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The Collaboration Economy

This is a repost of an article I published on April 12, 2021 for the Lumastic blog.

In 2009, Paul Saffo, a prolific author and futurist, wrote a blog post theorizing a “new economic era”.

In the article, he explains that the early 1900s brought us the “producer economy”: a time when our economic bedrock was mass manufacturing. This new economic engine was born out of the shared societal trauma of World War I that left us with a desire for abundance and a fear of scarcity. The name of the game was optimizing the means of production.

Then, after World War II, companies got so good at optimizing production that they were out-producing market demand. So, to deal with this problem, the “consumer economy“ was born. Abundance was no longer our core desire. In the consumer economy, we desired status and feared inferiority. The department with the biggest budget was now marketing and advertising. The name of the game was optimizing the means of consumption.

Then, in 2008, after decades of propaganda designed to keep people ‘keeping up with the Joneses’ and believing that “greed is good”, the consumer economy collapsed with the housing market. We reached a point of overconsumption and were due for a market shift. Saffo theorizes that this new economic era is the “creator economy“.

He talks about how the wealth of information provided by the internet has created a scarcity of attention, and now individuals online can gain status by creating things that attract this new scarce commodity. He talks about how television and mass media will be dominated by personal media platforms like Facebook, Twitter, and YouTube. He says that the name of the game is now optimizing the means of creation.

He wrote all of this before Instagram even launched, so it’s kind of crazy how much he got right. However, I don’t believe the creator economy is our next economic era. I also don’t believe we are in Lawrence Lessig’s sharing economy or Tina Brown’s gig economy.

I believe we are at the beginning of the collaboration economy.

The creator, sharing, and gig economy are one in the same. Their most prominent platforms touch very different industries: YouTube operates in advertising, Airbnb in housing, and Uber in transportation. However, they all share the same business structure.

See, the internet’s biggest companies aren’t individual companies at all.

They are massive collaborations between them and their users.

Let’s take Uber as an easy example that’s been talked about a lot. Uber is a company that pays people to drive other people around. However, drivers on Uber are not employees - they are a distributed workforce of over a quarter-million “independent contractors”. Uber is a company built by collaborating with a quarter-million small-businesses.

Now, let’s take a less obvious example: YouTube. YouTube is the entertainment destination of the internet with 5 billion videos watched every single day. But YouTube isn’t a production company, they’re a cable company. The endless supply of entertainment is created by millions of independent filmmakers, artists and entertainers. They make content for YouTube and get a cut of the revenue YouTube makes from running ads against their work. And YouTube makes more than $15 billion dollars a year from that partnership.

These collaborative relationships between independent businesses are the through-theme of our new economic era. And these tech companies represent our first shot at supporting this incredibly powerful, exciting, and new class of entrepreneur and small-business owner.

And we need to do way better.

On all of these platforms, their collaborators, the people who do the work to keep them valuable, are getting the short end of the deal. Imagine if you ran a business and your landlord, rather than charging you rent, told you they’re taking 25%-50% of your revenue every month. That’s what’s happening right now for hundreds of thousands of small businesses across the world. It’s predatory.

And the reason these platforms - these internet real-estate companies - can do it is because developing the software - the land - is complicated and expensive, and they have the capital to acquire their competitors and remain monopolies.

That being said, I believe there is hope for the collaboration economy.

These tech companies are the product of its first inning. Their reckoning comes when we start remembering the promise of the internet. Right now, we’re collaborating with many-to-one relationships; YouTube to its creators, Uber to its drivers, Airbnb to its hosts. However, unlike the communications technology before it, the power of the internet is it’s ability to connect many-to-many.

In the coming years of the collaboration economy, I believe spaces we connect on the internet will be owned by us. I believe that we will treat them more like countries and less like companies. I believe we’ll create internet communication standards that make it easy for us to own and move our digital property between platforms. I believe that thanks to the open-source and no-code movements, software development will become so accessible that creating internet-real-estate will be a weekend project.

I also believe that governments will realize that in a world where being an independent business is more common than working for a company, we need state-run healthcare and universal basic income.

I believe that the collaboration economy is our greatest shot at a democratically run economy where individuals wield the power once held by corporations.

I believe this because if this shift doesn’t happen, we’re fucked.

I am in love with the collaboration economy. So much so that we’ve staked our entire business here at Lumastic on supporting its growth. Of course, that means I’m incredibly biased 😂.

So, I’d love to hear your thoughts - slide into my DMs on twitter or you can email me.

Until next time.

Drew Lyton
Drew Lyton
Monday, February 14, 2022

I'm a software engineer, ex-founder and writer who cares deeply about creating a better relationship between technology and society. I'm currently writing a book about early stage entrepreneurship.


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