One of the insane stories of Facebook’s $US19 billion acquisition of WhatsApp is that the CEO of WhatsApp, Jan Koum, was on welfare a few years ago, and is now a billionaire several times over.
WhatsApp itself only has 55 employees, and several of the early ones are probably worth over $US100 million.
The speed of wealth accumulation here is breathtaking. And tech and the internet have a lot to do with it.
A few weeks ago I interviewed MIT professor Erik Brynjolfsson, who has done a lot of research on how tech is changing the economy. He explained:
…it’s the fact that technologies can leverage and amplify the special talents, skill, or luck of the 1% or maybe even the 100th of 1% and replicate them across millions or billions of people. In those kinds of markets, you tend to have winner-take-all outcomes and a few people reap enormous benefits and all of us as consumers reap benefits as well, but there’s a lot less need for people of just average or above-average skills.
Thanks to the internet, a few folks who had the right combination of skill and luck were able to create a gigantic business that spanned the globe in just a few years. And we’re seeing this replicated over and over these days in ways that would have been hard to fathom in earlier generations.
This doesn’t mean what’s going on in tech-land is “bad”, but if you think inequality is an issue that should be addressed, then it’s good to understand one of the key roots.