine do what a human can do? What is the point? I mean in the same way that we don’t want to go back to Taylorism and Winslow, where you had basically 100 people at the factory line and they were basically just taking one thing and moving it to the other side, which obviously you don’t need a human being for that. So people don’t want to do that because it’s inhuman. What’s the point of putting a lot of money into making machines behave like a human? What’s the point? And if you think about these deepfakes as an example, I would say there’s no net positive effect of that, so I don’t see any positive effect in someone creating a fake Tom Cruise video that I saw the other day, and marveling at this technology achievement. What’s the point? I think it’s ultimately, someone will basically misuse that to basically lead people free, and then I’m wondering again, what’s the point? Why do we need that as humanity? What’s the point? What does it give you, what does it give me? Let me try and answer. I know it’s going to be hard to convince you. So one thing that’s interesting is that the definition of what’s human or what’s inhuman keeps changing. So if you go back 500 AD and say a certain farm board is human or inhuman, you would get a different answer. You go back to the times of the Renaissance, so the answer would change. You go back to 1900s, and you go back to a couple of years ago, 20 years ago, just over the other side of the border in China, where there’s not a real border anymore, you would get a different idea of what’s actually human and what’s okay. I mean, a lot of people think, for instance, this is not a value judgment, I’m just saying a lot of people believe that most employees in China are kind of slave labor, that people who make our iPhones, right, in the US, and Apple sustains a lot of criticism for this, justified or not, maybe it’s completely unjustified. So that’s one thing. And the other part, I kind of like to be disagree about that because I think we can get to the bottom of this better, is the real superpower that I feel in this world is productivity growth. And productivity growth is this thing that is typically driven by technology, that there’s other inventions and philosophy I think is also technology if you want to define it so broad. Whoever wins that game of productivity growth wins the world. You win the wars, you win the development of your state. It’s always in the end coupled to productivity growth. Yes, malls play a big role, but malls often play a role in order to drive or disturb our productivity growth. And that’s long term, the thing that really matters. And what seems to be happening is that the opportunity we have at the AI, and obviously we’re not there yet, but the idea is that, and I think it happens in social media a lot, is that it gives us better decisions. So we have suddenly an army of not just 10 billion people, we have an army of 100 billion trillions of people, so to speak, but they’re not people, they’re not even full intelligentsia, but they can make recommendations and they help us make better decisions. So they kind of pre decide for us, obviously there’s a lot of risk, so in social media we see this very well. We all have lots of different AIs inside Twitter that Twitter wants for us, what Twitter does basically, it pre selects content that Twitter things, AI and Twitter things, a little customized bot there, that is good for us. A good in the sense of we might engage with it, Twitter has unfortunately a very bad definition of this, it might be really harmful to us, but we would engage with us, or we would really engage with it. And I think this is the real power of AI, you have this army of very low cost, even free, because you only train the AI once and then you can basically run it for free, you just need a little bit of electricity, it’s very fast, and you suddenly go from 10 billion employees, so to speak, you go to trillions and trillions of employees for a fraction of the cost, which whoever comes up with this first, might be China, US, Germany, whoever does it in Japan, they have this amazing productivity growth. Yeah, good point, let me talk about that, because it also touches on another, I don’t know, belief or principle that is pretty central for me, and my work and whatever I do, outside of work, is this whole concept of a feedback loop, and we might have talked about this prior to that, but there’s something called the so called UDA loop, UDA stands for Observe Orient Decide Act, so it’s basically a loop with four phases. It starts with observing something, then you put it into context, you put it into your worldview, and so on, whatever you observe, because you’re not like a toddler, which is basically a clean slate, but you obviously have your history, you have your beliefs, you have your priorities, and so on, then you come up with a couple of decision options that you weigh implicitly in your brain in split seconds, or macro seconds, and then eventually you act, and then ultimately you observe again, and that loop is so central to our lives, and it might even basically define humanity in general, so that this principle is very important for me. So now, the most important phase of the loop, very interesting backstory, a guy called John Boyd, who was a fighter pilot in the Korean War in the US, he basically was pretty much the most famous fighter pilot in the US, and he was basically claiming that he could take anyone down within like 30 seconds or 40 seconds of a dogfight, like at least get them into a position that they were basically considered to be dead or shot down, and this guy eventually became almost like a philosopher, where he talked about these feedback loops, and he combined with a lot of other theories and so on, so John Boyd, quite interesting stuff, but anyway, the orient phase is the most important phase of this loop, because it takes all of your observations, which is just readings from the outside, it’s basically the algorithm, it’s the brain ultimately, and then ultimately you do an action. So now, how does AI fit into this? AI, if you say that orient this important phase, let’s say we always want this to be our brains, we always want humans to basically execute that specific phase, the ultimate decision, that means that AI could only be on the actual side, like once you made the decision, you use some kind of AI to basically execute a decision on your behalf, like when you talk to Siri, then obviously a lot of button pushes you don’t need to do, because Siri or Alexa is doing it for you, and the other side is to basically use AI before the orient phase, before the stuff comes into your brain. And I actually hadn’t thought about that, but now that you mentioned it and the whole Facebook and bubbles and filter bubbles and so on, all of these conversations that hadn’t, I think that if you manipulate the information that goes into your brain by filtering it according to some principles, which might very well be biased, then implicitly you’re manipulating this decision phase of human being, which is my opinion is really bad. But if you put the AI on the other side and you say, I’m basically deciding, I’m curating my own feeds, I’m basically taking in stuff, whether it’s from the left side, from the right side, I basically thrive on diversity, let’s say, and then I make my decisions and then I use some crazy robot to basically do this on my behalf and save me a lot of time. I see a lot of value in this acting side. I see a lot of danger in this reacting side, like the likes of Twitter and so on, the likes of Facebook and so on. I can see that the danger is very strong and adamant and I think it’s something to definitely worry about, especially when you’re figuring out how biased these algorithms are and everyone’s biased, right? That the King Solomon was biased to a certain set of values, otherwise you can never make this decision, right? You always have an incomplete picture and you’ve got to use your bias, which is prior knowledge in order to actually arrive at a decision and it’s always biased, so to speak. It’s something where you want to create a little bit of utopia, especially if you want to call it that way. We all have this idea that we make better decisions, we create a better utopia and I think that’s true, actually, but the definition of utopia varies from human to human and I think it’s really, I didn’t know we would arrive at this today, but I think when we talk about these filters and that’s already happening, has always been happening since the books were printed or even before this, you know, there were only certain stories being shared and all the old testament was shared only, so a lot of things were left out, why were they left out though? Because we only wanted certain things to be transmitted, other things you fell out because either the audience didn’t like it or maybe the person who taught it didn’t like it. So these filters were going on since we have a civilization, I think it’s to an extent even true for animals, that nature filters out certain effects. So that’s what dog is going on now, it’s obviously on steroids, but the problem obviously becomes and you’re absolutely touching the most interesting point there is what happens to free will and I’ve been going back on this for many years now is you do have, we all think we have free will and we are convinced of it, right, but there’s so many experiments and you can endlessly repeat that, but if you put people in front of different information and do this consistently and within a social aspect, so you manipulate the people around them and trickle in, we call this propaganda, Eastern Germany was very good at this, it ultimately didn’t morph East Germany, but if you narrow the picture a little it’s extremely effective so you can change people’s free will quite a bit and then you go into the second question, that’s just on a political level, you go into what makes us human and why are we the way we are, why is our personality the way we are, right, do we behave in the way we are, whether we have children, all these things are put into our mind at the time we arrive on earth, right, so the question is if you really take that apart and I think that maybe we can’t really finish this today, but if you take this apart I would love to do that, for me it has become harder and harder to really justify this free will, I want it to be there, like everything in myself is screaming for the is free will, but once you go to the actual actions of humans around me and myself, there isn’t much left. Okay so I think obviously the whole discussion about free will comes ultimately back to what is general intelligence, what makes humans human and so on and so on, and maybe what I would say is that free will, if you ask people what free will is, they would probably say the ability to make my own decisions, right, I mean I’m just putting this description out there, right, but as you said, if we are saying according to this feedback loop that the kind of decisions that you do make is kind of correlated to the kind of information that you do consume, right, and if the information that you consume is manipulated then your free will will not be there because then your decisions will be biased and manipulated too, right, so if you follow… It’s not manipulated, like you say it’s just a random piece of information, there’s no bad actor, it’s just a random piece of bad information, it also changes your favor. Yeah, but that kind of implies that you are not actually in charge of controlling and curating and kind of in a real space of what you actually consume, right, and I think this comes back to what humanity actually is, which means that we can actually think about ourselves at a meta level, right, so we can basically reflect on our actions, right, and we could say, you know what, if I compare myself from 2021 to 2018, right, then I see that in certain areas I’m not actually doing what I want myself to be doing, right, in terms of whether I basically whatever do enough sports or do this or do that, right, so you’re basically, you’re reflecting on yourself, right, and I think this is obviously what sets us apart from nonhumans, right, machines, animals and so on, so I think what I’m trying to say is that you have, I do believe that you have control over it, and on one hand everyone is always talking about the doom and gloom of certain networks and all of these metastarses and all of this manipulation and so on, right, but then on the other hand you can also say that the only reason why social networks exist is basically the existence of the internet, right, and the internet has also brought a lot of other alternative information sources that coming back to what you said before that didn’t exist at King Solomon times, right, or 200 years ago when basically people were actively suppressing certain levels of information because there was only one newspaper or there was no TV and so on, right, now yes, you have these manipulative actors, right, and maybe you read about this recent scandal thing with Google who fired two members, two prominent members of their ethical AI team, right, and which basically raises this conflict about making money and ethics and so on, right, but what I’m trying to say is there’s also a lot of other options on the non doom and gloom side that we have that people didn’t have 20 years ago, right, so I think it’s all about you have to be aware of it, you have to think about it, right, you obviously have to be educated to be aware of these inputs being very relevant to you, right, and then actively try to manage it, right, and if you don’t do it, then of course I believe that your actions will be partially manipulated. Yes, yes, yes, I mean I think there’s lots, there’s lots to it, none of you hit the tough questions, I want to hit you with another one. I’ve been asking lots of people this, it’s a question we cannot solve but it’s a lovely thought experiment, the question is if we are in a simulation and the argument goes like this, you’re probably aware of this, is if we are not alone in the universe which seems to be the case, right, so there seems to be so many other planets, there must have been someone who’s slightly ahead of us only that’s a few hundred years, and if we basically simulate everything, we simulate video games, the second, like any human basically what’s going on our brain is basically any abstract thinking, it’s simulating actions you would take then you figure out what is the outcome and then you decide and that’s the reflection point which action should we take, so I would, the second assumption would be then if there is another civilization out there they would have figured out a way to simulate an environment that resemble kind of matrix style, the environment, may that be like in the 90s in a matrix style or any other part of the universe, do you feel, and the question is if you say yes to these two assumptions then we almost have to be guaranteed in a simulation, irrespective of we feel that’s something we can see or not, what are your thoughts on this? Okay, so from the logical, okay I guess I’m torn on the question whether I believe that this exists or could be possible, right, and I think following that fourth experiment I think it could theoretically be possible, right, that someone is manipulating us and everything that we see around us, right, is effectively made up, right, it’s basically an intricate game world, right, which is completely, right, but then number one, obviously super complex, right, but then again, maybe I just can’t comprehend it with my human brain because there is some outer intelligence there for which it is not complicated, right, for which all of the stuff is basically pretty simple and normal, right, but then on the other hand I could ask the devil’s advocate question, so what, right, if you can’t jump to that conclusion, that’s correct, but in order to let the thought experiment, right, you can’t jump to the conclusion, you obviously, right, it doesn’t make a difference, probably. Yeah, that’s a point, right, if someone said okay, because this beyond this matrix, right, we have some kind of limitation where basically someone has created a boundary for us, right, someone has said okay, that’s the end of your world, right, you can’t go beyond that, right, you can’t make a certain decision, you can’t actually poke the shell and look outside, right, that’s not allowed as per the rules of the simulation, right, and if we get to this point where we actually find that, right, but we have that, that’s the end of the universe, currently there’s no information we have from outside the universe, this theory is plenty, but we don’t have real scientific observations from outside the universe, well we don’t even know if the universe actually exists, we got the light from billions of years ago, it might not exist anymore, so to speak, we just haven’t gotten a message yet, but what’s really interesting is that the Big Bang, when you look at these Big Bang descriptions that we have, again we haven’t simulated it, but we have gotten pretty close, is that the whole universe was only the size of a fingernail. Yeah, I know, but I guess my point is, right, let’s go back to our East German roots, right, we know that obviously that wasn’t the matrix, right, but it was obviously kind of remote centrally controlled in a way, right, so there was another basically body organization which controlled us in a certain way, right, and we knew the limitations, right, so for instance what limitation is, we couldn’t travel to a lot of other countries, right, so we actually felt this limitation every day, right, and all I’m saying is if we do live in a matrix simulation right now, I’m not sure which limitation we are feeling, the fact that we don’t know what is beyond the universe or how big the universe is, right, that is not necessarily a limitation for me, there’s no one stopping us to go to Mars as an example, right, there’s no one stopping us, technology allowing it, right, to send something even further away, right, so it’s just our own development limitations that we haven’t gotten to the stage where we have whatever batteries and technology which can do all of that stuff, right, but at the moment I don’t get the feeling there’s someone saying okay stop until here and that’s the end of the game to defeat, right, and as long as we don’t feel this limitation and as long as I think we are empowered to make the best of humanity such as you know world hunger and all of this kind of stuff, we have all of the tools I think if we want to, right, then I couldn’t care less put it this way because I don’t know, I can’t decide, and again living in the here and now if there’s no immediate threat to humanity apart from climate catastrophe and so on which is obviously self inflicted I would say rather than someone bringing it down on us as part of a simulation, right, then I don’t really want to spend too much time on it myself thinking about that because it’s basically a little bit pointless, anyway. Yes, you take a very modern state of naturalistic view on it, you’re absolutely right, but the beauty of this this thought of experiments a little bit, it gives you a way to to think about the what if, there’s obviously no technical way, definitely not in our lifetime, there’s not going to be a way, even if you see aliens it doesn’t say anything about the simulation, we can’t solve it during our lifetime, right, so that’s something we can hopefully transmit into our version of the old testament and transmit it to the next generation and they can doing this for a couple of thousand years maybe one day you know figure out the limitations and we can actually test them, I might not, I mean nobody nobody knows if just this is the first limitation usually used to be or now we went to to the moon and probably going to go to Mars and then we’re going to go to all the other planets in person, but everyone can do it probably very soon hopefully, maybe the universe is what we see right now or maybe there’s 15 other layers of of onion around it and all of these could seem like a simulation, but actually you have to get to the 15th player or 1000th player whatever it is, but that’s exactly the point right, if you assume that there’s an intelligence out there which is more advanced than us right and if you assume that which a lot of assumptions understand, if everything is evolving, we are evolving but the intelligence is also evolving right, then we would probably never find out right, because as you said right they would just basically again full experiment, they would just reveal additional layers of the story right, just basically switch to the next page right and if the book is finished and you’re just writing your book right and you create you show the next layers of the onion right which is all made up right, so again if they are really that advanced and simulating us right then they would never allow us to basically find that out, they would just basically create story after story after story. That’s a way to look at it, yeah absolutely, absolutely, very different question, have you ever watched that show Blacklist? Blacklist? Blacklist, yeah the Blacklist, it’s a syndicated TV show in the US. No, I haven’t watched it yet. I only discovered it a couple weeks ago, it starts like a typical network television show but it gets really good and there’s one character called Tom Keen and you should look him up, okay Tom striking resemblance with Tom Keen, that’s the picture very fictional the character in that show. All right I will do that yeah Blacklist is something that I didn’t just notice, anyways thank you, thanks for taking the time, thanks for doing this, I know a year really busy and it took us a while to pull this off, I hope we can do this again and talk about free will a little more. Yeah it’s exciting, first time for me, thanks for having me of course and it’s good we saw it through but yeah let’s do that again, I think we both can talk a lot about things if we want to. Yeah hopefully, hopefully someone will listen, it’s not just us. Anyways, thanks for doing this, take it easy, talk soon. Have a good day.