Shane Greenstein: Innovation, AI, and the Technology Gold Rush | Be Yourself Podcast
Be Yourself Podcast

ShaneGreenstein

Harvard Business School Professor and Author — on Innovation, the Technology Gold Rush of AI, What Writing a Book Really Teaches, and How to Grow Leaders Who Stay True to Themselves

39 minutes
Innovation · AI · Technology · Leadership · Writing

How Did the World Get Rich — and What Does That Tell Us About Where AI, Innovation, and Leadership Are Taking Us Next?

Shane Greenstein has spent his career at Harvard Business School asking one deceptively simple question: how did the world get rich? Not in the financial sense, but in the civilizational one — how did we get from a world where half of all babies died before age ten to the world we live in now? His answer, refined over decades of research and three academic appointments, is that the processes that translate new technology into commercial markets are the engine of human progress. And in this episode of Be Yourself Podcast, he breaks down exactly how that engine works.

Shane explains the crucial distinction between technological breakthroughs and commercial breakthroughs — and why the latter, not the former, is what changes how everybody behaves. He walks through real examples: Netflix figuring out how to stream reliably to your home, a simple pharmacy reminder that took years of database integration to make seamless, and why AI today is following a pattern he calls the technology gold rush — a moment when every participant in the market is surprised by the discovery of value, and a rational frenzy follows.

The conversation moves from forecasting to writing. Shane shares what he learned from writing his book on the commercialization of the internet — the moment halfway through when he realized he didn't actually understand what he was writing about, and why that is the point. He talks about who should try writing a book, the value of deadlines, and why the best piece of advice he received about writing — write a short book — was the one he ignored first. And he closes with what growing the next generation of leaders actually requires: pluralism, turnover, and the courage to stay true to yourself.

01
How Shane fell into academia by accident — and why teaching became the ultimate test of whether you truly understand something
Shane didn't come from an academic family and originally intended to become a lawyer. What pulled him into academia was a love of writing and a love of teaching — and the principle he still holds himself to: if you can't explain it quickly, you probably don't understand it.
02
Commercial vs. technological breakthroughs — why the translation of technology into markets is where the real action happens
A technological breakthrough is a new capability. A commercial breakthrough is when that capability changes the way everybody behaves — across one market or across many. The smartphone, the commercialization of the internet, the PC: each was a commercial breakthrough that reshaped multiple markets simultaneously.
03
Small innovations with enormous impact — Netflix streaming and the pharmacy reminder that took years to build
Netflix figuring out low-cost reliable streaming was a narrow commercial breakthrough — just one market, but it changed everything in it. The pharmacy reminder required integrating a medical database, a prescription system, a calendar, and a phone number collection process that took years of drudgery. And yet today it's seamless. Both are the kinds of commercial breakthroughs Shane finds most interesting.
04
AI and the technology gold rush — what history tells us about the pattern we are currently living through
A technology gold rush is one in which every participant — including the inventors — is surprised by the discovery of value. The rational frenzy that follows, the confirmation bias from early applications like coding assistance, and the difficulty of predicting what comes next: Shane maps the current AI moment against the historical pattern he studied in the commercialization of the internet.
05
Writing a book — the midpoint crisis, the audience question, and the lesson Shane ignored before learning the hard way
Shane's book on the commercialization of the internet started as an integration of short essays. It became something much harder: narrating the same event from the perspective of Wall Street, Silicon Valley, the north shore of Chicago, and central Texas simultaneously. The lesson he learned — write short, know your audience — was advice he received before starting and ignored completely.
06
Growing the next generation of leaders — pluralism, turnover, and why staying true to yourself is harder than it sounds
Two things Shane takes from studying innovation markets and applies to leadership: never underestimate the value of pluralism, and never commit to a lifetime. Turnover is largely a good thing. And underneath both of those is a third principle — staying true to yourself — which is simple to state and genuinely difficult to do when there are fireworks in front of you and a big ambition on the table.

Shane Greenstein — Harvard Business School Professor & Author

Shane Greenstein is a professor at Harvard Business School, where he has been on the faculty for ten years. Before that he held positions at Northwestern University and the University of Illinois at Urbana-Champaign. He studies innovation economics — specifically how new technologies get translated into commercial markets and how that translation process drives economic growth and human welfare.

He is the author of How the Internet Became Commercial: Innovation, Privatization, and the Birth of a New Network, published by Princeton University Press. The book is a long narrative history of one of the most consequential commercial transformations of the twentieth century, told from the simultaneous perspectives of multiple participants — Wall Street, Silicon Valley, Midwestern research institutions — and built from years of short essays that Shane had to learn, halfway through writing, how to weave into a coherent whole.

Shane approaches forecasting with unusual discipline: rather than making bold predictions, he identifies historical patterns — like the technology gold rush — and asks what we would expect to see if those patterns hold. It's a method born from being accountable to students who come back and tell him when he got it wrong. He is currently writing a new book on commercial breakthroughs, and has outlined it fifteen times before diving in.

What He Does
Professor at Harvard Business School studying innovation economics and technology commercialization. Author. Teaches and researches how new technologies translate into commercial markets — and how that process is responsible for the most dramatic improvements in human welfare in recorded history.
The Big Question
How in the world did we get rich? Two thousand years ago a human baby had a 50% chance of dying before age ten. Today we are way beyond that. Something happened. Shane has spent his career studying the processes — innovation, commercialization, competitive markets — that made the difference.
The Book
How the Internet Became Commercial: Innovation, Privatization, and the Birth of a New Network (Princeton University Press). A history of how the internet went from a government research project to the backbone of the global economy — told from multiple simultaneous perspectives and built over years of research, travel, and midpoint crises.
The Principle
You don't understand something unless you can explain it quickly. Shane holds himself to this in the classroom and in his writing. If he can't boil it down, he goes back to the corner and looks again. It forces him to second-guess himself constantly — and he learns more that way than any other.

"

You don't understand it unless you can explain it quickly.

Shane Greenstein
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A technology gold rush is one in which every participant in the market is surprised by the discovery of value.

Shane Greenstein
"

All of us have a little bit of human kindness and a little bit of human decency in us, but it is so easy to forget that when you have some fireworks in front of you.

Shane Greenstein


BTW: This episode of the Be Yourself Podcast is produced by Beverly Media. Want a podcast that looks and sounds this good? Check out Beverly Production →
0:00 Intro
Shane I truly believe that you can only really comprehend something when you're able to tell it to other people. You don't understand it unless you can explain it quickly.
Serhiy What are your fields of study? What are you most passionate about right now?
Shane Shane, everything I do is animated by the big question, how in the world did we get rich?
Serhiy Is this your play field to make some kind of forecasts? Because I'm interested to know what's your take on AI.
Shane The pattern that first comes to mind is a pattern I would call a technology gold rush. A technology gold rush is one in which every participant in the market is surprised by the discovery of value.
0:50 Welcome Shane Greenstein
Serhiy Hey everyone, welcome to the Be Yourself podcast, the podcast on expressing our true selves. Today my guest is Shane Greenstein who is a professor at Harvard Business School. He is a book author. So Shane, welcome to the show.
Shane Oh, pleasure to be here. Thank you for having me.
Serhiy Shane, where are you?
Shane I'm in my bedroom actually in my house in Newton, Massachusetts.
Serhiy Massachusetts. Cool. So Harvard is the place where you go regularly. Is this like your place of work right now?
Shane Yes, I've been employed there for 10 years. It's my third job. Before that I was employed at Northwestern and before that at the University of Illinois in Urbana Champagne.
Serhiy Have you always wanted to tie your life with academia?
Shane No, actually I fell into it by accident. I mean I love it, don't get me wrong. But it was — I'm not from an academic family. I don't have academic parents and had one cousin who pursued a PhD — but that was a bit of an inspiration but otherwise I was just a good student and intended to be a lawyer when I was young and I don't know why that particular bug got in my head and at some point in college I began to question that and I love to write and I love to teach and academics let you do both and I fell into it and that's how it happened.
Serhiy I truly believe that you can only really comprehend something when you're able to tell it to other people. I mean that what fascinates — being able to teach as well. So is that a part of it why you —
Shane Oh yes absolutely. You don't understand it unless you can explain it quickly. That's — you know — Feynman was really well known for this aphorism that if you can't boil it down quickly you probably don't understand what you're talking about and I do hold myself to that principle quite a bit in the classroom and over and over again I will go over my writing if I can't boil it down — oh then I didn't understand it — and it's a wonderful principle to live by because it forces me to look around the corner and second guess myself a lot and I learn a lot that way.
3:40 Shane's Passions and Areas of Expertise
Serhiy What are your fields of study? What are you most passionate about right now, Shane?
Shane Oh, innovation and technology. That's what got underneath me as a kid and how things work and why they produce value and really everything I do is animated by the big question — how in the world did we get rich? I mean, how did that happen? How is the world — as a civilization — the world is so much better off today than it was during say the time of the Egyptian pharaohs. That's only a couple thousand years ago. How did that happen? It's remarkable. We have — 2,000 years ago a human baby had a 50% chance of dying before it reached the age of 10. And we are way beyond that today. If you made it to the age of 10, your life expectancy was, you know, 50 or 60 years old. But not much beyond that. And it's just remarkable, we hit this place that we have as a civilization. To be sure, we still have more to go. About half the humans on the planet — about four of the 8 billion humans on the planet — do not experience anything like a high-income world. But that's what animates me.
Shane And so I got totally fascinated by the processes that translate new technology into commercial markets, things that people buy and sell. And I'm still there. I still get — it makes me a bit of a skeptic sometimes. It also makes me totally excited when I see things that are just interesting. So today what I get really excited about are commercial breakthroughs. Not a technical breakthrough, a commercial breakthrough. So again translating an innovation or technology into something that changes the way everybody behaves and does things.
6:12 Commercial vs. Technological Breakthroughs
Serhiy Shane, because I actually heard this hypothesis that technological breakthroughs happen on average every — I think six years — something of this kind. Have you seen a pattern in terms of a timeline for breakthroughs and maybe you can actually give us a distinction between the technological breakthrough and a commercial one?
Shane Commercial breakthroughs come in two forms and technological breakthroughs play a role in both. One form — I'm particularly talking about it in communications where most of my background is — one form it takes, and the one that I think is really every couple years, is the type of commercial breakthrough that affects lots of markets. We're going through one right now on AI. But you know, most of your listeners probably experienced the iPhone, the smartphone revolution. Prior to that, the commercialization of the internet. Prior to that, I would say the commercialization of the PC. Each one of those had this characteristic that there was a massive change in multiple markets simultaneously when a new technology was commercialized.
Shane There's another form — that's one market at a time. Maybe not as dramatic, maybe you wouldn't necessarily have heard of it when it happens, but it still makes life better. When Netflix figured out how to stream to your house — that's just one market. That's a very narrow — in the greater scheme of things — a narrow commercial breakthrough. But it took them years and they figured it out how to do that at a low-cost reliable way.
9:02 Small Innovations with Big Impact
Shane Another one which I just absolutely love as an example is totally small. That's what makes these examples wonderful. That little reminder. Perhaps you're not old enough to visit your pharmacy regularly, but I'm at that age where I got to get my pills filled every month. And we get this little reminder on your phone regularly from the local pharmacy that says, "You're about to run out of that pill that keeps your blood pressure low. We've got it filled up for you. Show up in the next couple days, please."
Shane And if you think about that one for just a second, it's totally minor, right? It's just a little bit of text sitting on your smartphone. What a pain in the neck that was to put together. It was an integration between the database inside the pharmacy, your local doctor who has to provide and authorize the prescription, a calendar system — which at this point is routine inside of most IT systems — and then here's the thing: when you show up at the counter, the pharmacist has to get the phone number. So to get that whole system working took years and it was drudgery to get it working because you had to ask every single customer to fill out their phone number. And yet today it's quite smooth and you might reasonably ask why did we get that? It's because CVS and Walgreens ran some experiments. They foresaw that this generated a lot of customer loyalty and that's why they did it. We all benefit from that down the road.
Shane So there I just gave you sort of two examples. They're both small and narrow in a sense. You know, like Netflix at your home, it's not going to revolutionize the world, but on the other hand it makes life a little better and a little reminder makes life a little better. Those are the other kinds of commercial breakthroughs I find really interesting.
Serhiy And also you talked really interestingly about the invention of a microwave on the Denny Lee's podcast. So if you want, you guys can check it out. I'll leave the link here. But I mean, what just sprung to my mind is that we as younger people seemingly don't even — not even appreciate, but realize — what a bit — how much easier the life has become. And you know, even with you talking and explaining this little little thing, I just — I can't imagine how it was even ever any different. You know what I'm saying, Shane?
Shane Yeah. Well, you're living it right now. Look at your podcast. How in the world was this possible? This is amazing. If you think it through — we're sharing a set of investments in the backbone of the internet. We're also sharing usage of TCP/IP which is a way of sharing data across large networks. There's then a piece of application software that you're using somebody invented.
Serhiy Yes.
12:35 Low-Cost Production and Zero Price Economy
Shane And then you're part of what I would call the zero-price economy which is this phenomenon that's very common today. It's a very low-cost — it's a low asset. It's sort of asset light is sometimes the language people use. It's a low-cost production economy and what you tend to find is a low price for access to it with then a couple different ways to monetize down the road. And that's exceedingly common today by the way, right? That's — you see it not only in the podcast industry. It's something you see in quite a lot of software and online software — who then will trade that low cost access for something else down the road which is valuable to the supplier.
13:16 Forecasting AI and Technology Gold Rushes
Serhiy Shane, I'm interested to know as someone who's invested in learning how we got here — is it also on your plate to kind of project how it's going to move forward? Is this your play field to make some kind of forecasts? Because I'm interested to know what's your take on AI and maybe in some specific way of commercial application — can you give us some of your ideas how things will unfold in the nearest future?
Shane Well, I'll tell you how I do things. You know, like many people, I am suspicious of other forecasters. And there's a reason — because forecasting often — many forecasters don't have their feet held to the fire, if you will. Nobody comes back in a couple years to ask them if they got it right. One of the things that comes with being in a classroom is that my students do come back to me and tell me if I got it wrong. So I feel very responsible to do forecasting in a way that both remains true to the forecast and leaves room for the uncertainty.
Shane So the way I do it is to talk about categories of things that we've seen in the past and say with appropriate qualification — if that category retains its patterns in the future, this is what we'll see. That's the way I do forecasting. So the pattern if I'm looking at AI — the pattern that first comes to mind is a pattern I would call a technology gold rush. A technology gold rush is one in which every participant in the market is surprised by the discovery of value. Just like a gold rush where something is discovered — no one knew it was there — both suppliers and prospectors and users, everyone is surprised. Not even the inventors. The inventors are also surprised. That's the point.
Shane So how do markets behave in settings like that? Well, first of all you get a rush. Why do you get a rush? Because everyone believes if they don't get there first someone else is going to get the value. It's like a frenzy — oh no, quite rational. Everyone's investing in order to get there in front of everyone else. But it's a bit like the finish of an Olympic race for the mile. There's very little that separates everybody at the finish. So people put in a tremendous amount of energy just to end up a second in front of somebody else.
Shane And so we're observing this right now — this massive amount of investment with the purpose to try to beat competitors to a position to have a leading commercial position. An example we're seeing right now is that Facebook — Mark Zuckerberg perceives his place as actually behind, and so he recently did something quite astonishing which was put out that he believes he's behind. And so he hired a number of very high-profile developers and paid them more than anybody else. That was his way of — and you ask yourself what's going on here and it's like — oh it's that he's putting more investment into it because he perceives he needs to catch up.
Shane Another thing that you tend to see in a technology gold rush is — sort of a couple years in, which is where we are again — you expect what I would call a confirmation bias. You can't sustain the frenzy unless there are a few things that pay off right away. So if you look at AI — has any application using large language models paid off in a big way yet? And the answer to that actually is yes. Coding assistance. If you look at coding assistance, you can't deny it. It's absolutely impacted the coding world. It's 2% of the labor force. It's not the whole economy, but it's a significant part of the economy and substantial enough that you can see it and it's noticeable in data.
Shane Another place you're starting to see it — I have a friend who's done research to say you're starting to see the impact on book production in a very substantial way. And it's a pet peeve of mine. I hate when — all of the posts seems to not be written by a human being. They are all at least a bit modified if not fully written by the AI which is really really unsatisfying for me. Someone who's always tried to write himself.
Shane Yeah. So now you start to see a lot of slop. I think that's the present name for it. Mediocre low-quality but low-cost production of content. And yeah, that's very low cost to provide. So we're seeing quite a bit of that online. Another thing you're starting to see that's consistent with large language models in the short run is we're starting to see simulations of video and you're seeing it in advertising. Why would you record that ad with a live baby? They don't cooperate. They cry, they're difficult. So you fake the baby. You make a little imitation. Why would you use a real dog? Dogs are hard to train. And an actual lion — of course you'd simulate that now. So you're starting to see that — again not surprising for an immediate application.
Shane So now the more interesting question I think is — okay, we've seen the confirmation bias — does the early application give you a strong indication of what you're likely to observe 3 to 5 years from now in the applications and the valuable applications of this technology and its commercialization? And the answer at least from studying other technology gold rushes is — what you see in the first few years tells you very little about what you're going to see after that.
Serhiy So it's only the tip of the iceberg.
Shane It is, but icebergs come in a lot of different shapes.
Serhiy Oh, yeah.
Shane So it might be inconsistent or unpredictable. Yeah. Unpredictable. So, though I am optimistic that 20 years from now there's an iceberg there for sure — lots of value — it's much more challenging to be able to say with any certainty where the value is going to be 3 to 5 years from now on the basis of what we're observing right now. It's just very difficult to make that prediction. I do have friends who are bold enough to make such predictions. I'm a tad more skeptical. But that's where I'm coming from. Is that helpful?
23:15 Writing a Book: Lessons and Experiences
Serhiy Absolutely. And after talking about such a futuristic topic, I want us to get closer to earth and talk about something that I definitely want to do in my life and what you've already done and as I see you're doing it now — is writing a book. I find the most pleasure talking to book writers. I don't know what it is, but you guys just know how to put your thoughts together in a concise, clear, understandable manner. So what was your experience writing your first book? It was on commercial internet. And what are you writing now?
Shane Yeah, I had always been a short essay writer. And the book on the commercialization of the internet — its goal, its mission was to integrate a lot of those short essays together and you know there was something deeper going on there. It was trying to explain to my kids what those of us who had been involved had lived through.
Serhiy So I watched an interview recently by one guy. He said that I started YouTube without any expectation and I said to myself that well worst case scenario this will be a free education for my kids. So this was partly it for you as well right? You thought at least this book can serve for my kids.
Shane Yes. Like what was your dad doing all that time? And there's a reason why I need such a motivation — because I need to know who I'm writing for. So part of — and I didn't think of myself as writing for just a couple other pointy-head academics like myself. I thought of myself as writing a piece of history about contemporary events. So I wanted it to be relevant to a reader 10 years or 20 years down the road. That's why I've thought of the audience as being really very key.
Shane The second thing about a book that I learned from doing a long narrative is that it introduces many many issues and sub-problems, if you will — sort of problems along the way that I had never faced before. Because I'd always written short essays, I had never had to think of the big picture and how things integrated. And faced with the goal that I wanted to write an integrated volume, I started to face a set of questions I hadn't thought about before.
Shane The problem that really shows up is — depending on where you sat in the economy, you experienced the event differently than someone else. Someone sitting in Wall Street experienced the commercialization of the internet in a way that was quite different from somebody sitting in Silicon Valley and quite different than somebody sitting in the north shore of Chicago where I happened to live at the time. And that was quite different from somebody living in central Texas. And what was interesting to me was because I had been in that field for so long and did know people in all those places, I had some sense of what the experience looked like. And finding a way to narrate those different perspectives and weave them together into an integrated whole — that was the challenge that I ended up facing that I didn't expect.
Shane It took a long time. And along the way I learned a lot — I faced different problems along the way and each time it all boiled down to the same thing. It's just the principle. If I don't solve it, it isn't going to get solved. And that — you just sit there — I don't know what to do here. And there would be times I don't know what to do here. And I would just put it aside and have to figure it out. So to be concrete — ultimately I didn't really understand how the .com bubble happened. So what did Wall Street do? Why didn't somebody say no? So ultimately I had to ask around, find people who had been there, friends who had some understanding about how initial public offerings worked, what the mechanics of that war was. Ended up reading extremely widely on things that I had no appreciation for earlier.
Shane And that was — the logic of the effort took me into a number of domains that I had not really understood before. And that was really in retrospect lots of fun — at the time quite difficult and quite challenging. But in retrospect I'm so glad I did it. It was a bit like a marathon at the time. It's extremely painful and challenging but after the fact extremely satisfying.
29:43 Who Should Try Writing a Book?
Serhiy So who do you recommend try writing a book? Everyone? Is this a healing experience? Is it a therapeutical experience? And at what stage in our life do you think we should try writing a book?
Shane That's a great question. I don't know that there's a general answer to that. The book itself is a funny technology. It's a human technology. It's approximately 500 years old, maybe a little older than that. If you include various religious texts then it's a couple thousand years old — if you think of them as books — but the book itself is a creature of the printing press. So it wouldn't surprise you if I said I'm not sure there's a good general rule here.
Shane I guess the thing I learned was to start — start smallish — and start with a couple rules about what you want to do. A close friend of mine gave me the best advice which I ignored at first and I wish I had listened a little more carefully — his advice was whatever book you think you're writing halfway through you're going to change. So the implication of that is write a short book because otherwise you'll get halfway through and then it'll be a lot more work. I ignored him and got halfway into my book and realized — oh I didn't understand this and I have to change what I'm doing — and it was a major pain. Midway you realize that the title might be a bit different than you intended right.
Shane So this time on the book I'm writing now I learned that lesson the hard way and so knowing that that's coming I outline — I have outlined this perspective book 15 times before and done little sketches before diving in. I'm diving in. I've dived in now. I'm about a third into it. But I did a lot of preparatory work in advance this time to avoid the kind of pain I went through last time. Also, I'm writing something shorter this time. I'm much more disciplined about length and audience. This as a bullet book will be about commercial breakthroughs obviously.
Serhiy Does your publisher set you a deadline? Are you under some pressure in terms of the time here?
Shane No. No. I set deadlines for myself — for June to have a draft. I'm pretty responsive to my own deadlines. Not everyone is. An old professor used to say one of the greatest inventions of all human beings — by you know one of the greatest inventions — was the deadline. It makes people do things. So if you need a deadline, go get one. The publisher will give you one. I have a big internal clock. And I have a spouse who's very patient and who understands who she married, so she gives me the space I need.
Shane In the case I would say — by the way — I have run a couple marathons. You do need to — I needed a deadline for that activity. I needed to have a date. I had to put it on my calendar. It had to make me go out and run in 30-degree weather and train for it. I had to have a deadline in that case. But in the case of writing a book, no, I don't need it.
34:55 Growing the Next Generation of Leaders
Serhiy Shane, as we close — an image just popped up in my head where I see Kevin Spacey, an actor who I really loved. He played professors a lot. And I remember how he was talking to a room full of students and students were leaning in just listening to him. So my last question for you is — how do you or how do we grow the next generation of leaders and people who will change this world for the better?
Shane That's a hard question. Again, I love your title — be true to yourself. That's a pretty good aphorism to live by. Hard to do in practice. You know, looking at humanity and really in this case only over the last hundred years — there certainly are a lot of ways not to grow the next generation of leaders. There are quite a lot of lessons on what to avoid.
Serhiy Give us top three lessons.
Shane Okay sure. Certainly one of my first ones is — never underestimate the value of pluralism — a wide variety. This is something you see in innovation markets a lot. It's because there's so much uncertainty. You should make room for things you don't anticipate. So pluralism of supply. And I would say the same about leadership. Make room for pluralism of supply and turnover. Another thing I get from technology markets — never commit a lifetime. No technology will last a lifetime ever. And I would say the same about leaders — turnover is largely a good thing. So pluralism plus turnover turns me into a fan of democracy. It's kind of — and I get that out of innovation markets. It's dynamically far better for humans to have both of those.
Serhiy What would be the third one? There's just a lot of ways to screw up. Let's end on this note. What you said about being true — staying true to yourself is difficult. Why is that so? Why is it difficult?
37:31 Staying True to Yourself
Serhiy Why is that so that you believe that it's difficult? Because of the temptation to follow money or just a devil in whichever form?
Shane Yes. You know, at the core of it, all of us have a little bit of human kindness and a little bit of human decency in us, but it is so easy to forget that when you have some fireworks in front of you or some big ambition and but ultimately, you know, getting back down to those very human traits — just about everybody's got that in them. And if you can find that — that's usually — usually a good compass around which to make decisions. That's I guess the way I would think about it.
Serhiy Shane, thank you so much. That was really inspiring.
Shane It was a pleasure to be here. Thank you. Those were our very original questions. Thank you, Shane.