Politicians may argue whether “corporations are people.” Techonomists might ask a different question: Can people be corporations? The dictionary definition is “a group of people authorized by law to act as a single entity.” That a large organization can accomplish more complex tasks than a lone worker is wisdom as old as the industrial revolution. But is it still true in a digital world?
Today, software and connectivity trumps brawn, and success comes through the skillful manipulation of outside resources: global telecommunications networks, the installed base of devices, open source software, publicly-available application programming interfaces, along with the cloud and large datacenters that cheaply support any app and any number of users.
Modern corporate giants such as Amazon, Apple, Facebook, and Google employ far fewer people than their industrial-era counterparts. These software-centric corporations illustrate what a small group of individuals working as an entity can accomplish in today’s world. When Google went public in 2004 it employed nearly 2,000 people. At the time of its recent IPO in May, Facebook employed only 3,500. Even more dramatically, Facebook paid around $1 billion for photosharing app Instagram when it employed just 13 people.
If 13 people can create a corporation with a billion dollar valuation, the idea that people are corporations starts to sound a little less weird.
In fact, this idea would not seem at all strange to America’s early settlers. Rugged folk of the pre-industrial age flourished by using the abundant resources that were available to them: timber, water, soil, ore, oxen. Today, 21st century pioneers are likewise capitalizing on an abundance of digital resources.
A business climate that encourages individual effort and small work groups is not only trendy, it may be essential for the longer term health of the global economy. Large corporations that once employed tens or even hundreds of thousands of employees are scaling back. HP plans to eliminate 27,000 jobs, rumors suggest that IBM is also planning deep cuts, and Bank of America just laid off 16,000 employees.
Cisco Systems, with over 60,000 full-time employees, recently announced its intent to try to create next-generation products with what it calls “spin-ins.” Handfuls of Cisco engineers will comprise small corporations to work on advanced networking projects. Cisco will acquire the successful little operations and presumably make its members rich.
Cisco’s move underscores that individuals in smaller entities often have more value than those in large corporations.
The pursuit of workplace efficiency is another force moving us into a people are corporations era. As stalwart corporations shed employees, a new generation of service companies makes it easier for millions out of work to create their own businesses:
- Startupwithme, for example, is a website designed to link up people with different skills and “help fellow entrepreneurs create successful founding teams, and as a result, successful companies.”
- Kenandy is a startup built on top of Salesforce.com that bills itself as a “social supply chain” and allows people to collaborate as if they were part of a big corporate value chain.
- Kickstarter is a four-year-old Web business that introduces people with ideas to those who provide funding. Last spring the platform made headlines when entrepreneurs used it to raise more than $10 million to fund the development and production of Pebble, a wristwatch that works with smartphones.
Manufacturing, once the province of large corporations, is now open to anyone with a good idea and an aptitude for making things. There are numerous “fab labs” that provide computer access to laser cutters, 3D printers and other automated manufacturing equipment. TechShop, for example, is a membership-based organization that currently has six facilities in the U.S. Each provides members with access to tools and equipment, instruction, and a “community of creative and supportive people.” And the latest 3D-printer from MakerBot costs only $2,200, so you can have one in your basement.
The next big IPO may be for a physical product conceived by a corporation-of-one funded by enthusiasts, sourced through a social supply chain, manufactured in a fab lab, and marketed through social networks.
Extending the power of the corporation to individuals and small groups is giving power to the people. Gone will be the days when giants could corner markets. In the future, people who buy products and services will also produce them.
Huge corporate assets will survive in the form of plants and factories, but they will no longer be captive to the people who own them. Instead, anyone with the requisite credentials will likely have access to these facilities as readily as software developers now access the APIs for Facebook, Google, and Apple. Today’s mega-corporations will eventually be maintained by skeleton crews that steward the assets on behalf of a larger population of producers, some of whom may also own stock in the company through their 401ks and other people-friendly investment vehicles.
Yes, my friend, people are corporations. We are all on our own, but with increasingly unfettered access to tools that were once only there for mega-corps.