Smart Luxury

This essay was published in Luxury Briefing in February 2015

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Smart luxury

by Alexander Gallé

10 February 2015 

We're now 15 years into the 21st century.  It's worth taking a moment to think about the expectations we have from this century, or at least the next 15 years or so.  Luxury and the future have in common that thinking about them highlights our aspirations to an ideal life.

The year 2000 was in itself a huge future landmark for decades prior to it, a year into which we projected our wildest dreams.  Colonies on the moon and household robots in the year 2000 were pretty much guaranteed, back in the 70s.

Since then, however, many people seem to have become rather shortsighted about their expectations for the future.  Henry Ford once said: "If I'd asked people what they wanted, they would have asked for faster horses".  Today, it seems that many people would just ask for faster internet connections.  

Just as an automobile is categorically different from a faster horse, so the internet will soon be categorically different from just "faster connections".

In 15 years' time, the bandwidth used by internet connections between objects will completely dwarf the connections between people.  The internet of things is just in its infancy, so if you can remember the explosion in internet functionality that started in the late 90s you should get an idea of the scope of things to come in that domain.

The level of artificial intelligence that will be embedded in those connected objects will be off the charts by today's standards.  Self-driving cars are already safer and more accurate than humans, today.  Give the system a few years to upgrade and you'll have AI drivers picking you up from one side of town within seconds of you ordering one, driving through the city at a steady 100mph, all the while coming no closer than 2 feet from any other car or person, and dropping you off just a couple of minutes later on the other side of town.

The great news for our industry is that intelligence in objects and services is exactly what luxury is about.  The idea of creating an intelligent user experience - one that combines the efficiency of the machine with the soulfulness of human interaction - is one of our main aspirations, whether we're designing new cars or new hotels.  So far, it's the tech sector that has learned from the luxury sector, as demonstrated by Apple's rise from near bankruptcy in the late 90s to the world's number one company in 2012, or Tesla's rise from an electric car company to one of the world's best cars.  It's now time for the luxury sector to learn from companies like Apple and Tesla, and take the users' aspirations a few steps further.

Faking It

This essay was published in Luxury Briefing in July 2014

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Faking It

by Alexander Gallé

6 July 2014

The film "Tim's Vermeer" (2014) documents the story of a hacker/inventor, Tim Jenison, as he successfully recreates a Vermeer painting using various optical tools that were available to Vermeer in the XVIIth century.  The film makes a convincing case that technological inventiveness, rather than artistic mastery, was the reason why Vermeer's paintings were so much more vivid and realistic than any of his contemporaries' work.  Tim's use of a cleverly positioned small mirror - to evaluate the difference at any point between an object's colour and its painted representation - turns the painter's role into nothing more than an information processor, albeit a very precise and meticulous one.  

The academic reaction to this analysis of one of the greatest painters of the Dutch Golden Age has been somewhat negative, as you might expect.  This is mostly because any assertion on the use of technology in fine art is wrongly interpreted as an accusation of being a "faker", of not really being as great an artist as one pretended to be.

In his book "The Age of Intelligent Machines", Ray Kurzweil explains the exponential acceleration of technology by arguing that any field of science or engineering that comes into contact with information technology, will itself become an information technology, which then allows it to evolve at the same rate of acceleration as information technology. Since the 70s, the effect of this acceleration has been visible in just about every sector of industry: planes become flying computers, cars become computers on wheels, and the collective intellectual output of humanity becomes accessible on pocket-sized computers called smartphones.

And yet, Kurzweil's central claim - that artificial intelligence will surpass human intelligence within the next 25 years - seems to trigger a rather negative reaction among academics.  Every time AI reaches a new groundbreaking result in a field thought to be critical to developing intelligence, "true" intelligence is apparently about something even more elusive, and the method used to achieve the result is derided as "faking it", much in the way that technology in fine art is thought of as "faking it".

Technology's impact has been huge in the luxury sector, too, not only because it has helped some adventurous brands go much further than previously thought possible, but mostly because it has significantly reduced the cost of producing high quality goods, thereby making them available to people who until not so long ago would not have been the luxury sector's target audience.

As a result, a similar kind of denial has been creeping into the luxury sector, belittling the achievements made by newcomers and tech-oriented brands.  Tesla's cars, apparently, have no "love".  The best new world wines, apparently, have a "goût technologique".  Brands like Apple are, apparently, "masstige".  Never mind the fact that everyone remembers their jaw dropping when they first got into a Tesla, drank a glass of Bonny Doon's "Cigare Volant", or had an iPhone in their hands, "true" luxury suddenly seems to require many more elusive attributes, and technology is somehow perceived to be just a way of "faking it".

Is it true you need soul to create great art?  Yes.  Is it true there is more to intelligence than beating Kasparov at chess?  Yes.  Is it true you need culture to create luxury products?  Yes.  But technology does not fake those human attributes.  Rather, it augments humans' ability to leverage those attributes, and to allow more of us to enjoy their fruits.  Technoluxe doesn't fake luxe, it augments it.

Subjective luxury

This essay was published in Luxury Briefing in February 2014

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Value and subjectivism

by Alexander Gallé

February 2014

The idea of "enchantment-augmented" products certainly seems to have hit home with a few readers, judging by the unusual number of positive reactions to my last article.

Despite this, the value of the emotional connection as a core aspect of luxury brands seems to have not been captured in its full depth.  As a result, it is being thought of as just the icing on the cake, the core of the luxury industry being some kind of more intrinsic quality of the products.

There are two ways to approach this argument.  The first is to look at the exponential trend in technology, which I've been doing here at Luxury Briefing for a few years now.  The other is to look at the importance of subjectivity, and of subjective experience in other areas of our lives.

The first approach is, in my view, uncontestable.  I was born in the early 70s, when computers the size of your house only had a fraction of the computing power of your iPhone.  You only have to follow the evolution curve to understand that, in about 20 years, computers the size of your white blood cells are going to be 1,000 times more powerful than your iPhone.  The connectivity between them will be so complex that new levels of artificial intelligence will emerge out of their systems to create things that are as magic to you and me as today's iPhones would be to Isaac Newton.  What was a luxury item to the world's wealthiest man in 1913 is today available to billions of people around the planet.  What is a luxury item to the world's wealthiest man today will be available to billions of people around the planet in 2033.

The second approach takes a little more thinking about what it is that makes us happy, and what it is that makes us act, and interact.  Which provides me a happier and more memorable experience?  The plane journey that takes me to Lima an hour faster, or the plane journey that offers free broadband Wi-Fi access, great food, great wine, great coffee, polite stewardesses and courteous airport security?  Look at the online feedback and be blown away, as all customer comments are about subjective experiences: my seat was scruffy, my stewardess rude, my food tasted bland, my seat had no TV screen, we had no internet access and couldn't find out why our plane was delayed, etc.  The Stoics had it right: it's all about the effect experience has on our emotions.  Happily, there are a million things one could do in this field at a fraction of the cost of a faster plane.  For suppliers, therefore, luxury turns out to be the cheaper option.

The subjectivist approach goes much deeper, and there is, in my view, nobody who went deeper in our understanding of human interaction than the economist Ludwig von Mises did in his book "Human Action".  For Mises, all trade is based on subjective value.  In human affairs, there is no value other than subjective value.  The reason I trade my tie for your shirt is not that there is an equivalence between these two products, as classical economists would argue, it's that there is subjective improvement on both sides of the equation. Your shirt is more valuable to me, my tie is more valuable to you.  The money I earned working for you is more valuable to me than the time I lost, the product of my labour is more valuable to you than the money you paid me. 

All this aggregate value derived from millions of human interactions forms a matrix - a mesh as it were - of information that is, in its aggregate, objective.  For example, it'll tell you the market price of anything as defined by its comparison of value with everything else.  But the matrix's fabric, the stuff it is made of, is subjectivity.  Greater value is subjective value, and the greater price of luxury products reflects this.  Luxury is subjective.

Hacking products

This essay was published in Luxury Briefing in October 2013

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Hacking products

by Alexander Gallé

15 October 2013

Earlier this week, Rob Rhinehart, a young software engineer working in Silicon Valley, raised $1.5 million for his project from a group of investors led by Andreessen Horowitz, who are famous for their participation in some of the last decade's most successful internet startups, including Twitter, Facebook, Groupon, Instagram, Zynga, Airbnb, Foursquare and Skype.

Nothing unusual, you will say.  Internet startups get bigger funding than this almost every day...  Except that Rob's project isn't really an internet startup.  It's a food product.  In fact, it's the food product Rob decided to develop when he got tired of being distracted by the daily chore of having to buy food, prepare it, eat it, wash plates when he could be programming his other projects instead. 

Rob is the creator of Soylent, a food product that is engineered to contain every single nutrient your body needs to function properly.  It comes as a powder ("just add water"...) and he's been living on the stuff for the last 6 months.  That's not to say Soylent's intention is to replace food altogether, just to separate "food" from "feed".  "Food" is for when you're going to a restaurant, enjoying something delicious prepared by a professional.  "Feed" is for when all you need to do is feed your body the necessary nutrients, and Soylent is engineered to do just that. 

The aim is to make Soylent so cheap and ubiquitous that it'll be the answer to unhealthy junkfood as well as world hunger.  It'll solve the former, because unhealthy junkfood is consumed by a vast number of people simply because it is cheap.  It'll solve the latter, because reducing feed to its chemical elements solves many of the logistical issues currently impeding efficient production and distribution, dropping the cost of both to a fraction of what it currently is.  When economies of scale truly kick in, you'll be able to feed yourself in a healthier way than you currently are for less than $1 a day.

Lots of programmers think like this.  They see a problem in real life and wonder about the algorithm, the variables, the general model that could be constructed in order to understand- and hopefully solve- it.  Of course, other engineers do this too, but there's something about the immediacy of programming - programming is literally writing a product into existence - that puts one in a mindset in which it is much more natural and easy to move from "this could be fixed by doing X" to "I could fix this by doing X".  Before you know it, you've built yourself a prototype, tried it out on a few eager first adopters and put together a proposal to send to angel investors.  Massive growth through online popularisation of the concept ensures quick funding on further investment rounds.  Just a couple of years later, people around the world start wondering how they could ever have lived without your product.

I usually call this the hacker mindset, and what's interesting about its evolution over the last few years is that it's migrated from the minds of a few hackers improving the internet to a lot of other minds all set to improve the rest of our lives.  Everywhere around us, from Bitcoin to 3D printing to Soylent, young hacker entrepreneurs are redefining the game.  Their methods and findings are out in the open, whether it be through open source development or simple sharing of every aspect of the process.  Even their consumers get to participate in the next iteration, customising products and services to their own preferences, or simply shaping the value of the product as a whole by rating their experience of other users' services supplied through the product, as is the case with Airbnb (for accommodation services) and Uber (for driver services).

With such a major mindshift happening, it is unlikely that the variables currently defining even the most luxury-oriented products and services will stay relevant for very long.  Aside from the changing customer expectations of an entirely wired generation, the hacker mindset will change everything about the products and experiences the luxury sector provides, as it challenges the established methods of one sector after another with superior, more user friendly and more relevant products.   Mark my words: no stone will be left unturned.

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Chan or the art of luxury

"Chan or the Art of Luxury" - by Alexander Gallé - first published in Luxury Briefing's May 2012 issue.

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Chan or the Art of Luxury
by Alexander Gallé

This column is going to be part of a series I’ve been meaning to write for a while now.  In fact, I first thought about putting it down on paper when China started being talked about as an up and coming economic power.  I heard many people in the luxury sector at the time saying things like “the Chinese are all trying to copy our lifestyle, it’s a great opportunity for luxury brands to make their mark”.  Entire armies of art consultants and shopping assistants were being sent to China, as if the Chinese didn’t know the first thing about luxury and needed lifestyle consultants from Europe to come over and tell them how to live a luxurious life.  

Now, I suppose this holds true if you look at luxury in the shallow sense of the word: the bling, all-you-can-eat, spoilt-teenage-daughter version of it.

On the other hand, you can look at luxury, as we always have at Luxury Briefing, as something more akin to a philosophy, in which case it approaches what the ancient Greeks might have called “the good life”, which as a culture in itself leads to good craftsmanship, thoughtful design, a deeper appreciation of quality, etc.  In this case, the Chinese have nothing to envy on us, because they have been studying this in great depth ever since Lao Tzu penned down the Dao De Jing, and they’ve been expressing it in the way they manufacture objects for millennia.

I’ll divide my argument into two parts, the “how” of luxury, and the “why” of luxury.  The former relates to craftsmanship, the latter to design.  

The “how” of luxury is directly relatable to a core concept in Daoism, which Lao Tzu called “Wu Wei”.  It roughly translates as “doing without doing”, or “effortless doing”, or, more precisely, “working with the way life already works”.  You might say this, for example, of a woodcutter who, rather than hacking at a piece of wood, first studies it to find the direction the grain is going, and cuts the wood in the grain’s direction so as to get a single, clean cut.

Great musical performers also "do without doing": they just play and the music comes out just perfect. Get their thoughts, their self, in the way and the music goes wrong.  

The connection that is thus created between maker and user - via the object or performance - is one which many Western architects will recognise, as it leads to the same principles of honesty of shape and of materials which have guided modernist design thinkers such as Louis Sullivan, Frank Lloyd Wright, Mies van der Rohe and Richard Neutra.  The difference being that we had to unlearn centuries of aesthetic misdirection about the nature of craftsmanship and design in order to get there, whereas the Chinese elevated it to something close to a religion many centuries ago.

To be continued...

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