Gold

The Gold List - A journal written by David Sherry

The Nature of the Tech Revolution

I’m only just diving into cryptocurrencies, the blockchain, and bitcoin et all. 

You’ve probably been hearing these words buzzing around, and not paid too much attention. I’ll try and write more in the future here to keep you clued in.

But I’m not surprised you’ve tuned out. 

At this point we’re in the middle of a revolution bringing simultaneous massive breakthroughs. 

  • Biotech advancements that augment our bodies and extend our lifespan.
  • Space travel and the switch to electric from fossil fuels. 
  • The “Internet of Things.”
  • The Ai Revolution. 


And those are just a few. 

I want to point out something simple but profound about what’s to come, that might make you pay a bit more attention. It’s why we’re living in a revolution instead of just, I don’t know, a non-revolution. 

When a revolution happens, when a new paradigm occurs, it tends to have new behaviors that are totally different than what’s come before it. 

The old adage is, “If Ford had asked what people wanted, they wold have said a better horse.”

These concepts are not a better horse. They’re a car, with profound new application opportunities. For example they might take gasoline (new input) but also have high powered breaking systems you can control (new output).

That means that the invention of the car was the invention of Big Oil.

The invention of Big Oil lead to lobbying, and some say, wars. 

The invention of the car also lead to suburbanization, since workers could head into the city easily to their jobs and return back to their own homesteads. 

The point is that the invention of the car was not a better mousetrap. It was the start of a system that lead to emergent behaviors that would shape our society. 

Cryptocurrency and Ai, are more like a new species being born, rather than just one animal. Like the entire class of mammals starting vs. the birth of a certain type of chimpanzee. 

What I mean is that Crypotcurrency isn’t a new finite invention. Neither is Ai. It’s a new system.  And when systems evolve, things change dramatically. 

As we saw with the car, suddenly people are able to move to the suburbs. And the effect shaped our culture at large. But there’s no way that we could have predicated that as a product. 

These systems are all being paved right now, so it's worth looking at their components. 

1. They are decentralized (and thus limitless).

There’s no boundary when it’s a new system, and no one is in control. (Mostly) everyone can build in them. 

2. They are built autonomously by individuals (and they adapt regularly, sometimes by mutation).

Individuals everywhere are simultaneously testing new boundaries in these fields. It’s like having 100 types of birds all living in one forest, all trying to survive. It’s Darwinian. Think: Capitalism. 

3. They are highly connected (and so we perform new behaviors, together).

The group performs together to create results, even if everyone is only working individually. We’re interdependent, yet separate. Think: Wikipedia. 

4.They aren’t predictable (because no one is in charge). 

Who runs the web?  Everyone talking about these topics is only thinking within the ways that they know things work now. But there will be unforeseen benefits and consequences. We’re all driving but no one knows exactly where, we can only all just put in our inputs into the system and hope it steers us in a direction. This is the idea of the Black Swan (as Nassim Taleb calls it).

So I guess what I’m really trying to point out for people pondering new technology is this: 

Don’t expect this to function like a new invention. This isn’t the light bulb in your house.

Look at it like a totally new system. 
A new way of work. A shift in our culture.  With strange behaviors that will replace the old behaviors. The reason we have a hard time understanding the terminology, is because it's a new way of looking at things which needs it's own lexicon. 

100 years ago we were all farmers. 

Today we’re all working on skyscrapers on the computer. 

In 50 years we might be at home picking out art on a screen to feed into a display that generates art and sound for a symphony that 1,000 people are helping create and 50,000 people are attending from home.

Gold
#39



Why Crypto Tokens Matter - a16z Podcast

Alo Yoga and the Future of Retail

 

My girlfriend’s been talking about this yoga clothing store on the 3rd street Promenade in Santa Monica every time we go by it. For the most part, I hate shopping, especially in malls.
 

And it’s no mystery that malls are in decline. Because with the convenience and price of Amazon, who wants to wade through the stacks and spend an hour of your time at stores?
 

But I went in to buy her a gift card for her birthday. 

So the first thing I notice is it’s not for everybody. What meaning it’s not for every, body. In price and in fit. While many retail brands push to hit the mass demo, creating both media and clothing that can fit for everyone of every type, Alo goes deep into the beautiful, the fit, and the youthful, to keep it’s alure as a high end brand. 
 

This store’s got a coffee shop inside. Trust me, this is the new trend (a new bike shop just opened up a few blocks away with the same deal), and a bank, a BANK (I can’t even remember which one an it’s right by me) has a coffee shop in their location as well.
 

Because for retail to win in the age of Amazon Prime it’s all about the experience. There has to be more of a reason to go there.
 

So you walk into an Alo and immediately you see two giant lookbooks filled with Alo lifestyle photography. These are purchasable, and took serious dedication from the brand to put together. Then the coffee bar with couches (and of course, kombucha) and snacks. Then the people who work there that seem more like your fit friends from the yoga studio than store clerks. They’re hanging out in the yoga gear, helping you if you need it.
 

And most of their shops include a yoga studio inside them or above them. It’s an attempt to be a place to gather. And when you want to fit into the tribe, to aspire to seek youthful perfection, they’ve got the gear you need to be in the club…


I spoke with the manager, who told me they probably wouldn’t want to open more than 10 stores. In keeping congruent with their brand-strategy, everything seems to have spared no expense. Keep everything as high end as possible, get all of the details right. 


Ha, and I just looked up their info on their about page, see below (from their website):

Where there’s a solar-powered office, yoga five days a week for employees at our on-site gym, organic food trucks, electric-car charging stations, an advanced recycling program that reduces waste to that of a small household, and meetings outside by the fountains in our meditative Zen garden. We have a gong. And we use it. Our stores are designed to be places to commune — people and ideas mingle over organic juice, kombucha and coffee. And the airy yoga studio and roof deck at our Beverly Hills flagship store is where it’s really happening. There’s even a super-sized cosmic mural on one wall — come by for some astral travel (or just to take an Instagram pic).
 

THIS ISN’T A HALF ASSED ATTEMPT.
 

What I don’t understand, though, is that they are selling in Nordstrom. Sure, it’s short term cash, but at the expense of the brand? It’s why Gucci burns their bags that don’t get bought. They don’t want an oversupply, as it’s a token for the elite to showcase their status. This short term play hurt too many retails of the past decade. They created a niche, a premium brand, and then sold out to big box stores which cheapened the brand and ultimately hurt them in the long run. 
 

Don’t be a commodity if that’s not your market. 
 

And if you’re going in a direction, GO ALL IN.
 

The manager who I spoke with told me they would be doing no more than 10 physical locations. Which seems to be a smart move, they can push more online, and their 1Million+ Instagram followers can buy. Not to mention they hired a famous store designer to put the shop together to get everything looking right.


So Alo is doing it right from a retail perspective. They chose high end and they spared no expense to really do it right. We’ll see how it plays out for them. Will people still choose the physical location if the location is a destination? Or is this just a pipe dream for entrepreneurs wanting this to be true?
 

Either way, I’m kind of excited to go back with the gift card and speak with them more. Maybe that’s a hint that the destination retail store is possible.
 

Gold
#38



Alo Yoga on Instagram

FashionDavid SherryDaily
Subscription Services



I wanted to take some time to talk about subscription services. Partly because I'm only just now understanding them, and also because it's the business I've been in for 4 years. Note that this post is meant to be a fairly simple explanation of subscription services, and is more geared towards B2C and media businesses than enterprise SAAS. 

I think that the business model of services has some unique characteristics, and I want to make those as simple as possible for you to understand. Mostly, in the case that you find yourself running a subscription service (especially as it pertains to media) - you might understand a bit better about how to make your model sustainable and scalable. 

To start, what is a subscription? 

To me, the simplest way of putting this is; it's a contract between a company and a customer for an ongoing service that improves over time. We're familiar with our subscriptions to Netflix (or cable). 

There are many textures to this ongoing relationship that are fascinating. 


Subscriptions aren't static, and improve over time.

More and more, companies are switching to subscription services as it appears to fit more in line with the benefits provided by the internet. Because of how quickly things change, and because of frequent updates to software, buying things online is about signing up not just for a static product, but for one that will improve and change over time. This accounts for the rise in subscriptions. Because products today are fluid, not static. 

You don't buy a piece of software as a CD and install it any longer, you purchase a subscription such that it is auto-updated over time. 

The reason subscriptions work is becuase benefits of a subscription apply to both the customer and the company, because the company has a more predictable flow of cash, and the customer gets and ever-improving service. This symbiotic relationship works great as an incentive for companies to drive forward progress with their product.


Customers pay less but for better service.

With economies of scale, customers often pay less for the bundled content that a subscription can provide than they would for one off, static purchases.

This, is a drastic change. Think for example, of the subscription service of Spotify, wherein you pay $15/month for Billions of dollars worth of music. The customers, sharing the cost of the content, provide the company with steady income, that isn’t directly tied to usage.  In return, they get an incredible amount of value for one low price, as long as they continue to pay it on a monthly or yearly basis. 

Meaning, every subscriber will use the service in varying amounts (taking up bandwidth) but also many subscribers who use little of the service help write the checks that improve the service for all users as a whole. The point also seems to be that the larger the group of paying subscribers is, the more content or better service the subscription can often provide. 


Cash flows, instead of "lumps".

What makes subscriptions so attractive is that income is fairly predictable. They don't rely so much on sales or seasonal spikes. What makes them so dangerous, is that a single, simple drop in a metric like customer acquisition, has a massive wave of effects on your business for an entire year.

Small scale example: 
If you lose 100 more customers this month than normal, all paying $10/month.  Not only did you lose $1,000 of revenue this month, but $1,000 of revenue for every month after that. Maybe $12,000 or $24,000. This in turn significantly impacts future investment in the product, and you spin into a downward spiral. 

On the other hand, there is an upward spiral, wherein your company is growing and as you’re adding subscribers you’re also investing heavily into new production and value because you have a somewhat predictable runway for investment. This in turn creates happier customers and draws more in. It's a virtuous cycle that leads to a healthy subscription. 

The economics are distorted, as customers have varying identities and interests.

One thing that can be really difficult about a B2C subscription is the fact that everyone of your customers pays the same thing, but might have different preferences, use cases, interests, and reasons for purchase.

If we think about Netflix as a subscription, what is the reason you signed up?

For some, it is because of the new hit show, Game of Thrones.
For some, it's because of the library of documentaries. 
For some, it's because they love to watch 2 hours a day after work, and they hate commercials.
For some, it's because they want to stay hip, and maybe once or twice a month will binge a show. 
For some, they only want to see new nature or crime shows. 
And on and on.

As you can see, usage varies, interests vary, the proportion of watching existing shows vs. shows already in the library varies. Some sign up for the new, some sign up for the old.

Some will binge 20 hours per week every week, and they pay the same as someone who watches 20 hours per month.

So how do you win here? This is really tough for media subscriptions to walk the line on. To please the majority of customers, for the long run. Most times, in the example of Netflix, they might have to invest into producing a movie or show 2 years before customers will even receive it. That means that entire investment doesn't know if it will be worth it for awhile. Often in media these subscription businesses need to invest heavily in media to cover the spread of everyone in their audience. Ditto for music licensing. 

Data + discovery to the rescue. 

The solution to this problem comes from data and discovery.

First, discovery in a large library plays a role because it might be the case that a customer has a deep interest in travel documentaries but hasn't found a movie that, had she seen it, would be a huge hit for her. Her experience is worse on the platform because the media has been "wasted in the shadows" due to poor discovery. 

So smart subscription media businesses invest in discovery and recommendation engines. 

2nd, by collecting data on subscribers, businesses like Netflix can trend spot to place investments in areas that are more likely to be a hit with subscribers. Famously, data paved the way for House of Cards. So the investment becomes a bit less risky when it comes to paying in advance for new media. 

There are more unique characteristics than this, of course, but hopefully that is a solid primer. 


There are 3 keys to how a media subscription becomes successful: 

  1. It must continue to provide more value over time. (The subscription value grows the longer you’re with it).
  2. The subscription provides exclusive, or differentiated products you can’t get anywhere else. 
  3. You have a direct connection with the customer, either through trust or understanding via data.


So the key for a subscription is that it continues to improve and become more valuable over time.
Otherwise, why would I continue paying?

Here's another way of putting that.

  • By continuing to increase the value of the subscription (mostly through new content) – customers are incentivized to stick around. 
  • By selling differentiated, exclusive content, you drive customer acquisition. If your content were simply bundled elsewhere, it might be difficult to get customers to switch. You add and charge for the friction you've created with exclusivity. 
  • A direct connection with the customer is an overlooked piece that helps you create the ability to service your customers better than anyone else. This can come through data (Think: Netflix data on subscribers helping drive direction for new media production.)


Even though this email list is currently free, it's technically a subscription service. 

 

 

  1. I continually show up with new content, that, in theory, is providing value as well as improving over time. 
  2. It's exclusive to this email list,
    1. I can drive new sign ups with "hit driven posts" that capture larger attention, and I might post them elsewhere which drives sign ups. 
  3. I have a direct line to the reader, and listen to feedback to improve. 

I like subscriptions because they're like relationships, they push me to be better and to continually grow. 


'House of Cards' Using big Data to
Guarantee Success

Business Opportunities and Aggregation Theory

 

Recently I wrote a  post was about how creators can leverage the changing market to find success. It’s not easy, but when has it ever been?

Naturally, I want to explore this question next:

 

So what does this same conversation look like for companies?

 

I’ve heard no better argument for a predictive theory for how businesses of today are dominating the market than Ben Thompson’s Aggregation Theory.

I would implore you to read his work on this topic. But, being that it’s a bit dense to understand, I’ve written out my own take, which is explained and then thought about through a slightly different lens.

 

So let’s start here. 

 

Businesses today that seek to disrupt industries, have the unique benefit of re-thinking an entire market through a new lens. That in which we live in a wolrd where everyone is connected through the internet. Of which, there are two huge disruptions. 

 

First, you can reach 1 million people essentially for free with your ideas. Meaning that distribution is both cheap and infinitely scalable. In the old days, businesses had to rely on, or break through distribution choke points. Like newspapers having only a few pages for advertising, or shelf space in a store. There was simply a lot of cost, and a lot of friction getting your product or ideas to people, becuase there were limited channels owned by gatekeepers. 

Second, adding more customers to a software business is often incredibly cheap.

 

For example, each new sign up to Facebook costs them less than cents, and requires no sales force. Digital goods, and software, are incredibly scalable. Once again, the friction of producing and selling ever more goods has become incredibly efficient. Your e-book can be bought 1 Million times without printing, packaging, shipping, and making it to the shelf. This removes massive barriers to scaling a business because it just simply doesn’t need the same infrastructure.

 

These two massive removals of friction have changed everything. And when we think about the opportunities of tomorrow, start here. 

 

Because with these two advantages, businesses are able to approach old industries with a new unique advantage. That of looking at the industry with fresh eyes. In every major industry built in the pre-internet era, we are able to rethink the value chain of the market. Because somewhere in that chain, a component has or can become digitized, and thus commoditized. 
 

One example, Airbnb — Breaking the leg of “Trust” in the hotel industry.

 

As Thompson points out in his Aggregation Theory, what was important to consumers in the hotel/bnb industry was trusting that the place they were staying would be a safe stay. And so brands in the hotel industry attempted to build up the trustworthiness of their brands through advertising. Brand meant everything in the hotel industry, because the rooms themselves were essentially commodities. As they joke, “every hotel looks the same when the lights are off.”

 

When Airbnb came along, they took something that was once supplied only by brands who had built large amounts of trust with their audience, commoditized that value by giving that opportunity to individuals. 

 

Breaking the “weak leg” of the hotel business, Airbnb gave anyone who wanted to rent a room the ability to become a “trustworthy” brand through their marketplace.

This was because of the feature created by Aribnb for a “rating system” which helped organize and commoditize trust. Then, Airbnb leveraged an utapped resource, previously impossible to discover, and impossible to trust before the internet: Vacant room space. Airbnb has no infrastructure aside from it’s technolgoy.

 

No rents. No room cleaners, no front desk clerks. What they do have, is an engine for the new capability given by Airbnb to everyday consumers: Become your own hotel. 

This empowerment, built by Aribnb, was the strike needed for the Hotel industry to compete on a global scale. Airbnb now has 3 Million available rooms. 


So the trick for the savvy internet entrepreuner with a big vision is to figure out which component an existing industry leader owns, that has now been made weak because of the principles above. Which leg in their chair has the internet made unstable?

That’s where you’ll find your opportunity. 

 

Gold
#36



Aggregation Theory

Hipsterify, Williamsport, PA

 

I’m 6 hours east of Columbus, back in the midwest for a High School friends wedding. I opted to stay downtown in Williamsport, at the Genetti hotel, the biggest landmark in the area. Owned by Gus Genetti, of whom I assume is a giant for the town, based on the size and location of his property. 

 So I’m writing to you from a cafe on Pine Street called Allibaster. 

Now, it’s possible that I’m in a new bubble over in LA, and haven’t realized that there’s always been so art, culture, coffee, veganism and small batch kombucha in towns everywhere across the country… or, everything has been slowly changing behind the scenes.

This is the Hipsterification of America, and it’s likely almost complete. Sure, we associate a lot of the hate that’s been brewing in the country to small town USA, because they’ve been hit hardest by the economy. 

But as I walk into Allibaster Coffee, I might as well be in any city in the U.S. Because I’m now at “the shop,” which is almost too cliche, with Notorious B.I.G. playing, wood paneled walls, a big chalk board with hand scripted lettering for the latest coffee, and those metal chairs that every coffee shop in the country has seemed to buy. But the coffee's great and I'm at my watering hole with my people. 

The point that this morning I woke up in a town I’ve never heard of, hours from anywhere I’ve ever heard of, and what does my morning look like…?

Well I started at the farmers market. A mix of Amish and country type vendors with veggies, meat and baked goods. 

But when you go through the market, you notice another wave. Every few shops it’s vegan soaps, beard oils, and soy cheeses. I stopped by a vendor to pick up a muffin, and they told me that they now carried a “paleo” muffin of which they weren’t really sure how to describe it. Apparently their daughter bakes them (and is “trying paleo”), of which said vendor didn’t care for them but believed they carried no eggs or cheese, if I was into that. 

Is this because of Pinterest? Instagram? 

While we’re no longer synced up on TV shows or music, it seems like there’s an undercurrent of cultural trends that are playing out in every town and city across the country. Maybe it’s the “Image” that pervades once again.  When everything can be documented, we prefer to have it look nice and appear on-trend.

This is the irony of our times. We crave to be unique, and so often we buy what we see online, like Supreme, Glossier, Vans, 5-Panel hats. The problem is, EVERYONE IS BUYING IT. Or, all of your friends. Just like the iPhone. Of which they understand this and are pricing their new phones ever higher, for ever more ability to showcase your status by owning the latest and most expensive. 

But what this also spells to me is that the notion of Make America Great Again is dying not through policy so much as through culture. 

Sure, you can be the guy or girl who rags on the vegans, or lifts their chin at the new coffee shop serving a $4 cup, but then suddenly YOU’RE the square. The luddite.

And culture permeates like products. Which as Geoffrey Moore explains, moves through a cycle and then repeats itself.

First with the innovators. Those willing to take the biggest risk on something that might not work, like, a pour over only coffee bar with $6 cups. Then, the early adopters, who notice the talents, don’t understand the science but want to believe in and support the makers. Eventually, once made safe, and with the help of the prompting from the cool kids on the gram, the early majority arrive. This is when the wave hits, when the shop goes mainstream and begins cashing in on their risk.

But there’s still the hold outs. Loyal to the old brands, they opt out from pride, ignorance, or the desire to keep things as they’ve been or as they were. We're all luddites in certain areas of our lives, and we all make decisions about what to adopt...

But today, what you feel pressure to be is ahead of the curve, not behind the 8 ball.

It’s just simply not promoted or accepted at this point to not go forward. Call it a sign of the technology revolution.  And so these memes eek through the rivers and streams of our culture. And mostly their new healthy expressions of who we are. New lanterns are lit for segments of the population that didn’t have a voice in a white-washed culture. Remember, hip-hop was taboo. Yoga was taboo. Meditation was….

So I have a hard time believing that culturally we’re getting less progressive, when every small town is adopting the cultural waves of the cities. This is the last great pushback folks. The new culture has spread and now it's up against the “late-majority.” 

It’s called majority because it is a large segment of the population who doesn’t want any part of this change.
But the cultural always shifts. 

I think the hipsterification is already here. It's already spread. What's next?

Feels like equality and acceptance is on it's way.
 

Gold
#36



Crossing the Chasm

CultureDavid SherryDaily
Beme and the Future of News

The future of news is direct reporting.

From real people, not pundits. 

Right now, due to our election cycle and politics, major news networks seem to be in a heyday.  But this is a distraction. What's brewing is something behind the scenes. The heyday is almost always a last hurrah. You reach the peak right before you fall. That's why it's so difficult to innovate. 

It's like how truck sales in the US have been up, signaling an increase in interest, except that it's a false indicator of what's to come. At least in their current form. 

So Beme is taking a shot at the next wave of news. Like Vice, it's about real people, young people, getting involved and asking questions. 

And Beme was started by Casey Neistat, Youtube star with a real background in film making. The trick of Casey's work is making it look like it's not a huge production to produce, even though he's got all the smarts to do so.

Casey thought he could make waves giving people the ability to make video, with his app Beme. The problem was, it was way over hyped. And making an app that people love is next to impossible.

He had the users attention, but he didn't overdeliver on an experience that people wanted, so it flopped...

So CNN bought them. 

So maybe the news knows what's coming. Like Banks, investing their attention to Bitcoin. The smart ones know that the cliff is coming and they do something about it or get left behind.

So this is a smart move. People crave the realness. It's not about high quality cameras and options, it's about feeling like you're there in person. I *felt* something at the end of this video.

Like the Vice video I shared 2 weeks back. 

Beme sent someone to be THERE. Not posturing, just talking with people. And this will only get more enhanced with VR, as we immerse ourselves into the experience.

Now this type of video is long form. Not slit up with ads every 3 minutes and scrolling headlines trying to pull your attention away.
You get to see real people sharing their raw thoughts right there on camera. 

We can only hope that this will increase empathy.

AND WHAT YOU SEE IS THAT REAL PEOPLE ARE CONNECTING ON CAMERA. 

Which means maybe the type of media will help us find a way to connect outside of the video.  This is exactly what we need as a response to our divided political atmosphere. 

We're tired of hearing the same opinions.  Bring on more of the every day heroes. People there. People like you and me.

Bring on more of the realness.


" Beme Panels is real perspectives from real people about the news. Panels is a place for seriously honest perspectives, told through short videos from people all over the world."

Beme Viewer Comments:

"I cant wait for the day that these become daily"

"This is so much better than regular news."

"This is the kind of coverage events like this need but don't get through conventional media. Way to go Beme <3"
 

Gold
#37



After the Flood, The Rescue (Beme News)

Struggling artists blame the market, successful artists leverage it

How to make it as an artist today. 

I wanted to speak some today to creators and artists directly, as I am in this category.

 

My last post was about revolutions, with the point being that everything is changing.

So now the question is, how does a creator or artist make money today? 

How do artists and makers thrive during this revolution?

The truth is, commoditization is happening across every market, from content to software. Because of automation, because of a low barrier for entry, and because of an increase in efficiency for discovery which leads to winner take all markets.

 

What I mean is that if you’re a creator today:

  1. Your startup costs are low, and getting cheaper. This means more competition (everyone else has the same tools as you).
  2. Some of your work is being automated, which means there’s no value left. Leave it to the machines. When it comes to software, we see it being replicated cheaply. (Cough Instagram ripping Snapchat features).
  3. Your competition is easier for your customers to discover, and so the “#1 place on Google”, matters.


So if you’re a creator, this is bad for you, right?

 

Well there is some upside.

 

While products are becoming commoditized, because of the efficiencies and removal of a middleman from markets, creators who are creating “differentiated” content can get paid higher wages (in some cases) due to the removal of the middleman.
 

What I mean is that while photography is becoming commoditized due to the rise in supply, because photographers are individualizing themselves away from brands and agencies, they are able to capture the full value for their product directly without a middleman.

 

Ditto for the music industry. The music business is incredibly competitive, the barrier to entry is free, and often the content is free. But for those that do rise to the top, they do so with more leverage, and a more direct connection to the customer. This allows them to capture more value than ever before.

 

This means that…

  1. As a market, creators are moving closer to our customers.
  2. As a market, competition is increasing
  3. Differentiation and discoverability is key.

Those who are able to “win” value with their product creation (differentiation), are gaining more value than ever, because they are acting solo or often without large infrastructure, which frees up their expenses and allows them to prosper.

This is why on one hand, it’s never been a better time to be an artist, and on the other, you’re facing an entirely commodity market.

 

If you can differentiate, and build a niche for yourself with a direct connection to your customers, you can prosper enormously.

 

Of course, this only works when the type of work is still able to be differentiated. When it comes to, say Uber driving, commoditization is going to happen all the way to zero, because the “work” will be fully automated by computers. There’s no extra value to capture when the work cannot be differentiated.

 

A driver taking you from point A to point B is no different now, and no different than a computer doing so. So it will be done for free.

 

What can we do about this?

 

The first step is simply understanding what the market looks like, so you can analyze the risks and rewards.

 

It’s my personal belief (speaking to other artists, makers, creators), that if you CAN carve out value for yourself within a niche — your upside potential is actually even greater than it was a decade ago. There’s more opportunity to break in (because costs and risks are lower) — but there’s also more overlap between industries and the total “network” is more connected.

 

This is why I have friends who are booking photography gigs all over the globe. The discovery for their work has been unleashed by our connection through social networks. The tools at our disposal are much greater.

Just yesterday I had lunch with a friend who told me about his targeted Facebook advertising campaigns driving wedding photography business across the world. Because of the tool of Facebook, his sales process and customer discovery opportunities are much easier and greater than before. Because his work is quality and differentiated, he speaks to a specific group that’s eager for his work at a premium (the wedding industry).

 

I can’t overstate how stark this contrast is. To see it, just hop on youtube. You can watch a Jake Paul Video and forget the fact that he’s making $15 million a month using a $300 video camera. You click to the next video and its a creator using a $1,000 rig but is making $0 per video. They’re both living in the same market, yet one is thriving beyond what would have been believable just 10 years ago. One artist a millionaire, the other making for free. Which is the power of differentiation and discovery. 
 

How do you make it as an artist today? 

In step by step order.

  1. Focus on your work. (Supply)

My best guess here is to start by focusing on the one thing you can control, supply. As a creator, you are directly able to build supply of your work, be it painting, video, music or writing. This could take years, depending on your skill, and your street-smarts about the market your entering for what people want, as well as your originality and voice.

How do you know if your supply is good?

You know it when you see it. 
 

2. Focus on aligning with the right outlets (Discovery)

Once your supply is at a level that is bringing in interest and attention, and it’s reached a certain level of quality standard, you want to exercise your options for making the right contacts. This could be higher-ups at agencies or brands who might hire you for work, or it could be aligning with others who are a step or two above you in success but would still align with your work. The goal is to get in front of the right people, and connect with those who will help you with discovery and distribution.

This alignment helps the right audience discover your work and begin to share. This could also be like I mentioned, utilizing the tools of networks like Facebook, social, Reddit or distribution through channels hungry for new work to get your work out there and seen as credible.
 

3. Focus on creating connection to your work (Demand)

With quality, differentiated work, and the right contacts who you can partner with or share audiences, your ready to keep your stream of production going while engaging with your fans. This could be list building, commenting with followers or connecting in person. Realize that this customer attention and trust is your most important asset. It stems from your product supply, which leads the charge, but the connection thereafter is the real ticket for leverage for your future. Do a great job here, and you will have more stability and an asset that goes beyond your product. Tastes change, but connections can last. *This is my favorite part, happy to chat on this with you directly should you be looking to develop here.
 

4. Rinse and Repeat, starting at supply.

Now that you’ve got some audience build up, and you’re growing, you need to return to the bread and butter and ensure that it’s still breaking the mold. You can’t stay stale with your supply, as consumers tastes change, and you want to lead that charge instead of react to it. This is difficult to jump back into because it means breaking what works and reinventing the wheel. You do so smartly, in way that shows your fans the future but also give them a line to follow.


So it this going to be easy? No. Are the tools available to you if you take action, yes. 

I'd also like to note that there are many benefits to artist beyond monetary success. By sharing our art, we create connection. Not only is that satisfying in it's own right ("Wow, I helped someone's day today because they listened to my podcast") – but it also leads you to have a more serendipitous and interesting life. 

We can share our art simply for the joy of doing it. We can connect with others because it's enjoyable to do so. And we will see new forks in the road, twists and turns that were only available through the vehicle that our work provided us.

And that makes it worth doing.

**Pt. 2 Coming soon,
On how companies and brands make it today.

Gold
#36



How Luisa Dörr Shot 12 TIME Covers On Her iPhone

Revolutions


We read about revolutions in school. But now we're in one.

This isn't the run of the mill update to technology, it's the reformation of everything, from our societal systems to our culture. And what happens in revolutions? Everything changes, and often in ways you couldn't possibly believe. 

Like suddenly having all of human knowledge in your pocket. Like when we abandon driving cars and let the computers do it. And when banks disappear in exchange for the Blockchain.  

You read that and are thinking to yourself, yeah but...
Which is what's always said. And then the wheel turns and we hit a new normal. As soon as something is done, it's pulled into the fabric of our culture so that we no longer notice it.  Which is why we're no longer impressed by Google searching through a billion web pages in a second, or how the plane you're in is being flown by computers. 

But technology is advancing farther than ever. Forcing us to reckon with and abandon our tools faster.  It's disturbing the comfortable rate of adoption. 

To feel a whiplash you first need to accelerate, fast.
Which we did, for 25 years. 
Now we're feeling the pull back.

As we are accelerating forward by the ever-progressing technology engine, we have the pull to slow down or go backwards. 

Half of us excited, elated, and diving into new opportunities and new frontiers.

Half of us concerned, skeptical, wondering about what the consequences are and what will be. 

We're seeing that a lot of the consequences of our internet are becoming apparent and validated.

As they say, the invention of the Facebook was also the invention of the Facebook Bully.

So we're tenuous about our data, about who's listening, about whether or finances online are safe. In the infancy of revolution, there's always turmoil and uncertainty.

The question is then how can we positively move forward while in a revolution? 

Paradoxically It's likely by leaning in.
Which is why if you're in Radio... doubling down isn't the right answer.

But you knew this intuitively.

As we lean in we also need to protect ourselves. And the best way we can do that is to bring humanity into that which asserts control.

The wheel that's guiding the ship for us all needs to be reigned in, not from growth, but from ignorant destruction. 

Which makes me think that the real issue in any revolution is precisely in ignorant destruction. And sadly this can come from both sides of the coin.

From those racing forward not caring about those who they destroy in their path. (technophiles) 

To those trying to go backwards, keeping positive progress from happening (building oil pipelines, closing borders, preventing freedom).

What's next?

With the validation of our technology concerns, expect an increase in media and tech to help protect people, their privacy, their rights etc. This is a good thing. It's how technology always rights the ship. The negatives are negated by the positives. We need people to create methods for predicting downsides and minimizing them. We need to address privacy. We need to address security.

Expect the pendulum to swing back from internet addiction to real life. People vocalizing their interest in real life experiences, in meaningful conversations, face to face, in phone free time.

We still have the most high-def, reality software available: the real world.

Personally, I'm hoping to see more people engage in this topic. How does one live a fulfilling REAL life today? (This is a big opportunity to explore). Experienced life before the web? We need you to write a book about it. Maybe it will help us return in some form.

What we need is for artists to address this and guide us through. Help us make sense of what's going on.  Art has always been a mirror for who we are. And we trust it to help us see ourselves better in the midst of these changes. To bring us truth and meaning amongst the metamorphosis.

One such artist is Laura Karetzky, who brings this tension into her oil paintings by bringing in the screen. Including a real perspective at what someone today might experience. 

One such app helping us keep privacy is Signal.

One such luminary talking about these issues is Anil Dash.

Revolutions breed more questions than answers.

We're in it together, might as well welcome the discussion.



Gold
#35



Paintings by Laura Karetzky

Signal App

Anil Dash

A Community Affair (The Lot Radio)

 

Radio is turning into a community affair.

Have you noticed so many podcasts are now doing live tours?

I went and saw Last Podcast on the Left live at the Hollywood Forever cemetery months back and it was great. The venue was full, and the hosts were part rockstars, part normal dudes just like us. They even put up a few youtube videos and memes on the screen so that we could all enjoy together. It was like surfing with internet with your very funny friends.
 

Our media is becoming about community. Previously a radio DJ would take calls occasionally, but most of the communication was one way. With the host speaking to you, anonymous and in the car. But now when there are fans, and tech to help make them known, the doors open to new possibilities for how media interacts with their audiences.
 

Fans want to connect, be a part of the show, meet each other.
And so stations like Lot are doing two things right.
 

The first is they’ve open sourced their station. Now they book new DJ’s all day, every day, it’s 24/7!

The second is they had a really interesting hook. They said to themselves, “What if we could livestream new DJ’s in NYC 24 hours a day? Never ending?” This is how you stand out. You go ALL the way to the edge. Every night wouldn’t have been enough. It’s going to be full on 24/7.

And they made it happen. Grass roots, putting up a tiny shipping container on a lot in New York City that would allow them to broadcast.

Then they invited DJ’s in, and soon enough the schedule was full. It’s like your part of the club when you play there. And they have so much time to fill they can bring all types of people in. Someone should do this concept as a bar or venue. Open 24/7. Always a live band playing. Letting everyone in and letting everyone participate. Someone with a passion for pushing music forward in their city. Which these people clearly have. 
 

Have you played The Lot? It can be a badge of honor. You’re in the club.
 

So realize that this concept can be applied elsewhere, in many different industries: 

1. “Here’s a stage. Want to play it?”  Make the community the star.

2. This concept wouldn’t have worked if it wasn’t 24/7. That’s how you stand out. Go all the way to the edge.

So, What’s next?

Coachella and other major festivals made the whole experience about the fan. Now it’s about involving them in the full experience. Sharing the spotlight, and helping them engage with each other.  Even most musicians are making a good chunk of their ticket sales on VIP tickets that guarantee a meet and greet with the artist afterword. Which is amazing for the fan, but for the artist can be a nightmare. But that's the name of the game today. I heard about this from an episode of Hey Cool Job!  with Kinfolk’s event coordinator Judnick Mayard. She had some stories...

So watch for our digital libraries, steaming services, and favorite media channels to start linking up the communities of fans. And linking those fans further to the artist. Chats, live streams, meet and greets. Getting the community involved as much as possible in the experience. Even having them help plan or coordinate.

 This is the church potluck, brought to mainstream hip events with major acts and brands. 

Open source the festival. Open source the radio station. Open source the community component to our favorite media channels.

We’re in a new media world. We want to be involved in the process. We want to connect with others like us. Talk about the show. Connect and help create it. So instead of being disparate solo-consumers, media is turning into a community affair.

The Lot Radio is a party and you’re all invited.

Gold
#34

The Lot Radio

Last Podcast on the Left

Hey, Cool Job!

MusicDavid SherryDaily
Getting Paid

I don’t charge for this email.

"Of course not!" You might say.

But maybe I will some day.

In which you might say to yourself, “Of course you do!”
 

So what gives? Why not charge now? Or rather, when should I charge?

Understanding where value is created and extracted is a key piece to seeing, developing, and building our brands in the modern age. 

As we shift more from physical products (based on supply and distribution costs) to digital products (scalable, free, copyable to infinity)  — We’ll see new forms of arbitrage, new economic models, new species of value being traded.

I believe this is at the core of a lot of the angst entrepreneurs and artists feel today. “How” to charge for your services, and the competition in every market due to competition becoming global vs. local.It’s almost the common joke of the modern startup today.


“All this buzz, but no business model!”
 

This competitiveness on the internet, mixed with the ability to scale and repliclate anything digital drives down our costs, and price, massively. Even to zero in most cases. While we used to live in a world of product scarcity, we now live in a world in which much of our consumption is massively abundant.

The truth is there is more music, shows, blog posts, video, podcasts etc. than you could ever listen to. And these are all essentially free or very low cost (a la Netflix). 
 

Competitive supply (at a low cost) + new filters for creating friction (paywalls, subscriptions, marketplaces, advertising) drive our decision making about how we charge for what we create. 
 

Typically, anything of value is something that is scarce. The greater the scarcity, the higher the value (think: Taylor Swift tickets). 

But when all things are abundant, and often free — to make something scarce, you either need to find an industry where there has yet to be abundance at a low price (difficult to find) or make something that clearly stands out and is worth paying for to a customer.
 

The only relief that the modern artist finds is that their cost structure, too, has massively declined. If you want to shoot youtube videos, you only need an iPhone and some free editing software, whereas before you might have needed expensive cameras and an entire crew.

But, this is the same double edged sword that unleashed the abundance of media of which is now competitive with yours.

Which brings me to my main point: the real scarcity of today’s world is attention. It’s the only thing we can really arbitrage. 

Last week I wrote about how companies are after the small sections of our attention. The moments in between. 

Today I’m talking holistically about our attention. The full lifetime of our attention. Which, inevitably runs out. Which means it comes at a premium. It’s finite in it’s nature, which is why we can never consume all that the internet has to offer.

So the maker of today has two jobs, and you need to do both:

  1. Create something worthy of our attention.

  2. Arbitrage that attention to something people will spend money on (that delivers on the value promised).

 Even the election was an attention arbitrage. And Trump had been practicing this for decades. He won the attention war. And he arbitraged it to get into the White House. Interestingly enough, he’s also helped drive attention for thousands of other media creators, with entire shows spawning from these topics. All of which have leveraged the interest and attention of the presidency into something of value that people pay for.

You could also argue that Trump took the attention of his real estate business and arbitraged it into his T.V. Shows, which was then arbitraged into politics.

So now we see the cornerstone of being able to create value today is to capture attention and maneuver that attention into something valuable. Inherently we sort of understand this, and I believe it’s why people are so interested in growing their followings on social media. They believe that as they grow that attention, something of value can come from it. This is true, and is working for many who built real attention from an audience. 
Now that we see attention is a necessary component for building value, it doesn’t make it any easier. We all have that feeling like it’s getting harder and harder to have our voice heard in the noise.
 

I think at the root of that feeling is a Chicken and Egg scenario. You need to create value to get attention but you also need attention to create value. 
 

What to do! 


I think this is where the previous generation is getting stuck. It’s a new era. Your career path is not set in stone, it will shift many times. And with each shift comes a leap that needs to be made.

And each leap has no guarantee of working out. In fact, the odds are probably against you. If you want to be in the business of selling something you create, you have to have faith that eventually it will pay you back. And accept that it might not.

Because the trick to the chicken and egg problem is often building the attention first, and focusing the value second.
 

Which is the route many of the “no business model” startups are taking.

On the larger scale: Snapchat built a free app that created value, and built enough attention to arbitrage ads against that attention. While they’ve gone public, it’s still actually possible that the attention they’ve garnered will pay them more than their costs. Right now they’re still propped up by investment.

On the small scale: You’ve got the blogger who uses the following they’ve built talking about interior decorating to partner up with brands as affiliates and take a percentage of each purchase from their website.
 

The key in both scenarios is the attention. No attention, no arbitrage.

The hard part now is that leap.

Starting something new; Snapchat, a blog, where you have no idea if it will work, and for how long you will have to work for free to see a return if at all. The main idea is to build attention and trust, the secondary idea is to get a return on value.


This is where the younger generation is seeing the money moves in a freer form way of working. Whereas previous generations, understandably, saw a much more linear view of money and making money.


I fix your car, you pay me cash.

Newer entrepreneurs and artists are embracing Karma over economics. Which is what baffles others. It’s so NOT logical. It’s too much trust. Trust that if they continue to create something of value, they’ll be able to charge for it. Trust that somehow some way you’ll get a return.

 But the truth is today’s artists aren’t putting their trust in a business model. (Still scary for me to say), they’re putting trust in the accruing value of their product.

Trust that they can eventually gain attention. Trust that enough people will eventually pay for something because they trust you. 

In the music business you might make songs for free for years and just post them online free. Then eventually people buy tickets to your show. Or eventually it’s licensed to a video game. Or eventually you sell yourself as an MC for a charity event.

Their value is built over time, an investment in building the asset of attention. 

So what are we to do? Work for free and hope we never get paid?

My take here is that, like any good investment portfolio you want to have it balanced.

The way I believe we balance this new way of working is focus on how we can acquire capital in the short run. This means selling something you know that people buy, working at a company, freelancing, running a service or product you can get paid for today.

All the while developing a way to build value for others over the long run. The best advice I’d give you here for where to start is to be yourself.

Attention is scarce, but so are you. You are a totally unique person with a totally unique skillset and perspective. If you can allow yourself to naturally produce work that is true to you, I find that is the easiest way to build attention. 

I think of the author of Hillbilly Eulogy, who simply told his life story — which was compelling to others enough to get him paid. Now he’s looking at politics.

Today we look for unique voices. Those with opinions, those who have spent time developing their skills and their voice.

The way to stand out is to be unique. The way to be unique is to be yourself. So become an investor in yourself. In your current cash flow and your future skills. Build value for others by focusing on doing something that only you can do or make.

The tools are free, but still most people are scared to make the leap. Everyone can write an email. But they can’t write THIS email.
 

I wrote this email.

So when I do ask for $5 a month, people might pay.

Because where else will you get to hear this unique voice?

People will give you their attention, if you develop yourself in your craft and share it, because you are the last scarcity worth paying for.
 

And trust me, it’s hard work.