Rogue Thoughts

“What has been will be again, what has been done will be done again; there is nothing new under the sun. Is there anything of which one can say, “Look! This is something new”? It was here already, long ago; it was here before our time.” (ecc.1.9-10)

Recently I had an interesting conversation with a colleague of mine. He teaches entrepreneurship at a business school. He told me about his students’ approach to business and entrepreneurship which is completely different from classical economic theory otherwise taught at the Business School.

The claim went something like this: Usually when you as an entrepreneur come across a new idea or make an invention, the first thing you will do is to protect it with a patent. Young people act quite differently. They publish it on the internet, develop it through different means of crowd sourcing, and then they offer it for free, but make money on associated services. The model, sometimes called wikinomics, has been hailed as revolutionizing and changing the economy fundamentally.

I admit that it is a new model, which is interesting. I also do admit that young people are inventive, and that I am getting older. BUT it is kind of not the first time we heard that the young generation is changing everything. The same was said of my parents generation in 68 doing away with war and stuff. Then came generation X (which I think is me or I just missed it) that was just overeducated and underpaid (yeah, I think that IS me), then came generation Y, who demands that the workplace adapt to their life.

The sad fact though is that, nothing is ever changed fundamentally by the current “young” generation. I will explain why the “young” generation is always revolutionary why it always comes to nothing eventually

The apparently innovative behavior of the young generation is powered by an intergenerational dynamic – expressed by the new categorical imperative “Act only according to that maxim whereby you can at the same time be sure your parents wouldn’t do it”, when this oscillation meets a certain economical climate (up or down) fun things happen: up led to hippie culture, down lead to punk – that is the reason why young generations are always revolutionary.

The reason why nothing ever comes of it is that being young carries less obligations and therefore much more individual maneuverability with it. Eventually young people grow up and face the same conditions that shaped their parents lives.

To return to the alleged fundamental change in entrepreneurship heralded by the new “young” generation: The apparently innovative behavior comes from behaving differently than their parents: Well, their parents certainly wasn’t on the internet, so that an easy one. They sit in their dorm typing on the Mac their parents’ economic fortune has equipped them with. They have no real need for money, either because their parents saved money for college or because they are fortunate enough to get state subsidies (as we do here in Denmark) or loans. Either way, they have no fear that they will not somehow be able to get money for the next pizza. This allows them to develop apparently radically new business models. These business models, however, are only competitive because the businesses only need to make sure that the next pizza can be paid when it arrives. They are not faced with greedy middle aged shareholders (such as their parents – whom they already moved away from!) demanding profit from their investment every quarter.

When this young generation grows up they will realize that a normal family life with wife kids and a house (as is still the most common) does not run on 14 hours per day spent writing wikipedia articles and an endless supply of pizza: you need to supply Nintendos and vacations to Disneyland and listen attentively for hours to your spouse and even occasionally engage in real conversation!

I may of course be completely off track, but can you really mention more than a handful of successful businesses founded on wikinomics?