Geek Squad Founder Foretells "Excess Capacity"

We heard Geek Squad founder Robert Stephens talk about the Internet beyond web 2.0 recently. He was amazing.

One of the central business and economic concepts moving forward, he says, is "excess capacity."  Maximizing the use of things. 

You've heard of renting a car, and now sharing a car for just a few hours.  Now here's the next level:  rent your own car when you are not using it.  97% of the time cars are not used, says Stephens.  At Get Around, you can rent a car, but you can also rent your own car.

Want to rent your apartment while you are gone? Try airbnb.com

Want someone to do a task, or do you want to be available for hire to do a task?  Try TaskRabbit.

It's not kooky, not just a fad, or even a trend. It's about reducing tangible goods. And it is changing retail, manufacturing and how tangible goods will be (long lasting, durable, not throwaway) for the rest of the century. 

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[D. P. Lubic]

This could be interesting, and we've seen something like this before in certain industries, at least in the transportation business.

They didn't call it "excess capacity" before, though; it was called "improved utilization." This was one of the advantages of diesel locomotives over steam engines in the 1940s and 1950s, when the change in power came.

One of the big disadvantages of steam locomotives was that they were very maintenance intensive (and still are, for the tourist and heritage roads that still use them). A quick "turning" (servicing, without any minor "running repairs") would typically take about 3 hours from the time a locomotive came in from a run to the time it could go back out again. That's how long it took to clean the fire (dump the ashes and get the fire in better shape, removing clinkers, etc.), fill the engine and tender with coal, water, and sand (for additional traction), oiling it, inspecting it for anything that might need attention like leaks in the air brake system, and so on.

Diesels, by comparison, could be "turned" in only 45 minutes, sometimes less. No fire-cleaning, no ashes, no water to speak of other than to refill a radiator (a bigger version of what is in your car), and you refilled the fuel tank with a hose (also like what is done for your car). The difference was enough that typically a railroad could get by with half the number of diesel locomotives than the number of steam engines they replaced, even if it took two or more diesels to haul what was handled by a single steam engine. And of course, with the retirement of steam power came the retirement of coaling towers, ash pits and ash handling equipment, water tanks and their equipment, such as pumps and water-treatment machinery (and all that water-equipment was typically spaced every 25 miles or so!), and finally, the big repair shops that kept steam engines running, with their lathes, drill presses, planes, plate rollers (to curve steel into boiler sections and other parts), heavy punches and shears to cut steel, forges, steam hammers--and the men who ran this equipment, and took care of it and the structures that housed it.

This brings up something you've written about before, and that is what do we do with the new "excess capacity," not only of the cars and houses that we will be making better use of, but of the people who will no longer be needed to build them? That wasn't a problem for a railroad that was changing to diesels or getting out of the passenger service--it just sold the equipment for scrap.

But we aren't supposed to do that for people, even though it supposedly has been done. Reportedly at least one Crusade was launched for this reason; it was not just to retake the Holy Land, but to dispose of young men--knights--who could not inherit their fathers' land and castles, because their older brothers had already inherited that. These men would have been trained in the military arts, and would be ambitious, as such young men are. It might also have been seen that these men, frustrated with no chance to gain a property, could become dangerous--hence the idea to sent them off to battle, where at least some would die, and eliminate some of the competitive spirit that might cause trouble if it had no outlet.

So, what do we do with the "excess capacity" we will have in people? In particular, what do we do with the "excess capacity" of people with ambition? We have overbuilt so much, and at the same time have consolidated so much, that there often isn't much chance for advancement (i.e., "climbing the corporate ladder"). What do you do for people with ambition, what do you give them to do, when the best chance for advancement is to wait for the manager of the local Dairy Queen to die?

Sounds silly, I know, but then again. . .and in spite of the seriousness of the matter, perhaps there is something entertaining to consider in this, something enlightening, something inspiring. . .

Take care.