Six Things Technology Has Made Insanely Cheap

I believe that technology and democratization goes hand-in-hand. If you examine the now-commoditized products listed in this article (PC, software, TV, trading commissions, camera, cell phone plan), you can also follow how such technologies became much more widespread and accessible to the masses as prices dropped.

The subtitle of the article boldly proclaims, “behold the power of American progress”! And it’s interesting to me that the author (Aki Ito) states:

For anyone bearish on the progress made by the U.S. economy, consider this: Computers are now one-1,100th of their price 35 years ago.

On the contrary, I believe that much of this price deflation actually comes from international manufacturers (read: China, India, etc.) who are able to produce virtually the same item at a fraction of the cost. 

With those two factors in mind, tech advancements and cost-efficient copycats, here are few things that I believe will face the same deflationary pressures over the next decade:

  • Mobile phones: This is a no-brainer and has already happened with the likes of cheaper Android handsets, courtesy of Xiaomi.
  • Automobiles and trucks: Asian manufacturers, such as Hyundai, are innovating quickly and will be able to rival Western brands soon in terms of quality. Furthermore, if Uber’s expansion continues world wide, demand for cheaper and more efficient cars will rise as drivers proliferate and riders opt to forgo car ownership. 
  • Education: With the current status of rising student debt, something’s gotta give. Disruptive Education Technology startups, such as General Assembly, Codecademy, and Coursera will begin to offer non-accredited alternatives to higher education. For profit education companies, like Minerva Project, will offer degrees at a fraction of what it costs today.
  • Food: I have high hopes for companies like Beyond Meat, who are looking to product petri dish-grown meat in a more cost-effective and environmentally sustainable way. Before that becomes mainstream, however, farmers will continue to lobby for government subsidies which hopefully will be passed through to consumers. 

On the other hand, there are a couple of things I wish would drop in prices, but I think unfortunately will continue to rise:

  • Healthcare:Healthcare is notoriously a laggard vertical when it comes to tech adoption, and the burden of outdated IT/infrastructure is eventually passed through to the consumer. An aging population, the impending shortage of doctors/nurses, and America’s sedentary lifestyle will all pose to be challenging to the current healthcare system. Without the right incentives for health systems and individual consumers to change their behavior, healthcare looks like it will only increase in the years to come. 
  • Housing: While this is a particularly stressful topic for those of us living in the Bay Area, I think it’s a pain point that all young adults will face sooner or later. Given high student debt and low employment, young adults will find it much more challenging to become home owners than the generation before did. 

What do you think will become cheaper or more expensive over the next decade?

Six Things Technology Has Made Insanely Cheap

Patagonia’s Founder Is America’s Most Unlikely Business Guru

It’s not often that a brand’s image accurately reflects company values. Or, conversely, it’s rare to see companies practice what they preach. Pantagonia’s Yvon Chouinard (a fellow French-Canadian!) has succeeded not only that, but also in creating a personal and professional life that are one and the same. 

Among the few times I saw him truly light up: When he spotted some ring-necked doves on the shore near his house; when he showed me a new pair of Patagonia aluminum crampons that he’d had a hand in designing; when he described the best wave he’d ever caught, which happened at age 50, off the South Pacific island of Moorea. He still occasionally blacksmiths in a little tin shed on the Patagonia campus, and he showed me his latest project, a metal mussel knife that he’s been beating into perfect shape—sharp at the blade to pry open the shells, blunt at the handle to knock away the barnacles. He was dissatisfied with all extant mussel knives. So he made a better one himself. He looks forward to testing it in the shoals.

Patagonia’s Founder Is America’s Most Unlikely Business Guru

How to Succeed in Business (by showing up late)

DR. Dre, the sonic architect of gangsta rap, is surrounded by a gaggle of slack-jawed journalists and micro-skirted cocktail waitresses. It’s not quite 5 in the afternoon, and already the scene is a testosterone fantasy of swaggering grooves and flowing vodka. Dr. Dre, however, is here on business.

Born Andre Young, he was a founding member of N.W.A. and honed the sound of Snoop Dogg, Eminem and 50 Cent. But now what began as a sideline has turned into multimillion-dollar business. Mr. Young is the pitchman for the hot new sound in — headphones. On this October day, he is headlining a media party in the Chelsea neighborhood of Manhattan for his creations, Beats by Dr. Dre. To the surprise of almost everyone, except him and his partners, Beats have redefined the lowly headphone, as well as how much people are willing to pay for a pair of them. A typical pair of Beats sell for about $300 — nearly 10 times the price of ear buds that come with iPods. And, despite these lean economic times, they are selling surprisingly fast.

I’ve always been interested in market-defining products; ones that are late entrants to an already highly-penetrated market, and yet still manage to change these market dynamics to come out on top. Beats by Dre is such an example, as are products like Red Bull energy drink and Apple’s iPod. When Beats was created in 2008, the portable music player industry was already mature. When Red Bull entered the US market in 1997, the energy drink market was in perfect competition with a number of undifferentiated products at the same low price point. 

Perhaps a lot of it has to do with branding to differentiate itself from the other players. Dre used his connections with the music industry to feature his headphones in music videos, movies, and high-profile events. Red Bull aggressively sponsored all kinds of extreme sports events, and to this day, continues to brand cutting-edge and underground events such as Red Bull BC One and Red Bull Creation

However, the argument can also be made that the conditions of a highly-commoditized market are ripe for disruption. First, it helps that a market already exists and is highly penetrated; consumers don’t need to be educated on the product’s value proposition. Second, it definitely helps to better understand the challenges and pitfalls that competitors have previously faced. Third, of course, comes down to understanding the competitors. To see examples of other late entrants who are dominating markets, please see this Quora discussion

There are convincing reasons why Marathon winners are rarely runners that have led most of the race. Perhaps the same dynamics apply to consumer goods as well. 

(Unnecessary disclosure: I am a recent owner of a pair of Beats by Dre. The first generation Heartbeats by Lady Gaga ear buds, to be exact.)

How to Succeed in Business (by showing up late)

Whartonite Seeks Code Monkey: Wait, you mean a social startup called Facebook already exists?

whartoniteseekscodemonkey:

I hope this e-mail finds you well. I’m pulling together a startup, and I’m looking for some support on the technical side. The idea behind the startup is to strengthen and broaden peoples’ networks by targeting the real world social space. I’m an undergraduate at Wharton, and my technical…

This parody (I hope!) tumblr perfectly showcases what developers think of MBA grads. Unfortunate, but oh-so-true. (Note to self: learn to code before going to B-school.)

Whartonite Seeks Code Monkey: Wait, you mean a social startup called Facebook already exists?