Exponential Entrepreneurs Get Rich by Innovating (and Fleecing?)

The reviewer’s concern about technology platforms fleecing the masses is shared by Jaron Lanier who describes, and tries to solve it, in a thought-provoking book called Who Owns the Future? (Hint: his solution involves an extension of property rights.)

(p. A9) The exponential entrepreneurs are “paving the way for a new world of abundance” by finding big problems and exploiting the “Six D’s”: digitalization, deception, disruption, demonetization, dematerialization, democratization.

Take the case of Kodak and photography. First came the technology that allowed photographs to be taken and stored digitally rather than on film–digitization. But it seemed too trivial for a giant like Kodak to worry about–an act of self-deception. Then came disruption, when digital photography grew from a tiny niche into a big business and then surpassed print photography. People no longer needed to pay to store or share their photographs because free digital services had sprung up. Kodak found itself demonetized. Then photography was dematerialized, as cameras were built into phones and the physical materials of the darkroom were replaced by digital tools. Finally, the entire process was democratized, since anyone with a phone can (at no additional cost) take pictures, edit them and share them.
In 1996 Kodak employed 140,000 people and had a market value of $28 billion. In January 2012 it filed for bankruptcy. Instagram was founded in October 2010 and was bought by Facebook in April 2012 for $1 billion. It had 13 employees at the time. Instagram was the definition of an exponential organization, one “whose impact (or output)–because of its use of networks or automation and/or its leveraging of the crowd–is disproportionally large compared to its number of employees.” The Six D’s, the authors make clear, are leaving the poor executives who think in linear rather than exponential fashion in a state of three D’s: “distraught, depressed and departed.”
. . .
The great lie about so much technology is that it has enabled a more sharing, more democratic age. But too much of the “sharing” that happens online seems to involve people abandoning their livelihoods to the owners of “platforms”–letting the masses be demonetized and dematerialized for the enrichment of a few. Too much of the “democracy” feels like voyeurism or surveillance. The crowd is not just sourcing and funding this new economy; it’s also getting fleeced.

For the full review, see:
PHILIP DELVES BROUGHTON. “BOOKSHELF; Go Big Or Go Home.” The Wall Street Journal (Tues., Feb. 17, 2015): A9.
(Note: ellipsis added.)
(Note: the online version of the review has the date Feb. 16, 2015.)

The book discussed in the review is:
Diamandis, Peter H., and Steven Kotler. Bold: How to Go Big, Create Wealth and Impact the World. New York: Simon & Schuster, 2015.

The book mentioned by Lanier is:
Lanier, Jaron. Who Owns the Future? pb ed. New York: Simon & Schuster, 2013.

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