Unleashing Innovation: Lessons from Silicon Valley Legends

I have a photo of Steve Jobs and me hanging on the wall in my home office.  We both had hair.  In it, Steve listens intently as we discuss paradigms. After he left Apple, he had just started a company called NeXT Computers, and we are in front of his new computer. The photo was taken in the late 1980s. Our conversation centered on autonomous applications that communicate with each other across IP networks. HTML wasn’t a thing, and unknowingly, we were discussing Web 3.0 (or Web3) decades before it existed. The internet was just an esoteric protocol back then.

Steve recruited me to Silicon Valley. Around the same time, Tim Berners-Lee, equally captivated by Steve's new computer, created the World Wide Web at CERN on the same ‘NeXT Box’ featured in my photo.

In 1993, the first web browser, Mosaic (later Netscape), was released by twenty-something Marc Andreessen and Jim Clark, founder of Silicon Graphics. They were just a few blocks away from NeXT in Mountain View. It wasn’t referred to as Web 1.0 yet. Human interaction with the web was static, resembling a digital magazine, slide deck, or reference book.  

I joined a Silicon Valley startup that Sun Microsystems acquired. There, I worked with Eric Schmidt, Sun's CTO, who later became Google's turnaround CEO. I was in the room in Cupertino with Eric many times, where he scribbled on a whiteboard as he predicted Web 2.0 and Web 3.0 user paradigms.

I created my own Web 2.0 start-up in financial services in 1999, backed by the top venture capital on Sand Hill. I attended O’Reilly Media’s first Web 2.0 Conference in 2004 at the Hotel Nikko near the Moscone Center in San Francisco. We were next door to Oracle in San Mateo. Organically, we became immersed in pursuing and pushing the boundaries of human interaction over the web for business power users and the most inexperienced consumers.

In 2006, the already mentioned Tim Berners-Lee began discussing Web 3.0 as the ‘Semantic Web'—context-aware, interconnected, and machine-readable. In 2014, Gavin Wood, a blockchain pioneer, brilliantly refined Web 3.0 into the decentralized, trustless, token-powered Web3 we are now entering. He added to the definition but didn’t replace it. Web3 is not just about blockchain or smart contracts. It is about the same original 1980s paradigm—decentralization and user sovereignty.

Robert Metcalfe, founder of 3Com and a pioneer of Ethernet, predicted that Web3 “decentralization enhances connectivity and data collection, making networks exponentially more valuable.”

I am more of a Forrest Gump than a founding paradigm creator. I have been part of Web 3’s progression since its inception, collaborating or competing with its creators, directly or indirectly, over the decades. 

Web3 isn’t something new to budget for, evaluate for ROI, or assign your CIO to prototype. It’s not on the horizon; it has already arrived. Its implications extend beyond new technology; it is about how trust is established, value is exchanged, and consumers make decisions. That is what makes it a new paradigm. It represents a new methodology for commerce and is decentralized by nature. No one controls it: not the government, Silicon Valley, or banks. If true, what is the cost?

The cumulative technology spend inside residential finance is roughly the same size as when I entered the market in 1999 with my funded start-up. Technology spending in the mortgage industry amounts to about $10 billion, translating to approximately $1,500 to $2,000 per loan. Despite $200 billion in profit-sucking enterprise spending, there hasn't been a paradigm shift for twenty years.

Although it is ‘digitized’ and online, the mortgage paradigm remains unchanged—it is a digitized paper-based case management process. Contingencies must be eliminated from borrower documents. There are application fees and standardized 1003 forms. Consumer documents are found to remove underwriting contingencies. E-vaults of loan files still exist, and logbooks and tapes continue to be sent to the securities market. Servicing departments are big call centers. Audits and lawsuits concerning inferred irregularities are pervasive. The total cost per loan to originate has increased over those 20 years to about $14,000 from $9,000 when I started. After all that spending, the industry has made no progress, if not regressed.

I was recently at the National Press Room in Washington, DC, with a room full of mortgage lending CEOs and COOs. For the entire group, their top business initiative, which surpassed issues like compliance, economy, fraud, government oversight, and cost reduction, was leveraging technology to enhance consumer interaction.

The Web 3.0 shift is essential for businesses across the entire economy, not just in mortgages. It is a way of thinking, supported by the existing cumulative global technology environment, not just the enterprise. Now, human interaction is greatly enhanced, decentralized, and increasingly token-based. This new environment includes cryptocurrencies, decentralization, user sovereignty, seamless interoperability, AI, and smart contracts, which are well-known to homebuyers.

This shift resembles the home entertainment industry: households still watch films at home but engage in commerce with Netflix instead of Blockbuster. As an enterprise lender, you continue to provide the same value; you do it differently to satisfy consumer demands and interact with the broader ecosystem that allows you to do so.

To put Web3 to the test, I posed as a young couple on GROK, an AI agent on X, looking to buy a home in Canyon Creek, Richardson, TX.

> “My wife and I make $125K/year, have $13K in debt, and want to live near our in-laws. What can we afford?”

GROK didn’t sell me anything. It didn't point me to ads or loan officers. There were no realtors. Instead, it gave a complete, real-time affordability analysis, market comps, lender suggestions, and even commentary on school districts. It even gave me a few houses for sale that I could afford, and a local lender I should work with. All in under 10 seconds.

> “Assuming a 30-year fixed-rate mortgage at 6.5% interest (a reasonable rate as of early 2025), $2,800/month covers a $2,000/month mortgage payment, after property tax, total mortgage of ~$315,000. With a 20% down payment (~$87,500), you could afford a home priced around $400,000.

It ended with,

> “Lenders such as Lone Star, Highlands, or Guild may be more accommodating locally. Posts on X indicate that these local lenders frequently excel in personalized flexibility.”

None of the companies involved—Zillow, Guild, Rocket—knew they were part of this interaction. This is decentralization. The consumer controlled the journey from the very start. Information asymmetry, the bedrock of traditional lending models, is dead.

This is Web3.

Homebuyers won’t need to wait for pre-approvals in the coming accelerating years. Generative AI platforms will eventually have access to the MLS. Consumers will tokenize their assets, receive AI-vetted underwriting, and sign via smart contracts—all without a lender in the room. The buyer controls the data. The process is seamless, sovereign, and instantaneous.

For enterprise lenders, key competitive differentiators are shifting from distribution and processing to capital access and risk management. Scale is once again necessary, which explains the ongoing market consolidation. New ecosystem relationships will develop, and platforms will either decentralize or become obsolete.

My advice to the enterprise leader is short:

1. I am not your guru. Decide for yourself and with your shareholders whether Web3 is here.  Ask your kids how they interact. Read about the progress made on the token accounting treatment. Shift from centralizing interactions to becoming comfortable in a decentralized world that rewards seamlessness, user sovereignty, and speed.

   
   

2. AI is part of the Web3 landscape; it works on data and identifies patterns. Manage your data rights. Don’t waste money on sales robots. Think data first. An enterprise must expose data for AI to create efficiency within its brick-and-mortar or external business interactions. What data should the enterprise collect in its business practices? Remember, APIs don’t matter anymore. 

   
   

3. Likewise, assume the consumer is in charge.  What data is the lending brand exposing to the world, including social media, the web, blogs, and podcasts? It isn’t just the graphics on the webpage.  What data do you want to be identified during the hourly trolling without your knowledge? Expose that data while your competitors are trying to build a better mortgage payment calculator.

   
   

4. Identify use cases to prepare for tokenization, smart contracts, and distributed ledgers. Consider arms-length use alongside existing operations.  Read the book "The Innovator’s Dilemma,” which explains how companies like Blockbuster were blindsided. Organizational changes must be managed very carefully. Embrace opportunities to develop corporate experience with Web 3.

   
   

5. Formulate a strategic framework or plan. Avoid boiling the ocean—Foster awareness throughout the organization. Participate in the paradigm shift. Embed it as part of the corporate strategy. Avoid becoming reactive.  Do not misallocate funds.  Manage shareholders effectively. Seek assistance in this without disrupting existing structures and processes. Like all top talent, your talent will be drawn to the latest hot technology.  This presents a management risk. Remain vigilant.

   
   

US mortgage lending is the world’s largest consumer financial services market. Web 3 represents the ocean in which these consumers navigate. This presents an opportunity for the ecosystem to adopt the new consumer paradigm. It is not merely about finding a new vendor or CIO; it involves a fundamental shift in thinking. I believe at least one lender will take this step now, and when that occurs, that lender will gain a distinct and insurmountable advantage over its competitors. It will look like a niche market offering, like Netflix, while cable and Hollywood aren’t looking.