An Abundance of Abundance
Quantity has a quality all its own.
(excerpt from The Age of Metapreneurship)
We used to live in a world of shrill warnings: we’re running out of food; we’re running out of oil; by fill-in-the year-plus-20, we’ll run out of blah-blah resource and be on the brink of extinction. Now, we’re complaining about too much of everything: Too many TV channels, too much junk food, too many cars, and too many brands of soda.
Most of the 20th century was about dealing with scarcity. As we entered the 21st century, the shift was dramatic. Perhaps for the first time in history, we instead have to deal with abundance.
Once the web and digital products came of age, abundance became a way of life. The terrain changed, and it changed our behavior. We expect more of everything — content, information, products — and we expect it immediately. We expect lots of choices, and we expect them fast, easy and free.
Abundance. It sounds like a good crop yield; lots of food; a feast; everyone prospers and everyone is happy. Today, we have an abundance of content, products, people, knowledge, information, data, buyers and sellers. Abundance = good. At least that’s the most common interpretation. But abundance isn’t merely “more stuff.” Abundance complicates. Abundance has consequences. Abundance spawns new opportunities.
The Long, Fat Tail
Abundance is such a defining aspect of the modern age that we barely notice it anymore. We expect near-limitless access to products, services, technologies and information. And when someone discovers a product, service, or resource that is not available in abundance — entrepreneurs quickly respond by creating new products and services that remove any barriers to abundance.
In 2006, Wired magazine editor Chris Anderson released a seminal book called The Long Tail.
Chris Anderson released each chapter of his book to the public, as he was writing them, in a series of popular (and free) blog posts prior to publishing and selling the book.
In The Long Tail, Anderson describes an early example of abundance and its effects: a specialty book about a mountain climbing adventure, long out of print, but one that started to see renewed interest and sales — to the point of becoming a surprise best seller. Rising demand for this book was due to a combination of several factors, including the popularity of a similar book released 10 years later. But the underlying logic was simple: The obscure, tiny audience for this book genre was no longer obscure or tiny. Because of the Web and online marketplaces like Amazon.com, potential readers for mountain climbing adventure books could be found in the same place. And when customers are ‘aggregated’ in this manner, they became a large group.
Most readers interpret the iconic Long Tail graph to mean that selling lots of niche products to small audiences can be as profitable as selling a few hit products to a single, large, general-interest audience. And this is profitable because, in the age of on-demand content, an online seller can list all the niche products without actually having them in stock.
An alternative, or parallel, explanation is this: The success of Long Tail economics isn’t about the abundance of content. It’s about the abundance of people. More specifically, it’s about how scattered, dispersed groups of people become large groups, when connected on a network. The Internet, empowered by social networks and e-commerce sites, allows like-minded people to “self aggregate” to form large groups. In other words — almost any obscure topic or interest has a large audience now.
Abundance of Abundance
The Age of Metapreneurship is not merely an evolution where cheaper product development, cheaper technology and frictionless distribution evolved to produce an abundance of content. Once online networks — social, professional, commerce, and others — became pervasive, and became the default mode for almost everything we do, many different kinds of abundances emerged:
- An abundance of content, products.
- An abundance of data.
- An abundance of connections (on the network).
- An abundance of people (connected, on the network).
- An abundance of networks.
- An abundance of platforms.
- An abundance of entrepreneurs.
In fact, there’s so many different kinds of abundance now that economists and thought leaders have often proclaimed we live in a post-scarcity economy. Peter Diamandis laid out a vision for the future which he called an ‘Age of Abundance,’ in which technological progress would bring enormous amounts of energy and resources to bare for enterprising businesses to take advantage of.
Abundance = Good
Entrepreneurs today live in a world of free tools, free platforms, free data, free advice, free information and free distribution. All free because they are abundant, and easily attainable over the Web. But this is not an advantage anymore. In the Age of Metapreneurship, knowing how to leverage ‘free’ and abundance are now required skills. When starting a new venture, leveraging the free resources on the network is the new normal. Using networks to connect with customers, partners, influencers and employees, is the new normal.
Anderson, in a presentation titled “The Economics of Abundance” summarized some of the other positive side-effects of abundance:
- In the age of scarcity — we had to make assumptions about future demand, strategy, ROI.
- In the age of abundance — everything can be measured.
For acolytes of The Lean Startup Methodology, measurement is everything: from measuring customer feedback, a/b testing of design, to validating products and markets. With a host of tools, connected to the network, we can extend Anderson’s statement to become:
In the age of abundance — everything can be measured, monitored, tracked, and even predicted.
For Metapreneurs, not knowing what is happening with your customers, market, competition, and industry is a serious handicap. It’s like not knowing how perform a Google search.
Anderson continues with another interesting, if not unexpected, ramification of abundance:
In the age of abundance — waste is good: e.g transistors, storage, bandwidth and resources are cheap, so build a lot of it.
Seasoned entrepreneurs can’t shake that voice inside their heads that says “efficiency is good, never waste anything.” Modern entrepreneurs see it differently. Time is the only resource that can’t be wasted. Speed is everything — even for failure. If you’re going to fail then fail fast, so you can learn, adjust and try again. So, if resources are in abundance — whether it is bandwidth, memory, storage, or even talent — don’t waste time trying to optimize their use. Use them liberally to your advantage. Experiment and take risks. An abundance of resources, in the Age of Metapreneurship changes the basic equation of innovation: Leverage the universe of abundant and cheap resources; experiment, deploy, monitor, measure and iterate fast. If you don’t operate this way, you may be prone to failure, because your competition is surely leveraging abundance to build, launch, learn and improve.
If you’re a consumer, abundance seems great. You have a plethora of choices, and many chances to get the exact product or service you need. If you’re a producer or provider, it means that you can find large audiences for your product. Friction is removed; barriers removed. Everyone is happy. Not quite. Reminiscent of the tale of the Monkey’s Paw, abundance leads to a series of series of unintended and unfortunate consequences.
Abundance = Bad
It doesn’t take long to realize that having an abundance of anything leads to commoditization, and eventually this leads to an expectation of “free.” This is good if you are a consumer, but if you are the creator of a product or service in abundance, it is frustrating, to say the least. While the costs of creating products and services have dropped due to plummeting technology costs, the actual costs of labor have not dropped. In other words — in a world of “free,” people still need to get paid.
Resources and products are so plentiful that prices are driven down to zero. Free. But free does not mean “cheap.” In this age of abundance, something counterintuitive happens: Quality increases. Let that sink in for a moment. Abundant resources drive prices down to zero, yet the quality increases.
Even experienced economists stammer “Why? How is this possible?” The reason is ‘connecting the dots.’ In the Age of Metapreneurship, getting a large audience to use your product can be monetized in other ways — with a different set of dots to connect. Thus, attracting an abundance of people with “free” is a viable strategy. This is reminiscent of a freemium strategy, but without trying to upsell more product. If every competitor is offering their products for free, then providing other value, and providing higher quality products, are the deciding factors. Yes, if the product is free — you need to provide higher quality and more value.
This counterintuitive concept can easily be illustrated by looking at some of the most iconic companies of the era: Facebook, Apple or Google. A few years ago, using mapping and navigation services required a dozen CD ROM disks or an expensive device installed in your luxury car — all at a hefty price tag. Voice recognition — or talking to your computer — was science fiction that cost millions of dollars. Now, companies are battling each other to beg you to use these services for free — and are working hard to provide the highest quality and feature rich products so you’ll become a loyal user.
Contrary to most of the laws of economics, when an abundance of resources causes an abundance of free products, they become commodities — but they become high-quality commodities. And in the simple, cause-and-effect style of classical economics, this makes little sense. But in the modern, connect-the-dots Age of Metapreneurship, it works. Monetize the audience, not the product. For those extraordinary web services that we enjoy, Google and Facebook make money via advertising to broad audiences. Apple, by making features such as Siri or Facetime indispensable, makes you loyal to their hardware platforms. You buy more iPads, iPhones, or more third-party apps — where the dots connect — and Apple makes an extraordinary amount of money from the app developers.
But abundance has its downside, for example:
- An abundance of crops often cannot be harvested or stored in time. They will rot and die.
- An abundance of information = overload and confusion.
- An abundance of money = inflation.
- An abundance of people = overpopulation, or
- An abundance of stock = dilution.
For entrepreneurship, it means that differentiation is harder; it means more competition for customers, for partners, and for employees. And then the cycle repeats. Abundance can cause new barriers, new kinds of friction and new problems.
And thus, the problems born from abundance represent new opportunities for entrepreneurs.
Abundance = Opportunity
Traditional economics and business school courses focus on “the economics of scarcity” even if it is never called this. The laws of supply and demand, presuppose a fixed amount of “supply” (product) and/or fixed amount of “demand.” Today, we are indeed in the age of abundance; supply or demand can be so plentiful that they are essentially unlimited. The laws of economics have yet to catch up.
Peter Diamandis, head of the XPRIZE foundation, and co-author of Abundance: The Future is Better Than You Think, observes:
“Scarcity is contextual, and with the accelerating rate of technological innovation and the convergence of key exponential technologies, I believe we are rapidly approaching a world where nothing is scarce and everything, to some degree, can become abundant.”
“There are lots of things that are still scarce, [but] it’s only a matter of time before they become abundant. Health, access to the best education, labor, energy, water…even time.”
Diamandis is describing what has been called the post-scarcity economy,vii a society in which goods, services and information are free.
Are we living in an age where everything is free and nothing is scarce? Hardly. Years after The Long Tail, Chris Anderson makes the sage observation:
“Every abundance creates a new scarcity”
And there lies the shift: the new strategy for the new age of entrepreneurship. To succeed, entrepreneurs need to look at a market that is being disrupted by an abundance of resources, products, or people, find the new scarcity, and address it with a new product or service. For example:
- An abundance of content: Creates “noise” confusion, lack of differentiation. Thus creates an opportunity for providing valuable premium products and services: curation, commentary, branding, packaging, and filtering.
- An abundance of connections to social networks, the Web, to other computers, other networks, or devices, causes more noise, confusion, anxiety, and takes up a lot of time. It threatens privacy. New opportunities emerge for security, managing connections, and for prioritizing, so we can save time.
- An abundance of data: geographical data, traffic, user demographics, census, population health data, and behavior data. Opportunities now arise for data management, monitoring, measurement, using data to poll, predict and help with decision making.
- An abundance of people: Connected to the abundance of networks. Creates a need for new special-interest networks, contextual networks (e.g. for professional activities vs. hobbies vs. families vs. social or political activities).
- An abundance of expertise: Too many experts, consultants, advisors cause a lack of differentiation, and conflicting advice. It causes a scarcity of trust, and confusion for credibility.
- An abundance of entrepreneurs: means more competition for funding, for customers and for ecosystem resources. This creates new opportunities for collaboration.
Abundance is neither good nor bad. It just changes the alchemy of entrepreneurship. It changes the economics, business models, relationships, the way products are developed and marketed, and even the way companies are formed.
Mastery of managing abundance and new scarcities is the defining strategy of the era.
Abundance, and the resulting new-scarcities, make doing business more unpredictable. Straight lines are gone and dots need connecting.
This age of abundance didn’t happen in a vacuum. And it could not have happened in an earlier age. It owes its existence to modern networks.
(next up: “The Network is the Medium”)
i Chris Anderson, “The Long Tail,” Wired Blog Network (blog), April 29, 2008, http://www.longtail.com/the_long_tail/2008/04/seth-godin-asks.html.
ii “Long Tail,” Wikipedia, last modified on November 4, 2016, https://en.wikipedia.org/wiki/Long_tail.
iii Daniel Honan, “Are We Ready For The Coming ‘Age of Abundance?’,” Big Think, 2015, http://bigthink.com/think-tank/are-we-ready-for-the-coming-age-of-abundance. “Peter Diamandis laid out a vision for the future which he called an ‘Age of Abundance,’ in which technological progress would bring enormous amounts of energy and resources to bare for enterprising businesses to take advantage of.”
iv Chris Anderson, “The Economics of Abundance” (presentation on The Wired Blog Network), http://www.longtail.com/the_long_tail/2006/10/the_economics_o.html.
v Peter Diamandis & Steven Kotler, Abundance: The Future is Better Than You Think, (New York, NY: Free Press, 2012).
vi Peter Diamandis, “We’re Fast Approaching a World Where Nothing Is Scarce — Even Diamonds,” Futures Hub, November 16, 2015, http://futureshub.ch/singularity-university-news/were-fast-approaching-a-world-where-nothing-is-scarce-even-diamonds/.
vii Post-scarcity is a hypothetical form of economy or society in which goods, services and information are free, or practically free.
“Post-Scarcity Economy,” Wikipedia, last modified on November 7, 2016, https://en.m.wikipedia.org/wiki/Post-scarcity_economy.
Chris Anderson, “The Long Tail,” Wired Blog Network (blog), April 29, 2008, http://www.longtail.com/the_long_tail/2008/04/seth-godin-asks.html.
Barbara Gray, “The New Era of Economic Abundance,” LinkedIn, September 29, 2015, https://www.linkedin.com/pulse/new-era-economic-abundance-barbara-gray.
CJ Cornell is a serial entrepreneur, investor, advisor, mentor, author, speaker, and educator. As an entrepreneur, CJ Cornell was a founder of more than a dozen successful startup ventures that collectively attracted over $250 million in private funding; created nearly a thousand new jobs; and launched dozens of innovative consumer, media, and communications products — that have exceeded $3 billion in revenues.
He is the author of the bestselling “The Age of Metapreneurship — A Journey into the Future of Entrepreneurship.”
And the upcoming “The Startup Brain Trust — A Guidebook for Startups, Entrepreneurs, and the Mentors that Help them Become Great.”
Follow him @cjcornell or visit: www.cjcornell.com