We spoke to American economist and inspiring female entrepreneur Pippa Malmgren! She is a former US presidential adviser, bestselling author, and major tech influencer and expert, currently residing and running her drone business H Robotics in London.
Pippa believes that the rapid advancement of technology calls for new world leadership, and that the tech industry needs to be a lot more diverse in every sense of the word – including encouraging women of all ages to get involved!
In the interview, she describes some of the current economic and political affairs, the tech landscape, as well as the state of the business funding ecosystem.
Could you tell us a little bit about your early journey? How did you become a financial market adviser to George W. Bush?
It was a fortuitous route actually… I had worked as an intern in the White House under Ronald Reagan when I was in college. Having decided that I wanted a deeper understanding of the world economy, I left Washington and did my PhD in Trade Policy at the London School of Economics. I ended up working in the financial markets for a very long time.
Eventually, I realised that people in the financial markets don’t really understand the world of public policy very well, and vice versa. I happened to speak both languages, and basically became a translator – in that work I got to brief a lot of politicians; I guess I established a reputation for being the one person who would explain all this stuff in plain English and without making them feel stupid for not already knowing!
I got many phone calls from candidates for presidency in multiple countries – George W. Bush among them. My view is that if someone who might become the head of government asks you to brief them, you shouldn't refuse.
After leaving the white house, what made you pursue being an entrepreneur, and why were you interested in drone technology in particular?
I’m an economist, and I express that in different ways. I help shape economic policy by advising government, and explain the world economy by giving speeches and writing books – but after leaving the White House, I decided I should also play an active part in building it. After the financial crisis happened, I had a very strong view that we were going to get a very big recovery. I told myself that if I really believed in this, I should be involved.
I started to confer with one of my clients, the possibility of creating an automated device that would replace a helicopter. We ended up creating what is now H Robotics. We make industrial drones, in a world where most drones that people know about are fundamentally toys; retail, designed for consumers. We wanted to build something that is useful for bigger tasks.
Where are we at the moment with regards to drone technology, and what new commercial applications might we see in the near future?
The future is massive. People have barely started to use drones for commercial purposes. Because the first drones were toys, people’s understanding of them is still stuck in that space. I find that they don’t even comprehend what drones are really capable of. Another aspect is that human beings are two-dimensional creatures; we find the third dimension hard to comprehend. People talk about drones in terms of delivery: moving objects from A to B – that’s a very two-dimensional view. We think that delivery is the least likely, and most inefficient use of drones. Amazon’s been very clever creating a wonderful marketing story around it, but we don’t think that it's worth what the future holds.
The future is about data management and data gathering. We’ve built something that serves this purpose, and which can be used for a multitude of industrial tasks. Goldman Sachs estimates that this is going to be a multi-billion dollar market even by 2020, and the level of usage is practically zero in the industry right now.
What do you think needs to change to encourage more women to pursue tech careers? And why is diversity so important?
We need much more diversity of thinking in the industry, and diversity of people is a huge component of that. By diversity, I don’t only mean gender – I also mean age, income level, ethnicity, neuroplasticity, etc. There are many metrics by which we measure diversity. The tech world needs more of it on all those metrics.
I’m hugely encouraging of women of all age groups; there’s a huge bias in the tech sector that everybody has to be young – I think this is nonsense. There are plenty of people in the 55+ bracket who have huge potential; in fact, females over the age of 55 are the fastest growing group of new entrepreneurs. And their success rate is higher than men, which is interesting.
Can you talk a little bit about how the advancement of technology is changing the world, and what this means for democracy?
Technology is increasingly concerned with gathering data, and creating a picture with that data. My drones are a part of this: they gather 3-D imagery and thermo-imagery that allows you to understand a site or a situation better than you did before. What people don’t understand is that data-gathering capability is everywhere – it is in the phone you carry in your pocket, reviewing you in ways that you may not be aware of. The way you walk is a better indicator of who you are than your fingerprint. It indicates what level floor you are on in a building; it indicates what the condition of your heart is, and so on.
The purpose of every IoT device – whether it’s a rubbish bin, refrigerator, or an Amazon Echo – is to gather data from you. This includes your emotional reactions to things: your tone of voice; not just the words you use, but how you use them.
Previously these were just independent silos of data – but now, artificial intelligence connects the dots between them. Increasingly, companies are acquiring data across silos. WhatsApp and Facebook's recent partnership means that Facebook now has access to all your WhatsApp messages and can use them to determine what you're interested in. Similarly, the deal between Google and Mastercard means that Google now has access to your Mastercard purchase history, and can advertise to you accordingly.
Once you add all this data up, you can create a psychometric profile of ‘you’. This is so much deeper than what Cambridge Analytica had managed to do – all they had was Facebook likes… It fundamentally changes the balance of power between states and citizens, and between companies and customers.
This holographic-like environment, with multiple data points, gives you a picture more accurate than reality. This is a world where the internet knows more about you than you know about yourself. It’s a world of radical transparency, and a world which requires new governance because of the changes in the balance of power that I described.
Your new book ‘The Leadership Lab’ aims to explain what leadership in the 21st century should look like. What is the most important thing which leaders of the world need to understand in the context of our modern technology-driven era?
For a start, we need to get them more tech-savvy, which isn't easy. I’ve spoken to CEO’s of major corporations as well as political leaders all over the world, and some of them don’t know how to open a Twitter account! They don’t know how to use the functionality on their phones! How do we get them to be conscious of what’s real and possible?
They need to understand that concepts like the social scoring systems aren't just something that we see on 'Black Mirror' anymore. They are a current reality – China is doing exactly this today. The future which we used to tell stories about is now.
One of the problems is that the higher you go in politics, the fewer people have access to you, you tend to stick with your trusted team, and your sources of information are fewer and fewer – this is a huge danger for all leaders. Another aspect is that a lot of leaders are essentially specialists, and have been for their entire careers. But we’re in a world now where being a generalist is more valuable.
What do you think the election of Donald Trump in the US and Brexit in the UK tell us about the current state of society?
I’ve written a lot about the subject of populism and what drives it. I don’t think it’s going away. It's rolling out across Europe now: France, Germany, Denmark, Netherlands, Austria, Italy, Sweden. There are many core causes. One is that the elevator door is broken.
What I mean by that is that when we got the bailout in the financial crisis, we basically took away capitalism's failure. Not only did the people who put society at risk by making bad bets not fall – they actually got a blank check from the government… a reward! That broke faith in the system. Capitalism without consequences is like Catholicism without sin. You have to have failure in capitalism or it doesn't work.
When CEO's tell me they're very worried about populism, I ask them: have you hired someone who doesn't have a college degree or somebody who is displaced? They say no. These people know that the elevator door is broken and that you won't let them in. Are you really surprised that they are now fighting the whole system which they perceive to be unfair?
The good news is that technology opens that door: it's so democratising; it puts so much power in the hands of people who have no specific technical skills. Take my drones as an example: they can be operated by someone who is not a professional pilot. In fact, they are designed in such a way so that the junior janitor on your team will be able to deploy them – and that's very empowering. I'm very excited that the people operating my drones for some of my mining company clients in Africa, are young women who have no degree in technology and no background in coding.
How do you think Brexit will affect the business funding landscape in the UK?
I spoke with some of the world’s most significant investors. The pension funds, wealth funds, family offices – they all said that while they may not like the uncertainty of Brexit, it is still very difficult to make money in the EU – this is partly due to its slow growth, and partly due to its regulations (very different regulatory environment than the UK, certainly).
They generally declared that they're going to put as much (if not more) money into the UK as before. My impression is that there will be no big change; Britain will remain as attractive – and possibly more so, because after all if Sterling falls, that makes things like exporting etc. cheaper.
If the economy is more tied to the rest of the world – and it looks highly likely that Britain will do much more trade with the US, Mexico, China, the Middle East, or Africa – that’s actually a very positive growth picture. Bottom line – I don’t see any diminishment to funding for British tech. Everybody knows that Britain is leading in AI and many other sectors, and I expect this to continue.
The only issue would be if the British decided to raise the regulatory red tape and taxes to be at or above the EU level (which personally I think is such a heavy lift they couldn’t do it even if they wanted to). But right now it looks like the British are going to have a way more competitive regulatory and tax offering than the EU, which is actually moving in the opposite direction. They want more regulation and more tax.
And what made you decide to run your business from the UK? What are some of the differences you see between the business ecosystems in the US and UK?
Let’s take Silicon Valley as an example: it is incredibly expensive. When I look at some of my competitors who are based there, I see they have massive overheads. London doesn’t cost nearly as much, which means I can manage here with a much better margin.
The other thing is that Britain’s economy is really diverse in terms of the people. The prime minister is making a big effort to say they’re going to widen out the opportunity to work here to people beyond the EU – as a tech entrepreneur, I’m going to be able to hire highly skilled people from all over the world now. Going forward it’s going to be a much more level playing field.
What lies ahead for you in business? Are there any new sectors you are thinking about pursuing in the future?
Most drones are used for a very specific, narrow purpose. We're the opposite – we made a platform that you can deploy any new device, camera or sensor on, and therefore can be used for a million different things. We have no idea how our clients are going to use them, and that's the exciting part! This means that we work across many sectors; oil & gas, insurance, mining, public safety – the drones are designed to be used in many different ways, even by one customer, for ever changing tasks. I'm excited to see what the future brings!
What are your values? What drives you? And what is the lesson for entrepreneurs in general?
Like I said before, I want to always be part of building the economy instead of just talking about it. I think that it is important for people to get involved and be a part of things. There's no point in complaining about slow growth, and not doing something about it.
I recognise however, that to be an entrepreneur is not everybody's cup of tea – you've got to live a life of relative uncertainty. The payoff could be amazing, but at the same time it might never come.
I think that you need to really ask yourself why you are doing it. If the answer is because you want to be rich and famous, that's not really a good motivation, and it won't see you through the bumpy times. If on the other hand, you're doing it because you're trying to create something new; an invention which is exciting to you, that's a lot more sustainable – and even when the bumpy times come, you are comfortable in knowing that you're creating something which will change the world, and that's great.
We hope that all our readers will be motivated and inspired by Pippa's example!
Want to find out more about the state of the UK business funding ecosystem, educate yourself on the variety of funding options out there, as well as network with top UK funders? Why not join us at our Investment Conference, which will take place on Nov 13, or alternatively, next year's flagship exhibition BFS '19, which will take place on Feb 21! Click here to book tickets.