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Digital Feudalism

Intro | Digital Feudalism | Virtual Reality | Start-Up | The Cameraphone | Tech Tunes

HERETIC: Jeremiah Owyang is using his influence to speak truth to power—proclaiming that services such as Uber and Airbnb, are creating digital fiefdoms.

Jeremiah Owyang recently dropped a bomb in Paris.

Speaking at Ouishare Fest 2015, Owyang—one of the most influential observers of the phenomenon that has launched such companies as Airbnb, Fon, Lending Club, TaskRabbit and Uber—said the people behind most successfully "disruptive" technologies of the past five years are the same types of fat cats that have always driven industry.

"The 1 percent own the collaborative economy," Owyang said, allowing the stunned silence of his keynote audience to linger just a moment before elaborating on his thesis.

The so-called "collaborative economy" has been sold to the masses as a series of organic, peer-to-peer digital interactions, which, in aggregate, create opportunities for would-be entrepreneurs who lack the capital to establish their own brick-and-mortar businesses. But that explanation is bogus, he argues.

According to Owyang, more than $12.5 billion dollars have been injected into some 233 successful, collaborative companies by venture capitalists in the last 15 years. That money helped each company to achieve success, but it also transferred financial ownership in the startups to a handful of powerful venture firms.

Owyang has a name for this trend: digital feudalism.

"You can see the digital feudalism," Owyang said in a follow-up interview. "This market, which prides itself on helping individuals and local communities get what they need from each other, has accepted over $12 billion dollars of funding from venture capitalists, some of the wealthiest people in the world."

"In a few years, these investors need to retrieve their investment returns, as they need to return their money to their investors," Owyang said.

The kings, lords and vassals of medieval Europe had names for these types of returns: "homage" and "fealty."

Uber, which now operates in major cities around the world, is severely disrupting—as in decimating—the full-time employment of taxi drivers and their management, sidestepping unions and employee and consumer protection policies created by municipalities and states.

Similarly, Airbnb was designed to allow individual homeowners to rent out their homes or apartments to guests, but it since became a lucrative alternative model for large-scale property owners who see greater profit in operating as an Airbnb franchise rather than as a rent-controlled property manager.

"Digital feudalism is happening," said Owyang. "The kings, in this case the VCs, grant resources to the lords, in this case the entrepreneurs, to build a community in return for tribute. It's easy to identify who the serfs are."

Jeremiah Owyang Keynote: Digital Feudalism

Fri, 10am

California Theatre