On-Demand Economy Is Just Starting

Fifteen years ago, the idea of having access to any bit of information you could possibly want at your fingertips was outrageous. In 2001, you could get access to the Internet from your phone, but the experience would be slooooow, and it might cost you hundreds of dollars. Dial-up Internet from desktop computers – remember them? – was still very much a thing. Now, people carry smartphones that give them instant access to just about anyone, to every bit of news and to almost all the knowledge in recorded history. People use those devices mostly to watch videos of singing goats and people failing at dunking a basketball, but that’s a different story. The point is that technology, such as smartphones and smart watches, has created an on-demand world where gratification needs to be instant. When someone decides he wants something, he doesn’t want it in two hours. He doesn’t want it in 20 minutes. He wants it now. And, he wants it at the push of a button. As the trajectory of the last 15 years shows, the trend toward on-demand will only continue, perhaps even accelerate. The main driver, as usual, is good, old Moore’s Law, which has seen the computing power of a chip double every year and a half to two years since the 1960s at no increase in cost. Moore’s Law is why a gigabyte of memory, which cost $300,000 in the mid-1980s, today costs less than a penny, and why, despite some technology headwinds for Moore’s Law, we’ll have devices hundreds of times as powerful as today’s before kids born this year enter high school. Other “laws,” such as Metcalfe’s, continue to drive the value of networks at an exponential rate. So-called “network effects” are why millennials rarely have their phones more than a foot away and why there is so much effort to make devices even more accessible – in front of your eyes, a la the failed-but-not-forever-dead Google Glass, or on your wrist as a “watch.” Nicholas Negroponte, the founder of the MIT Media Lab, has argued for years that we’ll eventually wind up with cellphones surgically implanted behind our jaws, where they will have easy access to our vocal cords and our ears. But Moore’s Law and Metcalfe’s and the others that have driven the unbelievable progress in computing are just the start. Now, three more factors are kicking in, increasing the pace toward the on-demand world. First, sensors and cameras are wiring more and more of the world every day. Second, people are coming up with new business models that build on these new capabilities in surprising and powerful ways. Third, the effects will spread to what is sometimes referred to as “the next billion” (and the billion after that). Those of us in the developed world won’t have all the fun; the rest of the world will join in. Sensors and Cameras Fitbit et al. track every step you take and every calorie you burn, and they’re just the beginning. People have begun talking about the “Internet in Me.” The idea is that you might ingest some small sensor that will report from inside your blood stream about blood pressure, blood sugar, etc. A wireless signal – powered by the abundant electricity inside us – would send the information to your phone or watch, which would relay any necessary information to a doctor or some sort of healthcare provider. Drones are everywhere. They can check crops, monitor disasters or do whatever. In fact, woe to the next generation of teenagers – parents can now just keep a drone in the home and have it fly around from time to time to see if Junior is having a party while they’re away. Our mobile phones constantly provide information on traffic flow, based simply on how fast they’re moving in our cars. (When is the last time you saw a traffic copter, let alone a thin rubber hose across a road that tripped a counter every time a car ran over it?) Waze has layered crowdsourcing on top of the data from mobile phones, encouraging people to report accidents and other delays, to fine-tune maps and so forth. Nauto, a start-up, is trying to add another layer by getting fleet operators—and, eventually, individual drivers—to put cameras in vehicles (one looking at the road, one looking at the driver) with the initial goal to improve safety. If enough of Nauto’s cameras are on the road, they will provide a real-time look at the world. Want a parking spot right now? Nauto can tell you about the one that opened up 30 seconds ago a block away. Google is gathering information in real time about diseases like the flu – it can report when and where a lot of people start searching for information about certain symptoms. Even our thoughts and emotions are getting wired. Historically, in presidential elections, people conducted the occasional opinion poll, so you’d have a sense of the result of the debate a week or so later. Now, people monitor Twitter streams and Google searches in real time to assess who won and who lost. Those feelings then get aggregated in prediction markets that are far more accurate than political observers ever were. Of course, a lot of effort gets put into figuring out presidential elections because of the stakes involved, but this kind of wiring and immediate response will spread into other areas, as well. The physical world is being folded into the digital one through hacks such as QR codes, which let magazine readers scan them to figure out where they can purchase an outfit or whatever else is in an image. Amazon’s voice-activated Alexa sits in the middle of a room and allows people to buy something through Amazon right when they think of it, even if they don’t have their phone near them. Our lives divide into two parts these days: Those that are wired and those that will be wired.  New Business Models Just Google “the Uber of,” and you’ll see how much a single inventive business model can change things. You’ll be prompted with companies offering the Uber of trucking, dog walking, laundry, snowplows, tennis partners dentistry and much more. There is a powerful example in the insurance industry: WeGoLook, which is being called the “Uber of claims handling.” If a carrier needs a picture of a car, it can send someone out from the office, or it can draw on the tens of thousands of freelancers affiliated with WeGoLook and have one of them take the necessary pictures and gather the information. Especially in rural areas, it can be a lot cheaper to have a local person gather the information than to send someone out from a regional office. And, through the wonders of information technology, WeGoLook can be so thoroughly integrated into a carrier’s system that the person asking for the photos, etc. doesn’t need to even think about whether the request is being fed to an internal person or to WeGoLook. Even without totally new business models, tweaks are accelerating the pace of the economy. Seamless, the on-demand food delivery service, has shaken things up by making it much easier for customers to order food for takeout or delivery. Venmo has become popular among millennials by greatly simplifying the process of sharing costs and, in general, making small payments to each other. Amazon went from “delivery some time” to mostly two-day delivery, via Prime. Now it is working hard to get to same-day delivery and is even experimenting with drones that could deliver within perhaps 20 minutes. These business model changes will keep unfolding, too, in many cases like a slow-motion train wreck. You can already see some of the ways that 3D printing will step up the pace – you just click on the image of a hairbrush you want and have it start printing in your office immediately. Or look at the news business. Remember weekly news magazines like Time, Newsweek and BusinessWeek? Not only have they gone away but even daily publications like the Wall Street Journal have had to switch to instantaneous publication online – no more holding the big stories for the print edition the next morning. Those of us of a certain age remember what a big deal it was when Monday Night Football showed highlights from the day before. Now, we don’t even have to wait for Sports Center at the end of a game. We can just call up a highlight on our phones. If you look at the changes going on at CNN, you can see that its mission has changed, because there is a new form of 24-hour news network: It’s called the Internet, and it's "on-demand" -- no need to keep Wolf Blitzer droning on in the background. The Next Billion As more and more people from countries such as China and India and places in Africa enter the middle class, they will get access to all the technologies that drive the on-demand economy in the rest of the world. In some cases, they will even leapfrog us. In Kenya, for instance, growth in the traditional sort of banking is stunted even as the economy grows, because people use their mobile phones to exchange money. Who wants to go to a bank and wait for a teller? And these changes in technology, business models and demographics are just the things we know about. You can be quite sure that lots of clever people are already at work on other ways that will speed the move toward the high-speed economy. Think of the shift in the economy as the move from the demand curve to the on-demand curve.