2010 – The year the nerds took power

December was flooded with predictions for 2011. I had played the game in an earlier blog post on Apple’s smart phone strategy, so enough on my side. Social media crowd doest not look back, only forward. 2010 is history.

I am contrarian, so will do the exercise. This blog is about analysis, and it takes a bit of time & distance.  Let me try to recap 2010 as: ‘The year nerds took power’. The major symbol of this being Mark Zuckerberg who got elected as ‘Personality of the year’ by Time Magazine.  Mark is the king of the nerds, as a billionaire who is the driving force behind the world’s biggest internet platform (Facebook, slightly behind Google maybe), he is first & foremost a nerd, as depicted in the movie ‘The Social Network’.

Definition of a nerd according to Wikipedia: Nerd is a term that refers to a person who avidly pursues intellectual activities, technical or scientific endeavors, esoteric knowledge, or other obscure interests, rather than engaging in more social or conventional activities

Or, in short, my definition: nerds are people you should be scared of because they might be secretly working towards the world destruction or the world redemption but you’ll only find out when they click the ‘Go Live’ button.

Clearly, I was a nerd (and maybe still am). My first computer was a ZX Spectrum with an astounding memory of 48K, on which I learned programming (Basic) at age 7. I got on the Internet in 1994 then specialized in computer science at university and learned funny things like C, C++, Pascal, Java, Perl, and other exotic languages whose name I cannot even remember.

My start with personal computing - ZX Spectrum 48k- 1982

But I am not in power, since I left the nerd crowd to pursue an MBA 8 years ago, then got into business consulting and now management (in the Web, not in food, ok). For those few who worry, yes I had a decent social life throughout the process – but granted I was not the coolest guy in the classroom.

Now, with all nostalgia left, what makes me say that 2010 is the year they took power ?

A few points. First, Mark is still the CEO of Facebook. I think he is really in charge. In the past, most nerds got kicked out to get replaced by ‘decent’ CEOs once the company they started had reached a certain size.

Second, this is an increasingly technology-driven world. Or a platform-driven world. The digital economy is driven by links. Links are shared based on goodwill. Goodwill is created when you have ‘Waw’ products. Products are created by nerds.  Mark Zuckeberg told it once: “Facebook is a platform game. This is why I am the CEO”. When you have no money to market your platform, the only way to grow it is to make it vastly superior, viral, and so on. But it does not only affect Web products. Obama won through the Web. The smart campaign was driven by social media experts. Nerds.

Not convinced yet? Let’s look at a few examples. Apart from Facebook, what have been the other darlings of 2009 ?

Groupon, a company which is now valued at USD5 Billions or more (after 1.5 years of operations). In a recent article, the latest investors, who put indecent amount of money at even more indecent valuation, explained that their prime reason to invest in Groupon was not the business model (sell daily deals and retain half the money flowing through). No, it was the analytics, the ‘Power of the data’ they use to tailor the offers and understand the consumers. In short, they said they backed nerds.

Second, FourSquare. Geolocation might still be a niche for nerds (ie clicking on your smartphone to ‘check-in’ at a physical place and uncover some silly badges), but it is definitely of high potential if you think the immense marketing opportunities the sphere provide to better target people based on their preference, their identity…and their location. For nerds & geeks (still), by nerds.

Even in e-commerce, if you investigate the business model of the e-commerce darlings like the ‘Vente Privée’ types of animals, you will see that many are driven by analytics, to best balance the deals & cash flow for the brands, the consumers, and the company. Very analytics-driven, very nerds-driven.

“Yes but of  course in Internet world it’s all about nerds. But it’s a big world outside that, not powered by nerds.” . True. To some extent. What about financial institutions? Well, we now know that most of trading now is driven by automated programs, and hedge funds (who decide what to do based on super complex models). The finance world is more than ever driven by nerds. Probably they hit a down point  in 2008 and 2009 when the whole system crashed as the ‘preconditions’ of their models drifted out of the expected ranges, but by now they have quietly regained power, no worries.

“Yes, but there are still traditional industries like media in which you need non-nerd people like journalists to talk to people and write an article”.  Have a second thought. The big media winner of 2010 is Julian Assange, the founder of Wikileaks. If you have not heard about Wikileaks by now, go back hibernate. This is by far the biggest media hit in 2010, shaking the whole political & economic world. But Julian Assange is not a journalist. He is a former hacker. A nerd.

Clearly, the more we move to the digital economy, and the more the ‘classic’ manufacturing moves to Asia, the more power nerds will have. Does that make you happy or scared ? As far as I am concerned, as a former nerd, it does make me happy… and scared.

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2 responses to “2010 – The year the nerds took power

  1. Facebook could be the inflection point for nerds – your definition is that a nerd focuses on technology in place of social activity… but facebook is a technological social activity… maybe the revolution of the nerds is the transformation of the platform into social?

  2. Great observation Conor. Indeed many nerds work on products that do not interest most of the world…Some have taken the steps to build it from a ‘social’ perspective, which interest the non-nerds too. Facebook is of course one of them, Twitter too (even though it’s still quite niche).

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