Josh Klein on How Technology is Transforming Commerce
The word hacker carries many connotations, most of them negative. But is it possible that hacking can be a force for good? During his keynote speech at the 2015 NACD Global Board Leaders’ Summit, technologist, author, and self-described hacker Josh Klein offered a fast-paced dive into the misconceptions that directors and executives may be perpetuating without even recognizing their error.
“Disruptive trends in technology, culture, and business are converging,” Klein observed before exploring four areas in which this convergence is creating unprecedented opportunities.
- Code. In 2006, the cost to develop a website was exorbitant by any standard. Today, thanks to the multitude of free web-development tools now on the market, the cost is next to nothing. In Klein’s words, “It’s getting cheaper and cheaper to validate your business concept.” This fact alone will grow the pool of competition exponentially, because anyone who knows enough code to use these tools and has a marketable business plan can start a company. Anyone from legitimate start-up entrepreneurs to criminal masterminds can code a site, which means that companies must anticipate and plan for competition of varying legality and ethical standing.
- Culture. “Tech doesn’t spring from the ether,” Klein pointed out. “It emerges from the attitudes and desires of users.” Information can be shared and spread almost instantaneously, increasing the likelihood that a company will at some point receive undesirable attention. According to Klein, technology creates a meritocracy via democratic exposure of reputation. But instead of trying to hide negative feedback, companies should get ahead of the problem and own it as best they can. He cited AirBnB as one example of how digital technologies have created marketplace meritocracies. Responding to an incident in which an AirBnB guest caused significant damage to a host’s home, the company rolled out a million-dollar host guarantee policy. This move both acknowledged the problems with the company’s old business processes and affirmed its commitment to improving those systems and protecting AirBnB hosts.
- Competition. With the rise in sources of competition, businesses that rest on their laurels and become complacent about their success are putting themselves in a dangerous position. Looking out over the audience, Klein underscored the obvious: “We’re all sitting here, and the innovation may be happening someplace else.”
- Future Context. To many of us it seems that everyone is connected by the Internet, but only about one-third of the world’s population is online. Klein observed that the remaining two-thirds may be illiterate and may not have bank accounts; they do, however, participate in the black market, which is currently valued at $10 trillion and accounts for $1 in every $7 exchanged, making it the second largest market on the planet. Companies must anticipate how these demographic shifts will create new business demands and transform the face of e-commerce.
Klein ended by entreating his audience not to panic but instead to begin experimenting, learning, evolving, and to do this all as quickly as possible. “Do it now, because if you’re not, someone else is.”