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The Inevitable Page 12
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At my son’s school, I check one of the public wall displays in the side hallway. I raise my palm, say my name, and the screen recognizes me from my face, eyes, fingerprints, and voice. It switches to my personal interface. I can screen my messages if I don’t mind the lack of privacy in the hall. I can also use the tiny screen on my wrist. I glance at the messages I want to screen in detail and it expands those. I wave some forward and others I swoosh to the archives. One is urgent. I pinch the air and I am screening a virtual conference. My partner in India is speaking to me. She is screening me in Bangalore. She feels pretty real.
I finally make it to the office. When I touch my chair, my room knows me, and all the screens in the room and on the table are ready for me, picking up from where I left off. The eyes of the screens follow me closely as I conduct my day. The screens watch my hands and eyes a lot. I’ve become very good in using the new hand-sign commands in addition to typing. After 16 years of watching me work, they can anticipate a lot of what I do. The sequence of symbols on the screens makes no sense to anyone else, just as my colleagues’ sequence baffles me. When we are working together, we screen in an entirely different environment. We gaze and grab different tools as we hop and dance around the room. I am a bit old-fashioned and still like to hold smaller screens in my hands. My favorite one is the same leather-cased screen I had in college (the screen is new; just the case is old). It is the same screen I used to create the documentary I did after graduation about the migrants sleeping in the mall. My hands are used to it and it is used to my gestures.
After work I put on augmentation glasses while I jog outside. My running route is clearly in front of me. Overlaid on it I also see all my exercise metrics such as my heart rate and metabolism stats displayed in real time, and I can also screen the latest annotation notes posted virtually on the places I pass. I see the virtual notes in my glasses about an alternative detour left by one of my friends when he jogged this same route an hour earlier, and I see some historical notes stuck to a couple of familiar landmarks left by my local history club (I am a member). One day I may try out the bird identification app that pins bird names on the birds in my glasses when I run through the park.
At home during dinner, we don’t allow personal screens at our table, though we screen ambient mood colors in the room. After our meal I will screen to relax. I’ll put a VR headset on and explore a new alien city created by an amazing world builder I follow. Or I’ll jump into a 3-D movie, or join a realie. Like most students, my son screens his homework, especially the tutorials. Although he likes to screen adventure games, we limit it to one hour during the school week. He can screen a realie in about an hour, speed-screening the whole way, while also scanning messages and photos on three other screens at the same time. On the other hand, I try to slow down. Sometimes I’ll screen a book on my lap pad while slow, affirming vistas generated from my archives screen on the walls. My spouse likes nothing better than to lie in bed and screen a favorite story on the ceiling till sleep. As I lay down, I set the screen on my wrist for 6 a.m. For eight hours I stop screening.
5
ACCESSING
A reporter for TechCrunch recently observed, “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”
Indeed, digital media exhibits a similar absence. Netflix, the world’s largest video hub, allows me to watch a movie without owning it. Spotify, the largest music streaming company, lets me listen to whatever music I want without owning any of it. Amazon’s Kindle Unlimited enables me to read any book in its 800,000-volume library without owning books, and PlayStation Now lets me play games without purchasing them. Every year I own less of what I use.
Possession is not as important as it once was. Accessing is more important than ever.
Pretend you live inside the world’s largest rental store. Why would you own anything? You can borrow whatever you need within arm’s reach. Instant borrowing gives you most of the benefits of owning and few of its disadvantages. You have no responsibility to clean, to repair, to store, to sort, to insure, to upgrade, to maintain. What if this rental store were a magical cupboard, a kind of Mary Poppins carpetbag, where an endless selection of gear was crammed into a bottomless container? All you have to do is knock on the outside and summon an item, and abracadabra—there it is.
Advanced technology has enabled this magical rental store. It’s the internet/web/phone world. Its virtual cupboards are infinite. In this maximal rental store the most ordinary citizen can get hold of a good or service as fast as if they possessed it. In some cases, getting hold of it may be faster than finding it in your own “basement.” The quality of goods is equal to what you can own. Access is so superior to ownership in many ways that it is driving the frontiers of the economy.
Five deep technological trends accelerate this long-term move toward accessing and away from ownership.
Dematerialization
The trend in the past 30 years has been to make better stuff using fewer materials. A classic example is the beer can, whose basic shape, size, and function have been unchanged for 80 years. In 1950 a beer can was made of tin-coated steel and it weighed 73 grams. In 1972 lighter, thinner, cleverly shaped aluminum reduced the weight to 21 grams. Further ingenious folds and curves introduced yet more reductions in the raw materials such that today the can weighs only 13 grams, or one fifth of its original weight. And the new cans don’t need a beer can opener. More benefits for just 20 percent of the material. That’s called dematerialization.
On average most modern products have undergone dematerialization. Since the 1970s, the weight of the average automobile has fallen by 25 percent. Appliances tend to weigh less per function. Of course, communication technology shows the clearest dematerialization. Huge PC monitors shrunk to thin flat screens (but the width of our TVs expanded!), while clunky phones on the table become pocketable. Sometimes our products gain many new benefits without losing mass, but the general trend is toward products that use fewer atoms. We might not notice this because, while individual items use less material, we use more items as the economy expands and we thus accumulate more stuff in total. However, the total amount of material we use per GDP dollar is going down, which means we use less material for greater value. The ratio of mass needed to generate a unit of GDP has been falling for 150 years, declining even faster in the last two decades. In 1870 it took 4 kilograms of stuff to generate one unit of the U.S.’s GDP. In 1930 it took only one kilogram. Recently the value of GDP per kilogram of inputs rose from $1.64 in 1977 to $3.58 in 2000—a doubling of dematerialization in 23 years.
Digital technology accelerates dematerialization by hastening the migration from products to services. The liquid nature of services means they don’t have to be bound to materials. But dematerialization is not just about digital goods. The reason even solid physical goods—like a soda can—can deliver more benefits while inhabiting less material is because their heavy atoms are substituted by weightless bits. The tangible is replaced by intangibles—intangibles like better design, innovative processes, smart chips, and eventually online connectivity—that do the work that more aluminum atoms used to do. Soft things, like intelligence, are thus embedded into hard things, like aluminum, that make hard things behave more like software. Material goods infused with bits increasingly act as if they were intangible services. Nouns morph to verbs. Hardware behaves like software. In Silicon Valley they say it like this: “Software eats everything.”
The decreasing mass of steel in an automobile has already given way to lightweight silicon. An automobile today is really a computer on wheels. Smart silicon enhances a car’s engine performance, braking, safety—and all the more true for electric cars. This rolling computer is about to be connected and becom
e an internet car. It will sport wireless connection for driverless navigation, for maintenance and safety, and for the latest, greatest HD 3-D video entertainment. The connected car will also become the new office. If you are not driving in your private space, you will either work or play in it. I predict that by 2025 the bandwidth to a high-end driverless car will exceed the bandwidth into your home.
As cars become more digital, they will tend to be swapped and shared and used in the same social way we swap digital media. The more we embed intelligence and smarts into the objects in our households and offices, the more we’ll treat these articles as social property. We’ll share aspects of them (perhaps what they are made of, where they are, what they see), which means that we’ll think of ourselves as sharing them.
When Amazon founder Jeff Bezos first introduced the Kindle ebook reader in 2007, he claimed it was not a product. He said it was a service selling access to reading material. That shift became more visible seven years later when Amazon introduced an all-you-can-read subscription library of almost a million ebooks. Book fans no longer had to purchase individual books, but could buy access to most books currently published with the purchase of one Kindle. (The price of the basic entry Kindle has been dropping steadily and is headed to be almost free soon.) Products encourage ownership, but services discourage ownership because the kind of exclusivity, control, and responsibility that comes with ownership privileges are missing from services.
The switch from “ownership that you purchase” to “access that you subscribe to” overturns many conventions. Ownership is casual, fickle. If something better comes along, grab it. A subscription, on the other hand, gushes a never-ending stream of updates, issues, and versions that force a constant interaction between the producer and the consumer. It is not a onetime event; it’s an ongoing relationship. To access a service, a customer is often committing to it in a far stronger way than when he or she purchases an item. You often get locked into a subscription (think of your mobile phone carrier or cable provider) that is difficult to switch out of. The longer you are with the service, the better it gets to know you; and the better it knows you, the harder it is to leave and start over again. It’s almost like being married. Naturally, the producer cherishes this kind of loyalty, but the customer gets (or should get) many advantages for continuing as well: uninterrupted quality, continuous improvements, attentive personalization—assuming it’s a good service.
Access mode brings consumers closer to the producer, and in fact the consumer often acts as the producer, or what futurist Alvin Toffler called in 1980 the “prosumer.” If instead of owning software, you access software, then you can share in its improvement. But it also means you have been recruited. You, the new prosumer, are encouraged to identify bugs and report them (replacing a company’s expensive QA department), to seek technical help from other customers in forums (reducing a company’s expensive help desk), and to develop your own add-ons and improvements (replacing a company’s expensive development team). Access amplifies the interactions we have with all parts of a service.
The first stand-alone product to be “servicized” was software. Today, selling software as service (SaS) instead of product has become the default mode for almost all software. As an example of SaS, Adobe no longer sells its venerable Photoshop and design tools as discrete products with dated versions, 7.0 or whatever. Instead you subscribe to Photoshop, InDesign, Premiere, etc., or the entire suite of services, and its stream of updates. You sign up and your computer will operate the latest best versions as long as you pay the monthly subscription. This new model entails reorientation by customers comfortable owning something forever.
TV, phones, and software as service are just the beginning. In the last few years we’ve gotten hotels as service (Airbnb), tools as service (TechShop), clothes as service (Stitch Fix, Bombfell), and toys as service (Nerd Block, Sparkbox). Just ahead are several hundred new startups trying to figure how to do food as service (FaS). Each has its own approach to giving you a subscription to food, instead of purchases. For example, in one scheme you might not buy specific food products; instead, you get access to the benefits of food you need or want—say, certain levels and qualities of protein, nutrition, cuisine, flavors.
Other possible new service realms: Furniture as service; Health as service; Shelter as service; Vacation as service; School as service.
Of course, in all these you still pay; the difference is the deeper relationship that services encourage and require between the customer and the provider.
Real-Time On Demand
Access is also a way to deliver new things in close to real time. Unless something runs in real time, it does not count. As convenient as taxis are, they are often not real time enough. You usually wait too long for one, including the ones you call. And the cumbersome payment procedure at the end is a hassle. Oh, and they should be cheaper.
Uber, the on-demand taxi service, has disrupted the transportation business because it shifts the time equation. When you order a ride, you don’t need to tell Uber where you are; your phone does that. You don’t have to settle payment at the end; your phone does that. Uber uses the phones of the drivers to locate precisely where they are within inches, so Uber can match a driver closest to you. You can track their arrival to the minute. Anyone who wants to earn some money can drive, so there are often more Uber drivers than taxis, especially during peak demand times. And to make it vastly cheaper (in normal use), if you are willing to share a ride, Uber will match two or three riders going to approximately the same place at the same time to split the fare. These UberPool shared-ride fares might be one quarter the cost of a taxi. Relying on Uber (or its competitors, like Lyft) is a no-brainer.
While Uber is well known, the same on-demand “access” model is disrupting dozens of other industries, one after another. In the past few years thousands of entrepreneurs seeking funding have pitched venture capitalists for an “Uber for X,” where X is any business where customers still have to wait. Examples of X include: three different Uber for flowers (Florist Now, ProFlowers, BloomThat), three Uber for laundry, two Uber for lawn mowing (Mowdo, Lawnly), an Uber for tech support (Geekatoo), an Uber for doctor house calls, and three Uber for legal marijuana delivery (Eaze, Canary, Meadow), plus a hundred more. The promise to customers is that you don’t need a lawn mower or washing machine or to pick up flowers, because someone else will do that for you—on your command, at your convenience, in real time—at a price you can’t refuse. The Uber-like companies can promise this because, instead of owning a building full of employees, they own some software. All the work is outsourced and performed by freelancers (prosumers) ready to work. The job for Uber for X is to coordinate this decentralized work and make it happen in real time. Even Amazon has gotten into the business of matching pros with joes who need home services (Amazon Home Services), from cleaning or setting up equipment to access to goat grazing for lawns.
One reason so much money is flowing into the service frontier is that there are so many more ways to be a service than to be a product. The number of different ways to recast transportation as a service is almost unlimited. Uber is merely one variation. There are dozens more already established, and many more possible. The general approach for entrepreneurs is to unbundle the benefits of transportation (or any X) into separate constituent goods and then recombine them in new ways.
Take transportation as an example. How do you get from point A to point B? Today you can do it in one of eight ways with a vehicle:
1. Buy a car, drive yourself (the default today).
2. Hire a company to drive you to your destination (taxi).
3. Rent a company-owned car, drive yourself (Hertz rental).
4. Hire a peer to drive you to your destination (Uber).
5. Rent a car from a peer, drive yourself (RelayRides).
6. Hire a company to drive you with shared passengers along a fixed route (bus).
 
; 7. Hire a peer to drive you with shared passengers to your destination (Lyft Line).
8. Hire a peer to drive you with shared passengers going to a fixed destination (BlaBlaCar).
There are variations upon the variations. Hire the service Shuddle to pick up someone else, like a child at school; some call it an Uber for kids. Sidecar is like Uber, except it runs a reverse auction. You set the price you are willing to pay and let drivers bid to pick you up. There are dozens of emerging companies (like SherpaShare) aimed at serving the drivers instead of riders, helping them manage more than one system and optimizing their routes.
These startups try to exploit inefficiencies in novel ways. They take assets that are unused part-time (such as an empty bedroom, a parked car, unused office space) and match them to people eagerly waiting for them right this second. Employing a distributed network of freelance providers, they can approximate near real-time delivery. Now repeat these same experimental business models in other sectors. Delivery: Let a network of freelancers deliver packages to homes (Uber for FedEx). Design: Let a crowd of designers submit designs, just pay the winner (CrowdSpring). Health care: Coordinate sharing insulin pumps. Real estate: Rent your garage as storage space, or an unused cubicle as office space for a startup (ShareDesk).
Most of these companies won’t make it, even though the idea will thrive. Decentralized businesses are very easy to start, with low cost of entry. If these innovative business models are proven to work, established companies are ready to adapt. There is no reason a rental car company like Hertz can’t rent freelancers cars, and no reason why taxi companies can’t implement aspects of Uber. But the remixing of benefits will continue to flourish and expand.
Our appetite for the instant is insatiable. The cost of real-time engagement requires massive coordination and degrees of collaboration that were unthinkable a few years ago. Now that most people are equipped with a supercomputer in their pocket, entirely new economic forces are being unleashed. If smartly connected, a crowd of amateurs can be as good as the average solo professional. If smartly connected, the benefits of existing products can be unbundled and remixed in unexpected and delightful ways. If smartly connected, products melt into services that can be accessed continuously. If smartly connected, accessing is the default.