Home | MIT Sloan Fellows | Leadership Blog

Category: Digital Business

The Real Winners in the Cryptocurrency Battle

Alin Dragos, SF ’17, Head of Strategic Partnerships at the MIT Digital Currency Initiative (DCI), doesn’t read the current narrative of cryptocurrency innovations as a battle among competing token systems to dominate the digital currency landscape. Quite the contrary, he sees the success of multiple platforms as a victory for all of us.

Alin Dragos, SF ’17

“In cryptocurrency and blockchain technologies, we’ve invented a fast, efficient, secure, and transparent way to move value around the world that reduces the current level of friction and intermediation,” says Dragos. “The win here isn’t for any single platform, it’s for everyone in the world who buys, sells, or exchanges anything of value with another person or company.”

Upgrading a very old infrastructure
Dragos and his DCI colleagues—along with many like-minded leaders in technology, business, finance, and public policy—consider the world’s current banking systems to be inefficient and exclusionary. “Many unnecessary costs and hurdles have been introduced over time by intermediaries who no longer add enough value to the system to justify the fees they extract,” he says.

Cryptocurrency platforms are opening up the banking sector to a whole range of new participants. “Many more players can compete to offer accounts and other digital financial services to consumers who currently don’t have access to traditional saving, borrowing, and credit mechanisms,” Dragos notes.“I’m excited that so much innovation is now being driven from outside the established banking sector.”

Transparency, censorship-resistance, and the question of cash
Countries that are struggling with corruption can benefit from the transparency inherent in cryptocurrencies. “The technology has acquired an aura of being untraceable, but that simply is not true,” says Dragos. “Bitcoin, in particular, has gotten a bad rap as being an effective vehicle for money launders. But money laundering is more prevalent in our existing global banking system than it is on any cryptocurrency platform. The difference is that if you do bad things with bitcoin, sophisticated regulatory and law enforcement units will very likely catch you.”

Dragos also likes the fact that any economic activity employing bitcoin is resistant to censorship. “You cannot stop transactions from happening among willing parties, even if you wanted to,” he says. “In that sense, bitcoin preserves a fundamental societal benefit of cash.”

On the topic of cash, Dragos poses an interesting question inspired by the rise of cryptocurrency. “If cash didn’t already exist, would we invent it today? Some countries say yes, but others say definitely no. The next key question is whether we should have the digital equivalent to cash. In its current incarnation, cash comes with certain rights. Should we preserve those rights as we move to digital replacements? We must involve as many people as possible in open discussions of these questions. And we must make sure we carry forward the societal benefits that cash provides.”

The uphill battle to preserve privacy
When it comes to privacy protection, Dragos sees a challenge that reaches far beyond cryptocurrencies. “You can be as privacy-minded as you want, but the world is leaking data in every direction,” he says. “The more you stay online, the harder it is to remain anonymous. Anonymity will be lost without someone caring to protect it. Some people in the blockchain space are being proactive, but this shouldn’t be any one player’s responsibility. If we all advocate for it, we may have a chance of doing better than we are now.”

Dragos notes that blockchain technology has heightened the world’s interest in cryptography. “We see more interest in the field today than anyone has experienced in the last 20 years. It’s really cool now to be a cryptographer, and people who’ve been at it for a long time have a new impetus for their work. Current cryptography techniques were not designed for large-scale deployment, so we have plenty of room for innovation.”

The essential optimism of the MIT Digital Currency Initiative
Dragos and his colleagues at the DCI have made it their mission to create a future in which moving value across the internet is as intuitive and efficient as moving information. “We envision a tipping point where a critical mass of people demand the autonomy, openness, and value-generating capacity inherent in cryptocurrencies,” he says.

Although the technology still has a long way to go, Dragos contends that we’re already better for having it. “We need a great deal of fundamental research and development,  but the genie is certainly out of the bottle. Many smart, well-funded people are determined to make cryptocurrencies work for society at large, and I’m confident it will happen sooner rather than later. Adoption is already nearing tens of millions. In ten years, it will be hundreds of millions. By 2040, I expect it will be billions. Which is all the more reason to be sure we get it right from the start.”


The social media chain reaction

It’s one thing for our culture to develop an awareness of the power of microtargeting on social media—influencing people to buy a certain product or vote in favor of or against a certain candidate or issue. What has received less attention is the chain reaction that ensues as a result of microtargeting. Those who have been influenced go on to influence and not just on social media.

Once a microtargeting campaign changes the “influencer’s” ideas or behavior, that person may well go on to influence the behavior of friends and family outside the realm of social media says MIT Sloan’s Sinan Aral and Paramveer Dhillon in a new study published in Nature Human Behavior. “If you can change behaviors through microtargeting,” the authors say, “what role do influencers play in spreading those behaviors beyond the reach of the targeting campaign itself? That’s a crucial question for those wishing to influence everything from elections to health campaigns to product adoption.”

In the same way that Facebook data can be used to improve the targeting of persuasive messages, this pioneering study proves that empirical data can actually improve the identification of influencers. Aral and Dhillon demonstrate that the use of empirical data can maximize influence by up to 87%, simply by reaching—and changing the behavior—of more people. The influencers identified through data have more cohesive, embedded ties with their contacts.

Data can be used for good or ill

Aral adds a cautionary note that such data can be used for good or ill. For example, influencers can be tapped to interfere with legitimate democratic elections through the spread of propaganda. At the same time, they can encourage people to quit smoking or help them recognize the signs of heart disease.

Sinan is a leading expert on social networks, social media, and digital strategy. He has worked closely with Facebook, Yahoo, Microsoft, the New York Times, IBM, Cisco, Intel, Oracle, SAP and many other leading Fortune 500 firms to realize business value through social media and information technology investments.

Sinan’s research focuses on social contagion, product virality, and measuring and managing how information diffusion in massive social networks such as Twitter and Facebook affects information worker productivity, consumer demand, and viral marketing. He has received a number of awards for his research, including the Microsoft Faculty Fellowship, the PopTech Science Fellowship, an NSF CAREER Award, and multiple “best paper” awards. Sinan was also recently named among “The World’s Top 40 Business School Professors Under 40” by Poets & Quants. Coauthor Paramveer Dhillon, who is working closely with Sinan in this area, is a postdoctoral associate in management science at MIT Sloan.

Read more about Sinan Aral.

Intentional analytics

How fresh is your data? Do you know why you gathered it in the first place? Is there a rhyme to your reason when it comes to analytics? Abhi Yadav, SF ’13, launched the MIT spinout ZyloTech because he realized that even the best data-educated personnel at major companies were unable to deal with the continual stream, variety, and mind-bending complexity of omnichannel customer data.

ZyloTech was actually born in the New Enterprise class taught by MIT Sloan Professor Bill Aulet. Yadav then recruited Michael Cusumano, who taught his Business of Software class, to the company’s board. Along with a team of data scientists, engineers, and digital marketers from the Cambridge ecosystem, Yadav wanted to make it possible for companies to leverage all their customer data in near real time so as to continuously access advanced customer analytics that deliver vastly more accurate and actionable insights.

“It’s futile to try and get good results from a marketing campaign when you’re working off old, incomplete data and ad-hoc analytics,” Yadav says. “What we’re doing is bottom-up analytics. We are unifying and curating a customer’s identity, which includes past behavior, intent-based data points, and basic contact info. We continuously track each existing customer action as it’s happening to determine what that customer likes an doesn’t like and what their signature behaviors are.”

Leveraging MIT research

Yadav and his team tapped MIT research in consumer science and automated machine learning to create a proprietary technology that performs entity resolution while integrating a probabilistic and a deterministic data unification approach. “When you combine these two approaches with deep-learning (AI) to discover patterns,” he explains, “you attain an unprecedented level of knowledge about your customer from raw data.”

Setting aside the technical terms, what Yadav and his team are doing is distilling all that information to get the real juice out of it, to take timely action, and to discover what a company really needs to know about the individualized motivations, habits, and predilections of its customers. As a result, they will be able to offer individualized promotions at the right time and through the right channel.

Given the volume and variety of data getting generated every second, Yadav says, it’s essential to make the most of it through timely insights. “We see businesses getting frustrated with the classic modern challenge of big data versus big insights,” he notes. “They don’t see where it’s getting them, because running after IT or hiring lots of engineers has not furthered their objectives. My goal is to help a business go beyond the lip service on customer centricity with real customer-centric marketing that unlocks the riches that lie in customer data. The result: a better, smarter experience for consumers—and for the companies that hope to win them.”


Eat–or shun–that apple pie? Check your DNA

Fredric Abramson, SF ’77, has an extensive background in genetics, biology, entrepreneurship, and the law. All paths converge at his most recent startup, Digital Nutrition, which is using AI and genetics to revolutionize the concept of illness prevention.

Abramson is building Digital Nutrition, still in its startup phase, to be a $100 million-dollar-business that taps the very latest genetic science and technology to promote wellness and wellbeing. “With advanced AI and machine learning analytics,” he says, “we can deliver genetic data tools that will improve the life of anyone who uses our app.”

The idea: shape preventive health behavior with DNA-based personal nutrition feedback using a simple phone app. Well, maybe not so simple—at least in what’s behind the firewall—but the app itself, as Abramson’s team is creating it, will be second nature for the consumer. “The world is moving more and more toward personalization, and that’s not going to change—nor should it. Digital Nutrition is the ultimate in personalization. It puts consumers in touch with their genetic roots and coaches them on how to make choices based on that information.”

The mobile app is designed to be a sort of digital nutritionist, allowing users to identify the foods and supplements that are optimal for their own genetic makeups based on a simple swab DNA test. They will be able to scan bar codes from food, beverage, or supplement packages and receive an instant AI-generated score that reflects how well the ingredients match their genetic profile in terms of metabolism, physiology, and neurology.

A very personal nutrition app

What will set this platform apart is the science behind the app’s affable interface. Digital Nutrition will tap the massive amount of published genetic science to map areas where genetic data can have a positive impact on a user’s quality of life. “In effect, we are using technology to deliver deep science to the average person. The app will be an exceptionally brainy weight-loss coach, fitness guru, and counselor rolled into one. Eventually, as the Digital Nutrition app is adopted on a global scale, we envision that the marketplace will respond by developing nutritional products that work in concert with it, strengthening and broadening its ability to serve consumers.”

The company is actually a business unit of Abramson’s other enterprise AlphaGenics, the first bio-consumer company to exclusively use non-medical genetic data to provide lifestyle solutions. The field has been a driving interest of Abramson’s for nearly two decades. In 2002, he was the sole U.S. representative invited to participate in the European Union’s first framework meeting on nutrigenomics.

Digital Nutrition will allow consumers on a much larger scale to leverage their genetic blueprint for optimal health. “We’re talking about a low-cost scalable app that can improve the nutritional and health status of people worldwide, including populations in developing economies,” Abramson says. “It’s time we employ science to deliver better health, wellness, and wellbeing for everyone on this planet. That goal is just a DNA app away from reality.”

Deep mind thinking about AI and ML

Companies that know how to harness machine learning and artificial intelligence are clear winners in the 21st century economy. And, arguably, few companies on Earth rival Google for its ingenuity in unlocking their powers. Suzanne Frey, SF ’06, Director of Security, Trust, and Privacy at Google, says, in fact, that every area in which Google is advancing relies on the progress of AI and ML.


Frey says that a game-changer was Google’s 2014 acquisition of the London-based AI pioneer DeepMind. Now a world leader in artificial intelligence research, DeepMind is developing programs that can learn to solve complex problems without necessarily needing to be taught how. Working closely with subject experts, DeepMind researchers are building tools that augment advances in fields such as healthcare and energy. And, of course, it’s tapping its late-breaking knowledge to enhance Google’s own products and services.

Frey says that DeepMind’s capabilities were best demonstrated recently on the virtual playing field. “The work we’ve done with DeepMind really went big when we won a pivotal GO match against the #1 champion in the world, an accomplishment that most thought was a decade out on the computer science horizon.” Big deal…just a game? Frey explains why not. “In winning that match, DeepMind illustrated the ability to run an exceptional number of deeply complex scenarios in parallel, at scale, and select the best outcome. And that capability is applicable to so many domains—the biosciences, in particular, allowing biotech researchers to do drug testing and create genetic scenarios at scale without testing on animals. Bottom line: the implications of that winning game of GO could have enormous positive impacts on society.”

Productivity apps

As a time-challenged tech executive, Frey is understandably somewhat obsessed with time-saving apps. “My twin passions for AI and time collide heavily at Google. Anything that saves time and optimizes energy is important. Google, she says, is using AI to create a suite of indispensable apps like Smart Reply in Gmail, which offers you quick responses to choose from so that you don’t have to compose a message from scratch. Another app will note a meeting on your calendar and queue up related documents in preparation. All these little inventions, Frey says, can save a minute here, five minutes there, minutes that add up by the end of a given day. “Nothing is more precious than time; just think about the total area under the curve saved by each of these features, and I’m excited to say that there’s much more time savings to come.”

Voice-activated searches

On the educational horizon, Frey reports that Google’s search functions have advanced to such an extent that a Google search is almost akin to having a research assistant. Google Scholar helps students find relevant resources across the world of academic research, pulling in articles, theses, books, and abstracts from publishers, universities, professional societies, and other online repositories. Google Scholar ranks documents the way researchers do, weighing the full text of each document, where it was published, who it was written by, as well as how often and how recently it has been cited in other scholarly literature. “The quality of the search,” Frey points out, “is directly correlated to the quality of the AI.”

Google Home Assistant

“Hey, Google. Is Johnny’s Pie in the Sky open? Order me a pizza with pepperoni and mushrooms. And tell me how to get there. Is it on Front Street?” Frey gives this example of a series of tasks that Google Home Assistant could handle for someone returning home from a stressful workday. Again, she says, it’s about conserving that most valuable of all commodities—time. And as the AI becomes more sophisticated, so does the Home Assistant. “One of the most exciting developments in voice-assisted searches is that the ‘trail of thought’ problem has been solved,” Frey says. “We’re teaching AI to realize that your prior query is related to your next query. It understands the pronouns within a string of questions. After you asked if the restaurant was open and you followed it with the phrase ‘How do I get there?’ the Home Assistant knows that you’re asking how to get to the restaurant, even though you haven’t specifically used those words.”

The Home Assistant, Frey says, is an illustration of Google’s intention to reposition itself as a personal assistant rather than a comparatively aloof search function. “There is no part of Google that isn’t directly investing in machine learning and AI,” Frey says. “It’s all connected to our mission to move from searching to assisting. It’s a thrilling space to be working in right now, even in security and data protection, and I’m enjoying every minute of it.

The light and shade of AI

How much artificial intelligence (AI) can you pack into a Manhattan apartment? How much could it improve your life? When digital expert Pieter Nel, SF ’14, moved into his new place in 2017, he decided to find out. His Amazon Alexa is now fully networked with the space, and he controls everything from the lights to the Roomba vacuum cleaner with voice commands. “The technology has come a long way,” Nel says, “but it still has a long way to go. Don’t get me wrong. I’m glad I don’t have to do the vacuuming myself, but voice-command capability right now feels more like a novelty than a revolutionary time- or labor-saving feature.”

Nel spent several years as a COO and strategic advisor in the social media and social networking space before joining McKinsey & Company in 2017. “I moved on from the social networking sector because I felt I was doing more to help people waste an hour a day than to solve real problems,” explains Nel. “These platforms were envisioned as tools for enhancing exchanges among people, but mostly they have made our interactions more shallow.”

Nel believes that AI has enormous potential to transform the way we live, but certain pitfalls and distractions lie in wait. “AI could go the way of social media,” he says. “If it’s easier to talk to your virtual assistant than to another human being in a pub, we could end up more isolated from one another. We need great resolve and expertise to make AI productive in people’s lives and in society as a whole.”

Wikipedia plus-plus

If you’re eagerly anticipating your first sophisticated conversation with a robot, Nel says not to get your hopes up. “I ask my Amazon assistant to give me a flash briefing every morning, but we can’t have what most of us would consider an intelligent exchange. The technology isn’t smart enough or fast enough to genuinely converse, and it’s possible that voice interfaces will never be as quick as a Google search.”

The strength of the technology is its ability to process an immense amount of data related to any given topic rather than to replicate human traits. “When you combine massive information crunching with the distinct learning capabilities of AI, you get Wikipedia plus-plus,” he says. Not only will we be able to call up answers to any number of esoteric questions, personalized learning will take a giant leap forward. “Because AI will deduce what you already know, it should be able to customize your course of study in any area of interest,” says Nel. “Every 12-year-old in the world with a high-speed internet connection and a desire to learn will have a personal digital tutor with unlimited capacity to guide curiosity-driven knowledge acquisition.”

Gaining—and preserving—trust

The ability of technology providers to respect and protect privacy will make or break the future of these innovations, Nel says. “To reap the potentially profound benefits of AI in areas such as education and healthcare, public users must be willing to reveal a great deal of confidential information to networked machines.”

Nel believes that encryption technology is up to the task as long as the incentives to prevent breaches exist. “Right now, however, bad actors don’t suffer any real consequences,” he says. “And big social networking platforms such as Facebook pay only enough attention to privacy protection as is absolutely necessary to satisfy the typical user. Most companies’ energies are devoted to growth and market penetration. Security breaches are more of a public relations problem than a business catastrophe.”

Proceed with caution, Nel says, but definitely proceed. If we go forward with full knowledge of the pitfalls of AI, we may well be able to avoid at least a few of them.

Pieter Nel contributed to the recent McKinsey Quarterly article “What AI can and cannot do (yet) for your business.”

What do we [really] want from technology?

Erik Brynjolfsson, Schussel Family Professor of Management and director of the MIT Initiative on the Digital Economy, and Andrew McAfee, principle research scientist at the MIT Center for Digital Business, urge us to move beyond questions of what technology will do to us and instead ask: What do we want to do with technology? What matters more than ever before, they say, is thinking deeply about what we want the future to be. Having more choices means that our values are more important than ever.

In their celebrated 2017 book Machine, Platform, Crowd: Harnessing Our Digital Future, the duo firmly expresses optimism about the future benefits of artificial intelligence for the way we live. Not because that outcome is predestined, but because the technology at our disposal is more powerful than ever before. “Fundamentally, we have more freedom to do things that simply could not have been done by earlier generations. Rather than being locked into any one future, we have a greater ability to shape the future,” they say.

The AI in our lives

McAfee and Brynjolfsson take particular interest in the growth of virtualization and its long-term implications for how we live. Virtualization—as distinct from full automation—refers to processes in which digital technologies play leading roles but do not completely exclude people. Automated teller machines (ATMs) and self-checkout retail kiosks are examples of virtualized processes that many of us interact with routinely.

“Virtualization accelerates when networks and convenient digital devices are almost everywhere,” say McAfee and Brynjolfsson. The success of virtualized banking, for example, is made clear by the fact that the total number of bank tellers in the U.S. has decreased by almost 20% since its peak in 2007. And despite the so far underwhelming performance of self-checkout technologies, McAfee and Brynjolfsson predict large-scale adoption in the future. “When it does come, it might look like Amazon Go, an 1,800-square-foot convenience store…with neither cashiers nor self-checkout kiosks.” The store’s environment integrates cameras, sensors, machine-learning technologies, and a smartphone app to track and bill for whatever customers carry out of the store.

Eatsa, the virtualized restaurant concept launched in San Francisco in 2015, and Wealthfront, an AI-driven wealth management company founded in 2011, demonstrate other areas in which automation may change the way many of us conduct our lives. And while Eatsa hasn’t fulfilled expectations quite yet, Wealthfront has attracted more than $3 billion from 35,000+ households since 2011 using a platform of robo-advisers and online forms in place of brick-and-mortar locations and human professionals.

Although McAfee and Brynjolfsson acknowledge that self-selection by patrons and clients has been a key driver for these companies, they also assert that experimentation, iteration, and technical progress will expand automated and digitally mediated processes beyond the market of younger, more tech-savvy consumers. “We believe, in short, that virtualization is a secular trend, where ‘secular’ is used in the way the finance industry uses it: to denote a long-term development that will unfold over several years.”

Stay tuned, McAfee and Brynjolfsson tell us. Life in an AI world is about to get more interesting—and very probably better.

AI can forge richer human-to-human interactions

In the digital marketplace, online chat has become a key asset to consumers and companies alike, allowing sales personnel to help customers make decisions and resolve issues in real time. Enter Vee24. This young AI startup has created a service that could soon make basic online chat feel as primitive as a phone tree.

Priya Iyer, SF ’05, CEO and Chair of Vee24, says that old-style customer service is not going to cut it any longer with a burgeoning number of consumers who are comfortable in the digital world, customers whose expectations are rising on pace with technological capabilities. “Vee24 actually enables richer, deeper interactions between companies and their customers.”

What makes Vee24 so revolutionary in the “live engagement space” is the sheer depth, breadth, and range of interactions it offers. The company’s platform unifies all aspects of live engagement—text, voice, and video chat as well as co-browsing and screen-sharing—and provides support across desktop, tablet, and mobile devices.

In only its fifth year, Vee24 is already exacting a significant impact on the way people buy products—and it’s increasing the number of products likely to be purchased online. In the past, most consumers preferred making major purchases in person. Vee24 makes it possible for automobile shoppers, for example, to chat with a sales representative, zoom in on dashboard details or watch video that answers performance questions. Online sales staff can even assist them in filling out financing applications. In short, Vee24’s platform makes it seem like the customer service representative and the consumer are sitting across the desk from one another.

Stepping up outreach

“Vee24 transforms simple customer service into a concierge experience,” Iyer says. “When done well, such online interactions can actually exceed the quality of an in-store experience. A customer might want to show a furniture sales associate the layout of his living room, so the sales associate can suggest the optimal furniture configuration or rug size.”

Iyer notes that one of the most valuable uses of the Vee24 platform is tech support. “If you call a Vee-24-enabled tech support hotline to help you in troubleshooting a problem with a computer or digital appliance, the service representative may be able to download key information from the ailing device, then diagnose and fix the problem—or coach the consumer through the process.”

While some digital innovations wow consumers but don’t necessarily win them over, Vee24’s live engagement spaces are fast winning friends and influencing people. The company is finding that these online interactions are four or five times more likely to convert the conversation into sales, with a 25 to 35 per cent increase in average order value.

And Iyer’s team has made the platform easy to adopt. The Vee24 team can get a client up and running by simply adding a JavaScript tag to the customer’s website, which allows them to leverage the full complement of Vee24’s cloud-based solutions. They also train and help clients to analyze and optimize performance and results.

Vee24’s overnight dominance in the live engagement space is the result of an ingenious use of AI but also a fairly ingenious team headed by CEO Iyer, who brings to the company more than 25 years of experience in nearly every facet of software. Honored with the New England Entrepreneur of the Year award in 2014, she also made the Boston Globe’s Top 100 Entrepreneur list in 2015.

Digital solutions for Africa: The 2018 MIT Sloan Africa Innovate Conference convenes at the MIT Media Lab April 7

Africa. In many ways it has a long way to travel to compete as a peer in the contemporary global marketplace. But from another perspective, the population is highly motivated to find solutions to crippling problems and incentivized to reinvent those systems that are barriers to progress. The MIT Sloan Africa Innovate Conference is an annual touchstone for just how far Africa has come and where it goes next.

Ismail Ahmed, WorldRemit founder & CEO, one of the keynote speakers at the 2018
MIT Africa Innovate Conference.

“Digitization for Inclusive Growth” is the theme of the 2018 conference, which is organized by the MIT Africa Business Club and takes place at the MIT Media Lab on April 7. Workshops and panels will evaluate the lessons of the last decade of technological advancement and explore how to leverage digitization to ensure that Africa’s progress is as inclusive as possible.

The conference will feature a Solveathon led by the MIT Solve Center. Teams of entrepreneurs will develop and pitch solutions related to coastal communities, healthcare, education, and the future of work. In addition, panels will delve into the most intractable challenges that countries on the African continent still face—challenges that require strategic innovation on a grand scale. Those panels will include investigations into:

Continue reading

Shaping the Commerce of Sport: MIT Sloan Sports Analytics Conference starts February 23

What is the secret to building a team around a superstar? What is the future of ticket selling at sporting events? What’s the best way to engage the modern sports fan? These are just three of the dozens of topics to be explored by leaders in the realm of sport at the upcoming MIT Sloan Sports Analytics Conference February 23 and 24 at the Boston Convention and Exhibition Center in Boston.

A limited number of tickets are still available for this annual event, which has grown over the last decade to become the premier confab of sports movers, shakers, and innovators. Founded in 2006 by Daryl Morey ’00 and HBS alumna Jessica Gelman, the conference is chaired by Gelman and organized by MIT Sloan students. Its goal is to provide a forum for industry professionals and students to discuss the increasing role of analytics in the global sports industry. Now more than ten years old, the conference delivers rich opportunities to learn about and innovate the sports business world.

Continue reading