Forget foreign scapegoats. Tech innovation is what’s killing jobs. And the revolt after Trump will resemble the real Luddite movement.
The tech industry played an influential role in the outcome of the US Presidential election. Not just in providing the medium for fake news and propaganda. The root cause is job destruction by automation , which drove a base of dissatisfied Rust Belt voters to support Trump. Job destruction is accelerating — and if tech doesn’t get ahead of this problem there will be a significant populist backlash against the industry and its ability to progress.
This post was inspired by Bianca Al-Shamari, who is writing an article on job automation and the impact on future generations.
A recent study found 50% of occupations today will be gone by 2020, and a 2013 Oxford study forecasted that 47% of jobs will be automated by 2034. A Ball State study found that only 13% of manufacturing job losses were due to trade, the rest from automation. A McKinsey study suggests 45% of knowledge work activity can be automated.
The canary in the coal mine is trucking. Truck driver is the No. 1 job in the US of A. Driving a truck is a respectable job that pays well enough to provide for a family without a lot of education. It’s in trouble. The autonomous Uber Freight is taking orders, powered by Otto. Uber’s $680M acquisition of Otto’s 91 employees equals an effective valuation of $7.5M per employee. Or you could say $200 per US trucking job killed.
Being a Luddite in modern terms has been broadly defined as “people not adopting technology.” Like people that didn’t “get blogging.” But the term comes from the people who destroyed labor-saving devices in the British textile industry during the industrial revolution. They acted on orders from a mythical general Ned Ludd to rebel against the technology that was destroying their jobs.
Yesterday I posted The Coming Tech Backlash, on how my industry is due for a reckoning with the job destruction caused by automation. The key question people asked, and hopefully of themselves, is what can I do about it? As a small startup founding CEO, here’s my answer.
I’m leaning my product towards augmentation and job creation. And supporting emerging communities. These points are admittedly self-serving, but are therefore sustainable.
Pingpad is already collaboration software that augments the abilities of teams. We fall on the side of Augmentation from the Doug Engelbart lineage in the Automation vs. Augmentation debate.
There are hundreds of use cases for a bot-augmented wiki knowledge base. We are prioritizing those that drive job creation — customer success. Focusing on how Customer Success Teams can onboard new customers faster, resolve customer issues faster and ultimately drive more revenue through people working together. This enables customers to grow and create more jobs.
Pingpad is free for up to 100 Notes, ample enough not just for many business use cases, but great for communities organizing on Slack.
I’m also looking for opportunities to advance education for the disaffected. My particular interest is enabling junior colleges (I went to Foothill and gave a commencement speech there), which are best positioned to solve these problems, but need resources, technology and knowledge.
I’m going to keep bringing attention to the issue within the industry. And I’m looking for even better ideas that require a range of resources.
Just two years into the state’s experiment in the legalization of marijuana for recreational use, Colorado businesses are on track see more than $1.3 billion in revenue from the sale of weed and related products. That’s a whopping 30 percent higher than the $1 billion those businesses took in last year.
Those results are similar to what’s being seen in Washington, the second state to go 420-friendly. Washington reached the $1 billion mark in July 2016, just 12 months after the first legal sale of recreational pot.
And that growth is sure to continue, especially as more and more states hop aboard the cannabis train.
But as with any business, a growing customer base brings with it an opportunity to serve those customers with technology. Cannabis and kiosks are proving to be a perfect match.
Growing like a weed
With the results of November’s election, the use of both recreational and medicinal marijuana has been entirely legalized in eight states, with medical marijuana legal in 28 states.
While the approach of the incoming administration in regards to legalized marijuana remains to be seen, it’s likely that the movement has passed the point of no return.
Still, there are some sticky issues associated with the sale of marijuana. First and foremost is that despite it being legal at the state level, federal law still considers marijuana to be a Schedule 1 drug, putting it on the same level with heroin, LSD and ecstasy.
Because federal law prohibits financial institutions from processing payments from the sale of a Schedule 1 drug, for the most part the cannabis industry is an all-cash affair. Credit and debit card transactions just aren’t allowed.
Unfortunately, conducting business on an all-cash basis is fraught with risk. First and foremost is that having large amounts of cash on the premises makes a marijuana business a prime target for a robbery.
In June 2016, for example, a security guard at a suburban Denver dispensary was shot and killed during a robbery attempt. The killing of the guard, former Marine Travis Mason, was the first known on-the-job death at a licensed marijuana business in Colorado.
The same month, a medical marijuana dispensary owner in the Los Angeles area survived a shootout with two would-be robbers wearing masks and armored vests. The owner escaped unharmed, although the robbers were wounded when the owner fired his own weapon.
In addition to the outside threat, dispensary owners also face the potential of internal theft. Despite the amount of money flowing into the pot industry, dispensary workers start at or near the minimum wage. Handling thousands of dollars a day while taking home $10-12 an hour is likely to prove to be an overwhelming temptation for some seeking to supplement their income.
And that’s where the kiosk industry can help.
Fresno, Calif.-based Cannabis Cash Solutions, for example, is providing cash-handling kiosks for marijuana dispensaries that eliminate the need for employees to handle money. In addition, the devices store the cash in a secure vault until pickup by a manager or an armored car service
“What we’re doing with the kiosks is taking the money straight from the customer’s hands and putting it right into the vaults in our kiosks,” said Cannabis Cash Solutions CEO Andrew Savala. “The marijuana business doesn’t touch the cash at all.”
With Cannabis Cash Solutions kiosks, customers come up to the dispensary counter and interact with the dispensary’s “budtender,” who explains the different product choices available. Once the customer has made their choice the budtender directs them to the counter-mounted kiosk, where they insert their cash payment into a bill acceptor and receive their change. The kiosk recycles the cash inserted for use as change, minimizing the need for replenishing the change fund.
“Customers are still able to have that one-one-one interaction with the budtender,” Savala said. “The budtender can still spend as much time with them as they need answering the customer’s questions, they just don’t handle the cash.”
[Editor note – A total of 3.6 million vending machines will be online by 2020. CPI is the leader. Reference.]
And Denver-based ordering and payment platform provider Jane LLC has deployed its kiosks in Oregon, Nevada and Colorado, with plans to expand to California, Alaska and several other states. With Jane’s kiosks, customers can make their choice from a list of products displayed on the device’s touchscreen and pay at the kiosk. The customer then takes the receipt to the pickup counter to receive their purchase.
“We have been received with open arms in some locations, where others shut the door, priding themselves on the theory of ‘one-on-one customer experience, that’s our specialty and we don’t want to lose that.’,” said Karla Guarino, VP of Marketing/Operations with Jane LLC. “Every state has different rules and regulations which all have to be worked through. It’s an ongoing process, but an exciting one!”
Jane also offers a mobile app for iOS and Android devices. With the app, customers place an order via their mobile device and enter their order number at the kiosks when they arrive at the dispensary. Those customers are also issued a receipt to be taken to the counter.
Jane’s devices also include EMV compliant card readers that are ready to accept transactions in anticipation of the eventual legalization of credit and debit card transactions for marijuana.
“We have been working very closely with our banking partner to ensure our processes are 100% compliant and ready to accept transactions at any time,” Guarino said.
On the horizon
San Francisco-based cannabis investor network The ArcView Group predicts legal sales to top $22.8 billion by 2020, meaning the opportunities for kiosk deployments are only going to continue to expand, both in the United States and around the world. In addition, the expected growth is driving the development of new solutions for the industry.
Several companies have introduced kiosks that actually dispense marijuana, verifying customers via biometrics. Most of those efforts have struggled, though.
Tempe, Ariz.-based American Green recalled all of its Zazzz cannabis vending machines in December 2015 in response to feedback from dispensary vendors and customers, and is retooling its automated vending program.
And Los Angeles-based vending kiosk provider Medbox rebranded itself as Notis Global in February 2016, shifting its focus to cultivation, production and consulting.
Still, the technology that would be required to dispense packages of marijuana is already being used to dispense other products. There may come a time when marijuana vending kiosks are as commonplace as those renting DVDs.
“I was reading an article recently about a company deploying kiosks to dispense packages of tea,” Estaitieh said. “If a kiosk can dispense tea it could easily dispense marijuana.”
The current struggle for acceptance of those types of kiosks may be due to the fact that they have been primarily located in dispensaries. If a customer is already in a dispensary, they may be inclined to simply go to the counter and talk with a bud tender.
Depending on traffic, though, there may be a day when customers will prefer to use a kiosk for convenience. And as medical marijuana becomes more accepted around the country, pharmacies may look at those types of kiosks as a way to compete with dispensaries.
There also may be opportunities for marijuana-dispensing kiosks outside the United States as other countries seek to cash in on changing attitudes. Jamaica, for example, is in talks on a plan to install cannabis kiosks at airports and seaports as part of a plan to boost government revenues.
Jamaica decriminalized the possession of small amounts of marijuana in 2015 and has legalized the use of medical marijuana, part of a plan to market the Caribbean nation as a destination for “wellness tourism” and the accompanying flow of cash.
“The thought is that if you are coming out of the airport, there is a kiosk that you can go to,” Cannabis Licensing Authority (CLA) Chairman Hyacinth Lightbourne told the Jamaican publication The Gleaner.
“It would primarily be for people who have a prescription and, in effect, you’re doing it for medicinal purposes with a permit from the Ministry of Health,” Lightbourne said. “If they don’t have a prescription, then they can do what we call ‘self-declare,’ and this will allow them [to purchase] two ounces while they are here.”
Despite this progress, most financial services providers still see compliance as a hurdle. Only about 300 of the more than 11,000 banks currently operating in the U.S. work with legal pot vendors.
“Paradoxically, most of the institutions nationwide that offer business to marijuana suppliers are small and very unhealthy; most are the ones desperate for income,” said Lamine Zarrad, founder and CEO of Tokken, a Denver-based blockchain startup.
Tokken sees the marijuana industry’s situation as comparable to other industries, and thus it can apply solutions that other markets use. Tokken uses bitcoin blockchain to peg marijuana transaction information to its blockchain so that banks and regulators have an immutable, time-stamped record. Information about each transaction is hashed and input on the bitcoin blockchain. In this way consumers, businesses, banks, regulators and law enforcement agencies can view the system and ensure there’s no tampering, Zarrad said.
KIND is not the only software and/or compliance company to be thinking about cannabis kiosks—Jane and KioWare are two other companies that also want to use automated kiosks as a solution to the cannabis industry’s financial problems. Even Jamaica’s Cannabis Licensing Authority is on the kiosk train and wants to install weed kiosks in Jamaica’s airports. Yet with KIND’s recent partnership with Microsoft to provide cannabis tracking solutions for governments, Dinenberg thinks that KIND definitely has the leg up on competition.
Just a hop, skip, and a jump from Walmart home offices in Rogers, Arkansas stands historic Store #1, which, despite the impressive nomenclature, is really just one of many Walmart supercenters scattered across the country. From time to time, however, Store #1 serves as an experimental testing ground for the latest and greatest Walmart services, technologies, and other developments.
No, but the retailer is striving to make in-store pickup as easy as possible for time-strapped shoppers. Currently in the beta testing phase, when fully operational this BOPUS (buy online pick up in store) machine will automatically distribute (i.e., without employee assistance) pre-purchased goods to users of Walmart’s in-store pickup service.
As the video demonstrates, mobile solutions firm Field Agent recently dispatched several agents to Store #1 to use this BOPUS machine. All participants were first directed to walmart.com where they shopped for, purchased, and designated for in-store pickup an item costing at least $5.
Swyft was co-founded by Gower Smith, creator of the automated retail industry. “We are at the inflection point where automated retail is proven, however has not yet scaled. Just like when banks introduced ATMs, location numbers increased 10 times once independent manufacturers deployed low-cost machines. At ZoomSystems I quickly grew annual sales from zero to $100 million, but after handing off management, the company didn’t continue to lower capital cost to improve ROI. Our data showed that this was the key for scale to tens of thousands of locations and billions in revenue, which is our focus at Swyft.”
The QSR space is heating up rapidly and that’s only one industry. The situation in California of $15 per hour may end up driving the adoption of Kiosks and other automation quicker than anticipated.
Other ramifications could include people already making $15 – 20 per hour. Logic say’s they will want a raise as well. Why should they be getting “minimum wage” when someone working the most basic of jobs is getting the same? It stands to reason we’re looking at wages going up almost across the board.
In the end business will raise their rates to cover the extra expense, or, the smart companies adopt automation and other cost saving techniques as much as possible in order to keep costs down and selling prices low.
California’s plans to raise the minimum wage to $15 an hour by 2022 could spur a move in the restaurant industry toward automation.
Nice article on impact of minimum wage and automation.
This change should open the floodgates of automation exploration. Those that can invest now and keep costs low during the transition will weather the storm long enough for competition to go under because they didn’t plan ahead.
The Real Impact of Minimum Wage Legislation – link
DOHA: Automated self-service kiosks that would vend prescription medicines at the new Women’s Hospital are likely to begin operating after a month. The kiosks are currently functioning on an experimental basis. According to a pharmacist at.
With this partnership, Zipdrug is unveiling digital kiosks and placing them within CityMD locations, beginning in Manhattanat CityMD’s Murray Hill location. After seeing a doctor, CityMD patients can order medication delivery from any pharmacy directly through these on-site kiosks. Once an order is placed and medications are ready for pickup from the patient’s preferred pharmacy, a HIPAA-trained, drug-screened, and background-checked messenger will promptly deliver prescriptions to their location of choice. Medications typically arrive at patients’ doorsteps on average of 16 minutes withinManhattan after they are ready for pick-up and Zipdrug users can track delivery progress in real-time on an interactive map.
Goodbye to the pharmacy line. Hello, drug-delivery dude.
A New York City-based company, co-founded by former ad exec and serial entrepreneur Stu Libby, is angling to get your prescriptions straight to your door. It is called Zipdrug, and it not only has an app (and a phone line for the app-averse), but it also has a messenger service that will bring the meds directly to you.
It’s another small win in this decade’s hype-laden, entrepreneur-led war on wasted time. And the latest move in which entrepreneurs chip away at life’s little pain points.
Libby, who formerly co-founded a fast-growing company called Solve Media–it created ads out of sites’ Captcha text boxes–says he himself had spent far too many hours waiting in pharmacy lines for his heartburn medications. And after a family member was hospitalized for a severe heart ailment, he realized the shortcomings of being counseled about the importance of taking prescribed medications: A hospital can’t ensure any departing patient gets them into her hands. A little research taught him that one-third of all prescriptions go unfilled–and that increasing compliance is a big issue for doctors. So a year ago he set out to build Zipdrug.
Zipdrug aims to eliminate the pharmacy visit altogether, by automating prescription ordering through an app, and then deploying a drug-screened, background-checked, HIPAA-trained messenger to pick up and deliver prescriptions to the patient’s home. On average, the delivery takes 16 minutes in Manhattan (by comparison, according to Libby, the average patient’s wait time at a pharmacy is 45 minutes).
The upstart, which has two other founders, Kyro Beshay and Webster Ross, is still finding its footing in New York. It recently moved into a new office near Penn Station, and is hiring rapidly after taking in $2.6 million in seed funding last November, from the likes of Red Sea Ventures and Notation Capital. On January 7, it is announcing a partnership with rapidly expanding New York drop-in clinic system CityMD; Zipdrug information and sign-up help will be available in some of CityMD’s 52 locations early this year. Automated kiosks help patients sign up for Zipdrug after checking out from any participating clinic’s visit.
The goal, of course, is for Zipdrug to find lots of potential new customers–and to integrate itself into a trusted system.
“I love CityMD, and go by one in my neighborhood all the time,” says LIbby. “They really care about a streamlined, quality customer experience. Working with CityMD is also a great way to get to know New York. We are a new company–we didn’t start to deliver until this summer–and our greatest challenge and goal is to meet many customers and show them how premium this experience is.”
For CityMD, the Zipdrug partnership is a way to potentially improve its customer experience–and gain some control over what happens after a patient thanks the doctor and goes home. “All the touch points in our office, we can control and innovate,” says Ned Shami, chief strategy officer at CityMD and one of the company’s co-founders. “But something we’ve been looking at this year is, what happens when they leave our office?” CityMD was founded in 2010 by Richard Park along with Shami, and has grown over the past five years to more than 50 locations around the New York metropolitan area. Soon it will expand to the West Coast, starting with Seattle.
Delivery via Zipdrug is free for the first order, and $10 thereafter. Libby says that fee is likely to be offset by the fact that his company and delivery staff are savvy to discounts, coupons, and best prices for various drugs, and know to seek them out while the average patient may not.
Is the on-demand economy really ready to handle life-and-death medications? On the surface, Zipdrug may resemble a classic “what could go wrong?” startup pitch, and conjure up images of bike messengers skimming stimulants or muscle relaxants from granny’s delivery. But Zipdrug says its contractors won’t deliver certain controlled substances, including narcotics and attention deficit disorder medication.
There’s a huge potential market for Zipdrug in Baby Boomers.
Goldstϋr has deployed its automated kiosks for converting old or unwanted jewelry into cash or gift cards, in an agreement with Supervalu banner Cub Foods. Goldstϋr kiosks are now in place at Cub stores in the Minnesota cities of Silver Lake, Stillwater, Midway, Coon Rapids and Apple Valley.
Consumers can exchange their gold or silver jewelry for cash or gift cards in a secure and accurate process. For the retailer, this approach represents a new form of revenue that Goldstϋr can capture in addition to generating additional store traffic. Moreover, it can be a hedge against declining revenues from other in-store services.
The process takes two minutes and a $2 appraisal fee, with offers based on commodities market prices that are updated every hour. Consumers can choose from a cash receipt or store gift card as payout. If the consumer decides not to accept the bid as shown on the kiosk screen, they can simply decline the offer.
The kiosk is connected to all till points in-store, and automatically recalls the purchase information as soon as the receipt is scanned.
Using inbuilt scanners, the tourist can simply scan their passport and sign the form using an inbuilt signature pad. Respecting all local and international regulations, the printed tax-free form is fully compliant, and in some countries, such as France, it is linked to Customs to synchronise with local systems.
On the heels of launching a beauty line for The Honest Co., Jessica Alba is further expanding her $1 billion empire with another brilliant business strategy: opening airport kiosks for all those last-minute travel essentials.