Albert Wenger – Managing Parter at Union Square Ventures
All of our economic theory, all of our business practice, all of our public policy, they were all developed during an era of scarcity. Scarcity means that when you want more of something, there is an additional cost to be paid. And that was always true for physical products, but it is no longer true for digital information. That extra view of the funny cat video on YouTube, it basically costs Google nothing. And it is that zero marginal cost of digital information that is turning everything upside down.
It used to be, for instance, that we would select first, then edit, and then publish. Now we can publish many, many things, select a few, and edit those. It used to be that people had to go to investors, raise money, then make a product and hope that people would buy it. Now you can present your vision for your product to thousands of people, have them contribute, use the money to make a product that you know people want.
It used to be that people were very guarded about how something worked. Now we have open-sourced software, hardware, and even biotech. These are all inversions, things that are being turned upside down, and they are being turned upside down because the zero marginal cost of digital information. And we are just at the beginning of these.
Traditional big publishers still dominate music, movies; crowdfunding is tiny; open-sourced biotech is in its infancy. But if you take these trends and kind of extrapolate them out a little bit, what you’ll get is a kind of digital abundance. A world in which we can learn anything we want to online for free. A world in which all the world’s medical know-how is available to anybody, anywhere in the world for free. Where you can listen to music, enjoy art, read books online for free. And we can even see how, eventually, that digital abundance could help us reduce the amount of physical scarcity. How?
For instance, by 3D printing only products that people actually want. Also by taking existing things like cars, buildings, lab equipment and sharing them much more efficiently than we’ve ever been able to do. So this is a world that I am very, very excited about; but we are not going to get to this world simply through more technology. We are not going to get to this world simply through some businesses doing innovative things online. We are also going to need to invert our public policies.