Europe can be excellent

Milo Yiannopoulos wonders what social responsibility will look like in a world where only the very brightest and best have significantly monetisable skills.

Yesterday, West Coast investor and pundit Jason Calacanis published one of his occasional missives. This one was called The Age of Excellence. Like most of his columns, it was itself excellent, at least in its ability to prompt interesting discussions among the followers and fans Calacanis likes to call the “Jason Nation”.

“The age of good has ended and the age of excellence has begun,” writes Calacanis. “The world has no place for good, let alone average, contributors.” As far as the internet industry is concerned, there is now room only for the very best.

It’s a bold manifesto: perhaps one that could only have been penned by an American, for an American audience. But let’s take heart and have the confidence to assume that it can serve equally well as a challenge for Europe – one that the new crop of founders currently emerging in Shoreditch and beyond should be anxious to meet.

Calacanis’ contention is that in an oversaturated environment whose marketplaces have become democratised and whose delivery mechanisms have become socialised, only the very best products and businesses will now ever get noticed and succeed. There’s nowhere to hide: get lousy reviews and your product will fail.

“In the old days,” he says, “it was about distribution, location, marketing spend, celebrity endorsement, traffic buying or the black art of search engine optimization.” But that era is over – and with it are disappearing many of the concomitant people and services that used to be necessary to market merely satisfactory products.

There are some unhappy consequences to this apparent inevitability, which I’ve written about before. Most troubling – something that has already happened in Britain and the US – is the replacement of low-skilled people by decentralisation and by software, a turbo-charged version of the industrial revolution that is already rendering vast swathes of the population in developed countries, for want of a better expression, economically worthless.

However, if Calacanis is right, things are about to get even worse, because it’s no longer just the low-skilled who are at risk. For consumer internet businesses, getting the product right is all that now matters, and that means fewer and fewer people, with rare and unteachable gifts – the intellectual elite – will be capable of creating value, as contributors and service providers further down the value chain – for example, marketers and public relations executives – become redundant.

The end result of an increased focus on product, and of the new democratisation and transparency of social ratings, voting and feedback mechanisms, “is that a hit product becomes a megahit”, as social software takes hold and obviates the need for expensive marketing campaigns. Even worse, because these new social discovery mechanisms are subject to mob mentality, “the distribution curve of people’s attention is getting more extreme”.

In other words, far fewer products blow up far more quickly and at greater scale. This explains the appearance of the Words With Friends and Draw Something phenomena and the relative paucity of market penetration much below the very upper echelons of the app stores and the tech blog rankings. Big hits are now the only hits.

Transparency, manifested as user reviews and industry feedback mechanisms, have supplanted the old ways of engineering success: now you have to create something that people are actually excited by. With so many middlemen cut out, the rewards for service and content creators will be enormous, with the resultant wealth concentrated in the hands of a minuscule number of people.

As I’ve written before, the consequences of that writ large across general society are simple yet horrific: either non-jobs must be fabricated in the public sector to provide distraction and dignity for an increasingly massive but economically useless underclass, or half the population will be condemned to the benefits trap. There aren’t many other ways around the problem.

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The age of excellence is not entirely good news from a European perspective, for a number of reasons, chief among them being that we have, by and large, forgotten how to be excellent. Regular readers of this column will be able to predict at least two of my specific worries. To begin with, our entrepreneurs don’t generally have the same psychological insight as the Valley sociopaths who engineer fiendishly sticky social platforms.

That’s partly a result of a superior liberal arts education in America, and partly because the particular sort of behavioural insight necessary to manufacture these experiences is something Americans, unencumbered by European sensitivities around privacy and exploitation, are better at seeing through into marketable consumer experiences.

Then there’s the fact that so many European success stories, even very modern and supposedly technological ones, are built on little more than clever marketing. Absent the killer West Coast psychological instinct, we’ve become better at selling the substandard: thus innovative advertising and marketing, the methods of distribution Calacanis identifies as increasingly obsolescent, have become our calling cards.

For an illustration of what I mean, consider three of the burgeoning success stories from London’s “technology” scene: Wonga, MOO and Mind Candy. Wonga is a classic payday loans company dressed up as a friendly money-lender. True, the company has some sophisticated algorithms running in the background to sniff out high risk borrowers, but Errol Damelin’s real innovation is to present a traditionally grubby operation as a shiny, familiar-looking internet product.

MOO brings a similarly glossy interface to another archaic industry: printing. MOO’s website may be gloriously fun to tinker with, and there’s no doubt that the company’s marketing copy is brilliantly executed (it has spawned numerous imitators as a result), but all MOO really provides is a more attractive and convenient point of sale for very conventional printed goods.

Of the three, only Mind Candy, the company behind Moshi Monsters, can really be said to have innovated primarily in digital products. And, even then, the company could not help itself but topple into an orgiastic explosion of real-world merchandise, partnerships and endorsements at the first opportunity.

No doubt this is partly a function of its target audience, but my point is that even among the current crop of promising mid-life cycle internet start-ups, few of Europe’s bigger names meet many of Calacanis’ criteria for brutally digitally-focused idea factories. In other words, we’re not actually building many big technology companies over here.

Add to the more complex and diffuse DNA of internet businesses in Europe a shortage of capital, a shortage of qualified investors and a shortage of experienced, visionary founders and chief executives, and you begin to see why the continent shows no signs yet of catching up with the Valley.

Today’s European internet entrepreneurs are entering a saturated market amid heavy competitive disadvantage – barmy European Union regulations, entrenched Left-wing economic and social attitudes and high taxation – but, as those who have excelled, such as the founders of Autonomy, SAP and Skype, have shown, it is still possible to realise the European dream.

In so doing, however, the geek elites of tomorrow must be prepared to accept that they are set to become the new Wall Street, albeit a more globally distributed one, as they join the ranks of American, Chinese and Indian innovators. They are where money and power will be concentrated in the future. And they will be responsible for managing the consequences of the most rapid polarisation of wealth the developed world has ever seen.

Whether Europe is able to participate and succeed in this new era of ruthless meritocracy will depend entirely on whether there is the determination here to overcome regulatory and cultural barriers to runaway levels of financial success. The good news is, should Europe succeed, our continent has proven itself incalculably more compassionate and responsible at distributing the proceeds of growth than our American neighbours.

That, perhaps, will be our contribution to the age of excellence.