People already use digital technology to transact directly. Consider Etsy.com: Its users can create value themselves, at home, and then sell directly to consumers. And many Etsy users are asking themselves, “Why do I have to use PayPal or even U.S. currency? What if I use Bitcoin?”
Meanwhile, the future of digital investing isn’t in online trading, but in crowdfunding sites like Indiegogo and Kickstarter. People can start enterprises by matching supply and demand in real time. No bank loan, no debt structure, no growth imperative.
S+B: How should an existing business adapt its operating model to take advantage of the opportunities?
RUSHKOFF: First, they must change their communications. In what I’m calling a “presentist” landscape, businesses can’t rely on brand mythologies anymore. People don’t care about these fictional stories—Keebler elves and the like. They want to know how products are actually being made and sourced.
This means companies need something to communicate about. So they must focus on creating value—on innovations in their goods and services. The hockey-stick growth chart can no longer be the goal. Instead, as businesses get off the Industrial Age clock, they can begin to re-engage with the underlying rhythms of their markets. The real world has ebbs and flows, cycles that can be learned and worked with.
Ironically, financial institutions could be having the easiest time, because they can help usher in this transition. Not too long from now, if people ask a bank for a US$100,000 loan [because they are] looking to expand a business, the bank might provide $50,000—but then help them raise the rest of the money directly from the community with tools like branded discount cards. The bank gets collateral in the form of local buy-in. They improve the local economy, and their own business prospects, by promoting the local velocity of money instead of simply extracting value. And they’re regarded as heroes who have enabled the community to invest in itself.
These are going to be interesting times ahead for business. My advice? Don’t change too rapidly. Understand your tradition. Invest in your institutional memory. Most of all, take advantage of the relative scarcity of your competence—if you can hold on to it. Where are people going to buy their washing machines? From the few remaining companies that have not evolved out of the Industrial Age, that can still make and deliver products. Your goal should be to be one of those few.
- Art Kleiner is editor-in-chief of strategy+business.