Dealing with distortion in the digital era14 November, 2014 / Articles
Dealing with distortion in the digital era.
The Digitized Economy is shifting value away from established players unable to evolve quickly enough. The speed and size of this shift is tremendous, fueled by yet another wave of new technology powerhouses — the young “unicorn” companies wielding billion-dollar valuations to shape entirely new markets, with a glut of private capital lubricating their engines. Such exponential super-startups are even taking the Internet giants by surprise. The disruptors are now facing their own disruption.
Today, startups don’t need to buy infrastructure when it’s available to rent ‘as a service’. They can focus on operations. This capacity enables change to happen much more quickly – and lets 60 employees at WhatsApp deploy services to half a billion people.
This is a shock for policymakers, incumbents, and regulators who hoped the last wave of tech-enabled transformations would settle into stability. Instead, we see fast-moving disruption multiplying itself, brought on by a new wave of scalable innovation.
The accelerating pace of change, the blur of commentary, and the glut of private capital further distort our view of the shifting landscape. For most, there’s too much noise and not enough information. This information asymmetry between the establishment, the Giants, and the new class of unicorns is driving the distortion factor.
The level of distortion is rising so quickly that many are unable to discern between cyclical bubbles and tectonic shifts. The trend away from public IPO’s makes it even harder to effectively evaluate innovations when the books are closed to most. It has become a contest of competing visions for the future, seen imperfectly by many, and brutally clearly by a few.