The bumps we’ve seen over the past 12-18 months stem from a reality that the post-recession world we’ve built doesn’t scale beyond its current size. Consider the following:
-Chipotle wanted to be this era’s McDonald’s. Turns out scaling organic, freshly-prepared food isn’t as cheap or easy as they thought.
-Fintech lenders promised to disrupt big banks. Turns out the lending business requires a lot of capital, and that in jittery markets that capital doesn’t like funding a growing lending business. Maybe the big bank model isn’t so bad.
-The San Francisco Bay Area is the economic center of the early 21st century. But it’s finding that scaling housing and infrastructure for workers is a lot harder than scaling servers and storage. So jobs and people have to move to cheaper metros.
-On demand startups were the solution to mass unemployment and megacity renters who demand services immediately. But they’re finding that as the labor market tightens those workers are getting harder to find, and maybe the unit economics never worked to begin with.
-Tesla wants to disrupt the auto industry. But it’s never produced more than 50,000 cars in a year, and suddenly has to meet demand for as many as 500,000 cars a year. That won’t be cheap or easy, and it’s unclear how much shareholders and lenders will be willing to finance that growth. It’s not as cheap to scale atoms as it is to scale bits.
-Uber and Facebook are the 800-pound gorillas in their respective industries. But as they grow, they’re running into problems of scale. For Uber, it’s finding drivers and fighting regulation. For Facebook, it’s eating too much of the revenue pie for content, and maybe as it grows it’s going to come under greater and greater scrutiny given its media clout. Both will argue they’re not utilities, but the vision and scale they aspire to would make them exactly that.
-Conservatism is finding that the demographic groups that believe in conservatism no longer scale to form a viable national party. Trump will soon find the same to be true for his white working class coalition. The Republican Party needs a new ideology or constituency that can scale to compete with Democrats.
It’s time to let Steve Jobs and Ronald Reagan rest in peace, and find new leaders who can build the world of the 2020′s.