Identity is a funny thing. People think that they have a single identity when they really have multiple as your identity (and personality) change depending on the social context you find yourself in. We also seem to at a point in time where the centre of gravity around which our various identities orbit is about to jump from the physical world (the nation) to the virtual (a “social graph”).
For a long time our identities have been built on location. The public face of this is nationalism. “I am Australian.”
We forget, though, that nationalism is a fairly recent invention, only emerging in the late 1800s to early 1900s. Before nationalism an individual’s – peasant’s – identity was defined locally, relative to the community they lived in. Economies were a local concern and most people rarely travelled more than a few miles from home, ever.
In the 1800s Napoleon’s all-conquering army taught many rulers (who were often no better than standover men) the benefits of nationalism and industrialisation. The challenge for many rulers was to convert their peasants into citizens. This was a particularly brutal process with many traditional attitudes, cultural practices and local languages and dialects destroyed. The process also rendered many peasant skills useless, fundamentally changed the role of education in society (previously it produced educated clerks and priests, after nationalisation and industrialisation it needed to mass produce administrators), and created what we think of as the middle class. The shift to nationalism reached a peak in the 1940s when it resulted in some of the most vicious wars and crimes against religious and ethnic minorities witnessed in human history.
Social media is rewiring the world. For many individuals their identity is becoming rooted in their tribal relationships.
No longer do we need to subscribe to one of the dominant national tribes. Now we can be a part of a global, virtual tribe. Geeks are a good example of a social group that has been transformed from a collection of scattered individuals into a global tribe.
This shift in identity from local community to global tribe is one of the drivers behind the destruction of the mass market we’re seeing at the moment. “Get big or go home” is being replaced with “get niche or go home”. In many instances individuals seem to prefer recommendations from their tribe to guide purchasing decisions rather than focusing on feature-function breakdowns of products found via an extensive search. They’re reacting to the confusing world around them by turning to the people they trust, the members of their tribe who the individual feels has the same interests and preferences as themselves, rather than brands or locations.
This raises an interesting question for firms: How does one sell to an individual who’s purchasing decisions are tribal? (I.e not based on feature-function or location, and where tribal affiliation is stronger than brand.)
These global tribes are also finding new ways to mobilise resources and solve problems that are not tied to nations or nationalism. Services such as Kick Starter enable a tribe to fund a project or product. New developments in manufacturing (iStream Unitised Building are my two favourites at the moment) are slashing the cost of production and the up-front investment required. As a Service solutions enable tribes to knit together services and organisations.
Risk is still the path from idea to reward. But the where the path between the two used to pass through investment, now it passes through the tribe. This means that tribes are capable of solving their own problems, rather than relying on firms or governments to solve a problem on the tribe’s behalf. There are early signs that production is starting to fragment as a consequence.
For firms this implies that their new competitors are their own customers, the tribes that they service, rather than other firms.
To sell to members of a tribe you must be part of the tribe. It’s not enough to be in conversation with the tribe, your identity needs to interwoven with the tribe. How to do this at sufficient scale (i.e. find/create a large enough tribe, or aggregate enough smaller tribes) is an open question.
One obvious option is to own the platforms that the tribes use to communicate and coordinate their actions (such as KickStarter or Etsy), which is why there’s a huge amount interest in creating a new generation of platforms. However, it’s not entirely clear which of these platforms will be the infrastructure of a future virtual, tribal society, and which are not. (Uber, for example might be a “platform for the sharing economy”, or it might simply be a smart dispatch solution).
If were were to ask the question “who knows the customer best”, then the answer must be the tribe; and not social media (which is a medium); nor is it banks, telcos, Facebook or Google, that knows the customer best. (“Big data” analytics has similar characteristics to chess, where computers can provide tactical insight and are yet to demonstrate a strategic understanding of how the landscape is changing.)[ref]Freestyle chess if a fascinating movement to look into if you want to understand the interplay between a computer’s tactical insight and a person’s strategic creativity.[/ref] To understand a customer you need to be part of the same tribe.
For governments this implies that we might be at the leading edge of a new shift, as identity moves from nations to virtual tribes.
Many of the problems that governments are dealing with – declining tax revenues as more and more of the economy becomes virtual, the emergence of crypto-currencies (i.e. complementary currencies not tied to any national government or geographic area), rapid growth in the scope of financial crime, citizen disconnection from (and distrust in) the election process – can be seem as symptoms of this.
The ability to more effectively marshal resources (some of which were peasants) drove the adoption of nationalism/industrialisation. The shift from nationalism to something tribal will be more complex, as the old guard (who control all the resources) will not necessarily be the ones who come out on top this time. Apple (at the helm of the world’s largest commercial tribe) might be an example of the future. Or it might not.
We can expect the transition to be as brutal as that from feudalism to nationalism, unless we try to actively manage the fallout.
Image: John Hain