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Down with the Gatekeepers
"Even Well-Meaning Gatekeepers Slow Innovation"
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Hey Everyone 👋 ,
On Monday, I shared a piece I wrote in The Atlantic.
I wanted to share a second piece this week that relates to many of the themes explored in that piece. In some ways, today’s thesis is a catch-all for everything I write about on Digital Native and for everything happening in technology. Much of society’s architecture is built around gatekeepers, the intermediaries who capture most of the value. This piece is about how gatekeepers are being circumvented and rendered moot.
Also, join the Digital Native Discord community if you want to hang out and riff on these topics—we’re now about 600 strong.
I’ll be hanging out in the aptly-named #hangingout voice channel later this week. See you there!
With that, here’s Down with the Gatekeepers 🔓
Down with the Gatekeepers
A few years ago, some clever person submitted Pulitzer Prize-winning books to publishers as new manuscripts. Every single book was rejected. The takeaway was clear: barriers to creation are so great that even acclaimed masterpieces, when disguised, don’t make the cut.
I think of this example when I think of how gatekeepers artificially constrain creation. Publishers are a classic example of a gatekeeper; some of history’s best works almost didn’t make it through the publishing gates.
Dr. Seuss’ first book was rejected 27 times (!). After the 27th rejection, the author was walking home on Madison Avenue, ready to burn the manuscript in his apartment’s incinerator. As fate would have it, he happened to run into a college friend. And as fate would have it, that day just happened to be his friend’s first day of work at Vanguard Press as a children’s book editor. Dr. Seuss signed with Vanguard the same day, and his book was a massive hit. Dr. Seuss later wrote, “If I had been going down the other side of Madison Avenue, I’d be in the dry-cleaning business today.”
Other great works almost never saw the light of day. Catch 22? 22 rejections. Dune? 23 rejections. The Help? A whopping 60 rejections. Harry Potter is the bestselling book series in history, with 500 million copies sold; it’s the 3rd-most-read book of all-time after The Bible and China’s Quotations from Chairman Mao Tse-tung. But JK Rowling was rejected by 12 publishers.
Think of how many great works were lost to the rejection bin. This piece wouldn’t be complete without a “You shall not pass!” Gandalf meme.
When you begin to think from first principles, the questions pile up:
Why should we leave human creativity to the whim of one gatekeeper? Why should a book editor, a studio executive, an art gallery owner decide what gets consumed by the public? Why should intermediaries be the arbiters of culture?
What’s so groundbreaking about the internet is how it reorients the system, obfuscating gatekeepers and unlocking creation. In his 2011 letter to Amazon shareholders, Jeff Bezos wrote about three very different products:
Invention comes in many forms and at many scales. The most radical and transformative of inventions are often those that empower others to unleash their creativity—to pursue their dreams. That’s a big part of what’s going on with Amazon Web Services, Fulfillment by Amazon, and Kindle Direct Publishing. With AWS, FBA, and KDP, we are creating powerful self-service platforms that allow thousands of people to boldly experiment and accomplish things that would otherwise be impossible or impractical.
Bezos then underscored how these AWS, FBA, and KDP each removes gatekeepers, and why that matters:
I am emphasizing the self-service nature of these platforms because it’s important for a reason I think is somewhat non-obvious: even well-meaning gatekeepers slow innovation. When a platform is self-service, even the improbable ideas can get tried, because there’s no expert gatekeeper ready to say “that will never work!” And guess what—many of those improbable ideas do work, and society is the beneficiary of that diversity.
How many more Harry Potters would we have if the manuscript hadn’t been rejected by someone having a bad day, or by someone with an unusually-strong aversion to wizards?
The internet has made it vastly easier to get your creations through to an audience. In the late 90s, my dad jumped through the hoops of the publishing industry to get his first book, Deception, published. Twenty years later, he simply clicked “publish” on Kindle Direct Publishing for his second book, Pawns of the Wall. (With the caveat that I am a very biased son, you should check them both out!)
Bezos was right: even well-meaning gatekeepers slow innovation. One of technology’s most powerful effects is to open the floodgates to creation. To illustrate the breadth of human creativity, I often point to Barry Diller’s infamous words from a 2005 interview in WIRED.
There is not that much talent in the world. There are very few people in very few closets in very few rooms that are really talented and can’t get out.
People with talent and expertise at making entertainment products are not going to be displaced by 1,800 people coming up with their videos that they think are going to have an appeal.
This isn’t to pick on Diller, whom I admire greatly. Few people saw user-generated content becoming the force it is today. But Diller couldn’t have been more wrong. The same year he said those words, a company called YouTube was founded in a tiny room above a pizzeria in San Mateo. It turned out there were many people, in many closets, in many rooms with incredible talent. It just needed to be unlocked.
That piece in WIRED was titled, “Are We Ready for Web 2.0?” Fifteen years later, we’re wondering whether we’re ready for Web3. Web3 itself is a direct reaction to the gatekeepers. Vitalik Buterin, Ethereum’s co-founder, writes on his personal website:
I happily played World of Warcraft during 2007-2010, but one day Blizzard [the maker of the game] removed the damage component from my beloved warlock’s Siphon Life spell. I cried myself to sleep, and on that day I realized what horrors centralized services can bring.
This experience inspired Vitalik to create Ethereum.
Crypto was born from the vision of removing gatekeepers, of erasing reliance on centralized authority. The ethos of the entire movement embodies this vision. To take a few recent examples, consider Mad Realities and ConstitutionDAO.
Mad Realities is a Web3 dating show—you can think of it as The Bachelor for Web3—that flips the concept of a dating show on its head. Rather than a show’s producers (the gatekeepers) selecting contestants and designing plot-lines, as on The Bachelor, Mad Realities puts the community in charge. Buying a Mad Realities NFT means that you get to vote on who is in the show and on what happens. Designed by Devin Lewtan and Alice Ma, the project launched last month and has raised over $300,000.
Mad Realities inverts the power structure. The concept turns the pyramid upside down: power flows bottom-up rather than top-down.
ConstitutionDAO literally set out to buy the Constitution, complete with Nicholas Cage memes and all. The last-remaining privately-owned copy of the Constitution went up for auction at Sotheby’s, and 17,000 people contributed a total of $45 million for a shot to buy it. It was the largest crowdfund in history. In the end, the group (which included me!) came up just short, with the document instead going to billionaire Ken Griffin. But the project showed the power of grassroots community, orchestrated through tokens.
The movement was heartwarming and inspiring. Just check out some of these notes from contributors to ConstitutionDAO, shared by Packy at Not Boring:
While ConstitutionDAO revealed how far some parts of crypto have to go (it’s hard to imagine your average person jumping through all the hoops it took to participate), it also captured the promise of the movement.
We’re experiencing The Great Realignment, a systemic restructuring of how economics flow. That said, every era of the web has promised to remove gatekeepers—and yet, each era orbits around nuclei of centralized power. Web2 gave us user-generated content, but profits flowed to Facebook, to Google, to Twitter, to Snap. Will Web3 deliver on its promise, or will a handful of centralized companies devour most of the value? It’s too soon to tell. Some level of centralization may make sense, but likely to a smaller degree than in eras past. OpenSea, for instance, takes a 2.5% rake in exchange for providing a destination for NFT commerce; Ebay, in contrast, takes 10%. Some things seem obvious: Instagram, for instance, shouldn’t own a creator’s audience; the creator should. Other questions are more nuanced: should Jack Dorsey make the decision to ban Trump from Twitter, or should Twitter users vote with tokens? These questions will take years to figure out.
All that said, the obfuscation of gatekeepers isn’t a phenomenon limited to Web3. Innovative tech companies continue to remove middlemen and broaden access. Substack, for instance—the platform on which I’m writing this—removes gatekeepers. I don’t need permission from a publication or approval from an editor to share this piece.
And just as YouTube disrupted Hollywood’s studio model, offering a new path to fame and creative expression, TikTok has disrupted YouTube: TikTok’s AI-powered feed makes discovery even easier for creators, while the TikTok Creator Fund is pushing forward creator monetization. Rather than being tapped by a faceless executive in a New York or LA skyscraper, a creator faces a jury of consumers who vote with their engagement or lack thereof. Of the 25 most-followed TikTok accounts, only four belong to a “traditional” celebrity: Will Smith (#6), Jason Derulo (#13), BTS (#17), and The Rock (#18).
To provide a very different example, finance continues to be one of the sectors most affected by intermediaries. If you take $1 and send it around a few times, you’ll end up with pennies on the dollar; everyone needs to take their cut.
Gatekeeping in financial services takes many forms: predatory business models, calcified cultural norms, outdated regulations. Startups are pushing to reinvent the system. Neobanks, for instance, have introduced no-fee banking; Robinhood kicked off commission-free trading, which is now widespread in the industry.
Titan, a company that offers investment management to everyone, writes on its website: “Wall Street ignores everyday investors, catering to only the ultra wealthy. This divide didn’t sit well with us, so we built Titan: a premier investment manager for the rest of us.” Why should hedge funds decide who gets top-tier investment advice?
Or take WeFunder, which helps people invest in startups and small businesses. Some of the most outdated regulations out there are “accredited investor” requirements, which stipulate that in order to invest in the private markets you must have annual income over $200,000 or have $1 million in net worth. The system is flawed; the rich get richer. (To be fair, the SEC has continued to loosen the law in recent years.) Companies like WeFunder aim to change the system.
Similarly, Stonks calls itself “YC Demo Day for everyone”. Instead of just VCs and top angels getting access to pitches from the best companies, everyone can join and invest. The Stonks website shows what you could have earned if you’d had access to lucrative early-stage startup rounds.
In the future, we’ll look back incredulously that only high-net-worth individuals and people with connections to Wall Street investment banks could buy into IPOs, with the rest of America buying in after the pop. We’ll wonder why banks and other intermediaries captured so much of the pie.
The pendulum of society swings towards more fair and efficient systems. So much of society’s value is vacuumed up by people in the middle. If you think from first principles, is that the best construct for value creation and distribution? Across sectors—in worlds as different as media and finance—we’ll see middlemen disappear in favor of direct connections and transfers of value.
In last month’s The Scary Future of the American Right, David Brooks wrote:
In the Information Age, the purveyors of culture are now corporate titans. In this economy, the dominant means of economic production are cultural production.
He’s right: today, Big Business and Big Tech are synonymous with cultural production. Algorithms dictate culture. That’s starting to change, with a groundswelling led by creators and communities and orchestrated by the blockchain.
This is a profoundly good thing. As I wrote in the final line of my piece in The Atlantic, “Popular culture will finally live up to its name.” More ideas and creations will be incentivized and rewarded. As Bezos says, society is the beneficiary of that diversity.
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