The Passion Economy
I have been paying attention to alot of marcotechnological metatrends and really listening to what futurists and others have to say about how technology is digitally transforming all aspects of our society, particularly our economy.
And I believe that we are currently in a transition from late-stage capitalism to techno-socialism. Although there are aspects of capitalism that are good and bad and there are aspects of socialism that are good and bad, we are heading towards a potentially very interesting type of society and economy. Make no mistake about it however, the next decade will be brutal for every job as hypercompetition, hyper-globalization, hyperautomation and hyperdigitalization soars as the pace of change continues to accelerate at a steepening pace of change. We are all going to have to navigate a massive transition or big shift in our economy especially in the next 2–3 years especially as the coronavirus pandemic accelerates forces of tech disruption significantly.
The cost of goods and services or the cost of production in many industries is close-but-not-quite-there yet to a zero-marginal cost. Think about the impact the internet, smartphones, social media, and mobile apps have had on our economy. They have dematerialized, decentralized, demonetized, and digitalized many aspects of our economy for better and for worse.
For the consumer, the benefits have been the best as the consumer has infinite choices and abundance of resources just through these digital technologies such as the smartphone. And for internet entrepreneurs and software engineers, they have also mostly enjoyed the infinite leverage or scalability that information technologies such as the internet provide. And this has massive ramifications. Middlemen, big corporations, and big bureaucracies will continually be disintermediated, in the face of the information technology revolution, so we are heading towards a frictionless economy. Yes this will be bad for many existing industrial-era jobs as we transition to the digital age. However, we are living in a renaissance era for creatives and lifelong learners who choose to build a life and choose to create their own interesting paths in a permissionless world. The individual, consumer, creator, or entrepreneur has infinite power in the new world order to change things, to build things and to shape things.
Jack Butcher, Founder of Visualize Value, has the best way of explaining these concepts through present graphic designs and his message is ironic because he is combining his skills of digital marketing with his passions of graphic design to create a graphic digital marketing company which conveys these messages of leverage, digital entrepreneurship and more interesting topics ranging from product management to timeless business or life philosophy.
What makes Jack’s thinking really exciting is that he is intuitive and creative and builds in public and encourages others to do so as well. Meaning he thinks, tweets or develops digital products on the fly, rapidly iterates and ships quickly. I think this focus on early engineers, entrepreneurs, or designers sharing, documenting and open-sourcing as much of their work, design process, and creative flow as well as philosophy as possible is amazing and is contributing to hyperinnovation, digital disruption/disintermediation and a vibrant internet with thriving communities online like we have today. When passionate engineers, entrepreneurs, designers, etc. build, fail, share and document their process in public, the culture of innovation is fluid and everyone involved in the passion economy is dynamically learning from failures and successes of their peers. This builds a healthy ecosystem which drives growth, innovation and a learning culture.
He also has a build once, sell twice philosophy, which is really about building digital content and digital products and selling or shipping them at the scale of the internet delivered to millions of followers around the world on cross-platforms at low or a 0 marginal cost. In the digital world, digital products such as content or software are able to be shared millions of times over because of the economies of scale and less friction that the internet provides. There are some gatekeepers and platforms such as Twitter, YouTube, Instagram and LinkedIn that have reached the economies of scale, but Jack talks about using them regardless to build massive online leverage and value because of the power of distribution and network effects that they provide.
Jack Butcher argues that wealth creation through the internet is creating an age of infinite leverage for online entrepreneurs because they can build a product (easiest example is in the form of digital content), find various communities to connect with and build digital global brands without middlemen. Many technology entrepreneurs, founders and investors now believe this process of creative destruction and digital disintermediation so fundamentally which is why they are so passionate about their work and their message of freedom through this age of internet abundance.
Li Jin, Partner at Andreessen Horowitz talks with Anthony Pompliano of the Pomp Podcast about the passion economy and the emerging creator economy which is pretty similar and is still just at the beginning where the internet is allowing more people to become digital creators, and get paid doing what they are passionate about.
Naval Ravikant, the Founder of AngelList, argues that in today’s economy the best way to get rich is to build wealth through information technologies and entrepreneurship. His tweetstorm “How to Get Rich (without getting lucky)” was the best Twitter Threads on these topics of wealth creation in the 21st century.
Naval has done many podcasts also where he gives his wisdom on how to create massive wealth and abundance through the internet. But the best way to get rich and build wealth is by being a business owner, entrepreneur or investor (preferably in technology), leveraging the scale of the internet, human ingenuity, creativity and passion and connecting with the right audience. The part of owning equity is very important and is what’s missing in much of today’s education system. That’s why our financial system is based too much on relying on short-term debt and monetary inflation rather than building longer-term equity and technological deflation. And too many people in America spend the majority of their lives working and maybe earning income but never truly building financial independence. Now most entrepreneurs and investors still continue working after they achieve financial independence, but financial independence is crucial because it gives people freedom from the monetary and economic system based on debt and slaving away at a 9-5 for one’s entire life. Having that choice of working on projects you truly love and are passionate about after having financial freedom so you don’t have to live to work, but can live to learn, enjoy, explore and create without any strings or stress attached is the ultimate goal I think.
Naval Ravikant, Warren Buffet and many other very successful entrepreneurs or investors believe the same fundamental principle that the ultimate goal should be financial freedom so that people can generate a return on their investments/assets/businesses while they sleep so that they don’t have to “work for a living”. Naval Ravikant and Warren Buffet both believe in the power of compounding and compound interest when it comes to thinking about investing and business philosophy. Naval’s philosophy however is more nuanced and has a new-age Silicon-Valley (Steve Jobs-esque) technology orientation because he says that the best way to build equity is through internet businesses, where you can already combine your true passions, skills, creativity and resourcefulness in order to build wealth while doing what you love every single second. And that I think is a beautiful life and business philosophy which is possible because the internet is making it increasingly possible today to connect directly with consumers, directly with prospective customers and prospective community members and because technology is decreasing the barriers to entry and eliminating middlemen and friction allowing entrepreneurs to build their dreams.
Gary Vaynerchuk also is an inspirational entrepreneur who talks about the importance of passion and converting your passions into your job or career or entrepreneurial calling. It’s quite simple but most people don’t do it, because we are taught not to do it because of a schooling system designed for the industrial era and not for the digital era. In the digital era or age of the internet we find ourselves in we can do literally anything. So why not find creative ways to monetize your passions? Why not do what you love? If you do what you love, chances are you’ll live a much happier and more meaningful life and attract better things, better people and most likely better money in the process because you’ll genuinely become great.
Because the internet is shifting business models rapidly now more than ever to Direct-To-Consumer so people can make a living doing what they live on the internet by following that process combined with their unique passions and niche obsesssions and connecting with others directly who have those unique passions and niche obsessions. The Internet is accelerating digitalization and globalization now more than ever and his points are very true when you think about the massive technological shifts occurring and the biggest winners of today’s economy. Digital Entrepreneurship and the passion economy will trump the 9-5 and I think the days of traditional corporate structures, and soul-crushing 9-5 jobs are ending with this transition to technological abundance.
You can pretty much learn anything for near free if not free online today instead of going to college at very high quality with all the MOOCs out there such as Udemy and then you can teach others what you learn and monetize your skills in this passion economy where you customize or gamify your path by selling books, e-books, courses, starting a YouTube channel, Spotify podcast, writing a Substack blog, and then as you become a bigger influencer you can collaborate with other influencers, and do live events if you become big enough. When you combine multiple skills, passions and interests with your unique personality and authenticity, you can build a pretty special brand, and cult-like following and rise up as an influencer in one or multiple spaces. However, to stand out you have to be really great, because there is competition everywhere. And you also have many options of how you can monetize, so I think there is not really a set path or endpoint in terms of the new careers today, but more of a trial and error and experimentation vibe for upcoming entrepreneurs.
Most things can be done and will be done digitally and remotely today because of the convenience of the technology we have, and this trend to digital has been accelerated because the pandemic hit.
For employees and workers in the gig economy, however, paradoxically the benefits have not been the best but that’s a debate for another time. One thing is for certain however, consumers and workers now have access to the same abundance of choices available in today’s world such as the information that has become abundantly available on the internet today.
If you take something like Uber or Lyft and what they did to Taxis, what Netflix did to Blockbuster and what Amazon did to Retail. And now if you imagine other industries and how new exponential converging technologies may do the same exact thing to those as well.
Keep in mind the growing list of converging exponential technologies as well as digital infrastructure on our list. They include 3D Printing, Big Data, Cloud Computing, Artificial Intelligence, Blockchain, Cryptocurrencies, Smarthomes, Smartcities, Smartphones, Autonomous Vehicles, VTOL (Flying Cars), Neuromorphic (Brain Computing Architecture) Chips, Augmented Reality, Virtual Reality, Nanotechnology, Biotechnology, CRISPR-Cas9, Genomics, 5G Networks, 1 Trillion Sensors, Robotics, Clean Energy Technologies.
This is a dream for sci-fi geeks and technophiles. However what is a dream come true for some is a nightmare come true for others. And I believe that all of these technologies maturing and accelerating at the same time is creating a lot of tailwinds that we probably will not recognize right now.
However these exponential technologies and disruptive innovation will also make every industry that has not yet been, soon be dematerialized, decentralized, demonetized, and digitalized. What that means is that every good and service will probably become accessible and nearly free at a close to if not at 0 marginal cost to the consumer probably within this decade itself bringing about unprecedented abundance. This is why I say we are heading towards Techno-Socialism.
Simon Sinek summed up brilliantly in his book as he has done in several of his talks and podcasts which he has given the reason for the types of breakdowns we are seeing in our society and the reasons why certain people can lead better than others. His most important principle in The Infinite Game is simple - having a Just Cause.
That’s right, simply asking “Why” and questioning more often than not why we make certain decisions and asking ourselves why we choose to do certain things is the most empowering principles. Thinking independently from first principles and questioning, asking why am I doing this, why am I joining this, why is this done this way, why is this other person making that decision. This type of thinking may seem annoying and time-consuming and can be in a world that is very hyper-paced, but it very liberating to do this in a world that is mostly filled with Finite Players playing Finite Games. People do need a sense of purpose, empowerment and belonging not just in their lives but in their work as well because work fills a large part of people’s lives and so the community is also critical because a good community with good leaders creates belonging. I think as more of us will have to take further ownership in our personal and professional lives, we will become disruptive entrepreneurs or intrapreneurs in the new economy we are entering. This will help people not only become better leaders themselves but to help inspire the next generation of leaders in these challenging times. Infinite players also build the greatest startups and companies and become the greatest business leaders because they don’t just do it for the money, they do it because they are very passionate and fired up for their cause.
Peter Diamandis, the Founder of XPRIZE and Co-Founder at Singularity University says that these exponential technologies can create a world of abundance and already are through the process of dematerialization, decentralization, demonetization and digitalization. The entrepreneurs who have the mindset and the passion can leverage exponential technologies and these paradigm shifts to change the world for the better according to Peter.
And Elon Musk is the premier example of one such exponential entrepreneur who is changing the world for the better through disruptive business models and exponential technologies with all the companies he runs most notably Tesla, SpaceX and Neuralink. Elon Musk is pioneering a better future for humanity and is the ultimate inspirational tech entrepreneur who innovates purposefully and disrupts entire industries for the better (such as forcing the entire Auto Industry to pivot to Electric Vehicles and Full Self Driving Features).
This is certain to happen. The questions that are important are a few fold however.
What economic safety nets can we have in place for the interim as we enter what we can call as Future Shock? (This is why I and I think many are advocating for a Universal Basic Income or UBI although that raises certain questions as well then which is up for another debate).
How will we govern a society in which the marginal cost of goods and services is near 0 or where everything is nearly free?
What will people do in this society when it comes to fruition more and more and exponential technological advances create this type of abundance.
What will the negative impacts or unintended consequences be of this type of society and how can those be mitigated or minimized?
How do we redistribute the massive wealth that will most likely be concentrated in the hands of a few Hi-Tech companies? Should we think about data dividends like Andrew Yang proposed and take his Data Dividend Project more seriously which attempts to redistribute some of the wealth generated from the tech companies by user data and give some of it back to users?