In its early days, there were over 35 million users of America Online (AOL) according to the company. That number consisted of people periodically dialing into their accounts: “going online” at a particular time of day, emailing or IM’ing someone, then signing off once they finished — typically on a conventional landline. Today, not so many years later, we walk around with pocket supercomputers, always connected to a vast world of information through wireless networks. For the sake of comparison, there were approximately 1.2 billion daily Facebook users in 2016.We don’t “go” online anymore; we just “are” online.
This is transforming nearly every aspect of our lives, from how we shop, communicate, hail a taxi and entertain ourselves, to how we work, learn, invest and manage our finances. Just as massive, distributed computing power and persistent connections are transforming our personal lives, they promise to transform the accumulation and distribution of capital. We spend a lot of time thinking about this at Orchard. What do you call this next phase of always-connected financial services, this idea of persistent connections and the development of technology that provides new ways for capital to find its highest and best use?
Phase 1: Bringing Your Financial Life Online
When thinking back over the last couple of decades of technological progress, on the surface, the ways that we interact in our personal, professional and financial lives have changed dramatically. Indeed, most of us can barely remember what it was like to live and work in a world without email or social networks, or without real-time access to a seemingly infinite amount of information, near-instant global communication and productivity tools that simplify our lives. In financial services, though, many of the advancements to date have simply used technology to mirror in the digital world the same products and processes available in the physical one. That is an important step in innovation, but only the beginning.
Phase 2: Connected Capital