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Aerotropolis
The Way We'll Live Next
John Kasarda and Greg Lindsay
New Songdo, Korea's artificial city, connected by a 12 mile long bridge to Incheon International Airport, on another artificial island, and now one of the world's busiest hubs. Two hors flight from Shanghai or Beijing, and at most four hours away from a whole lot of cities in China you've never heard of, but which are already bigger than Singapore or Atlanta.
To John Kasarda, this represents the first in a new chain of cities that take networking to it's logical conclusion - cities and their companies linked by airports, and so, by necessity, built with the airport at it's center.
Zappos, the online shoe store acquired by Amazon started with free overnight shipping and free returns. Trying to make online shopping just like going to a bricks-and-mortar shop. 2008 gross hit a billion dollars, but because of returns policy, only $635m was revenue. And free shipping meant they paid UPS over $100m a year. So the net profit on that billion gross was only $10m. Runs on an inventory system called Genghis, which simply dumps a stock item into the next available place on the shelves. Basically runs an index like a computer hard drive, which stores data all over the place.
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Amazon runs a program called Prime, where subscribers pay $79 a year for free second-day shipping or $3.99 for overnight. The subscribers find it easier to just order most of their needs off Amazon than to add stuff to their shopping list. From Amazons POV makes sense because subscribers average spend more than doubles - from $400 to $900 a year. Converting a quarter of its customers would add $9 billion to A's bottom line.
More than 4000 Tongans live close to Dallas Fort-Worth International Airport, which is actually a lot, since there are less than 100,000 of them in Tonga. The families converged there from all over US and Hawaii and took jobs with the airlines to get discount flights back home for funerals and weddings. each family took care to make sure at least one member had an airline job - as a baggage handler or in the kitchens, it didn't matter.
Some citizens of Aerotroplis have reached escape velocity and left families and worldly possessions behind. Ram Charan, a management consultant and author of Execution, although charging up to $20,000 a day, is homeless. He sleeps every night in a hotel or aloft in first class, and holidays with clients' families. He sends his dirty laundry to an office in Dallas staffed by assistant he's never met. Three days a week they stuff a Fedex box with clean shirts and suits and ship it a few stops ahead on his itinerary.
People fly more. can't manage from afar without first establishing trust credibility and authority face-to-face. "You have to be there, nagging them. A lot of the time, the only way to accomplish something is to stand behind them going "Is it done yet? Is it done yet?" A lot of what I do is nagging them until they do it themselves."
Another consultant spends his time canvassing the first-class cabin to drum up business. "I could spend $150,000 on an on-line marketing strategy, or I can spend $2000 and take an airplane trip with multiple stops and come home with a dozen business cards and contacts.
We have an illusion that the Internet will eliminate the need for travel. But history teaches us that the opposite is true. Since the invention of the Internet an extra billion people take to the skies each year. This isn't a coincidence, it's a correlation. Facebook, LinkedIn and emails have generated thousands of new contacts. The Internet makes it possible to find business anywhere, but you must still clinch the deal in person. The more wired we are, the more we fly. At the current rat, the Internet will render business travel obsolete at about the same time it replaces paper.
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