“Three billion years ago, life was then a community of cells of various kinds, sharing their genetic information so that clever chemical tricks and catalytic processes invented by one creature could be inherited by all of them.
Evolution was a communal affair.
But then, one evil day, a cell resembling a primitive bacterium happened to find itself one jump ahead of its neighbors in efficiency. That cell separated itself from the community and refused to share.
[This article is, also, available on Medium. If you read there, I would appreciate some Claps. Thanks.]
Here’s a story about the future
– Technology is increasingly empowering the individual. – 30 or so years out, some Columbine Killers wannabes will be able to use a virus or dirty bomb. – The only real solution is the surveillance state. – There won’t be good individual counter-measures: trying to block surveillance will only make you stand out. – One path to that solution is panic and partial collapse of our democratic standards similar to the dynamic of post-9/11 legislation. – It would be nice to do better than that.
To be clear, if the above is likely…and I think it is…our current dicking around with privacy rules, for all the heat it generates, is simply setting up a house of cards.
We need to think beyond our immediate impulses and head-off solutions that could drag in disastrous side consequences.
There’s a class of ideas that I term cockleburrs. These are ideas that work their way into the fabric of my thoughts. And there they sit, irritating and hard to remove.
Privacy’s doom is one of my most/least favorite cockleburrs.
I’ve been tracking the Internet’s privacy implications for the last 15 years; writing about it on my blog and, now, Medium, for half of that.
Privacy concerns wax and wane.
We are now again, seemingly, at a local maxima. Witness the surge in attempts to address internet privacy through rants, analysis, and (yikes) legislation. Opinions range from insistence that personal privacy must be enforced through government edict (with, naturally, back doors for law enforcement) on over to the claim that it’s already non-existent so get over it.
Much of this discussion becomes irrelevant if we make some reasonable assumptions about how things might play out over a longer time frame.
…30–50 years out any system of individual privacy hammered out in the interim will be hit with at least one major stress test…some actual or threatened 9/11 — amped up a few orders of magnitude.
(Btw, the podcast TWIG is a great resource to keep tabs on the ongoing evolution of the technical, legal, and social sides of the issue(s). A great example of productive discussion along these lines is the conversation between Mike Elgan and Jeff Jarvis in Episode 493. Occasionally, otoh, TWIG seems stuck in a rut. My secret hope for this article is to contribute to moving the discussion forward.)
Stress Testing the System — Privacy’s Inevitable Collapse
Since the paleolithic we’ve seen a ‘hockey stick’ trend in the lethality of our weapons matched by a decrease in what it takes to deploy them. The end point, visible in the near to middle future, is the capacity for dirty bombs or custom diseases implementable by disaffected high school kids.
I suggest jumping to minute 7:00 and checking out his thought process so you can catch my dis-ease.
07:00 — Bottom up — the future will be empowering the little guy. We’re heading into a networked world; 95% of the change is at the nodes: the little guy.
13:22 — Disturbing change: uranium enrichment 50 years out will need low power and a pipe to sea water so accessible to small actors
15:21 — The solution: a global technological immune system
If the combination of a high power attack and a surveillance state response is highly probable, then much of the current privacy discussion is froth… a turbulence before we go over the falls.
The Likely Result
If any of these or other similar points of risk come close to be actualized, it is likely that some time during the next 30 year any system of individual privacy we hammer out will be hit with at least one major stress test…some actual or threatened 9/11 amped up a few orders of magnitude in impact by technological advances…and that will be counter-able only by the type of surveillance society also made possible by recent technological advances.
The 145-camera system, which administrators said will be installed around the perimeters of the schools deemed “at highest risk,” will also automatically alert a school-monitoring officer when it senses events “that seem out of the ordinary” and people “in places they are not supposed to be.”
Meanwhile, nations are pioneering detailed surveillance at a massive scale. China and England are both making arrests in facial recognition sweeps. China is automating a universal social credit score that can determine your ability to travel or get your kids into school. It is being implement by a branch of the government called, clearly without irony, the Central Leading Group for Comprehensively Deepening Reforms.
If the combination of a high power attack and a surveillance state response is highly probable, then much of the current privacy discussion is froth… a turbulence before we go over the falls.
The question is not will privacy go away, but how.
Back to Mr West
Let’s return to John West’s proposed solution: a “global technological immune system.” I’m going to abbreviate his presentation, but it’s well worth jumping in at 15:20 to hear his full discussion. To quote:
If someone starts to go down that road, a kid in high school or whatever [building a bomb or viruses], then we give them extra resources, we give them extra support, and extra transparency to keep that kid on the straight and narrow.”
…Basically the way democratic societies accept accelerating transparency…is we’ve created this kind of fish bowl world where everyone is watching everyone else in public spaces.
West mentions the Panopticon…but this is more like the Omnopticon — all watching all. I find some of his collection of solutions internally inconsistent but certainly thought provoking.
15:21 — “You’ve got to protect privacy but anonymity goes away.”
16:50 — “The way democratic societies accept transparency is that they need 95% of the cameras being in their hands.”
West references the panopticon and then the discussion goes a direction I haven’t seen elsewhere: he assumes surveillance will happen and asks how this can be made compatible with a free democratic society!
First, is he right that, long term, hidden top down surveillance is incompatible with democracy? He doesn’t tease out the why of this, simply makes the assumption, but I think he’s justified in doing so.
We’re left with a what seems like a highly probable future. The question is not will privacy go away, but how. We need to ask if we can get there in some sort of controlled slide that leaves our core values intact!
His solution: embrace an all-watch-all ‘souvelliance’ society.
Second, what the heck then would that actually look like?!
I grew up in a small town in South Dakota where everyone pretty much knew everyone else’s business. My level of comfort with ‘souvelliance’ is probably higher than most, but this is still a stretch.
Granted, we did spend most of the last 250,000+ years in small bands (occasionally holed up in a single long house structure for the winter) so the ideas of anonymity and privacy are recent and a bit odd in the long sweep of human evolution.
Still what might ‘law abiding citizens’ generally fear about losing privacy?
I’m thinking some of the common denominator issues are low level lawlessness and unruly sexuality.
Will your car report you for running a stop light or driving to a suspect location even if you disable auto-pilot? Will your taxes file themselves on auto-pilot as well? Will there be any thing like ‘currency privacy’? Clearly, spending needs to be monitored as a key indicator of situations where, as Mr West states, someone might need a little extra ‘support’ and ‘transparency’.
And will porn filters in 2030 guarantee that content actually is porn and not encoded virus recipes? When I recently read a history of modern Britain, it seemed like every wife was someone else’s mistress. Was that public knowledge?
In short, what the fuck would souvelliance society look like? The answer is left as an exercise for us all.
Postscript 1 — Moral Panic
What’s the connection? If you don’t listen to TWIG, it might not be obvious. It’s part of the dialog on any topic of tech’s potential negative impact, described in greater detail below.
Moral Panic: the concept is from sociologist Stanley Cohen. It was based on observing the public (over)reaction to the “Mods” vs “Rockers” rivalry in Britain in the 60s and ’70s. Similar to teenagers in the US, teenagers in the UK were considered dangerous. (Of course, judged by their impact on mainstream culture summed through the mid-50s to the mid-70s, they were.)
Note the term is ‘moral panic’ and not ‘moral concern’ — Cohen described an emotional contagion that overrode rational analysis.
All significant culture transformation with a big upside has had a corresponding dark shadow.
As noted above, there’s a current freak-out on ‘big tech’ with a variety of proposed solutions. Some are well considered; some are knee jerk; few systematically analyze the possible unintended consequences of the proposed solution. Often they look like a land grab: the Internet is itself generally considered a vehicle of sedition from the viewpoint of those that seek control.
We fear we’ve created a monster. We fear we’ll throw the baby out with the bathwater.
Still, I’m not sure moral panic is a useful concept here.
There’s an inherent problem with it. We can, I assume, agree that the bottom row below is undesirable. Weak Analysis solutions frequently do more harm than good. Even after a deep analysis, our solutions often go sideways.
However, there is a problem with the No Distress / Solid Analysis quadrant: it’s extremely unlikely to actually occur. Analysis is hard work. There’s got to be motivation to start and to put in the effort.
I was an operations guy during my day-job career. The way to work biz operations is to figure out the 3 or 4 ways any critical operation is likely to go sideways and take steps to prevent or mitigate the problem.
My motto: “Panic early!”
Instead of setting a point along the continuum of Distress that triggers a Moral Panic kill switch, it might be more useful (and effective) to ride the beast to an analysis of risk and look for paths to mitigation.
Who do we trust to have these discussions if not us?
We now have a millennia long, studiable history of the type of changes that delivered mixed social consequences both glorious and dire. Can we use that to get smarter?
A few additional points
The information tech situation doesn’t parallel Mods vs Rockers. It’s bigger…somewhere between the Industrial Revolution and the introduction of the automobile.
All significant culture transformation with a big upside has had a corresponding dark shadow.
The upside, it took the species up to the first .5 billion in population making homo sapiens (until now) a poor candidate for extinction.
But there was a downside. Let’s listen in:
Barney: Hey, this fields thing is going to saddle us with 2500 years of back breaking servitude and brutally short lives!!
Fred: Dude, get a grip. Beer!
Automobiles might be the best example: mobility, freedom, back seat sex (teenagers out of control), ambulances, accidents (a leading cause of death), hearses, global warming, and so on. The impact is mixed. Mitigation has been possible.
We now have a millennia long, studible history of the type of changes that delivered mixed social consequences both glorious and dire.
Can we use that to get smarter?
We should be able to recognize patterns of longer term impact and risk in ways not available to us at the start of either the agricultural or industrial revolution.
Last, here’s an algorithm in action: a recommendation for yours truly based on my youTube search for the Drive By Truckers’ song Gravity’s Gone.
Guess we’re all only 3 degrees of separation from Climate Denial. Could automated surveillance go sideways? Nah.
Increasingly, disvalues appear as the principal output of the economy, and the production of goods and services as the means to prevent being injured by these disvalues.
Ivan Illich, Whole Earth Review 73 (Winter 1991)
“How Much a Dollar Really Cost”
1) Money is a substitute where human connection fails.
I’ve been tracking research on wealth and bad behavior for years…it confirms a bias of mine (more on that below)…but there’s a matching flip side. Something that surprised me.
An aside in a marketing course pointed me to research: folks that feel socially isolated will pursue a riskier investment strategy. The working hypothesis is that the accumulation of money is being used to compensate for a lack of community and connection.
Up until very recently coop games sucked. They were generally aimed at grade school kids with a theory about provided a way to play games that wasn’t competitive. That negative objective (not being competitive) didn’t really do much for game design and even grade school kids tended to find them boring.
This started to change when one of the first wave of rock start German game designers, Dr Reiner Knizia, built out a Lord of the Rings board game into a successful coop game in 2000. (Knizia was a contemporary of Tueber of Settlers of Catan fame. For reference, Catan was published in 1995 and became the first Eurogame that remains an international hit.) Continue reading Coop Games – History and Suggestions
Premise – We Need to See What They Think They Have On Us
The intersection of innovations in data collection, tracking, and online advertising has created a novel situation in which the public is vulnerable to manipulation by unscrupulous advertisers and hostile foreign actors. In order for we as citizens to understand and take appropriate action, we need to start with an understanding of what information is being collected about us and how it is being used. From there it will be possible to tell what, if any, further regulation might be necessary. I, personally, think that this step should be all that’s needed.
We need a regulation paralleling the Fair Credit Reporting Act that allows us to discover 1) what data has been compiled on us and 2) who is using it and when.
This is particularly true for political advertising.
The companies that sell access to us including Facebook and Twitter, but, also, the Agencies that track our browsing history via cookies or feeds from our (now unregulated) Internet Providers need to make available information on what they are tracking about us and how it is being used. Continue reading Privacy and Data Protection Lobbying
We rely daily on science and it’s models to guide everything from what we eat, to the medicines we take, to the construction of the machines we use to get to work and back.
But are the models 100% certain? Are they True with a capital T?
That question misunderstands how science works.
There are all sorts of stories about how the world works.
If your story is going to be science you need to be able to use it to generate bets.
The bets need to be bets you can settle using something observable.
The outcome has to be defined clearly enough that all parties agree it settles the bet and are willing to pay up. Even folks that do not like your story have to admit you won the bet.
If your story productively generates enough bets and then wins those bets, your story is considered a ‘robust’ explanation of how things work.
Scientific Theories are the stories. They need to be able to generate Testable Hypothesis: the bets. Experiments test the hypothesis and declare the winner. Some theories win a lot.
We call the robust big winners ‘true’…but it’s more complicated.
Newton’s theories were incredibly robust until they got reframed by Einstein. Now they’re consider ‘true within limits.’ Big components, eg gravity itself, mean something very different to Einstein than to Newton.
Einstein’s Theories of Relativity are considered incredibly robust. And, along with most of physics (the most precise science we’ve got) there’s evidence that they’ll be reframed again within the next decade or three.
Net net, Newtonian mechanics aren’t ‘100% certain’…just true within the limits of our current understanding…but you bet your life on them every time you get in a car.
Science: being 25 years past my pre-science life expectancy, I’m a big fan!
The theory that we’re seeing potentially catastrophic human-caused climate change is, unfortunately, extremely robust at this point.
The models, also, point to ways we can mitigate that if we act in time.
Theories about climate change are contained in big models with precise mathematical relationships between the working parts. Globally there are 26 different research groups building competing climate models.
The models are in broad agreement on the big picture and are battling the fine points. On that front, they’re duking it out in peer reviewed journals for glory and funding. Yes, scientists do want glory and need funding. They are competing for attention and get glory and funding by winning bets, ie making accurate predictions. There’s an argument that this is harmful to the overall progress of science but, for now, winners win and losers lose.
It’s easier to shrug off the scientific evidence for climate change if you don’t dig into the modeling. This article from Bloomsberg Business Week, “What’s Really Warming the World?”, shows the detail and complexity being modeled better than anything else I’ve read. I think it makes the evidence much more compelling.
A final observation: if you do not have a model that’s winning bets against the others then you haven’t made table stakes. I don’t care if you’re some yahoo on talk radio or Freeman Dyson, one of my heroes.
I’ve been trying in this essay to stay carefully neutral on the Right / Left thing although I’ll cheerfully admit to being on the Left.
One has to ask why Russia supports alt-right movements not just in the US but across a broad range of Western democracies?
Russia, which views open societies and functioning democracies as a threat.
A point of interest is the easy alignment between Russian oligarchs and Republican operatives. (Although, I’m not sure both sides have the same level of insight into what it is they’re doing.)
Quite frankly, when the Soviet Union went away and Bush the First declared a peace dividend, I figured Republican Party would dissolve and that most Democrats and Republican’s would peel off into some center right party leaving me and those of like mind happily occupying the fringe Left. Having to be moderate is really not much fun.
I underestimated the Republican big wigs.
If the core mission of your party is making the rich richer, you need tricks to get elected. Fear and sowing division are the most effective tricks. I watched in amazement as the Republicans, post Soviet Union, pulled boogie after boogie out of their hat starting with gay guys in San Francisco and ending now apparently with an UN/US secret agreement to round up patriots and take their AK-47s.
Well, the GOP should be happy. The Rooskies are back, big time…but they seem to be on the side of the Republicans. Life is weird.
PS, not all Republicans are big wigs, of course, particularly in South Dakota where I grew up.
30 years ago I considered the Republicans the party of choice for folks I enjoyed arguing with about the appropriate role and size of public sector.
At this point, given their more or less complete capture by the oil industry, the GOP has morphed into an existential threat to the human species. I’m hoping my friends on the right are noticing that.
4) Data Point: Manipulating the Emotional Environment
Text and images below from The Agency, Adrian Chen, New York Times Magazine.
On 9/11/2014, the Columbian Chemical plant near Centerville, LA, appeared to have exploded.
Locals received text messages: “Toxic fume hazard warning in this area until 1:30 PM. Take Shelter. Check Local Media and columbiachemical.com.”
Hundreds of Twitter accounts were documenting a disaster right down the road. “A powerful explosion heard from miles away happened at a chemical plant in Centerville, Louisiana #ColumbianChemicals,” a man named Jon Merritt tweeted.
The #ColumbianChemicals hashtag was full of eyewitness accounts of the horror in Centerville. @AnnRussela shared an image of flames engulfing the plant. @Ksarah12 posted a video of surveillance footage from a local gas station, capturing the flash of the explosion. Others shared a video in which thick black smoke rose in the distance.
Dozens of journalists, media outlets and politicians, from Louisiana to New York City, found their Twitter accounts inundated with messages about the disaster.
Some included screenshots of CNN’s home page, showing that the story had already made national news.
ISIS had claimed credit for the attack, according to one YouTube video; in it, a man showed his TV screen, tuned to an Arabic news channel, on which masked ISIS fighters delivered a speech next to looping footage of an explosion.
In December of 2014 the same accounts touted a fake Ebola disaster at the Atlanta, GA, airport. Simultaneously, a different set of accounts began spreading a rumor that an unarmed black woman had been killed by police again in Atlanta.
Again, the attention to detail was remarkable, suggesting a tremendous amount of effort. A YouTube video showed a team of hazmat-suited medical workers transporting a victim from the airport. Beyoncé’s recent single “7/11” played in the background, an apparent attempt to establish the video’s contemporaneity. A truck in the parking lot sported the logo of the Hartsfield-Jackson Atlanta International Airport.
On the same day as the Ebola hoax, a totally different group of accounts began spreading a rumor that an unarmed black woman had been shot to death by police. They all used the hashtag #shockingmurderinatlanta. Here again, the hoax seemed designed to piggyback on real public anxiety; that summer and fall were marked by protests over the shooting of Michael Brown in Ferguson, Mo.
5) Social Cohesion defined and some insight into it’s dynamics.
A great place to start is Peter Turchin’s War and Peace and War, particularly Chapter 8: “The Bowling Alley in History: Measuring the Decline in Social Capital”. He considers various definitions of social cohesion, what he terms asabiya, and an provides as an example an eye-opening look at the quite different societies of northern vs southern Italy.
What is being discussed is the degree to which all members of a society assume common purpose.
What are measures of disaffection? What’s the assumed social contract and how widely is it shared? What happens to societies when common purpose dissolves or is destroyed?
Amazon’s paragraph book summary does a decent job: “The main driver of inequality—returns on capital that exceed the rate of economic growth—is again threatening to generate extreme discontent and undermine democratic values.”
Quoted in the New Yorker, “Piketty notes, the level of inequality in the United States is ‘probably higher than in any other society at any time in the past, anywhere in the world.’
6) = (The Long Playing Version of 12) —
The Counterforce: Where They Attack, We Defend
A longer list of Counterforce possibilities
A Legislative First Step
To get a grasp on this we need some immediate transparency.
We currently have the right to see our credit data and when it is used. It is no less vital to know when some enterprise is selling our stats to advertisers. We need the ability to find out ‘what they have on us’ and how they’re using it …particularly since it seems pretty easy for anyone, no matter how fucked up their purpose, to purchase ad space embedded in our social stream.
Making this information available to each of us individually would be the most effective engine of change. We could see how and why we were targeted and by whom. It would have the advantage letting us take subsequent steps from an informed position.
There’s Legislation in Europe that does this but not in the US.
California, Massachusetts, or New York would be great places to start. Let’s race!
Assume that the enemy’s key attack point is where they see or most significant vulnerability. They’re primarily attacking solidarity, looking to create hopelessness, and dissolve the type of social cohesion that leads us to seek broad solutions. The Russian operations are teaching us that these are key points to defend.
Strengthen the Tribe; Build Bridges
Since the enemy’s key attack point is where they see our most significant vulnerability and they’re primarily attacking solidarity…trying to dissolve the type of social cohesion that leads us to seek broad collective solutions…that is where we defend.
First we can take the easy step of defending by strengthening the tribe to buffer it against future fractures. Take the time to cultivate your real world connection with friends and family. We’re a tribal species. This part is essential to our cultural, collective, and individual health and it is the antidote to letting ourselves be driven into isolated hopelessness and become ineffective cultural and political actors.
Then comes the hard part: building bridges. This requires us to assume common ground with folks where that assumption can seem a stretch. Yet there are folks of decent intent on all sides of most issues and, important to note, while the most extreme examples of a position are the most visible, they’re not the most numerous.
70% of the folks on any particular ‘side’ have a nuanced and rational position that is open to dialog, and an instinct to meet folks halfway. The concept of ‘sides’ is in itself non-helpful. Most folks likely agree with you on other significant political and cultural issues even if they go another route on some. (We might want to save putting effort into the other 30% until a bit down the road:-).
Let’s make a pact to assume we’re all good guys until we’ve figured out a way to frustrate the enemy. They want us at each other throats. Once we’ve got that out of the way we can go back to being amazed at how misguided everyone else is.
The social media post or news item that disgusts, outrages, or depresses you might be designed to do precisely that. In fact, it probably is, whether the intent is your demoralization or simply getting clicks. Awareness of that can help. It is likely going forward that the more effective you are, the more you’ll be a target.
Here and in the point below, disrupt your initial reaction. Disconnect, take a walk, sit zazen, wait 24 hours before hitting send…then act.
Everyone loves outrage. Heck, I love outrage. The Right uses it as motor. The Left likes a good wallow. Without getting into ego, politics, and contaminated emotion, I think we need to give it up. It’s been eaten by the Grey Goo! It hurts us as it pretends to provide value. We are more manipulable but not more politically effective. It dissolves opportunities for common ground and erodes dialog.
Seek Unmediated Experience
It can be a beautiful thing to dance all night in an evil time.
– Micheal Ventura, Shadow Dancing in the USA
If the information flow is manipulating you, get out of the flow. This is part signal jamming and part reset. Look for the things that give us back to ourselves: nature, dance, art, ‘non-ordinary’ experiences that take us out and then return us more complete, communal cooking, nature, friends / connections…to each their own. Anything done with a tribe gets bonus points.
The articles in section 2 above give pointers. Here’s another resource:
Yet science is the best engine we have for separating the wheat from the chaff. Being 25 years past what would be my likely pre-science expiration date, I’m a big fan of science.
The key is a better understanding of how science works as a grand long-term project, i.e. go with skepticism but avoid ignorance. I’ve got a more extended look at that here. Hint, a deeper look at how science works and the models behind climate science make it pretty clear that ‘climate skepticism’ is mostly ignorance and not honest informed skepticism.
Big Boat Religion
In a world of Us vs Them there are clear religious mandates for broad inclusiveness…at least in the religions I know enough about to offer comment. Christianity’s core is (should be) love God and love your neighbor…with a clear Big Boat definition of neighbor. (I consider the use of Christianity as a tool of division to be blasphemy.) Mahayana Buddhism is almost literally Big Boat religion and seeks the enlightenment of all sentient beings. More recent religious geniuses such as Gandhi and Martin Luther King tell us that no one is free until all are free.
Considering our survival now depends on our finding broad common cause with all sentient beings, they might just have had a point.
1) First, I need to rethink how I think about political strategy.
2) I am struck by the paradox at the core of the WWC’s economic situation.
3) There’s a massive amount of misinformation that provides the context for most decisions in America politics.
The Open Source movement freed large scale software development projects from a set of narrow constraints imposed by the capital infrastructure needed to finance big projects.
Current developments including B-Corps, crowdfunding projects (e.g. Kickstarter) and, in particular, crowdfunding equity under the JOBS Act III (e.g. Wefunder) are allowing a parallel development in the capital infrastructure needed to finance Independent Businesses.
Biz — an enterprise that needs to return concrete value to key stakeholders, i.e. customers, investors, and employees.
Indie Biz — an enterprise funded bottom-up from customers, fans, supporters and small investors rather than top-down by VCs or large lenders.
Let’s start with a Manifesto. I like Manifestos; this will degrade into an essay all too soon.
Indie Biz Manifesto
An Indie Biz should grow out of community: businesses should be the outgrowth of communities of interest; capitalization should scale with community growth.
An Indie Biz should retain its connection to its community in as many ways as possible. Constant communication is the key.
An Indie Biz should provide a clear vision but allow a variety of interests. At the founding of Mountain Hardwear, our fearless leader, Jack Gilbert’s, provided this initial vision statement: “Where others have gone off in other directions, we are going to build the really good stuff.” Simple. Clear. Works for all shareholders…with the possible exception of financers.
An Indie Biz’s financial structure should keep interests aligned. For example, if offering stock to small investors, that stock should provide the same rewards and value as any founder’s stock. Proceeds should be parceled out relative to contributions. (My favorite model for that: Slicing Pie)
It’s not exactly anarcho-syndicalism but it’s a start.
Restating That By Example
The food biz can provide a great example. First, communication with one’s community is not generally a problem. You’re feeding people. You can tell if they’re liking it. There’s an engagement path (dinners for friends->catering->food cart->pop up->restaurant) where reputation can grow an expanding clientele. A clear vision (great food) can be pursued from a variety of motivations (making it, being creative with it, enjoying it alone and with friends, being proud to produce and serve it, etc.) Finally, with new regulations, a food biz could scale up based on financing from its community at various points along that path and returning value to its investors in a mix of cash payouts and discounts on dining.
Note: this provides a path for people with vision and talent but limited financial resources!
On rare occasion, I get a distinct whiff of the future arriving. Here was one:
20+ years ago at the height of Microsoft’s empire, Ruth (a little old lady)*1 and Jay Cheroske (a Ruckus Society activist and coder) separately explained Open Source Software to me.
Ruth gave me a description of the emerging ecosystem and breadth of projects. Jay gave me the emotional hook:
“There are two approaches,” he said.
“You can build proprietary software and make money by squatting on it like a big ugly spider.
“Or you can join in and build open source tools. You don’t make money by charging tolls and rents. You make money building and using tools to practice the craft you love.”
The core: you’re not in it to score and get out. You’re in it because it’s where you want to be…and you need to put together the revenue stream to stay at it.
I’m here because I want to make it easier for other people to build, do, and express themselves however they want. To me, that’s the heart and soul of tech. Technology is about making tools for us to express our humanity. To make our creative expression frictionless.
Expressing yourself creatively “frictionlessly” is a bit more difficult if your expression is a physical product…say gear we make for mountaineers, climbers, backpacking and wilderness explorers out in all sorts of weather and locations.
I’m a backpacking biz lifer. I don’t design gear, but I’ve been using it and loving it as long as I can remember. My job for most of my working life has been the application of information to the design and sourcing chain that brings that gear to you over the web or through REI or your local specialty shop.
For example, I was one of the founders of Mountain Hardwear in charge of IT, Forecasting, and Operations. My great love has always been systems and what we call hardware: tents, packs, bags. I’ve been lucky enough to combine them. I built my first forecasting systems in Dbase and Quatro Pro on a Kaypro II a couple of thousand years ago.
This biz is a capital intensive one. We often use boutique fabrics with long lead times using fabrication techniques being hacked together along with materials. As an example, Mountain Hardwear used a special Italian fleece laminated by Gore in Germany and sewn in Oakland,CA, into one of the original softshell jackets. We would have to commit 8 months in advance before a shop saw the product. We’d need to buy a second season before we could see most of the results of first season. Forecasting was a bit tricky.
In capital terms that means: spend season #1, spend season #2, start seeing money for #1, spend #3. That’s worst case. Some short lead products leaven it out but the capital demands are bruising. It’s basically a motherfucker.
Once gear visionaries emerge from the (often literal) garage, they hit against this hard. So, they generally have to make a deal with the money people. I could get into details of how it goes south from there but the net result is most typically a classic example of what Tim O’Reilly terms the ‘clothes line paradox.’ Value is created; value is harvested. But not by the same people. The brand, with diluted vision, totters on to a slow death or crashes and burns.
Occasionally the brand is strong enough to survive pirates, thieves and MBAs (witness The North Face), but it is not an accident that Patagonia and Osprey are privately held and essentially bootstrapped companies.
On rare occasion, I get a distinct whiff of the future arriving. That is happening now.
It is my belief that we’re on the cutting edge of a change comparable to the emergence of Open Source Software that is grounded in the way outdoor brands and other “passion driven businesses”can be funded.*2
(The parallels are probably best communicated in nested bullet points shown in the supplement post.)
When the capital required to fund an enterprise is significant…and the forced path to obtaining the capital is top down from professional investors or big banks…then it is easy for two sets of interests to collide in a way that is detrimental to the sustained creation of genuine value.
This is particularly acute for businesses that are, at essence, “affairs of the heart”…food, beer, outdoor gear, bikes, small label music, that sort of thing. These enterprises don’t often start with a business plan; they start with someone making something great and the community responding.
As they grow, they need funds. This typically sets up a collision course between the need for steady and unending growth, quarterly progress, and an exit strategy on the one hand versus looking for sustainable (and perhaps steady-state) business, a reasonable return for key stakeholders, and a consistent delivery of value and innovation in a more natural “punctuated equilibrium” pattern on the other.
Wefunder and such where the JOBS Act TIII allows a business with a track record and a little seasoning to then appeal to their community for working capital. (I’m involved in that now with a gear company, SlingFin.)
The maturing of the B-Corp is worth mentioning: a wider mission can now be baked in to an enterprise making it substantially more durable.
This will have (is having!) a number of positive effects.
Founders will in be a stronger position when they have to deal with the money people if they end up needing them at all.
Surviving businesses will exhibit a greater diversity of motivations (more Patagonias.)Like Open Source, the gatekeeper is now gone and a significant choke point for surviving enterprises has been removed.
More value will be harvested by the core value creators: designers, visionaries, and enthusiasts who support and sustain them.
This will result in a more vital ecosystem. There will be more great gear and experiences. This will help us better share our love affair with the amazing world we all inhabit!
Point 2) is, I think, the key. Rather than all value eroding over time to a monetary bottom line, more of the heart and vision of startup businesses will survive. Granted, “money is a necessary evil” and stakeholders need be rewarded, but those stakeholders will define their interests in less narrow terms. This will I think be to everyone’s benefit including the money folks. I’ve seen great long-term value trashed at a whole series of outdoor companies afflicted by a monetary focus that is too short-sited.
Do what you love reprise
One point that shouldn’t be overlooked is that the process outlined above will lower the barrier to entry and soften the barrier to success. Great outdoor gear has generally constellated out of the community. The return of the 10th Mountain Division from WWII, the 60’s backpacking craze, and the thru-hiker surge (AT, PCT, John Muir Trail, etc) all pushed innovation created precisely by the folks actually doing it. There has always been a permeable barrier between enthusiast and pro and a strong DIY ethic in our ‘industry.’
Most of us are in the biz to stay connected to our passion. We seek to make a living doing that. We feel that our work should be a vehicle for our contribution to wider society…while running an honest business. Now we have a whole new tool set to accomplish that.
PS, If you read this before 11 pm on 12/19/2016, come check us out at the SlingFin page on Wefunder…particularly if you love outdoor activities from the extreme to simple backpacking or bike camping. If not (pity you<g>) check out Wefunder anyway. You’ll find lots of essentials from coffee to beer to environmentally friendly tampons to glow in the dark shrubbery and smart guitars.
DISCLOSURE: Obviously, I have an interest in Slingfin. I’ve, also, invested small amounts via the Wefunder platform in a number of companies including Wefunder itself. You can see all that on my Wefunder profile. (Hmmm, just checked the link and it only shows things that have fully closed. I’ve committed to a half dozen others in amounts from $100 to $1500.)
*1 Ruth is now 93. From the perspective of my current age, I’d say she was barely passed middle age when she described Open Source to me in the mid-1990s.
*2 Outdoor businesses are generally what Kristin Carpenter-Ogden calls ‘passion driven businesses.’ She’s exploring this space in her great podcast, The Intrepid Entrepreneur.