The Corona Asteroid & the Digital Cambrian Explosion: An Analogy for the Post-COVID World
In his venerable work “The Black Swan”, Nassim Nicholas Taleb noted that “…history and societies do not crawl. They make jumps. They go from fracture to fracture, with a few vibrations in between. Yet we (and historians) like to believe in the predictable, small incremental progression”. What started off as ‘a weird story’ out of a lesser-known city in central China rapidly became an epoch-defining one. Within the first 3 months of the 2020s, history made a huge jump. As much as we felt we were crawling towards a fully digitalised life, a lot of our everyday routines were quite offline. Especially in the West, mainstream QR payments seemed a generation away and deliveries through apps were only ‘nice-to-have’ when we were too lazy to cook. Now, no one wants to even touch cash, let alone exchange it with a stranger — writing in perhaps the peak of the pandemic — even the thought of it makes me shiver. It would not be speculation to argue COVID-19 compressed 10–20 years of gradual digital adaption into a revolutionary timeframe of 10–20 weeks. The shift from offline to online, especially in spaces that already had an infrastructural headway, such as e-payments, delivery apps, telemedicine and e-sports, is no longer an slow, evolutionary process. The future came rather suddenly.
Indeed, it’s a familiar storyline… Approximately 541 million years ago, a massive asteroid (larger than two Mountain Everests combined) crashed into Earth. After wiping out any life that existed at its epicenter, its after-effects went global: an initial three year period of extreme cold (due to too many clouds), followed by a three year period of extreme heat (too much volcanic activity). At the time there were very few living things that had what it would take to survive the aftershocks. The invincible-seeming dinosaurs in particular were doomed. Only the very small ones — those that look very similar to today’s reptiles and chickens — survived. Why? They required much less volume of energy (food) to survive and were agile enough to rapidly change habitats in a time of high climate volatility. This revolutionary time is called the ‘Cambrian Explosion’. The Cambrian Explosion period is a special one, as it is when all the major animals we know now started appearing in the fossil record. It lasted for about 13 million years (a wink of an eye in the existence of the planet) and resulted in the genesis of most ‘modern creatures’.
Now that the ‘Corona asteroid’ has struck and its after-shocks reverberating around the globe, the fintech industry is set for its own cambrian moment. To continue the analogy — In that special era 541 million years ago, just as dinosaurs who could not adapt to the ‘new normal’ rapidly were dying out, a new set of animals found new spaces to thrive. Before the meteor struck, most of these creatures were hanging on the margins, all they did was run from intimidating dinosaurs who seemed like they did not have to change much to continue their dominance. Then, all of a sudden due to an exogenous shock, new species kept pouring into the evolutionary mix at an unprecedented speed and scale. They found their habitat; spared from the massive shock.
What we are experiencing now with financial technologies going mainstream is pretty much the same phenomenon. No company, shop, restaurant, bookstore or bakery business that is not underpinned with fintech (read: accepts digital payments, integrates with online delivery systems, connected digitally to its customers) can survive this sudden exogenous shock. The painful onset of COVID-19 is creating a huge space for a lot of latent innovation such as cloud kitchens, QR payments and open-banking systems to go mainstream. Almost suddenly, sticking to cash as a sole method of payment is too 2019.
I remember stall-owner uncles in the (rightfully) famous outdoor food courts of Singapore (say, the equivalent of the age-old pubs in the UK) looking at me like they’d been offered poison when I asked if I could pay by QR. As much as those uncles make the most tasty food in the world (what is better than a freshly cooked, sizzling sisig or a well-seasoned, tender chicken tikka?) the concern here is that they won’t survive the seismic shift. The same in continental Europe: trying to pay by card in Germany or Italy after a small purchase, it is almost like insulting the merchant. Hopefully not anymore. An asteroid reduced dinosaurs into reptiles and chickens. A virus may very well reduce paper and dimes into 1s and 0s.
Onat has been Regional Director for Southeast Asia at wamo Technology Ltd., (a UK-licensed fintech startup) since the beginning of 2020. He ‘s also been working on Gojek as his PhD case study at the National University of Singapore since the summer of 2017. His love for QR codes began during his time in Shanghai and he’s tried his best not to carry cash ever since.
