Sociologist Gerhard Emmanuel Lenski dedicated his life to understanding how societies evolve. Why humans evolved from hunting tribes to agricultural communities to Roman Empires into super-cities like Hong Kong, Shanghai, New York.
His conclusion explains why Uber, Amazon, and Airbnb are transforming modern life and could help predict what will happen next. Unless you want to be the last caveman in a world of fat farmers, you should think about what his model implies for your career and your business.
Lenski analyzed manifold explanations of human evolution. Does culture drive human advancement? Religion? Technology? After considering the options, he landed on one, most important driver – communication:
- Stage 1: Information is passed through our DNA. Our success depends on the genetic information we inherit from our parents so natural selection governs evolution.
- Stage 2: We learn to copy each other so communicate by showing. A child watches how his mother gathers fruits and learns to do the same. We begin defying natural selection.
- Stage 3: We learn to apply signs and logic (the caveman adopts gestures to communicate concepts) so we can now accelerate the speed of information sharing.
- Stage 4: We develop symbols and language (spoken and written) so can, for the first time, share information across distances and times by writing on walls and paper.
Each advance in communication drives a corresponding evolution in political systems, economic systems, distribution of goods, and social equality
Look at the relatively sudden rise Uber, Airbnb, Google, Amazon, Open Table, etc., through this model and it will become clear that the most disruptive companies today share one trait – they push information sharing into new levels of efficiency. For example, by facilitating smoother information sharing between drivers and passengers, Uber is disrupting the 100-year-old taxi model. Airbnb does the same with rooms. On an airplane ride home last week I sat next to a manager at Amazon who shared with me how, fundamentally, Amazon’s forays into fast delivery and devices is built on the same concept.
Google Consumer Surveys allows you to gather information for market research radically faster. For example, ValidateIt enables you to launch a survey in 60 seconds that will test whether you have chosen the ideal price point, the right name, the best description for your new product or service. According to Corrine Sandler, founder and CEO of Fresh Intelligence Research Corp., getting such answers would normally cost $50,000 and take weeks. With Google Consumer Surveys and ValidateIt, you can get answer in days and pay just $1,500.
Kabbage is applying this same concept to small business lending. By sucking up and analyzing data from your business checking account and QuickBooks, they can analyze your company’s borrowing capacity and give you an answer in 10 minutes, as compared to banks which will require three years of tax returns, and it could take them two weeks to respond.
Three friends from Orlando just launched Valuations.com. Tired of undertaking the arduous process of building an initial financial model to value each new client their boutique investment bank took on, they figured out how to automate what you otherwise pay an over-educated MBA banker thousands to do. Their tool, available for free right now at www.valuations.com, prompts you for some basic information about your company, then pulls up valuation multiples from public and private companies, and gives you a dynamic graphic showing what your company might be worth. Think of www.mint.com for business owners.
We have been moving up Stage 4 in Lenski’s model for the past 10,000 years. Are we now glimpsing Stage 5, where communication shifts from being a person-to-person to a machine-to-machine activity? Call it “Big Data” or the “Internet of Things.” Whatever the name, the meaning is the same. Something is changing. Adapt or …
