Today, I attended Silicon Valley Forum’s Launch Event, which was held at the Microsoft campus in Mountain View, California. It focused on 30 specially selected startups launching their products in front of an audience of VCs, Angels, Industry Executives, Bloggers, Press and Television. I just listened to Paul Saffo share his views on the current ‘social economy.’ (In the coming days, I will share more of what I heard and learned here).
Paul is a forecaster with over two decades experience exploring the dynamics of large-scale, long-term change. He is Managing Director of Foresight at Discern Analytics, and teaches at Stanford University where he is also a Visiting Scholar in the Stanford Media X Research Network.
Here are some of the highlights of what I heard:
We are in a rapidly changing era of “Clouds and Crowds.” Saffo stated that shift from mass media to personal media started when the internet was invented (What about AOL in the 80s and 90s? : ) and now everything is acerbating and evolving rapidly – increasing overall velocity. Or as someone from Apple once said ‘There are 52 weeks in a year, so every week, a revolution takes place!”
Saffo discussed how in the early 1990s we had a producer economy, where the main focus was on the person making the product, the VP of Manufacturing and his staff. Then we moved to the consumer economy, where the star in company’s was the VP of marketing. Eventually in the 1950s-1990s the main focus was on the consumer which is the person using the product.
This last stage was fueled by television which enabled new products to hit the market, such as Ron Propeil vegamatic. The biggest symbol of this later half 20th century consumer economy, however, might have been the cargo container, which became a symbol of globalization. Ironically, Scott Cook often highlighted the storage contain industry as an example of innovation and change. Here’s a summary of his description of the evolution of shipping:
Look at the evolution of shipping. By 1960 this industry had reached an apex with the NS Savannah, nuclear-powered cargo ship. Malcolm McLean was a trucker who observed tremendous amounts of delay in transferring merchandise: unloading and loading to and from ships. In the mid-50s he sold his truck company. He bought a rusty old tanker, the SS Maxton, which he put a flat bed on so he could put rectagular containers. SS’s maiden voyage was 50 years ago last week.
Containerized freight revolutionized shipping. The cost used to be $6 a ton. Containerized freight costs 16 cents a ton. There are today millions of people in Asia who owe their middle-class status to Mr. McLean. He didn’t focus on the speed of the ship, he focused on speed of loading and unloading.
Today, however, the central actor is not the producer or consumer, but rather it is someone plays both roles. There’s been a shift from watching (TV) and buying to shaping and engaging. Thanks to social media, the consumer who was once passive during television is now active.
Saffo sites Google as an example. Instead of paying for information, we are are transacting with the search engine using different type of currency: We give it information (produce), obtain information from our searches (consume) and it learns (gains a currency) from our searches). Another example of active participating is that we just don’t consume music now. We participate with it. Think about Call of Duty video game.
Companies need to understand that the creator and the consumer have the potential to be same person now. And users have a deep desire for participating and control of their experience.
Some interesting final trends he hit on:
- Social networks are increasingly being defined by who is excluded vs. who is included; there is a transformation from friending everyone on Facebook to establishing small groups of Networks to connect with (Google Plus). If you want a great book on this topic, check out Paul Adams new book: Grouped: How small groups of friends are the key to influence on the social web. (I hope to interview Paul for this website and Csuitetwo.com.
- There could be a change in business models. Imagine if some of the driverless Google robotic technology was incorporated into car sharing. Right now, insurance companies struggle with the paradigm that a Zip-Car user only drives a few times a week vs. perfecting their driving skills on an ongoing basis. They could feel better if there’s some sort of Google robotic guarantee.
- Instead of overly-protecting a company’s brand, companies might embrace the usage of their intellectual property by others because it will increase its visibility. Personally, I think it will be a long time until this happens. Even though there are some examples of embracing consumers to use a company brand, such as Star-Trek, one of the items most companies will only have their brand in a more open economy.
- The merging of producer and consumer will impact more than just the web. There will be new types products and new industries, such as 3D Printing or Additive Manufacturing. Saffo is the third person this week to discuss this trend with me. He discussed personalized electric guitars, M&Ms, and more.
- This trend is an outcome of the previous one. The 3D printing market will impact both the high and low ends of the markets. 3D printing and manufacturing, for example, could reduce manufacturing costs and thus bring jobs back to US shores from China. Here’s good report on how 3D Printing can change the world. about the impact. Or read The Economist great article on this topic. And if you don’t want to read the report, here’s a good summary provided by Mark Fleming:
- Assembly lines and supply chains could be reduced or eliminated for many products. AM can produce the final product — or large pieces of a final product — in one process.
- Designs, not products, would move around the world as digital files are printed anywhere with any printer to meet design parameters. A “STL design file can be sent via the Internet and printed in 3D.
- Products could be printed on demand without the need for inventories.
- A given manufacturing facility would be capable of printing a huge range of products without retooling—and each printing could be customized without additional cost.
- Production and distribution of material products could become de-globalized as production is brought closer to the consumer.
- Manufacturing could be pulled away from “manufacturing platforms like China back to the countries where the products are consumed, reducing global economic imbalances as export countries’ surpluses are reduced and importing countries’ reliance on imports shrink.
- The carbon footprint of manufacturing and transport as well as overall energy use in manufacturing could be reduced substantially and thus global “resource productivity greatly enhanced and carbon emissions reduced.
- Reduced need for labor in manufacturing could be politically destabilizing in some economies while others, especially aging societies, might benefit from the ability to produce more goods with fewer people while reducing reliance on imports.
- The United States, the current leader in AM technology, could experience a renaissance in innovation, design, IP exports, and manufacturing, enhancing its relative economic strength and geopolitical influence.
Yes, 3D printing is something to learn about…
For more info on Paul Saffo: