Evidence #10
Charts covering growing pessimism and depression, AI, healthcare, immigration, and nutrition.
Interested to get these notes? Subscribe here.
Evidence is a dinner series where guests each share a chart that is "evidence of a changing world.” Charts can be about anything, from a trend in popular culture to a breakthrough in science, and are meant to get people thinking about the future. These dinners are hosted by Damir and Dino and supported by Index Ventures.
This dinner was hosted in LA. We were joined by:
1 founder of a publicly traded hospitality company
1 CFO of a publicly traded financial services company
1 COO at a publicly traded healthcare company
2 founders of private technology companies
1 VP Product at a publicly traded social media company
1 VP Product at a private marketplace company
With each progressive generation, Americans are becoming more pessimistic. We agreed that social media and economic inequality (or the perception of it) seem to be the primary drivers of this.
Social media seems to highlight inequality in society and perpetuate FOMO/jealousy/desire. It has also become a platform for protest to be shared itself - there used to be friction in organizing protest in society previously. We all know that negative news travels further than positive news, so perhaps social media is simply an echo chamber for pessimism. And as media in general has increasingly fragmented from generation to generation, negative content is now winning the war over positive content (things were different when all of America was watching 3 TV channels). As an aside, there was general consensus that it is scary that another state controls a big part of the media that our younger generations are consuming and what might be done in terms of deliberate content ranking.
We also wondered what could be done to combat the perception problem around economic inequality. A specific idea that caught attention was the notion of a “baby fund” where each US citizen is granted a certain amount of $ that is put in stock market indexes and grow accordingly until the person is of a certain adult age to access the funds. The idea is to allow people to better understand what makes America truly special when comparing it to other countries around the world - that it is THE land of economic opportunity. Maybe we would all be happier if we stopped comparing ourselves to our neighbors and instead compared ourselves to people in other countries. Otherwise, if perceived inequality continues to grow, are we on a fast track to authoritarianism?
Society is increasingly valuing money and data suggests that more money does lead to higher levels of happiness. What does this mean about work and community?
One guest brought up the concept of “percentage of social interactions where money is exchanged.” In better economies, the percentage is higher. In worse economies, it is lower. In Italy for example, it is common for people to babysit for one another out of goodwill. One interpretation is that in economies like ours, people need to work more to get money to then exchange it for their needs/wants. And the economic opportunity exists for this system to exist. But does this interrupt the notion of community altogether - where people support one another out of compassion and caring instead of for money?
Relatedly, one guest mentioned that his purpose in life comes from his kids and the joy of seeing them grow and interact. But he also admitted that he didn’t realize this as much until he left his job and was spending more time with his kids. Work helps us procure the money to support our family but seems to interrupt the deep connection to the people that we love.
Covid may also play a role in this emerging psychology as we can see in the left chart. Did Covid show people that large social institutions can fail? That we can’t trust them as much? That we have to fend for ourselves more than ever and that means growing our focus on money?
TikTok and social media also play a role. Perhaps, pre-internet, we were content living in our local bubbles and focusing on our local relationships. But the internet and social media uncovered the whole world and showed us all the people, places, and things that exist. And if we want to access those things, that we need money. The FOMO dynamic in the world seems to be under-appreciated and may be a big driver in the breakdown of local communities.
Younger generations are seeing a huge rise in depression, up 3x in ~10 years. Is economic growth worth it if this is the outcome? This is a full-on crisis in society.
We suspected that the drivers are 1) mobile phone addiction and 2) parents not giving kids the attention they need, perhaps because of work and their own phone addictions. It seems that modern-day society is leading to isolation and numbness. Social media is replacing the hours kids used to spend seeing friends, sleeping, being outdoors, and being physically active. It’s also replacing the time families used to spend together. There were two books recommended on this topic - Enlightenment Now and Never Enough.
We debated solutions. If parents today aren’t giving kids the nurture and care that they need, perhaps it is something we need to rely even more heavily on teachers for. Let’s pay teachers a lot more money - their role in society seems to be growing in importance as they increasingly care for our youth.
If kids are addicted to social media, maybe we need to regulate it like cigarettes. Perhaps we need to take 1 out of every 5 ad slots on social media and have that be controlled by the government to run anti-social media ads akin to anti-smoking ads on TV. Or perhaps we need to put time limit caps on social media for users below a certain age.
In general though, it feels inevitable that government intervenes at some point given the scale of this issue. Can our government figure it out? Do we know our own version of Javier Milei to blow up this system? Or is authoritarian control needed for an issue like this (see China) and we’re screwed?
AI models seem to get worse after humans train them. The guest with this chart is deeply familiar with AI and shared that the raw GPT-4 model is incredible and much more useful than the human-trained version that is released to the public and that censors certain questions and answers (ex. how can I make a bomb?). Figuring out what an AI model should or shouldn’t be allowed to do is a very subjective thing as society’s wants are not logical nor are society’s morals and values empirical. So what seems to be happening is that society is increasingly restricting information flow due to how polarized views are on many topics. As a result, we’re getting content that no longer has edge - it’s becoming “politically correct” and ties into the numbness problem that seems to be seeping through society. We all agreed that modern-day comedy TV, for example, is a lot less funny than comedy of 10+ years ago. A book was recommended on this topic called What’s Our Problem.
We also discussed who has an advantage with AI geopolitically. Surprisingly, there was consensus that China, while seemingly very competent at AI and machine learning, will be at a major disadvantage going forward. We felt that China has no choice but to be very cautious with AI, specifically generative AI (aka using AI to automate content production or auto-answer questions). China, given its political structure, will kneecap AI out of caution for what it creates or answers for users. This heavy censorship of models may drastically limit the usefulness as this chart suggests.
One guest asked how authoritarianism might change due to AI and we debated that as well briefly. Over the long run, will governments prevent AI models from being used or kneecap their usage? Or will they eventually let AI usage be free reign but find new means to control their population (more taxes, more military control)? Military might may change due to AI after all. Governments may have at their disposal millions of robots and drones, like we’re seeing being deployed in Ukraine now. Before, you would need a giant military to keep a giant population in check.
The pharmaceutical industry is massive ($600bn) but only 9% of prescriptions are fulfilled online. Retail pharmacies like CVS and Walgreens dominate the industry today and have vertically integrated to make it hard to go around them. However, the consumer experience is extremely broken - often consumers don’t get the best price possible, they run into availability issues, and they have to wait 30+ minutes in a store to get their drugs. The software behind writing prescriptions is bad and too much of the work is put on doctors who are too busy to figure out the best pharmacy to send a patient to for their given insurance, etc. However, perhaps the experience isn’t bad enough - people are bad at valuing their time and changing behavior is hard. Even Amazon’s pharmacy business is still very small and people have learned how to use Amazon. Overall, we left this conversation feeling that very little was going to change but that in an ideal world, there would be some digital clearinghouse that would route prescriptions to the best possible pharmacy for a given patient at the time that the doctor is writing the prescription.
Sometime in the 2040s, America’s demographics will flip where >50% of the population will be of minority background. Already today, >50% of Gen Z is non-white. No society has seen a successful switch like this before.
We all took that view that American would be able to handle this though. America has been a diverse nation from the start and has the land to cluster different communities in (typically immigrants are put close to others of their background to act as a support system and help with assimilation). America isn’t one place after all - our individual states have vastly different demographics. So we all felt that social unrest would be less of a concern although other issues are still important. For example, will we be able to maintain trust in society? A rule of history has been that it is hard for differing cultures to trust one another creating a “trust tax.” A book was recommended on the topic called Bowling Alone. We also felt that one of the most important consequences of shifting demographics will be on politics and specifically how the electoral system functions. Minorities and immigrants are more likely to vote democratic.
A significant driver of the demographic change is immigration. We debated elements of this - illegal versus legal, educated versus not, English-speaking versus not, gender balance, etc. Who is next to come into US versus who do we want to come? We agree that immigrants work hard but also wondered if America is proactive enough at attracting the talent we need for future economic development. We also debated what America’s role should be for asylum seekers fleeing conflict or instability in their home countries (something that I’m personally grateful for given my parents escaped the Bosnian War).
Illegal immigration is at all time highs in the US. 300k people were encountered at the southern border in December, but even this number is an underestimate. Regardless, this is 3.5m people annualized or more than 1% of the population and higher than the US birth rate.
Is the Biden administration purposefully being more lenient? Perhaps because they have to act on an anti-Trump narrative and defend party lines? Or is this a conspiracy to grow the democratic base? At the least, the Biden administration is taking different protocols than the Trump administration - no detaining of people for prolonged periods of time and more court capacity to process them. So maybe it has become less punishing to try to enter than before and more of an incentive to do so? The consensus amongst the group was that the southern border is a national security issue that needs to be controlled.
On the flip side, we wondered why the US isn’t more proactive at recruiting the best immigrants possible from around the world. We seem to cap the number of visas available to high skilled people and the processes to get them are painful and anxiety-inducing. Often times, immigrants on visas are also beholden to their employers to stay in the country. Meanwhile, China is producing 3x the AI talent we do on an annual basis (75k engineers there versus 25k here). We have Shark Tank on TV to celebrate and encourage entrepreneurs. Should we have the a reality show for immigration to celebrate the people who move here to make an impact and grow awareness for their importance? Should there be a Forbes list for the immigrants who are making the biggest impact here? How can the government be more progressive at identifying and recruiting the people we need to remain a leader in many global industries?
59% of Americans don’t follow any nutrition rules. Furthermore, Americans have a very imbalanced diet that is overly concentrated on processed foods and carbs and lacking in fiber and nutrients. The result? A country where >50% of people are classified as overweight or obese. Lack of education around nutrition is one of the biggest problems in the country. Consumers are simply unconscious - they put things in their bodies without understanding the impact.
We discussed if the emerging class of GLP-1 drugs may be a silver bullet. The drugs clearly work with patients on them losing a lot of body mass. But there are issues. Only 40% of patients who try the drug are still on it at month 12. The drugs are expensive. They also lead to muscle mass and bone mass loss. And the biggest reason why people churn off of them is because they miss the happiness that eating food brought them before.
We wondered as a group what else can be done to address the obesity epidemic. Regulation of certain foods was discussed. As was the re-engineering of food products to retain their taste profile but with better ingredients. Social media also seems to be helping with education - as content splinters online, people are being exposed to more views on nutrition and more foods to try.
Ultimately, GLP-1s seem to be a real needle mover in the short-term. Education from both social media and dietitians may be a needle move in the medium-term. And perhaps long-term, we will have replacement versions of all of our favorite foods but made with natural, micronutrient dense ingredients.