Internet upstarts vs. legacy institutions

how is this long war going?

Ted Gioia writes,

And if (or when) total war does break out, I can easily predict the winner. The microculture has all the advantages—although that’s not a story you will read in the New York Times or Wall Street Journal.

• The microculture is the source of all the growth in media.

• It’s already the source of most of the revenues.

• Growth at many alt media outlets is still accelerating, so the gap between macro and micro factions is going to get much, much wider.

• Alt media has huge influence on the public in ways most elites can’t even begin to grasp—because they operate in an echo chamber that shuts out this reality.

• This alt audience is forming into actual communities with a surprising degree of cooperation and solidarity—which amplifies this emerging power.

• Every round of layoffs at mainstream media creates new entrants into alternative platforms. The old guard is inadvertently training and launching wave after wave of new competitors.

• But here’s the kicker—even the biggest potential enemies of microculture (those billionaires in Silicon Valley) need it for their own survival.

So the outcome of this war is already determined. The only thing that remains to be seen is how we get there, and how quickly.

My guess is fast. Very fast.

He is writing about independent, decentralized content creators like myself (microculture) vs. the legacy corporate content creators (macroculture). I think he has the directionality right, but I would not count on the macroculture firms dying off so quickly.

In 2002, I wrote,

In the future, it may very well turn out that both independent journalists and newspapers will require philanthropic support in order to operate. At that point, newspapers, with their high overhead, will be less likely to survive than independent journalists. However, I am sure that the New York Times and a few other newspapers will have sufficient nostalgia value in the eyes of some future wealthy mogul to ensure ongoing funding.

A few years ago Andrey Mir coined the expression “donscription,” meaning a subscription that is basically a donation. He sees the NYT as operating on that basis, in that the subscribers like its editorial stance enough to donate via subscription. Substack writers are pretty much supported by donscriptions, also. So I was pretty much right 20 years ago, although the death of newspapers took longer to play out than I expected back then.

I read Gioia’s essay because of the link from Aaron Renn, who raises concerns.

’m glad we have Substack. Without the end of gatekeepers and the rise of microculture, I wouldn’t have this career. But we also need healthy macroculture at places like the New York Times. A collection of Substackers, Youtubers, podcasters, etc. can complement macroculture, but can’t fully replace it.

The problem, as Gioia points out, is that macroculture is unhealthy, arrogant, and hostile to the new ideas, models, and creators that might help reinvigorate it. Peace is better than war, but war is what we’ve got. In this environment, microculture is the option we have on offer.

It’s similar for other legacy institutions. They are very important to a healthy society. There’s no way to readily replace them. Yet they are frequently failing, impervious to reform, and often hostile to those who might have a better answer. In this environment, alternative structures are too often a necessary compensating approach.

I am in the camp that sees legacy institutions as beyond reform. Harvard is not going to fix itself. Eventually, alternative forms of education will emerge.

I still have hope for a network based university. I would change the vision now to take into account AI. Chatbots make it possible to do mentorship at scale.

Imagine if you took every essay Patrick Collison has ever written and transcribed every one of his podcast appearances. Maybe spend a day or two recording a new conversation with him asking his advice for young people and having that transcribed. Then using LLM technology create Patrick the Mentor GPT. You can deliver Patrick’s mentorship to anyone who wants it! And add other business leaders or famous people as mentors to choose from.

The conflict between small, decentralized agents and large legacy institutions has interested me for decades. Twenty-three years ago, I had the audacity to write an essay called World War Internet.

are the forces of the Old Economy counter-attacking? Are the Internet troops retreating, and will the retreat turn into a rout?

That essay got a lot wrong—it is humbling to re-read it. For example, I doubted that Amazon would win the battle over physical retail.

My opinion is that we should try to avoid getting involved in the inventory and shipping process, as Amazon has.

There are plenty of opportunities for us to provide online product comparison, to improve corporate communication internally and with suppliers, and to provide corporate information infrastructure using the "application service provider" model. In other words, we can provide valuable services to the hardgoods industry, without trying to take over the distribution system.

This was more on target:

Because many forms of entertainment can be delivered as bits, one can argue that the entertainment battleground is not as unfavorable as the hard-goods battleground.

As was this:

The traditional news media are finished. All that remains is to see how the implications of that fact play out.

And maybe this:

With the Net, a consumer can obtain a great deal of the information that previously was held exclusively by real estate agents, physicians, and attorneys. While change will be slow, the end result is that the traditional professionals will have to cede large amounts of territory.

Can you believe I wrote this:

we still rely on old-economy banks and credit cards to provide the media of exchange.

In 1994, my expectation was that the demand for micro-payments would emerge quickly relative to the reaction time of traditional banks. I thought that this would create an opening for Internet companies to create an alternative monetary system. …

I still believe that the Internet ought to give rise to a new monetary system. If the airline industry can create a pseudo-currency out of frequent flyer miles, then surely the Internet economy can come up with a viable entry.

It almost sounds like I was begging for somebody to invent Bitcoin. But I think I had in mind something closer to Stripe. My problem was not with fiat currencies. My problem was with the high overhead involved in legacy banking.

substacks referenced above:

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The Future of Media

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In 2024, the Tension Between Macroculture and Microculture Will Turn into War