For most of the industrial era the only option for having goods and services was to own them. If we wanted to have anything, we had to buy it. This was also the way industrial society was set up. It moved society away from the traditional ideas of shared resources into consumption silo mode. The industrial era made many things affordable for the first time. The rational choice was to purchase and own, so we accumulated goods and stored them at home for when they were needed. Being able to have everything we needed, and places to store it all (fridges, cupboards, spare rooms and garages), reduced a lot of the friction that existed before industrial communities came into being and resources were shared.

So what’s changed?

Much of the friction of sharing is now coming back out of the commercial system. While vehicles gave us access to vast geography on demand, the internet is giving us access to vast information, entertainment and even physical goods on demand. Many of the things we had no choice but to buy if we wanted access to them are changing the way they come to market. Increasingly, we have an option to buy or to simply access an asset on demand. We are choosing the latter.

Why do we even own stuff?

There are two main reasons for owning anything: utility and status. Owning something for its usefulness is pretty straightforward: you need to own it to be able to use it. Owning something for status reasons (think luxury brands and goods of ostentation) is about how it makes us feel and appear to the outside world. These are two important reasons for ownership, and neither will go away. We’ll continue to accumulate artefacts, filling our homes with the items we need and want. But now we have a choice. We can now often choose to access instead of own, while at the same time still having all the benefits of ownership, and we can even have the benefits of status through access. The ability to find what we need in a virtual world has reduced a lot of the friction that comes with finding the same things in person or physically. We can seek things out with a low personal cost of time and money. We can access these items with very little friction. This reduced friction creates opportunity for temporary connections with goods and services, which, in a physical world, would be too costly and cumbersome. This means where we used to have to buy items, we can now instead pay to use them when we need them.

The sharing economy

In a sharing economy we can enjoy the benefit of usage and status on a temporary basis. It’s an obvious solution when you consider that we only use much of what we own for a fraction of the time that it’s available to us, excluding such things as furniture and the fridge. Quite often, we now share or purchase collectively whatever we need, paying only for the time we use it. Instead of purchasing and owning idle assets, we can now access assets on demand.

Personal access

On an individual level, many of the things that existed physically have transitioned to virtual. Knowledge and entertainment have not only become virtual, but are also largely free. Wikipedia is the greatest repository of knowledge the world has ever seen. It’s more accurate than any body of knowledge that came before it; it has a wider scope than any encyclopaedia; it’s updated more frequently than any other source; and it’s free. Most of the entertainment available online has a similar story. We used to have to buy information in physical forms (books, magazines, and so on) or go to the place of information storage to access it (libraries, museums, and so on). However, we now live in the age of the instant expert. Anyone can know about, or learn about, any topic they choose on demand. We don’t need to buy the information, we don’t need to be invited to have access to that information and we don’t need to be pre-qualified by any gatekeeper to be allowed to find out what’s behind those walls anymore. The barriers to knowledge, which is the key social and economic parameter, have come down and what’s more, the knowledge you can gain is free. We can, if we choose to, know most facts about any topic, and much of it’s not hard to find with the search tools we have at our disposal. The barriers that kept outsiders out and insiders in are being removed. Anyone who has the energy to care enough to know, can know.

Physical access

Not only do we have free access to virtual knowledge and information, we also have access to real, non-virtual, physical goods without having to pay for them. We can now get our hands on goods that could once only be bought or rented at ‘insult renting’ rates. It’s not just the sellers who are being inconvenienced by the shift from owning to accessing, it’s all sorts of hiring businesses. Traditional business that played in the temporary access space, as well as those in the hiring and rental area (such as accommodation and cars) are also being significantly disrupted by this shift. The collaborative consumption movement means that buying is a choice rather than a necessity. We can rent cars by increments of hours now and have all the benefits of a private car on demand without the excessive cost of hiring or owning one. This is pretty significant given that the average motor vehicle spends more than 90 per cent of its available life idle in a car space. We can now gain temporary access to goods, from haute-couture handbags, to chainsaws, to private jets, to gardens, to office spaces, to bicycles. Anything that can be bought can now be accessed.

Ownership is a mental state

Music and stuff hold a pattern that’s the trajectory for many things as technology becomes more accessible. As computing power increases and the creation of physical things democratises, the need to own will often be substituted with the benefits of access. Owning is an emotional state that bears no true value unto itself. Nowadays we don’t have to own in order to reap the emotional benefits of ownership. We’ve already proven this to be the case in a number of industries, so there’s no reason why it won’t become a reality in many more.

Commercial access

Anyone with a smartphone has more computing power than NASA did in 1985. Anyone connected to our information network has more information at their fingertips than the president of the United States of America did just 10 years ago. These are not throwaway statements. They’re serious facts that should not be taken lightly. They’re more than eyebrow-raising facts; they’re door openers to the major factors of production. Information is more than information; it’s access to the possibilities of a commercial world. It’s the first resource we need before we can do anything. Having access to near-perfect knowledge gives any person clues about how to accomplish things and organise the factors of production, even when they seem to be unaffordable. Once people know where things are and what’s possible, they start to take on the types of power that were previously the protected intellectual capital of governments and powerful businesses. Once the pieces of the commercial puzzle are knowable, visible and evident, it is in the very nature of people to start playing with the pieces to see what possibilities they can offer them and their business. It’s what we do as human beings. Access really is everything.

Access to everything

While it’s clear that everyone has access to much of the same information, access to certain business resources has an immediate economic impact. Access to developing nations’ labour is one such factor. In the past, knowing how to go about outsourcing production was no easy task. Whether it was for human resources to perform services, or accessing a factory to manufacture something for your business, this information was both hard to find and closely guarded. The large conglomerates who started flirting with off-shoring work in the late 1970s and early 1980s closely guarded their supply chains. For good reason, this knowledge was a trade secret that gave them a cost advantage — and therefore a competitive advantage — over their competitors. In addition, it took a significant number of resources to find, organise and manage the production of anything in a low-cost market. You had to physically go to the markets in question, have personal introductions and get approval from non-capitalist government authorities. It took a great deal of time, money and political deal making. And still there was no guarantee that the quality of the output would match that of what could be produced locally. ‘Made in China’ used to mean ‘cheap and crappy’. Now that China has become the production hub of the Western world, ‘made in China’ usually means better quality.

A personal global factory

These days any business or person can find people to help them with their projects in most markets. We’re not only mere clicks away from connecting directly with organisations that can perform any type of service and factories that can make any type of widget or high-end electronic device, but we can do it with far less risk. Not only can we easily find someone to make what we need, we have the added benefit of social recommendations. All of the organisations competing for our global business come with the comfort of the ratified reputation of the service provider. No-one does this better in the manufacturing sphere than Alibaba.

Alibaba is a website that started in China as a link for local Chinese manufacturers to find buyers for their products. The significance of Alibaba can’t be understated. Since it was launched in 1999 more than 4.2 million manufacturers from every corner of the earth have been added to its supplier list. If it can be made in a factory, a supplier who can make it to your specifications can be found on Alibaba. In short, it means that anyone from anywhere in the world can get anything made at globally competitive prices.

No-one has to own a factory anymore. No-one has to travel to low-cost labour-market countries anymore. No-one needs local introductions to do business in international markets anymore. It’s the most significant shift in manufacturing since the industrial revolution. Anyone can be an ‘industrialist’ if they choose to be. Now we all have access to what has historically been the most complex and costly part of the supply chain: a factory that makes things.

The clothing company

In the early 1990s I started a clothing company. We made T-shirts and streetwear and sold them in local stores. In many ways I was competing with established leisure sportswear companies (from the surf and skate industry). Our clothes were pretty good; people liked the designs. They were in demand everywhere that we managed to get ranging in a store, which was often a challenge for a brand that didn’t have any advertising support in a brandcentric industry. We had the clothes made locally in Australia. Our landed cost on a finished T-shirt was $12 per unit, which was expensive for a product we sold for $19 per unit, given we were just starting out and we wanted to bootstrap the business (that is, to ensure there was demand before we tried to reduce the cost by having our clothes made offshore).

We knew that all our competitors’ (big companies) products were made in China. We also knew they landed their products for about two dollars a unit — a vast difference in margin. Whenever we tried to find out where in China the suppliers were, barriers were put up in front of us. We were told we needed to be selling many thousands of units before we’d qualify for offshore production. We never got big enough in volume terms because our product cost was so high and we didn’t have enough margin to support our clothing brand. And this was a time when the social web was yet to arrive so there was no direct means of promotion. We simply couldn’t compete with the established players. We didn’t know how to gain access to global, cost-effective suppliers. The world we tried to do business in was full of barriers keeping us out.

The barrier wasn’t about design or product quality; it was about access to an efficient supply chain, the secret supply chains that the big players knew about and had relationships with. The barrier was access, pure and simple. And now that barrier has been removed. Now anyone can get their T-shirts printed at the same price that Nike or Quiksilver pays.

The two-way street

Access to developing markets, resources and labour is not the one-way street many believe it to be. It opens up possibilities for the supply side as much as it does for the demand side.

I built and launched my first dotcom business using a freelancing website. In order to build the site, I outsourced the coding on a site called oDesk. There were a lot of benefits for me personally. First, I got the services for about ten per cent of the local price. Second, it enabled a non-techie such as me to gain access to techie services. But the launch of my startup had an added benefit, a real benefit that isn’t spoken about all that often: it facilitated an important cultural exchange.

Meet Vasilii Racovitsa

Pictured here (figure 8.1) sharing a meal with me in my home is Vasilii Racovitsa. Now that doesn’t seem like such a big deal …

… until you know that I first met Vasilii via oDesk where he was a freelance web developer back in 2007. Vasilii was born during the Cold War in the old USSR in a province called Moldova. (Moldova is now an independent country.) While my relationship with Vasilii started as a commercial one, it’s much more than that now. In fact, it’s been much more than that for many years. He’s a dear friend and business confidant for whom I want family and financial success as much as I want it for myself. But I only met him in real life for the first time last year.

Besides the fact that Vasilii made my first web play come to life, he also taught me more about technology than anyone else. The truth is that the lower labour rates in eastern Europe enabled me to arbitrage my way into techie/startup land. Many people falsely believe that benefitting from lower labour rates in developing economies is a one-way street and that the people in developed economies are the only beneficiaries because we ‘take advantage’ of those in less developed markets. In truth we’ve both benefitted dramatically. Through my local connections, Vasilii now generates more than 50 per cent of his business from Melbourne — a mere 14 854 kilometres from Moldova! Not to mention that his income, through accessing Western money, is now many multiples above the average wage in his home country.

Vasilii came to Australia to pitch for a large development project that’s totally independent of me — a project that dwarfs anything we ever worked on together. But it was facilitated through the network I introduced him to. People would call me and say, ‘Steve, can I use your guy from Moldova to get some development done?’ What’s more interesting is that his business employs more people in Moldova than the original startup we worked on ever did here in Melbourne. And his development team now works in every form of coding/language/mobile device you can think of.

When Vasilii was in town, it was like hanging out with a long-lost relative. He’s just like the guy I used to speak to every day on Skype, a strange thing to say now that we know the virtual world is the real world. It’s also a great reminder that the online and real worlds should only ever be preambles to each other and in some ways seamlessly interchangeable. While the tools this digital revolution has provided are amazing, it’s the human connections that are creating a truly Sans nation state economy.

Sans nation state economy: an economy where global transactions subvert national control due to their virtual nature

The laptop corporation

The story of access isn’t limited to production and digital services. This is true for all the major elements that go into the business marketing mix. We also have access to new ways of raising finance, as we’ll explore in chapter 12. And we have access to an audience, as we’ll see in chapter 11. A more accurate and wider view is that we’re all laptop corporations if we want to be. If anyone has access to an entry-level, $500 device and an internet connection, they also have access to a media production facility, a media distribution facility, low-cost labour markets, the world’s manufacturing districts, global banking and payment systems, and even bespoke capital-raising techniques from crowdfunding websites (see chapter 12). In real terms, anyone with access to the network has access to all of the important factors of production.

Access to technology and information creates access to an everything state.

Information not only changes what we can know and what we can do, it changes where we’ll get it. We’re entering the age of the infinite store, where you, I and everyone else can retail.