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Alex DancoFeb. 5, 2017Understanding Abundance, part 1: It’s Caused by ConsumersWhat do we really mean when we talk about “Abundance�Let’s start this series by answering that question, because it’s one of the more important concepts we’ll have to grapple with over the coming decades.There are a number of different ways to conceptualize abundance, but I favour one in particular. To me, abundance is not really a quality of technology, products or the supply side at all. It’s actually a statement about the consumer:Abundance is the condition reached as the friction involved in consumption decisions approaches zero.To unpack this statement, let’s first examine the opposite state: scarcity. We’re used to thinking about our free market economy in terms of scarcity and friction, because they’re what drive return on invested capital. In an environment of scarcity, the friction, switching cost, and deliberation involved in a consumer purchase is high and there are many factors to consider before a decision can be made. That is how we usually imagine customers making decisions! When a consumer buys a TV, we picture them asking: Will it fit in my living room? Do I like how it looks? Do I need a new TV at all? When a business signs a contract with a supplier, they make a decision based on many factors. What is your reputation? Do you meet our requirements? Do you comply with regulations? Do we have a prior relationship? Is the price fair?* * *
