Life, and regulatory compliance, is pain - deal with it

I went from Jaws, to AI, to my loathing of unicorns - welcome to my brain

This year marks the 50^th anniversary of the movie Jaws. The Steven Spielberg film is credited with inventing the summer blockbuster. It cost $9 million to make and has grossed approximately $477.92 million worldwide since its release in 1975. It was the first movie to exceed $100 million at the US box office. However, any film buff will tell you, outside of producing one of the most menacing villain theme tunes of all time, it is also famous for its failures and the suffering endured during production.

The movie, about a shark terrorising a New England beachfront community during the height of summer, had trouble getting its mechanical shark to work during filming. (The availability of trained actor sharks is few and far between.) The art department-designed shark malfunctioned so often that Universal Pictures threatened to throw Spielberg, then a young and untested director, off the film.

Spielberg had several choices during the creation of Jaws. He could continue rebuilding the animatronic marine predator until they got some clear shots. He could take a bow and walk off the set. Or he could continue filming a movie about a bloodthirsty villain that the audience almost never sees.

50-year-old movies are immune to spoiler alerts, and we all know Spielberg's choice. Ironically, the presence of a silent, almost invisible killer (although one with a tell-tale theme song) ended up being creepier and scarier than the (be honest, it’s a bit schlocky) movie could have ever offered.

I’ve been thinking about “failure” and “suffering” lately. We are all advised to embrace and allow for failure in our everyday work and personal lives. The best things in life are often realised after we work hard for them and suffer through their development. No one plans for mistakes, but when they happen, how do we learn from them or even realise that they led us down a path better than the one we envisioned at the start?

Last Thursday, during Hotwire’s Fintech in the Fast Lane event, Simon Taylor of Sardine commented that the difference between humans and artificial intelligence is that AI will never suffer, has never suffered, to learn what it does.

“AI can replicate a great jazz musician,” he said. “But it can’t understand why that musician made a deliberate mistake in the second verse or a pause in the last chorus.”

In essence, AI only learns through the knowledge gained from the suffering and failures of humans.

What would the world look like if no one suffered anymore? What if the barriers we all complain about were removed, and life, work, and relationships were all … easy?

I have a feeling that the world would be filled with mostly boring, if not very unpleasant, people. I am sure this would result not in high-growth, successful companies but instead in those that crash and burn, taking an immense amount of customer trust and value down with them.

While at Hotwire’s event, Brittany Atkins asked me about unicorns. Not the rainbow-pooping mythical kind, but the type of company that the media, the government, and LinkedIn warriors will fall over themselves to excuse all kinds of cultural and compliance-related red flags, lest they decide to set up their European headquarters elsewhere. (Good riddance, BTW.)

As soon as the word “beaver” left my mouth, I thought, ‘oh shit’ (I was thinking about building things that last). However, it gave many of you a laugh :-)

One of the most common discussions around regulation is whether it will hamper or encourage innovation. Yes, large banks, with floors of lawyers on the payroll, are at a huge advantage over smaller startups swamped by hundreds of pages of compliance. (Those with large Canary Wharf buildings branded with your logo are in the advantage camp.)

Calls for regulatory clarity and understanding are warranted. However, (and I am going out on a limb here), regulatory compliance should always be difficult. It should take some effort, I would even say it is something a company needs to “suffer” through. Complaining that it is hard is like whining that you can’t play Rachmaninoff's Piano Concerto No. 3 after one lesson. (That takes time, effort, and practice.)

Financial services may not be on par with dealing with nuclear weapons or people’s health, but it isn’t that far down the list. Whether a 300-year-old bank or a five-month-old payments app, financial services deal with people's money. Regulations should be comprehensive and involve a process to work through.

Removing regulatory requirements and easing the processes in the guise of some sort of promised ecosystem of high-growth companies will lead to consequences that will benefit very few.

Imagine if Jaws had been made in France with a working shark. Spielberg might have ended up just a B-movie director, and the world would never get to see E.T., Indiana Jones, or The Color Purple. Maybe.

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I can’t believe I was having trouble finding a musical finale when the answer was here all along. Don’t worry, I think it is mostly safe to go back in the water.