Every so often, a novel technology emerges that propels society forward. The 1974 release of the first personal computer, the subsequent birth of the Internet, and the development of cellular technology are all prime examples. These weren’t just exciting business innovations, but exponentially valuable ones that changed society in countless ways.
These “exponential technologies” have an impact that extends beyond the limited notion of commercial success, or even shared value. They allow us to do more, learn more, and earn more than ever before. They transform our usual ways of thinking, behaving, and relating to one another. They empower and enrich the lives of many people, not just an elite few.
Right now we’re seeing an unusual explosion of society-shaping, exponential technologies. But why?
Take a closer look at the technology-powered brands and platforms making headlines today: Bitcoin, Boom Financial, CommonBond, Prosper, Airbnb, Tesla, Oculus VR, Wikileaks, 3-D printing, crowd sourcing, crowd funding, peer-to-peer lending, and so on. Each of these platforms just passed a threshold of popular acceptance, while the value of each one is ready to explode, if it hasn’t already. But market acceptance is just the tip of the iceberg.
Collectively, today’s exponential technologies hint at a larger trend–a societal reset now underway.
Consider for a moment these common traits:
The technologies and companies I mentioned above either directly or indirectly challenge a pre-existing stronghold. For instance, Tesla helps eliminate the need for car dealerships by selling direct to consumers, saving people time and hassle. 3-D printing democratizes manufacturing, theoretically allowing anyone with the wherewithal to create a “mini factory.” Peer-to-peer lending platforms like Prosper and CommonBond, crypto currencies like Bitcoin and new apps like Boom Financial help to usurp the need for central banks, credit cards, currency exchanges, money transaction fees, and more, allowing anyone with an Internet connection to participate in the global economy.
And then there’s Wikileaks, a platform developed by hackers in order to empower people with classified knowledge they never had access to before, knowledge about critical events that is threatening to dogmas that have long been in place. Today’s exponential technologies don’t just bring about change within industries. They reconfigure the power structure.
Because exponential technologies are so disruptive, they create backlash. Some face sustained political and legal attacks from competing businesses, industry groups, and local and federal governments. Take the ongoing crusade against Julian Assange. Or the automotive industry’s endless string of lawsuits against Tesla. Or the repeated attempts to ban Uber across Europe. Or the banking industry’s ongoing objections to Bitcoin, along with the secretive manner in which the platform first got started. The stories behind some of these organizations sound like something out of a Dan Brown novel.
One fascinating piece of Bitcoin’s history, for instance, is a line of code found in the original ledger, which reads: “The Times, 03/Jan/2009, Chancellor on brink of second bailout of banks.” It’s as if Bitcoin’s mysterious founders unleashed not only a new currency, but a warning shot to one of the most powerful industries on Earth.
A key reason why most exponential technologies endure despite backlash is that they are decentralized, or driven forward by a diverse network of individuals working together. That makes them difficult to maneuver against, especially once they get going. For example, despite city officials’ attempts to slow it down, Airbnb is now worth $10 billion. That’s because it gives so many people a way to achieve greater independence and economic prosperity. It shares new possibility with people. So people, in turn, share the model forward. Wikileaks, Prosper, crowd funding, peer-to-peer lending and others mentioned above are no different. As part of the sharing economy, they each rely on mass collaboration in order to succeed. Perhaps the most significant aspect of this sharing trait is that it permanently reshapes the demand curve. Just as in the case of Napster, even if the companies themselves fail, new consumer behaviors and preferences will live on.
Despite their astounding levels of ingenuity, companies driven by exponential technologies tend to be unusually candid, often revealing their most prized discoveries to the world. For instance, while the world’s biggest technology firms duke it out over patents, Tesla releases them to the public: “in the spirit of the open-source movement, for the advancement of electric vehicle technology.”
Similarly, Oculus VR crowdsources use cases for its technology, encouraging researchers to achieve their own breakthroughs. Bitcoin goes so far as to operate as a completely open-source system, allowing anyone to see where every bit in the world is at any given time. This level of transparency is surely unique, and contrary to industry standards. That’s a good thing, as it puts added pressure on outmoded business models to evolve.
Each one of the aforementioned traits is unique. But when these traits occur together as a sequence, as they do in most of the case examples listed above, something spectacular starts to occur. The old system cracks apart as more of its flaws are revealed. The singular desire to dominate markets is eventually outweighed by the collective will to advance them. Wealth and opportunity become more evenly distributed throughout society. And unstoppable change emanates from the bottom up. This, I believe, is where we are moving right now: into a period of profound market transformation and dramatically different societal expectations.
While these traits (and my corresponding theories) may seem utopian, there is ample evidence to suggest that real change is afoot. It is worth considering just how significantly markets might reshape themselves, and to what end. As CommonBond CEO David Klein recently told CNBC in an interview: “I think what finance looks like in 10 years is unrecognizable to us today. I think the platforms that are coming to the world are going to completely change the way we think and interact.”
Very possibly, they already have.