Posted by: John Vandivier | September 19, 2013

Zdnet: Pay heed to the internet’s Third Wave Cows of Disruption

[From John: This article is funny on the one hand and on the other hand it is also marks an important event. Basically it says that we can now buy beef directly from the farmer with bitcoin. While some people may not see that as important, it is. Such an event is a gigantic leap forward toward a self-sustained bitcoin economy. Food is a necessity in any economy. While we have seen restaurants and cupcake makers accept bitcoin before, all of those producers had to source ingredients in fiat. It is also important to note the exceptional pricing these guys offer because it attests to the efficiency of bitcoin.]

Source – Zdnet – Stilgherrian – 9/19/13

I have seen the future of the internet, as well as the past before the internet was even invented, and in both, I saw cows. Disruptive cows. Pay heed, because these Cows of Disruption can show us how things might unfold, thanks to this all-pervasive mobile-cloud-analytics revolution that the fast-talking people keep blathering on about.

Your standard m2m enabled bovine
                                                                 Your standard m2m-enabled bovine.  (Image: Shutterstock)

Yes, I used the d-word. Disruption. I’ve previously railed against the startup scene’s fashionable “disruptors” smashing the piñata of public services to scoop up the shiniest, most profitable parts for themselves, and damn the consequences for everyone else. But today, I’m talking about disruption on a much longer timescale.

In his 1980 book The Third Wave, futurist Alvin Toffler described what he saw as the three great waves of change that have transformed human society.

The First Wave was the Neolithic Revolution, when settled agricultural societies replaced the hunter-gatherers.

The Second Wave began as the Industrial Revolution in Western Europe, which then spread across the planet. Second Wave societies were about the nuclear family, a factory-type education system, and the corporation.

“The Second Wave society is industrial and based on mass production, mass distribution, mass consumption, mass education, mass media, mass recreation, mass entertainment, and weapons of mass destruction. You combine those things with standardisation, centralisation, concentration, and synchronisation, and you wind up with a style of organisation we call bureaucracy,” Toffler wrote.

A key part of Toffler’s theme was that the very nature of Second Wave transport and communications technologies defined the physical scale on which things were organised — had to be organised. Nation-states were the size they were because transnational railways “extended the actual, as distinct from nominal, control of the national government. Washington could now move troops quickly all across the continent to enforce its authority”, and all that was organised via the telegraph and then the telephone.

And only something the size of a nation-state could afford to build and run those things.

Nearly half a century ago, I witnessed part of that Second Wave break over and engulf the dairy industry of southern Australia.

Until then, dairy farms had usually been husband-and-wife operations, milking a few dozen head of dairy cattle morning and night using mechanical suction devices. Milk was stored in 20-gallon cans, collected by trucks daily, and delivered to a local milk factory.

But during the 1960s and 1970s, all manner of technology arrived more or less at once. Theherringbone milking shed and then the rotary milking shed made it possible for a farm worker to milk more cows. Rural roads were paved, and diesel trucks became bigger, faster and more reliable. Bulk handling equipment was introduced, with milk stored in refrigerated tanks until collected by tanker truck every two or three days. Milk factories became larger, and fewer in number. Factories paid less for milk, and farms needed to scale up to hundreds of cows to remain viable.

Husband-and-wife dairy farms were disrupted out of existence.

Nearly half a century later, Toffler’s Third Wave of the Post-Industrial Society is now rolling across rural Australia. It splashed upon Hogarth Range, 750km north of Sydney, and one of the newly evolved critters in the shallows is a premium beef supplier that’s — dare I say it? — disrupting the meat industry.

David and Peta Moloney and family had lived in Canberra for a year, and weren’t impressed with the meat available in supermarkets. High prices, even though farmers were paid just AU$3 per kilogram for the meat, and low quality thanks to the time it took the meat to make its way through the supply chain.

“This is so wrong,” David Moloney told ZDNet this morning. “There’s a whole lot of expenses in getting it to the supermarket, and refrigeration costs, and transport costs, wastage, and so forth.” Peta Moloney came up with idea of eliminating all that, David said. “I put together the business plan, and the website and all the technical side of it, and away we went.”

And thus, in 2004-05, Honest Beef was born.

The concept is simple. Honest Beef sells directly to consumers, who order 20-kilogram “beef packs” and other standard packages. “Six to seven of them is one animal, and when we get seven orders, we ring up the farmer and say, ‘What weights have you got?’ and he says, ‘I’ve got one of those’, and away it goes, off into the abattoir,” Moloney said.

“The idea is that the animal’s still running around the paddock when you make an order. We don’t store beef at all. We have no refrigeration, we have no nothing,” he said. “We’re cash-flow positive. We get paid before the animal’s dead.”

When it’s “fully consigned”, as Honest Beef’s explanation coyly puts it.

“We don’t do PayPal, we don’t do any of the credit cards. They charge too much, that eats into our profits, and we have to pass that on to the consumer. Direct payment and Bitcoin, they cost us nothing.”

Yes, Bitcoin.

Honest Beef started accepting the digital currency earlier this year. Is anyone using it? “Plenty,” Moloney said. “The last two animals we sent off, we had [those] two pay by Bitcoin, and we’ve got a third waiting. We’re probably getting 10 to almost 20 percent of our customers paying by Bitcoin now.”

Now, there’s nothing particularly high-tech about Honest Beef. There’s a website and Bitcoin, sure, but the rest is just telephones and trucks, emails and evisceration.

There’s plenty of ways to scale it up. Farmers could register their cattle by location, weight, and condition. A mix-and-match algorithm could find the best way of assembling customer orders into a reverse-jigsaw puzzle that shared out the slaughter to minimise time and travel, and maximise profits. But why bother?

Honest Beef illustrates what becomes possible when you start thinking of every business as something as a service. Or, as futurist Mark Pesce put it last year, when every business is an API.

Honest Beef taps into commodified road and air logistics, and commodified digital banking and communications — all the generic stuff that’s delivered globally at “cloud scale” because it’s the same whether you’re selling beef or tomatoes or shoes or children’s toys or helicopters — and uses that infrastructure to deliver your personal share of a dead cow from a particular valley in northern New South Wales at a flat rate of AU$10.75 per kilogram. And the farmers keep 70 percent of that.

I joke that I have “my t-shirt maker in San Francisco”. But, realistically, we could all soon be like the Victorian aristocracy, every family having its own boutique provedores of gourmet foodstuffs as precisely specified as we like, and instead of a working class to deliver it, we’ve got robots and the cloud.

Well, at least until the climate collapses and oil runs out and everything dies.

Source: http://www.zdnet.com/pay-heed-to-the-internets-third-wave-cows-of-disruption-7000020878/

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Responses

  1. […] Direct payment and Bitcoin, they cost us nothing.” Yes, Bitcoin. Honest Beef started accepting the … off, we had [those] two pay by Bitcoin, and we’ve got a third waiting. We’re probably getting 10 to almost…See all stories on this topic […]


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