Making Connections not Transactions
Back to the Future of Economic Interaction
“I guess you guys aren’t ready for that yet… But your kids are gonna love it.” — Marty McFly
I started writing this on a plane to NYC, economy of course; I haven’t been back for almost exactly two years. Six hours in, and film selection exhausted, I briefly entertained the romanticized memory of New York. It’s a city I’ve never really worked in and every visit was fleeting — who wouldn’t have fond memories of that. I’m thinking about the rather unexpected chain of events that led to me sitting here (more on this later), and the remarkable ease with which I was able to do so. Bear with me here.
I am a firm believer that we are frequently presented with choices and make decisions that alter the course of our existence. Most of the time we are just completely oblivious to it. On the rare instance when one is cognizant of it, or perhaps self-delusional into thinking so — the act of choosing is challenging to say the least. Steering clear of existentialism, what is actually on my mind is what follows those choices logistically.
Give me that sugar cube
A big factor in any decision is effort and reward: choosing the long route home from work may seem silly, unless there is a chance you might bump into that girl (or guy) you’ve been trying to muster the courage to talk to. That’s a simple example, but the principle is the same: you might choose to study at Oxford, which will cost money and time instead of going straight into work, because you believe that it will bring you closer to some goal — academic, monetary or otherwise. Let’s go bigger. Moving country — lots of things to consider here. First thoughts are of course of the risk and opportunity that it offers. All of that’s great, but then you actually start thinking logistics: travel, accommodation, packing, bank accounts… not exactly items in the “for” column on that list.
The Logistical part of my decision took under an hour. I was able to book the cheapest flights with Skyscanner, get cheap and half-decent accommodation on Airbnb in central Manhattan, and put my trusty steed (read: bicycle) on eBay
Agencies → Self-Service
Over the last decade some great companies have been built that have changed entire industries. That’s not news. What they changed is the interesting bit. If you think of Travel and Auction house industries 20 years ago, they predominantly followed the agency model — you would use a professional who would enable you to perform a transaction you couldn’t (or wouldn’t) do yourself. What Skyscanner, Expedia and eBay have in common is that they induced a behavioral change — we now see each of these activities as ‘transactions’ that are so fast, easy and secure that we do not mind doing it ourselves. Without the agent skimming off the top, it is now cheaper and far more scalable and everyone wins, except the agent. Too bad.
Self-Service → Making Connections
Act II in our economic evolution has been more recent and has fuelled the dizzying growth of companies like Airbnb in Hospitality, Uber and Lyft in Transportation, Nasty Gal and Wanelo in fashion and many others. Their secret sauce, however, is no longer just facilitating transactions — you are not just renting a room with Airbnb — you are renting someone’s room. You make a personal connection, and it is upto you to make something of it. In NYC I stayed a few days at the home of a lovely fellow tech entrepreneur who I have stayed in touch with since. What could have been just a hotel stay actually became a friendship.
I’ve been using Uber in London and other cities for some time. It’s a great product and a great company. In San Francisco I discovered Lyft — and I haven’t used Uber there since. With Lyft you sit in the front seat, fistbump the driver (weird at first but you get used to it), and if you want to — make a new friend. The attraction is that you are no longer conducting transactions with nameless corporations — the product you are buying is in part that personal connection.
Where’s my hoverboard?
It is a common view among Millennials that this is all new, and their parents just don’t get it. Often it’s true — I don’t think my parents would stay in someone else’s tiny bedroom in Brooklyn, nor would they like for someone to stay in theirs. But, recently I saw a talk by Brian Chesky (CEO of Airbnb), and he points out that his grandfather used to stay with complete strangers all the time when travelling around the country. You just turned up, knocked on the door and a kind soul would put you up. Think of Kerouac’s ‘On the Road’.
It seems the whole sharing economy was part and parcel throughout our history. The ideas of how to treat your guests and how to be a good samaritan have been passed down for generations. And in many parts of the world they still are. As with networks, the new wave of technology has re-enabled us to make economic connections the way we used to know the farmer and shopkeeper in our village. The yearning for such connections transcends the simple utility of the product itself.
