Trends fascinate me. The other night I watched a movie, called “Something Ventured“, about the rise of venture capital and Silicon Valley. Before the end of the movie thoughts of much larger trends extended back thousands of years and ahead a few generations. The men in the movie tapped into and helped steer a trend that had incredible consequences – especially incredible when viewed from when they started. Understanding that trend led to great investment wealth. But I think they were part of a much larger trend that may be leading to a different kind of wealth.
The story in Something Ventured is basically what happens when eight disaffected employees leave their unsupportive company and start something new. They and people they encountered began to see the value in investing in innovation. Except for Genentech, almost every company they successfully invested in were in computer hardware or software. The stories of Apple, Cisco, Intel, et al will be legendary; or, at least as legendary as the stories from people like Edison, Carnegie, Rockefeller, et al. In my mind, they are all part of one phase of a larger trend.
They built empires, but empires are nothing new. Rapid, unprecedented expansion is nothing new. But the subject of the expansion continues to change.
Empires began as geography. The Egyptians, the Greeks, the Romans, the Mongols, the Chinese all were defined by rapid expansion across each of their known worlds. They acquired geography for glory, resources, and power that was frequently channelled to royalty. Trickle down existed then too, but it didn’t make it past the dukes and earls and such. Even there the titles were tied to land. Eventually each empire became unsustainable. The two main exceptions are China, which some could say is in danger of implosion; and US, which is spending more than it makes. One difference is that China and the US funnel those proceeds of geography across a greater populace than just royalty.
Skip up to the Renaissance and empires begin to get built around money. Businesses and corporations are formed to make money. They aren’t burdened by the responsibilities of governments. They can focus on narrower goals, maximize their potential, and create great wealth for their shareholders. The Dutch East India Company got things started, though I suspect the Medici acted as a transition between power based on land and power based on profit. Since then investing has been about trying to find the next profitable thing with a major variant being each investor’s balance of risk versus reward. The stories we hear and tell are about the explosive growth companies. The common knowledge within investors though is that almost every company eventually fails or fades. The ones that survive usually maintain a name but radically redefine their business.
Mini-empires are being constructed from social capital and explosive growth is called going viral. Now that much of the world is electronically networked, thousands of celebrities are created more quickly than they can react. They don’t need land or money. All they need is a meme, or a video, or a blog. There’s no reason for me to list them. You’re on the internet. You probably have a unique list of subscriptions. I’ve been watching the rise and path of Hannah Hart, otherwise known as MyHarto on YouTube. She is like Julie from the movie Julie & Julia (the story of a blogger who is inflicted with fame) but Hannah adds a lot more alcohol in her series “My Drunk Kitchen.” Watch for the fun, not for information. Social media is unpredictable, but the cost is so low that almost anyone can jump in. No royal decree or incorporation required. (Check out my YouTube channel to see what one or two guys can do for free. tetrimbath) Each of these celebrity arcs is essentially unsustainable despite the resilience of Justin Beiber. If you don’t know who he is you just proved the limits of celebrity. The wealth generated is less tangible (though you can check your Klout score), but eagerly sought. It is in demand.
From land and royalty, to wealth for shareholders, to accolades for crowds of celebrities the trend is to less tangible rewards spread more pervasively. What’s an investor to do? Modern investing didn’t exist when royalty ruled. The primary way to make money from social media is through advertising or by becoming one of the celebrities. Will what we know as investing turn out to be just a phase that civilization had to go through on the way to maturity?
What trend would be even less tangible and more pervasive? The only things that come to mind are the movements towards community and common consciousness. The Occupy Movement acts from a community that is evolving a mission and goal by consensus. The self-help movement advocates compassion, meditation, self-realization and seems to be forming itself into more substantial community than the predecessor communes of the 60s. The hippies have grown up. They and their kids are redefining dreams using those lessons learned. I’m doing that too, though my dreams are currently restrained by a mortgage. (Hey, want to buy a nice little homewith a big view and a neighborhood marina?)
Many are searching for lives that are more connected to each other than to currencies.
Change is accelerating. That’s well known. The speed of change usually refers to technological change. I think societal change is accelerating as well. Technological change was from stone to bronze to steel to silicon to what, graphene or quanta? Societal change seems to be from massive tangible assets providing power to a monarch to massive abstract wealth distributed amongst shareholders to massive acclaim across many creative or lucky contributors to what, massive community that embraces all or a tap into the common galactic consciousness? That may not help my portfolio but that does sound very profitable.
Maybe I look for that because my stock portfolio is so deflated. But I think that if we had a compassionate, mutually supportive community that continued to innovate we would have evolved into an empire to be proud of.
Despite my guess at a trend, it is also good to remember that we never completely abandon our past. Otherwise my personal geography (my home) and the money associated with it (its market value and my mortgage) wouldn’t have existed to inspire this post.