:: The Park Paradigm ::

Markets for the Digital Generation

If you are not familiar with the term ‘edglings’, read Stowe here and here. An exerpt:

As power moves from the center to the edge the “Centroids” — those that hold with the centralized power of an industrial era — will scream about all the negatives that they perceive in the out-of-control future that threatens the basis of their worldview. But the Edglings will find it liberating to get out of the stranglehold on information, communication, and the marketplace that centralized organizations attempt to impose.

Just as importantly, I think that Edglings share a common base of perceptions about the world and our place in it that transcend the media market, and form what I think of as the basis for a future metaphysics, or, at the least, a new worldview. I have written about the central propositions of web culture before (see Rebooting, and The Rise of Web Culture and Its Enemies, for example), and I believe that the rise of web culture is perhaps the greatest hope that humanity has for a better, or at least survivable, future.

People like Dave Morin, his peers, his friends - his generation - are edglings. He calls it the “Hand-me-up Generation”.

Whatever label you put on them however, the key underlying behavioral and cultural frame they share is to look to each other for answers, for services, for jobs. Their default setting is not to defer to the center, to the perceived or received authority. At least not unthinkingly. They lack that conditioning. Now don’t get me wrong, they are not against these institutions per se or as a matter of principle. Their approach is altogether more pragmatic - if the service or product offered is excellent and relevant to their needs and desires they are happy to transact. Thus the success of a company like Apple which for all its cool and fashion factor, is the antithesis of open or edge.

This is important for anyone involved in financial services. Many of the reasons why big is better (scale, liquidity) remain and are perhaps even reinforced in this digital age. However other countervailing forces - cultural and technological - are emerging that do not favor the incumbents. Financial exchanges are the ultimate hubs in a hub-and-spoke model, watch out for the continued rise of peer-to-peer trading paradigms. Today’s industry is predicated on the consumer outsourcing their wealth (to banks, fund managers, Wall Street and City pundits, etc.), watch out to the continued rise of the self-directed investor. They aren’t going to be very impressed with much of the pablum currently served up as convention wisdom; I’m probably too harsh but the financial services industry is not adapting their value proposition very quickly from one that historically was predicated on their absolute primacy in terms of information and knowledge. Any 10 year old with a broadband connection now has more information at her fingertips than a $1 million / year master-of-the-universe Wall Street trader had 10 years ago, and the gap today is narrowing fast. Indeed many professionals on Wall Street and in the city use simple tools like Google and Yahoo Finance to quickly find information they need on a day-to-day basis.

The hand-me-up generation will ‘consume’ financial products differently from the Baby Boomers. There is a huge opportunity for firms - both new and existing - that adapt to this new paradigm.

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