Small is the Human Scale

There is potential for the internet to transform business way beyond what we have experienced to date — to be more human and even more creative.

20th century business was about scale — the mega corporation. Sure, there were many amazing success stories of small businesses that made it big — but success was still defined by becoming BIG.

The internet, a defining invention of the 20th century, is BIG in scale, but at the same time it gave power to the SMALL: a whisper in one part of the world can be heard by millions; a fashion designer in a small town can sell directly to the world; a musician can release her own songs to a global audience.

But, from a business point of view, internet platforms are controlled by corporations that are even BIGGER than the 20th century imagined — Trillion dollar titans like Amazon, Google and Apple.

Small is Beautiful

There is something natural and appealing about small businesses and small teams.

Small cares about people and the community.

Small fosters creativity.

Small can be uniquely brave, bold and courageous.

Small is the human scale. All meaningful interactions in life are at the human scale.

Clayton Christensen speaks eloquently about how all meaningful impact in our lives manifests in direct human relationships rather than through large organsiational structures that traditionally are seen as the badge of personal success for a business career [1].

But, large organisations seem like the only vehicles that can create substantial economic impact. Managing workers, suppliers, clients, investors, regulators, government, only seems efficient when one is BIG. Business works more efficiently when capabilities are aggregated in large organisational structures. But is this true in a future digital world?

The Web we know

The early (or “first”) web (in the 1990’s) formed around a (largely) passive consumption of information by the majority of participants.

The “second” web (from the early 2000’s) evolved as participants became equally producers and consumers: of content on platforms like Wikipedia, YouTube, and FaceBook; and of commerce on platforms like Amazon, Airbnb, Apple and Uber.

The creation and sharing of media can feel like a new kind of participative democracy, but it has a dark side when this content is exploited by large organisations to manipulate participants and profit from their personal information.

In the same vein, commerce on the second web has created new economic opportunities, and has particularly transformed our lives as consumers (as users of services like Amazon, Apple, AirBnB and Uber). But, it also has a dark side for the producers, the individuals who provide the real service — Uber drivers are an obvious example — who feel disempowered and exploited by powerful digital organisations, rather than being in control of their own economic lives.

While individual consumers have been empowered with new opportunities to participate in a global economic network, it doesn’t feel like we have really found a new model for all enterprises to flourish. Rather, we seem to have found another way to concentrate commercial power and profit at even larger scales.

The Third Web

The next evolution of the internet is poised to change this. The huge backlash against the abuses of Facebook and Google heralds a new empowerment for individuals and how they manage their personal information.

But there is an equally significant change in how it will empower people in their economic lives to achieve business impact without needing to be indentured to the large digital organisations that currently reap most of the rewards.

In the same way as social networks allow us to produce and share content in a direct way (cutting out traditional distributors of music, movies, books,…), we are seeing new business networks evolve that allow us to interact directly in business transactions, without the traditional business intermediaries like banks, wholesalers and digital marketplaces.

This has the potential to make managing workers, suppliers, clients, investors, regulators and government as simple for small business as for large corporation, and this will truly unleash the potential of the small business.

How will this work?

Data will be “self-sovereign”. Self-sovereign means that data is in the hands of individuals and businesses who are the legitimate source of the data. “Social networks” will simply be the myriad ways that we share this data directly, without needing large corporations to intermediate. Why do I need Facebook to publish my photos to my friends when I can do it myself?

In this “third web”, financial transactions are simply another form of shared data that is provably trustworthy, cannot be tampered with, and has privacy “built in”.

Rather than having large centralised market places to manage ordering, paying and fulfilment, we will be able to exchange orders, payments and other commercial transactions directly with our clients with complete trust — kind of like email: free, simple and ubiquitous; but with a level of security and trust that befits commercial transactions.

The web will be the marketplace. Just as we can currently freely publish information on the internet, we will be able to publish sharable, verifiable commercial agreements.

A business will be able to operate efficiently at any scale, not by handing over control to an internet marketplace, but by connecting directly with other businesses and individuals that together can aggregate their services to allow them each to be SMALL, while distributing economic benefits fairly. Each business will be able to freely pick-and-choose partner services that help them to offer a complete solution to their clients.

The answer to “Who works for me?” will be much more fluid. In many ways, this will be a digital version of the intricate and human business networks that are traditionally found in Africa and Asia.

With some imperfections, the Bitcoin network has pointed the way to how this type of “decentralised” world can work, not so much in its role as a cryptocurrency, but as a successful example of a decentralised network of trust.

The early internet embodied a simple idea of sharing information that contained the seeds of new models of interaction that its inventors did not even imagine. Similarly, the “third web” will trigger new business models that we do not yet fully understand, but inevitably, it will harness business energy at a much smaller, more human scale, distributing rewards more equitably.

This is the aspiration to transform business that we have at IOUze: to make business work better at the human scale.

References

[1] “How will you measure your life?”, Clayton Christensen https://www.youtube.com/watch?v=tvos4nORf_Y