Untangibles

You may not have heard much about untangibles, but you will.

Untangibles are to intangibles as intangibles are to tangibles. Times ten.

Basically, when viewed scientifically, the universe is made up of three distinct components: matter, energy and dark energy.

Matter is tangible--and relates to a corporation's products and material assets--buildings, trucks, computers, desks.

Energy is intangible--and refers to a corporation's know-how, ability to reason, design acumen, and part of what is termed "goodwill".

Dark energy, discovered by science only recently (1998), is entirely untangible. That means they can't find a single mote or flicker of it. Despite it's elusive nature, scientists know conclusively that it's running the entire universe. They estimate dark energy comprises 96% of the universe--with matter and energy making up the remaining 4%.

You can imagine, then, how crucial untangibles are for any business' future.

Before 1900, the economy was almost entirely tangible--and the world GDP grew at an average rate of less than .3% a year.

From 1900 to 2000 the economy was both tangible and intangible. Running on two cylinders instead of one, the world GDP grew exponentially more quickly--averaging a robust 3% per year.

But while the intangible age has provided for many of us materially and intellectually, it hasn't done much emotionally or culturally.

Just like the tangible age failed to deliver reason (high quality intangibles), the intangible age has failed to create meaning, happiness or relaxation--or any other high quality untangibles.

In the market, untangibles are essentially creative content--songs, movies, television, fiction, etc. This sector of the economy is most clearly defined by its low, fixed prices.

All songs are $.99, all movies $10, all DVDs $24--regardless of production cost, demand, or quality.

Your company has all three attributes whether it knows it or not--products, reasons/technology, and stories. The stories are what's most important and where most of the value is, but because they're essentially irrational, they scare the pants off of most managers and executives.

Forests are murky and ambiguous, trees are concrete and clearly defined. Forests are also where the money is, even though many businesses get by for years going fearfully from tree to tree.

The current economy doesn't properly value untangibles just as the economy in 1800 didn't properly value intangibles. And it suffers from just as significant inefficiencies because of this oversight.

This will change as the market corrects pricing structures for untangibles. CEOs, CFOs and COOs will be largely outsourced just like white collar is now. Most of what we think of now as commercial activity will be little more than a back office for enormous content engines.

Untangibles are 96% of the economic landscape. Right now they're largely hidden, just as reason and technology was hidden a hundred years ago, but they will have their day.

Put it this way: after iPhones, designer shoes and blazing internet connections are universal, disposable cheap and omnipresent, the only thing that anyone will care about is content--meaning--and they'll gladly pay a premium for quality just like they pay a premium for organics, good design and selvage jeans--high quality tangibles and intangibles.

Put another way, after all the "what" and "where" (tangible) questions are answered and all the "how" and "when" (intangible) questions are answered, the only game in town will be the beautifully untangible "why".

As this new untangible age blossoms, the world GDP is likely to increase by as much as 10 times--to an incredible 30% a year. The economy will not only be more efficient but will also be more relaxed and have a much smaller negative impact--thanks to new ultra-efficient untangible systems that produce nowhere near the environmental impact of current intangible and tangible systems (both of which are relatively inefficient and produce lots of waste).

The Googles and Microsofts of tomorrow will be making films, writing songs and books, producing high quality television and creating new content. They will play the internet like Jimi.

And they'll mint billionaire artist/producers like MSFT mints millionaire managers/engineers.

And the owners--the pioneers and original shareholders--cold easily be trillionaires.

It sounds fantastic, but it's important to remember that it sounds exactly as fantastic as billionaires did the the most reasonable experts just a hundred years ago. The tangible age created millioniares, the intangible age created billionaires--you do the math.

Oh--and by means of comparisons--as the paradigm-shift cycle time seems to decrease each cycle by a factor of at least ten (tangible age--thousands of years, intangibe age--one hundred), we should expect to see these trillionaires in as little as ten years.

Sound impossible?

Imagine a corporation better at relating than Oprah, better at rocking than the Stones and with better taste than Prada. Now make it global and mass-market like hip=hop.

The best band in the world selling $14 songs.

They don't have to tour to make money, nor do they care about albums, so they release 10-20 singles--hits--a year.

At $14 a song, $140 an album, a corresponding $12 reality tv show (two and a half episodes a week), a licensing deal with Gucci for an affiliated clothing line, an 8 Mile-like movie telling the backstory ($24 a ticket, $14 a rental, $140 for the DVD).

Since they're the first and clearest of vision, they sign the best new talent to their roster like Dr. Dre signed both Eminem and 50. (Who both signed other platinum-sellers, started clothing lines, etc.) They might even have ghostwriters writing books like Jeff Koons has other people doing his paintings.

At that point, Hollywood looks like the backwater it is and have lawyers watching accountants watching computers loading up bank accounts. As no artists really want to run the back office, if you can do it right and preserve quality, you'll be sitting on top of the largest licensing and production deal in the history of the world. Managing the best artists/designers/creatives in the world.

And inspiring others to shine--you make trillions by making the best artists billions. As every artists has a virtual monopoly, there's little of the competition for market share that we see in the tangible/intangible economy.

And a rabid audience of wealthy, brilliant sell-outs and starved, creative counter-culture refuseniks--both desperate to connect creativity and cold hard cash in their own lives. Thankful that it's been done and interested in as many particulars and as much inspiration as possible.

It's aspirational, inspirational, high, low, Wall Street and gutter all at the same time.

It will be untouchable and it is the future.

We have everything else--the only significant demand left is for a meaningful way to live. A way to be happy and feel the luxury that surrounds us.

And the market always gets what it wants.