Are many new businesses going to be useless?
Most businesses are socially useless. –Umair Haque
With “Black Friday” behind us and “Cyber Monday” ahead of us, economic pundits continue to wring their hands and fret that holiday retail consumer spending will not “hold up” enough in 2009 to pull us out of the current economic funk. At the same time, many in the underground “anti” world are asking people to just Buy Nothing for 1 day (Nov 27th was Buy Nothing Day).
Umair Haque (one of my favorite bloggers) is taking a different path by (indirectly) asking us to consider buying from Constructive Capitalists who are creating what he calls “thick value”. Umair’s Constructive Capitalists are not in business only to make a buck by selling a commodity product to consumers suffering from “affluenza”. Instead, they are doing things that matter to people, communities & society. They are creating “awesomeness.”
Umair goes rails against socially useless businesses in the hilarious post Is Your Business Useless.
According to Umair, “socially useless businesses” have cost us about $12 trillion at a minimum over the past 5 years via the various bailout packages. Paul Krugman, Simon Johnson, and Lord Turner agree.
Socially Useless Businesses
Socially useless businesses created a global economy on life support, a jobless “recovery” and mass unemployment amongst the young. Socially useless business is why we don’t have a better education, healthcare, finance, energy, transportation, or media industry. Socially useless business is a culture in shock, reeling from assault after assault on the fabric of community and comity. Socially useless business is the status quo — and the status quo says: “You don’t matter. Our bottom line is the only thing that matters.”
Until now. Today, socially useless businesses are living on borrowed time — and the clock’s about to reach zero hour. Somewhere out there is a Constructive Capitalist who’s going to use the power of meaningful economics to relegate you to the dustbin of economic history — just like Google and Apple are doing to big media, Wal-Mart’s doing to big food, FMCG, and retail, and Nike’s doing to shoes.
Constructive Capitalists are better businesses. They’ve learned how to create thick value: value that’s socially useful. They are doing things that matter to people, communities, and society.
Though I agree with Umair that socially useless businesses shoulder a lot of the blame for the current economic mess, I would argue that we (consumers) shoulder some of the blame.
Fewer Trips to the Mall
As I’ve discussed here, consumers really are boss (consumer spending drives 70% of US GDP) and our purchasing decisions/habits do make a difference. After all, people like you and me decided to buy all of those junk mortgages and souless McMansions. We’ve chosen to run up credit card debt instead of save for a rainy day. If, for example, we decided to downsize and live within our means, we could break the cycle. If we responsibly shopped on sites like the ethicalsuperstore.com (read their manifesto) instead of Target.com we could support new ethical and social business focused on people, communities & society.
In many ways…its up to us.
Fewer Trips to the Bank or Venture Capitalist for Entrepreneurs as Well
Seth Godin is also in the “Umair Zeitgeist” as he recently reminded entrepreneurs that the do have options when it comes to avoiding those socially useless banks that Paul Krugman discusses above. In “Debt, Equity and a Third Thing That Might Work Better.” he reminds folks that they don’t have to settle for risk averse banks and “venture vultures” when staring new businesses. Other new & interesting social financing entities are forming that avoid the traditional system all together. I recently stumbled across SellAVenture (not the real name) at the ClearlySo Conference. This group will bring social enterprises looking for start-up funding together with like minded people keen to fund via small amounts of money. People like you and I will be able to get in on the action to drive socially useful businesses…no banks required.