Building the New World Based on the Internet’s Existence
What 2016 taught us about technology and the mission for 2017
The Internet Won
The first time I went online was circa 1995. I’ve never left since. Internet culture and the web’s development have been dear to me for quite a while. For the longest time, the internet community has been dreaming about a future in which the internet would be everywhere and everything would be on the internet; or like the internet.
It’s 2017. The internet is now ubiquitous. It’s in most people’s pocket, all the time. Kids born 1995 or later (many of which are btw adults now) basically can’t remember a time without the internet. Hell, even I barely can. And there is a sizable number of walking and speaking human beings who literally never lived in a world without smartphones: This year the iPhone is going to celebrate its tenth birthday.
Nobody — not even in Germany — will ask questions like “will the internet go away again?” anymore. Hokum à la “But our company will never be an internet business; our clients don’t use it” retreated to the realm of business obscurity. Instead, the plethora of HBR or McKQ articles about the looming Digital Transformation finally alerted even the average non-tech CEO: This internet seems to be real! And isn’t this Digital Transformation thingy a lovely excuse to sign-up for a manager class outing to the Mecca of technology itself, The Valley?! Sure is. California sun and girls (and who knows, maybe some weed even) included.
All this illustrates one simple fact about the internet’s global state at the beginning of 2017: It won. I’ll not bore you with the actual numbers (click here if you really care) but nobody who’s not completely out-of-touch with our world will demand statistical evidence anyway. You simply see it everywhere by now.
Tech Stories, 2016 Edition
However, this victory bears consequences. Some are great, some horrible and many unintended. 2016 unmistakably rubbed them in our face. Just take a look at this year’s dominant storylines in tech:
The Causa Trump
The coming presidency of Donald Trump is in many ways tied to the internet. There’s his heavily Twitter-influenced campaign style. His exploitation of the relatively new phenomenon of fake news. And an overall public climate that allowed him to succeed which is strongly correlated with the internet’s rise. On a related note, we also witnessed Brexit which shared some common traits.
A.I. Eats Jobs (a speculative debate [so far])
2016 also was the year of a vocal debate about artificial intelligence. After the long A.I. winter, the topic made its comeback to the mainstream media. There, the discussion ranged from possible implications on jobs (likely) to several ethical issues (relevant) and even the extinction of humanity at the hands of robots (speculative). Both, optimistic and pessimistic analysts alike, are positive the technology’s impact is going to be massive.
To tech folks, the rise of market-making, aggregating platforms wasn’t news. But 2016 represented the peak of a broad public discussion about the issue — at least for now. I didn’t attend a single tech conference that didn’t offer several sessions and workshops explaining platforms to regular managers. Beyond the business crowd, general-interest media focused on the (undeniable) risks: Will successful platforms — by virtue of aggregating and commoditzing all suppliers — become immensely powerful? Are network effects and winner-take-all tendencies going to leave us with a handful of monopolistic giants? Is GAFA(M) only the beginning of global tech domination?
Tech Island is No More
Some of the criticism, particularly from regular news media, is certainly overblown. The devil is in the details and those are often overlooked. Still, the public sentiment can’t be ignored for there is an underlying reason which weaves together all the above storylines: The internet no longer is the geeks’ island. It influences and changes the dynamics of the real world. It impacts politics, the economy and every business. Sounds like a lot? There’s more to come: We can already observe how technology starts to change social behavior. Soon, its going to leave its mark on financial systems, mobility and even the human body.
In short, it’s no longer just a proclamation to say software is eating the world. No, Marc Andreessen’s famous dictum has become an accurate description of the world we are living in. And we are watching live as the munching is happening.
Make no mistake though. The former may sound like it but I’m neither alarmist nor tech apocalypticist. To the contrary. I believe we are at the rare point in time that offers the huge opportunity to make meaningful changes in the world and significantly improve its condition. As the foundations of our societies are shaken up, something new will likely emerge. Our technology will play a vital role in designing whatever comes next. It allows to build a highly-connected, more unified and even fairer world. One that allows people to strive, grow and pursue purposeful lives.
Alas, there is no guarantee this scenario manifests itself. It would be foolish to expect so. The future is up for grabs and many are reaching for it. Some with bad intentions and many more with well-meaning-yet-dangerous ignorance. At the risk of sounding trivial: If we want the best possible future we need to fight for it. Or, rather, we need to build it.
That’s why we need — maybe more than ever — entrepreneurs. And not the breed that’s only out to make a quick buck but the likes who pursue bigger goals and want to make a positive impact.
The Old World Won’t Build It
“Why entrepreneurs”, you ask?
First, because the leading actors of the old world won’t build the new one. It’s a matter of incentives. If you are at the steering wheels of the status-quo, the incentive to drastically alter it is small. That’s why most established companies tend to innovate incrementally, not radically; why politicians hardly appear to be thinking outside their system’s box; why many people prefer the security of their job over change even if they hate it (sure enough the security is often merely perceived).
Second, the realm of business fosters innovation. It’s the one area of modern societies where dynamism meets the ability to raise capital (which is necessary to scale an idea) as well as the freedom to create things that span boarders. Hence, the most substantial changes won’t be driven by state institutions, politicians or activists but by entrepreneurs. For some undertakings, this admittedly creates a risk: Most businesses need to prioritize growth and profits — sometimes at the cost of more idealistic goals. While smart companies align their revenue creation with their purpose, there are other ways to overcome the issue. For instance alternative legal structures like benefit corporations and cooperatives.
Third, the future is entrepreneurial anyway. Getting there early won’t hurt.
What to Build in 2017
If the internet (or technology more broadly) is in the process of shaking up the foundations on which our current world was constructed, then the mission is to build the new one. Hopefully in a way that’s beneficial for society.
Instead of merely building new technology we need to think about the bigger picture. Technology is increasingly intertwined with the real world and arguably shapes it. There are lots of opportunities for improvements. But in order to seize them founders need to start thinking broadly, not just about tech. In one his most profound pieces this year, Ben Thompson wrote:
These secondary effects will be the key to building a prosperous society amidst the ruin of the Internet’s creative destruction: what is so exciting about Uber is not the fact it is wiping out the taxi industry, but rather that transportation as a service has the potential to radically transform our cities. What happens when parking lots go away, commutes in self-driving cars lend themselves to increased productivity, or going out is as easy as tapping an app? What kind of new jobs and services might arise?
This paragraph contains the guideline for building the kind of companies we, I think, need. Founders should take a close look at the parts of our world that haven’t been transformed by the internet yet. Of those there are plenty, ranging from many a real-world markets to the way we govern our societies. Think about them as systems. Ask yourself: How ought they work given our technological capabilities? Which components are unnecessary? What needs to exist so you can rewire the remaining components in a better way?
Importantly, I urge you to think carefully about the secondary effects Thompson mentions. While it’s not easy to anticipate 2nd order effects¹, not even trying increases the likelihood of unintended consequences. These needn’t necessarily turn out bad but it’s a coinflip. Since no less than the future is at stake, I advocate for maximizing the chances of a desirable one.
Welcome to the Real World
For the longest time, the internet community has been dreaming about a future in which the internet would be everywhere and everything would be on the internet; or like the internet.
The dream has become reality. Now, it’s time to stop dreaming and start shaping reality.
¹ A useful method I sometimes use: Instead of starting with a solution and thinking about 2nd order effects, I start with the long-term vision and kinda “reverse engineer” the way to get there.
Originally published in my newsletter Digital Thoughts on Dec. 21.