Unscaling is made possible by the number of Internet-based platforms and cloud-based services and tools now available to startups and small businesses in general. New companies can now be launched without a massive investment in personnel and IT infrastructure. They can quickly get to market, and compete effectively with far larger companies. Mobile Internet platforms, in particular, make it easier and cheaper to experiment in the marketplace. While most such experiments will likely fail, some, like Airbnb, will succeed and can then quickly scale up their capabilities as their businesses grow.
That’s from the blog of former IBMer Irving Wladawsky-Berge, who is riffing on the back of a Newsweek piece by Kevin Maney on the “end of mass production”. Read more
Felix Salmon at Reuters sums up the problem with a lot of “disruptive” innovation these days.
It’s not really all that innovative — but rather focused on finding ever cleverer and more subtle ways of dodging established regulations, which, as he also points out, exist for a reason.
Should it therefore be surprising that the likes of Airbnb, Uber and even Bitcoin are more cost effective than established competitors when they’re either cutting out the taxman or costs of compliance altogether? How can regulated industry possibly hope to compete?
Which also confuses, if not exploits, the ethos of the sharing economy in and of itself. Read more
A nice spot by Emily Badger of Atlantic Cities:
“Do you have to give out 1099s?” wondered Congressman Chris Collins, a Republican from New York.
“This is fascinating,” said Arizona Republican Representative David Schweikert, pondering a startup platform called 1000 Tools that enables people to rent cement hammers from each other. “You may slow down capital expenditures but actually make the economy much more efficient.” What’s the net effect of that?
“Given the nature of peer-to-peer platforms, it would be difficult if not impossible to capture their contribution in official employment statistics,” argued Congresswoman Nydia Velazquez, raising a good point. “So what are the ramifications of excluding this job creation from government employment indicators?”
The questions came up Wednesday at a House Committee on Small Business hearing that marked the first time Congress has peered into the sharing economy. The tone of the inquiry was more sympathetic than probing. And the event, attended by just a few dozen congressional aids and industry insiders, was low-stakes. There’s no related federal legislation waiting in the wings hoping to suddenly regulate these businesses, which are perhaps mostly notable for the fact that no one yet knows how best to regulate them.
Ever since Robert Gordon made his assertion that all the low hanging technological fruit has been picked, evidence to the contrary has been piling up.
It’s worth noting, first off, that Gordon’s paper was relatively backward looking. It arrived at its conclusions by taking trends prior to 2007 and projecting them forward, largely ignoring the 2008 crisis that occurred. It also measured innovation in terms of dollar denominated growth. Read more
FT Alphaville’s series on the rise of the collaborative economy has so far looked at a new type of growth, how peer-to-peer lending is a return to full-reserve banking, and the link between social networks and evolutionary game theory.
In the latter post we considered the value of reciprocity and collaboration, and whether what appears to be altruistic content generation really is self-serving after all?
But what about the rise of completely altruistic models like crowdfunding websites? Read more
FT Alphaville has been taking a closer look at the collaborative economy, and noting the stellar growth this mysterious sector has been experiencing of late.
An important question to consider, however, is to what degree is this growth being driven by a genuine rise in reciprocity and altruism in the economy — or to what degree is this just the result of natural opportunism. Read more
FT Alphaville had the pleasure of moderating the “Future of Banking” panel at OuishareFest, a collaborative economy gathering, earlier this month.
During this discussion, an interesting point was made by Francois Carbone, CEO of an equity-based crowdfunding venture Anaxago. Namely, when you think about it, every peer-to-peer initiative (P2P) on offer today is really representative of a move towards a private sector version of full-reserve banking. Read more
Earlier in May FT Alphaville attended Ouisharefest in Paris, a conference dedicated to exploring and discussing the growth of the collaborative economy.
The timing of the event coincided with the ECB cutting its benchmark refinancing rate to an all-time low of 0.50 per cent to counter economic weakness which had in the central bank’s opinion spread to the eurozone’s “core economies”. Read more