Hyper-Aware-1

It’s amazing how a single newscast can set the world on fire.

The very second Standard & Poor’s announced they had downgraded the U.S. Credit rating, communications systems around the world began to boil. Reaction time was critical and those who could react the quickest were able to position the negative news into something less negative, perhaps even a positive.

Reaction was fast and furious. At the same time, over-reaction was even faster and furiouser. Few people were able to gauge the proper response to the events unfolding.

Our always-on, always-tuned-in society was instantly aware of the crisis, and at the same time, instantly aware that everyone else was instantly aware. There can be no better breeding ground for panic.

In a matter of seconds, Wall Street had become a series of digital flashmobs competing with other digital flashmobs.

We have entered into a new age of hyper-awareness where reaction times have dropped from minutes to seconds, and in the case of computers that make trades based on mathematical models, the time is now measured in milliseconds.

This new level of awareness is still a crudely refined capability that we are only now beginning to understand.

The Secret Story Behind the First Tech Bubble

The original tech bubble began with Netscape in 1995. Their IPO was extremely successful as the stock price jumped from $28 to $71 on the first day, and ultimately cleared the way for hundreds more net companies to do IPO’s far earlier than ever before. A firm with $3 million in losses suddenly became worth $2 billion.

Jim Clark, Netscape’s co-founder had been advised strongly against going public, but went ahead anyway because he had to make payment on a mega-yacht he was having built. If he missed the payment, the builder would give his slot to someone else, and he wouldn’t get his yacht for years.

The bubble began to collapse in March 2000 when an article in Barron’s stated that many Internet companies were running out of cash at an alarming rate.

Few people realize one of the other key factors driving the bubble – Y2K.

In the late 1990s, hysteria was beginning to build around the calamity that Y2K would bring as a result of computer clocks not being able to properly switch over to the new millennia.

Tech people everywhere suddenly remade themselves into Y2K experts and people managing tech budgets quickly realized that anything presented to upper management that mentioned Y2K got instant approval. In a matter of months, managers around the world learned how to frame every request around Y2K and tech budgets mushroomed.

Companies around the world were freeing up record amounts of capital because no one wanted to get caught with their pants down.

With larger than normal budgets, geek influence began to grow and millions of new tech projects sprang to life. Fledgling startups found it easy to get first-time customers, often with other fledgling startups, and the entire house of cards sprang to life in a matter of months.

When January 1, 2000 came and went with few notable incidents, the entire Y2K industry began to collapse, and along with it, the rest of the tech sector.

Companies no longer needed their larger-than-normal budgets for the annoying snot-nosed kids on the geek side of house and the Barron’s article simply gave upper management a reason to begin slashing budgets.

While certainly not the only reason, Y2K was a critical part of why the bubble collapsed. But in 2000, it collapsed over a matter of months, not hours.

So What’s Changed?

Many of the theories arising in the late 1990s were not wrong. The timing was wrong but the underlying theories were sound. They were simply too far ahead of the curve.

Many of the same concepts that were used to launch failed companies over a decade ago, have been successfully reborn inside of today’s markets. The buzz-words of the 1990s included things like:

  • Globalization
  • Mindshare
  • Bandwidth
  • Paradigm shift
  • Eyeballs
  • Bricks and mortar
  • Decentralization
  • Disintermediation

Certainly the language is different, and not all of these concepts still apply to today’s business environment. But each has provided a piece of foundational thinking needed to build our current crop of successful Internet companies.

Forcing Business Underground

Our increasingly dysfunctional above-ground job sectors have given rise to mushrooming underground economies operating inside the web. For every celebrity startup vying for VC money, hundreds of below-radar operations are making serious inroads, raking in hordes of cash. But they are doing it with very little startup money.

In spite of what some press stories are telling us, money for early-stage startups is nearly non-existent. Banks have stopped lending money to anyone without mega assets. Angel investors are running scared. And 70% of all Venture Capital firms have simply disappeared over the past 10 years, dropping from roughly 2,500 firms in 2000 to 750 today.

The only reliable source of money is still friends and family, but it usually only comes in small amounts.

Replacing many traditional VCs are a series of Micro VCs that have cropped up as a result of Amazon leasing server space at a nominal cost, eliminating the need for startups to buy their own server farms. We are also seeing an interesting trend towards hybrid incubators like Techstars and Lightbank that offer small amounts of funding along with mentorship and coaching.

In a normal downturn, every 100 people who have been laid off will result in 7 of them starting their own business. Without access to capital, the vast majority of those would-be entrepreneurs have turned to the web where startup costs can be measured in hundreds of dollars rather than hundreds of thousands of dollars.

More importantly, the employees these startup companies would have hired have been eliminated. They have figured out ways to operate as a one-person business, bring people on for short-term projects, and contract for services.

Once people learn how to run a super-lean one-person business, there’s no turning back. Jobs are not just temporarily eliminated, they are never coming back.

Because of our hyper-aware communication systems, one-person business owners are in close communication with others who think and act just like them.

The Downside of No-Fund Startups

Without any form of institutional funding for startups, governments are losing control of online commerce. That means no tax dollars, no regulatory authority, and no sense of what’s really going on inside these businesses.

Borderless economies mean no sales tax dollars for local streets, schools, libraries, and parks.

There exists a pervasive notion that “since the system has failed them, they will not support the system.”

Above-ground economies such as store-front businesses are continually subject to the scrutiny and whims of local governments. The added hassle of dealing with planning and zoning departments, filing sales tax reports, and attending city council meetings is more than a mild inconvenience. It’s a total deal killer.

As a result of this combination of negatives, the brain-drain happening as people shift from the physical world to the digital world, is dealing a crippling blow to the talent pool and income streams left to run the country.

Driven by Awareness

With the pervasiveness of smartphones and instant connectivity, we are living in a society that is jacked-in 24-7 to the world around us.

Talent is being discovered at an earlier age in remote parts of the world:

  • Justine Bieber, who was born in a small town in Canada, was discovered in 2008 by Scooter Braun, who happened to come across one of Justine’s videos on YouTube. He later became his manager.
    .
  • On June 6, 2011, 4-year old Australian art prodigy, Aelita Andre, opened her first solo art exhibit in New York City called “The Prodigy of Color” at the Agora Gallery.
    .
  • Last week 19-year-old Andrew Hsu received $1.5 million in funding for Airy Labs, a startup that is making social learning games for kids. As a Thiel Fellow, Andrew has a pretty arresting resume. He completed high school at 9 years old, had 3 bachelor’s degrees at 16 years old, and was a 4th year PhD candidate in neuroscience at Stanford when he quit to start Airy Labs.

These types of discoveries are not isolated cases. They are happening with increased frequency all around the world.

Not only are we increasingly aware of the world around us, we are able to focus the frequency of our awareness to precisely the topics and industries we are most interested in.

Refining Our Hyper-Awareness Skills

Our inability to properly meter our response to this heightened level of awareness is exactly what’s driving today’s megavolatility on Wall Street.

Yes, there are high levels of fear, worries about a double-dip recession, uncertainties about Europe, and a dearth of political leadership. But all of these legitimate concerns stem from our inability to function within this new context – living in a hyper-aware society.

I’m certainly not suggesting we need to dumb-down our systems or we, as humans, are somehow incapable of living in a world with this level of awareness. Rather, it is the fine art of managing and leveraging these capabilities that we haven’t yet mastered.

So can we really tame the beast inside Wall Street simply by spending a few zen moments next to some guru of awareness? Probably not. However, by better understanding human characteristics and tendencies associated with living in a hyper-aware world, we should be able to craft new kinds of systems that lower volatility and perhaps even eliminate knee-jerk high-stress reactions to the news of the hour.

Final Thoughts

We have come a long ways since 1850 when Paul Reuters, founder of the Reuters News Service, set a new speed standard for delivering news between Brussels and Berlin by using carrier pigeons.

Hyper-awareness is here to stay. We cannot un-ring the bell or somehow roll back time.

Just because we have access to the information doesn’t mean we have good ways of interpreting it. Most of our thinking is a mile wide and an inch deep, with little ability to probe the depths of seriously complicated issues. Yet we are connected in a new and different way. So will our thinking ever change?

Our journey through life is an ongoing adventure and our ability to both understand the nuances of change and adapt to whatever life throws our direction is what makes this a magnificent time to be alive.

Every problem creates an opportunity, and there are currently tons of opportunities waiting to be mined.

By Futurist Thomas Frey

Author of “Communicating with the Future” – the book that changes everything

.

3 Responses to “Living in an Age of Hyper-Awareness”

Comments List

  1. Mimi K

    Your idea of 'hyper awareness' is, I think, related to and may better be described as Spontaneity. Spontaneity is NOT just freely doing what one wants. Spontaneity was defined by Gregory Bateson in his Ecology of Mind as the highest form of intelligence, associated with play and loosely defined as the capacity to creatively respond swiftly in the moment. Spontaneity was also developed as a social change theory by Jacob L. Moreno. In broad, simple terms, Moreno saw societies as conserving their old paradigms and values in a "cultural conserve." A society becomes "neurotic" when its responses to evolving, changing conditions keep coming from the cultural conserve. Same old same old. As in the famous definition of madness, doing the same thing expecting different results. When a society goes neurotic - mad, Moreno said that the "cure" was spontaneity, the ability to respond in a new way and very swiftly, suddenly transforming society. Hyper-awareness caused by the extremely fast communication of information that you describe demands that we develop our skills at Spontaneity -- skillful rapid creative response. I suggest that this is the far extreme opposite of what anyone learns in education today.
  2. Jeff Samson

    Tom, Great article. Mimi K's response regarding spontaneity and your comment on information immediacy recalled the notion that we need to consider what should be responded to immediately and what should wait for additional thought. There are reasons for letting issues of broad import ferment for a while and the stock market reaction was clearly out of step. We knew it was going to happen and were disappointed when it did because it is was unreasonable. Only the media may have benefited. Human spontaneity is a benefit of our being and makes life fun. It creates a big part of our personalities and might be argued that we'd be dead without it. On a deeper level, it is certain that voting should be done directly by the individuals. However, sometimes the quality of our impulsive decisions is detrimental and at best creates confusion. When individual responses reach a collective benefit level they may be better delegated to intermediate computers. These computers will analyze a previously compiled data bank of economic and human reactions and output the most appropriate options. History shows that most responses are as predictable as the event itself for human situations and the options are not that vast. Therefore, modeling the data bank with aligned questions should be feasible. Perhaps, a future career will be the news reporter who reviews computer recommendations for collective behavior and passes the information on to those involved so they can vote on the best action. Unfortunately, this approach might replace many politicians and government workers. Jeff
  3. <a href='http://www.MacStartup.com' rel='external nofollow' class='url'>Kevin Cullis</a>

    Tom, Hyper-awareness benefits does not equal long term consequences to poor quick thinking. Kevin

Leave a Reply