Moving to asset-lite living
How many extra shavers, bars of soap or cans of soup do you currently have on your shelves at home? How much money do you currently have tied up in “inventory” of typical household items? What if you could get by without any?
Every time you buy a loaf of bread, pack of gum or stapler for your desk, you take ownership of those items. All of these become part of your personal assets. The ownership cycle generally ends whenever the item is consumed, abandoned, or thrown in the trash.
Most of us have houses full of personal belongings and we even rent storage units for overload items.
Our possessions continue to grow until we start approaching retirement age. That’s when we start taking a hard look at everything we’ve accumulated and begin the shedding process.
Two recent trends are beginning to change this cycle. One is the transition from physical products to digital ones. The other is our every evolving systems that enable us to access items at the time of need rather than maintaining a standing inventory.
This is all part of our transition from just-in-case to just-in-time living.
Shifting Our Thinking about Ownership
In her “2012 KPCB Internet Trends Year-End Update,” famed Kleiner Perkins VC Mary Meeker zeros in on this shift by first explaining the move to mobile technology.
During the last quarter of 2010 we saw our first inflection point with the sale of mobile devices exceeding the sale of desktop PCs. She goes on to predict the next inflection point will be when the total install base of mobile devices will exceed the number of desktop PCs sometime in 2013.
During the past few years our thinking about everything being physical and stationary has transitioned to the mobile and digital mindset.
- Smart device cameras overtook stand-alone camera sales in 2008.
- Smart phone GPS apps overtook portable GPS devices in early 2012
- Job fairs in physical locations have been replaced with LinkedIn and other online job finder services.
- In-bank paper-based loan forms have been replaced with online credit applications.
- Physical in-store cash registers are being replaced by iPads with Square.
- College lectures in the classroom are being replaced with Coursera, Kahn Academy, EDx, Udemy, and more.
In Meeker’s view, we are moving from an asset heavy generation, dependent upon physical money, physical time constraints and physical space issues, to an asset-light era where we can walk out the door with our clothes, smartphone, and nothing else, and can still be functional all day.
Freeing ourselves from the physical limitations of time and place proximity dramatically reduces our cost of living and the overhead cost of a business employing us.
Moving from Just-in-Case to Just-in-Time
Rather than having closets full of CDs, record albums, and VHS videos, we can have our entire entertainment library hosted in the cloud and retrieve it whenever we want.
Rather than owning a car and paying for parking, insurance, and maintenance, services like Zipcar, Uber, and Hailo are offering some very appealing on-demand transportation options.
Rather than having pockets full of cash and credit cards, our smartphones are quickly becoming the do-everything wallet of choice.
Over the coming years, entrepreneurs will force us to rethink our need for almost anything physical.
As delivery services improve, with future automated drones reducing the time it takes to receive an order from days to minutes, our thinking about our ties to the physical world will begin to morph.
3D printers are beginning to show us how we can create what we need rather than spending countless hours searching the planet to find the item and have it shipped to us.
The time and precision with which our needs can be met will cause us to rethink virtually everything that feels like ownership.
On a recent trip to Australia I was shown a house that was owned by Elton John. He owned it for 12 years but only showed up there once.
In the past, rich people were always defined by how much they owned. Real estate, expensive cars, vacation homes, and fancy jewelry have long been the symbols of greatness.
But at the same time, all of our physical trappings weigh us down. They occupy our mind, cloud our judgment, and consume our time. Our possessions become our obsessions.
No, the world of physical ownership will not abruptly end over night. But the speed with which we begin to migrate in that direction is about to pick up.
Today 144 million Americans spend an average of 52 minutes a day in their car, most of it spent commuting to and from work. In the future, we will not show up for work just-in-case we need to be there. Rather, we will figure out schemes for being there just-in-time, either virtually or physically, as business needs dictate.
If the average non-productive time spent in cars were cut in half, how else could people spend their extra 26 minutes a day?
What will a world of on-demand education, on-demand healthcare, and on-demand employment look like? If you’re struggling to imagine this kind of future, you’re not alone. But we are about to find out very soon.