Second Orders

There are few things in the world that surprise me intellectually as much as thinking about second order effects. Specifically second order effects of emerging technologies. Thinking deeply about it, I realized that our lives are more impacted by the second orders of the latest tech instead of the tech itself.

For example, washing machines freed up 2-3 hours each day for women increasing their participation in the economy which led to more employment and productivity boost for the society. One very peculiar outcome of this was increase in cab demand because women in progressive cities needed to travel more. Of course correlation and not causation, but I digress.

One might think is this type of thinking useful? Apart from an individual’s perspective thinking about second orders from a macro perspective helps making counter-intuitive bets that others might not be able to spot, this exercise also helps in clearing the smoke of the current technology’s hype and instead focus on areas that will grow simply because the technology is growing.

Since the theme of the decade is very decisively AI, I thought it might be a good exercise to dig up some second order effects of 3 buzzing technologies and try to gauge if there’s a bigger shift in an unseen area.

Self Driving Cars (and Trucks) – Organs, Real estate, and advertising

My current obsession (apart from my projects) are self-driving cars. A technology that by most measures will fundamentally change how we live our lives. There are usual second order suspects that will occur once self-driving cars scale to 100%, you can read them in the suggested reading below. Apart from that there are 3 key areas that I’d like to watch out for:

• The Organ transplant industry
• Real estate prices
• Advertising is just getting started

About 100,000 people in the US apply for organ transplant each year. About 39,000 of them get it while others have to wait on a waitlist. What’s interesting is ~12% of these organs are supplied by the car accident industry. If Waymo can reduce the number of car accidents in America by 95% then the 4,000 or so patients who receive organs today will most likely die.

But it brings us to an important point. Where else can we salvage our organs from? We have decent pipelines such as:

• Stroke
• Trauma (Including car accidents)
• Drug overdose
• Miscellaneous

I Robot – Dishwashers, Farming, and Home Automation

I love Isaac Asimov’s I Robot and its adaptation starring Will Smith.

• Vacuum cleaners
• Farming