Happy Birthday, Motorola DynaTAC. 0800-Why-Im-OK-Watching-Billionaires-Going-To-Space?

Last week, we celebrated the 38th anniversary of Bob Barnett, an executive of Ameritech Mobile Communications making the first cellular mobile phone call.?

What phone was it you ask?

It was a Motorola, not just any Motorola, it was the Motorola DynaTAC 8000x mobile phone. This was the phone that walked so its spiritual successors Nokia 3210, Blackberry and even the iPhone could run.

You may never have personally held the DynaTAC, but trust you’ve seen this icon.

The DynaTAC arrived with the RSI inducing dimensions of a small conservatory and the classic 80s minimalistic design of a house brick. It was exquisitely finished in premium era-appropriate options including used Tupperware off-black and used Tupperware off-white and needed 10 hours of charging to take full advantage of the 30-minute battery life available. I'm confidently told the short battery life wasn't actually a technology limitation, but rather a clever design decision to reduce back injury.

Weighing in at a lean 794 grams (compared to the iPhone 12s 165grams), the DynaTAC would set the customer back the ‘low-low' price of $3995 at launch, which adjusted for inflation tips the scales at over $11,000 today.?That’s right you paid the equivalent of $11k for the luxury of a product that lacked coverage, battery life, a screen, 'industrial design', a camera, internet connectivity…….

Given the median family income in 1983 was?$24,580, it's fair to say Doctor Martin Coopers Motorola DynaTAC was about as opulent as any 80's status symbol as you could imagine.?There are early adopters, and then there’s the chicken that lays the egg that becomes the early adopter.?This was squarely aimed the upper echelons of society as demonstrated by the marketing above coupled with the price,

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Legacy

Jokes aside, make no mistake, the DynaTAC set in motion the mobile revolution crucial to many things we enjoy today.?Conversely, it would be fair to say 38 years ago the mobile phone was a product with limited functionality available for a very specific customer. Over time, inspired by the DynaTAC, other mobile phone manufacturers joined the race, increasing competition and accelerating how quickly manufacturers (and suppliers) reached the economies of scale so important to lower costs and subsequently the barriers to entry for a wider market.?Today our mobile devices are a window to all recorded human knowledge (and plenty of memes), they house many of your favourite memories, provide access to support, serve as catalysts to revolutions, connect your family and build communities across geographical boundaries.?I’m not saying that all the second-order effects created by ubiquitous access to mobile devices are good, (see Snowden leaks, Cambridge Analytica, political manipulation etc) but in providing access to open journalism, utilities, learning resources and increased opportunities to form communities they have definitely had a net positive impact.?The surprising, complex and diverse ecosystems (entire sectors in some cases) that have emerged from the rise of the smartphone are even more incredible, and the image below makes me laugh but accurately demonstrates that.

“Economies of scale?occurs when more units of a good or service can be?produced?on a larger scale with (on average) fewer input costs” - Investopedia

I’m not entirely sure about the accuracy of this chart is but the numbers stack up and this will serve as a good demonstration of second-order effects.

Unforeseen Second-Order Effects

One could argue that 7 of the globally recognised companies on the list above would not exist at scale if it wasn’t for the first steps made by the Motorola DynaTAC.?One has directly benefited from advances in mobile and battery technology (but more on them later), and one is a f***ing accessory division generating 23.05B! Although the designers of the DynaTAC could never have foreseen mobile phones becoming every individual’s technology and communication hub in the future, that’s kind of the point.?Innovators often open doors to things we didn’t know we needed, and ideas that might not have been explored. Once they are able to achieve scale, the second (and third) order effects can herald more profound impacts (both positive and in some cases negative) on society.

In a way, many of these booming sectors including non-linear?media, music streaming, podcasts, social media, mobility as a service, & mobile banking can all follow their direct lineage back to the introduction of Doctor Martin Coopers Motorola DynaTAC8000x. Even established sectors like battery technology, transistors, microchips, CPU, GPU, semiconductors, data storage & GPS owe a great deal to our expanding appetite for mobile devices and can thank the DynaTAC8000x. The disruptive impact of mobile phones and the industry build on top of it is nigh on impossible to quantify but on balance positive.

Again progress

Every transformative disruption or development has second and third order consequences to its adoption; i.e., outcomes that are different than the first desired outcome yet are directly related to the disruption. They are most often separated by time and space from the perspective of the first appearance of the disruption.

Contemporary Parallels

You could pick any number of sectors but let's take the EV market.?For decades scientific experts made it very clear how critical a low carbon future would be, one with less of a reliance on fossil fuels, more considered manufacturing and material choices, but as we know political and societal habits move at a glacial pace.?Even though electric vehicles are nothing new, it took the disruption of Elon Musk’s Tesla to show the incumbent automotive industry (and a large section of society) what could be achieved at scale in a world with a viable alternative to ICE engines.?

Again, like Doctor Martin Cooper, Musk was laughed at in some circles when the Tesla Roadster was originally released in 2008, with the product labelled by many as a 'toy for the woke bourgeoisie'. Looking at the numbers and they kind of had a point.?The Roadster had production problems, rollout issues, no dedicated charging infrastructure and it cost the low-low price of ￡92,000 at release (￡117,213.97 adjusted for inflation). It didn't even perform as well as the Lotus Elise chassis it was based on, and during its 4-year production run, Tesla only sold a paltry 2400 units by conventional standards.?

But were conventional standards of success ever the point for Musk’s first EV??

In 2021, with the benefit of hindsight, we can say with confidence that Tesla's success has ushered in a renewed level of interest and public credibility to the EV sector, legitimised the expansion of charging networks and with global sales in 2021 projected to be 750,000+ at the time of writing this, Tesla has truly changed the perception and appetite of EVs.?Yes, the price point of Tesla's current range isn’t exactly at Sandero levels, but in reinvesting funds and R&D from the original Roadster programme, Musk was able to bring design, engineering, and production inhouse and over time build out the critical elements needed to achieve?economies of scale.?At around ￡40k, today's entry-level Tesla is nearly a 1/3 the price of the Roadster released just 12 years ago and comes complete with exponentially more technology and features.?Much like the lower price point of the DynaTAC successors, the?Tesla product range is also scheduled to expand with the release of increasingly attainable offerings priced at >￡20k, but more importantly, Tesla inspired competitors to join the EV race.

As for the unforeseen second-order effects, of which there are many, my favourite remains the concept of regular over the air product updates, meaning for the first time, the vehicle you buy/lease had the potential to improve in performance and safety over its lifetime. To quash doubts about safety and security, following a series of battery fires, Tesla raised the ride height of its vehicles in March 2014, typically for all incumbent OEMs in 2014 this would have required a costly recall. We could write an entire article on autonomy but outside of hardware and performance, the fact the company changed public perception so quickly in a way politicians and scientists couldn't is still something I find incredible.

Looking back, Musk's gift was to provide visibility and credibility to the EV market and open a door for others to follow. Now practically every car manufacturer has pivoted their business to include an all-electric or hybrid range with most phasing out new ICE vehicles completely in the coming years. Would they have done so this quickly without the success of Tesla, I'm not sure.

Once again progress from an extremely challenging starting point with a low probability of success.

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What about these rockets?!

Fast forward to October 2021.?In the shadow of an ongoing global pandemic, nearly 2 years of lockdowns, rising unemployment rates, civil unrest, and broken supply chains, I appreciate why the optics of the private space race between the billionaire boys club will seem egregious to many.?Since March 2020, the money in our pockets is worth less in terms of buying power, while the collective net worth of Musk and Bezos has risen exponentially (even with that divorce settlement!). In summary, they are up in orbit while we have been locked down. For that reason, I completely understand why it's difficult to get behind the narratives these innovators often peddle.

"This situation is terrible on paper, but remember people rarely eat the recipe"

If the only media we consume conditions us to be enraged its difficult to see the positives "if the only tool you?have is a?hammer, everything tends to look like a?nail". If we only see the billionaire boys club, it's impossible to see the potential utility some of these companies could serve, and for that reason, it’s important to sometimes take a step back from the narrative and look at the trendline and not the headlines.

While it is true we have enough pressing issues to address here on terra firma, many of which I feel the billionaire boys club and their companies should support, there is absolutely no telling what incredible research will be gained by democratising commercial space travel (still can't bring myself to say 'space tourism'). In mastering reusable rockets Space X (and more recently Blue Origin) has reduced the cost of a mission by upwards of 40% per launch while attracting public interest and academic talent to the sector. At the same time, obscene amounts of R&D capital have been committed along the way that will ultimately benefit many industries.

It may be too soon for us to evaluate the impact of any second-order effects that inevitably follow this level of innovation but we are feeling some tremors. One of the positive bi-products of reusable rockets is the Starlink satellite programme which is already bringing the internet to underserved communities around the globe exactly when we need it.

Rather than focussing on the gap between me and those engaged in the 2020 space race, lockdowns exposed a problem within my own community that I was na?ve to, tech inequality. In realtime we saw how easy it was for those living in 'digital deserts' with poor infrastructure or access to laptops or tablets to be left behind. Seemingly overnight, access to the internet would now have a direct impact on every student's ability to learn but these disparities were not exclusive to academia. Hybrid work offers the promise of expanded and enhanced career opportunities for professionals, changing how you work when you work and potentially where you choose to live. The caveat is consistent, fast internet access was the minimum requirement, something our governments have failed to provide for decades. Expand that issue out globally to include developing nations and the problem grows exponentially. Fundamentally an individual's access to the internet (something completely down to the luck of where you're was born) determines your safe access to information, debate, education and wisdom on a subject matter. Today, in 2021, the internet is a critical utility, like water or electricity, one that should be available to everyone everywhere. With our reliance on connectivity set to increase post-pandemic Starlink goes some way to expanding access to this service. No SpaceX, No Starlink.

If a billionaire in a pi**ing match goes some way to reducing the size of the digital deserts and continues to remove barriers and constraints on disenfranchised communities globally, I'm all for it.

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History of - Products, Ideas, Services Achieving Economies of Scale

Many innovators, inventors, or thinkers now held up as icons of transformation were viewed as foolish or worse (clinically) insane by their contemporaries. What they have in common is that at some point they rolled the dice to raise funds, share knowledge, built supply chains, factories, relationships, and refined their technology/solution/offering/thesis to achieve economies of scale.

In many cases, their knowledge or initial product offering(s) was targeted at an affluent slice of society, a wealthy individual, a government-funded organisation or a group of early adopters willing to pay a premium for access.

The Printing Press - Johannes Gutenberg

Electricity - Edison & Tesla

The Automobile - Henry Ford

GPS – Roger Easton

Air Travel – The Wright Brothers

Germ Warfare* -?Ignaz Semmelweis?(if you don't know the story I encourage looking it up)

In every case above, the innovator's offering was recognised as net positive and economies of scale were achieved. Regardless of whether it was a physical product, new knowledge or intellectual property, each of their offerings was eventually democratised and made more accessible for all. So much so, the second and third-order effects still resonate in society now.

Unfortunately the current business model of Earth.Inc still presents many challenges that require a singular clarity of vision our governments often can’t provide. Challenges that sometimes only wealthy innovators or mega-cap corporations can entertain tackling, even if on occasion they are glorified vanity projects. As a result, however unpalatable it might be, sometimes to achieve mass adoption of some globally beneficial products, services and ideas the initial offering might not be aimed at us.

When we, the other 99.9999% are not the initial target market, it's understandable why this space race can be a tough watch and why it generates so much negativity, but just like Doctor Martin Coopers journey to bring the DynaTac8000x to market, we need people willing to take a leap of faith into new markets. We never know what downstream benefits can be gained when the ambition is so vast.

While I'm interested in the progress of Space X, personally I don't care so much if Elon Musk achieves his grand vision of reaching Mars. I do however appreciate innovators innovating and if history repeats itself, I'm far more interested in the second and third-order effects that we may achieve along the way.

This is one of those situations where if they shoot for the Moon even if they miss at least we'll end up amongst the StarTAC (or Starlink).

Fingers crossed, history repeats itself and once again we all see progress.