Among many of the meaningless problems that the adorable whiskery German has pondered upon during his life, the concept of historic recurrence is perhaps the most understandable. To anyone with a decent knowledge of human evolution, the idea that the history repeats itself cannot sound too alien. And yet, according to Nietzsche, we have to forget it, lest we won’t be able to step forward, haunted by the experience of the past. Not to worry, dear Nietzsche. If there is something the human race excels at, it is constantly repeating the same mistakes.
It is good for the business too that the mankind is so daft. Thanks to free market the price, cost and value of everything and everyone should be fair; defined by the demand and supply. It follows that in capitalism, superior profits can only be earned by speculation. It is natural and necessary for the capitalism that booms and busts occur. They repeat with a chilling certainty. The Tulip Mania of 1637, The Great Depression of 1929, or The Dotcom bubble of 2000 – they are all stories of greed, which have pushed prices too high, before they collapsed in sudden and unexpected market breakdowns. Capitalism is a malfunctioning system, but one that fits best the human nature. Never mind how many market collapses people have seen, a new zeitgeist will always emerge that will drive sensation, investment and new business.
Our zeitgeist is the digital economy. The likes of Uber, AirBnB, Facebook, or Twitter are believed to have reinvented supply chain. We read, interact, buy and live through the internet. Soon, every service and every product will be bought & sold directly. A customer can order private driver directly through an App, without the need to phone up some Taxi service. We all become marketers of ourselves. There is no place for companies anymore in the digital economy, except for the ones that control the flow of information between us. They are the new darlings of the stock market, forming what is the new market bubble.
These digital companies are based on smart, but immediately replicable ideas. Local versions of Uber, for example, are emerging all over the world. Only very little of their IP could not be copied. A good idea, clever algorithm and some incumbency advantage are not enough to justify the company’s market valuation. After eleven successful funding rounds, Uber has reached the price tag of $50bn. The money came from sophisticated investors like Goldman Sachs, BlackRock and Microsoft – not the types that could overlook the vanity of Uber. They have not bought into Uber to follow the crowd, but to thrive off the crowd’s foolishness. It has never been easy to play the game of momentum. For all its repetition, the story of boom and bust is hard to read. The trick is to invest and then get out just before the collapse. Excess tends to be the best sign that the things will soon go under.
Underclub.co is the Uber for lingerie. The service does exactly what it says on the tin. That anyone would find inspiring to apply Uber’s peer-to-peer principle to underpants, is a pretty good indication that the market fall is not too far off. All of this occurred to me, as I witnessed a little whiskery man jumping into a taxi in Frankfurt. He felt proud for calling upon the driver with an iPhone App. How revolutionary. Nietzsche would be proud too. Another misstep of the mankind. Another market bubble.
Alexandria Miller, “On the Advantage and Disadvantage of History for Life”, Yale University, Yale Modernism Lab, (2009)