068 – Do we know what we are doing?

[00:00:00] David: Hello and welcome to the IDEMS podcast. I’m David Stern, one of the founding directors of IDEMS, and I’m here with Kate Fleming, our incoming director. Great to have you, Kate, and I’m looking forward to an interesting discussion.

[00:00:19] Kate: Hi, David. I am too, except I have no idea what we’re talking about [laughs]!

[00:00:23] David: So the thing I want to talk about today, and this has come up in some sense partly from lots of discussions with you, but I feel it’s one which is a useful discussion topic, is this idea, do we know what we’re doing?

And I feel that we have a really easy answer to that: it’s no, but neither does anyone else. And maybe what we know is at least as much as other people do. And this is something which I think is a really important point and so I wanted to discuss that with you, and other people can listen in to our discussion.

[00:00:53] Kate: Yeah. I think one could make the case that the vast majority of earlier stage companies that are charting new territory don’t really know what they’re doing. They have theories, they have an idea that they could make a change, they see a problem, and they have obviously created like a clear way that they conceive as the intervention.

But is there certainty in that? No. Is there a clear way forward? No. It’s, yeah, it’s always uncertain.

[00:01:22] David: But I guess my point is going a little bit further than this, and this is where I’m really looking forward to this discussion, because I agree with you absolutely for early stage companies, but I feel the same holds for everyone else everywhere doing anything.

And this is the key point where, if I think of my background in really deep math research, the thing that I learned, the deeper I went, the more I realised I didn’t know. Anyone who’s talking about certainty, probably it’s because they haven’t actually seen enough yet to recognise the uncertainty that exists.

[00:01:56] Kate: Oh, one, this is deep, and two, I agree. I would say it’s why there’s so much nostalgia, where people really look to the past, because the past is concrete, it’s knowable, where the future is so uncertain, and, the confidence you would have to really put forward a vision and say that it’s certainty would automatically make you stupid.

You cannot know. So it’s always a theory.

[00:02:26] David: Yeah. It’s not just that it’s always a theory, it’s that there are things that we can know and that we can have pretty much confidence in. But the world we live in, and it’s not just the world now, it is the way the world works, there is inherent uncertainty. And even things that we can be pretty certain about, I can be pretty certain, because of Newtonian physics, that if an apple falls from a tree, it will fall down.

[00:02:52] Kate: This kind of certainty. Yes, there are universal truths.

[00:02:58] David: There are things which are known and where there’s good evidence behind them, if the apple doesn’t fall down, then you’ve got to really wonder what’s actually happening? So that really would challenge then your thinking. And this is the scientific process. Good scientific process is to recognise that however good your theory may be, you need to be able to recognise the limits of it. And so understanding the context under which that would not be true is actually what science is all about.

So I think there is a very scientific and deep sort of concept there. But there is also an element which comes back to your point about, as an early stage organisation, that uncertainty is natural. We’ve been given and we keep getting lots of advice from different people, and, knowing how to listen to that advice, how to take it in, but how not to necessarily follow it, is part of, I think, this key point that I’m interested in digging into. About, do we know what we’re talking about? No. But that doesn’t mean that other people know what we should do.

[00:04:02] Kate: Yes, that’s very true. And I also think one of the commonalities that the two of us share is that we have spent a lot of time observing, listening, really sinking our teeth into problems, solutions, so that you have this quite broad, and deep understanding of issues, of patterns, of, cross functional intersections, all of these things. Often I will get someone offering a piece of feedback where I think that’s not wrong, it’s just that it’s maybe missing this broader context, or you don’t have this other information.

And I never want to dismiss out of hand because often there is something that someone is picking up on that’s correct.

[00:04:46] David: Yes.

[00:04:46] Kate: But how do you incorporate that into this broad sweep of things that you actually know a lot about?

[00:04:55] David: Absolutely, and I suppose the story we should tell on this, which is how Danny and I really met and it’s a shame he’s not here in this to be able to tell this story as well.

[00:05:03] Kate: Yes.

[00:05:04] David: But it is this fact that when we first met, he was part of an event that I was running with other people and there were a whole set of volunteers and he was the only one who really observed and I observed him observing. And so we met exactly because of that deep observation element and our appreciation for that deep observation, not just to take at face value, to take the time to observe, to understand the perspective that others are bringing, and to then make our own decisions. We don’t need to follow the crowd.

[00:05:39] Kate: And I think Danny, even between the two of us, I think you and I could be quite um

[00:05:45] David: Go home!

[00:05:47] Kate: Whatever, the back and forth, we could get intense.

[00:05:51] David: Yeah.

[00:05:51] Kate: And I think Danny, I’ve observed that Danny will listen and he will realise actually what’s happening here is a communication problem. You’re both saying the same thing, but you’re saying it differently. And so I think there’s often that where someone comes with a solution, but they really are just observing a problem and they… You know, it’s communicating through that, and getting to the heart of that, that’s quite challenging. And so Danny is very good at that, I think.

[00:06:18] David: Absolutely. And it’s one of those things that as you say, both of us are good observers, but we are maybe not known as observers. Many people who interact with us may not consider us as observers. Whereas Danny is considered and is an observer in a really powerful way.

[00:06:38] Kate: Yes, yes, fair. Although I would say we both are acute observers, but yes, yes.

[00:06:47] David: Exactly. We combine the fact that we do observe deeply with the fact that we can be very fast, we can be very to the point, we have the perspectives we bring. And that comes with its advantages and its disadvantages. But as you say the key skill of deep observation is central to this. We’ve had lots of people we’ve interacted over the years and we never considered that there was the right person, we’d given up on a third director until you came along.

[00:07:14] Kate: Okay so we had that call yesterday with Topos, which we could link to them, however we want to handle that. But I think it’s revealing that when you’re in conversation with other people who are thinking deeply about these same issues, there is a lot of confirmation that we are at least on the right track. That these are not anomalous, insane, we’ve developed them in a bubble. Anyone else who is looking at the same suite of problems and the complexity of them is arriving a quite similar, at least the need to solve similar problems to move in similar directions.

[00:07:54] David: And I think the interesting thing there, and this is again what sort of really brought us together, is the fact that the more we dug into each other’s sort of backgrounds and what we were thinking and how we were getting it, the more alignment we found. And what we tend to find with other deep thinkers is the same thing, that people who are thinking really deeply and who are observing, that commonality, often we don’t align on what we are putting our efforts into, because everybody’s choosing where they’re putting their efforts.

But when you dig into why are you putting your efforts into that, there’s so much commonality in the understanding of people who are thinking and observing deeply about issues that the world is tackling right now.

[00:08:39] Kate: Yeah, it’s interesting, as the only non mathematician on that call, I did find myself, and I’m not a poet, but I think historically there’s been this observation that poets and mathematicians have similar ground because they’re dreamers, they’re big thinkers they’re covering a lot in their conceptualising of the world and people’s relationship to it.

And I did think about that, of what is that, what is the type that ends up diving into this and really wanting that. And I think that’s one of the things in business, is that business is really always looking to simplify. It’s what is this very efficient, How can we decomplexify this to make money?

Whereas when you move outside of that as the main focus, you inevitably go into having to incorporate and reconcile a lot of variables and humanity alongside the fact we all need to live and eat and like these real problems. But also there’s a lot of beauty there and all of that. How do you, fit all of that together?

[00:09:43] David: What I really love about you bringing this back to business, because I think this is really where the essence of this question, do we know what we’re doing, has come from for me, is social enterprise. And when you talk about people in the social enterprise world, they talk just as you do about this idea that actually business as a force for social change and positive social impact can be incredibly powerful and has been historically.

And so actually recognising how in our world, social enterprise can serve to balance those. A social enterprise has to be in profit, otherwise it stops existing.

[00:10:19] Kate: Yeah, well, and I think it’s movements like cooperatives, you can see through the arc of history, or at least the capitalist history, I’ll go through that, but where there’s always this, balance or, or I would say correction. It’s one force, and then there’s a correction that comes, or it’s the hyper profit driven, and then there’s the correction. That is, how do we make this responsible? How do we make it accountable? How do we make it something that isn’t so out of balance?

[00:10:48] David: Yeah, and that out of balance often leads to sustainability issues.

[00:10:52] Kate: Yeah.

[00:10:52] David: Actually, long term profits over short term profits. This is the sort of thing where these are some of these balancing factors where I think right now there is a real opportunity for social enterprise to step up and to really take its place, providing some of those corrective forces which can balance out and lead to long term profits rather than some of the short term cycles we’re seeing.

[00:11:20] Kate: I would say I think it’s hard though because I think when you’re a social enterprise, not all social enterprises, but certainly in our case, the focus really needs to be on impact first, and I think that you cannot lose sight of that, and inevitably it means that you have to put that slower hard work that is the impact piece ahead of the faster commercialisation work.

And it does mean that I think when you’re going out and talking to people about what the business is doing, it feels this isn’t really a business. This is something that feels more charitable, it feels like, you know, people recognise a different model.

And again, I guess a lot of it is just shifting how people think about things that people think they know what they’re doing in this one way. And then we’re proposing this other way, which I believe, we both believe, is equally valid, but has to work on different assumptions.

[00:12:16] David: And it’s really interesting you say that because there was a decision we made in year one of IDEMS, that Danny and I basically were presented with a situation where we had to decide were we going to spend our profits and actually do things that we believe were importantly socially impactful, or were we going to try and actually build up our reserves to be able to sustain the profitability going forwards.

And we made exactly the decision that you are advocating here, which is the decision to actually say, no, we cannot build the business to spend later on impact. We have to have the impact ingrained in the DNA of the organisation. And that I absolutely agree with.

But, where I guess the challenge, if I take a step further back from that, we didn’t start with the impact. We did start with the business. We actually had a profitable business, which meant that we can make that decision. And so that interplay between these two is so hard. And the key point I would argue is while I totally agree with you, there is another perspective, which is you got to actually just have the business bits right. You’ve got to be profitable to be able to make those decisions.

[00:13:38] Kate: That’s such a good point and it does bring up that one of the overlays that I’m applying is related to building tech and needing outside funding and so you have a different approach where you and Danny very deliberately decided we are going to run a sustainable business, we are not going to take funding, we’re going to figure out how to do this in a way that is just us building something out for which there is demand.

[00:14:05] David: This was exactly the foundation which we wanted. We wanted the foundation to be a sustainable business, which has the clear business strategy and the clear business model. We also wanted to be a tech startup. But we wanted to get to that once we have that sustainable business model established in place to some extent. And really where you’re coming in and pushing us in challenging and interesting ways is to try and say, okay you have a foundation, but you need to do the tech startup piece and you need to get that going.

Cause look at what you’ve built with nothing. It’s worth nothing. Of course, you’re going to struggle if you’re building that, just bootstrapping it. It’s insane! You need to get that balance right, and we’ve not had that balance right. And this is exactly this point of, do we know what we’re doing?

No, we just made decisions which were maybe not what others would have recommended, but which were right for us. And this is where, again, the same thing maybe applies now. Is it the right time to actually own our tech startup status?

[00:15:11] Kate: I think it is because we’re feeling a certain imperative toward it, as opposed to this is just what you do, because we’re launching something that’s technical, or digital, and we want to get it out to market, and you just take funding, and you build it, and whatever that process is. This is much more, there is right now a recognition of, oh my gosh, there is all this stuff that’s here that’s just ready to explode and it needs funding to do that.

[00:15:39] David: It can’t get out at scale, it can’t achieve the impact that it’s ready to achieve unless we put a little bit of polish on it, unless we actually finish it off.

[00:15:48] Kate: Or a lot.

[00:15:49] David: I accept that it needs a lot of polish. It needs a bit of building out as well first before you’ve applied the polish.

[00:15:59] Kate: Yes, fair.

[00:16:00] David: That achieving that as we’re doing just on the side, is something where we’re getting to that point where at some point we need to say no, this has value, it has substance, it needs to get out and it needs to get out at scale, it’s a tech product, we need to own that.

[00:16:18] Kate: And I think in terms of do you know what you’re doing, you have now had five years to prove product market fit, not just in one place, but in a number of places. You have really proven that there’s serious demand, that there’s funding there, and there is a viable business model for a number of these things. Then the challenge is, how do we, which is the challenge we’re working through right now, how do we put this all together under the single umbrella of IDEMS, yet still give things the attention and nurturing and spotlight, I think they need to really grow.

[00:16:54] David: And this comes back to a tension point between the two of us, which is not a negative tension point.

[00:17:01] Kate: Yes.

[00:17:02] David: But a really positive tension point of should it be under that one umbrella? Should we be splitting out? Because it would be so much easier to take some of our products and just say that’s a tech startup, we can do the tech startup thing with that.

And this is something where that tension point is healthy. And one of the things which you’ve come back to me quite often on is that, the people I’m speaking to who I know would be interested in this, they’re not going to want to learn about the complicated ways you’re going to present it as funding. They just want it to fit into what they know.

And that’s something where, do we know what we’re doing? No. But we also know that they don’t know what they’re doing. Maybe by trying to help us in that way, it actually pushes us in a direction which isn’t as good for us or for them. And so that balance about, just because what we’re doing is hard and we don’t know that it’s the right way of doing it, I’m afraid, what I pushed you back on certain cases is we could still try, can’t we?

[00:18:02] Kate: And I think the point that you’re very validly making is many people are recognising that current models are not working. That it’s not, they’re not producing the right incentives. They’re not sending tech in the right direction. So to just decide to try to figure out how to slot ourselves into that, because in the short term, okay at least it gets us that funding. I agree. It’s problematic. And I think you have been very adamant and I’m, I don’t think we should make those trade offs. And I actually…

[00:18:31] David: Or now is the key thing.

[00:18:33] Kate: Yes. Okay. Yes. I think it’s because the business is still young. It’s easy to be swamped by some force that comes in and exerts an outsized influence on the direction.

[00:18:47] David: That point is exactly why Danny and I started the way we did. We knew that nobody would take our ideas seriously when there’s two of us just thinking about this, doing it our own way. And so we didn’t want to have the tech angle at the forefront because we couldn’t be taken, we couldn’t take ourselves seriously at that point.

Actually having built to where we are, part of what convinces me that now maybe we might be at the stage where we could convince people is at least we’ve convinced you. And there’s nobody I’d have rather convinced.

[00:19:17] Kate: But I was already convinced.

[00:19:20] David: I think this is really important, we were aligned. You were going in your own route as we’ve discussed in a previous episode, and when we dug into it, that alignment was so deep that you did what nobody else has ever done, which is said, wait a second, instead of you helping me, maybe I could help you.

[00:19:40] Kate: And help myself.

[00:19:42] David: But that’s exactly the point. And this is where this element of, we don’t know what we’re doing on this, but having that trust that we know enough to be able to convince others to come with us on this journey to find out are we finding a different way of doing this? Are people willing to take that risk to try something different? That’s why I was really excited to have this discussion with you. The fact that we don’t know what we’re doing, exactly, doesn’t mean that we don’t have insights about why what we’re doing might lead to different outcomes.

[00:20:18] Kate: Yes. And I mean, I just come back to, you go to any conversation that’s happening right now around impact, around technology, people know that there need to be new ways. And what are those new ways? I think we’re proposing one.

[00:20:35] David: It might not work, but it might. It might work.

[00:20:39] Kate: I think it will work. It’s just, will it work at the scale? Will it work in a way that’s commensurate to our ambition? That has yet to be proven.

[00:20:47] David: Absolutely.

[00:20:47] Kate: But it definitely, it’s definitely sustainable.

[00:20:50] David: This is what the core we’ve built is that sustainability. And this is what’s so different from what worries me about other tech approaches, is that sustainability is not built in. And so they can just be a flash in the pan, with the slight exception of the likes of Apple, who have built up incredible cash reserves. That’s a really smart play. They’re not a flash in the pan. No, they will survive pretty much any downturn because of their cash reserves. That’s a bit off track here, but it is this element of actually, a lot of start up tech is not built to be sustainable. And that’s what fundamentally we are.

We want to be, we’ve built sustainability in from the core. We don’t want to be a flash in the pan. But we do want to build tech which goes out at scale and influences the world.

[00:21:39] Kate: I guess in all of this, this is really risky in some sense, even though I don’t experience it as risk, you don’t either, but it’s risky in the sense that it is novel, it’s untested. And that really, arguably, is where innovation comes from. And I think we are living through a time right now where a lot of people look around and say, where’s the interesting innovation, at least in digital solutions, like the world of the internet feels very stagnant and, not very interesting right now.

[00:22:11] David: Wait a second. Given this sudden interest in AI, you’re saying the world looks stagnant now?

[00:22:17] Kate: No, but I’m talking about the solutions that people experience in their own lives do not feel like they are pushing toward a better world, toward some like great leap forward. I guess what I’m saying is it still somehow feels like how is this new wave of innovation different from the last innovation that did not ultimately end up serving us? If you’re just the average person, that’s what I think most people are feeling is great. This crazy wave of amazing things is coming, and I’m pretty sure they’re not going to serve me. That is, I think, what a lot of people are feeling.

[00:22:59] David: And I think, this is something where I did an episode on the Responsible AI with Lily, which was just talking about some of these issues and talking about the fact that Amazon have just shut their walk in walk out stores because actually what that was really doing is just taking the cashiers away from high income societies and putting them into low income societies.

And really that this wasn’t AI at all, this was just a way of replacing high paid labour by lower paid labour. And exactly that point that you’re making, which I agree is that this realisation that these big technological leaps forward, because they are happening fast, and they’ve been happening faster and faster. Are they really serving us as individuals? Us as society? Who are they serving is the big question. And we don’t claim to have all the answers to this, but we do claim that we are a slightly different model of this, and that’s what’s so exciting. And do we know what we’re doing?

No, neither does anyone. We do know, we know a lot, we’ve learned a lot, and we know a lot, and so we don’t really know everything, and that’s fine, but nobody does. What we’re doing is different, maybe from the outside it looks risky, from the inside it doesn’t feel risky.

[00:24:24] Kate: It doesn’t feel risky at all. It feels so needed and almost inevitable in a sense when you look at the demand for this. And really in unexpected places I think people are looking to solve these problems, even in business people are looking to solve these problems.

[00:24:39] David: Yeah, and so let’s watch this space and see maybe over the next few years we will learn a bit more about…

[00:24:46] Kate: We’re vindicated that we did know something.

[00:24:50] David: We had observed something because again it comes down to that observation. We had observed something and found a different way to think about it.

This has been a fun discussion. Thank you. I’ve really enjoyed this.

[00:25:01] Kate: Thank you, David.

[00:25:03] David: And maybe it’s been, I hope it’s been thought provoking to anyone who’s happened to be listening.

[00:25:08] Kate: Thanks, David.

[00:25:09] David: Thanks.