Yesterday's Scarcity, Today's Abundance
Jim Correll, director Fab Lab ICC at Independence Community College, Independence Kansas
I'm not an avid student of economic theory. Indeed, few of the topics that ever come up among the entrepreneurs, students and members using Fab Lab ICC have anything to do with micro or macroeconomics; economic theory.
However, scarcity is an essential principle of economic sustainability. ... As something becomes less scarce, it has less economic value. On the surface, the concept of scarcity is understood intrinsically by entrepreneurs and small business owners. If you're selling something that is not readily available, it has more value than something that is abundant everywhere. New products come to market to solve problems. Bringing a new product to the marketplace is much easier if there are not already solutions readily available. New solutions have to be unique, i.e. scarce to have value. Tim Voegeli, Tubeless Solutions, Wichita, Kansas, said it best during one of his visits while prototyping a new bicycle tool at our Lab. "If it's not unique, why bother."
Some items remain scarce for thousands of years. Examples are gold, diamonds and other gems. Some items remain scarce for a very short time. Anyone remember Beanie Babies?
Technology and innovation are moving more and more products and services from scarcity to abundance in shorter and shorter amounts of time. Business models centered around something solely based on scarcity are among the riskiest ventures.
I've told the story before from the time I was in the professional photography business in Wichita circa mid-1980's BD (before digital) about a business based on the scarcity of the fax machine. In that day, fax machines were new and expensive and they weren't common. If you wanted to send or receive a fax, you had to go to a specialty business (Kinko's, Sir Speedy, etc.) and pay $1 or so per page to send a fax to a similar specialty business elsewhere. Your recipient had to go pick up the fax. There was no email back then so the fax was a way to transfer documents, including signatures, instantly without having to wait on what we now call snail mail.
There was a guy in Wichita that was trying to build a business model around the scarcity of the fax machine. He wanted to have delivery vans in all the major markets of the United States to deliver the faxed documents from the specialty businesses to the recipients. He hired me to do a photo shoot of a driver making a delivery. I guess it didn't occur to him, and his investors, that in a year or two, fax machines would be so common that all offices would have them and his business, including the huge investment in all these delivery vans would be obsolete. I'm not sure he got the business off the ground and, in fact, I'm not sure I was ever paid for my work on the photo shoot.
There was a day when personal computers were scarce and expensive. Some companies, I believe IBM was one of them, thought they would never be common and thus their expensive main frame computers would remain viable well into the future. This was nearly the end of IBM until they pivoted toward a service based, rather than hardware based business.
Today's business models, based solely on scarcity of technology or the expense of production machines are vulnerable. In the blink of an eye, everything can change and yesterday's scarcity becomes today's abundance.
Meanwhile, there is something that remains scarce and will remain scarce; excellent customer service and attention to detail in serving the customer's needs. This scarcity is based on human nature and not technology. Business models centered on this scarcity of customer service will be successful for years to come regardless of what technology they use to solve customer problems.
Jim Correll is the director of Fab Lab ICC at the Center for Innovation and Entrepreneurship on the campus of Independence Community College. He can be reached at (620) 252-5349, by email at firstname.lastname@example.org or Twitter @jimcorrellks.