Google, FB etc keep buying smart companies all the time.
A handful of global companies keep buying smart companies before they can get a product out to the market.They are essentially creating monopolistic moats over not just cutting edge intellectual property, but also the intellectuals – the men and women capable of creating/ leveraging new technologies.
So many startups now start with the end in mind, the vaulted ‘exit’. What happens when all the technological advancements get concentrated in fewer and fewer hands? The only anti-dote to Marx’s dystopia of ever accumulating capital was the intellectual capital that allowed anyone to give it a go with limited risk and succeed. Is that anti-dote of intellectual capabilities relevant any more?
Any body can learn to code, etc. But can everyone access the infrastructure and the necessary accelerating feedback loops to improve as fast as these few companies can? That pace of accelerating innovations is the new Capital for 21st century.
If we don’t want an increasingly unequal world, we will need to view this capacity to rapidly innovate as a capital that needs to be seen similarly to other capital assets – land, machinery, channels of access to consumers.
Which means, it is time for regulations. We can’t let ever fewer investors and companies to corner the ability to rapidly innovate.
This is essential. Unlike 15 years ago, when a zukerberg could code out of his dorm and build an empire. Now another zukerberg could code just as well, but if his idea & code is any good, it will either get copied by these juggernauts or get bought early on. Look at how FB is copying snapchat to its death. It is not a level playing field anymore. A successful digital company now will require a war chest of billions. There are investors ready to fund these war chests. But the problem is, that these investors are same few folks from California (and one notable Japanese guy).
There is no Nigerian, no Indian, no Brazilian, no Greek, no Swedish….(and a 190 countries later) person among those few people who control the new engine of human innovations.
A side effect of this narrow competition is the poverty of ideas that the best minds are working on – google glasses, automated vehicles, AI assistants … are these the biggest challenges for the humanity? As Climate change, growing inequality and rising xenophobia tear the world apart, should the people who can create the infrastructure of the new world be spending their times on elitist pursuits?
It is not difficult to copy them and become the new age capitalist. However they have created a high-entry barrier by turning it into a mad game of bluff. Their tactic is to value companies at ridiculous valuations. The valuation is divorced from reality and based solely on the potential of possible monopolistic leverage. Naturally, most sensible people, stay away from this capricious game.
These people are feverishly gambling with the intellectual capacity of humanity. It is a mad mad world. They need to be stopped if we want a better world.
Yes. Self -respect, not self-esteem. They hold themselves in high enough esteem. Many of them could be rightly called out for their arrogance or over-confidence. It is not an issue of self-image as much as it is about an internal moral framework.
I am specifically talking about the way the client-agency relationship is deteriorating and how the advertising bros are reacting to it. What happens when we lose business now? What happens when we keep getting invited to pitches that do not end with change of AORs? What happens when a not-so-smart client gives you useless feedback or worse, hopes you to decode his/her grunts, nods and irrelevant comments? What happens when clients don’t give you enough time or money for the stars and worlds it wants to create for its brand? What happens when they squeeze you for margins, favors and extra un-billed work? What is happening with talent? Are they getting proper feedback, proper support to do their work?
I see the management, across most agencies & globally, conceding ground at each of these moments. The dialectic is totally absent. Apart from a few vanity browny points, we hardly see agency management taking stand when it really matters. I am not talking about pride. I don’t see pride as a virtue. We don’t need to be proud of our work. Pride is a negative emotion. What we need is a sense of self-respect independent of our work, independent of our financial leverage, independent of our contractual obligations and rights. Self-respect that is grounded in our humanity, in our ‘agency’ as human beings. That I feel is absent.
That self-respect powers you to ask the right questions, to stand for your right to your time, your money. That self-respect helps you see things clearly. Without that self-respect, convenience blinds you from reality. Without that self-respect, we accept client’s gibberish or half-baked thoughts as concrete orders. Self-respect gives you the power to very humbly ask the questions that must be answered. Without self-respect, the management ends up piling on more work than the team can handle and with far too many reworks and rounds of reviews. Even if they feel sorry for it, what good is that remorse? What force is marrying them to this situation? It is a simple issue of proper feedback and setting the right expectations. Self-respect propels you towards clarity, towards equal terms of engagement, towards a work-ethic that leads to joyful work not dreadful work.
i hope for agency leaders to grow respect for themselves in their own eyes.
So the research suggested the consumer as a patriarchal housewife – a woman who listens to, and seeks her husband’s suggestion. A woman whose day revolves around catering to the needs of her children and the husband. Surprise surprise, patriarchy exists. But client won’t buy it as it is, won’t really engage with the reality, probe the ‘why’. Patriarchy doesn’t exist in the world of client’s brand guidelines. Now only if by closing one’s eyes to reality, one could change the reality.
The client leader probes the poor researcher, ‘Did she ask for ‘opinion’ or ‘suggestion’? I think the modern woman is a ‘progressive’ equal partner’. “Isn’t she happy to help her family members succeed in their lives?‘ That was expected: the generous reinterpretation of truth to fit their narrow worldview. The VP says so, because the global brand guidelines tell her so. The brand’s consumer is the mythical progressive smart housewife who is modern and yet not outraged by patriarchy. The thing with personas molded by corporates is – it is an exercise where wishes and projections of multiple ivory tower dwellers, coalesce. They fling their narrow world-views and politics at each other, reality be damned. What matters is to sidestep contentious issues and go for the middle path to profit.
Ok fine. so profit motive is critical. Then why do the whole ‘persona’ bit – why go after ‘life insight’ and ‘cultural insight’? Why not simply stick to the need your product is actually solving. Sell the goddamn soap for what it does. Find insight about the product relevance. It does not need to ’empower’ to sell more. But no. “We are a progressive company”. yeah right.
Solving a problem, needs recognition of the problem, recognition of agency of others. With corporate mandated blinkers, all one can do is provide lip-service to ideals and do nothing that would really do anything ‘real’ about the issue.
I wish for brands and agencies to leave the ‘movements’, ‘revolutions’, ‘activism’ alone. Any of it done in ‘bad faith’ only harms the movement, not help it. The powerful usurp the social dialogue and the issue gets ‘managed’.
Sell your damn soap. Don’t bother with being ‘progressive’ or ‘activistic’.
Most governments, as agents of power, bother about creating and maintaining public good only so far as it helps the cause of those in power. Governments are shaped by the need of those in power to remain in power. Govt can afford to bother about public good only when the electorate is wide enough – when there are many essential and influentials. (Refer ‘The dictator’s handbook‘ for the concept, or this video for a quicker appreciation of it.)
With the rise of digital platforms we have seen rise of super rich, super powerful corporations and individuals. Their rise has contributed to the the deepening of inequality. They have boldly ‘disrupted’ lives of many for concentrated profit for a few people. Economically, platforms are disenfranchising people while creating a few super powerful elites.
What does it mean for democratic power?
Rising inequality means fewer ‘essentials’ needed for rulers to remain in power. (In a dictatorship typically, there is a ruler, a few essentials and many ‘interchangeables’: Whereas in a democracy, there is no absolute ruler, ideally there are many influencers, many essentials and few interchangeables.) Rising inequality directly affects the power and leverage that people hold. It leads to dictatorial power relationships. In a sense, in the domains of knowledge, markets and online relationships, Google, Amazon & Facebook are quite dictatorial, even if their beliefs are egalitarian. They can dictate the terms of accesses to their services. Indeed, have you ever thought of disagreeing to their ‘terms of conditions’? Is there a space to negotiate? and what happens when you start depending on these services completely, but cannot engage with these services meaningfully to negotiate with them?
When power relations are conducive for dictatorships, why would governments or corporates bother about the public good? What incentive do they have?
Platform monopolies are a threat to democracies. The possible knee jerk reaction to their hegemony, would be as well.
Facebook, Google, Amazon… are behemoths shaping our world. They are doing so not for public good, but rather private gains. Consider Amazon’s stock market performance for example. Why would people be investing in a loss making company? They are doing so for the long punt. People are investing in a monopoly of tomorrow in the form of Amazon. They are investing in Bezos’ vision of a complete monopoly. They want a piece of that monopoly’s obscenely fat profit. That is why investors allow him to put all the money at its disposal to expand its reach and locking consumers in its value chain. Consider the impending value explosion when Amazon can start leveraging the IOT (Internet of things) at its disposal – usage, user preferences, supply chain intelligence, user financial wherewithal, spy called alexa, vendor data… It is about to become the single biggest market that consumers across the world would have to deal with. It will not make economical sense for consumers to pursue an alternative. Amazon plans to be the default platform of economic exchange. Do you really want the complete global market to be owned by a few individuals?
Amazon hopes to become the ONLY global market platform for a majority of earthlings.
Similarly – Google is almost the ONLY global definitive knowledge and information platform.
Facebook hopes to be the ONLY global online relationship building platform.
Thank god, Uber faltered and hopefully can’t be the ONLY mobility platform.
Uber faltered because it very visibly threatens existing economic exchanges and consequently current livelihoods. It is visibly pitting one labour force against another. Amazon does too, though it is surprising that it hasn’t faced public wrath yet. Wars have happened for lesser losses of power & economic leverage. Consider the Knights Templar in 13th Century, the early European Banking Platform. They were burned at the stake by France’s king then, to take back the financial leverage that he had ceded to them. It is not 13th Century anymore, but it isn’t an utopia either. There are massive number of people who are getting left behind with the platform revolution and they are bound to react, in modern ways perhaps, hopefully peacefully, but there will be a reaction.
The most plausible reaction could be regulations. There is a trade-off there. The libertarian ideals of most of these platform owners meant that the digital realm was a egalitarian & non-judgemental space for conversations, exchanges. That libertarian ideal is under threat from regulations. China has successfully managed to create an internet for its citizen that is heavily censored and spied through. Unfortunately, other governments would be just as keen to use the economic loss to legacy businesses due to platforms as an excuse to change the nature of platform instead – from trustworthy exchanges to tools of surveillance.
Understanding the power of platforms
I define platforms as enabling environments/ infrastructures, that –
Gives egalitarian access to other people/ services through
Unique and valuable exchanges that would not be possible outside of that platform
And allow people to improve upon, enrich the platform – either with APIs or engagement
Historically, such platforms were either pre-existing, or created and maintained by governments or community collectives. No private enterprise had the incentive or wherewithal to create platforms. Consider a road that gives access to people to move through that would not have been possible without it – a road is a platform then. It was cost intensive to build, so governments built it. It was a public good. It was part of the ‘commons’.
Consider a river. Communities access water for their use through it. Communities built dams, turbines, irrigation channels for the benefit of the collective. As such, a river is a platform for access to water that is also a part of ‘commons’. No one, in right conscience, would think of owning it.
Consider the 6 inch of top soil that the earth is blessed with. Without it humanity would not have existed. It is the platform of food supply. It enables farming, forests and the food cycle. No one can own it, unless they want to destroy humanity.
Consider the renewable energy decentralised grid that is powering much of Denmark. In this grid, people with solar panels installed on their roofs, sell their surplus electricity to the grid and can tap into that grid electricity when they are in want. Now this is a platform with an exchange of electric power too. Many private companies facilitated its creation, installation and maintenance. However, they don’t stake a claim on the electricity thus generated. They understand themselves as enablers, not usurpers or rent-seekers.
Soil, water, electricity, roads… these are fundamentally empowering platforms, the access to which is a fundamental human right.
In the 21st century, similar access to knowledge, financial exchange, access to markets, relationships-at-distance… are all fundamental human rights.
Can you imagine a life today without being plugged into these various platforms? Such a life is possible, but it would be very disadvantageous for the minority activist. Without access to google & FB powered intelligence and communication, without amazon’s substantially cheaper goods, without uber’s efficient mobility, without convenience of credit cards/e-money, the minority activist is at a severe disadvantage.
So if these accesses are that crucial, can we trust them with far removed private interests? Typically, a white male from California is embedding his biases in these platform’s algorithms. A few of these men own the vast platforms that men and women from the farthest corners of the globe depend on. Even if they were to be epitome of moral righteousness (which they clearly aren’t), they are still just individuals amenable to influence of their investors, their immediate social circle, the government where they operate from. Consider Facebook’s misuse to influence election in US for example.
There is a fundamental conflict of interest. Lack of subjectivity allows for evils such as hate speech to gain access. But imposing a certain subjectivity curtails freedom of speech for another set of people, perhaps as an unintended consequence. There is no easy way out of this catch-22 situation. Consider the example of facebook banning breastfeeding pictures. It had to #freethenipple eventually. But the same issue will get vastly different responses in more conservative countries. How does a global platform manage such differences? Facebook is trying its luck with denial – “we are not a media company“. But soon enough, it will have to take sides. Like when Scott Galloway implies for it to be American first!
In his otherwise excellent talk here exhorting these big platforms to be broken up, he brings in nationalism and suggests a smaller solution – to break them up. If global platforms earn revenues through global operations, why should they put any one nation first? Why should they prioritise paying tax in one country? They must give back in every country where it gains from. To be a global entity is to be globally accountable, globally responsible, globally adaptable.
Secondly, the solution of breaking the companies up – is inadequate. If the ownership does not change, what difference does it make if Zuckerberg presides over one large corporate or a dozen smaller ones to the same effect?
Besides, the integration of amazon, aws, alexa etc makes sense. It makes markets more efficient. The aggregate efficiency due to integration increases, which is good news for Humans who are going to soon suffer with human-excess-led climate change.
Scott Galloway has a soft corner for capitalism and its potential. He doesn’t want to see the obvious socialist ramifications of his argument.
Platforms as commons ruled by the principle of self-rule
The integrated platforms are powerfully useful for all. They should not be broken up. The ownership has to be broken up. More accurately, they should not be privately owned at all. Private ownership creates disparity of wealth, invites biases and prioritizes innovations that serve the needs of elite, instead of the majority. And unlike other businesses, platforms are critically important for civic life. Would you want water, road or soil to be privatised? For the 21st century that list will include mobility, relationship, intelligence and market platforms too.
Ideally Bezos, Zuck and Sergey should create a plan to divest their companies’ ownership to the commons. They should steward their companies into becoming true platforms relinquishing their direct control. If Buffett and Bill Gates can give away their wealth, why can’t these platform makers instead give away control? Keep the wealth created thus far. Let the future wealth go into commons to make the platforms more resilient, useful and responsive to the diversity of the global exchanges.
Imagine all these platforms employing open source principles, becoming openly accessible, and evolving with the people they serve.
Imagine, all cab drivers, logistic companies, courier companies having access to the Uber algorithm, modified to serve their needs; modified to give every driver and rider a say in formulating the policies that govern them and others like them in their locality. Imagine, all businessmen and individuals with access to amazon-based markets, governed by direct digital referendum based consensus making.
Amazon and Uber cut out the middle men. In turn they themselves became giant middlemen. It is time we do away with them too.
A solution like this would not have been possible 5 years ago. But with blockchain technology, there is a potential for mass democratic participation in platform management.
Blockchain based democratic platform management
Blockchain is an elegant solution to an important societal problem Earth is facing. It’s most promising feature is its ability to enable strangers to cooperate and trust each other. It enables ‘decentralised consensus’. This is a powerful ability that, I believe, has the biggest possible impact in democratic processes in every aspect of civic enterprise.
This technology would enable governing of platform by direct participation and consensus among users and vendors possible.
Watch this interesting documentary by Mr. Jeremy Rifkin. He talks about the three essential enterprises that shape us – energy, communications and mobility. And with digital technology and principles of open source, humanity can finally increase the aggregate efficiencies, productivity of human enterprise and bring down marginal costs of these enterprises down to almost zero. Why does this matter? Because, without this idea, we are at an economic and ecological dead-end.
Again like Mr. Scott Galloway, Mr. Rifkin too is afraid to unsettle the capitalists and shies away from taking his argument to logical conclusion. (look how he cleverly deflects the TTIP question. I won’t hold it against him though. He has a great idea and he needs to sell that idea to humanity. Tact is more powerful than hardheadedness when you want to bring about real change.)
Now consider this – every conceivable platform – energy platform, utilities platform, knowledge platform, mobility platform, market platform… Consider all platform are components of collectively owned infrastructure for humanity. Like with renewable energy platform in Europe, there might be an initial cost that consumers and vendors would have to pay in the form of taxes to help build them or buy them off. But then the marginal cost of running them in the future is minimal.
Imagine that world – People being able to access platform services in their context whenever they want, on their terms and without the fear of losing control of one’s own agency, one’s own destiny.
I believe that that would be a better world – a world which won’t depend on a single currency (read the first section on the link to understand why single currency ‘money’ is not that good an idea). The integrated platforms would enable seamless exchanges of products and services, the utility of the individual to the collective becoming the currency du jour.
The world would not need the ‘universal basic income’ that is being touted now as the solution to the impending mass class of ‘useless people’ and the Goliathan inequality that AI revolution will engender. If we charter an integrated platform access to all humanity as a human right, we will, in a sense, enable basic welfare of all individuals. Rifkin’s view of bringing the marginal cost down to zero is critical here… which means that there is gradual upfront cost of creating that infrastructure, that integrated platform of platforms. But once that is done, the costs would be manageable.
To make it a reality, it will require a ‘disruptive’ shift in corporate ownership, structures of governance and redrawing of notional national boundaries. All tall orders. It is a humongous project that would pan the globe and require cooperation among all governments. Not an easy task at all. But I am convinced of it being an essential disruption. Let me know if you have a better idea.
Foucault (can’t understand him) says something interesting in this video. He talks about history of science (consequently progress of humanity’s thoughts) as discontinuous grids stacked on top of each other. which I didn’t understand until Chomsky clarified it – essentially how 19th and 20th century ‘sciences’ discredited psychology, philosophy, linguistics. and how these sciences are trying to emerge in the new century.
It reminded me of the topic of indigenous knowledge systems – tribal understanding of the flora and fauna, of astronomy and body, of history and time… or for that matter, the resurgence of ayurveda.
In today’s world of make-your-own-facts bubbles and social media, it feels as if these grids are colliding and all that would be left of it is a rubble of human scientific endeavour – a full stop to human progress.
To arrest that, myth-busting is not enough. We need to create knowledge ‘grids’ that people can subscribe to and support, to participate in and contribute.
So here’s the idea – maybe, someone’s already done it. all the better. here it is –
A global map across time and space – of sciences, of ways of thinking, of meaning making.
We need it to ensure the best perspective, thoughts do not evaporate with changing moods of the world. That they survive and grow stronger. That we acknowledge a plurality of sciences and perspectives.
Two things happened recently, that have filled me with an existential dread as an advertising guy. I see a leak in the advertising industry’s ship. But instead of fixing it, the two indicators are telling me that advertising industry is busy being in denial – telling its employees, its clients that everything is fine, all we need is ‘purpose’, ‘creativity’…(and other buzz words). Semantics and bullshit have never rescued a sinking ship. The ship is totally rescue-able – it can even get better. But for that the emperors must acknowledge their true sartorial status.
The first indicator – Denial
So I got my grubby hands on a leaked document from one of the biggest agencies, charting out their plan to succeed in the new year. They identified just the right problems plaguing the industry. I was quite surprised to see the clarity in problem statement. Wow, hope!
And then the embarrassingly small minded solution to the big problem – a new fucking planning tool. Don’t get me wrong, i understand the power of a new perspective and this tool was a new interesting perspective of looking at modern business problems. It quite adequately and elegantly captures the new realities of digital behaviours and mass media’s sharper relevance. BUT, it did not solve for the problem that was stated. If the brands are dead, how would a new perspective resuscitate them? If agency’s role in brand building is getting marginalised, how will a new planning tool help it in becoming more relevant? It is part of the solution, not the solution itself. Perhaps I misunderstood the scope of thinking – so I engaged a few people in conversation – perhaps there is a technological component to the tool that will help scale the operating procedures. After all, what good is a perspective if it remains a sales tool rather than a systematic way of thinking for the whole enterprise. That can happen by designing intelligent workflows, reimagining the roles and expectations. So I asked about these opportunities, but in return I received puzzling silence. Maybe they don’t get it? maybe I am not getting it? Either ways, glug glug glug.
The second indicator: Talent paucity and nothing constructive done about it
Successful Digital startups ‘pivot’ fast enough to stay relevant and thrive. Agencies very obviously can’t. They are good at applying cosmetic changes to their ‘purposes’ and ‘philosophies’ even as nothing operationally changes.
Successful companies are good at institutionalizing the feedback loop – the giving, taking and leveraging of constructive feedback. Company improves if employees improve. But agencies seldom have that culture – the evaluation ritual is perfunctory most of the times. All agencies depend on talent, though only a few invest in talent with time and thoughtful dialogue to help improve. Most agencies simply throw money to hire someone with new awards. They would much rather spend money than time and efforts. Effectively that has created a loop of talent turnover instead of learning and improvement.
Why 2018?
Because of the momentum – The media inventory being questioned, tracking and target positioning ad ex as bad guys, stocks falling for holding companies and there being obvious ways in which an eagle eyed activist investor can take charge and improve long term growth prospects… Besides the vulture funds have too much cash and not enough places to put their monies in. Hedge funds, hedge this.
I am interested in the changing dynamics of agency business. So I tend to read whatever I can about new efforts being made to reinvent businesses. Some of the efforts are truly astounding – the AI agency Born, for example – sounds very interesting. Then there is Maana, a big data company that helps make sense of internal data. I don’t completely understand them yet, but I know what need they are fulfilling and how they are relevant. They are trying fairly interesting new things.
And then I come across news from advertising agencies – and it feels as if all that ad agencies do is bullshit, not actually innovate. Just came across an article on adage that I had to read twice to make sense of. Here it is. So the article packages the desperate efforts of some small agencies to stay relevant as ‘new business models’. Sure, what they are doing is indeed a new ‘business model’ – like depending on freelancers instead of investing in teams and infrastructure or to charge only by hours instead of guaranteed scope under contract. But is any of it in their own long term interest? If you are not engaging in contractual partnerships, you are simply creating a cheaper alternative to traditional agencies while absorbing the uncertainty for yourself.
A ‘business model’ that essentially creates ‘less value’ is similar to a ‘business model’ of outsourcing manufacturing jobs to ever poorer countries. The client gets a cheap deal and the labour at home suffers. That is not innovation. It is desperation.
In the article, BETC LA, (a dance company? an agency?) boasts about spending ‘only’ a quarter of a million dollars on a launch campaign. I tried to dig a bit deeper trying to understand why would an agency need to spend that kind of colossal sum on a ‘launch’? The agency website still say that it ‘will’ launch in oct 2017. Doesn’t compute.
It feels like somebody had to do wild mental gymnastics to portray these various precarious agencies as pursuing bold new ‘business models’. If you get into cost wars, the cheapness spiral will only drive down the industry.
In a way it is poetic justice. The industry that played a role (even if indirect) in destroying unions and collectivist utopia of 20th century finds itself on the other side of the table – capitalism draining it out and rendering it into a commodity.
There is time still to do the right thing, to grow by increasing the ‘value‘ of what we do, by being more conscientious of what we do. Here’s a few ideas for ad men/ women to grow in the future –
1. Recognise your precariousness and Unionise to gain strength.
2. Recognise your human potential and look for opportunities ‘beyond ads’
3. Learn from beyond the narrow world of advertising and create new value, don’t sell old wine in new cheaper bottle.
