Little changes are boring and big changes always get the spotlight. The Internet of Things promises to increase internet connections from approximately 2 billion people centered devices today to 52 billion people and “things” within 10 years. Wow, what would our grandparents think of our new world? Has anyone ever lived in such a time? They have.
We could be forgiven for believing we are the first generation that’s lived through this kind of fast and massive change…that we are somehow different. We are not.
Steamboats and Railroads
I’m reading a book on steam and railroads in the US and many of the statistics leapt out at me. One example: Transportation costs between the East Coast and the interior were reduced in the early nineteenth century by 95% with the advent of the canals like the Erie and Baltimore and Ohio.
That’s 95%. And that’s the 1820’s. Imagine if your iPhone dropped by to $25 and your cell phone bill to $4/month. Maybe not a perfect comparison, but you get the idea – game changing innovation and improvement in a relatively short amount of time.
Knowing these stories keeps our feet on the ground when those around us are hyperventilating over change. What’s equally interesting about the past is what can be learned from these stories:
- Direction understood, final form up in the air: Charles Carroll, the last surviving signatory of the Declaration of Independence said, at the turning of the sod on the Baltimore & Ohio in 1828, “I consider what I have just now done to be among the most important acts of my life, second only to my signing the Declaration of Independence.” There was an understanding that something game changing was in the air, but exactly what the game’s rules were or who the winners would be were yet unclear.
- Some will get really, really, really rich: When the rules are rapidly evolving, some will figure out the winning strategies for the game a little before others and win big. Edward Harriman went from humble beginnings to control the Union Pacific, Southern Pacific, Illinois Central, Central of Georgia and Wells Fargo Express by his death in 1909. Cornelius Vanderbilt, Daniel Drew and Jay Gould didn’t make out badly either. There is thus a tremendous amount of value in seeing the outlines of the marketplace as it emerges – at least before your competitors do.
- Disruption will get disrupted: While the Erie Canal initially had a great impact on travel from the Great Lakes to the Atlantic, railroads and even a later canal across the Ontario Peninsula (thus avoiding Niagara Falls) made it quickly less economically viable than other ways to move goods. The canal that took 8 years to built was only a hit for around a decade. It never pays to ride a single success for too long.
Need more examples? The Pony Express, doing the unthinkable of delivering messages from St. Joseph, Missouri to Sacramento, California in only ten days (unthinkable at the time) lasted 18 months. We knew we needed fast communication as the Civil War loomed and California boomed, but we didn’t know how. The Pony Express was revolutionary but its biggest success was to prove that a transcontinental telegraph was possible. In two years, the time it took for a message to reach the West Coast went from months, to days, to minutes. That was serious change.
The companies that built the business and technology landscape as we know it are only as powerful and secure as their next move, not their last. Giants of today are going to be relics tomorrow. The important thing to remember is that we’ve been here before, and that makes us humble about how little the times really are a’changin’.