Mind Crunches #7: The Return of the Atom: Digitally Transforming Ourselves
Alternatively: How technology empowers a new era of individualism and how this affects businesses, societies and governments
“Ever since I started working on this article, a chart has been haunting me. It plots the percentage of people living alone in a country against that nation’s GDP. There’s a strong correlation. Nations where a fifth of the people live alone, like Denmark and Finland, are a lot richer than nations where almost no one lives alone, like the ones in Latin America or Africa. Rich nations have smaller households than poor nations. The average German lives in a household with 2.7 people. The average Gambian lives in a household with 13.8 people.
That chart suggests two things, especially in the American context. First, the market wants us to live alone or with just a few people. That way we are mobile, unattached, and uncommitted, able to devote an enormous number of hours to our jobs. Second, when people who are raised in developed countries get money, they buy privacy.
For the privileged, this sort of works. The arrangement enables the affluent to dedicate more hours to work and email, unencumbered by family commitments. They can afford to hire people who will do the work that extended family used to do.”
This is an excerpt from the famous David Brook’s article about nuclear families and it confirms a phenomenon that we have all witnessed but most of us probably haven’t realized its magnitude. The “modern way of life” promotes individualism. The latest findings from the Association for Psychological Science shows that an increasing socioeconomic development is an especially strong predictor of increasing individualistic practices and values in a country over time which means that individualism spreads worldwide and not only in Western countries.
In medieval and early modern times, community was the basic unit of society, in part due to the lack of communication and transportation technologies that would allow a person to live securely and independently of their community. Today, the joint effects of technology, the principles of modern citizenship, and relatively open borders give people the ability to decide where to live, with which nation to align, and what lands to call home. People lack deep links to any singular culture, the ties of community dissipate and the individual becomes the basic unit of society.
It is very interesting to explore how this tech-enabled individualism has shaped the relationship between people and businesses, fueled a new form of entrepreneurship and redefined what it means to be a citizen. In other words, let’s explore how someone can digitally transform oneself.
The Explosion of Content Creation & Personal Brands
We live in very interesting times, We currently witness the synchronous maturity and democratization of trends and technologies (in a COVID-accelerated pace) that are giving birth to a new breed of entrepreneurs and content creators who focus on building personal brands.
Over the last decade the way we create and consume media has changed enormously, adoption of mobile technology and self publishing has allowed anyone with an internet connection to have a voice. Decentralised publishing, unregulated content and low-code software development has given enormous power to creative individuals. Tools like Substack, Medium, Webflow, Mailchimp, Audacity and Amazon Kindle Direct Publishing are only few of the available pillars for anyone who wants to build a personal brand, publish content and create a community. What started a few years ago as a trend with “influencers” getting paid to promote sponsored products is now a fully formed movement. Monetization of digital content is now easier than ever, building communities online is much faster than doing it in real-life and as a result many people prefer building a start-up promoting either themselves or their interests rather than seeking a low-income job. Erik Torenberg argues that this new breed of entrepreneurs are creating their own version of reality.
If you think that this is just a cool trend for teenagers, you are wrong. a16z, the famous venture capital firm in Silicon Valley, recently shared how the industry of e-commerce is now shaped by a video-first culture of user generated content. You probably know by now the power of Tik Tok, the paradise of personal creativity and content creation, and why giants like Microsoft, Oracle and Walmart are fighting to acquire it. Or you have heard why teenagers who are very good at video games are being paid $millions to join online gaming platforms.
Content Curation as a Business Model
Another version of personal branding is content curation rather than creation. In other words, monetizing your personal taste. We live in an age where we face a scarcity of attention not a scarcity of content. It is reported that there are an average of 550 new social media users each minute, and over 40,000 search queries on Google every second. The Facebook like button has been pressed 13 trillion times, and each new day welcomes another 682 million tweets.
So how do you disaggregate signal from noise? Content curators will do this for you. For example, there are people who have subscribed to this newsletter because they trust my personal selection of the most important news around digital transformation. There are also powerful psychological reasons that make curation very appealing both for the curator and the audience. Building a community that follows your personal taste is the ultimate expression of originality. As Gaby Goldberg writes, the psychology behind the need for curation is based on:
Zuckerberg’s Law, or the tendency to share more and more on social media over time
Dunbar’s number, or the average number of stable social relationships one can maintain at a given time (it’s around 150)
Zipf’s Law, which describes how in any system of resources there are a small number of items of high value, and a “long tail” of many more of low value (slightly tangential but related reading: Metcalfe’s Law, which has now largely been refuted as a method of evaluating social networks, but in 2012 helped to rationalize Facebook’s insane over-valuation in its IPO)
Customers of Governments & Consumer Citizenship
Erik Torenberg is one of my favorite thinkers and I highly recommend you following his work, especially his efforts to revolutionize education. In his latest newsletter, he describes his thesis on how technology will unbundle governments and create the Sovereign Individual.
Put simply: We'll transition from being a "citizen" of government to a "customer" of government, where governments compete to earn our business. The “citizen” construct implies that you exist to serve the government. The customer construct, on the other hand, implies that governments exist to serve you. That governments, like any businesses, compete over earning your trust. And, just like in the private sector, this competition leads to better products, better service, and more innovation. The market serves as a filter—corrupt governments die out, and better and more competent ones remain. If Amazon and Apple provide excellent products and services, there’s no reason governments can’t either. Imagine housing, education, and healthcare, at the quality level of Apple and Amazon, for everyone.
What will cause the change from citizens to customers? Protection: When individual protection is hard, we rely on others to protect us—governments for example protect us externally with the military and internally with the police.
When technology makes protection easier, we rely less on the government to serve that existential role, which leaves governments with less power as a result.
If you think about it, we are moving to a phase of “Citizenship a la Carte” where nations will increasingly compete for foreign talent and wealth exactly the same way that multinational organizations compete for customers abroad.
For example, the city of Beijing recently unveiled its plans for blockchain-based government.
James Breiding writes, in his excellent book “Too Small to Fail”, that citizenship should be approached as a competitive advantage.
Nations have come to realize that, as they become more desirable, they can effectively rent out or sell their “social contract” to a growing pool of globally mobile people. Nobel laureate Gary Becker advocated that nations should sell rights to citizenship and let the market determine the price immigrants are willing to pay.
Towards Smaller Nations & Charter Cities
So if nations compete for citizens in a global market how will this influence their structure and they way they operate? Breiding’s thesis is that the future will be full of smaller, nimbler and more cohesive nations since the size of a nation doesn’t equate with power anymore. Imagine small small nations with strong social fabrics and contracts, distinctive culture and a focus on operational excellence they way startups are operating.
Another form of government that has the potential to dominate in the future is this of charter cities. I have mentioned in my previous newsletters that charter cities gain a lot of traction and this phenomenon is a perfect extension of the tech-driven individualism. For those who are not familiar, charter cities are special jurisdictions within countries that aim to reduce poverty and spur development via a legal system that differs from that of the host country. As Mark Lutter writes:
Charter cities start from a blank slate in law and administration. They allow for the building of new systems. These new administrative agencies can be designed for action and efficiency, they are not bound by existing institutional infrastructure. In other words, charter cities can help build state capacity in select regions in low income countries, overcoming typical challenges to institutional reform.
This is an interesting interview with Paul Romer, Nobel laureate, on charter cities.
Q: To some people, this is going to sound like a new version of colonialism or imperialism. Is it?
A: Let me pose a related question: Suppose a family from Haiti is granted the right to live in Vancouver as permanent residents but not as Canadian citizens. Is it colonialism or imperialism to offer this option to them? Or for them to accept? Because the family would be free to make the choice about whether to live in Canada, the answer is plainly no.
In the same way, charter cities are based entirely on voluntary actions. Only a country that wants to establish a charter city will do so. Only people who want to live and work under the rules specified in the city's charter will move there. Free choice is essential for the legitimacy of the rules in a charter city. It is also what makes a charter city very different from colonial occupation.
Individual Impact Funding
With the new breed of personal brand entrepreneurs, it becomes more difficult to identify and support the individuals who can drive real change. How can you identify the work of an individual out of the hundreds of thousands of scientists and entrepreneurs if they don’t form a type of a startup company? How can you tie your funding to specific results if there is an operational mechanism behind to track progress of a project?
The usual funding mechanisms are too slow in normal times and this is exactly why we have been witnessing a new type of venture funding designed to identify and jump start high-risk, high-reward ideas that advance prosperity, opportunity, and well-being. In other words, they give power to the people! Emergent Ventures is such a type of funding mechanism and it is really inspiring to see the variety of ideas that are supported. Some random examples are:
an official quarantine monitoring and contact tracing platform adopted by the state government of Maharashtra in India
a shared mobility platform designed for Indian campuses but now in corporate parks, colleges, townships, and cities across India
A self-taught computer maven from Seattle, Avi Schiffmann uses web scraping technology to accurately report on developing pandemic, while fighting misinformation and panic
QUICK MIND CRUNCHES
The most insightful and to the point presentation I have ever read on Internet content regulation.
A cultural analysis on a potential Tik Tok acquisition by an American company. Highly recommended!
Why Shopify is the new “template company”. In other words, why a PowerPoint slide with the title “Shopify for X” will replace the infamous “Uber for X” slide that every consultant’s deck included in 2019.
Why Domino’s was so well prepared for the COVID-19.
Recommended Book: Radical Uncertainty: Decision-making for an unknowable future - you can find the list of all the books I am reading in my blog. This was my July-August reading list.
Latest nerd crush: Balajis
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