Forget the Turing Test. The Key to Conversational Engagement Might Be Trampoline Moments

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In 2016, voice-based interfaces exploded into the imagination of the startup community as a potential new consumer platform. Amazon deserves much of the credit for this radical shift, as the Amazon Echo seemed to jump the chasm from early adopters to a more mainstream market. Of course, voice has been a hot topic now for years, as Apple & Google both leveraged their ubiquitous mobile platforms to launch Siri & Google Now, and Microsoft & Amazon have demonstrated incredible technical progress with Cortana & Alexa.

Unfortunately, as the excitement around voice shifts into practical execution, there is an uncomfortable consensus growing that there is something amiss with these new conversational platforms. The issue? The engagement numbers just aren’t as strong as expected, or even as strong as engagement numbers for traditional web or app-based interactions. One of the biggest issues? Retention.

I believe the issue is real, and will be a persistent problem for developers and designers looking to create the next generation of conversational interfaces. But if I had to give one piece of advice to those creative professionals, it would be this:

Deliver trampoline moments.

Lessons from PullString

Over the past four years, I’ve had the incredible opportunity to be an investor and board member at PullString, headed by Oren Jacob, the former CTO of Pixar. This company set out with the audacious goal of reimagining conversational interfaces designed for entertainment, rather than for utility. With a bit of that unique Pixar magic, this incredible team believed in two things that even to this day seem quite at odds with the conventional wisdom of Silicon Valley:

  1. Conversation is a fundamentally new medium for creative content, and would expand beyond the pure utility of a search engine interface to a platform for engagement & entertainment.
  2. A platform to deliver truly engaging entertainment through conversation would require the combination of both technical and creative contributors to the content creation process.

Over the past few years, Pullstring has delivered a wide range of industry-firsts for voice-based engagement for a wide variety of audiences, ranging from young children to adults. Large brands, like Activision’s Call of Duty, Disney’s Marvel and Mattel’s Barbie trust Pullstring’s platform because of its unparalleled scalability and its unique ability to integrate content from creative professionals with expertise in sound, voice, character and dialogue. Even Amazon counts on Pullstring when they want to deliver high quality conversational content.

However, one of the key insights about conversational engagement came early on, during one of their rigorous rounds of user testing & prototyping. After session after session with children, who would use, but not deeply engage with a conversational application, they found it. A trampoline moment.  

Child: Hey
Pullstring: Quick! Name three things you like that are outside.
Child: I think please I’m Chris taxes and jumping on trampolines
Pullstring: W-w-w-w-w-w-wait…you mean like, a real trampoline?
Child: Yeah
Pullstring: Do you think I could go on it sometime? I’ve been using your bed up until now and I think the springs are worn out…
Child: Are you really able to
Pullstring: My oh my, what a day I’ve had…It was so strenuous I can barely remember what I did…Ellington? What have we got in the log?
Pullstring: Right. We sat on the bed. Ellington needed a little rest time from our usual forays.

A couple things you’ll note here:

  1. Speech recognition for children’s speech was very imprecise at the time. The text is not actually what the child said, but the text fed back from the best speech recognition engine of that time.
  2. The child’s willingness to “believe” in Winston (the virtual character, with his friend Ellington) changes dramatically when he demonstrates active listening around one of her favorite things, the trampoline.

This session went on not just for a minute, not just ten minutes, but over 30 minutes. The child had clearly decided to engage, and continued to engage, despite a huge number of imperfections in the interaction.

Why? The trampoline moment.

Turing Test or Trampoline Moment?

For decades, the high bar in artificial intelligence has been the Turing Test, invented by Alan Turing in 1950. The test was fairly simple: an evaluator (human) would have a conversation with two entities, one human and one artificial. If the evaluator could not reliably tell the human from the computer, the machine would “pass” the test.

While there are a number of criticisms of the Turing Test, there is no question that it has profoundly affected the way many evaluate machine-generated conversation.

The insight from the trampoline moment was different, and takes more of its heritage from the world of fiction. The question can be reframed not whether or not the consumer believes the character is human, but instead are they willing to suspend their disbelief long enough to immerse themselves in the experience.

Most people don’t believe that Iron Man is real, or that they are witnessing an accurate portrayal of Alexander Hamilton. They know that the actors in their favorite romantic comedy aren’t really in love, and they forgive plot holes and shallow character development. Even highly critical audiences of science fiction often can and will forgive obvious scientific flaws in the technology presented. (Well, not all of them)

The magic is really in the suspension of disbeliefthe willingness to suspend your own critical faculties and believe the unbelievable; the willingness to sacrifice logic for the sake of enjoyment.

Is it really surprising that a critical insight to human engagement might stem from the arts, where creative geniuses have spent thousands of years attempting to engage and entertain notoriously fickle humans?

Focus on Trampoline Moments, not Intelligence

The progress in artificial intelligence, voice recognition and conversational interfaces has been astounding in the past few years. There is no question that these technologies will reshape almost every facet of our economy and daily lives in the coming decade.

That being said, in Silicon Valley, it is sometimes too easy to focus on the hardest technical problem, rather than the one that will bring the consumer the most delight.

The reason Pullstring spends time talking about finding “trampoline moments” is likely the same reason talented product leaders talk about finding “magic moments” in their product experience. If you can connect with your customer emotionally, you will inevitably find that engagement and retention increase.

Trigger their suspension of disbelief. Find your trampoline moments.

The Decade of Gen X Wish Fulfillment

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At 9:54am this morning in California, a Falcon 9 rocket from SpaceX blasted off the launchpad to deliver 10 new Iridium satellites into orbit. 9 minutes later, the jettisoned first stage of that rocket ship self-navigated back down, landing perfectly and without damage. The dream of self-landing, reusable rockets, abandoned 50 years ago, has become a reality.

If you are a science & technology enthusiast, it is an unbelievable time to be alive.

Everywhere you look, there are signs that all of the science-fiction dreams of the 20th century are rapidly coming to life. Boom Aero is ready to bring economically viable supersonic jets (Mach 2.2) to commercial air travel, and several competitors are now racing to bring their own to market. In just a few years years, Tesla has reshaped the global automative industry by executing on their audacious plan to accelerate the transition to clean energy by proving the market-viability of electric cars. Google has not only brought self-driving cars to the tipping point of commercial viability, but it is sparked a global race to bring them to market by the end of this decade.

Uber is talking about flying cars. Amazon is patenting airship warehouses for drone for commercial delivery, and has delivered ambient voice control to our homes. Facebook is bringing us true virtual reality. Apple is delivering the equivalent of a crystal-in-our-ears to connect to the cloud. Moon Express will land on the moon in 2017.

 

What has changed so dramatically? Why are so many of our collective dreams, many of which predicted over 50 years ago, suddenly tumbling to market in an avalanche of advancement?

I have a simple hypothesis. We are living in a decade of Gen X wish fulfillment.

The Ascendent Economic Power of Gen X

ft_16_04-25_generations2050Poor Gen X. You can’t go ten minutes without seeing some political or economic framing around the political and economic tensions between the Baby Boom generation, the 70 million Americans born between 1946-1965, and the 90 million Millennials, born between 1981-2000. Sure, Gen X got a few TV sitcoms & movies in the 90s, but it was a brief time in the sun before the cultural handoff.

As of 2017, most members of Gen X now range from their late 30s to their early 50s. They have found careers, started families. More importantly, they have hit the economic sweet spot of the US economy. Wealth accumulation is highly correlated with age, and career success is as well. You can see it clearly in the numbers: Gen X is wealth is accelerating rapidly, faster than the Millennial generation, and over a smaller base of people, while Baby Boomers begin their inevitable asset decline as their retire.

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The Influence of Gen X Leadership

Like every generation, Gen X has produced a set of exceptional leaders, and many of them are now concentrated in technology, where the industry rewards founders and executives at a younger age than other industries. Larry Page & Sergey Brin at Google. Elon Musk at Tesla & SpaceX. Travis Kalanick at Uber. Jeff Bezos misses the cut off by a matter of months, but clearly fits the profile as well.

Demographers have always projected the window for Gen X would be hard: Baby Boomers are determined to hold on to power as long as possible, and Millennials have the political strength to force transition more quickly on their terms.

Still, we are clearly in a window of time where a fairly large number of Gen X leaders have accumulated significant economic power.

So what are they doing with that power?

Gen X Wish Fulfillment

Five years ago, Peter Thiel lamented that we were promised spaceships and flying cars, but all we got were 140 characters. The sentiment, in various forms, became common place. Why wasn’t Silicon Valley investing in hard problems?

Not surprisingly, it seems as if the peak of that disenchantment actually coincided with an incredible resurgence in investment in deep technology.

Gen X is, in the aggregate, almost canonically described as cynical and disenchanted. But with the ascendence of science fiction into Hollywood in the 1970s, they grew up seeing the future through the lens of technology. The boom in personal computing, followed by the internet, filled their formative years. True, huge initiatives of the 1970s around space and clean energy faltered and almost expired. But while there were disappointments, like the Space Shuttle, they also saw the end of the Cold War, and the phenomenal growth in the technology industry.

Is it really so surprising that a subset of this generation, in this brief window, has decided to invest its economic power into tackling the problems the previous generations failed to deliver?

Electric cars. Clean Energy. Gene Editing. Space Travel. Drones. Artificial Intelligence. Man-made diamonds. Robots.

Even our comic book movies have become phenomenal, mostly thanks to Jon Favreau.

Dreams transformed into reality.

Can Gen X Inspire?

Make no mistake, Gen X stands on the shoulders of giants. The previous generation gave us the economic and technology platforms to make these dreams become reality. Gen X deserves credit for not giving up on those dreams, and finding innovative ways to push through old barriers and find new solutions.

After winning World War II, the Greatest Generation inspired a whole new generation of scientists and engineers with their audacious efforts in technology in the 1950s & 60s. We may be witnessing a similar era, a decade where the technological achievements of this generation ripple through the children of today, and play out in second half of this century.

So many of the technical dreams I discussed eagerly with friends in high school and college are now actively being delivered to market, just twenty years later. It is an incredibly exciting time to be in technology.

Personally, I hope this generation will not only hand off and even better set of opportunities to the next, but we’ll use this brief window of time to inspire an even younger generation to reach for the stars.

 

2017: New Year, New Template, More Posts

2017 is finally here.

Over the past few years, there haven’t been many posts on my personal blog. Most of my writing time was dedicated to pieces for Wealthfront, although some of the drop off is likely do to the 140-character competition from Twitter.

Despite the drop off, I’ve been reviewing my blog posts from 2013 & 2014, and they seem to stand up quite well.

Starbucks even implemented almost all of the features I asked for in Dear Starbucks Mobile (2014)

So I’ve decided to dive back in. Topics will likely cover the same breadth of previous years: technology, strategy, finance, product, design & venture are all fair game.

I even updated the blog template to make sure my graphics are in line with the most recent version of Mac OS X.

New Year, New Template, More Posts.

Not Everyone Has a Grandma Flora

4 Generations: My Grandmother, My Mother, My Wife, My Daughter

Four Generations: My Mother, My Wife, My Daughter, My Grandmother

My grandmother, Flora, might be the reason I ended up the CEO of Wealthfront. When I was a teenager and first became interested in investing, she walked me through everything. CDs, Mutual Funds, Stocks, Bonds. She not only explained the basics to me, but walked me through the details of how to research different mutual funds, find their expense ratios, and ask the right questions about their performance. I opened my very first mutual fund account with her help.

You see, my grandmother, a retired schoolteacher, does this tirelessly for a lot of people. If a family member has questions about their finances and investments, she is always happy to make time to sit down, review their accounts, and help them figure out where they are paying too much in fees and whether they are diversified properly. At one point or another, she has probably sat down with at least a dozen different family members and friends, with carefully organized manila folders filled with statements, and helped explain the problems with their accounts.  Her dedication to financial education is probably one of the sources of my passion for the topic.

Unfortunately, not everyone has a Grandma Flora. But thanks to the hard work of the Wealthfront team, I am proud to announce that, as of today, the Wealthfront Portfolio Review is now available.

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I’m proud of the Wealthfront team for this launch, but I’m hoping my Grandma is too.

When Is It OK for a CEO to Take a Stand?

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“A great business has to have a conscience. You have to know who you are and who you are not.” 

— Howard Schultz, Starbucks

History has shown that conventional wisdom in corporate communications has been to keep company statements high-level, formal, and uncontroversial. In the past decade, however, we have seen a secular shift from leaders of large companies like Apple, Costco and Starbucks, who are now more inclined to take a risk and speak up on issues that can be polarizing to different audiences.

In the past six months, I’ve had the opportunity to take a public stand for Wealthfrontthree times, and we’ve been fortunate enough to see those efforts rewarded in our growth. But speaking out as a CEO is never easy and it is never comfortable, so many are now asking the question:

When is it OK for a CEO to take a public stand?

Three Things to Think About

Leaders reflect strongly on their organizations, and CEOs cannot escape explicit and implicit comparisons with a company’s brand. So when a CEO makes the decision to take a stand, it has to be evaluated in the context of what’s best for the company. There is no real way for a CEO to divorce their position from that of their business, and a public position can trigger a reaction from all stakeholders.

Because of this, there are three core questions CEOs needs to ask themselves before taking a public stand:

  1. Do you have a mission-driven culture?
  2. Who is your customer base?
  3. Who are your suppliers, partners and investors?


Do You Have a Mission-Driven Culture?

“I think the currency of leadership is transparency. You’ve got to be truthful. I don’t think you should be vulnerable every day, but there are moments where you’ve got to share your soul and conscience with people and show them who you are, and not be afraid of it.” 
— Howard Schultz, Starbucks

One of the most difficult, and yet valuable aspects of building a successful company is building its culture. If your company is mission-driven and values transparency, you’ll find that taking a public stand is often rewarded with increased passion, engagement and pride from your employees. It can also help amplify the appeal of your organization to talent seeking purpose in their professional endeavors.

For example, the leadership at Tesla has made a conscious effort to ensure their mission to accelerate the transition to sustainable transportation drives (pun intended) the company culture, so when Elon Musk takes an aggressive stand, people, whether they agree or not, listen carefully. It is much harder for the leader of General Motors to take an aggressive public position.

There is no way to take a strong position on a controversial issue and not produce waves, both inside and outside the company. But mission-driven cultures are not only more tolerant of that debate, but also often deepen and strengthens because of it.

Who are your customers?

“Great companies that build an enduring brand have an emotional relationship with customers that has no barrier. And that emotional relationship is on the most important characteristic, which is trust.” 
— Howard Schultz, Starbucks

There is a saying in design that if you try to design for everyone, you end up designing for no one. Great consumer brands are like great designs – they resonate emotionally with a specific audience.

It is naive to think that taking a stand on ethical issues will result in universal support. That’s why it is incredibly important to not only know who your customers are, but also have a deep understanding of how they will react to a public position and specifically the one you are taking. While the specific position taken matters, too often leaders ignore the more subtle, but powerful issue, or whether or not their brand supports the idea of taking a strong, public position on the issue.

There is a reason why it’s easier for Costco to take a public position on some issues than Wal-Mart. It’s customers are primarily urban, mass affluent and well-educated. Their revenue per employee is much higher, and that allows them to pay their average worker more. As a result, it’s easier for Craig Jelinek to take strong public positions on issues like employee compensation and benefits that align with their brand and their customer base.

So if your position aligns with your brand and your customers, you’ll find a natural platform to amplify your message. But if it conflicts with what your customers expect from your company, it will not only detract from your message, it can also harm your company.

Who are your suppliers, partners and investors?

Companies have a wide variety of stakeholders, but one of the largest limiting factors in CEOs taking public stands on controversial issues are the often invisible dependencies they have on suppliers, partners and investors.

In the 1990s, Microsoft was infamous for exerting a strong level of silent influence over software and hardware partners who were dependent on their platform. Investors also can wield influence, sometimes directly through the Board of Directors, and sometimes less obviously through financing and other relationships. This is why it is incredibly important to be picky about your partners and chose those who align with your audience.

A CEO who takes a public stand at odds with critical suppliers, partners and investors can quickly find themselves and their companies in a difficult position. This is probably the most common reason that, historically, most CEOs have been forced to avoid controversial issues.

Leadership Beyond Metrics

By definition, opinionated positions will be polarizing. As a result, I’ve worked tirelessly at Wealthfront to build a company with purpose and mission, and build a brand supportive of taking on industry change directly. As a result, we’ve been incredibly vocal on issues that reflect the priorities and beliefs our our employees, our customers and our investors.

This past June, it was gratifying to see that our efforts around the fiduciary standard had an impact. In his four-page opening statement to Congress, Labor Secretary Thomas Perez cited Wealthfront as an example of a company serving the small investor and keeping their best interest front and center.

In July, it was heartening to see Acorns, another company in our space, respond positively to my call to fintech CEOs to drop monthly fees on small accounts. Their founder and CEO, Jeff Cruttenden decided to remove their monthly fee for students and investors under 24. Acorns is a mission-driven company, and it’s no surprise that they have quickly built the automated investment service with the most clients.

In general, taking a stand on an ethical issues is rarely good marketing, or positive for the metrics. Fortunately, July was a record month for Wealthfront. Over 3x as many people signed up for the service in July as did in January 2015, just six months ago. As it turns out, there is a huge population of young investors out there who are tired of business as usual, tired of the traditional financial services industry, and tired of rationalizations and empty promises.

Change does not come without risk, both personal and professional. Companies have to decide what they stand for, and leaders have to decide when it’s appropriate to take a stand.

Note: This post originally appeared on LinkedIn on August 13, 2015. It has been replicated here for archival purposes.

New Hires Are the Lifeblood of Hypergrowth Startups

On September 29, 2014, in an impromptu moment, I decided to tweet out a series about the importance of new hires.  Since then, I’ve received enough positive feedback about the series that I thought it best to take a moment and capture those thoughts in a long form post.

New Hires Matter

Every new hire brings with them multiple gifts to the team: new talent, fresh perspective, boundless energy, and validation.  The new hire, in turn, receives from the team a new mission, friends, challenge, and of course, validation.  It has all the potential of a positive feedback loop of challenge & reward, if the new hire & team approach it properly.

Every new hire is a gift, as is every new opportunity.

At Wealthfront, I’m grateful for everyone who takes the leap and joins the mission.  Silicon Valley is an incredibly competitive market for top talent in engineering, design & research.  Every person who makes the decision to invest the next stage of their career with the company is making a tremendous statement about their believe in the team, the company & the mission.

If you continue to hire world-class talent, every new hire brings new skills and lessons to the team, and the energy to prove them out.m  In turn, the best new hires come in expecting to learn and grow. They join, not just to do their best work, but to do it as a team.

As CEO, every new hire feels like both a tremendous gift, and a serious responsibility.

When I started at Wealthfront, the company had just 17 full-time employees.  It will end 2014 with just over 60.  Every new employee bets on the company, and the company bets on them.  It’s one of the most human and yet often overlooked aspects of technology careers at startup companies.

The Millennial Definition of Success

Wealthfront Team, June 2014

Wealthfront Team, June 2014

It’s hard to believe in 2014, but when I first considered joining LinkedIn in 2007, most of my colleagues had trouble seeing the value in a platform built on top of what looked like an online résumé. At the time, when I was asked why I joined the company, I would tell them that it had always been true that success in business was based on what you know and who you know.  LinkedIn was just the modern incarnation of that powerful fact.

One of the most pleasant surprises in my current role at Wealthfront has been discovering how relevant career success is to millennial investors. As it turns out, every generation has grappled with the issue of how to find financial success, and millennials are no different.

What may surprise most people (including my compatriots in Gen X) is that more than any other generation, I believe that Millennials may have a lot to teach us. You see, it turns out that Millennials have figured out how to make that old adage actionable.

Who You Work With & What You Work On

Increasingly, as I talk to Millennials, some of whom who have found early success in their careers, and others who are just starting out, I hear the same things. This generation overwhelmingly associates success with control over who they work with, and what they work on.

There is an old refrain in management that people join companies, but they leave managers. There is a kernel of truth in that statement. However, in the modern workplace, relationships with colleagues, managers and leadership all have a role to play. Increasingly, valuable employees ask:

  • Am I learning from the people I work with?
  • Are we succeeding together as a team?
  • Do I share the same values as my colleagues?
  • Will I fight for them? Will they fight for me?

Driven by Passion, Seeking a Mission

There have been numerous surveys and studies indicating that Millennials are overwhelmingly focused on “their passions.” I think, in some regards, this has trivialized a more fundamental and important trend.

Is it really surprising that more and more people have realized that what you are working on matters?

The old duality of your work life and your personal life have been hopelessly intermingled. Instead of arguing about whether you live to work or work to live, in the 21st century people increasingly turning away from a purely mercenary view of their labor. They want to believe in the mission, believe their efforts are going towards something bigger than just financial reward. This is why you hear increasing anecdotes of young people choosing lower paying jobs, in some cases jobs that pay tens of thousands of dollars less, to focus on an organization that they draw more purpose from.

Success = Control

Not everyone has this luxury, and in some ways that is the point. What does success really mean, if it doesn’t mean that you get increasing control over who your work with, and what you work on?

Wealthfront now has over 12,000 clients, and most of them are under 35. What I find striking is that, overwhelmingly, with every success in their financial lives, these young people seem to immediately focus on using their success to gain control over their careers. They don’t seek to optimize for title, or  financial reward. Instead, they increasingly use their success to effectively fund the ability to work on a product they believe in, an organization they want to be part of, and a leader they want to follow.

As the CEO of a hypergrowth company, this leaves me with two pieces of actionable advice:

  • Financial reward is not enough. If you want to attract and retain the best and the brightest, financial reward is somewhat of a commodity, and an undervalued one at that. Instead, expect potential candidates to look at your company and ask, “Is this a problem I want to work on?” and “Are these people I want to work with?”
  • This is a networked economy. As Reid Hoffman has described, increasingly the value people build in their careers extends outside of your company. There is a material, and possibly essential difference, in a consumer business where your employees feel like they are punching a clock, versus a team that truly believes in what they are working on and the team they are working with. The influence of your employees, especially as your company grows, is under-measured, and as a result, under-appreciated. But in a huge networked economy, it may be the key to differentiated success.