Executive Q&A: Mark Anderson’s Predictable Behavior

July 17, 2015

Leslie Helm


During the past 20 years from his home on San Juan Island, Mark Anderson, founder and CEO of Strategic News Service, has built up a newsletter that is as respected for its high-octane subscribers they include the likes of Bill Gates, Paul Allen, Michael Dell, Elon Musk and Paul Jacobs as it is for its annual predictions on technology, its deep dives into new trends and its provocative views on such issues as trade with China and global warming.

YOUTH: I grew up in Elmhurst, Illinois. Dad worked at American Oil and became head of their venture capital business. Mother taught us poetry and writing. I got the writing part from her and the engineering part from Dad.

CAREER: I studied aeronautics at Stanford University, then shifted to physics and ended up in biology. My first job was at UWs Friday Harbor Laboratories. Since then, to stay on San Juan Island, I have worked as a commercial fisherman, a roofer, a poet, a software company founder and a journalist.

NEWSLETTER: I wrote my first newsletter in 1995 and have been publishing weekly ever since. People think our success in predicting comes from inside knowledge. Not true. It comes from pattern recognition brought to a fine art. It requires being away from the fray. Its gut feeling. After 20 years, Im at the forefront of a wonderful thing. Everyone wants to do this now. Predictive analytics is the hottest thing going. The NGA [National Geospatial-Intelligence Agency] is the best at pattern recognition and theyve asked me to speak to them about whats happening next. What well see are new computer systems using pattern recognition processors that work a lot like neuron synapses and will be 10,000 percent better at seeing patterns.

OIL FORECAST: I predicted the oil price collapse last summer when oil was between $92 and $94 a barrel. Now its about $50. That changes everything. Energy cost is the largest economic factor. People were worried about whether Iraq and Iran were going to start pumping oil again, but that was a tiny thing. I was watching the huge [domestic] oil supply from fracking, the increased use of deep-sea oil technology off places like Brazil and the increased use of alternative energy. I saw that the new supply of energy would make it impossible for Saudi Arabia and OPEC to manipulate oil prices.

CHINA: China has a business model I call info-mercantilism. Mercantilism is a way of assuring a country has more exports than imports. Now its also about stealing intellectual property. Most companies are state enterprises or heavily supported by the state. One [province] put $40 billion behind Huawei [a Chinese telecom equipment manufacturer]. That allowed them to gain market share by offering 40 percent discounts. Huawei now has 60 percent of the global market. China has identified 402 other sectors in which they plan to steal IP. Wow! I am CEO of an organization called INVNT/IP [Inventing Nations vs. Nation-Sponsored Theft of Intellectual Property] that includes companies like Google and cabinet-level government people. We have the best nonclassified database of Chinese thefts of technology. Local companies like T-Mobile and Boeing have had secrets stolen.

TRANS-PACIFIC PARTNERSHIP: Its important because it bands together Asian countries to state that they honor intellectual property. China is excluded because they dont protect IP. When it becomes too costly for China to steal IP, they will stop. Being excluded from TPP is one cost. When we built out the internet, we thought we were so clever. We paved a golden highway to all of our secrets.

THE CHINESE MARKET: American companies have made a deal with China for 15 years offering trade secrets and training in exchange for access to the Chinese market. Everyone from Caterpillar to Boeing to Intel went for it. But for 99 percent of the companies, it was a loser deal. They never got complete access to the market. Now, CEOs are recalculating the cost [of being in China]. The Chinese government told Chinese companies they have four years to get rid of their IBM computers. Now, IBM has to figure out what to do when China says, Give us your source code and put in a back door for the Communist Party. No one wants to do that. [Soon after this conversation took place, IBM announced it had agreed to share its source code with China.]

GLOBAL WARMING: We need a business solution to global warming. Im a founding member of the Graphene Stakeholders Association. Graphene is stronger than steel but just one [carbon] atom thick. You can build literally everything you see out of graphene: windows, buildings, carpets, chairs. The EU has put $1 billion into this. Britain, about $500 million. The United States, nothing. A lot of energy is going into how to produce it commercially. We need to build a business that takes CO2 out of smokestacks to make graphene. If we learned the art and science of making everything out of graphene, when you were tired of a shirt, you could shred it and make an airplane. Its all about manipulating carbon atoms. We are two to five years from seeing graphene in all kinds of things. There is a company in Manchester [England] making light bulbs out of graphene. Others are making tennis rackets and golf clubs. If we could develop a 3D printer that uses graphene, you could make anything. Because we have a center of excellence in Moses Lake around carbon fiber, we potentially have all the pieces we would need for a gigantic step forward in graphene.

COOPERATION: This is a great opportunity for the United States and China to cooperate on something that would make them both feel great. It would also be an off ramp for fossil fuel companies. But every company would have to say, No more carbon dioxide. Everybody says its too expensive. But there is nothing cheaper than saving the planet.

LEADERSHIP: Our leaders arent leading properly. We arent a very smart species. We have smart people, but as a species, we are self-destructive. It takes a war or a volcano or some great crisis before we will move at all. Once we wake up, we can fix it. But its hard to make us pay attention. We are very selfish. That could be what makes us successful, but it could be our doom.