sunday, june 11, 2006
How Coffee Changed the Modern World
It is difficult to overestimate the impact of coffee on our modern world. In fact, an peek at how this interesting plant has changed the world we live in can be illuminating on where we might be headed.A few years ago I happened to pick up Peter L. Bernstein’s Against the Gods: The Remarkable Story of Risk. It’s a fascinating look at mankind’s long and complex effort to understand risk and probability; or, more precisely, to find a way to predict the future from the confines of the present. It turns out that coffee has an interesting chapter in that tale.
This wondrous plant is a native of the new world and was sprung on an unsuspecting European public as these shores became colonized in the 15th century. By the late 1600s coffeehouse had sprung up across the continent with several hundred in London alone. These places stayed open all day and saw people constantly coming through their doors, chatting, drinking and interacting.
The drink had created a meeting place for people that was wildly popular. Recall, these were precursors to the modern eat-out restaurant or even the modern bar. Food and drink was prepared for personal consumption but, since it was difficult and expensive to procure and prepare coffee, the coffee house became a necessity for the popular drink.
It was a good time for business altogether. Back then there was a rapid expansion of overseas trade. British, Spanish, French and the Dutch roamed widely across the oceans brining their wares back and their stories as well. This created a great change in the culture since, suddenly, wealth by trade became a possibility for anyone. All you had to do was hook your fortune to the right ship; the right cargo and when it came in you would be in the money.
There was just one problem – how could you know?
Making a good prediction on where to put your money required knowing about the current weather, destinations available, goods to be got and the unknown types of problems that had a tendency to pop up. There wasn’t any real type of mass media that covered world events available on the corner. Information from the ports of call beyond the continent was sketchy and difficult to find.
But there were coffee shops. And what was bandied about there between cups of coffee was information. Soon folks realized there was a lot of gain to be had by hanging out at coffee shops. Samuel Pepys relied on them for information on the ships he was interested in and he considered the source more reliable than his job at the Admiralty.
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(In a similar manner, coffee houses are credited with the institution of the newspaper – but that’s a different story)
Eventually, the list posted in the shop was expanded to include a huge list of information: stock prices, info on foreign markets, high water times for the Thames. The outcome of battles at sea were often first reported in the coffee shop. This data helped a growing group of tradesmen who the business of commerce had created almost from nothing – underwriters. Anyone wishing to financially back a ship would seek insurance from a person or persons who could cover the loss in exchange for the payment of a premium. This person would then sign his name under the terms of the contract, thus, and underwriter.
But to make it as an underwriter you needed even better information than a speculator. A speculator is one taking risks as part of his enterprise, an underwriter is the person who measures the amount of risk involved and insures a given venture knowing that his premiums from other ventures will pay for the loss of any given one. Data, and damned good data, was his lifeblood. Lloyds, and its famous list, was a necessity for his business.
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So why does this matter? I think this story is an excellent example of the situation the Internet is at today. We are that little coffee house. We have all this grand information we can pass back and forth and enjoy but damned little of it is being used. The trick here is to find the best way to use all this data in a way that is most suitable.
Almost every effort I’ve ever seen to create content on the Internet is simply a copy of other media and information services. Online newspapers are as boring as print newspapers. Why should I wait to download a ten-second clip of the TV news when I can turn on the damned set at 5 p.m.?
The key is not to collate data in traditional methods but find a new method that suits the information that exists. Step “outside the box” to use the buzz phrase. As Scott McCloud has noted, we are but immigrants to this new world - our children will be the natives. They will be the ones who slough off all the preconceptions we bring into the world of computers from movies, TV, newspapers and so on. They will be the ones that walk through the doors of progress we cannot even see.
Of course I doubt everyone hanging out at Lloyds realized they were creating a new way of looking at the world and I really doubt the underwriters were sharp enough to figure out how handy it was all going to be right from the start. It took more than a century from Lloyd opening the store until Lloyd’s of London was born.
Where do we look for this? Well, it may be a good idea to start with the most wildly popular aspect of the Internet – pornography. While the underlying interest in the subject matter has a lot to do with that it doesn't explain the stunning success of businesses that sell it - especially when you consider the amount of porn that's out there for free.
Business-wise, the difference is that when you pay your money you immediately get your product. You get exactly what you paid for and instantly. Every other type of e-business you have to wait to get the product and the process of getting it to you is what drives up the price.
So is the solution to just find a way to get stuff to people immediately? Of course not. Newspaper sites have tried this and the minute they charge or ask for registration people head for the exits.
The key is to take the next step of magnitude. The key for the Lloyd’s underwriters was discovering how to use the new source of data in a way that was unique to it -- calculating risk. Pure linear thinking only gets to the end of the diving board you have to make the jump into space at the end. The next step for the Internet will be similar, someone will figure out how to use the data in a new manner and that will be the breakthrough.
When the epiphany comes I believe you’ll see something as revolutionary happen as occurred in that coffee house in the late 1600’s.
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