Blog | Entrepreneurship

New Rule of Money #5: The Need for Speed in the Information Age

Why size doesn’t matter and agility does

Summary

• The need for speed is the driving force in the Information Age

• You need an entrepreneurial mindset with the ability to adapt and pivot at the speed of information

• Anyone can get rich in the Information Age - as long as they’re financially literate

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Dr. Buckminster Fuller once said that when change went invisible, the speed of that change would increase exponentially—what he called accelerating acceleration.

In his lectures, Dr. Fuller talked about the pace of technology and how we were “entering the world of the invisible.” To him, technology was advancing so rapidly that many people were blind to it…and would be blindsided by it.

He was worried that millions of people would not see quickly enough the changes technology brought to the world and that they would, as a result, be put out of work by technology and inventions that operate well outside their vision. He said, “You cannot get out of the way of things you cannot see moving toward you.”

Today, you must be able to keep up with the pace of change in technology. This starts with understanding that we live in an age where information is a powerful currency and knowledge is money. This is the foundation for having the speed to keep up with change.

Wealth through the economic ages

Robert Kiyosaki has written about the four mindshifts of humanity; you can call them “economic ages.”

The first three economic ages were:

1. The Hunter-Gatherer Age: In the Hunter-Gatherer Age, humans relied on nature to provide wealth. They were nomadic and went where the hunting was good and the vegetation plentiful. You had to know how to hunt and to gather—or you died. For the hunter-gatherer, the tribe was social security. Socio-economically, everyone was even. They were all poor.

2. The Agrarian Age: The Agrarian Age saw the rise of different classes of people. Due to the development of technology to plant and cultivate the land, those who owned the land became royalty, and those who worked it became peasants. The royals rode horses while the peasants walked. Socioeconomically there were two groups, the rich and the poor.

3. The Industrial Age: While many people would place the beginning of the Industrial Age in the 1800s with the rise of factories, others would argue that it actually began in 1492 with Columbus. When Columbus went looking for the New World, it was to find new sources of valuable resources such as oil, copper, tin, and rubber. During this time, the value of real estate shifted from growing crops to providing resources. This led to the land becoming even more valuable. And three classes emerged: the rich, the middle-class, and the poor.

The fourth age is the Information Age. This is the age that you live in now.

Welcome to the Information Age

In the Information Age, the fast eat the slow. In order to survive, you must be able to think and adapt at the speed of information.

In the Information Age, anyone can get wealthy because everyone has access to the same information via the Internet—and in many ways they can manipulate that information to benefit them. It’s simply a matter of who can think the most creatively and act most quickly upon the information available to them.

In the Information Age, Industrial Age companies—and those who operate like them—are toast, and nimble entrepreneurs, and those who can think like them, are winners.

To illustrate, let’s take a look at Kodak, the company who pioneered personal photography.

Kodak and not keeping up with the growth and pace of technology

In 2012, Kodak filed for bankruptcy. For years they had ruled the photography world, but now they were failing. Why? In the face of the rise of digital photography, Kodak failed to keep up with the growth and pace of technology. They thought they were too big to fail.

Unfortunately they were not. In fact, the worst part is that Kodak had invented digital photography years earlier and could have easily been first to market. Instead, they sat on the technology because they were afraid of cannibalizing their core business of physical photography.

Today, they are a shell of who they were and the only ones cannibalizing their core business are other companies who saw the potential of digital photography.

The need for speed and the definition of insanity

In 2012, The Wall Street Journal reported that Kodak was “seeking permission to pay about 300 executives and other employees a total of $13.5 million in bonuses to persuade them to stay with the company as it reorganize[d] under bankruptcy-law protection.”

Why did Kodak want to reward executives that oversaw the company’s voyage to bankruptcy? As the New York Post reported, “The targeted employees have knowledge and skills critical to help the business emerge from Chapter 11 and would be difficult to replace if they left to pursue other offers.”

As the old saying goes, the definition of insanity is doing the same thing and expecting different results. What Kodak needed was new thinking, people who understood the need for speed in the Information Age. What they did instead was reward the dinosaurs. Only in old-world, Industrial-Age thinking, would a company seek to reward the employees that ran it into the ground in an attempt to retain them to fix the problems they created.

Such thinking betrayed a lack of understanding that the world had changed and that Kodak had to change with it if it wanted to be successful. In a world that called for the need for speed, Kodak chose to stick with older, slower, more comfortable ways.

Understanding the what but not the why

The reason that Kodak, once the leader in the photography business, had to file for bankruptcy was not because they lost talent but rather because the talent they wanted to retain had failed them.

Kodak lost its edge and failed to innovate. As a result, they first lost market share to Japanese competition and then became unable to keep pace with the shift from film to digital technology.

While Kodak understood the need for digital technologies (the what), they failed to understand how people would use them (the why). Instead, they opted to rely on digital technologies that pushed people to printing photos—an Industrial Age way of thinking.

In the Information Age, what is valued has changed. It used to be that people paid a lot of money to have their pictures printed. They then paid even more money to buy frames to put them in and photobooks to keep them in. Today, those industries are being replaced by phones and cloud-based services that store your photos.

It used to be that you were careful with the pictures you took because you had only so many you could take in a roll of film. Today, photos are mostly thrown away and cheap. Hardly anyone uses film. Now, photos are a way to share a moment in the moment, not a way to capture the moment for later. With the rise of Instagram you can take thousands of photos at no cost in order to get the one you want to share, and the reason most people take photos is to share them.

Kodak was so focused on what they made, photos, that they failed to see the shift in consumers’ why when it came to photos—that photos were now to be shared. Rather than focus on technologies that made sharing easier, they chose to focus on technologies that made creating photos easier while keeping up the roadblocks to sharing.

Instagram and keeping up the growth and speed of technology

Now compare this with another photography company that is much different than Kodak— Instagram.

Instagram’s philosophy is very simple. Enable people to take pictures on their phones, doctor them up a bit, and share them online. It’s free, has been updated countless times in the last few years to accommodate users’ demands (such as incorporating Stories to compete with rivals like Snap, which calls itself “a camera company”), and has over a billion active users.

Instagram was focused on meeting people’s why, not just their what. As a result, they are hugely successful.

A few years ago, Facebook bought Instagram for $1 billion. It had thirteen employees.

When it went under bankruptcy, Kodak had 7,600 employees and about 16,000 Medicare-eligible retirees.

All this serves to illustrate that size really doesn’t matter—the need for speed does.

Think like an entrepreneur

This isn’t to say that small companies are better than big ones. Rather, big companies must still think like small ones, especially in this day and age of ever-changing information.

Innovation is key. Only those who have the agility to keep up with the growth and pace of technology and innovate quickly will survive. And most often, it is entrepreneurs who lead in this category. The best companies are the ones that continue to think like entrepreneurs, and the richest people are entrepreneurs.

Thinking like an entrepreneur takes a strong financial education. The Rich Dad Company was created to help train and raise up entrepreneurs.

Your best next step is to start investing in your financial education today and start acting like an entrepreneur. If you do, the world is your oyster.