With our recent move to Silicon Valley, I indulged one of my guilty pleasures: getting rid of stuff. While I know this vice smacks of OCD, there is nothing I enjoy more than rummaging through the stuff I own, turning the object in question over in my mind and thinking, “Do I really need this any more?” And of course, this habit extends not just to the paraphernalia I already own, but to every other piece of stuff that threatens to enter my orbit.
It’s becoming easier than ever to simply not own things. A quick inventory of goods in the house reveals that most are being replaced either by substitutes that take up less space or, in extreme cases, no space at all:
- Television: Gone is our behemoth Sony Wega, with its bulging CRT. Our new flatscreen is probably one-hundredth the volume, despite the fact that it has a larger screen. And, if we were so inclined, we could hang the TV on the wall and forego the media stand.
- Music: I haven’t handled a CD for the past five years for any other purpose than to rip it in iTunes and shove it on our networked hard drive. With services like Spotify and Pandora offering subscription-based music for less than the price of a CD per month (free for Spotify if you’re listening from a laptop), even the compact form of the hard drive seems overbearing and unnecessary.
- Movies: While I was never one to collect DVDs, a small collection of favorite titles accumulated nevertheless. But with on-demand services like Xfinity and Netflix able to provide just about any movie to us any time we want, the idea of holding onto data-imprinted plastic discs seems quaint at best.
- Books: The family bookcase suffered the most significant losses during our recent move, with the size of our library declining by half. So long dead-tree technology, hello Kindle DX, and Kindle app for iPhone and iPad. It would appear bookcases may be a thing of the past (a fact that has not gone unnoticed by IKEA). One Billy bookcase down, one to go.
The exercise got me thinking about how this trend could dramatically reshape society if applied across the entire population. Households have doubled in size since the 1950s while the average family size declined by almost a third resulting in a significant increase in the per-capita size of housing. But do we really need all that space anymore? It makes you wonder what other services or product innovations could drive down the size of households?
In the opening chapter of “Natural Capitalism“, the Rocky Mountain Institute examined a number of small changes that could be made to the modern car to create what they term a “hypercar”. Simply changing the car body’s material from steel to carbon fiber resulted in an interesting feedback loop:
- If the car is made of carbon fiber, rather than steel, the car will be lighter
- If the car is lighter then the engine doesn’t need to be as powerful
- If the engine doesn’t need to be as powerful, the engine can be smaller
- If the engine is smaller and less powerful, then the car doesn’t need a large transmission or brakes
And so on; one small change begets a virtuous cycle of reduction. I suspect we may see something similar happen as many of our consumer goods get replaced by services, especially those than can be delivered electronically.
Of course, just like the hypercar, eliminating the assumption that goods need to be delivered physically has dramatic consequences for the supply chain that previously delivered the physical good. While the most readily visible consequence is the slow death of retail stores, the impact of the shift to electronic goods goes much deeper. Applying the same logic as before:
- If the good can be made of bits instead of atoms, the good can be delivered online
- If the good is delivered online, then the good doesn’t have to be transported to the customer
- If the good doesn’t need to be transported to the customer, then the good’s supply chain no longer requires raw materials (paper, plastic, cardboard, metal), physical stores or warehouses, transportation, or fuel
- If the good doesn’t require those materials or infrastructure, then it doesn’t require labor to mine the resources, or manufacture and transport the goods, and significantly reduces the labor required to sell the final product
I suspect (probably incorrectly) that most of the consumer goods that can be “digitized” have already been digitized (books, movies, music) and the pace of change for those industries will decline — there’s only so much extraneous stuff we can eliminate from our households. However, as Marc Andreessen pointed in his epic “Why Software is Eating the World” article, this trend is just getting started within government and industry.