Disconnected and Disenfranchised
Not so long ago, buying something meaningful involved a measure of human interaction. Whether looking for an engagement ring, getting a mortgage or booking a family holiday, you visited a shop or an office, looked through a selection of offers, came back with questions, asked for advice and ultimately decided whether to give someone your custom.
But today, if you have the money for it, most of what you need can be acquired online without uttering a single syllable to another soul. You only ever talk to someone if there's a problem that can't be resolved in-app.
Technology has made many aspects of daily life much smoother and easier for many consumers. But as a consequence, it has also eliminated many of the gritty, mundane, day-to-day interactions we previously had with all kinds of people, and replaced them with a few thumb taps on a piece of black glass. Commercial interactions aren't just about instantly satisfying customers' needs; they're also about creating and maintaining interpersonal relationships between customers, staff and society at large.
We need to figure out how to keep humans in the loop without sacrificing the speed and efficiency of their services. At a practical level, as responsible consumers, entrepreneurs and investors, this means asking ourselves whether we'd be happy to have a family member working for the companies we do business with. The economic principle of specialization teaches us to allow counter-parties to flourish if we want to continue to have counter-parties to trade with. Similarly, technology-driven companies must be careful to maintain the long-term well-being and success of their stakeholders— principally employees and customers—if they are to build sustainable businesses.
Entrepreneurs must think hard about the social consequences of the services they are building. They should recognize that business models that promote equity and social progress are much more robust than ones that simply exploit inefficiencies and transfer goodwill from one population to another. While the single-minded obsession with efficiency, repeatability and cost reduction makes sense from the purely micro-economic standpoint of a business, it's likely to be flawed over the longer term. If Trump and Brexit have taught us anything, it is that we need to do a much better job of having a dialogue with people who are not our lookalikes on Facebook. Focusing on the human impact of what we do will help maintain the serendipity of everyday encounters and keep a real-time communication channel open between people on both sides of the virtual counter.
In this context, entrepreneurs must think hard about the social consequences of the services they are building. They should recognize that business models that promote equity and social progress are much more robust than ones that simply exploit inefficiencies and transfer goodwill from one population to another. The successful networks and marketplaces that exist have out-competed many others that didn't get the balance right— such as online games or betting marketplaces that didn't monitor and manage the ratio of sharks to minnows, social networks that were taken over by trolls, or music or movie sites that allowed consumers to pirate their favorite content.
Good companies work hard to balance the interests of the parties that make their business possible. It’s not a simple task, even for fast-moving software start-ups that can change their pricing and even their business model with a few lines of code. It's even more challenging when it comes to physical products like smartphones and sneakers. In Bangladesh, the average wage for a garment worker who makes jeans is $68 per month. Imagine if this were made explicit at the point-of-sale, or if one of those workers came across a Black Friday ad for the same jeans that she sews by the thousands every month, offering them for just $119.99 a pair.
The good news is that most entrepreneurs I know care deeply about these issues. They see their companies as agents of integration and inclusion rather than of elitism and division. They value transparency and want customers who feel good about every aspect of the service they are providing— including their supply chain.While any business exists to serve its customers and therefore creates a distinction between customers and providers, we should also ask whether the people who work for a business can also be customers of their employer (or businesses like it) in their own right. We could apply a couple of litmus tests: Do they offer a service that their employees can afford— not just aspire—to use? And pushing the argument even further, we could ask the inverse question; would customers of a business— or their younger family members—be willing to swap places with the people serving them? Is the work rewarding and safe or is it soul-destroying and exploitative?
I believe that a business is poised to realize its full impact when it has a value proposition that is attractive and accessible to its own employees, and a work environment that is attractive to its customers. This not only ensures that it can attract a more diverse range of customers, but also that it will benefit from goodwill, brand love, and loyalty.