For the record: Boaty McBoatface is a brilliant name.
The UK Coast Guard decided to try out this thing called “social engagement” by opening up the naming of its new vessel to the community at large. It would let the public nominate and vote on potential names. What could go wrong?
Well, what could go wrong is that the Science Minister didn’t like the winner. Boaty McBoatface won by a huge margin, as it should have. But that entry has been disqualified. Why? Because the name is not “serious enough”.
The US Republican Party should take note: apparently you don’t have to abide by the rules of democracy if the people’s choice is not “serious enough”. Just sayin’.
“What happened to disapproving of what you name your boat, but defending to the death your right to name it? Is democracy a lie?”
A good article, which points out that the futility of democracy does not end with a ship.
“By voting, you can play some role in electing your member of Congress. But you have far less control over which policies that member supports once in office, let alone which policies the government as a whole pursues. Similarly, you can cast a ballot for Boaty McBoatface and help shoot the name to the top of an online poll. But you’re pretty powerless when it comes to what the science minister does with that information.”
I include an article about an article, which I normally don’t like to do, but in this case you’ll thank me – the original article, by tech investor Bill Gurley, is reaaaaally long. The Quartz summary is more readable, in my attention-deficit opinion, and highlights the scarily relevant points.
It goes a bit beyond the now-usual “the bubble is bursting” commentary to talk about how Silicon Valley hubris is bringing the roof down on their own heads. On the one hand, it’s a pity, as so many young dreams will be washed away. On the other hand, you would think we’d learn from past mistakes, no? According to Bill, the four main factors in the VCs’ and founders’ own way are:
– emotional biases (the overwhelming desire to be a paper billionaire),
– greedy VCs with more ambition than ethics (who get unrealistic guarantees in the contract, which deters further funding),
– inscrutable financials (greater transparency in the numbers would lead to better decisions and less blind hype) and
– too much money looking for a high return.
“The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate.”
Here we have an interesting look at the difference between books and the web. “Boundedness” on the one hand. “Unboundedness” on the other. Is there a way to bring them together?
The Web is the most efficient technology we have for creating and distributing information …
And if …
The web is the most efficient technology for organizing connections between bits of information …
And if …
The Web is an open platform on which we can build new tools and services …
And, further, if …
Books represent the (arguably) the most important single nodes of information from human minds …
Why doesn’t the content inside of books live on the Open Web — where it can more easily be found, shared, read, and built upon?”
We have unlimited information on the Internet, which allows us to build connections, to adapt and to innovate. A book’s reassuring limitations concentrate our attention but at the same time block the creativity of immediate interaction. Online books, without the physical heft, offer the same restrictions.
“So we moved from paper books to digital books, but rather than embracing digital fully, we instead built a system that tries to mimic the limitations of paper. In fact the ebook system we have built in many ways imposed new restrictions: on ownership (since you don’t own your ebooks, you license them from wherever you bought them), and use (you can’t easily lend your ebooks, or give them away; you might be able to highlight and take notes on your books — but there isn’t anything useful we can do with those notes).”
So is there a way that books can retain their advantages, set in the beginning of printing-press time, while joining the connectivity revolution?
“Books can learn from the web how to be bounded and unbounded at once: to keep the circumscribed, portable integrity of discrete content; but to open that content to the platform of the Web. To open the reading experience to being built upon… But I think there is power in the notion of a book, its thingness, and the Web can perhaps learn how to encapsulate, in the way a book does, a discrete thing, a bounded set of ideas.”
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A brief roundup (you’re probably grateful, right?), but it’s been a crazily busy week. Glad it’s Friday. You too, I hope!
So I think I finally have this blog migrated to self-hosting, although there are still a few (cough, several) glitches to work out. Thanks for your patience, and any constructive suggestions are welcome!
Some of the most interesting articles and ideas from the past week:
The always brilliant Jon Evans calls the end of the tech bubble.
“The startup gold rush of the last ten years is over. Sorry.”
Why? Because of too many startups, too many VCs, too many unicorns…
“…the more the startup ethos — MVP, “disrupt,” etc — becomes conventional wisdom, the less effective it is. The day we reached a consensus that “startups will define the future” was the day it ceased to be true. Innovations rarely come from mindsets adopted by the mainstream; you can’t be revolutionary when everyone else is trying to be revolutionary in exactly the same way.”
Yet there are still fields where new entrants can do real good:
“Tech giants may have adapted (somewhat) to the startup threat, but there are other fields — healthcare, for instance — still trying to adjust to last decade’s technology. These will remain fertile ground for some time yet.”
And bitcoin, blockchain, augmented reality, virtual reality and IoT still have a ways to run. Niche apps might get some focussed traction. But the startup sector’s buzz is gone. Which will hopefully curb the egos.
This entertaining article will have you nodding your head in agreement and fighting the urge to rush outside and look at some nature. (It’s Sunday, why fight it?). Even if you’re not a Slack user (and it appears that most of us are these days), you’ll be familiar with the overwhelm, the creep of helplessness, the sense of sacrifice for the Greater Good.
“Then, out of nowhere, here you come riding into my life like a goddamned Clint Eastwood straight out of Bridges of Madison County. The personality! The colors! You were all promises, rose petals, and sex appeal. And SO much more responsive to my needs.
Soon, we were messaging every day. It wasn’t long until it was hard to think of a time I’d ever gotten things done without you.
And that, really, was where things began to unravel for us.”
Samuel lays bare his lack of commitment to the relationship, citing the “clingyness” of the fun user interface and the intrusion of the conversation drip.
“I may have been fooling myself when we were still in the honeymoon phase, but when there was all the talk of you killing email, I have to admit I thought it was the email problem you were attacking, not just the email platform.
Which is to say, I thought you were providing some relief from the torrential influx of messages, alerts, and notifications I was receiving on a daily basis. “Me + Slack = Fewer distractions and more productivity,” I thought at the time. I have to say, though, that I’ve since found it to be the opposite.”
While the article is a good read, it overlooks the fact that people’s expectations of how you are going to behave are generally based on how you behave. Extrapolation. You don’t want to have to be on Slack all the time, don’t be on Slack all the time. If it’s to gain productivity, your team will understand. I love Slack for the amount of email it cuts down on, and how it makes distance work relationships feel more face-to-face. And I’m on the platform maximum 1 hour a day.
That said in Slack’s defense, Samuel does hit home with some very good points:
“I wonder if conducting business in an asynchronish environment simply turns every minute into an opportunity for conversation, essentially “meeting-izing” the entire workday.”
“Everything is scattered, and the mental load that comes with it is real. Linda Stone calls this perpetual, shallow quasi-presence “continuous partial attention”, and this makes each conversational thread, almost by definition, a loose one.”
There is always a backlash when something becomes so popular. And it’s important that we question what holds our attention. Of course Slack is not the perfect solution. Conversation itself is not the perfect solution. It’s complicated, messy and distracting. Yet it is productive. Slack is a step towards putting warmth back into virtual work conversations, and the juggling of channels and threads is no different to the fragmented reality of office life. And anything that reduces chain emails is, in my opinion, A Very Good Thing.
In case you didn’t have enough to worry about, I present to you: the politicisation of code.
“Historically, programming languages have lain on structures of domination. Software engineering consists of one agent (the programmer) giving commands, and another (the computer) receiving and, unless there’s an error, obeying them.
To make a programming language feminist… would require shifting to a collaboration-based structure.”
““Just because certain forms are technical, it doesn’t mean they don’t have social or political influence. Computation can’t have this pure, objectified, position-from-nowhere objectivity. Objectivity is marked in influence specifically by who you are and where you are and what you’re bringing to it.””
I have no idea what that means.
A programming language has been developed in Arabic “to challenge the anglocentric nature of computer science” (although it will have a hard time interacting with, um, 100% of other languages out there).
Taking issue with the binary dominance of 1s and 0s, TransCoder – a “queer programing anti-language” developed by digital artist Zach Blas – introduces a whole new set of, well, statements.
“For instance, running the matrimonial function “iDo” causes a computer to self-destruct, while “metametazoan” deletes all language “that is representative of gender binaries” and “sets everything in the program equal to itself.””
Known for its strong grasp of statistics, FiveThirtyEight’s analysis of the startup scene in the US eloquently sheds light on trends most of us were probably unaware of.
First, that entrepreneurship has been in decline in the US for the past 30 years. (What?). In 1980, 450,000 new businesses were started in the US. In 2013, 400,000, even though the US population was 40% larger.
“The startup drop-off has corresponded with a decline in other measures of economic dynamism — Americans are changing jobs less often, for example, and are moving across the country less frequently — leading economists to worry that the U.S. as a whole has become more risk-averse.”
But new research shows that the narrative is not that simple. There are fewer new businesses, but amongst those 400,000 are opportunities with greater potential.
“Startups as a whole may be declining, they find, but the kind of entrepreneurship that economists care the most about — fast-growing, innovative companies like Amazon — hasn’t shown the same downward trend; in fact, in the past few years, those kinds of startups have surged in number.”
Yet those kinds of startups are having a harder time in creating sustainable growth and jobs.
“The U.S.’s problem is less a failure to create enough new businesses and more a failure to help those businesses grow…Restarting that engine is key because historically, nearly a fifth of all new jobs each year have been created by new companies.”
It turns out that most entrepreneurs don’t want to build an empire. And the problem has been, how does the system identify those that do? A new study claims to be able to do just that.
“Ambitious startups share certain qualities. Their names, for example, tend to be shorter and are less likely to include the founder’s name. They tend to be set up as corporations, not limited liability companies, and they are often incorporated in Delaware, a state known for its business-friendly regulations.”
So far so good, right? No. The study goes on to show that, once identified, the “high potential” startups have a much lower chance of success than, say, 20 years ago. And those that do manage to grow are not adding jobs as quickly as their predeccesors. Tech efficiencies and scalability (more sales with less staff), offshoring and globalization, contract workers and the freelance economy… The forces at work holding job creation back are a potent mix of economics and culture, fostered by tech companies themselves.
This is not unique to the music industry. The startup world is very, very hard. The general rule is that 2 out of 10 startups “make it”. Courtney does add the valid point that startups are now a riskier place than ever from which to launch your career.
“Now, that’s par for the course in startups, and really in most businesses. But up until now the rotating door of companies was spinning — you could easily move from startup to startup without much disruption. But now all the VC money that was greasing the doors has dried up, and people are stuck — there’s just nowhere to go.”
Articles like this one serve as healthy reminders that we are all susceptible to survivorship bias: those that do well or get media coverage do not represent the sector. We tend to not hear about the ones that don’t get off the ground, or that do but then fizzle out. So we get brainwashed into thinking that technology and a good idea will bring riches and a dynamic lifestyle.
“Being in the middle of the music startup meltdown right now is terrible, full stop. It’s never fun when people lose jobs and companies close, and it’s going to get worse before it gets better, and the next few quarters are going to reveal even more turmoil in the sector. But it’s not like the internet is going to be turned off for all time; plenty of startups rose out of the web 1.0 collapse, and just as many good ones will come in the future.”
Slumps, especially of the meltdown variety, teach us that having a good idea is not enough. Having an identified and unattended market is not enough. Even getting a lot of funding is not enough. The current change in atmosphere is sad – it’s never fun to see so many dreams crumble. But it is a wake-up call, a reality check and hopefully a return to fundamentals, which will lead to stronger innovation and healthier investment. If only we can be sure we won’t forget again, like we’ve done before.
This article is not so much about Amazon, as about the creep of “ether commerce”, or commerce that happens without us really being in control.
“This is commerce sublimated into the secret recesses of ordinary life rather than commerce conveniently accessible from the computer. And not digital commerce, either, the comparatively easy domain of digital downloads and in-app purchases. Ether-commerce winds its way around you, invisible, like an H.P. Lovecraft monster.”
We’re talking about product-specific digital commerce, such as the buttons that Amazon is distributing that allow you to re-order supplies as soon as the idea pops into your head.
“The ultimate endpoint of ether-commerce is full automation: purchasing things without even really buying them.”
Since we end up paying, this can sound very frightening. And the cultural and psychological shift – and let’s not even talk about the business side – is deep.
“Those of us who are shackled to our smartphones might wonder: Why not just use the Amazon app to order a new carton of Huggies or box of Larabars? But from this perspective 1-Click doesn’t make sense either—the shopping-cart checkout process isn’t so laborious, after all; consumers just become less tolerant of any inconvenience as new conveniences arise.”
Ok, let’s talk about the business side. The participating brands gain marginal revenue, but at significant logistical cost. Enter the network effect: delivering a box of detergent to your front door is not a problem if I’m going by there anyway. And with the ecommerce or ether commerce or whatever boom, chances of that are high. But even having to stop the van, haul the detergent out of the back, walk it to the front door and wait for someone to answer has a cost. Is the small additional amount earned on that sale worth it?
It seems that the answer is yes. Volume, from both a mindshare point of view (why would I buy another brand of detergent when this one is sooooo convenient?) and from a logistics perspective (more deliveries = each delivery costs less!) is the holy grail of big-brand ecommerce. Which makes Amazon the ideal partner for the big consumer brands.
Just wait until the Internet of Things goes mainstream. You won’t even need to push a button to order your staples. Our agency in the running of our household will be pushed even further into the background. Convenience? Or the relinquishing of control?
Being told that your job is in danger is beginning to sound old. Still scary, but old. The WEF presents here a concise and blissfully easy to understand summary of the main causes for the radical change in the employment outlook, and a recipe for turning this ship around.
“It’s increasingly clear to me that creating more jobs is not enough, nor is it the real solution. This solution is based on a big misunderstanding. To tackle this crisis cubed, we need to focus on not just jobs but on people earning incomes. This requires us to develop a new model of work.
What is clear is that the transformations that are now taking place worldwide, resulting in the loss of jobs, are caused by forces we cannot alter. The disruption of our world of work is the result of a tectonic shift just as dramatic as industrialization and urbanization – and it occurs along three fault lines:”
Those fault lines are technology (automation reducing the need for people), talent (a skills gap), and Millenials (who want different things from their employment, such as meaning and a healthy work-life balance).
“Neither governments nor companies can become sustainable engines of job creation. But then this crisis is not actually about “jobs”.”
The new model of work mentioned above?
“Take away the hierarchies of today’s corporations and what are we left with? At their core, companies are a collection of people engaged in collaborative efforts. It is this collaboration that is at the heart of our new model of work.”
This sounds like the spread of the entrepreneurial mind-set, even within big corporations, at every level. Slack-connected teams, on-demand platforms and a re-thinking of what work means are both symptoms and causes of the shift. The difference between “work” and “a job” is becoming glaringly vague. The fragmentation of large entities, both locally and internationally through globalization and outsourcing, is changing what we understand by “corporation”. And the quantification of “trust” through platforms and ratings is shifting professional relationships into a looser, more superficial structure.
“So to survive, corporations have to reinvent themselves as conveners of collaborators. That is their new template. They have to morph into collaborative ecosystems – with their own rules and community ethos – in which individuals can plug in their skills. The collaboration economy can be our new model of work.”
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This opens your eyes to the power of context.
“A photograph is shaped more by the person behind the camera than by what is in front of it.”
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Two things I enjoyed this week:
Rain Fall, by Barry Eisler (inexplicably republished as A Clean Kill in Tokyo). Not exactly high literature, but very enjoyable, morally dubious, satisfyingly complex and exotically detailed. And, in my opinion, very well written. It’s about a half-Japanese, half-American assassin based in Tokyo, who unravels the fallout of his latest kill.
A MOOC on Coursera from Yale University on The Global Financial Crisis. It’s just started, but so far it’s totally compelling. Get this, one of the professors is Tim Geithner! In the first week he’s already talking about what they did wrong.
This is a brilliant article poking gaping big holes in the “online education isn’t having much of an impact” wall, which itself is a victim of a narrow vision.
According to Mr. Shirky, 4 million undergraduates, out of a total pool of 16 million, took at least online course in the fall semester of 2012.
“…more students now take a class online than attend a college with varsity football. More than twice as many now take a class online as live on campus. There are more undergraduates enrolled in an online class than there are graduate students enrolled in all Masters and Ph.D. programs combined.”
That’s a lot. But, the figures he cites are from the autumn of 2012, the “most recent semester with complete data in the US” – how can that be the most recent data available? Whatever happened to the data economy? And we’re talking about online data, it’s not like they had to count pieces of paper! Doesn’t it make you wonder why this data hasn’t been collected?
But I digress. Although it is an important point. Three years later, at the growth levels then experienced, the figure could well be double that. Or triple that. Or maybe the same. It seems pointless to speculate on data that’s three years old.
“…One common observation about online education is that it will mean ‘bricks for the rich and clicks for the poor.’ Something like this has indeed happened, though ‘…clicks for the poorly served’ would be more accurate. Students taking online classes aren’t looking for bargains; the majority don’t take classes from the lowest-cost provider available. They are looking for flexibility, because they can’t quit their job or stop caring for their children or their parents just to attend college, but the world is telling them they need a degree to go from $7 an hour bagging groceries to $13 an hour drawing blood.”
So why is the digital revolution in education so misunderstood? Because of data segmentation, hyped expectations and simple elitism.
“…for us to imagine something is good, it has to be good for us. Meanwhile, back in America, online education isn’t succeeding because it is better than Oberlin, it’s succeeding because it’s better than nothing, and nothing is what’s on currently offer for millions of people.”
Those of us who had comfortable four-year stints at good undergraduate universities need to realize that we are not the revolution. The potential reach of online courses and the flexibility that they offer for relatively low cost means that more people can get better educated, from anywhere. That’s the revolution.
“We already know what the college of the future will look like, because the non-traditional students are creating it now. It’s a hybrid of online and in-person classes, centered on the student and not the institution, with credits accruing from multiple schools, and adding up to a degree in alternating periods of attendance and absence.”
If college education is necessary to move beyond minimum wage, and it seems like that’s the case these days, then it needs to be more flexible, and less administration-heavy. The rate of undergraduates dropping out of college in the US is the highest in the developed world, and is growing. This will lead to a skills gap, and will put a cap on economic growth, unless we can help students to get that degree.
And not just in the US. Students the world over can improve skills and get a degree, which will boost their entire community.
“Given the lousy fit between institutional assumptions and the actual lives of most students, we should applaud their inventiveness in using digital options to make college work for them. But we should also recognize our complicity in creating a system that works so badly in the first place. Online classes are no longer surprising, or experimental, or rare. By adopting them, students are telling us what they need our institutions to become.”
This is really freaky. Apparently it’s a genuine cloud formation called the Bergeron Process, in which air condensation freezes without becoming solid while the water around it evaporates. I don’t pretend to understand it. But it’s really freaky.
If you’ve ever thought, or are thinking, about setting up a startup, read this. Even if you haven’t, read this. A blissfully cold jug of water thrown on the growth-above-all funding hype.
“…maybe, just maybe, you too have a nagging, gagging sense that the current atmosphere of disrupt-o-maniaisn’t the only air a startup can breathe. That perhaps this zeal for disruption is not only crowding out other motives for doing a startup, but also can be downright poisonous for everyone here and the rest of the world.”
This is not your typical eat-what-you-want-when-you-want efficiency homage. This is not your typical On-Demand economy tribute. This article is a refreshing and even charming look at what the awfully-named “sharing economy” could be. Is convenience really the ultimate goal? Or does experience and human warmth get a look in?
“We are alive at a time when huge systems—industrial, infrastructural—are being remade, and I think it’s our responsibility as we make choices both commercial and civic—it’s just a light responsibility, don’t stress—to extrapolate forward, and ask ourselves: Is this a system I want to live inside? Is this a system fit for humans?”
When it rains, Pantone’s hydrochromatic paint – which is transparent when dry, but turns opaque and colourful when in contact with water – transforms dull, wet streets into vibrant and artistic scenes. A whole new form of street art? Art + weather = impact on emotions.
Ugh, if I hear another “the Uber of…” I just might shriek. And I would have expected a bit more journalistic rigor from such an illustrious institution as The Wall Street Journal. But putting Uber in your headline must work, I guess, because I clicked on the link to read it. Inwardly shrieking, of course, but still…
The article goes on to describe briefly how platforms are changing the way we think about finance, from lending to buying shares. The part describing a possible future for private share offerings was particularly interesting:
“But what if the next wave of stock ownership isn’t just trading your own account, but stocks as a form of affiliation with brands? What if that Starbucks card came not just with a free latte after 10 purchases but a share of Starbucks after 100? And what if the maker of that cool new device, the GoPro of tomorrow, could offer its shares directly to its avid users instead of having to rely on investment banks to dole out the shares? “
Although instead of “Uberization”, why not just say “decentralization”?
I have to open this summary with Mary Meeker’s Internet report, a compelling where-are-we-and-where-are-we-going snapshot of the Internet business world. Marketing, hardware, usage, …. She covers most trends with interesting graphics and pithy insights. TechCrunch had a good summary, although they missed some gems (inevitable, the full thing is 196 slides!), which I will try and show you over the next couple of days. If you want to see the original deck, you can do so here.
A delightful read, on focus, productivity, and being a woman…
“Still, nothing unperplexes easy. And the nature of the tangled necklace is that you’ll forget what you know about its not being tangled. You’ll lose patience. You will in fact knot before you unknot — and, if you’re like me, you’ll reknot everything because you can’t forgive yourself. The necklace will come to represent your internal mystification. What’s worse, it will represent your drive to deepen your own mystification, and make it permanent.
The good news is that a countervailing drive will kick in immediately. Never will you want something more than to untangle the necklace. You will hate the chain, you will break the chain, rather than let it lie. You will move heaven and earth.”
Finally, an article that de-mythifies the startup hype, by someone who should know…
“‘Startups’ have become a commodity in an industry of startup conferences, websites, courses and competitions. As founders of young organisations, we struggle to distinguish genuine guidance and support from the distracting pizzazz of the startup industry, where we’re just the product, not the customer. Lured by the lights, we spend valuable hours crafting slide decks, jumping on planes, giving presentations and filling out entry forms, almost always so that someone can sell tickets to the show.”
A refreshing look at the ultimate objective of startups, and how the culture of “killing it” and “disrupting” misses the point:
“Sure, a good startup should make people sweat. It should cause a lot of scrambling and soul searching among the inefficient, the outdated, and the complacent.
But in the end, instead of destroying and recreating a profitable industry, a successful startup aims to modernize it, up the game of the current players, while fundamentally improving the customer experience. I’m not saying there won’t be some casualties, but I’d like to focus on making things better for people, not killing something. And by giving the end consumer better information and the power to use that information, you make the current industry fundamentally better.”
And speaking of freezing, the new ice-cream flavour from Ben and Jerry’s made me smile. Called “Save our Swirled”, or “SOS”, it mixes raspberry ice-cream with marshmallow, jam and dark and white fudge ice-cream cones. The slogan is “If it´s melted, it’s ruined”. Gimmicky, sure, but I like it.
The Spanish press this weekend talked about a new online initiative to “banish the fear of failure”, in a bid to stimulate entrepreneurship. The European Commission is financing FACE Empreneurship, a digital platform that will encourage entrepreneurship through seminars and activities both online and offline, designed to help would-be entrepreneurs overcome their fear of failure. No, I’m not joking, I wish I were. €1.5 million is about to be spent on “fixing” the fear of failure.
Photo by Casey Fyfe for Unsplash
Personally, I don’t see much evidence of a crippling fear of failure, certainly not one that warrants that much money thrown at it. The start-up scene, at least here in Spain, is bustling with good ideas that deserve success. We all know that they don’t all achieve it.
So, say we reduce the fear of failure and more entrepreneurs pile in with their startup ideas. Are these “additional” (as opposed to the startups that would have launched anyway) businesses going to make it? Will there be a noticeably higher number of successful startups because of this initiative? Let’s assume that some of them do survive. We’re still increasing the number of failed startups. But that’s ok, right? At least we’re no longer afraid of failure. Bring it on.
Seriously, in what way is increasing the overall number of failed attempts good for the economy? For the net affect to be positive, we would need to target the percentage of new businesses that make it. And for that, we need a different type of initiative. Obviously I’m not implying that, to make sure there are no failures, we should not allow any new businesses. The point that I’m trying to make is that the initiative is misdirected. Fear of failure is not the main barrier to success.
I know several entrepreneurs who did not have a knockout success the first time around, and yet are still willing to try again. They are willing to talk about it, too. That is a giant step in the right direction, that we see real examples of inspiring people not ashamed of failure. Strong people, willing to ignore the social stigma, and to use their experience to help others get through bad times. Entrepreneurship is very, very hard. Few fulfil their dreams. Most give up and go and get a stable, salaried job. Some pick themselves up and keep on trying. As Winston Churchill said, “Success is going from failure to failure without ever losing your enthusiasm.”
Did failure make these men and women stronger? No. They were strong to begin with. They learnt a lot, obviously – you learn so much more from bad times than from good times. But failure is something you survive, and these entrepreneurs were strong enough to do so. Most aren’t. Entrepreneurship isn’t for everyone, and failure can ruin lives.
So, should we remove the fear of failure? Isn’t fear, in general, a good safety mechanism? We’re not talking about not being able to quit smoking, or failing to get into the university you wanted. The kind of failure that we’re talking about can obliterate family savings, it can even cause people to lose their homes. And sometimes, there’s no climbing back from that, because of unforgiving structural factors that have nothing to do with psychology.
If we want to bridge the startup gap between Europe and the US, we should be focussing on reducing the consequences of business failure. Would we not be less afraid, if the consequences weren’t so severe? Should we not be doing more to help those who do fail, to pick up and start again? A focus on helping entrepreneurs to rebuild, the development of support systems to help them to do so, and the removal of the social stigma that accompanies failure in Europe, would do so much more to reduce the fear. I don’t believe that it’s the fear of failure itself that paralyzes, rather the fear of facing its consequences.
I’m going to assume that the objective is a higher number of successful startups, not just a higher number of startups, irrespective of whether they’re successful or not. So, to achieve the objective, aren’t there more effective things that we can do? Like, make it easier and less costly to hire people? More tax breaks? Better access to training, export finance and low-interest loans? Fewer laws that penalize investments in startups? An even better way of reducing the fear of failure is to reduce the risk of it happening.
Seminars, inspiring talks and interactive exercises will not doubt be motiving and possibly even fun. But, good for the economy? I doubt it. Increased risk is great for the winners. It’s not for the losers. And there are always many more losers than winners in this game.
And I seriously doubt that the main barrier to more successful entrepreneurship in Europe is a fear of failure. The European Commission should be focussing its euros and its time on encouraging structural change, not placating psychological blocks that could well turn out to be a good thing.
When will someone ask why European entrepreneurs are more afraid of failure than their counterparts in other continents? Once we figure that out, and once we start to deal with this fear at its source, then maybe we can get somewhere.
One of the participating companies, Cabify, whose image decorates the Sharing España article (and of which I am a happy client), competes with traditional taxis in that its prices are on the whole lower and its cars are nicer. It has a convenient booking app, but so do several other taxi companies. It lets you pre-book, and the payment is automatically and conveniently taken from your credit card, as with other taxi companies. Cabify operates in several Spanish cities without legal problems, and has passed several inspections. The difference between Cabify and Uber is that Cabify’s drivers have the requisite chauffeur licences (which cost a fraction of the taxi licence price). The similarities are mainly that Cabify’s drivers are independent contractors who own their own cars. They don’t “work for” Cabify, they “collaborate”.
I’ve said before that I think that the “collaborative economy” is badly named, and I stand by that. Cabify drivers, EatWith chefs and Myfixpert technicians are selling their services, their time, their effort… It’s a commercial transaction. In general they receive a fixed, market-based amount for their efforts. In a collaboration, economic or otherwise, you work together to produce a result, which you then get to share. The participants in the “collaborative economy” companies collaborate in generating the platform’s profits, but they don’t get to share them.
image by Sylwia Bartyzel via Unsplash
However, collaborative economy is a much better name than “sharing economy”, and why the founding members chose to call the association “Sharing España” is beyond me. It sounds innovative and kind, which should appeal. But it is misleading, and that almost always backfires.
Calling it “Sharing España” is buying into the hype. In case you doubted that there’s a lot of hype, here’s venture capitalist Shervin Pishevar: “This is a movement as important as when the web browser came out.”.And take a look at these headlines: “Sharing Economies are Here to Stay”, from the Guardian. “The Rise of the Sharing Economy”, from the renowned Economist magazine. And I got the Pishevar quote from an article in Forbes, a usually serious business magazine, called “Airbnb and the Unstoppable Rise of the Share Economy”. A magazine of that level should know that nothing in the economic world is unstoppable, especially after the economic crisis that the developed world has been clawing through. Wasn’t it hype that got us there in the first place?
Take the case of Airbnb. They started out in 2008 by advertising floor space in their apartment during a trade fair that had flooded the city with cash-strapped creative types. They had space for three airbeds (yes, that’s where the name came from, Airbedandbreakfast), which they managed to rent out. Is that a new business? No! Could they have done that without the Internet? Yes! A few flyers taped to lampposts around the area and pinned to bulletin boards in coffee shops would no doubt have produced the same effect. Were they sharing? No, they were renting out space. A commercial transaction.
And that’s the key. Sharing should not be commercial. Sharing is worthy, valuable, and gives benefit to the sharer and the sharee. But it should not have any motive other than the satisfaction of doing the “right” thing, of being kind.
In 1995, two Swedish economists launched a motivation experiment that had unexpected results. They visited a clinic in Gothenberg and divided the potential blood donors there into three equal groups. One group was told that they could give blood if they wanted, it would be appreciated. The second group was told that they would be paid 50 kronor to give blood. The third group was told that if they gave blood, 50 kronor would be donated to their favourite charity. Interestingly enough, the number of willing donors in the second group dropped significantly. Offering an economic incentive “tainted” an altruistic act, and the participants lost interest. Simply “doing good” was enough motivation for the first and third groups. And that’s my main point. Sharing is good. Let’s not taint it by equating it with a commercial transaction.
Sharing, empathy and honesty are the three main pillars of childhood values. And yet, of the three, sharing is the only one whose definition is being re-engineered by the media (in most cases at the behest of the businesses) to create buzz, generate hype and coin sound-bites. We’re doing ourselves a disservice. Hype can generate some short-term attention, but it generally fizzles out to the catchy tune of “I saw it coming” and “I told you so”. And the damage is not just limited to the number of closed businesses, the millions of $ or € wasted on buzz-based funding, and the subsequent prejudice against valid businesses that got tainted with the hype brush. The price will also be paid by education, values and society as a whole. I can so see little kids in the playground, when being urged to share, ask “what’s my percentage”?
We need to reclaim the word “sharing”, to give it back its generous meaning. That would generate a benefit for current and future generations, which we could all actually share.
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If you’re interested in more stuff about the Sharing Economy, check out my Flipboard (and yes, I did, I called it “Sharing Economy”):