Written By; Peter Sims – January 2016
Are you living in a “new power” world or still stuck in the old?
Marc Andreessen’s oft-used phrase “software is eating the world” has become a business mantra, and is the Andreessen Horowitz website tagline. That’s understandable. Technology is eating the world, and a lot of industries, not just jobs, something we see every day at Parliament. And, if technology hasn’t eaten your job yet, it might soon. A recent research report from McKinsey & Company estimated that 45% of work activities could be automated by existing technology.
None of this is news.
If you worked in music industry ten years ago, you’re probably unemployed or work in a new industry today because any teenager or 20-something can record a song in their basement and release it on YouTube, which has become the best route toward audience, fame, and riches for aspiring pop stars. All those jobs that people used to have going from bar to bar to find new artists, or promote them, make CDs, etc. — they’re all gone. Long gone.
If you’re a real estate broker today, your job will probably be gone in 5 years because some 20-something team of 10–15 people is working right now on a solution that will cut brokerage fees in half or by two-thirds for consumers.
If you’re providing ‘advice’ to people on their investments strategy, you better figure out pretty quickly how to complete with robo-advisors like FutureAdvisor, which was acquired by the asset management behemoth BlackRock earlier this year.
Or, if you’re working in the publishing industry in New York City, and it’s not already clear what can happen to an industry where the means of production and distribution are now democratized, get ready for the next 3–5 years. At Silicon Guild, our publishing platform that connects authors and audience directly (without all the middlemen), and is built around a community of 35 best-selling authors, two people can create the same amount of value for authors and audience as an entire floor of people on Madison Avenue. We aren’t just dis-intermediating an old industry — we’re re-intermediating a new one.
I’m by no means the first person to say any of these things, yet I do in order to make an argument. The argument is simple:
yes, technology is eating industries and jobs, but the much bigger problem might be that you could be stuck in an old power context.
Old Power vs. New Power
Power is important. It’s how people get things done, create income and wealth, and not live in situations where they have little autonomy or control. Power must be earned, and the good news is, anyone who has something that they can offer to create or add value can earn power. Now, importantly, many people don’t have power because of an array of injustices, and that’s a very, very real problem today just as much as it was during the Gilded Era or when Dickens wrote “Oliver Twist,” but that type of political power is not the focus of this piece.
Of course, a lot of people measure power and status by their title or size of their office. But, none of that matters in a world dominated by new power forces. You can be the CEO of Simon & Schuster and have little or no control over how authors and audience can connect in new ways. Publishers are no longer needed like you were in an era when Simon & Schuster and a handful of other players controlled the means of production and distribution. You simply couldn’t get a book out to your audience in the old days unless Simon & Schuster bought it, put its stamp of approval on it, and distributed it to book stores.
I know a woman who quit her job on Wall Street to write romance novellas. She is one of the top selling e-book authors in Germany and beyond, with an enormous following. She lives in a house on the beach in Florida, and writes on her deck every day, overlooking the ocean. She has no publisher other than Amazon, and is making a very good living doing what she loves: writing.
Welcome to the world of “new power” players. Are you one of them, or are you still trying to reshuffle the deck chairs on the Titanic of the old power world?
I first latched on to the distinction between “new power” and “old power” after reading a short Harvard Business Review article last year by Henry Timms and Jeremy Heimans entitled “Understanding New Power”. The framing was brilliant (although, full disclosure: Timms is a good friend). Their main distinction between old and new power was that old power operates like a currency while new power operates like a current.
So, for example, Hillary ’08 was very much ‘old power’ vs. Obama’s ’08 new power social media machine. The old power mindset believes power is like a fixed pie — you’ve either got it or you don’t. If you’re in a position of power in an old power mindset, then you had better kiss the brass ring. A new power mindset says, screw that old power thinking: I’m going to go build a network of like minded people, so that together we are much stronger and more powerful.
As President Obama has observed himself about his time in office, we’re living in a world where power is highly dispersed — not even the President of the United States can get things done easily unless he starts thinking differently.
Are you working in an old power context or new power one? Recently, I came across a graphic that, for me, sums up the differences between old power and new power organizational mindsets:
Rather than be overwhelmed and intimidated by the technology forces, we all have the opportunity to adopt a new power mindset and harness the power of living in a highly connected, networked world. Unlike our parents, we no longer have to call Information to track down someone’s phone number, try our best to schedule a meeting, and then wait months for the process to unfold. We can simply friend or follow someone on Twitter, LinkedIn, or Facebook, track down their likely email in minutes, and reach out and say, “Hey, I’ve been following your work and I have an idea for how we can create value together, or get something done that matters!”
We’re living in an era that is ripe for all types of collaborations, so long as you can add unique value.
More and more executives get this, too. No CMO thinks they can actually control their brand from the top anymore. Every customer who tweets or reviews them on Yelp increasingly does. Every head of HR or Chief Talent Officer I know realizes that the best talent expects to have a voice and to be able to express at least a part of their own humanity and individuality at work. And, don’t try to sell a load of crap when talking about values because people have many ways to see through bullshit. No CEO seriously thinks that talented people will ever work in a cube again — even Citigroup is working create a cool office space.
In my mind, the company of the future is an ecosystem, and I’ve been amazed how many Fortune 500 senior execs are increasingly agreeing with that belief.
GE just moved its headquarters from Fairfield, Connecticut to Boston. Why? As Steve Lohr of the New York Times reported, “The Boston region, [CEO] Mr. [Jeff] Immelt said, is “an ecosystem that shares our aspirations.”
Why is it that big companies are all of a sudden opening up, and trying to find ecosystems where they can build collaborations? Because execs from companies from GE to Citigroup to even new power players like LinkedIn know that in a new power world, their company is under attack from all sides. Countless startups have access to all the networks and assets they need to add more value, quickly, with a lot less attitude than old power players. In financial services, the red-hot startup SoFi, which just recently surpassed $6 billion in loans originated, is eating the big banks on everything from student debt refinancing to creative approaches to mortgages, and recently closed a $1 billion venture round.
Marc Andreessen obviously gets it. He’s a leading new power player whose firm has completely disrupted the Silicon Valley venture capital chess board. Andreessen has an opinion about everything, and his views can be hard to bear at times, but I give him credit for this: he’s responsive. He’s an extremely busy guy, but in my experience he’s very responsive to his Twitter handle.
Contrast that with John Doerr, the great VC from the last generation. I’m completely immersed in Bay Area entrepreneurship, and I’ve never even seen Doerr. Not only that, he doesn’t respond to emails, or to Tweets. That’s an old power mindset. John Doerr can do whatever he wants, but I sure hope the people working for him at Kleiner Perkins don’t maintain the same approaches. Kleiner Perkins might be yet another company that couldn’t change with the times.
The big difference between a16z and Kleiner Perkins isn’t just that Marc Andreessen uses Twitter so effectively and openly, but that a16z imagines the world as a new power ecosystem not an old power private members club.
The choice is for all of us. If you’re willing to be humble and open to learning a little bit from everyone, the opportunities are immense, and we can invent the future. As the technologist Alan Kay has said, “The best way to predict the future is to invent it.”
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