Stewart Squared
Episode #28: How to do world building?
- AI
- reality disturbance
- third convergence
- media evolution
- PC industry
- internet
- mobile phone
- Jim Ward
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About this episode
Welcome to Stewart Squared podcast with the two Stewart Alsops. In this episode, they explore the evolution of technology from the rise of the PC, internet, and mobile phone to the current state of AI, cutting through the hype with firsthand insights from decades of industry experience. They discuss concepts like "reality disturbance," introduced by Jim Ward, and the "third convergence," which ties media, technology, and business evolution together. Along the way, they examine key moments in tech history, from the rise of Amazon to the shift in government spending and its economic impact.
Check out this GPT we trained on the conversation!
Timestamps
00:00 Introduction to the Stewart Squared Podcast
00:52 Understanding Reality Disturbance with Jim Ward
04:05 The Evolution of Lucasfilm and Pixar
09:04 The Rise of Live Streaming: From QuickTime to Twitch
12:05 The TiVo Revolution and Media Investments
18:10 The Advent of Cloud Storage and AWS
22:15 The Early Days of Amazon and Venture Capital Insights
30:17 The Early Days of Amazon and AWS
31:13 Arthur Rock's Investment in Apple
32:36 The Evolution of Apple and Its Funding
33:52 Defining Startups and Reality Distortion
36:12 Historical Political Comparisons
42:09 Government vs. Business Economics
44:50 Military Spending and Defense Contractors
49:38 Economic Policies and Inflation
55:04 The Psychological Impact of Currency Value
56:20 Concluding Thoughts on Reality Disturbances
Key Insights
- The Evolution of Media and Technology Convergence – The conversation highlights how media and technology have repeatedly reshaped industries, from the rise of the PC and the internet to the emergence of AI. The “third convergence” represents a new phase where media, technology, and business models intertwine, continuing a historical pattern of technological disruption that alters how people interact with content and commerce.
- The Concept of Reality Disturbance – Jim Ward’s idea of “reality disturbance” is introduced as a way to explain the radical shifts in perception that new technologies bring. Whether it was the rise of the internet, the advent of live streaming with Twitch, or the current boom in AI, each wave of innovation disrupts established norms and forces industries and individuals to adapt to a new reality.
- The Rise of Amazon and the Role of Venture Capital – The discussion sheds light on how Jeff Bezos built Amazon from an online bookstore into a trillion-dollar company, largely through venture capital backing that enabled rapid expansion beyond what organic growth would have allowed. The role of venture capital in scaling ambitious ideas, even in industries previously seen as uninvestable, is a key takeaway.
- The Shift in Government Spending and the Role of Deficits – The episode covers how U.S. government spending has changed over time, from heavy military investment during the Cold War to the dominance of social security and Medicare today. The way the U.S. government handles money—operating on cash-based accounting rather than profit-driven principles—has profound implications for debt, inflation, and economic stability.
- Lessons from Historical Investment in Media Technology – Investment strategies in media and technology have evolved significantly, from early bets on TiVo and QuickTime to modern streaming and gaming platforms. The episode explores how some media investments, like Twitch, have reshaped entire industries, while others failed because they were ahead of their time or unable to scale.
- The Changing Nature of Startups and Big Tech – The traditional definition of a startup has blurred, with massive companies like Stripe and Meta still being referred to as startups despite their scale. The conversation explores how venture capital has moved beyond just funding technology development and now plays a role in shaping entire industries through aggressive growth strategies.
- AI as a Transformational Force with Uncertain Outcomes – While AI is widely regarded as the next major technological wave, its impact—whether inflationary or deflationary, disruptive or stabilizing—remains uncertain. The discussion emphasizes that while we can analyze past technological shifts, predicting AI’s long-term economic and societal effects is still speculative, making it one of the most important areas to watch.
Episode transcript
Hello and welcome to Stuart Squared, where the younger generation me, the millennial, interviews the older generation, the baby boomer, about the history of technology from PCs to AI. The millennial is Stuart Alsop III, me, born in 1985, and the baby boomer
I'm the millennial and I'm the foreign. Welcome to the Stuart Squared podcast. I'm here with my father, as we do every Sunday, where we're investigating the rise of the PC industry, the rise of the Internet and the rise of the mobile phone so that we can understand where AI is going and really cut through the hype. Because my father has been through many different hype cycles. It's one of the things I'm most fascinated about in our current era, because obviously there's a lot of hype and there's a lot of real value. And so we're going to learn today. Going to talk, I think previous couple episodes we've gone into the first convergence, the second convergence, and the third convergence, which I believe you made up. I don't think anybody else is talking about third convergence in this way. And it's also tied to your partner Jim Ward's understanding of reality disturbance. And reality disturbance is a much easier thing to convey than the third convergence. So let's start there. Let's go into can you talk more about how you met Jim Ward and where you guys sort of decided to do business together?
So reality disturbance is Jim's concept. He came up with it. So I don't want to take credit for it. And at first I was a little bit squishy about it, but once I understood what he was talking about, I I'm on board. So Jim and I met, probably met before that. But the but he came to work with us at All Bluey Partners in 2008 after spending over 10 years at Lucasfilm. And Gilman had known him longer and but I had known about him at least. And so he came and became a venture partner at All SAP Louie, the same time he moved to Phoenix and and did some other stuff, which means he ran for Congress as a Republican. And we were thrilled when he lost because that meant he could keep working with us and ultimately became what we're now referring to as a CEO whisperer. So he's not been an investor investing in companies. He's been working with our existing companies trying to get our CEOs to understand what was important about running a company and figuring out how to make it successful. So he has a process which he's trademarked called the God Particle. And in running a company, the God Particle is knowing exactly what you're trying to accomplish so you don't waste time, you know, being distracted and. And focused on the wrong thing. And so. So that's kind of Jim's time over the last 16 years with us. And during that time, he and I began to recognize that we both understood the media business. Me from the point of view of. As an investor, because I have this track record of investing in media technology companies more than this, but companies like TiVo and Sonos and Twitch and most recently.
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