Externalties taking over

Externalties. It’s supposed to be an economic term for indirect costs and benefits for a given transaction. An even cruder definition for the business person is how to make money when the product is free. The most current example is Facebook which approaches 1 billion registrations and value nearing 100 times earnings. Everyone is trying to figure out how to profit from so many people on the same network.

Maybe it things are not so different. It's easy to believe lemonade sold at the street corner because it’s fresh. The reason for success is that the buying experience feels like home. Price and quality are not completely direct. 

Somehow the internet is delivering so much externalities all the time that it is changing our view of reality, no matter how deep the addiction or how much some avoid it.

Relationships between people are what drive everything. It used to seem more direct because we had little choice but depend on face to face meetings or a phone call. With the mobile consumer internet, we can talk to more people everyday through texts, emails, social networks, video calls, anywhere, the quality of personal interactions can be overlooked. Quantity is trumping quality.

It would be easy to blame the new technology and add more physical reality to our lives, but we can have bad relationships with people we see everyday.

The difference is in using our brains to determine what people are really implying by their words and actions, instead of becoming numb by the number of connections we make. No matter we are Skyping or texting or having a face-to-face actual meeting, it’s still about externalities: indirect inferences, eye contact, clues, lies, invitations, rejections, trial and error, games… I guess when you can be straight with someone without all the pretentions; you have a potential good friend.

So externalities have always been there. The internet has just forced us to deal with a lot more of it. Those with the skills to cope will make a lot of fans and maybe money on the side. Just don’t forget your real friends and family.

We can’t live on externalities alone, but on the truth of those who love us.