Technology has helped to level the playing field across a wide range of industries, letting more individuals come to the table in fields such as publishing, entertainment and, of course, building web startups. And according to Kleiner Perkins Caulfield and Byers partner Chi-Hua Chien, the next space ripe for a big tech-powered wave of democratization is commerce.
In an on-stage conversation with David Kirkpatrick at the TechCrunch NYC Disrupt conference Wednesday afternoon, Chien explained how tech has helped flatten a number of previously stratified spaces. The mid- to late-90’s saw the democratization of information — companies such as Google made data available to everyone, no matter where or who they were. After that came the democratization of distribution, with services such as Twitter and Facebook allowing anyone to broadcast their content and potentially attract an audience. The democratization of computing has occurred as well, with billions of people in the world now having access to computers because of the availability of low-cost mobile devices. Up next? The world of shopping and selling.
“We’re now entering an era around the democratization of commerce,” Chien said. The past, he said, has been about “mass aggregation,” with companies such as Safeway and Wal-Mart rising to the top of the commerce space by simply being the best at aggregating a suite of products into one space. These big companies also built up their own brand names to make shoppers feel secure in buying things from them. Today, though, we are starting to “see an unwinding of aggregation of commerce as technology starts to disrupt” the industry, Chien said.
“If you think about what a Wal-Mart does, it aggregates credibility and inventory,” Chien said. Credibility is the Wal-Mart brand name, and the inventory is simply products and storage. Today, credibility can be established by smaller players via social media, and real estate and inventory can be outsourced much easier.
Chien pointed to two Kleiner Perkins portfolio companies to illustrate this movement: Square, which he said is democratizing becoming a merchant, and Zaarly for democratizing the ability to do a particular job. In a short conversation off-stage, he told me that Gumroad is also one of the Kleiner-backed startups that is leading the way toward big commerce disruption.
Looking at Kleiner Perkins itself, Chien not surprisingly declined from discussing the lawsuit filed by investment partner Ellen Pao (the news of which TechCrunch was the first to break yesterday) during his fireside chat.
But, he did shed some light on the firm’s larger strategy, in particular its increasing focus on making digital investments, after a few years of being more well-known for making moves in the green tech space. “In the last five years, [Kleiner has] added four investing partners focusing on consumer digital,” Chien said.