Technology Changes Everything

If you haven’t noticed, technology has not slowed down any since it started changing life as our ancestors knew it about 100 years ago with the invention of the car and telephone (now completely taken for granted as part of our lives and which have evolved a great deal on their own). In my career, I’ve noticed small evolutions and giant revolutions – and I believe we’re in one of the latter right now.

January 3, 2014

If you haven’t noticed, technology has not slowed down any since it started changing life as our ancestors knew it about 100 years ago with the invention of the car and telephone (now completely taken for granted as part of our lives and which have evolved a great deal on their own).  In my career, I’ve noticed small evolutions and giant revolutions – and I believe we’re in one of the latter right now.

The first major cultural revolution since the 1960s on a global scale was the Web (not the Internet of DARPA days, but the 1991 creation of the Worldwide Web that gave people something to do other than email). The Web made possible e-commerce, which is now nearly 10 percent of global trade – and growing. It also made possible several of the most important companies in the world today: Amazon, eBay (which also owns PayPal), Netflix and, perhaps most of all, Google, which have remarkably disrupted the worlds of shopping, banking, television and advertising/media. I had that “omigod, this will change the world” moment when I first saw the Mosaic browser in 1993 (when you still had to download it from the university where it was developed by then-student Mark Andreessen and team), typed in
www.louvre.fr, and were suddenly able to view those great artworks in interactive real time (well, 1993-style).

The second major tech-driven cultural revolution of our lives was social media, and I had that same omigod moment in the fall of 2002 when I received an invitation from a friend I’d lost touch with during the dotcom crash to join a “social network” called Ryze (this preceded even Friendster – and like Friendster, it’s still around, albeit greatly changed).  Social media – and the nearly concurrent P2P software movement that shook the music industry with Napster and Kazaa – has now grown up and spawned several multi-billion companies in less than a decade, including Facebook, LinkedIn and Twitter. When social media met geolocation, the “interest graph” and mobile, a second wave of companies came of age, including Foursquare, Pinterest, Google+ and Instagram.

In the past year (just in time for the technological earthquake that seems to happen every ten years), social media has merged with commerce and created a new wave of crowdfunding and peer-to-peer finance companies, as well as a completely revolutionary technology called cryptocurrency that has spawned the multi-billion-dollar phenomena called Bitcoin that is a stateless, user-generated (via algorithms), peer-to-peer form of money (I in fact became so interested in the field when I attended the first mainstream Bitcoin conference in San Jose earlier this year that I helped create the world’s first distributed angel network for investing in early-stage cryptocurrency companies, BitAngels (bitangels.co). Since then, we’ve grown to 300 members and funded more than a dozen early-stage companies.

Factor this in with companies like LA-based real estate crowdfunding company Realty Mogul, which has allowed small investors to buy into shopping malls, office buildings, and even storage facilities, and Lending Club, which is letting individuals lend to other individuals all over the world based on their credit scores and use of funds, and we are looking at a major revolution that may do as much to change the way banks and stock markets work in ten years as Amazon did to brick and mortar retailers.

The key element of technology, once it’s adapted, is that it layers one protocol upon another until the world-shaking becomes normal, and then it enables the next world-changing technology to develop on a solid base. Mainframe computers led to minicomputers, which led to the personal computer (which had many naysayers in the 1980s – why would the average person ever want a computer in his home?). The ubiquity of PCs and laptops led to the ubiquity of local area networks, which then provided a fertile laboratory for the rapid adoption of the Web. The Web’s searing popularity led to the demand for smarter, Web-connected phones, which eventually incorporated broadband speeds and geo-location. All of the above led to an even faster growth curve for social media (Facebook alone grew from less than 1 million to more than 100 million registered users in less than four years – and then to 1 billion in another four years).

The market capitalization for Bitcoin as a currency/commodity has grown from $10,000 to more than $12 billion in less than four years, and yet it’s still a mysterious entity in the financial world, whose adoption thus far is at a level that’s less than 2004’s Facebook or 1994’s Web. I believe that 2014 will be the year that Bitcoin, crowdfunding (including crowdfunding with Bitcoin), crowd lending, crowd sourcing of everything from design to procurement, and many related parts of the democratization of money, wealth and power take hold in the global economy. And it will be social media, from the blogs that write about it and analyze it to the incredibly robust communities on Reddit that provides much of the reliable engine of this next wave of remarkable innovation.

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