IMPACT COMMUNICATION
AND INNOVATION
AND INNOVATION
On Thursday the 19th, Impact Hub Pinheiros, home of UP in São Paulo, hosted the "Future of Business" lecture, presented by Jeremy Kirshbaum of the Institute for the Future, a non-profit think tank founded nearly 50 years ago in Silicon Valley.
Speaking to an audience largely interested in turning their business goals into social impact initiatives, Kirshbaum argued that we should think about the future—and specifically dedicate ourselves to the practice of futurism or foresight—because we need useful ways to visualize scenarios beyond those we would personally prefer to experience. Furthermore, the future is a safe space to address controversial and difficult topics, as well as the perfect time to discover new opportunities and prepare for shifts and changes that will require resilience.
Citing futurist Roy Amara’s law, Kirshbaum noted that we tend to overestimate the impact of technology in the short term while underestimating its effects in the long term. For the Institute for the Future researcher, visualizing what might happen ten years from now is much easier than for two years, as certain long-term predictions can act as a form of stabilization resulting from the changes that occur during that shorter, more volatile period.
Following the findings of a study led by Kendall Haven and sponsored by DARPA, Kirshbaum spoke about the importance of storytelling. From a neuroscientific perspective, Haven published the book Story Proof: the science behind the startling power of story (2007) to explain how our brains are hungry for stories, to the point that when we lack them, we start to invent them. This is what results from extreme isolation experiments have shown, as the individuals analyzed begin to hallucinate when exposed for long periods to environments completely deprived of sound and light, for example.
In this way, the future can also be viewed as a story, which can be guided by four structural questions. They are:
1. Who is this story about, to me?
2. How good or bad is the story for this character?
3. Who is responsible?
4. What should I do?
But to tell this story, or even make it happen, Kirshbaum says you don't need vast resources. In The Nature of the Future (2013), Marina Gorbis talks about how incredible it is what people can accomplish today without any money, administration, or employees.
More connected than ever, we are now able to move projects forward based on the networks we form rather than the capital we raise. In this sense, distributed business models are becoming the major trend developing for the future. According to Kirshbaum, these are the very models that will disrupt virtually every industry, including platform-based companies and Internet of Things businesses.
The transition, therefore, would move from a closed, centralized system to an open, cloud-based network model, eventually reaching a fully distributed state. The logic is identical to that proposed in 1964 by Paul Baran, and today we can see that this scheme could be applied to almost any business.
Kirshbaum used the urban mobility system as an example, moving from a time of traditional taxis to companies like Uber and Taxify, and finally arriving at Arcade.city, a platform controlled directly by drivers and, therefore, no longer centralized by a single company. It is in an example like this that we see the logic of blockchain and the absence of an intermediary that both centralizes processes and takes a cut of the money in circulation.
In other words, in a distributed model without intermediaries, fewer fees and less bureaucracy would be necessary. However, we are also confronted with issues regarding customer support. To illustrate this, Kirshbaum mentioned forgetting his passport in an Uber driver's car. Upon realizing it was missing, he contacted Uber and quickly got his passport back. In a distributed system where there is no longer a company centralizing rights and obligations, who is responsible for providing customer support if a problem occurs during a trip?
In this case, data will also be harder to collect. As companies (intermediaries) provide certain services, they end up collecting user data ranging from location to browsing habits, purchases, and more. This is then turned into profit by selling it to interested third parties or used for internal improvements based on user behavior analysis. It is in this scenario that executive roles will be called into question, as technology will make this type of intermediary position unnecessary.
Kirshbaum asserts that distributed social practices will determine success in this world, even though no one yet knows exactly how to do it right. A case that did not prove successful, but serves as a signal for future endeavors, is the decentralized autonomous organization known as The DAO. Its basic premise was to handle venture capital funds, providing a new decentralized model for organizing commercial and non-profit projects using the Ethereum blockchain and open-source code. Launched in 2016, the platform lasted only a few months before being abandoned due to security vulnerabilities and programming errors.
The challenge for companies wanting to prepare for a distributed future is to find new ways to collect data from users and their devices, as passive collection will no longer be possible. Furthermore, what types of social and leadership practices must be developed to adapt to this new world? Finally, Kirshbaum poses the question of how companies can move out of the middleman position and start acting more as third-party service providers for distributed networks.
Beyond changing how companies operate in this distributed landscape, the very notion of employment will also be modified as the entire market enters a state of volatility. We are already seeing the first signs of this through phenomena like post-truth, new roles for states, shifting identities and demographics, the climate crisis, and global conflicts. Companies and industries that manage to excel and adapt to this volatile scenario will be in the position of "High Delta Markets"—businesses that bridge polarities such as emerging versus developed or virtual versus physical. Kirshbaum jokes that it no longer makes sense to use terms like "e-mail" or "e-commerce," as the "e" once stood for "electronic" or "electricity," representing an adaptation of traditional media into new electronic versions.
To better explain the difference between High Delta and Low Delta companies, Kirshbaum used the retail market as an example. He defined low-delta businesses in this sector as large physical stores that concentrate products and sell them to a few other intermediaries. High-delta companies, on the other hand, are high-frequency stores that sell in large quantities to small entrepreneurs.
Having lived in countries like Nigeria and China, Kirshbaum gives examples of how small shops or street vendors in those countries can make nearly $200,000 a year by selling large quantities of products that are then resold at a lower price. Regarding this, however, the researcher did not go into detail about the conditions under which these items are produced in China, focusing instead on the numbers and values generated in this type of trade.
In these hubs, however, innovation is even more emergent, fragmented, and rapid. Many inventions that recently became popular in the West, such as selfie sticks or fidget spinners, are examples that first appeared in these commercial centers in China. In fact, it is also discussed how the Chinese end up developing products proposed via crowdfunding, for example on Kickstarter, even before they have been fully funded. Added to this is the fact that all these inventions often lack a single author—no one really knows who created the selfie stick or fidget spinners, for example, since making the product happen is more important than thinking about authorship.
Finally, Kirshbaum presented some tips on how to create a strategy to adapt with resilience to this scenario:
- Divide markets based on shared characteristics, not by countries.
- Create methods for entrepreneurs to participate and distribute on your behalf, regardless of whether you have a physical product or a service.
- Forget about intellectual property and just go as lean as you can.
- Don't categorize business models as "digital" or "electronic"; instead, observe the behaviors already naturally adapted to the digital environment within the market.
- Don't panic! Stay steady when things start to get a little crazy. Those who were around when people needed them most are highly valued. In this world, trust and familiarity can outweigh the hype.
