Where We’ll Die
“Tell me where I’m going to die so I won’t go there”
If you’ve read much about Charlie Munger, you’ve no doubt come across this aphorism. And as the pace of change continues to ramp up in many areas of business, it’s starting to become clearer how many will die.
The natural instinct then is to do all we can to avoid that death. Fight against the change. But this fight takes a lot of energy and resource. And in the end it’s futile.
So what about accepting where and how many traditional business models will die, and planning for that future? It’s the digital world that’s destroying these businesses. And the digital world is doing so by building walled gardens.
In this case, it’s not hard to see where and why traditional business models will die:
- The open internet, the one envisioned and built by the academic world, will become obsolete within a decade
- As the open internet dies, the walled gardens being built on top of it will capture more users, more time, more attention, and more revenue
- Any business model that isn’t building walls or living within the walled gardens will die
- New business models will be created within the walls, and may exist across multiple walled gardens
Already these walls are getting higher. This year alone we’ve seen:
- Google blocking advertisers from buying YouTube ads outside of its own ad-technology stack
- Google creating what is potentially a brilliant home wi-fi router. However you’ll have to log in to it with your Google ID and send data on your home network back to Google.
- Facebook is locking news publishers into its garden without any payment, under the guise of a better user experience and faster load times
- Facebook via its internet.org program is offering ‘free internet’ to those in India who currently aren’t online (where ‘free internet’ is Facebook and a small selection of other sites that they decide on)
- Apple, like Facebook, is pulling news content into its own walled garden of Apple News
- Apple also continue to wield their power over the music industry, despite a slight hiccup that caused Taylor Swift to become a techno-activist
- Meanwhile in China, WeChat has been so successful at its walled garden approach that it’s essentially a mobile operating system
These walls are not being built because the existing internet infrastructure is incapable. They are not being built to further any evil desire for world domination. They are being built because corporations are building them. Corporations who have every desire (and right) to maximise value and protect revenues.
The new internet is the commercial internet. The last decade has been an awkward transition from a free and open academic utopia, to a disruptive and valuable unicorn paddock.
In 1996, in response to the US Telecommunications Act, John Perry Barlow wrote his Declaration of the Independence of Cyberspace:
“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.”
But “we” were not left alone. And there’s no point being nostalgic for what was and what could have been. The walled gardens are here to stay. And if you are outside of those walls, that’s where you’ll die.
- November 2015