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Scarcity, Abstraction & Abundance
I was reading Alex Danco's excellent series Emergent Layers and his post on scarcity, abstraction & abundance really stuck out to me. The core idea is that money is made from points of friction, meaning something is hard to get so you can charge for access. Technology then abstracts that friction away, making that thing abundantly available and then a new point of friction emerges.
Alex uses today's tech companies to showcase this scarcity -> abundance cycle. Intel made hard to use microprocessors programmable so computing power was easily accessible. Microsoft made the PC easy to build on top through their operating system. Cisco made networking easy so connectivity was abundantly available. Google made information free, Facebook your social graph, and so on.
In How We Got to Now, Steven Johnson talks about some major innovations in history and the subsequent hummingbird effects. What struck me was how well these non tech examples fit the scarcity & abstraction framework. So a few below.
In the early 1900’s, summer was a grueling time. To cope they’d drink iced beverages, play in the water, or even ride the train aimlessly to try and keep cool. The heat made several activities impractical - watching a movie in a hot small theater was bad, eating hot foods were horrible, etc. A more liveable temperature was a scarce resource.
In 1902 Willis Carrier invented the air conditioner. The backstory is worth a read, but the air conditioner was a big change and turned temperature control from scarce resource to an abundantly available one. Anyone could now change their living temperature to whatever they wanted by simply adjusting the thermostat. A new point of friction (access to power) emerged.
As a a result of this humans could move to places previously uninhabitable. Tucson went from 45k to 210k inhabitants in just 10 years. Florida became one of the top 4 most populous areas in the world, growing from sub 1M to 10M+ people in less than 50 years. And the Carrier Corporation is still the top air conditioning company over 100 years later with $12.5 billion in revenue and 45k+ employees (2012).
Before the late 1700’s, the dark consumed the bulk of people’s lives. People planned their days around the sun and used candles at night to try and illuminate the darkness. Life was generally more dangerous at night and with no street lights, crime was high. People also slept very differently – often over a 12+ hour period in 2 separate sessions.
Light was the scarce resource for the people of the late 1700’s. And so in the 1793, William Murdoch invented the gas lamp. By 1807, the first public gas lamp was lit in the streets of London. Crime went down, factories could stay open longer, and people could be awake for more hours in the day. The gas lamp made light abundantly available to the people. A century later, Thomas Edison would commercialize the electric lighting system and subsequently created General Electric, still one of the largest companies in the world.
We take time today for granted. Buses, trains, coordinating schedules, etc all depend on a synchronized time system. But before the 1600’s, we used a combination of sundials & mechanical clocks. The clocks had to be recalibrated several times a day to stay accurate. Time was not measured in seconds & hours, but in hours & days.
This was a real problem for those sailing across oceans. Determining your location at sea is based longitude / latitude. Latitude you can determine from the sky, but longitude is based on a system timing and subtracting from two clocks. With clocks wildly inaccurate, you can’t tell where you are, which is a problem when you’re in the middle of the ocean.
In the early 1600’s Galileo invented the basis for the pendulum clock. This made time measurable to the second, only losing 1 sec / week vs. the historical 20 min / day. The dramatic increase in the accuracy of keeping time made doing anything based on time – measuring performance, managing work schedules, meeting people, etc – actually feasible. It made accurate time keeping abundantly available for the people.
I love these examples and think it's a useful framework for thinking about good ideas. Figure out where points of friction exist, figure out how to abstract it away to make that resource abundant and then solve the new point of friction. Obviously easier said than done! :)