← The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
457. Proximity: Redefining Business and Innovation in a Digital Age
00:43:50
In this episode of The Brainy Business podcast, host Melina Palmer welcomes Dr. Rob Wolcott and Kaihan Krippendorff, co-authors of the book Proximity. Rob, an adjunct professor of Innovation at both the Booth School of Business and Kellogg School of...
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- [00:00]
Melina Palmer
Hey there Melina.
- [00:01]
Rob Wolcott
Here I'm excited to share.
- [00:03]
Melina Palmer
I'm teaching two virtual courses in Applied Behavioral Economics which are enrolling now. Advanced concepts of Behavioral Economics and Internal Communication and Change Management.
- [00:15]
Rob Wolcott
So if you're interested, don't delay, learn more and enroll at HBL. Like Human Behavior Lab.tamu like Texas A&M University edu. Again, that's HBL.tamu edu and click on.
- [00:34]
Melina Palmer
Certificate program when you're ready. Let's start the show welcome to episode 457 of the Brainy Business Understanding the Psychology of why People Buy. In today's episode, I'm excited to introduce you to Dr. Rob Wolcott and Kaihan Krippendorf, co authors of Proximity. Ready? Let's get started.
- [01:02]
Kaihan Krippendorf
You are listening to the Brainy Business Podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now here's your host, Melina Palmer.
- [01:17]
Melina Palmer
Hello hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. In today's conversation, I'm joined by Rob Wolcott and Kai Han Krippendorf, co authors of Proximity. Rob is Adjunct professor of Innovation at the Booth School of Business, University of Chicago, and Adjunct professor of Executive Education at the Kellogg School of Management, Northwestern University. Between 2007 and 2019, he served as Clinical professor of Innovation and Entrepreneurship at Kellogg. He won Teacher of the year from Kellogg's EMBA program in 2013, 2014, 2015 and 20. A visiting fellow at Imperial College Business School in London, he is co founder and Chair of Twin Global, a global community of over 3,000 innovation leaders from over 30 countries and across sectors including business, government, the arts, academia, and defense. An early stage investor in nearly 30 companies and funds, he is also a board member of Clario, a strategy consultancy focused on the global energy transition, resources mining, food and agriculture industries, human Transformation Platform Abroad, I.O. and Global Non Profit, HCP Cure Blindness, Himalayan Cataract Project. He is also an Advisory Board member for Open Innovation Lab of Norway, Magic Cube, Startup, Wind and other ventures. Rob is a contributor to Forbes on the impact of technology on business, society and humanity, and his work has appeared in publications such as mit, Sloan Management Review, Strategy plus Business, the Harvard Business Review, the Wall Street Journal, and more. And that is just the first of these two amazing guests today. Kaihan is the CEO of Outthinker Networks, a global think tank comprised of corporate strategists, innovators and entrepreneurs shaping the future of business A sought after management author and keynote speaker, Kaihan is an innovation catalyst to business leaders and CXOs of some of the world's admired companies. He's recognized by Thinkers50 as one of the top innovation thought leaders in the world and helps organizations generate breakthrough ideas that drive transformation and achieve long term growth in our accelerated world of change. Really quickly. Before we start talking about proximity, I want to be sure you know that there are links in the show notes for my top related past episodes and books, ways to get in touch with Rob and Kaihan and myself. It's all within the app you're listening to and at the brainy business.com/457. Now let's jump right in. Rob Kaihan, welcome to the Brainy Business podcast.
- [04:17]
Kaihan Krippendorf
Great to be here. Thanks Melina.
- [04:19]
Rob Wolcott
Great to be here. Thank you for having us.
- [04:21]
Melina Palmer
Yes.
- [04:22]
Rob Wolcott
So excited. So for those who don't yet know you would love if you could share a little bit about yourselves and the work that you do, we'll go ahead and we'll start with Rob.
- [04:33]
Kaihan Krippendorf
Great. Thanks Melina. Great, great to be here. I watched a couple of your. Your other podcast is really, really neat. So Rob Walcott, I'm an adjunct professor of innovation at the Kellogg School and the Booth School at Northwestern University of Chicago. I focus on innovation strategy and management and established organizations, enterprises, governments. I also invest a lot in technology startups and then have a community called the World Innovation Network or Twin Global. We could talk about if it's relevant.
- [05:03]
Rob Wolcott
Awesome.
- [05:04]
And Kaihan, my wife finally gave me a name for what I do. She calls me a for profit academic. I do research, I write books and I monetize that by giving talks and workshops. And then I also am the founder of Out Thinker Networks which is a peer network of heads of strategy and heads of innovation of large enterprises.
- [05:28]
Melina Palmer
Fantastic.
- [05:30]
Rob Wolcott
And so in the world of the brainy business, right, for profit makes sense, you know, around here. So how did you get into proximity as a concept like who approached whom on the book? Have you, have y'all co authored on things before this was your first time working together?
- [05:47]
Kaihan Krippendorf
Well, I mean the person, the credit where credit's due. Jill Hellman, a good common friend of ours said before COVID she said, you know, you two have to meet. I don't know why but stuff's going to happen. So she was right. But where proximity came from was I was at a tech conference in 2014 and Melina, I'm sure you've been to a lot of tech conferences and what you noticed probably What I noticed is the second speaker sounds like the first, the third speaker sounds like the second, the fourth speaker sounds like the third. And I thought, you know, we've got to be able to do some do better in terms of foresight for the future. Where are things going? And so I posed a question to myself at that session. I said, what is fundamentally different about all things digital compared to the industrial age? So what are the fundamental differences of digital and digitally enabled technologies of all sorts compared to industrial? And what I quickly realized was digital allows us to compress capabilities in smaller and smaller packages and distribute them all over the economy ever closer to each moment in time and space. And so therefore, digital will compel the creation of value ever closer to the moment of demand. And that's predictive. This is predictive of where every industry is going the rest of our careers. And we can talk more about it in a minute. And then Covid hit and I'd been working on this for a few years, was just starting to formulate the idea for a book, and Kaihan reached out about a program that out Thinker was doing. And Kaihan wanted you to take it from there.
- [07:20]
Rob Wolcott
Yeah, Covid hit and we were figuring out what do we do, in part because I wasn't traveling anymore. And then it occurred to me that a lot of speakers aren't traveling anymore and that a lot of people can use help. So we thought, why don't we have a summit in which we get all of these thought leaders, like the best of the best thought leaders and their domains. And we did 24 speakers and 24 hour summit raising money. We did this with Thinkers50 raising money for Covid charities. And, and Rob was one of our speakers and we had this great guy working with, he was a, he was a data visualization person that worked at PVH or something like that. And he somehow sucked in all this information from Zoom and did these amazing graphs and the, the word that was most frequently mentioned, I'm saying, you know, we had Renee Mauber in there talking about Blue Ocean. We had Amy Edmondson talking about psychological safety, right? The number one word was proximity. And in my methodology, in my belief, I believe every strategic concept since the history of time is a language tool that helps us see and choose options. And proximity had this profound stickiness. And if you sit with it, it helps you see options that you did. It's like, what before 1980, what did. No one had the term competitive advantage, right? Because Michael Porter made that up. Before 1990, nobody had disruptive innovation and I think the proximity when I, When Rob shared that, I was like, you know, this could be that kind of concept. So when he invited me to collaborate with him, you know, I jumped at the chance.
- [09:08]
Hmm. And so people were naturally. Did someone. So someone talked about proximity specifically, and then it was sticking with people throughout the. The talk. That guy you said that did the zoom data. Rob, you did?
- [09:20]
Kaihan Krippendorf
Yeah, Melina. I presented proximity on Kaihan's outthinker 24 hour thing. And they had thousands of people around the world and they were chatting as we all do, and the word that just kept coming up in the chat through the day after that session was proximity. And people were reflecting on it. But remember at that time, Alina, everybody was thrust into their home offices doing things on a screen. And I remember at that point somebody, a good friend of mine said, well, Rob, what we're doing right now, that doesn't feel proximate because, you know, I'm in. You're in Evanston, Illinois, where Northwestern is at that time, and he was in Europe. And I said, no, wait a minute. Actually, it's the opposite. It's exactly proximate. Why is that? Because you're sitting in Europe and that. That doesn't really matter. I'm. I'm in Evanston. We're on the same screen. So the value is being created proximate to wherever we are. Just like right now, Melina, you're here in the US as am I, Kayhan's in India, and we're able to have this live conversation. That's proximity.
- [10:23]
Rob Wolcott
I love that. And in the world of silver linings. Right. As we all the time. But that we don't love that Covid existed or any of that. Right. But then the. And I know you talk about it in the book of we don't like to take on, you know, new changes or things often unless we're kind of thrust into them where we don't have another option. So, you know, the zoom technologies and video conferencing was something that existed but people didn't do. I love in the book, say something about, like, it's just because Jim happens to be on the road and he's going to be in there, but, like, nobody's going to talk or listen to.
- [11:00]
Kaihan Krippendorf
Jim, so it doesn't really matter because he's on. Remember those things, the video conferencing thing in the center of the table that no one paid any attention. Somebody would pipe up and they go, what? Where's that coming? Oh, yeah.
- [11:14]
Rob Wolcott
Yes.
- [11:16]
Kaihan Krippendorf
We're all Jim?
- [11:20]
Rob Wolcott
Yes. So I know from going through the book with proximity, you break it into these different ways of how we work and how we power and lots of really cool examples in there. Can you share a little bit though, for people that aren't yet familiar with this even idea of proximity and what it would mean for the future, where all of our futures are going to be more and more proximate, as you were saying, and I'm now more very acutely aware of from reading the book, you know, what is proximity as it applies to life and business?
- [11:55]
Kaihan Krippendorf
Yeah. So I'll start. Kaihan's actually been doing a lot of workshops with executives about what this means for them, so I can ask him to opine on that for a moment. But the basic idea is because digital allows us to distribute all sorts of capabilities ever closer to each moment of demand. So whether that's 3D printing or AI, mobile apps, rooftop, solar, anything that's digitally enabled, because those various capabilities come closer and closer to each moment, that allows us companies, consumers, governments, anybody to create, do things we could never have done before for. And you get the ability, in fact, we're encouraged to procrastinate. Proximity models encourage us to wait as long as possible until there's an actual user with a specific need set and then you produce and provide that value at that exact moment. And that's the direction we're going. In every industry, obviously it looks very different in power than it does in food, than it does in, in producing products. It all looks different, but it's all going that direction. So proximity is a predictive concept. You can say now that I know that value will be produced and provided ever closer to the moment of demand. You can take your own industry, your own company, and think out say 10 years and say if the value that I'm currently providing is being produced and provided at the moment of demand, in 10 years, how might the world look? And you can start to predict where things are going. We can give you lots of examples. I'll give one that we all know very well and that's video streaming. So that's sort of obvious. You think, because that's all digital content and digital moves at the speed of light. Right. But before video streaming, before Netflix, for the most part, you didn't really have proximity in the provision of content. Today we have proximity everywhere. Anything, anywhere, anytime. That's sort of the tagline for the book. You can watch whatever video you want anywhere, anytime. By the way, Kaihan and I are not saying that's nirvana. I mean you can spend a lot of time binge watching the Kardashians, but, you know, nothing against the Kardashians, so set that aside. But the production of video content is still not proximate. In most cases, it was produced months ago, maybe even decades ago. But where are we now? Molina? We're at the knee of a curve for generative AI. So with things like Sora, you can create custom video content real time, in the moment. And so as Kyan and I talk about in the book five years, 10 years, 15 years from now, we're trending toward a moment where video content experiences will be created for an audience of one in the moment. And by the way, we know that's where it's going to go. It's not like, well, I wonder if one day, no, this will happen. I can't tell you here, or if it's 20 years from now. This is definitely where we're going. And so it becomes predictive. Kaihan, you've been working with a lot of companies and thinking this through. What are some things you've found?
- [15:07]
Rob Wolcott
Yeah, I was just thinking, I was just visiting a drone factory here in Mumbai this morning, and they've kind of built the local industry for, for drones. And they've got like four or five different types of drones and they've got wide wings and short wings and different things depending on what the mission is. And what they do is they pull together the parts. Think about value as created when you pull the parts together in a configuration that's useful for a particular need. Now, the US Military also has a drone program that, that Rob uncovered and we researched a bit in the book. And what they do is they build a drone for particular use, but they don't build it in a factory, they build it in the field. And they don't build it out of parts. They build the parts or most of the parts through a 3D printer. And they don't design, they don't build it to a design that was made before. They use AI on the field to design the, to design the design. And so they get there and let's say they have to get some kind of drugs to a soldier on the other side of a mountain. And the mountain is a certain height and the wind is a certain speed. And so it needs to have just the right length of wing in order to have the lift to get over and just the, and to carry the right weight of payload. And the battery pack has to be, they can, in 24 hours, they can design it. And 3D print it and assemble it right there. So that, I think, is a great example of proximity. The parts are coming, the molecules are coming together closer to when it's needed and where it's needed.
- [16:54]
I loved all those examples. And of course, you're talking about, you know, as we look at space exploration and thinking back to, you know, even, you know, Apollo 13 and the square peg, round hole problem, it's like, not.
- [17:08]
Melina Palmer
Even an issue if we can print.
- [17:10]
Rob Wolcott
The thing while we're here, right. And we can send you the specs of what it is that you need to create to solve this, you know, scrubbing issue that you have for the, you know, CO2 scrubbers. Right. And so when you're able to think about, you know, what's happening in the moment, the other thing that really stuck with me, and I'm guessing this is why it's an example you put at the very beginning of the book. But the idea of prescriptions and medications, I think, is such a great one of being able to see and understand the problem of, you know, my local Walgreens has to have a gajillion million things on hand just in case, and things will go bad, like medications expire, and what if I'm in a remote area and if there's a war zone or an issue, it's hard to get those things to people. And so understanding what people are doing to be able to solve that problem, I think is such a great example of the power of proximity.
- [18:09]
Kaihan Krippendorf
Well, that. That is one of our favorite examples in the book. And Dr. Jeffrey Lang was a former medical doctor with the Army. He spent six tours of duty in the Middle East. And you can read about the larger story online or in the book. And. But the punchline is they kept running out of generic drugs in a war zone. And so Dr. Ling said, this is ridiculous. Generic drugs are made of carbon, hydrogen and oxygen. If I had the right chemistry set, I could make the drug myself right here. So we went back to the United States, got a big grant from darpa, worked with a team from MIT and also Dean Kamen's team, and they did it. And if you look it up, it's called On Demand Pharmaceuticals. It's a separate company now. The military is using the technology at small scale, but it's had its first commercial implementation in Tupelo, Mississippi, in January. Even since we finished the manuscript for the book and since they switched on the system targeted for six injectables, by the way, because after all, it's healthcare. We've gotta move slowly, not make too many mistakes. But since they switched on the system in January, that health system has had zero stockouts of those critical drugs. And that's the first time in their history as a health system that that's the case. So what this does is like you said, if, if you need thousands of different drugs and inventory and they have shelf lives and we throw them out, we have to make them new. There are so many industries with mind blowing waste apparel, something like 30 some percent of all clothing produced every year in the world goes directly to landfill. I don't wear it and throw it out. It just never gets to a consumer. Food obviously notoriously wasteful because of extended supply chains and shelf life and all that. What if we could postpone the production of garments or drugs or bring food production closer to where, exactly where it's needed. That's proximity. And in the long run proximity will win because of it. Dramatically more responsive and it's dramatically more efficient.
- [20:15]
Rob Wolcott
Yeah. And yeah, Dean Kamen's team before working on that work with Coca Cola to create the freestyle machine which is based off the same technology of micro dosing and micro liquid technologies that and, and, and the principle's the same. Right. The value get is the combining of. So you go up to the machine and you hit I want a diet caffeine free cherry vanilla Sprite. And they could have bottled that months ahead of time in a bottling plant far away and tried to find the one person that would want that, but they didn't have to. They waited until that moment that there was someone and they combined the soda with the syrup there, thankfully.
- [21:03]
Kaihan Krippendorf
Because I'm not sure who would want that soda. Yeah, but you know, that's really, that's really our point. That's really our point. There's nobody in the demand planning team at Coca Cola who's ever tried to figure out how many of those somebody's going to want in Tupelo, Mississippi but now they don't have to. By the way, Kaihan, I think that was the team at MIT that worked with Coca Cola.
- [21:26]
Rob Wolcott
Yeah, you're right. I looked it up. It's actually Dean's company that worked with Coca Cola. I couldn't find the linkage of him working with the MIT team.
- [21:34]
Kaihan Krippendorf
Oh, I see. Okay, all right, fair enough.
- [21:36]
Rob Wolcott
Yeah, perfect. Well, and I'm assuming that there's some sort of technology in there that they are able to see if for some reason everyone starts buying that caffeine free Diet Coke or Sprite with cherry vanilla. Right. Whatever it was you're saying on there you say, hey, maybe we should make this thing right. We want to bottle it because everybody seems to like it.
- [22:01]
Kaihan Krippendorf
You know what, Melina, you've hit a strategic opportunity on the nose, which is the more you have these sensing mechanisms, seeing the decisions people are making, seeing what they desire, the more you have visibility across the ecosystem. Not just your own products, but also as Kaihan talks a lot about how you need to bring your supplier networks together and all this, the more visibility you have across the ecosystem to bring this value to consumers or customers, the more responsive you can be. Long run. So to your point, Coca Cola could be watching and say, hey, we keep getting this weird configuration, but a lot of people are ordering it. You know what, maybe we should experiment with bringing a product out at scale through traditional means. And that's an opportunity to do the traditional things in new ways.
- [22:49]
Melina Palmer
Right.
- [22:50]
Rob Wolcott
And in a way that you're able to kind of spot test by organic user decision making and being able to look and say, okay, there's a influencer said this is their favorite drink and we think they're, you know, at the peak of their curve. So, like, we don't need to deal with that because it was a challenge and it's going to go away and we shouldn't invest in that thing. Or you see, okay, this is gaining some traction. People love this, so let's go bottle it. Right? But you can kind of see how things start popping up in a business. Rob, we were talking about before we started recording about the, what I saw as, you know, real overarching theme in the book that ties into things I talk about with the audience all the time. And in my own books, the, this idea of thinking like taking a step back and looking at your problems in a new way. And I really appreciated that in the book you have examples of, you know, when you build for the. You talked about on the battlefield, right? So you're building for the last battle and not what's coming. Or you're building on the grid that was built 100 years ago and not for the technology that we're going to have in 10 or 20 or 100 years from now or even in one year, one minute from now.
- [24:07]
Kaihan Krippendorf
Yeah, that's a critical point, Melina. I think people have a tendency to see the new technology. It's not that they don't see it, they'll see it and they'll say, what can we do with this? To be a little better at what we already do. And that's fine, but that's not enough. What you have to do, especially with some of the things coming out these days, is what can this technology allow me to do that I could never have done before? And when you realize what that is like, just think generative AI. There are so many opportunities, things we could never have done before that now we can. And you can't achieve the value or remain competitive if all you're doing is tweaking your existing supply chain, your existing platforms, your existing business model, et cetera. You've got to say what's going to be possible in the next few years to totally change the game and then find steps you can take in the near term to start to make that real.
- [25:02]
Rob Wolcott
Yeah, and I think that like what I've been, as I've been facilitating sessions on, I think like the, it's almost like right in your face and you can't get your head around it. Think about this. Google came to dominate. Alibaba came to dominate, Amazon came to dominate, Baidu came to dominate. All by helping people search for content and things that were already there. So let's take Google and Amazon and let's take Baidu and Alibaba. It's search. What we're talking about is beyond search, the inquiry, whether conscious, pressing the buttons or unconscious. I'm just, you're just observing me. It is triggering the creation of things that weren't yet made. And I don't think we can get our head around that because our whole, the whole like from the dot com boom to today has been all about digitizing and being able to connect people with stuff that's already been made. And I think we're about to go beyond that. And so it's hard for us to really conceptualize what the implications really are.
- [26:11]
Kaihan Krippendorf
Well said.
- [26:12]
Rob Wolcott
So it's hard for us to wrap our heads around that, of course. And if we're going to try to nudge our listeners to kind of start thinking that way. Let's say they work at a legacy brand, right? Whether it's a, a large organization or a smaller one. But we'll say, you know, one of those that's been around for 20, 50, 100 years. A brand that they're at, that has some legacy there, but they're needing to look into the future of what might exist for them. Maybe they're going to be co creating some stuff, you know, where would you suggest they start to make sure they're preparing for what's coming without abandoning what's gotten them to where they are?
- [26:51]
Kaihan Krippendorf
Well, one of the things we point out a Lot is as an incumbent, as an established company, we need to think about what do we really need to build brand new. And by the, by the way, we don't necessarily mean you have to do it by yourself. You could find partners, you can use platforms, whatever, what has to really be built brand new and what can you leverage from your legacy? And usually established players have value and what they've done for many years. And it could be their customer base, it could be their brand, it could be some of their content or their, their platforms, their distributed facilities, whatever it is, what can you leverage and also do brand new? So a simple example. We all know when Disney got into streaming, they had to build the streaming capability from scratch. Now obviously they used partners. I'm not saying they did it all by themselves, but it was new. On the other hand, their content, they have the, the best entertainment IP library in the world. So they were leveraging that established content, but also building something brand new. Another physical example would be Generac, which we talk about in the book. Now, being from the Midwest originally, I love finding companies that are, you know, middle of Wisconsin making very traditional products, but they're doing really exciting, cool stuff. So Generac makes standby generators and I'm sure many of your listeners have it if, if your power goes out, your ice cream doesn't melt. So, you know, not super exciting. But what the new CEO about eight years ago, Aaron Yogfeld realized was, hey, you know what, what we have with these standby generators are distributed energy resources and DERs, whether that's solar, rooftop, small scale wind, increasingly small scale nuclear, you're starting to see pop up here and there. These are distributed energy resources. So he said, you know what, we already have distributed energy resources backup generators. We need to become a leader in managing DERs in the future. That's their long term vision. And so they continue to make backup generators. Of course, that's their core. But alongside that, they're building a new platform within Generac to help people manage distributed energy resources. And it's, they're designing a completely new business to do that. So it's very exciting to find examples like that. There are many other examples I could give you.
- [29:18]
Rob Wolcott
I thought UPS with the specific parts and understanding their distribution was a good one. Can you share that example a little bit from that?
- [29:27]
Kaihan Krippendorf
Well, briefly, they early on recognized that 3D printing could be great for them. People think the opposite. Well, no, they won't transport as much. In fact, that's not the case. If more and more people are making just a Few copies of something and they need to send it somewhere, then that's a lot more little brown packages. So you're talking about UPS's investment in what at the time was Cloud DDM and then became. Oh, I forget the name of the company.
- [29:56]
Rob Wolcott
Something awesome that exists.
- [29:58]
Kaihan Krippendorf
Something awesome. But that company was then acquired by somebody else. So it still exists, but it's been acquired yet again by a larger company. But UPS was not trying to get into the 3D printing market. That wasn't their play. They wanted to understand it and help to seed it because they saw a future where people would need to send more and more little brown packages, and that's where they make lots of money. So you can. You can figure out a whole variety of plays. Kihan does some. Some great workshops where he helps. We both do this, but Kihan's been doing more of it where you really get in and say, what are some barriers to proximity in your own space? And then what are some actions you can take near term to make that happen?
- [30:43]
Rob Wolcott
Yeah, yeah. So, yeah, I think that there's. Well, there's kind of four capabilities and four steps. The four steps are actually like, pretty simple. Step one, number one, envision P equals zero. Envision in your industry that somebody wants a banana. And that banana is not only delivered right there, it's grown, seed, it's seeded, grown, peeled. After being ripened, it's cut, it's processed, and it's put into your mouth like seconds before you realize that you want a banana, right? That. Step number two is break down all the barriers to that. Well, it takes six months to grow a banana. It's grown far away. You have to ship it. It takes this long to ripen it. Then we have to peel it, and you got to cut it. That takes this time. And then you have to get FDA approval to, like, have it, whatever, monitor then. And all of those are opportunities, right? Then you take each of those and you take a look at some of the proximity technologies, whether that's 3D printing or that's AI or API or micro dosing or automation, all those, and just take each one and say for each of these barriers, which could we potentially solve with one of these technologies that gives you a bunch of opportunities. We can get the plant to ripen more quickly by putting it in a controlled environment, you know, farm, like a vertical farm, and then we can shorten the time. What would that do for proximity? And the beautiful thing is you don't need a lot for proximity. Think about, you know, Domino's Beats like all the other pizza places because they get their pizza a little bit there faster. A little bit. A little bit faster. Right. Why does, why does Uber beat taxis? Because they got your car there 30 seconds faster. It doesn't take a lot of proximity. So if you can get that, that six months down to three months, maybe that makes a difference. And then you come up with these opportunities and then you prioritize them and then you start executing against them. And so there's like these, this systematic way of exploring that. And it starts with this envisioning P equals zero. We found that to be really compelling vision.
- [32:43]
Kaihan Krippendorf
Yeah. By the way, Molina, P equals zero, you'll remember from the book, but for your listeners, P equals 0 is this hypothetical notion in the future, this point in the future where any sort of value is produced and provided at that exact moment and not before. And in some things, like video streaming provision, as we said, we're already at p equals 0. But in other things we're not. But that's the direction. And you think in terms of that hypothetical future where bananas can be created and processed and provided all at the moment of demand in the future. And then you work backwards from that. Do what some people call back casting.
- [33:21]
Rob Wolcott
Well, and even I thought it was fascinating to read about 3D printing meat, you know, which go nuh. Right. Like how does that even work? But, but then, you know, reading about or even like I think there was something having to do with salmon and like growing the, the meat like the. So when you start to think about that problem in a different way and you're saying it's the, the texture and how you're like printing the layers of meat and it's not that. Maybe it's just me, but when I think about 3D printing, I'm just thinking it's just plastic.
- [33:54]
Melina Palmer
Right.
- [33:55]
Rob Wolcott
We're just, that's all we have to 3D print with. But I was definitely not thinking far enough along of all the things that can be used to 3D print.
- [34:04]
Kaihan Krippendorf
Actually, that's a perfect example. When you think about cultured meat, I would ignore the whole 3D printing thing. I mean, that might confuse people. They are using it to create textures and to create layers of meat. Set that all aside. What's going on with cultivated meat is these are not meat substitutes. These are actual muscle cells from animals where you can grow the muscle cells in a laboratory sort of environment and there are no animals involved at all. There are no ethical issues. There are no supply chain issues. Very limited. You don't need Think about if you want to grow beef today, you need thousands of acres. You need to spend 18 months growing the cattle, then you need to send them for slaughter. You know, set aside the ethical issues, the environmental issues, all the methane emissions, etc. Well, with cultured meat, and we talk about visit I made to Israel in early 2023 to visit Aleph Farms. It's a, it's a room, I don't know, about the size of the first floor of your house. And they're actually producing real meat tissue, real meat cells in that facility. Now here's the thing. A lot of people will say, oh, that's not working, it's way too expensive. Well, yeah, that's true. But guess what happens with new technologies over time? They get better and better and better and eventually they transition in and change the game. And here's the punchline. For cultivated meat, you don't need the thousands of acres anymore. Once it works, you need small footprints right in urban areas, wherever the demand exists. And you can highly customize each of those products. Aleph is working with some celebrity chefs to design their own beef, for instance. And when this eventually works, the only person allowed by intellectual property rights to use that specific style of beef will be that one chef. And then he or she owns that, that as intellectual property. That's something we could never have done before. And so that's an example of the medium, long to medium term sort of proximity that's coming for agriculture.
- [36:14]
Rob Wolcott
Fascinating. With the scarcity and the exclusivity that comes from that. As we look at the behavioral science aspects of. And just even in that way, when you think about the value to those chefs, to know that there's a standardization and what it is that they're getting that you can plan for in a different way, lots of really cool value points that might not, like I said, weren't even possible as you're working with actual animals.
- [36:39]
Kaihan Krippendorf
That's exactly right.
- [36:40]
Melina Palmer
Fascinating.
- [36:41]
Rob Wolcott
Well, as we look to wrap up the conversation, there's so much amazing things, so many amazing things for people to learn about proximity and opportunities for their businesses and just what's coming in our lives in the next, like you said, 1 year, 5 year, 10 years, however, however long. And so if there was one more thing that you think would be really important for people to be thinking about as they're planning for those futures, you know, what would, what would you want people to be considered about when it comes to proximity?
- [37:11]
Kaihan Krippendorf
Kyun, you want to start?
- [37:13]
Rob Wolcott
Yeah, I would say, like, as I've been working with it more and applying it more. I think there are really kind of three capabilities that you need to build to be able to prepare for this. Number one is to turn your physical customer to a digital customer so you've got ongoing digital interactions with them. You need to be able to take your product and start breaking it apart into parts so you can con figure it in different ways. Like don't sell a Lego castle, sell the Lego pieces and then start getting your head around not making it until you have an order in hand and start preparing your systems for that. I think those are three requisite capabilities that are going to position you for proximity whenever the flip happens in your industry.
- [37:59]
Love it.
- [38:00]
Kaihan Krippendorf
Yeah, great. And I'll build on that. I actually have two Melina. One is very practical. It sort of builds off what Kaihan was just talking about. The other one is just super crazy. But the practical one is Kaihan and I wrote an appendix to the book. And the appendix is a proximity strategy workbook. So it has some methodologies, some charts and graphs, things you can fill in, questions you can ask about your own business and where it might go in the future. And it's a great way to get started visualizing what proximity means for you and your customers. But the crazy one that I love so much, and it's part of the reason Kahan and I have the confidence to say proximity is where everything's going. The rest of our careers is the concluding chapter, and that's about virtual reality and space. These are both the two horizons of the 21st century for humanity. We've never been there before, not really. And they're both 100% proximate. What do we mean by that? Well, virtual reality, as it gets better and better. And we're not talking about you've got the goggles on, and we're talking about 5 years, 10 years, 20 years, 30 years as the goggles disappear. And you have brain machine interfaces and you can have any experience visceral, anytime, anywhere. We call this, by the way, the post virtual world. You can read about it in the book. But in that future world, you can not have your cakes and eat them too. Think about the implication of that. That means you can have any experience anytime, anywhere, and that's proximity. But even more tangible is space. If you're on a spaceship for seven months to Mars, you've only got what's on the spaceship. You absolutely have nothing else. So therefore, all the research and development going on worldwide to help humans thrive in space is driving toward proximity to be able to do anything, anywhere, anytime. And so that's why we know this is where the future is going, regardless of what industry or aspect of your life we're talking about.
- [40:05]
Rob Wolcott
I love it and I'm excited for space. I will say I'm more excited for.
- [40:10]
Melina Palmer
The experience of eating the cake without.
- [40:12]
Rob Wolcott
The calories or it feels like I'm eating cake but I'm actually eating Brussels sprouts or something like that. Sounds delightful. I am, I'm all in for that technology.
- [40:23]
Kaihan Krippendorf
By the way, I love Brussels sprouts too. So, you know, I could have my cake and my Brussels sprouts.
- [40:29]
Rob Wolcott
You know, that's. That's your dream. That's probably my husband's dream. I'm one that's not a Brussels sprouts fan myself. Well, Rob Kaihan, thank you so much for joining me today in our proximate conversation from around the world as we were able to be virtual together today to talk about proximity. We will of course have links in the show, notes to find you both on LinkedIn to get for everyone to get their own copy of Proximity and maybe one for a friend. Is there anywhere else where people should go to follow or connect or learn more?
- [41:04]
Kaihan Krippendorf
I'm always on LinkedIn. Connect with me there. Let me know that we met on Brainy Biz because of course we didn't, but let me know and you can always find out about the book@proximitybook.net LinkedIn.
- [41:18]
Rob Wolcott
Is good for me too.
- [41:20]
Awesome. Well, thank you both again so much. It's been delightful to chat with you here today.
- [41:25]
Thank you.
- [41:26]
Kaihan Krippendorf
Thanks Melina.
- [41:28]
Melina Palmer
Thank you again to Rob and Kaihan for joining me on the show today. What got your brain buzzing in today's conversation? For me, I find the idea of proximity to be fascinating and this new view of all the fields around us that we need to be thinking more proximate in everything we do. How by being more proximate we can actually be more customized while also being more sustainable. It's amazing and so wonderful to see the cool things people are around the world to change things for the better. That example of the medicines and war zones is one that has really stuck with me since reading Proximity. I love that by stepping back and thinking about a problem in a new way, you can find a solution that makes so much more sense today and into the future. Now we don't have to pre make all the medicines and send them to sit in storage and hope someone orders them. What if they can be created safely on site when someone needs needs them from simple materials. It's just amazing. I'll say it again, it's amazing. The key thing that sticks with me is to not build for the future on an infrastructure that was created sometimes hundreds of years ago. You don't have to be bound by what was when dreaming up what can be. We barely scratched the surface of all the amazing things already being done in businesses that are profiled in the book Proximity. It has chapters on what proximity is, of course, but then looking at how we work, how we eat, how we prevent and cure, how we create and produce, how we power, how we defend, and finally, how this all applies to space, virtual worlds and living the lives we desire. I highly recommend this book. It changed my thinking and I bet it will do the same for you. What are you feeling inspired to get more proximate about? Come share it with us on social media. You'll find me as the Brainy Biz pretty much everywhere and as Melina Palmer on LinkedIn. And of course there are links to make it easy to connect with Rob and Kaihan as well in the show notes, along with my top related past episodes and books, including Proximity, of course, and more. It's all waiting for you in the app you're listening to and@the brainybusiness.com 457 and thank you again to Rob Walcott and Kaihan Krippendorf for joining me on the show today. It was a delight to chat with and learn from you. Join me Tuesday for another Brainy episode of the Brainy Business Podcast. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me, and remember to be thoughtful.
- [44:12]
Kaihan Krippendorf
Thank you for listening to the Brainy Business Podcast. Melina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.