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Episode 48
October 28, 2017

Gamifying Healthcare

Healthcare is no game, but try telling insurance carriers that. Phillip gets manipulated into buying a denim jacket, innovation in fitness and fashion, Adobe "reinvents" fintech, and the guys go deep (real deep) on healthcare and insurance.

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Healthcare is no game, but try telling insurance carriers that. Phillip gets manipulated into buying a denim jacket, innovation in fitness and fashion, Adobe "reinvents" fintech, and the guys go deep (real deep) on healthcare and insurance.

"LOL, jean jackets are still a thing"

  • Phillip got a new jean jacket
  • Moral of the story: even when you know what's happening to you, even when you know you're being manipulated but digital marketing, you still buy the product.
  • Brian suggests the inception theory of jean jacket marketing (perhaps Phillip watched Stranger Things 2?).
  • Pricing elasticity on an individual basis as an untapped area of potential

Minority Report Policing in Dubai

  • Dubai International Airport plans a new face scanning virtual aquarium.
  • They are legitimately there to just track your face and scan you and make sure you're not a terrorist of some kind.\ A prediction: at some point facial scanning is going to drive advertising to you.

Amazon's Inadvertent Market Contraction?

  • Microsoft partners are getting lifts in azure deployments ever since Amazon acquired Whole Foods. It seems that retail is really shaken up about Amazon kind of owning the world.
  • Keep an eye on it: Amazon needs large brands and enterprise partners to continue using AWS: a large exodus might cause business contraction.
  • Something to keep an eye on: maybe the contraction in this space may have a negative effect overall on amazon's business because Amazon needs the large enterprise partners and brands to still use AWS. They can't all jump ship for Azure.

Amazon's Athleisure Adventures

  • Amazon is in talks with two manufactures to create its own sportswear brand.
  • Both Taiwanese companies already make clothing for the Gap, Uniqlo, Kohl's, Lululemon, Nike, and Under Armour.
  • Brian predicts "make" will be more important than "brand." See episode 8 for reference.
  • Brian and Phillip meet Michael from Best Made Company, an upscale lifestyle clothing and gear company recently acquired by silicon valley startup, Bolt Threads to pilot a new type of spider silk.
  • We no longer need a consumer marketing campaign for people to accept nylon or to buy more cotton (Phillip reminisces about "the touch, the feel of cotton.")
  • Shout out to Kniterate, and Bolt Threads, to potentially disrupting the textile industry.

Apple's New Retail Stores: If It Works, Double Down

  • Apple's new Town Square store just opened in Chicago.
  • Shocker: it's just a big giant Apple store.
  • Retail spaces are more than just about purchasing at this point: this is Starbucks 2.0.
  • A new discovery: the Apple store and the play area at the mall are the exact same thing, we just don't call the play area a town hall.
  • Mark it: Brian saliently wins Phillip over to his Apple optimism at 27:47: why wouldn't Apple invest in this more? Why not? Go ahead and make it bigger, make it nicer.

Adobe and Banks Team up to "Reinvent" fintech

  • Adobe is working with banks to merge physical branches with digital experiences.
  • Brian's having a hard time getting excited for Adobe teaming up with banks to merge physical branches with digital experiences.
  • Adobe's "sensei" uses artificial intelligence to automatically reformat content on a bank's website to fit a screen inside the bank.
  • It sounds a lot like they just used AI to build a responsive webpage. What's new?
  • One interesting point: using a customer's geographic location to trigger a notification on a smartphone once they enter a branch: bank geofencing.

Loyalty Programs and the FBI

  • REI and the FBI worked together to catch a suspected airport bomber by using an REI bag they found in the woods and tracing the purchase back to the loyalty card of the suspected bomber.  
  • We finally found a real use for loyalty programs in this country.

Body Dataaaaa!

  • John Hancock partners with Apple to offer $25 Apple Watches.
  • The catch: you have to exercise regularly for 2 years with it, or pay it all back.
  • Insurance getting involved in body devices might herald a move to the gamification of healthcare.
  • A move to "push" healthcare rather than "pull." Push customers to healthy living rather than wait for them to come to the doctor.
  • Potential hazards: what if your provider has access to your purchase data? Do you really want them to see how often you ate at Taco Bell last month?
  • Brian goes a "little bit future" and suggests free preventative care for every American to save the country a ton of money.
  • Silicon Valley has the chance to make healthcare a game and transform its role.
  • We have legitimate technology that can help save your life.
  • In fact, it helped save James T. Green's life.

Puerto Rico and Tesla Grid Update

  • Tesla is continuing to invest in Puerto Rico.
  • can Tesla adopt their work on a larger scale?
  • Is it smart for Puerto Rico to privatize their energy grid with Tesla's help?
  • Should we allow the privitization of a fundamental human need in 2017?
  • Tesla's and Google's work in Puerto Rico is a silver lining in an ongoing humanitarian crisis.


The Hack Back Bill

  • A new bill introduced in the House of Representatives let's people hack back.
  • It's called the AC/DC act. Metal.
  • Legislation as a defense of people who have to do something technically illegal to stop viruses and malware, perhaps?
  • An attempt of the the government to get a handle on new threats in a digital world.  

Snapchat Vandalized in AR

Phillip: [00:00:44] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce, rated one of Forbes Top Six Podcasts Worth Your Time. I'm Phillip.

Brian: [00:00:52] I'm Brian.

Phillip: [00:00:54] And we need your feedback about today's show, so make sure you do that at and hit up that Disqus comment box on the site. Also, while you're there, make sure to drop us a five star on Apple podcast or Google Play, and you can listen at any time on your Amazon echo devices, of which there are about 300 different ones now, on TuneIn radio with the phrase "Alexa play Future Commerce podcast."

Brian: [00:01:18] Sweet. And also, don't forget the setup for our FC Insiders, our weekly newsletter about what's new and what's next in retail. And honestly, you really can't miss this because we are about to release some sick content.

Phillip: [00:01:33] Sick.

Brian: [00:01:33] Like it is amazing, and it will only be available to you through FC Insiders for a limited time and then we'll release it to the general public. But if you want early access to this unbelievable content. And let me tease it a little bit.

Phillip: [00:01:52] Tease it. Tease me, Brian.

Brian: [00:01:53] Yes. Phillip has written an article, which also he has basically done sort of a mini podcast with. And we're going to be alternating on this new blog posts/one off 3-5 minute in length podcasts. And they're going to be in-depth looks at different things in the industry. So really, you do not want to miss this.

Phillip: [00:02:23] Don't miss it.

Brian: [00:02:24] I've already listened to it. It's great.

Phillip: [00:02:27] We can't possibly overhype it because it's that good. So go right now. And there's gonna be a little wiggly box at the top that says "Subscribe Now." Make sure you do that and get on the FC Insiders list. And this one is can't miss. But they're all going to be can't miss. So, OK, so that's it. Self-promo over. We're super into it. Holy cow. There's so much news. I know we keep doing these new shows, but they're great vehicles for talking about a lot of really, really interesting stuff going on right now.

Brian: [00:02:57] There's a ton going on right now.

Phillip: [00:02:59] Can we kick off the show with my jean jacket story?

Brian: [00:03:03] Yes. Let's do that. Ok. Tell it. Tell it.

Phillip: [00:03:07] Is that the thing we could do?

Brian: [00:03:09] Yeah. Let's sort of like frame this up. So, Phillip. I saw your jean jacket. It was pretty cool. What happened? How did you come about owning such a cool jean jacket?

Phillip: [00:03:20] Well thanks, Brian. First of all, the fact that I'm saying Jean jacket 2017 is just blowing my mind. So, gosh, OK, this is the power and like sort of testament of how all of our retail and digital marketing strategies work, even when you know what's happening to you, even when you know you're being manipulated, they can still work. So the long and short story altogether is the other day I was on Facebook and ironically, I don't know what spurred the thought, but I ironically posted on Facebook, "LOL Jean jackets are still a thing." Right. So I posted that on Facebook, and it was not even before the end of the day that all of a sudden Facebook is marketing denim jackets to me. And it is fall. And maybe it's coincidental.

Brian: [00:04:10] Not it's not.

Phillip: [00:04:10] Probably isn't. It's not.

Brian: [00:04:12] No, we know too much. We know too much. {laughter}

Phillip: [00:04:14] We know better. We know better. You know? And so I'm getting all these, you know, Facebook ads for a bunch of brands I'd never heard of before.

Brian: [00:04:24] Whoa, whoa, whoa. Hold on. Wait, what if it actually goes back a step further? And like the reason you're even thinking about Jean Jackets is because that was incepted to you.

Phillip: [00:04:33] Oh, my gosh. You know what?

Brian: [00:04:34] Probably it's true.

Phillip: [00:04:35] It probably is true. You've actually now blown my mind in reverse. Oh, my gosh. OK. So maybe it isn't even when you know it's happening to you. OK. Anyway, so I'm now thinking about denim jacket. And it was about two days of that sort of, you know, back and forth and seeing brand after brand after brand and seeing all these different denim jackets when all of a sudden, I saw this denim jacket. There was a company called Life After Denim. Which I had seen on Facebook before, but it came up a couple of times and another one called Grayers, which I'd seen before, and then another one, Todd Snider. So Todd Snider, this denim jacket comes up and I was like, you know what? Like, if I had to own a jean jacket, it wouldn't be that one. It actually was a really nice looking denim jacket. It didn't look dumpy. It looked kind of like what you would expect. Like what? I don't know. It was just a totally different...

Brian: [00:05:38] You still have to have good products.

Phillip: [00:05:40] Yes.

Brian: [00:05:40] That's the lesson there.

Phillip: [00:05:42] I think that's really what it is. And plus, you know, I think what happened to is I was seeing a variety of styles and maybe making up my mind, too. Like I was incepting myself into buying a jean jacket, even though I thought fundamentally that they were, you know, frumpy and old and sort of a bad throwback, mostly because they were like the acid stone wash variety. But this was actually a nice looking one. Anyway. Ok, so the Todd Snider ad comes up. I saw it and I was like, "If I had to buy a denim jacket, this is the one I would buy." I said that to myself out loud. I clicked on it. I went through. I saw it was like a hundred and forty bucks or something. And like, I am not going to buy a $140 denim jacket. And I exited, right? There is my exit intent. And 24 hours later, I kid you not. I'm back on Facebook 40% off ad today only for that bloody jacket. I click through and right on the product detail page, there's an Amazon Pay button. And before I even knew what I was doing, I click the Amazon Pay button, bang. It was all done.

Brian: [00:06:45] One click? One click?

Phillip: [00:06:48] Yeah, I was already opted into the one clicks, baby.

Brian: [00:06:52] One click.

Phillip: [00:06:52] I did have to confirm the one click like, "Are you sure this is what you want to do?" And this is your address you're going to ship it to...

Brian: [00:06:57] Well yeah I hope you would need to confirm that.

Phillip: [00:07:00] But I think what's insane is that we are at a point now... I lived the entire life cycle of customer acquisition. I knew what was happening to me. And it still worked.

Brian: [00:07:11] It didn't matter because you know what? You know why? Because there was a quality product.

Phillip: [00:07:16] Yup.

Brian: [00:07:16] That was attractive.

Phillip: [00:07:17] Yep.

Brian: [00:07:18] And then they marked it way up, and then offered it to you at a price that you thought was a reasonable.

Phillip: [00:07:27] Yeah. Actually, you know, I'm really interested to know and maybe some of our listeners are doing this sort of thing. There has to be a strategy for customer acquisition that relies not on blanket inflated costs, but maybe sort of more targeted audience based pricing psychology or price elasticity testing. I really feel like that is an untapped area of potential, especially in all the personalization that we're that we see from time to time. You know, Amazon does this a lot. That's why there're so many third party tools out there to track the prices of Amazon publicly over time. Anyway, I just find it fascinating that even every step of the way, even though I knew it was happening to me and maybe even subconsciously, I was incepted in the first place in wanting a denim jacket. It just blows my mind.

Brian: [00:08:21] Yeah, but you just brought up another idea that it might already be a thing, but hasn't really hit me yet. Dude, do you think maybe the future of advertising in this context is the stronger our online identity gets, and like the more specific it becomes and the more personal becomes like personal offers, personal offers from companies could become a big thing. I know this worked for you. It was a sort of a broad offering, I'm sure.

Phillip: [00:08:51] Yeah.

Brian: [00:08:52] Maybe not. Maybe I'm wrong. Maybe this was a personal offer. But how crazy would that be if sales weren't blanketed anymore?

Phillip: [00:09:01] Right.

Brian: [00:09:01] And all the sudden you wanted to go... You know what everyone's, like Target's spend is and... Yeah.

Phillip: [00:09:10] I do see this happen especially... I'm sort of into the apparel brand sort of thing. So there's actually this... There's a company that offers something called a sock drawer makeover. What is the name of this company? Oh, Nice Laundry. So they have these collections of socks, and you can buy like a whole, what they call the sock drawer makeover. And we're giving a bunch of free advertising away today for whatever reason. But you can build boxes and it's like $59-$109. But you get like, you know, six to 18 pairs of socks and 18 pairs of socks that you kind of like build your own box of socks, which is cool.

Brian: [00:09:53] A box of socks.

Phillip: [00:09:53] A box of socks. So I actually I really like most of their designs. What is really interesting is they run this business on two main things. One is sort of the, you have the box, but they also do a free, or they also do a targeted offer. So they do the bounce exchange like, you know, exit intent thing. But they also allow... Like they generate a coupon code for you that is yours to use for the first time that you shop. And it's not just on email. They offer it to pretty much everybody, if I remember correctly, which is really unique. It's some, you know, crazy code that you have to paste into the checkout. But I just find it interesting, like how many brands are using that sort of pricing psychology. To be honest with you, I don't know that $59 for six pairs of socks is a bad price point. And then they have subscription socks. I don't know. Maybe it's just a way to intro you into the brand. It's likely more what it is. But I just I love... Actually I kind of just love the site. It's beautiful. Anyway, good product at the end of the day, I did get the jacket. It looks... Objectively, Brian, do you think it looks good on me?

Brian: [00:11:20] It's pretty sharp. I like it.

Phillip: [00:11:22] It's a sharp jacket right? Ok.

Brian: [00:11:23] It was a good pick. And again, I think this... It's a good story.

Phillip: [00:11:27] It's a good story.

Brian: [00:11:27] It's a good story because it shows the life cycle. But also, I think it just really shows like get the right products in front of people and, you know, make products that actually sell. And then and if you couple that with good online marketing practices, you will sell products.

Phillip: [00:11:45] Yeah. And I think somebody has to be interested in that in our audience somewhere. I hope that was for you. Not every story has to be about, you know, virtual aquariums in Dubai airports where fish are spying on you and are scanning your face to add to a face recognition database.

Brian: [00:12:03] Which is what we should talk about. Next.

Phillip: [00:12:03] But that just happens to be our next story.

Brian: [00:12:06] Yeah, that does happen to be our next story. I mean, this is very much in line with what was it Blip Bar was doing with Wikipedia?

Phillip: [00:12:17] Yeah.

Brian: [00:12:17] Where like they they could recognize any face that was on Wikipedia. You take a picture for someone and they're in Wikipedia, and they would bring up a whole bunch of information about them, not just their Wikipedia page, but now it's like any time you go through this face scanning virtual aquarium at the security check point...

Phillip: [00:12:41] Which is like a string of words you never thought that you would ever utter.

Brian: [00:12:45] The tunnel that you walk through.

Phillip: [00:12:47] Yeah.

Brian: [00:12:47] It's pretty cool. You should have a look at it. We'll post that in the show notes.

Phillip: [00:12:55] Yeah.

Brian: [00:12:56] Pretty crazy stuff. We're definitely in the future. This is starting to feel a little Minority Report to me.

Phillip: [00:13:05] Yeah. So then they're adding the actual... So you walk through this virtual aquarium, which is really just a vehicle to, you know, require you to submit to some facial scanning. This is not low key. Like it is pretty overt what it is they're doing. They just make it a nice experience by making it feel like you're walking through an aquarium. But they are legitimately just there to track your face and to scan you, and to make sure that you're not a terrorist of some kind. It's interesting. Yeah. Very Minority Report-esque. At some point they're gonna drive advertising to you. Have I told you my theory about advertising in airports?

Brian: [00:13:49] No. Tell me.

Phillip: [00:13:49] I feel like if you were to put a bunch of enterprise software ads in any one concentrated location, an airport would spontaneously appear.

Brian: [00:13:59] Actually, no joke, man. That's like AWS. Braintree.

Phillip: [00:14:05] Yeah.

Brian: [00:14:05] Everything.

Phillip: [00:14:06] Yeah. Rackspace.

Brian: [00:14:09] Yeah.

Phillip: [00:14:09] Yeah. Very, very, very interesting stuff. And you know, it's funny, as you mentioned AWS there. One that doesn't come up a lot, but we're gonna probably start seeing more, more and more of... I'm sort of hearing some chatter about Microsoft partners getting massive lifts in Azure deployments ever since the Whole Foods acquisition from Amazon. It seems that like retail's really shaken up about Amazon kind of owning the world. And so that's a thing to sort of keep an eye on. Is that maybe the contraction in this space is going to have a negative... The M&A activity may have some sort of a negative effect overall on Amazon's business because Amazon needs the large enterprise partners and especially large brands to continue to use AWS. They can't all jump ship for Azure, which is incredible.

Brian: [00:15:05] Yeah and I think they should definitely have... They have reason to be concerned because Amazon is kind of taking over the world. Now Amazon is launching a sportswear brand that's gonna compete with Nike and others. This is just on the heels of Nike finally agreeing to sell on Amazon.

Phillip: [00:15:24] Yeah.

Brian: [00:15:25] Which just happened a couple of months ago. So, I mean, if I were a retailer, a larger retailer I should say... Again, not a smaller or mid-sized retailer. If I was a larger retailer, I would be nervous.

Phillip: [00:15:40] Yeah. Yeah. Well it is something to be concerned about if you're a retailer. But I think it's one thing's like I don't want to give business to the people that I'm competing with. I get that notion. What I don't like is the subtext that somehow Amazon is able to see your data because that fundamentally to me feels icky. It feels contrary to what? The whole point of having secure web hosts are supposed to be and maybe you don't trust Amazon with that. But wouldn't Amazon's entire business model be shot if we couldn't trust them with looking at the data that they're securely storing for us? Isn't that the whole point? Like GovCloud? Right. Like in HIPACloud, like they have specific entire networks specifically just to address the security concerns around people being able to look at their data. I don't know.

Brian: [00:16:41] Yeah, I think this is why people are a little nervous.

Phillip: [00:16:44] I just don't buy it. I think it's a bunch of FUD.

Brian: [00:16:48] Do you think if they don't have any reason to be nervous?

Phillip: [00:16:51] Well, I think if you don't want to give money to your competitor in one area of their business while you're competing in another, that makes a lot of sense to me.

Brian: [00:16:59] Yeah, but I don't think that's the new world. Like the new world... I think unfortunately, or maybe fortunately, competitive brands are giving money to each other all the time. And maybe that's just the new tangled web of business that we live in. Like too many conglomerates and too many like overlapping services and too many things where companies rely upon each other, you know, and there's a benefit to that, I think, in that I mean, there're checks and balances.

Phillip: [00:17:26] Yeah.

Brian: [00:17:27] But also some danger, too.

Phillip: [00:17:30] I mean, this actually kind of plays into this Amazon athleisure story anyway, because according to Business Insider dot com, which is where we got the story. There are two companies that Amazon is in close talks with. Both are Taiwanese sportswear manufacturers Makalot industrial and Eklat textile. The both of them already make clothes for Gap, Uniqlo, Kohl's...And Eklat, I guess, makes apparel for Lululemon, Nike, Under Armour...

Brian: [00:18:07] So it's all the same stuff. {laughter}

Phillip: [00:18:09] It's all the same stuff with a different label.

Brian: [00:18:13] What stuff looks better? What stuff is a better price? Just get that.

Phillip: [00:18:16] It doesn't matter. You know, it doesn't matter at this point. It's all the same. It's just the same thing.

Brian: [00:18:21] Yeah. This actually gets back to something I think we talked about on Episode 8, which is clothing and apparel in the not too distant future, make is going to become more important than brand, almost. The quality of the materials and the quality of the manufacturing. I think would have more transparency to that level. And so brands will be more about design, but the make would be really, like it's going to be a little bit more attribution.

Phillip: [00:18:54] Actually reminds me we met somebody this week who was just... It's I guess, a fairly well-known company. I'd never heard of them. They're called the Best Made.

Brian: [00:19:07] Oh, yeah.

Phillip: [00:19:08] And and so shout out to Michael at Best Made because we had a really good time meeting you last week, but said the Best Made company started, you know, making hard goods like axes and knives and things like that. And now are in soft goods with, you know, leather goods and basically anything that has a stitch. Clothing. And, you know, they are a lifestyle brand in that sort of outdoor space and in the upscale outdoor space. What I find really interesting is that a textile startup from Silicon Valley acquired them, a company called Bolt Threads, because they saw them as a great vehicle to pilot a new type of spider silk or genetically copied synthetic version of a spider silk or organic synthetic of a spider silk. I'm not really quite sure. We should just have them tell the story on the show.

Brian: [00:20:07] We really should.

Phillip: [00:20:08] But I find this really interesting in that the application of tech to fashion is no longer the "We need a consumer marketing campaign for people to accept nylon or a consumer marketing campaign for people to buy more cotton." Right. Because when I was growing up, we had cotton. We had literal cotton commercials on television funded by the U.S. government, so that you bought more cotton products. And that I think, you know, is giving way to companies that, you know, are disrupting the space with new textiles. Like, you know, we've mentioned them in the past like Kniterate and which is like a manufacturing process or the, you know, 3D printing of textiles. That's the manufacturing disruption. And now Bolt Threads the actual, you know, material itself. It's interesting. I find it very interesting.

Brian: [00:20:59] Yeah. I actually think you bring up a good point. You lead to a broader point, which is I think if you're nervous about how much like upheaval you've seen in specifically the fashion part of retail, get ready because I think there's gonna be a lot more.

Phillip: [00:21:17] I think you're a little too... What's the word? I don't know. You have a really positive outlook in this idea of brands being only sort of associated toward fit in and look and overall style and not about the materials. I feel like most all of this stuff, some people probably have a sense, especially if you're into fitness and fashion fitness, then you're probably used to the same tech shirts, the same running tech shirts, every single running tech shirt that you or is the same fabric. Like fundamentally. There are very few types of different fabrics. I think you're sort of already we're kind of used to that, but I don't know if we define it specifically that way. I don't know. I don't know what I'm trying to say.

Brian: [00:22:07] I don't know. I think there's a lot more, I think there's a little bit more to it than that. But I do see what you're saying. I think I'm not just talking about that point when I say that the apparel world is up for a little bit more of a shakeup, I think there are new fabrics coming out, as you just mentioned. So like yeah, maybe there are a few right now, but there're more coming, one. And two, I think the manufacturing process is changing. And so...

Phillip: [00:22:41] Yeah, that's for sure. This actually we've brought him up before. But a shout out to Jesse Lazarus who listens to our show.

Brian: [00:22:49] I don't think we've brought him up by name yet, but yes.

Phillip: [00:22:51] He seems to be OK with it, I think. He actually was telling us about sort of the the woven on-demand textiles that can do really complicated weaves now. Like a Jacquard, I think.

Brian: [00:23:09] Yes.

Phillip: [00:23:10] And that's apparently a breakthrough for durable fabrics that you would need for furniture manufacturing and things like that. So there are massive leaps forward happening right now in the on-demand space. And I think that will power bespoke brands. And not the... Well, Nike will find a way to make it to build it into their product for sure.

Brian: [00:23:34] Yeah, definitely. They already are. With shoes. They started with shoes. And they're doing a great job. Nike, I think Under Armour for sure and I think Adidas as well are all doing some really cool... In fact, yeah, we talked to Nick Vu a little bit about that, but some really cool... I mean, I wouldn't call it like, you know, 3D printed shoes, but it is on-demand shoe printing or shoemaking.

Phillip: [00:23:59] Right.

Brian: [00:24:00] And so, yeah, Under Armour has a brand line called Icon or something like that. I should probably look it up that they have the shoe line that's like insanely customizable. And you know, the way they've been able to do that is through improvements in their manufacturing process. So yeah, I think it's a lot ahead here.

Phillip: [00:24:26] So that was a fun little bunny trail that we weren't planning on taking.

Brian: [00:24:29] That was a fun bunny trail. I love talking about that.

Phillip: [00:24:32] You know what is completely counter to the narrative that there's a ton of innovation in a space that's actually not being innovated at all? Is Apple's new retail stores. The town square. Town Square just opened. This is in Chicago, I think. And it is. Everyone is talking about how beautiful it is, but it was supposed to be a brand new take at how retail happens. Instead, it looks more like it's just it's still an Apple store. Shocker. It's still an Apple store. It's just a bigger, more sort of open space with a bunch of like places for people to sit around and listen to other people talk.

Brian: [00:25:08] So, yeah, I actually... So here's what I think that's kind of interesting about this. I do think that Apple while this is just a bigger retail space, Apple's hinting at something about retail that's coming.

Phillip: [00:25:20] Yeah.

Brian: [00:25:20] Which is that retail spaces are definitely more than just about purchasing at this point. Or they're going to be. Like they're going to be used for other things. Places to talk about things and to engage in activities. And, you know, there'll be an entertainment component. There'll be a social component. It's going to be Starbucks 2.0. I don't know if you remember, but when Starbucks first came out, it was like the first like worldwide world, let's say nationwide even to begin with, brand where people actually used it to go in and like engage with each other. And sit down and talk.

Phillip: [00:26:02] Right. Yeah.

Brian: [00:26:03] I think that that model is going to be applied totally like...

Phillip: [00:26:08] It's already that way though.

Brian: [00:26:10] Yeah. It's already that way.

Phillip: [00:26:11] Does Apple need to reinvent the name of the same store that they already have? I mean maybe they do for their shareholders, but does the world need it? What I see is I went to the mall twice this weekend. God help me.

Brian: [00:26:23] That's a lot. I haven't been to the mall in a long time.

Phillip: [00:26:28] I always have interesting experiences when I go to the mall. So I went to the mall because I had to go to the running store and I wanted to get some shoes and stuff, whatever. And when I was there, the only store in the mall that I passed that had people in it was the Apple store. And there weren't just two people in there. There were like a hundred people in there. There was a huge crowd of people all around the iPhone. iPhone 8. They were all on devices. They were all kind of playing with the stuff in the store, but they were very much... It was a happening place. The only other thing that had that much, you know, activity in the mall was the play area with a bunch of three year olds.

Brian: [00:27:10] Same thing. Like they're identical. {laughter}

Phillip: [00:27:13] It's literally the same thing. Exactly. The play area is like the Apple store for kids. But we don't call that a town hall. Right? And that's, I guess the thing...

Brian: [00:27:25] No, take a little bit of a counterpoint then. Why wouldn't Apple invest more in this? Sure. Make it bigger. Make it nicer. Rebrand it. Why not?

Phillip: [00:27:35] OK, fine. You know what? You sold me. You're freakin right. You're completely right. I'm thinking about this all wrong. I'm so cynical sometimes. You're right actually.

Brian: [00:27:44] You just made the opposite point you were trying to make.

Phillip: [00:27:47] That might be the first time on the show that you have so like saliently just won me over to your side.

Brian: [00:27:54] I don't think it's the first time. {laughter}

Phillip: [00:27:55] It's not the first time. You're always wrong, Philip. No, you're right. Actually, I have to take my own advice, which is when something's working, you double down and invest more in it and grow that strategy. I mean, what could they possibly do next besides an Apple store, a bigger Apple store? That is the town hall I suppose.

Brian: [00:28:21] With more spaces to talk and more people can get in there because it's already maxed out.

Phillip: [00:28:24] Right. You know what an Apple store needs that it's missing?

Brian: [00:28:29] A ball pit.

Phillip: [00:28:29] Beanbags. {laughter} We both went with orbular objects there. So anyway, it's a very interesting thing. Yeah, I actually want to go check this out. I also I find what an interesting sort of tangential story is the the once sort of flagship Apple store, the Glass Cube in New York City, what's the name of that store? I forget the name of that store, which was sort of their flagship store. That store is also due for a refresh. And I think they're doing a similar... I don't know. I'm actually really bored of this topic now since you've changed my mind.

Brian: [00:29:14] The next topic...

Phillip: [00:29:16] Yeah. Also boring? {laughter}

Brian: [00:29:21] It's interesting. {laughter}

Phillip: [00:29:21] I don't know if it's boring so much.

Brian: [00:29:24] Yeah. Adobe is working with banks to merge physical branches with digital experiences. And essentially, you know, it's kind of that... The potential... It's just another one of those things that Adobe is doing that I don't really... {laughter}

Phillip: [00:29:48] {laughter} It's just... I have to ask you in the nicest way, did you read the story?

Brian: [00:29:55] I did, yes.

Phillip: [00:29:56] OK. Ok. So here's what I took away from it, which is hilarious. Which is so they call it fluid experiences, which uses artificial intelligence to automatically reformat content on a bank's web site to fit a screen inside the bank. I'm thinking to myself, so they used AI to build a responsive web page? I don't understand.

Brian: [00:30:21] Right. Yeah.

Phillip: [00:30:21] What's happening here? This I find interesting. Location based personalization where they're using a customer's geographical information to trigger a notification on the smart phone once they enter a bank. So that's basically like geofencing. I find it interesting because banks right now are doing this themselves. And to have a tech partner, you know, and it's sort of an emergent Fintech way and a trusted tech partner like Adobe that could potentially be bringing this sort of, you know, more future leaning tech.

Brian: [00:30:55] It's funny that they're doing this because of a decline in physical branch visits, which...

Phillip: [00:31:01] Yeah. Why do they want this really coming into the branch?

Brian: [00:31:05] Why do they want to even increase branch visits? Like that even make sense to me. Why wouldn't you want to move your customers out of your store in this case?

Phillip: [00:31:16] I'm fairly positive that the things that actually make banks money, which is not checking, it's loans, it's the things that you have to sit down and talk to a person about and getting people to come in probably increases the chances of you actually talking to one of those people. Right.

Brian: [00:31:38] Well, I might be an outlier, but that does not happen for me.

Phillip: [00:31:42] Have you ever been upsold at... You've never been up sold at your bank? You walk into the bank for whatever, you know, dumb reason that you came into the bank, and they...

Brian: [00:31:50] Never. Not once.

Phillip: [00:31:51] Really?

Brian: [00:31:52] Yes.

Phillip: [00:31:53] You obviously don't have Wells Fargo, you'd have like 30 bank accounts right now. {laughter}

Brian: [00:31:56] Oh my gosh. Nope. I like get me out of here as fast as possible.

Phillip: [00:32:05] I got you. You know who else said, get me out of here as fast as possible? The airport bomber. This is a terrible segue. Ok. Here's a better segue. We finally figured out what loyalty programs are good for.

Brian: [00:32:23] There you go.

Phillip: [00:32:25] And you say, "What are they good for, Phillip?"

Brian: [00:32:28] What are they good for, Phillip?

Phillip: [00:32:31] They are good for getting airport bombing suspects when the FBI can't catch them. REI... I love this story, by the way. I don't know why I love it so much. I feel like it has some bearing on what we talk about. But REI...

Brian: [00:32:46] It does. I'll expand a little bit.

Phillip: [00:32:48] Please help me, because I haven't figured out why I like this so much. But, REI and the FBI worked together to actually catch this suspected airport bomber. And so it was a person, a guy, who I will not give the dignity of mentioning his name, who set an improvised explosive device at Asheville Regional Airport on October 6th in North Carolina. So according to the surveillance footage, he came in a black cap. And after midnight, he left the bag inside the building. And so I guess the FBI had found a bag in the woods, which was an REI bag, and they found, you know, all kinds or like the accoutrement of building a bomb. And so but they used this to go back to basically a local Asheville REI store. And they found like through all the, you know, the FBI process, they found that maybe this was the guy. So they actually used, he had used cash to purchase. But the way they found him was that he used his REI loyalty membership number when he paid.

Brian: [00:34:13] And that's the part.

Phillip: [00:34:13] That's how they got the guy.

Brian: [00:34:15] Yes. Yeah. I think that's the part that gets you. Because cash doesn't even matter anymore. Cash used to be like this transparent...

Phillip: [00:34:24] Off the grid. Right?

Brian: [00:34:27] Yeah. Now you can't buy things without entering your loyalty number or that costs ridiculous amounts of money. So it doesn't matter if you pay with cash or credit card or whatever, you're being tracked. And the FBI will use your information, use your loyalty information to find you.

Phillip: [00:34:44] Oh my word. And I love that this is what's great is that this poor... I mean, not poor anything if the guy actually bomb the airport then he is kind of a scumbag. But this guy also had the presence of mind to pay with cash, but not the presence of mind to try to get those REI points. Like he knew what was happening to him, too. This is his denim jacket. {laughter}

Brian: [00:35:10] Yeah. That's exactly. Well, maybe. Maybe he realized. Maybe he was just, you know, buying something in REI and didn't want to miss out.

Phillip: [00:35:17] That's true. You know, what's what's more likely the case is that he didn't buy the bag with the express purpose of putting bombing materials in it. It was likely an unrelated purchase. But it's just interesting that we finally found a real use for loyalty programs in this country.

Brian: [00:35:35] The part that tickles your funny bone.

Phillip: [00:35:37] Yeah. I just want to keep saying that over and over.

Brian: [00:35:40] Yeah. All in jest. All in jest. Because loyalty programs are awesome.

Phillip: [00:35:48] Yeah. I do think loyalty has... Have we ever talked about the future of loyalty on this program?

Brian: [00:35:54] You know what? We actually had someone lined up to come on the show. It was going to be like our first interview, and it fell through.

Phillip: [00:36:01] Yeah.

Brian: [00:36:01] And we never did anything with it. We need to go back and do something with that.

Phillip: [00:36:04] Yeah. We need to go back to that. I feel like loyalty programs in general... I don't know. They feel like very, very sort of aged, ancient systems. And I don't know. I love loyalty programs. I'm a member of many, many, many loyalty programs. But, yeah, I feel like there's definitely some Prime disruption candidates there.

Brian: [00:36:33] I agree with that. I think that there's a lot of opportunity there.

Phillip: [00:36:38] I'd love to get some more on the show that's an expert in that area.

Brian: [00:36:41] I agree.

Phillip: [00:36:41] This is this is all a bunch of sort of like passive aggressive hint hints to somebody that might be listening right now.

Brian: [00:37:41] Also now, we get to talk about one of my favorite topics again.

Phillip: [00:37:45] Your very favorite topic, I might say.

Brian: [00:37:49] Yeah. Probably.

Phillip: [00:37:50] You gotta say it the way you usually say it, though.

Brian: [00:37:54] Oh, what's that? Let me hear. You're pretty good impressions, Phillip.

Phillip: [00:38:00] You give like a sort of a singsongy like "body data."

Brian: [00:38:05] Oh. Do I?

Phillip: [00:38:07] I'm pretty sure you do. I'm going to go through the show. I'm going to find everywhere you've ever said body data. And I'm going to cut it into one super clip.

Brian: [00:38:13] Think it's a more kind of yelly because I'm kind of excited about it.

Phillip: [00:38:16] Yeah. You actually have a body tech story, which I think is cool.

Brian: [00:38:21] Yeah. So one of the things that was super interesting that just happened is John Hancock, which is that life insurance company, one of the largest life insurance providers, announced that they are partnering with Apple to offer all of its new and existing members for basically free Apple watches. That's a perk of the program. And so essentially, you sign up for the program, you get device for $25, basically free. But as long as you exercise regularly for two years, you'll be allowed to keep the device for that $25. If you don't, then you'll have to pay it off in installments. And what I love about this is that pretty much we kind of called this a little bit on Episode 8, which is that insurance companies are gonna get involved in body monitoring devices, and they're going to be the ones to fund the consumers use of these devices. And there's going to be a lot more gamification. This is some minimal gamification, like you get a free device. But in the future, there's going to be way more gamification of health. You said in the last episode that we did that sort of the future of the world depended on what was it?  Disruption of...

Phillip: [00:39:51] Public transit...

Brian: [00:39:52] And food service. I'm at a throw in... I'm going to add on gamification of health to that list, because that's a big deal. And it's become a bigger deal. And I was thinking about this even more lately. And I was like, you know, this is just the move towards sort of the push form of health care, right? Where it's been the pull form of health care before, where, you know, we have to go and the health providers are waiting on us to go and and tell them when we're sick. Now they're going to they're going to be pushing to us and saying, "Hey, your device just said you need this," or "You're device is saying this and that means you need to do this." And check ups...

Phillip: [00:40:36] \And sign in with your Chase dot account right now. And we can see all the times you went to Taco Bell in the last month. I don't know. Yeah. That's a slippery slope.

Brian: [00:40:48] {laughter} It is a slippery slope. It is absolutely a slippery slope. And I think there's going to be some amount of resistance against this. That said, we have some serious health system issues in this country.

Phillip: [00:41:04] Sure. Yeah.

Brian: [00:41:05] I'm really looking forward to how the tech community applies themself to this. And one of the things I was thinking about was I wonder if there's some studies out there about how preventative care saves money. I'm sure there are.

Phillip: [00:41:21] Oh, gosh yeah.

Brian: [00:41:23] I need to go look that up. Yeah.

Phillip: [00:41:23] That is literally, that is like the crux of the actual... That is health care.

Brian: [00:41:30] Right. Right. I think about us building web sites at our respective companies and if we do something right the first time or make sure that a problem doesn't happen, that's going to save everyone 10x or more time and money down the road. Right?

Phillip: [00:41:46] Right, right. Right.

Brian: [00:41:47] I'm sure that's 100% true for health care as well. I think that our system right now is setup where people are actually kind of afraid of doing preventative stuff because they don't know how much it's going to cost them. And it might be an additional expense that they don't need to go take care of. And I'll use myself as an example. I have like a small lump in my back that's supposed to be benign. They said I could get rid of it if I wanted, and I was like, you know, whatever, I don't want to spend the money on it because it's not scary. Even though they sort of recommended it. It's not a problem. But, you know, if you want to get rid of it, you know, we kind of recommend that you do. And I was like, whatever. This is something I can do later. I'm not worried about it, which is probably a bad way to think about it. Right? But it's really hard to get an estimate on how much something's going to cost and blah, blah, blah. You know, I think this is happening across the board. It's not just me. There are a lot of people out there that are afraid to get preventative care done because they don't know how much it's going to cost them.

Phillip: [00:42:53] Also, doctors are scary.

Brian: [00:42:55] Also dumpster scary, right. What if we... I'm going to get a little future for a second. What if we made preventative care for free for everyone?

Phillip: [00:43:07] All right Bernie Sanders, back down now.

Brian: [00:43:10] I know. I know.

Phillip: [00:43:11] I actually I love this idea. Keep keep going. Riff on it a bit.

Brian: [00:43:14] If you're already sick, you still have to pay. And you know, we can work out how that works. But I'm not smart enough to figure that out.

Phillip: [00:43:20] Brian's fixing health care in the United States. Here we go.

Brian: [00:43:24] Preventative care is covered, and we find a way to make that happen. It could save the country an insane amount of money. OK. There's my little like Brian's gonna fix the world moment, and I'll be done with that.

Phillip: [00:43:40] Yeah. I think you're definitely in the same vein of what I think insurance companies would want as well.

Brian: [00:43:49] Yes.

Phillip: [00:43:49] I think they want less risk in their pool of subscribers.

Brian: [00:43:53] Yup. You want health care expenses to be the outlier, or the major health care expenses to be the outlier, right? I heard something really, really interesting on... It was on... It might have been Planet Money. It was on an NPR podcast. I'm pretty sure. But they talked about how the sense that, and we're getting off into politics here a little bit, but it does come back around in that President Trump has just recently signed an executive order to cease payments to insurance companies which were offsetting costs under the original Obamacare plan, and the subsidies were going to fund low income health care. So they were offsetting costs for low income health care. There was a court ruling that basically decided that those were, some people are using the word unconstitutional, but not required as part of the Obamacare setup. So the federal government doesn't have to do it, however you want to frame that. So they're stopping those payments. The insurance companies are required to continue to make that premium to drive down the costs for the low income people receiving the benefit. So they're going to lose out money anyway. So the general consensus is, well, does the insurance company lose money or do they raise premiums to offset the cost? And it turns out, and I did not know this, but it kind of blew my mind, that insurance regulators from state to state actually want insurance companies to raise premiums. Like, I don't know if this blows your mind or not, but government regulators want insurance companies to raise premiums year to year. They want the 20% increase in premiums.

Brian: [00:46:00] Wait. Why?

Phillip: [00:46:00] Because they don't want instability in the insurance market. The only thing worse than insurance companies... Insurance companies already operate on a 3 to 4% margin anyway. But the only thing worse than instability in the insurance market and uncertainty is actually having a legitimate crash of a big provider with lots of subscribers that can't afford to make its bills.

Brian: [00:46:25] Too big to fail.

Phillip: [00:46:26] They would rather have basically a scenario where they have 20% year on year premium increases and have the insurance companies continue to stay in business than them not be able to pay their bills.

Brian: [00:46:38] How do 20% year over year increases in premiums equate to 2-3% margin or whatever you said?

Phillip: [00:46:46] Well, there's a... So again, this is government regulators who are basically legitimizing or authorizing the premium increases to offset rising costs. And it all comes back down to what you said earlier, which is that there are legitimately rising costs. Not only is the cost of medicine getting more expensive, the cost of being a doctor and practicing is becoming more expensive. I have a friend of mine who's an anesthesiologist who was just telling me that if you look at what we have, all the M&A activity that we have in tech and Fintech and in fashion and all this stuff that you and I deal with in retail, it's the same on the healthcare side. There are no private anesthesiology practices anymore. They all belong to one or two or three major, you know, national conglomerates or networks of doctors. Doctors aren't partnerships anymore with profit sharing. They get legitimate salaries. And you know what? Those salaries are sometimes lower than what the profit share would have been. And they have rising education costs coming out of school. So they have greater debt to pay over a longer period of time. It's not like things are getting cheaper for anybody. It's becoming more difficult for everybody across the board now. Their multipliers are bigger. An anesthesiologist is making 400K-450K dollars, you know. But they graduated with 300K dollars of school loans.

Brian: [00:48:16] Yeah, that's still like a year. One year.

Phillip: [00:48:17] Whatever. At any rate. And they also there's a lot more risk in that business, too, as well.

Brian: [00:48:22] Yes there is.

Phillip: [00:48:22] Yeah, I think so. You have an interesting dichotomy there in that really, the way to limit risk in the pool is to have more healthy people in the pool. That is the key insurance debate that we've been having for the last 12 years in this country, and to keep more healthy people in the pool, to keep insurance markets stable, we need to either incentivize unhealthy people to become more healthy or we need more healthy people to be mandated to require to be carrying that insurance. This is... It's tough.

Brian: [00:48:55] This is why I'm so excited about this topic, because I feel like this is where Silicon Valley can come in with games and augmented reality and virtual reality and other things...

Phillip: [00:49:05] Right. I do think technology could incent people into better behaviors. You call it gamification. I mean, if there were actual... The thing is that there is already gamification in this area. OK. We're way off on this tangent. I'm just gonna go with it.

Brian: [00:49:22] Go with it.

Phillip: [00:49:24] You would not believe the amount of money that it costs you to be obese in this country. And I know firsthand because I've been obese. Okay. And I'm slowly working my way backwards from it. But if you think about it...

Brian: [00:49:39] I wouldn't say slowly. You're working very quickly away from it.

Phillip: [00:49:43] I'm working my way back. I'm working my way back.

Brian: [00:49:45] You've worked your way back.

Phillip: [00:49:47] I've worked my way back. So let me tell you a little bit about what it's like to be obese. I went to buy well, I bought a bathing suit about a year and a half ago, and a bathing suit at Walmart or Target isn't really going to fit. I was a big boy, right? So you know where you go, you go to Destination Excel, which is a store that's specifically for big and tall people. They have appropriately sized clothing. Do you know how much a bathing suit from Destination Excel costs? One hundred and twenty dollars for a pair of swim trunks.

Brian: [00:50:23] Dang, dude.

Phillip: [00:50:23] All right. So then you compound that with the fact that your clothes are actually just fundamentally bigger and heavier. So you know what that equates to? Excessive baggage fees when you check a bag because your bag is overweight, because you have two pairs of shoes and two suits and, you know, and toiletries. And that's just the beginning. So you have excessive health care costs, obviously, because you're probably not terribly healthy. And things sort of wear out a little bit faster. You you tend to, you know, shower more or you're probably a little hotter. So you sweat a little bit more, which means you probably do laundry a little bit more or dry cleaning a little more often. All of these things are technically costing you more money. And in summary, I mean, you could even take it down to the minutia of your car has to drive, you know, your fat butt around. And so it's probably using a little more gas. Across the board, it costs a lot of money to be obese. And I didn't realize it. I mean, I would pay for the seat upgrade just so that I would have a little more room in my seat, because it's kind of uncomfortable to sit in a really small seat in economy class when flying.

Brian: [00:51:39] That's true for everyone.

Phillip: [00:51:40] Yeah, I know it's true for everybody, but I'm saying more so as a larger person.

Brian: [00:51:45] No, I hear you.

Phillip: [00:51:45] So anyway, it comes down to if it were just purely about incentive, I would think that the social stigma and the money savings that you could have from being healthier at a smaller, smaller waist size, you would think that that would be incentive enough. Now, I do think if you can make it a game, which I think is different than incentive, it could be transformational. But the game right now is, you know, is social media. And that's not been enough to change people's behaviors. So is it a fitness app? I don't know what it looks like, but it's got to be something larger than, pardon the pun... It's gotta be something larger than, you know, just the app that the insurance company puts out. It's the effect of the equivalent of the Geico thing you plug into your car to make sure you're not speeding, you know?

Brian: [00:52:39] Yeah. And it needs to happen soon. I was reading another article recently that said basically Americans are retiring later, dying earlier and are sicker in between the entire process than they were over the past few years.

Phillip: [00:52:53] Oh wow. Yeah, that's encouraging.

Brian: [00:52:55] Yeah. Yeah. So something needs to change.

Phillip: [00:53:01] I mean this kind of started actually... You went down this tangent with with the story about body tech and an insurance company offering Apple Watch. Right?

Brian: [00:53:11] Yes.

Phillip: [00:53:11] But this is also is legitimate technology that could help save your life and help prolong life.

Brian: [00:53:17] That's really true. Very good point.

Phillip: [00:53:18] Right. James T. Green, who's over a Gimlet Media Podcasts posted on Twitter that he has a heart watch app that he runs on on his Apple Watch. And it alerted him of an elevated heart rate, which was completely abnormal for his activity level. And he kept an eye on it and eventually went to the ER where they found a pulmonary embolism. And this relates directly to the I think the WWDC story that we saw a couple of months ago from Apple that they participated in the world's largest heart study from data that came from anonymized data that came from Apple Watch and Watch OS. So my point is, is that these could be also early detection devices to keep you from having, you know, what ostensibly would be a more catastrophic and ultimately more expensive, possibly lifelong journey or life ending journey that could also be more expensive for you. So, yeah, I kind of wrestle with it there. It's not just about health. It could also be your early warning and detection, you know?

Brian: [00:54:20] Yeah, totally. Yeah. And then that's just it. If we keep keep out this, and I think if we keep working at building better body tech and then using the tools that we have out there in creative ways to measure our bodies, I think we will be able to come with some tools that can help save lives and do a better job of monitoring our health and propelling us to a better level of fitness. Speaking of like a better life, Puerto Rico...

Phillip: [00:54:50] Oh, yeah.

Brian: [00:54:51] We've been talking, I think for the past couple episodes now about the rebuild there. Tesla is now investing in Puerto Rico.

Phillip: [00:55:01] Yeah.

Brian: [00:55:02] And they're in talks. I'm not sure if it's come out yet, but they're in talks to install power grids powered by solar energy and storage batteries. How long ago was it that they were released 46?

Phillip: [00:55:21] I don't know. Maybe a two weeks ago. Yeah.

Brian: [00:55:25] Yeah, yeah. So this is exactly what we were talking about that episode. This is an opportunity for Puerto Rico to rebuild their infrastructure from the ground up and really take advantage of the new tech that's out there. And ultimately, hopefully come out with even stronger infrastructure. And we were really hoping that companies like Tesla would get involved. And so it's definitely happening now.

Phillip: [00:55:49] I mean, maybe even a more decentralized infrastructure that doesn't have to be specifically tied into, you know, a government run utility grid system.

Brian: [00:56:04] Exactly.

Phillip: [00:56:05] Yeah. Tesla has already done this, by the way. I mean, there are two pieces of news. One, they've already set up a micro-grid in Puerto Rico that is electricity via solar power with the power pack batteries. But now I think the conversation turns to can they adopt this on a larger scale? And the government officials in Puerto Rico are considering basically just privatizing the energy grid with Tesla's help.

Brian: [00:56:30] Which is crazy.

Phillip: [00:56:31] Privatizing the... Let me... One more time. Privatizing Puerto Rico's energy grid with Tesla's help, which is like... Kinda gives me the heebies for just a little bit, but it's also exactly probably what Puerto Rico needs, and I don't know what I expected it to look like, so I kind of like it. Gosh, it's awesome. I don't know. I'm sort of torn like the privatization of a fundamental human need in 2017 kind of feels...

Brian: [00:57:07] Here's  the thing, worst case scenario, Tesla gets all evil and Elon Musk-y.

Phillip: [00:57:14] Yeah. Worst case scenario.

Brian: [00:57:16] Worst case scenario. Right? You can bet that they're going to regulate the hell out of it.

Phillip: [00:57:25] That's true. That's true. And then, you know, 15 years from now we'll be having a conversation about how government regulators want them to increase the cost of power 20% year over year for stability because they'll be too big to fail.

Brian: [00:57:39] Too big to fail.

Phillip: [00:57:39] Yeah, exactly. Unbelievable. I really have nothing more to say about it.

Brian: [00:57:47] I know. For real.

Phillip: [00:57:49] Yeah. So between Project Loon. Which is friggin hot air balloons bringing Wi-Fi and LTE to Puerto Ricans in the air from  Google. Between that and Tesla's micro-grids this is shaping up to be at least a silver lining. But, you know, 80% of people still don't have power. Like 31% of people have running water.

Brian: [00:58:22] Yeah it's still bad.

Phillip: [00:58:23] It's still bad. As cool as that sounds, it's still very bad there.

Brian: [00:58:31] So cryptocurrency. {laughter}

Phillip: [00:58:34] There's no smooth transition.

Brian: [00:58:36] There's no smooth transition out of this. Russia is considering its own cryptocurrency. That was a pretty interesting announcement. Putin basically just came out and said, like, maybe we should do this, maybe we should have our own version of this. What were they gonna call it again?

Phillip: [00:58:54] Cryptoruble?

Brian: [00:58:56] Cryptoruble. That's right. Yeah. I don't know if it's officially happening yet, but Putin's called for it. Which means it is happening. Yeah, which this doesn't sound to me like what crypto is intended to be in any way, shape or form. It just sounds like another currency.

Phillip: [00:59:19] Right. The whole point of cryptocurrency was decentralisation and anyone can mine.

Brian: [00:59:23] It's the opposite of...

Phillip: [00:59:24] This is the opposite of that.

Brian: [00:59:27] Right. Which, I'm going to say something a little bit provocative. But is cryptocurrency about to fail? I feel like I've seen a lot of stories recently where a lot of people in the financial community are saying, you know, a lot of these new cryptocurrencies are just scams. This is the most opportunity that we've ever seen for fraud. The Wolf of Wall Street guys said that recently.

Phillip: [01:00:01] Wow. That guy right when he sees it, too, you know?

Brian: [01:00:05] Exactly. Exactly. So if you're involved in cryptocurrency, be careful because right now there's a lot of opportunity to be scammed.

Phillip: [01:00:15] Yeah. I mean, yeah, maybe. What I think is terrifying for me is at the time of this recording, Bitcoin is approaching 6,000 to one US dollars. 5650.

Brian: [01:00:30] That is terrifying.

Phillip: [01:00:31] It is terrifying isn't it? I don't know.

Brian: [01:00:34] Yeah. To me, this can only end in tears.

Phillip: [01:00:38] I mean, it's being driven up. So there's a bunch of things driving that price up. I don't know that that's sustainable. I'm not a a cryptocurrency analyst by any means, and I don't listen to enough of the podcasts to actually get it. But my sense is that this is a bubble. And what happens to bubbles, Brian?

Brian: [01:00:59] They do burst. Typically.

Phillip: [01:01:00] They burst. That's what happens typically.

Brian: [01:01:03] Not always. Not if they're too big to fail.

Phillip: [01:01:06] This is not a Lehman Brothers..

Brian: [01:01:08] No.

Phillip: [01:01:11] Actually, Lehman's the worst example in that crowd. So I don't know. I don't know. This is a...

Brian: [01:01:18] Yeah. I mean, even MasterCard is accepting Blockchain's payments now.

Phillip: [01:01:22] Ok. I mean, actually, I'm big on this story. So what's this one all about?

Brian: [01:01:27] Yeah. So MasterCard recently announced that payments can now be made on Blockchain. I don't think they're really... So it's just offering, you know, this option for business to business transactions sounds like. I don't know. I don't think it's gonna be rolled out to everyone. I didn't see that.

Phillip: [01:01:54] I mean, this is basically its own API. It's like MasterCards own API and it's a Blockchain API effectively.

Brian: [01:02:02] Yeah, yeah. It's a pretty big reversal, though, because previously they were very anti Bitcoin. And so I think that they realized that this movement's picked up enough momentum at this point to be a legitimate form of payment. Blockchain is where it's right now. It's just it's concerning to me.

Phillip: [01:02:32] For me, this is more about people trying to... It's like domain squatting and I think everybody recognizes the potential of the technology, but everybody is just trying to stick their own name and and lay claim to a particular name or brand their own in the meantime, while, you know, these other markets kind of go crazy. Bitcoin is still the Wild West as far as MasterCard is concerned.

Brian: [01:03:03] Speaking of the Wild West, I'm going to transition really quickly. There's a new bill that's been introduced in... Is it the House?

Phillip: [01:03:18] Yeah.

Brian: [01:03:18] I think it's the House. Yeah. That would allow people who've been hacked to hack back. And I think you have a really amazing tweet. Why don't you go ahead. I thought your tweet was just brilliant.

Phillip: [01:03:31] I mean, basically what's really funny is so they're calling this the ACDC Act, which was the Active Cyber Defense Certainty Act, the ACDC Act. So I said the only thing that's more metal than making the web a legitimate and legal Wild West where you can like exact your revenge legally on somebody... The only thing more metal than that is literally naming that that bill ACDC. It doesn't get much more hardcore than that. But this particular story has a sort of a weird subtext to it in that sort of built into it... You can hack back? You could hack an attacker back, but you can't actually do anything illegal still. You can't destroy property. I don't know what that means. Hack back.

Brian: [01:04:34] It means nothing. There's no teeth to it.

Phillip: [01:04:40] Well, my guess is that this this basically allows or legalizes the malware researchers that are sort of under scrutiny to do things like modify a Trojan or some sort of a worm or something like that in-transit so that it can sort of become sterile or benign. This happened actually to a security researcher recently. And I'm not prepared to share the story because I forget all the details. But a security researcher with the recent Windows attack that was going around that was some ransomware, and it was hitting a dummy domain and making sure that domain wasn't registered. And this security researcher found that, and it was a jibberish domain. It was, you know, key. It was, you know, 512 characters, some crazy domain. And effectively what he realized, the researcher realized that this domain wasn't registered at all. And he supposed that maybe the attackers had put that in as like a sort of a kill switch that once a domain did get registered and it was a back door, once that domain did go live, that the worm would stop propagating. And he was right. So what he did was he registered the domain and the whole world rejoiced because this thing, you know, all the ransomware stopped. But little did he know that that actually he found himself in the crosshairs of the government who's, you know, basically have sort of allied him into and lumped him into a bunch with all these other bad guys effectively. And he was arrested. And so essentially, this kind of legislation is necessary to protect people like him. It would be considered active defense because it would be slowing a hacker through the deception or movement of files or in this case a domain and not necessarily hacking the attacker. So the headlines better as usual, the headlines better than actual content. But I don't know. Cybersecurity is getting really...

Brian: [01:06:59] Yeah. I think the other thing that's sort of, you mentioned subtext, but this sort of gives the feel to which is the government, isn't really equipped to...

Phillip: [01:07:15] We don't have the legal measures necessary to deal with this stuff.

Brian: [01:07:20] Right. Exactly. And that's due to a lot of things, probably namely that when we initially... This country's never seen anything like this. The world's never seen anything like this before. No one's prepared. And so only the experts that know how to handle this, and I'm not saying the government doesn't have security experts and people that can hack. I'm sure that they do. But when it comes to actually litigation in law and how people are, how hackers are handled, there's still a lot of holes in our system. And so bad people are getting away with bad things and good people are getting in trouble for things that they probably shouldn't be getting in trouble.

Phillip: [01:08:12] Yeah, exactly. Well, I don't think that... I don't know that, first of all, this is just a law that was introduced. I don't know that it will ever go any further than that.

Brian: [01:08:29] Not with a headline like that.

Phillip: [01:08:31] Not with that headline it won't. I do think we do need legal measures to protect a lot of things. Actually there a story that we didn't cover, which was Snapchat created sort of a statue, a monument, which was then later vandalized, but it was not really vandalized. In AR there was a separate AR app that you had to download to look at the Snapchat vandalism. But I think that there are some really interesting...

Brian: [01:09:07] Wait, wait, wait. Hold on there. We didn't talk about this. So I want to know this one because it's just... Did you just say something got vandalized in augmented reality?

Phillip: [01:09:14] Yes. Yeah. Oh, you didn't see the story. This was huge a few weeks ago.

Brian: [01:09:19] No, I missed that.

Phillip: [01:09:20] Yeah. Somehow it didn't make our show notes a couple weeks ago. So we never talked about it.

Brian: [01:09:30] This is amazing. This is the kind of thing I want to hear about.

Phillip: [01:09:31] We did talk about it over a MageTalk for some reason. I think because Kalen was super interested in like what even was going on. He's like, I don't understand what the problem is. It's not really vandalism if I have to download a different app. Is it really vandalism if I have to download another app? It's just a different AR experience. That's not vandalism. That's just you're using the technology in a different way. So I'm trying to pull up... I'm actually trying to pull up Snapchat vandalism...

Brian: [01:10:09] While you're doing that, speaking of Snapchat...

Phillip: [01:10:12] What's that?

Brian: [01:10:14] The news about Spectacles, essentially...

Phillip: [01:10:17] Oh, my gosh. Yes.

Brian: [01:10:19] Yeah. So it sounds like Snapchat's sitting on like hundreds of thousands of Spectacle units that are on hold.

Phillip: [01:10:25] This is according to The Verge, right?

Brian: [01:10:29] Right. Which is, you know... {laughter}

Phillip: [01:10:29] So, you know, take it, you know, take it with a grain of salt. But yeah, hundreds of thousands of I guess Snap Spectacles. Right? They're just hundreds of thousands of these that are unsold that they've got to get rid of somehow. Yeah. They still haven't come up with a second product. Supposedly there was gonna be a drone at one point. I don't know if you remember that.

Brian: [01:10:59] I don't remember that. What are they gonna do with them? They're gonna like...

Phillip: [01:11:04] They're gonna be buried in a landfill next to all those Atari E.T. games out in the desert somewhere.

Brian: [01:11:12] Atari {laughter}

Phillip: [01:11:12] Do you remember that? The Atari E.T game?

Brian: [01:11:15] Yes.

Phillip: [01:11:15] Yeah. That was... I actually owned that game, which was fun, actually. I just pasted it into the chat. So there was a few weeks ago there was some virtual art that Snapchat had created, which was I guess basically a you know, like a a balloon animal of some kind. Anyway, it was a Jeff Koons sculpture. And so what had happened was somebody went through CrossLabs AR app and they basically recreated the exact sculpture, but then put graffiti over top of it and was more of making a public statement than anything else. They just created the same exact 3D model. They put it in the same exact place. You had to download a different app fundamentally to see it. They're calling it vandalism. It is not truly vandalism in the sense that somebody vandalized the Snapchat version. But I think it does bring up an interesting point, which is at some point somebody's being able to to label a particular physical location or place objects into a physical location, regardless of the audience, regardless of the size of the app or the ubiquity of the app, if it is a sort of morally distasteful or hate speech or violent image, do we want that at all? And we have no means or no legal means of protecting ourselves from those things happening. And that's why I think that we'll probably see regulation in this regard much swifter than we would for something like, you know, hacking someone back who's trying to hack you.

Brian: [01:13:08] Yeah, I don't think so. I don't think we're going to see regulations around this as much. I think it's going to be too hard to regulate. I would argue that this is gonna become the norm where people are going to do a subversive things and build on things and in augmented reality, in different spaces throughout the world and sort of layer on top of each other. I think that's gonna happen a lot. I think there's gonna be definitely like you mentioned, this is an additional app that you had to download. I expect it to be things like that. This isn't going to happen within Snapchat's native app. But I do think a lot of things like this are going to happen. And there will be entire worlds upon worlds, lenses upon lenses, you know, whatever you want to call it, that are going to happen. And it's going to be very little anyone can do about it.

Phillip: [01:14:16] And on that bleak note... I think you're right. I think we're going to have to see it. You know, I guess we have to wait and see for the future all the time. But I think that it's interesting to see what we prioritize as broadly affecting the safety of the American consumer. I think we mentioned a couple episodes ago that the SEC is actually filing an investigation into Blockchain and potentially regulating Blockchain because it poses a financial threat to American consumers. I mean, really. It's interesting what we place the value on when it comes down to dollars and cents. I think just like in the realm of when Google changes their algorithm, then retailers take notice. It's like whatever is going to make me rank is now the most important thing for me to do. It doesn't matter what it is. And I think that it's the same. If it makes if it makes us money, then it's important. It loses us money, then it's even more important.

Brian: [01:15:31] Yeah.

Phillip: [01:15:31] That's what it's going to come down to. That's what we'll draft legislation around.

Brian: [01:15:36] That's probably true. I agree with that. All right. I think that's probably it for today. That was a lot.

Phillip: [01:15:42] Is that it? An hour and 20 minutes? That wasn't enough for you?

Brian: [01:15:45] Yeah. You know, just an hour and 20 minutes.

Phillip: [01:15:47] That was beautiful though.

Brian: [01:15:49] That was fun. It was good. We got into stuff I didn't even expect to get into. Like so much stuff I didn't expect to get into.

Phillip: [01:15:55] I know.

Brian: [01:15:55] That was awesome.

Phillip: [01:15:55] This might be my new favorite episode. I really liked it. My jean jacket story.

Brian: [01:16:00] Jean jacket start. That's the only reason that's your favorite episode.

Phillip: [01:16:03] It's the only reason why this was and hour and 20 minutes.

Brian: [01:16:06] Exactly. Yes. Well, thanks for listening to Future Commerce. We want you to give us your feedback about today's show. So please leave us some feedback in the Disqus comment box on our site or on Twitter or LinkedIn or wherever you can find us. Direct email. Whatever it is. If you're subscribed on iTunes, as always, as we always tell you, please leave us a five star review. You can also subscribe to listen to Future Commerce on iTunes and Google Play or listen right now from your Amazon Echo with the phrase "Alexa play Future Commerce podcast." And please, please, please, if you like this kind of content, and you like thinking about what's next in commerce and in the future of commerce, then please subscribe to FC Insiders. The next content that's coming is definitely worth your subscription.

Phillip: [01:17:02] We can't overhype it enough. Go now. Sign up.

Brian: [01:17:08] Right on our homepage.

Phillip: [01:17:10] Do it.

Brian: [01:17:11] It's at the very top of the web site. You cannot miss it.

Phillip: [01:17:14] It says FC Insiders. I mean, just do it. That's it.

Brian: [01:17:19] I'm not going to spell it. I'm not going to spell it.

Phillip: [01:17:23] {laughter}

Brian: [01:17:23] With that... Keep looking towards the future.

Phillip: [01:17:25] Peace.

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