Now we all live like kings

Isn’t it strange that you use the same iPhone as most billionaires?

Throughout history, those with wealth experienced the world in a completely different way than others: vast palaces, doting servants, elaborate boats, carriages, and cars. Probably a harem, too.

One way to look at how technology has transformed our lives is that it allows the middle class to experience a level of luxury and functionality within striking distance of the truly wealthy, but at dramatically lower cost. Corners are cut, but they’re the most expensive corners (both in their initial and ongoing cost).

To bring these two thoughts together:

• Digital experiences, largely on phones, but more recently, AR and VR, replace vast palaces.
• Digital assistants, such as Alexa, replace servants
• Inexpensive premium vehicles and commercial airlines replace elaborate ones (with self-driving cars and even Hyperloop on the horizon)
• Tinder, Grindr, and their brethren make a harem accessible to everyone (Editor’s note: our intern begged us to add this one, and we couldn’t help but chuckle at the prospect of a Dark Ages-era serf swiping right)

Why is this happening?

• The middle class has the most money to spend and companies want access that cashflow
• Best-in-class digital experiences are very expensive to build
  • If companies need to invest billions of dollars to sell thousands of units, they need to charge millions of dollars each to recoup their investment
  • But if they can sell millions of units, they only need to charge thousands of dollars (or less) per unit
• So unless companies know their buyers have very deep pockets (e.g., aerospace & defense contractors, yacht manufacturers), they must target the middle class

The truly wealthy can sometimes pay vastly more to get a slightly better experience than the common man. They can still own mansions, fly private, and, umm, I guess Jeffrey Epstein was probably selling more than good tax advice.

But they still use the same iPhone.