In 1998, during the rise of the dot-com boom, I traveled the world regularly on consulting gigs. Every time I walked through an airport I stopped at the newstand for a stack of magazines so heavy that I tended to avoid overpacking my laptop bag so I could carry them.
The same thing is happening now with the burgeoning token sale market. These sales, which are essentially efforts at growing the money that computers will use to pay each other in the future, are following the wave almost to the letter.
PC Magazine. Details. Laptop. Vanity Fair. New Yorker. The Atlantic. Utne Reader. Little literary journals. Page upon page upon page of printed text. You could buy magazines for pennies an issue and they’d arrive monthly. Page counts were so high they used to create documentaries about magazine editorial teams working around the clock to ship the Book. Revenues were high and climbing, ad rates were astronomical, and the only way to tell people about a new laptop was to buy a page in Computer Shopper and, if you were forward thinking, you’d build a website.
Editors were kings of the realm. They had absolute power, they had cash and expense accounts, and their audiences were rabid for new issues. There would be no stopping the magazine juggernaut. Sure, the Internet would make it easier to find newstands nearby but who wanted to read on a screen? And the abattoir run-off that was the slushpile would never grace the front page of any smart magazine. There was a system in place and it worked.
Fast forward a few years and everything flipped. The whip of demand rose from the flat end and decimated the established brands. The long tail didn’t just win it destroyed everything in its path, tearing down institutions left and right. First it was the underfunded titles — the weekly newspapers, the humor rags — and then it took the big boys and girls, organizations whose publishers still remembered the days of darkrooms, razors, and paste.
They said it couldn’t happen but it’s still happened. Playboy? Dead. Rolling Stone? No longer in print. Countless newspapers country-wide? Dead, their presses cold. Now news comes from unpaid (or highly paid) journalists online who follow none of the traditional norms yet reap immense benefits from the network. Your entertainment comes from gamers reviewing games, readers talking up a new titles, and pundits drowning out TV news. In short, the folks who never got a chance to speak in 1998 are now shouting.
The same thing is happening now with the burgeoning token sale market. These sales, which are essentially efforts at growing the money that computers will use to pay each other in the future, are following the wave almost to the letter. Old, smug folks are sitting up top, sure they’re not going to be touched, while more progressive folks are digging in hard in expectation of hard times.
This kind of disruption — a wholesale destruction of an industry by the “rabble” — has happened once. And now we’re all about to see it again.
The VC as rock star trope became ascendant in 2008 — about the time TechCrunch really took off — and the idea that a guy with big checks could be an arbiter of innovation and the future was given absolute credence. These arbiters had long hidden in the shadows, secure at family funds and equity storehouses, and 2007 gave them a bit of a goose. They’ve riding high for a decade, the best making amazing bets and taking names and the worst living comfortably as they assigned capital based on, arguably, incomplete information.
That’s about the change. Just as the editors of the monthly magazines fell, one by one, as the democratization of the Internet took over, the old VC model is about to fall, taking its adherents with it. When the world is able to vote with their clicking fingers and money is as fluid as ether, we will find ourselves in a world where the long tail knows more and does more than the establishment ever could.
This is definitely not all good. I despair often at the state of modern media but I know that these past two decades have been defined by change and growth, a comfort that helps me sleep at night. The same will be said of the creation and investment in new global companies. When I don’t have to bow before the altars of power and instead state my case in front of the world I expose myself to scrutinty and am promised far more success. If I show people what I’m building and show them how they can take part, they will flock to my aid.
It’s an optimistic view, but then so was the idea of social media.
And we all see how that played out.
Ultimately the storm will wipe out many but leave many new organizations in its wake. Just as blogs wiped out magazines, token sales will wipe out angel and seed. Just as social media changed news delivery token sales and crypto will change the way we think about company growth. Ultimately the same economies of scale, the same filtering functions, and the same impetus to create will hit the startup industry and hit it hard.
I stopped trusting Madison Avenue, the heart of publishing, to keep me informed and entertained. At what point will I stop trusting Wall Street to keep my money safe?
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