The Organizational Singularity: AI-Proof Your Company | EP #258

Is there a line-year business, a high margin line-year business that two guys with open claw could replicate in 1690 days? This is something across the board useful for everyone. When we wrote the exponential organization's book, we didn't realize how pressuring it would be. It turned out over 10, 12 years we were dead on. Now that we see a gen ticket on the future of intelligence, what does the organization look like? We think we have a pretty interesting viewpoint perspective on that. If you don't retool your organization or don't restart your organization, you will be disrupted because someone doing it is going to just eat your lunch. The central thing to think about is all of our organizational structures in the past were organized around hierarchy. And now they need to be AI native, a genetic workflow. And that's a totally different model. It needs to be architected around intelligence, not around hierarchy. The next question really becomes how do you get there? Now that's the moonshot, ladies and gentlemen. About to sit down with my dear brother, Selene Miss Mayal, my moonshot mate, talk about the organizational singularity. This is a conversation that I think is absolutely critical for every company to be looking at. We're in a period of rapid transition. Agents, AI, AGI, ASI, it's going to restructure how every company, every industry is being run not in five or 10 years in the next one year and the next two years at most. Selene is going to lay out his process that every company can follow to move from the old way of doing business as an organization, which is sort of top down heavy human centric to a digital AI centric AI native company. Please take a look at this. This is about your survival. It's about your thriving. It's happening and you're either on the evolutionary tree or you're going extinct. It's that simple. All right. Let's jump in. Everybody, welcome to moonshot. A special episode with my dear brother from another mother, Selene Miss Mayal, Selene. You're finally here. You're in our moonshot studio. You've made it. First time, it looks awesome. Yeah. And I love everything about it today. And today is a special day. It's your birthday. It is my birthday. Yes. So for those who don't know, Selene Miss just turned 16 at this week's 16th birthday. And we're going to celebrate. It's such a digits around you a little more. Okay. It's right. The dyslexia in me hits it. So we're going to talk about something that we've been teasing on the moonshot to podcast for a while. Something that I'm excited about, which you call the organizational singularity. Yeah. And I want to make sure that everyone listening realizes this is something across the board useful for everyone. It's not if you're the CEO of a large fortune 500 company, though it's useful if you are, if you're an entrepreneur, if you're in a small company, if you're a parent trying to advise your kid where to go work. Exactly. Yeah. Look, when we wrote the exponential organization's book, we didn't realize how pressurant it would be. And so we're kind of saying, okay, now that we see a gen ticket on the future of intelligence, what does the organization look like? And so we have taken a crack at that with the help of my entire community, all pitched in for this. So we think we have a pretty interesting viewpoint and perspective on that. And you've been saying for a bit now that AI has killed the modern company. Yes. The fortune 500s out there, but I don't think they've gotten the memo. Yeah. They don't because there's a drag that goes affect right when the comment hit the dinosaurs didn't go overnight. It took a few generations for them to die out and figure out what the hell is going on. So we're going to go up a model. All right. Well, let's dive in. And I want to make sure that folks get where things are going to go. And again, how do you surf on top of this massive change? I think the key part of this is what do you do once you understand that everything has changed. So let me go through what has changed. So we have for a hundred years run organizations on a particular 30 set coined by Ronald Coast in 1937. He wrote a paper called The Nature of the Firm and he theorized in this economic paper that big companies will get bigger because transaction costs and coordination costs inside a company are cheaper than outside because you have a very young payroll. You can order them around. And therefore you can get better work done inside them outside. And he actually won the Nobel Prize for this paper. And for 80 years, we've gone through that. And if you go through a couple of slides here, I'll just show you, we've seen all these deep thinkers coasted this. Simon talked about where the organizational boundary said Clay Christians came along. It said innovators dilemma as you get bigger smaller companies can deliver cheaper products. Then Stanley McChrystal talked about how do you get coordination at scale without losing the emotional connection to the organization? How do you extend past that? EXO 1.0 used community and crowd in AI to pull coast sideways to sort of extend our reach and ability to think about X prize and how you're able to coordinate external teams to do things. Think about the idea that for Uber, the mission critical business function, which does a match driver and passenger, does not happen inside the organization. Happens out in the wild. And when you can enable that with technology, you can scale. Right. So we have a couple of ways of extending Crosis law and then Jack Dorsey did what he did with block and with roll off both are worth this book. And we are now extending all that we basically come to the conclusion is that the whole thing breaks in the face of agent AI. Crosis law no longer applies. Why? Because if you have to build a website inside a company, you have to go through layers of meetings and approvals. Branding has to look at it. The privacy guys have to look at it. And it will tell you know they can't be done. Whereas today you can step outside the company, use a sell at home for five minutes and get it done for free and have it know your brand guidelines have it know your design. Yeah. They'll be yeah. They'll try and have it actually spin up a dozen different aversions and have them try in the market. Yeah. And this is fantastic tweet that I've quoted which I've forgotten the name of the fellow just now. But he said, building the features cheaper than having the meeting about the feature. So true. And that's such a great way of framing it. Because that means that coordination, the act of coordination is more expensive than the just execution today, especially when as AI is driving down the cost of execution. Yeah. I want to make sure we get as we discuss this. We understand what is the role of people in this right? Well, let's get to that because I want to just first make the case that this is this breaks. Now, you still need that you could ask the question, we need an organization at all. And it turns out we do and we've got it. We have a term called the fiduciary wedge where okay, coordination costs and execution costs become low, which was primarily the reason for organizations the last hundred years. Okay. But you still need for as a purpose container, a fiduciary, a legal container, a liability container, a legal container. So think SPVs for investments or just containers, right? They hold legal and fiduciary liability. Essentially, companies become more and more like that. And there's a gap between human judgment and liability versus what the AI can do. And that gap we call the fiduciary wedge. So you still need an organizational structure and the legal entity. Everybody, you may not know this, but I've done an incredible research team. And every week myself, my research team study the meta trends that are impacting the world. Topics like computation, sensors, networks, AI robotics, 3D printing synthetic biology. And these meta trend reports I put out once a week, enabling you to see the future 10 years ahead of anybody else. If you'd like to get access to the meta trends newsletter every week, go to dmandis.com/meditrends. That's dmandis.com/meditrends. And then the question is ultimately what's inside that organizational container? That's right. And there are going to be assets and IP and agents and some number of humans. That's right. And agents making API calls to God knows what and hacking the things and getting phone numbers and calling people up like Alex Finns AI just called them up, right? So this kind of takes the EXO 3.0 book from the original book to the 2.0 book to now what we call the organizational singularity. By the way, is this a book that you're putting out? It's a book that we're putting out. And is there a place people can go to learn more about this now or right now we have it at organizationalsignularity.com. Okay. So go to that website and you'll be able to sign up. But right now we're only releasing, well, let me, let me jump to the surprise here. We're actually releasing the book as an AI because a book is a static thing. I've finished published the book. It'll be out of date. So it has to be an AI. So we're going to be launching a Claude skill because every three days something comes out that changes the game a bit. So we're keeping the book as a living document, which we tried to do with 2.0. Right. But I worked out. But the technology wasn't there yet. Now it is. So we're very, very excited about that. Okay. So there's a problem though today, which is that 80 plus percent of AI projects and companies are failing miserably. And they're failing miserably because existing companies are geared towards human to human to human workflows, all the approvals and bottlenecks, chains, et cetera, et cetera, were all human centric. Right. It's like I used the analogy of when we first created a television. We took radio announcers and put them on TV. Right. And you didn't use the medium at all. So these projects are failing because you're moving AI into legacy organizations and automating the legacy human bottlenecks. Of course they're going to fail. You need an AI native environment to do this one. So we had to kind of step back and say, okay, the entire EXO model breaks, coast breaks, all those thinkers up to now, they'd all breaks. We have to rethink it from scratch. And so we did that work with my community. We did that and came up with a whole new. And just to be clear about when you say something is breaking, ultimately, we're going to I think what you mean is if you don't retool your organization in this fashion or don't restart your organization, you will be disrupted because someone doing it is going to just eat your lunch. Here's a question for every CEO and every C-suite member out there. Is there a line-year business, a high margin line-year business that two guys with open claw could replicate in 60s and 90 days? If it is, call us because you better get started fast because we're going to. There's two guys out there with open claw disrupting drop-by. You and I've talked about this. Anybody who's got a juicy margin is open for a tax season. Yeah. You might think you're protected by regulations. You might think you'd be protected by your brand. There's a few protective modes and I'll get into that. But for now, it's a whole new world and it's the whole new ballgame. What we mean by the organizational singularity is instead of coordinating and organizing the company around hierarchy, you organize it around intelligence. That's a very big shift. That's about as big a shift you could ask for. We've come up with this architecture where you have the MTP, which you know well, the mass of transformative purpose from the original model accepted. And this becomes not just a poster that you put up on a wall. This actually becomes a protocol. MTP becomes an actual protocol and a guide for AI agents and human agents and whatever to act. I mean, it's cornerstone. It's a it's a North Star. Yeah, but it's actually a protocol and it's just new world. What's the architecture of MTP? What's the boundary conditions around it? Right? What are the feedback loops that tell you you're within the concon of the MTP are not stepping outside the cone? For example, in the early days of Uber, great MTP, everybody should have a private driver. But if you always ordered search pricing, they would knew that and they would always charge you search pricing, even though you and I would be standing next to each other on a cheap skate, I never order search pricing. And I would get the cheap price and you would not. Right. And so that kind of somewhat pushing the boundaries on the ethics side is now guided in this whole MTP architecture. So that's the middle of it. And then we have drive, which is the intelligence scaffolding and the engine around it, which I'll touch on. And then shape, which is how does the organization drive and shape our acronyms for subcomponents? That's right. Those are acronyms. You don't need to get into them all in detail, but you'll get the general idea around it. Okay. So then we have the next step is to then look at the intelligence stack in detail. Okay. And if you look at the diagram, you'll see this kind of architecture where we found six layers of what that core intelligence engine looks like. And the best analogy we have for this is Boyd's Uda loop. In the military, they have observed Orient Decide Act. And it's a core flywheel at the middle, which is also the core of the solve everything framing. When you have that inner loop going, right, then whatever you put into that loop starts for having a positive feedback loop on everything else. So we created the intelligence stack to act a bit like the Uda loop so that there's constant learning going on. But around it is a very, very important wrapper, which is governed and assured, which is the constraints and the oversight. It's the harness. And oversight to make sure that agents aren't going rogue, right? We saw, we've seen over the last few weeks, agents going into crazy things, the railway agent that deleted all the volumes of rental car data, et cetera. So we need to make sure there's a very strong. So imagine the following. And I'll mention what I mean by that. So the very heart of it is this intelligence stack with this very clear governance protocol. What do we mean by governance is trusted evil architecture, a searchable log, every agent has to have a searchable log granular rollback. Can you go back to the previous version if you start going off and a human review queue so that as human beings are always in the oversight, checking things. So this comes down to the role of what does a human being do with execution and coordination is done. Human beings rise up a level and they do dashboard oversight. They do monitoring. They do exception handling. They do problem solving. They do efficiency increases, right? So those are the activities that human beings will do. It's kind of like you go to Germany, nobody's working on the factory floors, but unemployment hasn't dropped because everybody's doing more work on problem solving and increase efficiency, design thinking and other things. So we think the same thing models there. This governance assure loop as part of this Uda loop, those two combined give you a very tight core engine that makes sure the whole thing doesn't fly off the rails. Okay, so that's the intelligence stack. Now when your agents talk to other agents, they need some clear mechanisms for how to do that. By the way, just to be clear here as you outlining the process, you've structured something that you can teach companies to implement. Absolutely. I mean, let me let me work through a live example. Yeah. Okay. So you have these multiple layers, right? And let me just run through these layers against people who are there's a purpose layer, this sensing layer. There's an interpretation layer, there's a decision layer, there's an orchestration layer, a learning layer, because you need that free bulk. And then the government. And by the arrangement told us, right, you know, rapid learning is the key to success. So this is that wrapped up in a very tight set of layers. So imagine you're a retail company and a competitor suddenly announces same day delivery. Yeah. Okay. So you have a set of sensing agents out there going, hey, this just happened, right? So the sensing agents bring that new information back to the other agents. The next is interpretation. So the interpretation layer then goes, okay, well, what does this mean? Does this could this threaten our line of business? Could this threaten one line of business, multiple lines of business? Is it an existential threat? How big of a deal is this? And they interpret that data. The next layer is a decision layer to say, what should we do? Should we offer same day thing? Should we buy a startup that's doing same day delivery? Should we ignore it because we don't think it's really going to work out? We think that it's a stupid idea. What do we actually, what's the decision? I mean, as I think about this, normally this would be your strategic officer, your marketing officer, all of those coming together, having meetings and then decide what to do. That's right. And you're saying all of this could be turned over to agents. Layers of agents can handle all of this now, right? So now you have a layer you have, you have a feedback. You have a fee at each of these layers as a human being going at the interpretation layer do I think this is okay? Yeah, hit button, let it go to the next level. So it's an approval process. A approval process. And also senior people looking over going, they could be looking at agents looking at six different strategic options, right? Whereas in a very manual iteration, that may take months to evaluate the competitive alternative, now you're doing it in hours and days. Right? So that's the impedance mismatch there. And by the way, what we've seen historically is the impedance mismatch between a Fortune 500 company and a startup where the Fortune 500 company to use that as an example has so much to lose if they screw up that they're paralyzed to make decisions. And the startup is like screw it. Let's just try everything. Yeah, exactly. Exactly. And this is just taking a step further. The way Robert Goldberg puts it in a big company, one of 20 people can say no to an idea kills it. Yeah. Whereas the startup can go to one of 20 investors and once he says yes, and they're off to the race, that you balance that out. Right? Okay. So now you have these layers of agents, okay, purpose agents, sensing agents, interpretation agents, deciding agents. And next level is an orchestration agent. So let's say the decision agent comes back and says we should buy a startup that's doing this, right? And then now the orchestration is saying, okay, we got a set up, we set up a set of functions to go find a bunch of startups, analyze whether which ones are ready for M&A, tell the corporate dev team, get the lawyers ready, etc. And then get the legal agents ready. Get the legal agents ready. And finally a learning loop where did we buy another company before and did it work out or not, right? And how did that work out? And all wrapped up in this governance thing. So that's the kind of an example of how you would flow through these. And at the core is this engine recursive learning. The another way to think about the organizational singularity is when you can have recursive self-improvement at the workflow level. Love that. Okay. So if you took, say, invoice processing and you have right now all these human checkpoints of yes, did the goods arrive? Should we, who's, does the supplier exist in our systems? Or is there a legal contract? And there's a human checking all those things. Maybe you have an ERP system that's automated one or two of these layers. But now you can have the whole thing done. And then an agent can say, well, how do I make this better? Every loop. How do I make this better? Every loop. And constantly improves. Once you get to that level, you can basically set back and you're off to the races then because everything's just self-improve at that level. Okay. So that's the very heart of the whole thing with this layer. Now we also recognize that agents are going to be doing very crazy things or how do you navigate that. And we've come up with a framing which we found in smart contracts in Web 3 plus some old Web architecture that says every agent should get a passport with a little metadata on what that agent is allowed to do or not allowed to do. Right. So for example, policy controlled APIs. Okay. Object, data object metadata that goes with it to say what is that data allowed to be exposed to or not be exposed to a liability framework is making sure agents are doing illegal things because your lawyers will go bananas at agents going off outside your organization doing things because you've no idea what they're doing. So every agent gets a almost like a little passport on what they're allowed to do. It's it's constraints constraints and oversight. And now you have other agents in the governor's sure loop over watching these things. The minutes are something off the rails human gets notified agent gets stopped rolled back. checked again and you can do again. And the reason this works is, you know, in the quantum world, you need like a thousand physical Ubis to hit a logical, right? Well, agents are relatively free. So you can have a lot of agents doing things and a lot of agents overseeing them. So the overall cost, you still get the benefits of that overall stack, okay? And here's the question I'll come back to for every CEO out there and every business leader out there. Could a two or three person team with Hermes or OpenClaw disrupt major lines of business in your business? If that's the case, now there's a few most that you could develop, okay? One is proprietary data, right? That's a clear mode. If you have key data that can't be replicated also, or number two, regulatory, which we see in healthcare, et cetera, regulatory capture more than anything else. And that mode can be eroded over time. Can be, all of these can be, but they'll serve as most for the time being. But the biggest mode is an intelligence mode, where if you can learn faster than everybody else, nobody's gonna catch you, right? This is why Claw, Learning and Strategy PT, they're learning loops are further ahead than say, Manus or Grock or whatever, and we're seeing how quickly they're moving ahead. Once you hit that, it's very hard to catch up, right? And a fourth one would be, fifth, really deeply committed to purpose and not wavering from that, because nothing shakes you. If relationship with the end customer and developing the depth there. Yeah, dedicated customer relationship, which feeds into proprietary data. And brand. Brand, very critical. Brand sits with MTP, that emotional connection with the end user. If you have a strong brand, you should use all of these new agents and capabilities to reinforce that. Means you could, it's hard to shake you out of that position. Welcome to the health section of moonshots brought to you by Thout in Life. My mission is to help you use the latest technologies, including AI, to not just do your work at home, teach your kids, but to help you live a long and healthy life. I'm here today with an extraordinary physician, the chief medical officer of Thout in Life, Dr. Don Musellum Don. Let's talk about cancer. You know, I know from the member database that we have at Thout in, our members who come in who think they're healthy, it turns out 3.3% of them have a cancer in their body, they don't know about. That's right. You know, the majority of cancers that we screen for, those aren't the ones that are necessarily taking the lives when found at a late stage. We know that when cancer is found early, the chances for cure are much higher. We know it's much easier to treat a cancer when found early versus when found late. What we're finding in our members is over 3.3%, we're found to have these cancers that were otherwise wouldn't have been found or detected. Yeah, you know, it's interesting. People, you don't feel the cancer until stage 3 or stage 4. And if you don't know what's going on inside your body, it's like driving your car with your eyes closed. And you can know. And so when members come through found, how do they detect cancers? So we're doing full body MRI, and we also do early cancer detection screening. This is very, very important. And these are not typical tools used in the conventional care setting when it comes to prevention. This is a hard thing because currently, these are not studies that insurance would yet be covering, but the goal is to collect these numbers do the research and work hard to democratize wellness. Yeah, so at the end of the day, you can know what's going on inside your body. It's your obligation to know. So check out found life. Go to foundlife.com/peter to get access to the latest technology to help you detect cancer at the very beginning at stage 1, when it is curable before it gets to stage 3 or stage 4 in your world of hurt. So those are some of the part of that. Now let's talk a little bit about what happens to the company and the classic organization, which has C-suite, middle management, coal phase, doing things, what happens to them? So C-suite already gave the example. Just to be clear, what happens to them if you-- In the new world. If you bring in-- if you restructure-- Yeah. Do you have a given a name to the restructured organization? Exist an EXO 3.0 is the best name I have. If anybody has a better name, I would love to hear it. So if you're going from a classic organization or an EXO 2.0 to an EXO 3.0, what happens to your organizational structure? That's right. OK. And it's a whole new world. We're not-- OK. So C-suite becomes basically accountability holders, dashboard oversight, evaluators, and validators rather than doers. You're not going to be doing a strategic evaluation. Agents will do that. You basically hit-- yes, I like the evaluation. So basically you're using your wisdom and experience to decide what your agent's action is in line. Now this opens up all other questions, which we'll get to in a second. So C-level is guiding and holding accountability and watching what the agents are doing and then deciding yes, no, do this, do that, whatever. Middle management is where the biggest change happens because middle management and existing companies almost completely doing coordination. They take data from the co-face. They repackage it for proper absorption by the C-suite. That function drops about 90%. Now then you need to lift up the human beings there and have them doing exception handling, problem solving, et cetera, of which there's a ton. We just don't do it because most people don't have time. Right. Now you'll have more time to do those things. The bottom 20% are doing much more enabled work because they're-- agents doing almost everything. And they're also doing oversight and watching. Now we've talked about on moonshots a number of times the idea that we're going to see a reduction in the size of firms from 100% down to 20%-- 80% reduction. You still-- Our calculation is you'll be able to run an average company with about 20% or 25% of the workforce that you had before. OK. Now you can go down the negative side. There are media side and go, oh my god, 75% unemployment. Or our moonshots view would be, we'll have 5, 10 more companies being created. And there'll be that much-- The blossoming of entrepreneurs. That's right. And we're seeing the camber and explosion of startups already. We're seeing actually hiring go up right now for entry-level jobs, which is really pretty interesting despite that. So those are the three things that happen to the three layers of the business. Now the question then becomes, how do you turn into one of these? And by the way, where do you see the 80% being lost? All of the levels? No. Mostly the middle level. No, I think 60% would become from the middle management. Yeah. 20% from the bottom, 20% from the top. And that's the compression. The compression is there. But mostly for mental management, because you don't need to be gathering and aggregating sales reports. There's no way you're going to outperform an agent doing that. There's much more work that needs to be done in the company that you could do more value-bley. Now an interesting question comes up in this, which is the alignment problem, which is, how do you have-- if you don't have entry-level people doing the work, and sweating it out, putting spreadsheets together, and doing the grunt, what happens to your organizational in institutional-- Yeah, that's right. And where do you get senior management? Eventually, when lower management and entry level are not there. And what we think will need to happen is very active and aggressive or preentist your programs. So if you're a suddenly a mental manager that gets displaced, we'll go partner with the chief CFO and we're looking at alternatives. And you'll learn a ton more. You'll be much more fun back to the apprentice. Really back to the apprentice. The guild kind of models. We think that'll start the thing. OK, so you have this new entity, this intelligence core, new shape for the organization, C-suite, middle management, and call face. Right. And this is the part where we have deep expertise, because when we built the EXO model, we decided we were one of the key things we had to solve was breaking that immune system problem. So if you try anything disruptive in a big company, the antibodies attack you. So we just-- Just to clarify this, when we say how do you get there, how do you go from a classic organization to retooling yourself as an EXO level three here? You're a $100 million trucking company. Yeah. And now two guys can lease trucks, have an AI-centric organization and compete the hell out of you. What are you going to do? OK. Now, this is the question of what do you do now, and how do you turn into this new model? OK. And what you do-- and I cannot stress this enough with the experience we've had-- is you cannot change and fix and transform the existing company. It goes all the way back to Buckman, Mr. Fuller, who said you can't fix an existing system. You have to build a new system at the edge and let that become the new gravity center. John Hagle and John C. Lee Brown identify this as disruptive things happen at the edge. The poster child here is Nestle, created in Espresso in 1976. For 10 years, they try to run it into the line of business inside the mothership. Doesn't fit. Different brand, different supply chain, different delivery, different customer proposition. Finally, they're like put it over there. There's too much friction inside the company. They give it a different building and boom. Well, we wrote about this. The classic was Steve Jobs getting the-- starring the Mac or the IBM screen of PC. You take your credit. Yeah, Apple. You keep it with their-- That's right. Yeah, Apple would take a small team, put them at the edge, keep them secret and say go disruptive to a different industry. So Nestle is a poster child of this. Nestle is now one of their highest performing lines of business and every hotel room in the world has one. So we know this. We've been talking about this for a long time with the exo. You do disruptive things in the edge. And we've been working with Procter and Gamble to see them energy. a black and darker to HP, helping them do disruptive edge innovation. It's the human ego in the final result protecting themselves from disruption. Yes. So you have to do that different stuff at the edge. There's a reason why Amazon Web Services wasn't done in the core service. It just doesn't fit. Right. Okay. So you have to take this methodology and this approach, just believe that you can try it the way. By the way, I tried in a, I'm not going to say which of my company is a hundred person organization, right? Where I'm very much, you know, I'm a compelling individual. And I still could not get it. And so I literally had to start it as a separate organization. You do. Yeah. And I've done that now multiple times. Yes. And you maybe take it to an extreme because every time something happens, you just spin off another company, which may, which is the Richard Branson approach. Like every time he got to 150 people, they'd spin off another company to break through the Dunbar number problem, right? But I'm going to ask the viewers and listeners of this to you. You can go research this to death. But if you do anything other than do disruptive things at the edge, pointing to adjacent spaces in a different way, you will fail. I've seen the innovation process in detail, probably in 250 out of the Fortune 500. And I've never, ever, ever seen any other method work. And I want to say one other thing. If you're going to try and do this on the edge, ultimately the edge organization needs to report into the CEO at the very top. You cannot. And there's one other thing. The board of directors need to provide the CEO full support. Yes. You know, if you're disrupting your own organization, you don't have the board support. Yes. So let me talk there how you do this. You do not touch the existing organization. It's your revenue engine. If I, yeah, don't touch the cash cow. Yeah. And if you start doing what's happening right now is people are trying to stick AI injected into places. It's just not working. Right. So what you do is at the edge of your organization, you create an AI native digital twin. Okay. And then what you do once you set that up separate entity, take three to five of your crazy young people. Yes. Okay. Partner with a company that's a builder, not a consulting company, but a builder. So you get what's called Ford deployed engineers, which is the latest buzzword in software these days. And what you do is you pick a workflow. You've got all these workflows in the legacy organization. Is that a product or a service? Well, call it invoice processing because a workflow, right? That's a very standardized cutting cookie cutter workflow that you know exactly what how it works. And you you rebuild it in this new entity. Okay. You don't move it. You copy it. You make the steps in this. We've got a whole methodology for a task breakdown and score each task, et cetera. That's built into the methodology of the whole approach. You replicate it in this new system. Okay. You fork the data. Right. So that you have the data to do it. And now you start running it here. Now you have a you've de-risked it also because if something was horribly wrong, you're not risking the mother's share. Cannot stress this long. So you run this in parallel until you hit that recursive self-improvement loop. And once you see the improvement loops here are way faster than you can do it here, then you know you're in thing, even then give it another few weeks. And you just call it check against the original. Quality check. You've got everything. And then you slowly deprecate the old and you take next workflow. Maybe it's receipt confirmation and you move that over. Maybe the next one is demand forecasting and you move that one over. And little by little you grow this thing at the edge. A full digital twin. And full digital twins. That's that's that's in recursive self-improvement. And then next thing you know you've got your AI native digital twin fully running. Our current estimates are that once you have that digital twin running properly, your performance improvement should be between 100x or higher per year. Just 100x better. Like if it's processing one invoice, not a true process, 100 invoices next. If you were taking 100 days to do something, you should take one day to do something. What's the human scaffolding around the digital twin? Well, that's the whole thing. That's where you're building up this thing in the human beings in this new model. You have human beings there, but there's more less of them and they're doing more oversight, exception handling, problem solving, etc. You're literally building your AI native digital twin at the edge. Okay. And what gets me excited as well is the idea that once you've done that, you can start to create adjacent companies. You can spin off anything. And you can start to create, I mean, as if you're a great entrepreneurial team. Yes. You're limited by, I mean, a lot of my companies have amazing teams of people doing things. And, you know, I don't want to push them any further because, you know, quality of life, they'll break, they'll get stressed out. But if all of a sudden you can get that automatic digital twin running, that team can now start building other products and services. Exactly. Yeah. You can do that. Now, let me give you a real example. Okay. There's two cases, sectors, by the way, that have gone through this full loop. Okay. One is the contact centers. We used to do human business processes and outsourcing. We had call centers doing stuff. Then phase two of that automation was chatbot-assisted customer service, right? And now we have AI native customer service, Klarna has done this. Yeah. I'm just talking to the AI's on Starlink. Yeah. It's all Groctrin. It's all Groctrin, right? Yeah. I set up a new website for, in fact, this organizational senior Lertey. And I went on Cloudflare and the AI told me exactly how to run the exception rules and domain forwarding. It was like this is incredible. And so just the automation of what's going to be possible is going to be magical to people. Anyone using AI to refine level today sees how much fun it is, right? Compared to what it was like before. So we've seen this today. To the point that we're working seven days. We're killing ourselves. But you know, everybody's having so much fun now. It doesn't feel like work, right? No, it's like because we're getting so much done. I mean, it took three years of hell to write the first book. It took us two and a half years of hell to write the second book. Mostly because we had to rewrite it because it deal with me. No, no, no, no, because we had to rewrite it after because generative AI came out to Louisiana. But this third book was three months. Yeah. Right? And because there was so much every contributor could use an AI add more data to it, more help to it, add their methodology to it and then boom, you're off to the races. So the second domain with this is fully happened by the way is marketing and content generation. Right? We used to have it. Sure. It was agency heavy. It's a I native, right? And so we can see certain verticals hitting this spot in a particular way. So let me go into the rewriting methodology. We call this methodology rewriting. Okay. And I want to go into a little bit of detail. People understand the specific steps that are involved in this. So you have a workflow like inverse processing and you're going to start moving workflow over. Before you do any of that, you have to do a backcasting exercise. Okay. What's that mean? A methodology in future studies and forecasting where you pick what the vision looks like. Say Elon wants to get to Mars. You could say, okay, I want to get to Mars in seven years in order to get to Mars in seven years. Where do I have to be in five? Where do I have to be in three years? And now you have your roadmap. If you start from the starting point and go, I want to get to Mars, you've no idea what you're doing, how you're going to get there, etc. So backcasting has turned into a very powerful methodology. So step one is take your company, so let's say it's that trucking company or retail company that I used earlier and say, okay, in this future world, what does that company look like, fulfilling its MTP and its architecture in an AI native centric way? You put that in. By the way, that's one of the hardest things for people to do to let go of how they've done it. Yes. And by the way, it's also one of the easiest things to do in conversation with a large language model. Beautiful. Right. Go do that backcasting. So that's phase one. And we have people that can help people do that. Step two, you score your company. So we've got a whole bunch of metrics on which we want to score the existing organization. For example, I'll just give you two of them. One is what is the organizational drag inside your organization? Right now if you try and get something dead, it'll have to go through like five or six different decision loops and approvals before you get it done. Or can they like Nvidia, they go straight to the founder and go, can I do this? And he says yes or no. Or an AI tells you yes, you can do it or not do it, et cetera. So what's the organizational drag one to 10? Right. A second metric would be where is AI as a first class citizen in your company right now? Love that. If it's a tool injected by a T, you're on the low end of the score. If you've got a chief AI officer and you're building AI native capability already, your score is much higher on that one to 10 score. So we've got seven dimensions. We ask you those seven questions you score yourself. People have this on the website for people to take for free, right? Evaluate yourself. It's a one to a seven thing. The next step is you take the most prescriptive workflows you have in your organization and start mapping them and documenting. So you have clear knowledge. A big problem by the way is going to be what's called tacit knowledge, right? There may be like let's say you're doing video production. Okay. There's a bunch of steps you're doing as a video producer that may not be obvious from the outside. They're not documented anywhere. And if you lose that person, an AI can't do them right away, right? It's the unspoken. And by the way, there's a whole process right now about which companies are basically shattering you with an agent. They're trying. They're trying to shatter. Yeah. But it turns out if you're a Gen Z worker, 44% of Gen Z workers are sabotaging the AI and giving it bad information. So it can't take their job later. Wow. It's at that level of immune system response, right? So it just that is a perfect example of the immune system. Just immune system. You're trying to do something, but the culture is killing you. trying to get that done. By the way, I'm going to just reiterate, we've created a 10 week process that we found a way of hacking, breaking the main system, hacking culture at scale. We've done it a hundred times for big companies. I love I love I try to play in a little bit of that. I love it. Okay. Next step is is cut the organizational drag starts stripping out approval levels in your company so that you actually strip things down into you can break it and what would that look like? Okay. Next step is build start building that digital twin and migrating workflows over one by one. And the final one is you rewire you rewire your systems more and more so that everything is going to that rather than to this. Let me take one more crack at visualizing this. Today, this is how most companies operate. They have their cloud provider or their networking or their capability. Then they have a set of ERP systems oracle financials, SAP, whatever. And all the data sits inside those systems, right? And those companies don't want you to have that data easily. So it's wired to wired in. Then you have an application layer and people are trying to layer AI on the top, hacking against this horrible architecture that we've had for 50 years. And it can't be easily unwound. Picture the new architecture, new architectures, you've got connectivity and cloud provider, a data lake that has all your data accessible in one spot with proper approval levels attached to each data object. Right. Then you have your application layer that is custom built for you because AI can do that and workflows, etc. Then your AI, then your agents on top of that. So this is a wholly different stark stack and architecture that you own that you bought them completely. Right. And this is why the SaaS providers are so freaked out because that model does not is not compatible with this model. Right. So right now they're trying their best to keep their place because they're wired into the limbic system of the legacy organization. But if you build this proper stack, you have full agency and control and years much cheaper cost than you could do before the speed is infinitely ask anybody who's tried to implement the ERP system, how much hell they had trying to do it. And then you end up trying to map the organizational float to the ERP system versus the other way around. Now you can have software built that way. So this we've built a whole methodology for this last couple of points around this is we think this overall transition is going to take about five to seven years to do this full transition. Wait, wait, let for understanding. So not for a single company to do it for all companies to get there for the majority of companies over a five to seven year period. You're either dead or we've transitioned to this and this maps is well by the way in the conversation we've had about the turbulent period of time. And we call this we actually call this the turbulent transition. Yeah, yeah, exactly that. I've said it's two day years we have we have to carefully architect society. Yeah, how we get through this two day year period. That's right. Okay. And yeah, now I'm just talking about companies forget anything else. But it's the underlying reason that's right now. Okay. So in our opinion, you should be able to run a company between 10 to 25% of the people that you have today. If you're a regulatory centric. Yeah. Right. Or have physical work like you're building a data center type thing. Then it's less. If you were if you're a marketing company, then you're going to be down to 10% human beings. Yeah. Right. But a physical company. Even then it's only 25%. Okay. So for example, we were doing work with Fermi America and we estimated that we should be able to run a power plant instead of with 800 people with about 80 people. That's a full 10% back crop there. It should be a one to a 20 plus manager to what's Jack Dorsey called H.I. I see high impact individual contributor. Yeah, should be one manager per 20 of those instead of one to five or one to three that just that Jack took it to an extreme. He did. He wanted to have, you know, just CEO and everybody connects to him. He did. But what that means is using AR to do everything. Yes. Because there's no way the CEO can keep them. Many people connected to that. Many people anyway. Right. And then and this is already happening. Take cognition's labs. Their AR grew 73 times. When they implemented this full system when they went fully AR native. This is already happening. This is not a some pie in the sky. Yes. We're taking early signals. And over the last few months as we've been watching the market evolve. Every single data point we've gathered is pointing exactly as this trajectory that we're pointing. So this is actually a race. This is, you know, if you're a company in an industry and someone else runs this process and has a recursive improving digital twin. Yes. And you don't. Yes. You're cooked. You're cooked. Yeah. That's right. So if you're a unilever and proctor and gamble is taking all their stuff and automating it. You will not have to listen right or the other way around. Right. Whoever whichever way it is. Okay. So let me talk about what survives and what to put away this and just just to hit it. You know, we friend of the pod. Elan is talked about increasing the GDP, you know, triple digit growth. I mean this just adds you know rocket fuel. I mean, it's insane. Yes. We're going to see insane levels of. That's a company is that are delivering 100x compared to what was doing being done before doing is under the right. You know, in terms of profitability. Right. That's right. A revenue scale and profit goes to the roof. Yeah. Now profitability will be limited because that profit margin. And then we can get into the whole UBI, UHI, universal basic services, stuff, etc. This episode is brought to you by Blitzie, autonomous software development with infinite code context. Blitzie uses thousands of specialized AI agents that think for hours to understand and enterprise scale code bases with millions of lines of code. Engineers start every development sprint with the Blitzie platform bringing in their development requirements. The Blitzie platform provides a plan then generates and pre-compiles code for each task. Blitzie delivers 80% or more of the development work autonomously while providing a guide for the final 20% of human development work required to complete the sprint. Enterprises are achieving a 5x engineering velocity increase when incorporating Blitzie as their pre-IDE development tool, pairing it with their coding co-pilot of choice to bring an AI native SDLC into their org. Ready to 5x your engineering velocity? Visit Blitzie.com to schedule a demo and start building with Blitzie today. Let me just do it before and after. What survives is what the new entity looks like is the MTP encoded as protocol in the company. Number two, the accountability shall legal entity, fiduciary holder, liability container, etc. Prepiratory intelligence in that stack is very critical. Coordination protocols become very killer. Curatorial judgment when execution is nearly free, judgment and taste become really important in the future. We've talked about that. Super important. Super important. Those are the things that will survive and thrive in this new world. What does not survive? Number one, the org chart, the way we built it. David Rose, it's famous for saying whatever the org structure, the guy who successful in the 20th century will have you fail in the 21st century. Turns out he was right. It's just taken a little longer. It's iterated again. So the org chart in the traditional model completely fails. The five year plan dies completely. In fact, any static planning dies. Yes. Because if you do any strategic thinking of this, what the world's going to look like a year from now, you have no concept. Cosset learning was we're in the middle of the singularity. You can't rely on any static plan. So the plan itself has to end. We even got it to this point. I think about the imagine people as he's getting very anxious right now. When I've spoken about this, a conference is people are like my head is like a breaking freaking out dying here. But again, we've got we looks like we found a very stable mechanism to get to get you from a to be right. So there's there's. Thank you for that. By the way, I mean, I think it's so important. Well, in terms of what the world needs. Right. This is you and I love doing stuff that the world needs. It's very clear. This is what the world needs as a stable framework to get us from a to be. And if we can have a little less of the chaos as old systems fail and we can fail over more elegantly, then please couldn't forget us to do that. So the five year plan in fact, we actually took it to the point where right now if you have an organization that org structure changes only when you have a major event like an MNA transaction or you launch a new line of business or something. Or you replace or you perform in stocks. You replace the management team. So that org structure does not change very much. But in the new world, that org structures dynamic and constantly changing, adapting to the current situation is like an amoeba. And that's the org structure. Forget the orgs. The organization itself becomes a protocol. And that's a big kind of thing to get your hand around that. Okay, middle matron is a coordination layer gone. Okay, quarterly reviews as a unit of decision making gone. Annual planning. Yeah. In nurse your most customers don't switch because switching is annoying gone. Okay. Acetz in the agent economy gone. So there's a bunch of things we've kind of highlighted what happens first And so we're kind of looking at this and one guidance I would give to people if your company is less than 50 people You can brute force this and do this in the whole company because you've got a first name basis with everybody if your company is over 15 Your case it was a hundred. Yeah, do not try and break the immune system and do not because you'll risk the existing company You don't want to do that do this digital twin at the edge. Yes. Okay. So what we're doing right now is there's thing Okay, let's pick a few CEOs that want to go through this Okay, and we're gonna score them and let rewrite score and if they've got to take in some through it What yeah, I mean we started with about We're right now at about four companies. We're kind of going through them with that We'll probably do ten at a time So if you're interested and you want to go through this let us know and So let's be very specific about that because I can imagine a lot of our viewers want this anyway a lot of large companies and not General companies and so forth So if someone does want to be one of the first ten going through this. Yeah, who do they email? Where do they go? Two paths would be email Kevin at Open EXO Kevin Allen is our head of community and and navigates all this and his AI will help K even open at open EXO dot com That correct or go to the our website organizational singularity.com and you can actually fill out a form and say I want to try this But you're gonna selectively choose who you were gonna say yeah because let's say a company has horrible organizational drag Yeah, we're gonna say go fix the organizational drag first because we're gonna spend all your time on that and not doing with And we think it's a 90 day process to do like to start this process and get a few workflows working in this new way And if that once we get you going then you should be off the races and you can build on yourself Okay, I will take batches the first batch will be ten or twenty probably and then we may do more We'll see how that goes my entire community is being Retrained for this so my EXO community is now 50,000 people in 150 countries So we're retraining them to be able to navigate this we're all gonna go through this journey together I'll be personally enrolled in the first couple of batches Yeah, like I was personally enrolled in the first sprints etc We just heard to make sure this we just heard Jake Muhammad say that he wants to run 50% of the Emorati government yes, yes, do you see this working for governments as well? Completely think of any government almost all the processes in a government or prescriptive very well understood the process for renewing a Driver's license is extremely well understood and frustrating and frustrating But now that friction can be removed in a really magical way Yeah, in fact they did this. I mean Minister al-Alamah, right? Yes, I'm coming get a golden visa the minister I mean you're gonna be my poster child and they are processing golden visas in five hours or resident visa in five hours It's unheard of in in that world So they've already been down the path like this. They're taking it naturally to the whole other next level But for governments and non-profits this completely applies right and there's a whole chapter we have in the book Which I won't talk about here, but go in the whole solve everything paper that you and Alex did right now all of Alex is thinking on the Interloop we've taken a crack at what does the how do you organize? Domain after domain and create a domain collapse In more and more sectors and how do you organize for that? Yeah, so you can create an organizational design Where you can pick a domain like healthcare or education and set up a structure that then has that inner loop start to move Yeah, and I guess the other question is if you're an entrepreneur thinking about starting a company. Yes, you have Basically a platform here in a playbook to start that's right immediately. Yeah Now you know what we can you can read this in fact what we're gonna do is we're launching the book as an API as an AI Right, so we're gonna launch it as a clawed skill That you can just download like claw just today. We're gonna have connectors to all quick books and everything else like that We're gonna do download the entire Contents of the EXO framework as a clawed skill because every two three days we're learning new things We're gonna build it in so the skill itself is changing on the real-time basis It's not like you get certified in this from five years ago You have to the AI itself has to keep updated. So we're releasing the book as an AI nice as a native AI amazing So I guess the question is if You know if you're ready for this and and you're selected that's great If you're a company that's got too much what you call it organizational friction. Yes, organizational device What do you do? Oh, come and see us because we'll show you will tell you what to do for example If you've got a process that takes 10 steps, okay Brute force it and rethink that process. So it takes three steps Once it's taking three steps or less then you're able to you're ready to start thinking about moving over into the digital twin You can also start setting up the legal framework for the digital twin get board approval Right, there's a lot of scaffolding that has to take place for you to get to there, okay You may have legacy legal issues like for example in Germany Workers councils decide how many employees the bigger companies allowed to have or not have which is not great from a flexibility point of view But there's so much else you can do to start Navigating this in fact one of our folks Patrick Sandina said look let's figure out a way in this process of retraining all of the The people that we were doing work and that that might be a risk Retraining them to be in this new model so that you have a kind of a whole Transition plan for society built in So which is then you solve the social contract along the way and so we'll see how that works out. Yeah, I love this Liam You've been pregnant giving birth to this Why would we be talking about this? It's about it's worth three months of of stuff and and then what I would do is I started writing the first version of the book and worked with Claude and Chateu PT on three instances of Gemini Chateu PT and Claude each taking cracks at different things Then I sent it out to the community and said give me feedback and so we got lessons learned and then we went and talked to them in the cutting edge AI practitioners So what are you doing? What are you seeing at the cutting edge? And so it's been a it's been a because the field is changing as fast as we are able to keep up with it So just keeping out with this like moonshots right we're spending a huge amount of time just keeping up with all the breakthroughs and headlines If we're having to spend have a team dedicated to just keeping track of all the things happening so we can constantly tweak the methodology itself on how to do the rebuilding amazing Again just to reiterate if someone's interested Kevin at openexo.com. Yeah Or go to what's the website organizational singularity.com fantastic which is not full I think this is teaching boards and founders How to survive the next you know the disruptions that are coming the disruptions are coming the disruption is is now It's like there was William Gibson said the future is here is not evenly distributed right the organizational singularity is here It's just not evenly distributed if you're a five person startup you're building an AI native way anyway Yeah, and we have a whole bunch of our community members that are doing that and we've been learning from them right you see Alex Finn with all the open cloth stuff in the hermys and what that's pot what that's making possible the big with the central thing to think about is all of our organizational structures in the past were organized around hierarchy and human centric workflows and now they need to be AI native Agentec workflow and that's a totally different model it needs to be architected around intelligence not around hierarchy Love it and I hope on the on our weekly soon biweekly soon daily Moonshots daily oh my god, I know I know it's crazy, but do you know how many flights I've had to change? Oh my god Oh my god, the only flat I can take is right when Moonshaw's operating after now stayed until the next day I know how many airports and airports have you broadcast? It's been bad. It should get better by the way. It should be better But I hope that we'll be able to track this and you can report on companies that have made this transition And how this is updated that's right just for me. This is one of the most important learnings that you can deliver I'll give you one early thing we've seen you know what's one of the biggest cadre of category of people that are approaching us is universities They're like we need to automate we need to totally change we can see the writing on the wall. Yeah, right massive disrupting coming so they're coming going How would we do and we're like great? Let's start with you. Let's start automating the existing one and move you into this new model so that as you turn from Trying to teach content to teaching Execution becoming entrepreneurial hubs. Yeah, right. We talk about the fact that your engineering degree won't be that you studied engineering for four years You built a bunch of stuff and it was interesting enough. You got credential. Yeah, that will be the engineering degree It'll be doing rather than learning and so that's such a big shift for the legacy. It's it's what I'm really impressed Why is there seeing it? I didn't think they would see it, but they're actually seeing and reaching out to us amazing listen buddy. Thank you for sharing this It was actually amazing To see I mean your brilliance and your passion about this mine with the community Okay, it's a lot of the community but still it's it's your drive here. This is your heart and your soul. This is it I mean, this is how you organize for the new world right if you're going to rebuild civilization If rewrite civilization, right? You have to kind of think about how the organizational design around this all works And we have to rethink the whole thing. So I'll say this into into camera If you're an employee at a company and you want your company to thrive, send this to your CEO, send this to your board. If you're the CEO, this is coming. There's no if, you know, about it. It's happening at an accelerating rate. And remember that disruption is not coming from your largest competitor. It's coming from the AI native startup that sees how slow you are and how much profit you're currently making and they're going to come and try and eat your lunch. I think your T-shirt says it all. Abundance hole. Yes, I'm fine. This is coming. Yes. Brother, thank you for this. Oh, great people. Thank you for having a love-spitting time and excited to go and celebrate your birthday tonight. We will do that. Yes. Fantastic. If you made it to the end of this episode, which you obviously did, I consider you a moonshot mate. Every week, my moonshot mates and I spend a lot of energy and time to really deliver you the news that matters. If you're a subscriber, thank you. If you're not a subscriber yet, please consider subscribing so you get the news as it comes out. I also want to invite you to join me on my weekly newsletter called Metatrends. I have a research team. You may not know this, but we spend the entire week looking at the Metatrends that are impacting your family, your company, your industry, your nation. And I put this into a two minute read every week. If you'd like to get access to the Metatrends newsletter every week, go to deamandis.com/metatrends. That's deamandis.com/metatrends. Thank you again for joining us today. It's a blast for us to put this together every week. [BLANK_AUDIO]