Tim and I had a fun Google Chat back in March about a concept for a book called “Too Big to Succeed.” The window for a book on this theme to become a blockbuster is almost closed, so I figure it’s time to stop hoarding the idea and make it a blog post.
The phrase “too big to succeed” has already infected the cultural lexicon this year. A quick sweep of Google shows it being applied to the banking industry, the auto industry, Twitter, big Pharma, China, and Washington, among other things.
It’s a good phrase, springing up (as best as I can tell) in response to an even-more-popular recent construct: “too big to fail.”
The concept of an entity or industry being “too big to succeed” deserves an extended riff. Do industries just have to congeal into tiny networks of giant institutions over time? And if so, does that tendency pretty much force the massive flameouts and market inefficiencies we’ve seen all over the economy recently?
I don’t think this does have to happen, and therein lies the thesis of the book.
I think the era where every industry has to become an oligopoly is nearing an end. I don’t think the shift towards mass institutions was a natural, inexorable network characteristic. If we look at the tape, I think we’ll see that the oligopoly era was a network distortion produced by our industrial-age regulatory framework. And it’s time to leave these things to a quiet rest.
In industry after industry, I think we’ve got an opportunity to shift our policies towards supporting nimble, durable markets that mimic real networks: diverse collections of nodes with a few particularly well-connected hubs. Let’s look at a few examples:
The news industry
Over the past century, the news business went right past oligopoly into monopoly and got stuck there. Today, most of the journalism produced in every American city is an accidental byproduct of a giant, dying media conglomerate. As with all these other oligopolistic industries, the news titans are clamoring for a bailout, asking the government to prop them up and regulate away their competition.
But we can imagine a system of better, more sustainable journalism built on a robust network of independent newsrooms threaded throughout every neighborhood. Networks of editors could package this work for diverse sets of overlapping communities. In places like the Bay Area and Seattle, we’re seeing the beginnings of this new model, but to thrive, it will require at least as much regulatory support as the big dogs got when they were buying their presses back in the day.
The medical industry
This was what got Tim and I started. Today, most health care is provided by big, unwieldy hospitals. They tend to cluster in these giant office parks, often far away from the inner city, where they’re needed most. You walk in and have to navigate a maze of rooms, bouncing back and forth between receptionists and nurses and physician’s assistants and doctors.
But the vast majority of medical care people need on a daily basis doesn’t require a hospital to provide. As Tim said in our chat (punctuation mine), “There should be as many clinics as there are coffee shops, pharmacies, or copy stores. Universities do this (at least Penn does). We have a student health center; they have walk-in and appt hours, you pay a fee and it’s free. They see you and administer standard care, run tests, give physicals and vaccines and such, and then refer you to the hospital or a specialist if it’s more serious. You HAVE to go to the clinic if you’re in Philly and it’s not an emergency. And in part b/c it’s a tailored operation, geared towards younger people, it’s tremendously efficient.”
The food industry
I just saw Food, Inc., yesterday, which might be what got me off on this riff again. If you read Fast Food Nation or The Omnivore’s Dilemma, you know that Eric Schlosser and Michael Pollan both identify monoculture (i.e. oligopoly and monopoly) as the primary villain in our awful global food situation. The last century saw food production shift from the local farmer to the multinational factory conglomerate. That shift is ruining our health, our environment, international diplomacy, and perhaps worst of all, our food. Meanwhile, the unbelievably obese food lobby has taken control of our government, writing intrusive laws to ensure its survival even as it crumbles under its own weight.
The movie industry
At this point, Hollywood basically exists to churn out quarterly blockbusters that each aim to repeat the formula for one blunt, universal emotion: love (“The Proposal”!), fear (“Saw XI”!), excitement (“Transformers!”), humor (“17 Again”!), etc. Nuance is lost, and art suffers. Like the food titans, the news kingpins, the health care lobbyists and others before them, the movie moguls are descending on Washington to seek protection as the twin forces of distribution implosion and supply explosion shred their profits.
But when my nephew is cooking up mindboggling special effects on his laptop, who needs Hollywood? The industry’s product is unsustainable. You can’t flog the formula forever. Let a universe of independent artists flourish, and overhaul the laws to help them make their magic.
We can lay this pattern onto the energy industry, the publishing industry, banking (of course), transportation, post-secondary education, you name it. If I were editing this book, I’d make that the first third, in fact: spend the preface and first chapter making the overall argument, then spend a few chapters exploring how it plays out in all these different industries. Follow up this part with a chapter laying out the history — how this screwed-up oligopoly system took root in the first place. Trace it back to the industrial age and beyond.
The middle third of the book (I’m taking this straight from the gChat) could be about the rules of a new, more natural network system. The role of big companies in this ecosystem, what differentiates successful lean businesses from unsustainable niche businesses, how a network of microbusinesses can collaborate and compete effectively.
The last third might address how society generally would benefit, and how it would have to evolve to support this. This is where you explore the policy piece — how our laws have to change. It’s also where you talk about the Richard Florida stuff — our evolving understanding of how properly organized urban environments should function — and how this shift facilitates that.
Of course, as I said, I think the moment for this book is almost gone. From last September to this past January, we had a brief interlude of just transcendent possibility. Monumental shifts in our society seemed graspable. People talked about spending a trillion dollars over just a few years to fundamentally remake our economy, and we actually passed a stimulus package that got closer than anybody imagined.
But we’re seeing that ambition melt quickly. We’re on the verge of historic health reform legislation, sure, but now we’re choking on a price tag of $1 trillion over 10 years, regardless of how much it saves us over the long term. Our chance to achieve forceful climate change legislation is dimming by the day. And our September lust to reform the banking industry has molded over into a desire to, er, re-form the banking industry, in much the same shape as it was in 2001 or so.
There was a window where a big, Gladwellian book selling this notion of industrial transformation — not as some sort of hippie anti-corporatism but as a breakthrough business idea — might have made some traction. But I think that window’s almost shut. So this book is, for now, a blog post.