I read Doug Rushkoff’s Cyberia back in 1992 and loved it. Rushkoff is great at weaving a load of cultural trends together and coming up with a seductive bigger picture. In the early 1990s it was cyberculture, house music and smart drugs. Today, he’s moved on to marketing, social media and post-capitalism.

His talk at the Social Business Summit in Austin, Texas, last month began with a gentle ramble about feudalism and the Middle Ages before moving on to a humorous deconstruction of everything that’s wrong with classic, textbook businesses today. He puts a compelling argument (even if you don’t agree with everything he says)!

Here are my notes from his talk. What follows is roughly verbatim…

Medieval feudalism

In the late Middle Ages, people had lived under feudalism for 100s of years; people began trading using their own currencies; trade boomed; towns got so rich, people started building cathedrals just to have somewhere to store their wealth.

This was a problem for the aristocracy; they wanted to continue making money from being rich and doing nothing. So they outlawed local currencies. They said you have to use centralised currency – you have to borrow our money in order to do business and pay it back with interest: this was Centralised Banking: the “coin of the realm”.

The second thing the aristocracy came up with was centralised monopolies: they approached businesses and said I’ll give you a license to be the only business in this market if you pay me 10-20 per cent. If you are a monopoly, your only purpose is to extract the most value from what you do. This was really bad for specialisation and skills because if a factory owner wants to make more money, and s/he has a monopoly, then s/he is only interested in hiring [expendable] labour at the lowest possible cost.

So, the industrial age was not necessarily about doing things better, it was about doing things more efficiently in a very particular type of economy.

Modern day stories

Mass media, advertising and marketing was all about promoting brand images (eg, the quaker from Quaker Oats) that become more powerful than the images/ stories of the craftspeople next door. It was a commodified relationship. This is not evil. It’s just the way things went.

Once you de-socialise in one area of your life, you start de-socialising in others (because you’re embarrassed to go to the local PTA with the lady who runs the local pharmacy because you’ve stopped buying your drugs from her and now buy them from Walmart). All this is dehumanising. And competencies decrease because the branding is the only differentiator (“Oh, we buy these [Keebler] cookies because they’re made by elves”).

Go to Harvard Business School and they’re still teaching the Jack Welch style of business which is basic Renaissance Corporatism: take everything you actually do and understand that if you’re actually doing something you’re not making as much money as you would if you sold that off and got up a level closer to the bank. Anyone who’s actually working? That’s inefficient. Welch looked at GE and said “Let’s sell off anyone who’s actually doing something. So we can get away from this manufacturing of stuff and materials and competencies. Let’s become capital. Let’s become the bank, because the whole game was built for the bank”.

Real social isn’t about brand imagery

The net broke this. The net killed brands by leading to a non-fiction media space. It allowed people to deconstruct brands from the images. Keebler is no longer elves. It’s a place where people make cookies. The net broke the oligarchy-led, bank-driven, economic growth model. You don’t need massive infusions of centralised cash to run a business. That’s what happened with the crash. The banks needed somewhere to put their money. They tried dotcoms and they didn’t need all that money – so they put it into real estate – and look what happened!

Facebook is a brilliant exercise in “How far can I reduce people’s sense of who they are to a consumer profile?” We went from wacky web pages to Myspace (which is kind of modular web pages) to radio buttons (Facebook), which is “I’m straight and married”. But real “social” is not about [traditional] marketing. It’s about re-connecting the people who actually care about the industry you think you’re in. Reconnecting consumers to fans to employees to management to shareholders to partners.

It’s about reconnection

Your competitors are no longer your competitors in a social media space. They are fellow stakeholders in the industry that you all care about: the thing that you do. Imagine you’re in the lemonade industry: you don’t care if he came up with a better lemonade idea – that’s great! You can use it too. Here’s my idea: let’s talk! The distinctions don’t matter when the thing you do is the thing that you do.

Most people still don’t do the thing they do. They outsource the thing to someone else and do the banking and marketing of it. They don’t do the thing. If you don’t do the thing that you do, do not get involved in social media. It will kill you. You want to be transparent? Then there has to be something inside. You can’t be social, you can’t become transparent if you’re just going to show that you’re a bunch of paper pushers using some Chinese outsourced something.

It’s about expertise and culture

Moving into social means becoming dedicated to the expertise, the culture and the intelligence of whatever your sector is. You don’t have a chartered monopoly any more so your competitive advantage is going to be actually tied into your ability. And the good news is we’re finally in an environment when your ability can be communicated directly. That is the new story for a social media era. It’s not about the elves. For Kentucky Fried Chicken it’s the chicken crust, it’s not Colonel Saunders. It’s your nerds, your R and D, your bizarre, passionate geeks. And the management is there to protect those people. And your most ardent fans are the people trying to get to work in your company.

Instead of being an advertiser led/ brand challenge, it’s a different kind of communications challenge: it’s applied memetics: what do people hear when you talk about the thing you do. It’s truthful. It’s not fantasy. But your truth has got to be good. Use social to message the truth.

Most companies are still afraid of it (social media) because there’s this sense that they don’t actually do anything. If you want to introduce social media within a company, first you’ve got to convince management that what they’re doing is actually good. Or (and this is harder), if they don’t already do anything then you actually have to get them to do something good.

We are no longer in the universe of messaging and marketing, we are in the universe of doing.

If marketing is a conversation, why is everyone shouting?

Photo: designbyfront (via Flickr)