This appendix contains examples for how a number of markets and companies can be mapped to this matrix of socioeconomic value creation. Where a market or company falls is not set in stone, but is in fact a very important debate. This matrix is intended to provide structure for having the conversation about the value we, as a society, are creating and what opportunities we should be directing our attention and energy towards.
Defining X Axis of Long Term Societal Impact
Establishing the X axis of long-term societal impact is our call for entrepreneurs and business leaders to turn away from incremental improvements on the status quo and focus on solving problems that will transform the world.
Here are a few guiding principles for where to place a company along the x axis of long-term societal impact and then we will provide a number of examples.
Section 1: Negative Long Term Societal Impact [-5,0]
Persuade people to buy things they don’t need or that harm them long term
Waste people’s time
Make people or the world unhealthy
Give a false sense of satisfaction or accomplishment
Many companies make a profit while making some of the world’s biggest problems worse. They do this by either providing convenient painkillers that hide the problem rather than treating it, or merely shift the problem somewhere else rather than solving it. Examples include McDonalds and Zynga, discussed in more detail in the next section.
Section 2: Marginal Long Term Positive Impact [0,5]
Incrementally improve relatively efficient areas
Make people feel better about themselves
Help people make a living
Most businesses fall in this section.
Section 3: Transformational Societal Impact [5,10]
Approach problems systematically, treating root causes
Teach men to fish rather than giving them fish
Focus on unlocking human potential
Create more value than they capture
Seek to empower people
Improve people’s relationships, their ability to create and ability to learn
They nurture ecosystems and platforms
“We don’t build services to make money; we make money to build better services” – Mark Zuckerberg in Facebook’s IPO Filing letter.
“The supply of secure, clean, sustainable energy is arguably the most important scientific and technical challenge facing humanity in the 21st century.“
Collaborative Consumption; Long Term Societal Impact: 6; Economic Impact: 5
World population is rapidly increasing, as are the energy consumption demands of many third-world countries. Collaborative Consumption offers the opportunity to systematically reduce resource and energy consumption. The more in demand the good being consumed, the more societal impact it has.
Companies include: AirBnB, Zipcar, Getaround, Chegg,
Oil & Gas Companies; Long Term Societal Impact: -4; Economic Impact: 10
The high energy density, low cost and easy accessibility of Oil and Gas has powered the world’s rapid growth for the last two centuries. Now science clearly shows that fossil fuels are significantly damaging the world’s ecosystems. We need to switch to a world run by renewable energy quickly or we risk ecological disaster. Meanwhile the Oil companies are doing what they can to ensure they maintain their monopoly on the world’s energy supply.
Solar Energy & Energy Storage; Long Term Societal Impact: 10 ; Economic Impact: 10
“Solar energy is by far the largest exploitable resource, providing more energy in one hour to the earth than all of the energy consumed by humans in an entire year.”
Improvements in the efficiency of our solar energy systems could transform the world.
“The implications of cheap solar power would be truly staggering, revolutionizing virtually every aspect of life and geopolitics. Potentially dangerous nuclear power would become obsolete; dirty energy sources like coal and oil would be a thing of the past; and the world would no longer have to kowtow to corrupt governments that just happen to be resource-rich.”
Companies: First Solar, Bloom Energy
Fast Food; Long Term Societal Impact: -4; Economic Impact: 9
Low-income households can get food cheaply, but they pay costs with poor nutrition, diet and obesity.
Examples: McDonalds, Burger King, Coke, Pepsi
Longevity & Personalized Medicine; Long Term Societal Impact: 9 ; Economic Impact: 7
Many believe that life expectancy will reach greater than 150 and some believe we may even be able to end aging completely. Life extension technology will totally restructure our socioeconomic system. It will change how we work, how productive we are, how we think about family, friends life, death and religion.
Disease Treatment and Prevention; Long Term Societal Impact: 10 ; Economic Impact: -7
Diseases like AIDS and Malaria are rampant in many places throughout the third world. A sick population gets caught in a downward spiral that makes it almost impossible to create a healthy, growing economy.
Social games; Long Term Societal Impact: -2 ; Economic Impact: 6
Most social games provide little long-term value to people’s lives and they often significantly harm them. Social game companies have become extremely good at addicting people to something they don’t need and depriving them of the time to focus on worthwhile aspects of life. They are little different than Tobacco Companies.
Companies: Zynga, Electronic Arts,
Crowdfunding Platforms; Long Term Societal Impact: 6 ; Economic Impact: 6
While Crowdfunding platforms are technically a financial tool, the most popular ones to date, like Kickstarter and Indiegogo, have enabled a tremendous number of creative projects to raise money to get off the ground. The untapped creativity now being unlocked is a big cultural boon.
Advertising; Long Term Societal Impact: 2 ; Economic Impact: 9
On the whole advertising probably marginally contributes to society long term. It does help businesses sell more products to their customers, which theoretically provides value to society. But a large portion of advertising is deceptive, manipulative and gets people to buy mediocre products that don’t really add value to their lives. If a greater percentage of ad dollars go to spreading transformational products and services its long term societal impact would increase.
Cheap Mobile Phones: Long Term Societal Impact: 8 ; Economic Impact 6
Cheap mobile phones have transformed life in the developing world, enabling new forms of commerce and political revolution.
Companies: Nokia, Grameenphone
Data Infrastructure: Long Term Societal Impact: 8 ; Economic Impact 8
The raw fuel of the information age is data. We need vastly better tools for storing it, processing it and analyzing it.
Companies: Cloudera, Eucalyptous
TED, Wikipedia, Facebook, Apple, Google, Twitter, Amazon, Craigslist, Bittorrent
In the past: Standard Oil, Ford, Bell Telephone Company, Boulton & Watt, Frigidaire, Kodak, Apache, MySql, Nordic Mobile Telephone, Intel
Potential Transformational Companies and Organizations: A Human Right, Halycon Molecular, Better Place, X PRIZE Foundation, Seasteading, Change.org, Singularity University, LightSail Energy, Asana, Researchgate