Commodities vs. Experiences

“Every man is the sum total of his reactions to experience. As your experiences differ and multiply, you become a different man, and hence your perspective changes. This goes on and on. Every reaction is a learning process; every significant experience alters your perspective” — Hunter S. Thompson

Life is about choices. When viewed at a high level, most of those can be broken down into choosing where to allocate our two most valuable resources: time and money (and money can often be viewed as a proxy for time. Many people trade their time for money).

As we barrel headlong into the future, there are two major types of “assets” that we can accrue with those resources: commodities (things) and experiences.

Commodities

Commodities (things) are continuing to get cheaper. Manufacturing is becoming more efficient, increasingly being handed over to machines. Technological innovations like 3D printers, digital modeling and machine learning techniques are bringing the cost of production down.

The price of commodified goods is decreasing, helped along by large platforms like Amazon and Alibaba. Overall, goods and services are becoming less valuable as time marches forward.

The American Dream used to consist of purchasing a home, a car, and accruing things: a television set, a home theatre system, a pool for the backyard. But things have changed, and it is yet to be seen whether it is due to circumstance or a new paradigm is emerging.

The millennial generation is rejecting this version of the American dream. Despite lower mortgage rates and increased employment, they are not currently investing in purchasing homes. Instead, they have chosen to invest in experiences.

Experiences

Increasingly, people (and the marketplace) are beginning to realize that experiences are far more valuable than things. Experiences are what you ultimately will remember at the end.

As our friend Hunter above noted, “every man [and woman] is the sum total of his reactions to experience”. Somehow, “every man is the sum total of his things” doesn’t have the same ring to it.

In the future (as we are already seeing), there is going to be an even bigger premium placed on experiences. As opposed to commodities, experiences are becoming more expensive. Machines and robots may be able to make common goods cheaply. But recreating experiences will be incredibly difficult for a machine.

Experiences, because they are imperfect, because they are flawed, are inherently inefficient. They are tailored for humans by humans.

This unpredictability is the very thing that makes experiences so appealing. If everything went perfectly to plan, you wouldn’t have gotten lost and stumbled across that amazing hole in the wall that turned out to be your favorite pizza place in Milan. You wouldn’t have met that special someone when you were lost and trying to catch a bus to El Chalten in Argentina. The laughs, the fun, the love, and even the scary are never planned — not when it’s genuine and at its best. That’s what experiences are all about — the unexpected.

You don’t have to look beyond sporting events and concerts to see how valuable experiences really are. The average cost of a ticket to the Golden State Warriors vs. Cleveland Cavaliers game 7 showdown was ~ $2,100. In this case, people wanted to witness first hand a historical showdown. The result was uncertain, and that uncertainty is exciting.

Ticket and concert prices in general have been rising across the board.

Market Reactions

Some companies are already taking advantage of this insatiable desire for experiences. Airbnb is pushing into the business of curating experiences through recommendations from their hosts. Their experiences feature will focus on making you feel like more of a local — part of their “belong anywhere” campaign. I can only assume it will help users find recommendations from locals that you can’t find in a guidebook.

An insatiable hunger for experiences is why a platform like ifOnly can thrive. Access to new experience is incredibly valuable. Especially those experiences that can’t be found easily.

Facebook, Twitter and others are providing second hand experiences through the use of live video. Snapchat even amalgamates user stories to give people access to other’s experiences.

Enhancing Experiences

This isn’t to say that certain things are not valuable. I personally tend to choose to purchase things that that can enhance experiences. An example would be backpacking gear that allows you to spend 5 nights in the wilderness, connecting with nature.