The idea of hacking into something immediately conjures up images of crime and illegal activity. It takes us back to 1980’s science-fiction films where young kids hack into government computer systems and gain unauthorised access to nuclear silos that might start World War III. Maybe your mind jumps to someone doing a rather crappy job at something they’re meant to be a professional at: ‘They’re a real hack’. Whenever we hear the term ‘hacking’ being used to describe a person or an activity, our defences spring into action because we’ve been groomed for so long into thinking that hacking is a bad thing. What we should really be focused on is the hack itself and determining in isolation whether the hack is in fact a good one that takes us, collectively, a few steps forward.

Hacking defined

While the word ‘hacking’ could be used to define a number of behaviours, I’m hoping this definition will open your mind to the good side of hacking from the outset.

Based on this definition it’s fair to say that hacking can be used for good, especially if what we’re hacking is an open system accessible to all and it’s been designed without the end user in mind. Given that we’re living in an environment that’s being redesigned for and by the end user, it’s time we understood that we’re in the era of hacker culture.

Hacker culture

Just as we had industrial culture, we’re now entering a phase of digital hacker culture. The tools we live with, around and inside of, such as the smartphone, computers, digital networks, the internet knowledge bank — the internet operating system, if you will — all open us up to a world of hacking systems, a world in which we can embark upon redesigning how things are done to suit ourselves. The tools that everyone has access to are the same ones being used to hack old, outdated industrial systems. They create new possibilities where if the industry itself does not reconfigure to suit the new world, it will be done for them.

Because our world is digital, both commercially and socially, it gives us new powers to play with the system itself. Because the way we access things now doesn’t involve doors and walls and buildings as much as it used to — and I mean in the real physical sense here — we can hack into the system itself. We can use the digital tools and the way we connect to the system to re-route ourselves around it and to build a new method that gives us a better outcome, regardless of whether or not it gives those in power a better outcome. We can take a look at the system and find another way virtually to get the same result physically. And we dig it.

Hacking is inevitable

As we transition to digital platforms for most industries, every industry is either being hacked by startups entering the space, or by end users who are sick of getting a raw deal. In the days before transparent markets, industries had a far greater chance of being pricemakers. They could get away with having significant differences in prices by market or location depending on what was more profitable to them. They could decide when they wanted to launch in other markets based on what suited their budgets and marketing plans. They could even decide not to ship to a market at all if they didn’t want to and there was very little the end customer could do about it. We suffered from this dramatically in Australia, as it has always been regarded as a small pond often not worth investing in.

Now, unless every market is served immediately, with the same price, with the same range and the same service, the system will be hacked. The audience armed with connection knowledge and access will hack the system to equalise the market offer. And no industry is under more hacker pressure than retail.

Retail hacking

No industry has been hacked more often than retail. People are constantly going around the traditional retail channels to get a better deal. A number of simple system hacks have been invented by savvy entrepreneurs and eager customers who just want to get a better deal in retail. For example:

• group buying gave customers access to crazy prices just by pooling buyers into one time and one place
• delivery houses sprang up to purchase goods on behalf of buyers in overseas markets whose home markets either didn’t sell the brand, or sold it at a higher price because of a lack of competition
• coupon sites emerged for online buyers with aggregated discount codes in one convenient online location to get better prices than could be achieved buying direct
• comparison sites arrived to point people in the right direction for pricing in both online and bricks-and-mortar retail, ensuring the best prices.

Bricks-and-mortar retail had the unfortunate situation of having to deal with being hacked virtually and physically at the same time. Retailers have even had to deal with potential customers coming into stores to try on clothes and test items they had no intention of buying anywhere but online, giving new meaning to window shopping. When opportunities exist to hack the system for a better deal, no matter how clumsy, opportunists will take them.

Industry hacking

An industry is a system that has been designed by the players of that industry. If there’s weakness in the system, the system will be hacked. The design, by definition, has to be for the maximisation of profits. It’s always been about benefiting the players within it. All systems change over time. Their structure is modified and the architecture renewed. We’re currently going through a radical redesign of the industry system. It’s during these times that getting hacked has its highest probability. And we can add to that fact that others from outside the industry are most likely to be the ones doing the hacking.

An old rule in marketing has been to never launch a new product or service that will cannibalise existing revenue unless the new product has a higher margin. It’s one of those marketing maxims that’s no longer true. Most high-volume products are becoming more dispersed with lower margins. Not innovating because margins may be eroded simply opens up the doors for a new player who’ll accept those lower margins. It opens the doors to the system hacker who will accept a smaller margin because they’re doing it on a skinny and/or virtual infrastructure.

My favourite media hack

The television industry is being hacked because of its reluctance to accept the new market realities. A key rule that it would do well to remember is that everything virtual is borderless because people will invent hacks to get around the so-called safeguards or restrictions put in place by the industry. Living in Australia means we don’t get automatic access television content from the US and other overseas markets. Generally, sites such as Hulu, Netflix, and the BBC are blocked, which in all probability they do to facilitate more margin through licensing deals with each separate market. But the organisations trying to block people online because they’re not in the desired geography simply doesn’t work. It only takes the use of a geo-blocker to gain access. These are services that hide the physical location of where you’re retrieving data from, or make believe that you’re geographically located in a specific market. There are a number of these services available as web browser extensions. And as soon as one is closed down, in usual web fashion, another one pops straight up to fill the gap.

It’s also a clear indication that no matter how much companies and brands try to slice up the global market into countries, we’re increasingly in a truly global space. The hacks get shared. People who uncover the hacks gain social credibility by sharing the hacks with their friends, on the social networks and on blogs. Once the hack is out of the bag, it never goes back in. Once it’s out there, it’s out there and it’s just a Google search away, which then often provides the juice needed for speedy entrepreneurs to formalise the opportunity with some new startup serving the niche in question, as with the geo-blocker business. Given that stopping system hacks occurring in an industry is nigh on impossible a better approach is to embrace the hack.

Why we have to self-hack

In a hack-or-be-hacked world, the best plan is to face the reality and self-hack. The best example of self-hacking in the marketplace is what’s occurring in our most esteemed learning institutions, our universities. Anyone can learn anything online these days. We can learn in any field of study through a variety of sources: written articles, blogs, live streamed lectures, industry journals. We can even tap into the global thought leaders of any subject. Most thought leaders in every field have a solid digital footprint these days and they’re willing to share with their followers their ideas on a daily basis. A better time has never existed for learning, as anyone can tap into the best minds from around the world in any area of study. You’d think this would have the universities shaking in their boots for fear of an impending battle of relevance. Instead, they’ve embraced the inevitable and started hacking their own system.

Step forward MOOCs

The Massive Open Online Course (MOOC) has recently emerged as one of the most interesting industry reinventions. A MOOC is an online course for which there are no participation restrictions and which has full open access via the web. They are courses of study, which, for all intents and purposes, are the same as the courses of study undertaken by the students enrolled in the university. They have one distinctive difference, however: they’re usually free.

It’s not just fringe dwellers in the education space who have embraced this reality. There’s barely an Ivy League University in the US that hasn’t become involved in the MOOC revolution. Harvard, Stanford, Princeton — almost every university is now involved, and there’s no sign of this innovation ever going away. Enrolment rates are staggering. The first MOOC to be released by Stanford was ‘An Introduction to Artificial Intelligence’, launched by global thought leaders Sebastian Thrun and Peter Norvig. More than 160 000 people enrolled in this course alone. It’s almost hard to believe that anyone on the internet can enrol in a course taught by the world’s most respected educators from the most respected institutions and not have the thousands in fees that normally accompany such learning.

Yes, but they’re not-for-profits

It is easy to think that this example doesn’t really apply because universities are non-profit organisations and that this isn’t really a fair comparison to a commercial situation. That viewpoint would be unfounded. The truth is that while profits are not distributed to shareholders, universities have real costs that have to be offset by real revenues. So it’s a true commercial risk and a forward-thinking move by universities. But what the founders and adopters of the MOOC seem to have understood about our new business landscape is that it’s going to happen anyway. So why not fill the void ourselves and be those who can receive the new revenue streams once the system reconfigures and the profit opportunities present themselves. It’s a great piece of self-hacking, if I must say so myself.

If we can hack the purchasing process and even industries, why not hack where and how we work and build a system that suits us, not just the people we work for?