From Winner Take All to Win and Help Win: the Original Vision of the Internet is Making a Comeback

https://sariazout.mirror.xyz/etHY_neWXosxDJpGOhzuwi-cB0qOvMco_iwO5yJ1Ai0

A collaboration between Sari Azout and Jad Esber

This is a VERY special essay. Read through the end to find out why.

From the internet’s beginnings, we were promised that it would be the great equalizer. Analysts and tech prophets of the early 2000s wrote think pieces about how tech would transform the power dynamics of modern life and erode the hierarchies of society.

But the bright-eyed optimism of the early 2000s has been almost universally replaced by a techno-dread, a feeling that technology is creating more problems than it’s solving.

Today's digital spaces, rather than democratizing wealth and access, amplify the inequities of the physical world.

One study found that making it to the top 3.5% of YouTube channels—which means about 1 million views each month—only gets you $12,000 to $16,000 a year, right around the federal poverty line.

For all the talk about the democratization of the creator economy, thus far, it’s become a superstar-driven, winner-take-all affair, where a small number of people do incredibly well, while the rest struggle.

Sherwin Rosen attributes this to joint consumption technologies. Despite the internet giving everyone the same access, the best performers - even if marginally more ‘talented’ than the rest - can also now reach an internet-scale audience and serve a much bigger market, reaping an even greater share of wealth. In The Rise of the 10x Class, Dror Poleg argues this dynamic is now carrying over to all parts of knowledge work, as the Internet makes it possible for people to work from anywhere and earning potential is no longer capped by geography.

In her seminal piece, The Creator Economy Needs a Middle Class, Li Jin argues that it is up to us to build platforms that strengthen the creator middle class and lays out design decisions that can help make success attainable by many.

Out of the turmoil of the last twenty years, new and hopeful possibilities are emerging. Today, we’re seeing the confluence of a few major cultural and technological trends that make us optimistic that the vision of the Internet we had decades ago - creative, quirky, diverse, accessible, democratic - is making a comeback:

1. A renaissance of individualism on the Internet that changes the definition of talent
2. A shift away from ad-funded models towards creator empowerment
3. Web3 technologies that unlock infinite remixability and more granular distributions of value

A Renaissance of Individualism on the Internet that Changes the Definition of Talent

The assumption underlying the winner-takes-all market dynamic relies on creators being judged simply by a talent or excellence standard. However, we ignore that taste and talent are co-determined. Talent is the name we give to people who best deliver what we prefer. So if we disagree on what’s “best”, we disagree on who is most talented.

Every sport that uses ‘mechanical judges’, like stopwatches, instead of human ones are judged solely against an excellence standard. These athletes conform to a taste-free talent vector. We see the entry of a taste vector in Olympic sports that have human judges, such as gymnastics, figure skating and freestyle skiing. To become good at these sports, one must also move towards “connoisseurship”. This requires the development of a “discriminative faculty to judge and express taste according to the aesthetic principles of a consumption domain”. For a long time, internet content was at the behest of the rigid mechanical judge that is “number of subscribers” or “view count”.

To demonstrate the phenomenon of taste distribution more practically, any walk down the supermarket aisles will show that the assortment needed to cater for a diversity of tastes broadens as one moves from say paper towels to soups to wines - products of increasing hedonic value. There is not much dispersion of preferences for paper napkins on any dimension other than price/sturdiness. But that is not true for even the subset of wines that sell in supermarkets. The same applies on the internet.

But what do people end up preferring? Holbrook theorizes that people, as a whole, are much more dispersed in what they prefer than is the ‘expert consensus’. Holbrook’s work draws from Bordieu’s, who famously discussed that those with the highest volume of “cultural capital” dictate what’s deemed “good taste” - and therefore “what’s best”.

But how do you accumulate the “cultural capital” to dictate “what’s best”? Bordieu, whose work is rooted in the study of the French bourgeoisie, describes how “the working-class ‘aesthetic’ is a dominated aesthetic...obliged to define itself in terms of the dominant aesthetics”. Holbrook argues that in more individualistic contemporary cultures, this gets distorted and we end up with more heterogeneous tastes.

Winner-take-all outcomes happen in cultural markets under the influence of received expert opinion. But that’s at odds with the internet’s promise to “democratize everything” and to allow us to express our individuality - a culture that flourishes when we can each define what “talent” means to us and that is antagonistic to forced standards and received opinion.

Thus far, platforms as well as a select few “influencers” have taken on the role of “expert” taste-making and that has had a profound effect on what has social and cultural value.

And so, we introduce “Jad’s Theory” (of talent & taste on the Internet). We’re witnessing a renaissance of individualism on the internet - a breakup with institutions and the rise of the individual and, with that, an unbundling of internet communities. For the creator middle class to rise, we need to see higher resolutions of taste preference and a breakup with singular, discriminatory platform algorithms and the opinion of the ‘few’ that arbitrate taste and force today’s dominant aesthetic. With that, individuals can decide on “what’s best” for themselves, allowing for the talent power law to play out across more taste vectors and spreading the opportunity to be perceived as “the best” - and, with that, spreading the opportunity to profit from that.

A shift away from ad-funded models towards creator empowerment

We’re currently living through a shift in the business model of the Internet, from ad-revenue to direct-to-creator monetization. We can’t underscore enough how profoundly this alters incentives - platforms are now less focused on driving eyeballs and more focused on building tools that make creators money.

Ad-funded models require content to be managed at scale, and as advertisers are the main customer, they start to fill the role of the “expert” that defines what is valuable. This causes content to naturally hew to what’s deemed ‘advertiser-friendly’ and the more popular becoming even more popular.

This also means that in an ad-driven world, monetizing your social presence is only accessible to popular creators, and the size of your fanbase is the single metric that matters.

New, creator-centric business models enable monetization based on intensity of fandom, not size. Swipehouse & Pearpop, for instance, allow fans to pay for interactions, something that makes sense for creators with 10,000 followers or 10 million followers.

Whether it’s Substack leading the charge on newsletters, Clubhouse announcing plans for creator payments, Soundcloud introducing fan-powered royalties, Twitter unveiling Super Follow, or Snapchat Spotlight distributing over $1m to creators every day, we’re seeing platforms offering a slew of on-platform revenue options, with a renewed focus on aligning their business models with creators of all sizes. This puts the onus on the user to decide “what’s best”.

High willingness to pay creators, along with better methods to monetize creative output is a potent combination that will lead to a massive rise in the number of people making money online, and new ways to scale income without scaling time. The opportunities around passive income will become a new keystone of the user experience of these platforms, pulling many creators out of the labor stack and into the capital stack. The mom-and-pop businesses of tomorrow will be the Clubhouse hosts, Substack writers, Twitch streamers, Discord Community Managers, Shopify dropshippers, TikTok stars, etc.

Web3 technologies unlock infinite remixability and more granular distributions of value

TikTok is proof that ease of remixing drastically lowers the barrier to creativity. When everything becomes a base from which you can create new content, the creative affordances are infinite. Usually, the original creator’s work is stolen and the distributor wins. Stories like the creator of the Renegade dance that took off when Charli D'Amelio did it getting “frustrated because they weren’t tagging me or giving me credit” wouldn’t exist if everyone “on-chain” saw the financial reward from the rise of a remix.

Every idea, every project, every piece of content is just a remix of ideas that came before it. In the past, it hasn’t been possible to track the provenance of these ideas or to compensate their originators when they are being used. But technology is on the cusp of enabling us to compensate people for all instances in which their work ends up being useful.

The true power of Web3 technologies is the potential to reshape how value is created, shared, and distributed on the Internet, making distributing value as easy as sending and receiving an email. That’s a fundamental technology unlock that makes it possible for creators on the internet to earn more of the value they create.

An underexplored undercurrent of Web 2.0 monetization tools is that creators have been incentivized to publish good enough content frequently vs. great content sporadically.

On Substack, for example, you’re paid monthly, creating pressure to write consistently. The problem is not just the inevitable burnout that comes from having to churn out 1-2 posts a week. The problem is this heavily skews towards pumping out bland and mediocre half-baked thoughts you’ve had a day to work on, not evergreen content that will still be valuable in five years.

But what if your back-catalog wasn’t stagnant, but rather an ever-evolving source of passive income? What if the value of your work was driven by the number of references and citations, and more references meant more dollars? What if the ROI of an essay that took hundreds of hours to write was orders of magnitude higher than those designed for virality or disposability?

We’re particularly excited about a web that can route economic value to sources of inspiration, one that can lead to a revival of the back-catalog resulting in a renewed focus on quality over quantity,and one where win and help win is the guiding philosophy.

NFTs give us a way to honor, in perpetuity, the people who’ve influenced our work.

With that spirit in mind, this essay will be an experiment in ‘Attribution+’ - where we not only attribute sources of inspiration but route economic value to them.

In practical terms, this means we are minting this essay as a NFT, and the proceeds of the NFT sale will be split between the authors AND the individuals that have influenced the work.

Thought Partners

(acknowledgments: people whose work we referenced directly in the essay)

Li JinJohn DeightonLeora KornfeldBrandon BarabanGabriel NessimDror PolegPatrick RiveraBalajiJosh NissenboimTanay JaypuriaCaroline Nguyen

How will the proceeds of the NFT be split?

• 55% of the proceeds will be split between the authors, Sari and Jad
• 30% of the proceeds will go to the pool of thought partners we reference above, whose ideas and feedback were instrumental in shaping our own.
• 5% will go towards Josh Nissenboim who drew the illustrations.
• 10% will go to readers (like you) who help us spread the word about the essay.

What are the benefits of owning this NFT?

• Be a proud owner of an experiment that honors the original ideals of the Internet - users and creators, unconstrained by intermediaries, sharing ideas and economic upside
• A powerful signal to the world that you support the “win and help win” worldview, and are, unabashedly, an Internet optimist.
• The prospect of turning a profit by reselling the NFT down the line (Patronage+)
• Own the underlying illustrations we created for the essay.
• We’ll also send you physical prints of the four illustrations (one of a kind because this is the only time we’ll ever print or sell them) which, TBH, we’d hang in our powder rooms - they’re great dinner conversation starters for the intellectually inclined.
• A 1hr Zoom call with Sari and Jad to dive deeper into the thesis (for anyone who bids over 0.1ETH is invited to participate)
• A lifetime Startupy membership and early access to koodos (for anyone who bids over 0.5ETH)