STAYING ABOVE THE API

DON’T BECOME A COG IN THE MACHINE!

As you well know, we live in an increasingly digital world. You can’t pick up an article or watch a news story these days without some mention about how technology, digitization, artificial intelligence, machine learning, and the speed of advancement in those areas is having some kind of effect on our daily lives. As appraisers, of course we see it in a variety of areas within our own industry and daily work life. We see the real estate and mortgage industries going increasingly digital from the application process to even the final signatures on closing day. You can sign all your docs digitally via some signature app and you can even do it from the comfort of your bedroom, if you so choose. Not in all cases, of course, but the pandemic proved very motivating for innovation in some of those areas. Mobile transaction closers have been around for a while now, but closing transactions in a parking lot through car windows was a whole new thing. 

Selling and buying houses virtually site unseen became a real thing during the pandemic as people were encouraged to whip out a smartphone and participate in a digital walk-through of a prospective purchase, many times from many states away. In essence, for the past year or two, people have been unwittingly, albeit with their permission, beta testing how to get things done with the fewest amount of humans in the process and with the greatest amount of technology involved. In essence, the use of apps on our smartphones and computers are enabling a whole new way of getting things done. We’ve talked many times on this podcast how the introduction of the Iphone back in 2007 ultimately changed the world forever. No need to go into the multitude of ways it has done that, it would take too long. We all find ourselves using dozens of apps on a daily basis to get real work done. The more tech enabled appraisers are using mobile apps for the site visit, for sketching, the data gathering process, the comp selection process right on site, uploading it to the cloud from the driveway of the subject to their staff, and, in some cases, making revisions to reports from the field. 

Personally, I love it! I love tech, the tools that evolve out of out and because of it, the efficiencies often created by technology advancements and applications, and the way it can change work for the better. Does it change it for the better in all ways? Well, that’s debatable depending on the topic and industry we’re referring to. It also depends on who you’re asking. If you ask the customers and clients of a product or service you might get a different answer than if you ask the users and workers in the industry providing the product or service. Sometimes the tech, the software, and the apps make life better in some way, sometimes you just want a human to solve your problem and there isn’t one to be seen for miles around. Nevertheless, it’s the world we live in and, lest we devolve into a Mad Max-like apocalyptic world, we’re never going back to the way things were before the apps. 

Today’s episode, like many of the episodes I put out, is more meant to give you something to ponder than it is a set of steps to follow to accomplish something. As we talk about technology, apps, software, and all that comes with that discussion, we have to get familiar with a couple of terms often used in those discussions. If I throw out the words ‘code’, ‘coder’, or ‘coding’, you’d all likely know what I’m referring to. The stuff, the person, and the process of writing code for the apps and the software. Since the dawn of computers, code is the language the computers use to accomplish tasks. If I throw out the letters ‘UI’, some of you might know, some might not right away, but it stands for ‘user interface’ and it’s what the users of the software or the app see when they’re using it. 

There’s another term often used in conjunction with terms like UI, code, software, and applications and it’s the letters API. You might be very familiar with apps, UI, and the idea and process of coding for those apps, but fewer will likely be familiar with the term API. I was introduced to the term API many years ago when I was building some websites for some of my businesses using a platform called WordPress. With WordPress, you can download and attach add-on programs and apps that will do certain functions for you in the background. When you download the add-ons and attach them to your website, sometimes you need what’s called an API key, which is a bit of numbered and lettered code that connects the API to your software and activates it. For a long time I had no idea what API meant, I just knew that I had 6 or 7 different API keys for different apps and add-ons for my wordpress websites. Over the years, however, I would see the letters API more and more so, eventually, I started Googling what API meant and what it did. 

Without going too deep into this, API stands for Application Programming Interface and they are bits of code that allow apps and programs to talk to other apps and programs, or to servers located somewhere else. For example, if you’re an Uber driver, you download the Uber app on your smartphone, sign in as a contract worker, and then you can get orders for rides. The API talks between your phone and the servers back at Uber HQ to connect you with a rider, it tells you how much the ride will pay you, and it even dictates exactly the route to take to get the rider to their destination. My son worked for a massive food and product distribution company for a period of time in one of their many warehouses. He had a hightech headset, a handheld computer, and an API telling him in a digital voice exactly which aisles to speed to next, exactly where on the shelf the product was, how high to raise the forklift, which pallets to pull down, and how much product to throw in his bin. He did that all day every day getting rated by the API on how fast and productive he was that day. His pay and bonuses were based on how he stacked up against the standards set for him. Those standards were based on all the data gathered through the software on how fast the fastest employee could pick product. 

Here’s the point about the API; we live in an era where more and more tasks, and thus humans, are being controlled by an API. They are dictated to by some pieces of code on who’s going to do it, what they’re going to do, how they’re going to do, who they’re going to do it for, and how much they’ll be paid to do it. The API has zero emotion about the whole deal, it’s just code programmed by some other human. What I want you to focus on with this episode is the image of the Uber driver, or maybe somebody like my son working in a high tech warehouse, who has very little autonomy over the who, what, where, when, why, and how of what they do because the API dictates all of that. There are two worlds that exist in that image, one that lives above the API and one that lives below the API. The world above the API is the world of the creators of the API, the coders, the thinkers, the managers and leaders, the suits, if you will. The world below the API are all the workers who just do the work based on what the API tells them to do. 

Why is this important, you ask? It’s important to start becoming aware of this because, as the world changes and more and more things are controlled by software and APIs, the knowledge and worker gap widens as well. I’ve talked with hundreds of Uber drivers over the years because I’m that guy who always starts a conversation within minutes of getting in the car. It usually sounds something like this, “how’s it going, Jim?… oh yeah?…how long have you been driving for Uber?… that’s cool!…do you enjoy it?…that’s awesome… what’s the most interesting person you’ve ever picked up?…”, and so the conversation will go. What you tend to hear from the drivers is how being an Uber driver gives them flexibility, they can come and go as they please, they can work whenever they want, they can work for other companies as well, and they get to meet some interesting people from time to time. Very cool! The problem is that,  although all of those things may be true for them, they are simply cogs in a big machine being driven by the API. The programming interface is the thing that tells them what to do and when, and for how much. If that Uber driver isn’t the one picking you up, there are 20 more that can be dispatched to you within minutes. 

There is nothing special about Jim. If I really like Jim, I have no way of requesting that Jim be the one who picks me up next time I need a ride to the airport because the API does all of that work for me. Jim is just a cog in the machine and will be paid accordingly. There is nothing wrong with Jim or his decision to be an Uber driver, that’s not what I’m saying. Jim is a fictitious representation of anybody who is operating below the API, meaning they take their orders from the software. There is no upward mobility below the API and operating below they API guarantees, most likely, that you will be paid less and less for what you do as time advances because the job of the coder operating above the API is to make the API better and better at creating efficiencies. By the way, the coder who operates above the API, as well as all of her managers, supervisors, and bosses are all paid way more than the people operating below the API. Why is that? Because those operating below the API are more easily replaceable. In fact, in the Uber example, although this may be a while yet, there will come a day when your Uber driver is the car itself. Uber, Tesla, Google, Rivian, and several others are all working feverishly on driverless vehicles. What do you think the first industry will be to test that system? You guessed it, the taxi cab and ride sharing industry. 

Why pay a driver when you can just monetize the vehicle and the API. The ones making the money will be the owners of the self-driving vehicles, as in Tesla owners who will sign up to let their self-driving car leave the garage when they’re not using the vehicle and it will be out in the world picking up paying rides based on the API. The owner of the vehicle will split the revenue with the service and turn their car into a revenue machine instead of just an expense. Of course, Uber and Lyft will have their own fleets of self-driving vehicles in your town eventually and they’ll cash in too. All thanks to the API and progress. And, of course, this is only one area and industry. There are many industries that are going in this direction.

Looking at the appraisal industry we might be able to say that APIs have infiltrated it as well. For those who work with AMCs, your orders, your pay, and a few other aspects are most definitely dictated by the API. The API might dictate who gets the bid request, whose bid gets accepted, and, to some degree, how the file is to be completed. We know from using portals that scan the report for errors and underwriting quality hits that there is an API controlling that process. It’s not a human scanning your report, it’s software programmed to look for X, Y, and Z, and when it doesn’t find those, it spits out a revision request, or at least a suggestion to comment on something. This is the software and the API at work and there’s little we can do to escape it. 

What I’m hoping to do with this episode is simply to bring some awareness around the growing gap between those who live and operate above the API and those who live and operate below the API. If you operate below the API you will always make less than somebody operating above the API. If you operate below the API your job will always be at risk of being automated away since that is almost always the path for the software and the API. The coder and his boss, both operating above the API, are incentivized to continuously find better and faster ways to automate the process. In many cases, the better and faster way is to get rid of the human doing the thing that the API is dictating. Not always, but in many cases. Amazon is figuring out that it’s better to have robots picking orders than humans. Robots don’t steal, they don’t call in sick, they never complain, they don’t need lunch breaks, they don’t strike, they don’t fight or argue, they don’t go postal and shoot the place up, they don’t need benefits, and they can be programmed to do almost anything. How did they come to that conclusion? Over time and with the help of an API progressively getting better and better at optimizing the process. 

A few weeks ago, I came across a blog by author, Mark Manson, talking about this very thing. I’m going to read to you the part of his blog post on this topic, and then I’ll ask a few questions for you to ponder. Mark’s blog starts this way:  “A few days ago, I was having a conversation with a friend about the many people we knew in our lives who seemed to be stagnant—i.e., not changing, not progressing, not accomplishing their goals—and the many people we knew who were not stagnant—i.e., moving up in the world, making things happen, reinventing themselves and their lives. We asked each other: what was the difference between these two groups of people? 

One answer continued to pop up for me: intense curiosity. The defining trait of progressing in the 21st century appears to be a driving curiosity about anything and everything. The 20th century did not reward curiosity. The traditional structures of schools, corporations, and the church didn’t just deter open questioning and experimentation—they often feared it. Instead, they usually rewarded emulation. Any sort of innovation or experimentation was limited to a few people at the very top of the pyramid. Everyone else was expected to be a good worker bee. 

But the internet has inverted this. Today, it seems that it’s the ones who fail to experiment, innovate, or challenge preconceived notions who get left behind. Why? Because in the 21st century, any decision-making that is sufficiently repeatable or predictable will eventually get automated or outsourced. 

Peter Reinhardt called this phenomenon “living below the API.” An API is how software communicates with other software or with people. An Uber driver works “below the API” because his decisions at work are determined by software, not by himself. Journalists arguably live somewhat below the API because much of what they report on is driven by web traffic data and social media virality. 

Basically, the more algorithms and software determine your day-to-day decisions, the more you live below the API. What’s worse is that the API is always rising, consuming more human endeavors as it goes. As technology progresses, so does its ability to micromanage every aspect of our lives for maximal efficiency. This efficiency benefits society as a whole yet punishes those who fall under it with stagnant careers, repetitive entertainment, and soul-destroying jobs. Once under the API, our opportunities for growth and advancement shrivel up—once robbed of the ability to make bold decisions, any chance to stand out or get ahead is likely gone. 

Similarly, once under the API, your interests and worldview will become cemented, as algorithms feed you information they know you agree with and entertainment they know you will enjoy. People who live under the API feel as though they are this wonderful, unique, hard-working individual, but the truth of the matter is that they are simply living out what the algorithms have already determined for them. 

The only way to stay above the API is to foster an intense curiosity, to take professional and personal risks, to habitually challenge preconceived notions, to lean into uncertainty and unpopular opinions, to challenge yourself with information you don’t agree with, with entertainment that doesn’t come naturally to you. 

In short, staying above the API requires a certain level of discomfort—and I don’t simply mean the discomfort of working more hours or reading more books—I mean the discomfort in the kind of hours and the kind of books. It’s not a question of effort but intent. You should feel a little bit contrarian. You should feel a little bit wrong. You should feel a little bit foolish. That’s the only way to know that you’re right. The only way to be “on” is to feel a little bit “off.” The only way to stay ahead of the curve is to ditch the curve.”

So, here are the questions I’d like to leave you with: 

1. In what areas of your life can you see the demarcation between the jobs being done above the API, and which ones are being done below the API?
2. How do you see the gap between above the line and below the line growing in your industry?
3. What can you do to stay above the API?

Until next week, my friends, I’m out…