We Need to Redefine ‘Entrepreneurs’ in The Digital Economy
Contrepreneurs have become indistinguishable from real entrepreneurs
Future Perspectives is a bi-weekly newsletter round-up of my essays from the frontier of digital money, governance and organization. For more info on my REST API technical writing for Fintech companies please visit www.andrewgillick.com
You know the story.
You can’t let your ad-blockers down for 10 minutes these days without being advertised the secret to running a $1m online business; the 4-hour work week; the Next Big Investment; the dream life passive strategy; Andrew Tate’s Hustler University.
Your Medium feed is clogged with clickbait articles by pontificating authors who churn out three articles a day on the same theme: I “How I made my first $100k as a Creator”; “I followed X Strategy — This is What Happened”; “10 Steps to 10x Everything in Your Life.”
YouTube, the most lucrative advertising venue in the Western World, seems to have absolutely no standards or bottom to the cast of characters it churns out.
The woman pausing on her run down the ski fields to tell you ‘about earning passive income’ by selling other people’s e-books on Amazon and earn $10k a month on just 4 hours work.
The perma-tanned middle-aged man giving away his ‘secret’ passive Forex trading bot from inside his Tesla Model X.
The self-help guru with his latest ‘MASTER THE UNIVERSE MANIFESTATION MEDITATION!’
Of course, there’s also the whole web of influencers who engage in network-marketing (aka Multi-Level Marketing) and undisclosed affiliate links on their websites and social media which earn them passive income.
Fake it till you break it
The ‘fake it till you make it’ mantra of millennial and GenZ ‘entrepreneurs’ is nothing new in the evolution of business, nor in nature generally.
In natural evolution it’s called Batesian Mimicry.
This is the process by which, for instance, a non-poisonous snake will evolve the same colours and skin patterns of a more venomous snake to deter predators. Faking it to survive.
And this mimicry strategy is why, I believe, it is so hard to distinguish real entrepreneurs from contrepreneurs in the digital economy. So we’re all on the same page, let’s distinguish the two definitions here:
Entrepreneur: Profits from his/her own invention or adding value to existing inventions, building goods and services on them.
The risk in knowingly carried by the entrepreneur.
Contrepreneur: Profits from telling others (selling dreams) how to make money or through deception e.g. fraud, multi-level marketing, Ponzi schemes.
The risk is unknowingly carried by the customer.
And it’s a hell of a lot easier to imitate someone successful or create the illusion of a successful company in the digital economy rather than, say, in the steel industry and for very little money.
Digital Imitation
One popular strategy is to find a product on Alibaba or Amazon that is novel in your country or region, then:
outsource your branding and logo done on Fiverr
give it to the manufacturer Alibaba to slap on the product
outsource a Wix website on Fiverr (hell, you can even create an NFT!)
buy a 10k Twitter followers, buy email lists
pay Google or YouTube to pump your ads
In many skills and trades, it’s getting harder than ever to distinguish the real innovators from the imitators due to powerful technology lowering barriers to entry.
For example, in photography, it’s now nearly impossible to tell which photo has been taken with an analogue SLR by a skilled photographer who has chosen the right lens and edited in a dark room and which has been captured on an iPhone with the assistance of AI.
In music, it’s difficult to discern a sound engineer and producer in a studio to a bedroom DJ recording on a Digital Audio Workstations such as Ableton or ProTools.
In publishing, Grammarly can make the illiterate sound eloquent and ChatGPT it may soon be possible that we’ll be unable to distinguish a Hemmingway from a HemmingBot.
Digital Deception
It’s fitting that Netflix’s new series documenting the rise and fall of Bernie Maddoff’s Ponzi empire overlaps with the trial of FTX’s Sam Bankman Fried for fraud.
Both Madoff and SBF were in the ‘business’ of financial engineering.
The most salient similarity is perhaps that Maddoff’s trading firm on the 17th floor was bailing out and making loans to his Ponzi investment fund on the 19th floor in the same Midtown building! In the case of FTX, SBF’s Almeda Research hedge fund was making loans and shoring up the balance sheet of the insolvent FTX.
Both Madoff and SBF were able to hide their shenanigans by moving in the right socio-political circles and making massive political donations. SBF was able to flesh out his vapid empire by recruiting the world’s most famous sports stars and celebrities as ambassadors and sponsoring some of the world’s biggest sports teams.
This strategy of reputation by association with someone with positive attributes is what psychologists call ‘social proof’. Both Madoff and SBF used this strategy to full effect.
Madoff Vs SBF
Whether or not FTX is declared an outright Ponzi and SBF is done for fraud is besides the point as the entire crypto system operates on vacuous products, promises and network-marketed money.
There’s no natural demand or buyers for a product only for promises of which are achieved through extreme leverage and multi-level marketing.
Having worked in crypto companies and DeFi projects for the past five years I can tell you that there are far more SBFs in crypto yet to come out in the wash.
Even SBF himself said that there are many insolvent players in the industry and singles out DeFi as the main trigger for another collapse.
Conclusion
The kinds of ‘entrepreneurs’ we have today are characteristic of the late stage of what Ray Dalio describes as the Big Debt Cycle: hubris, lack of productive investment and financial excess chasing too few real assets.
It’s important when choosing an investment, a business venture or even splashing out on an expensive product to consider whether it is just a by-product of the late stage debt cycle or an genuine opportunity with longevity.
In our end-justifies-the-means modern society, for too long we have deified anyone who can make the quickest buck. This has led to a duplicitous digital business culture which needs a good shake out.
ABOUT ANDREW GILLICK
I create industry-leading technical and API documentation for Fintechs that frees up developers, attracts investors and captures customers.
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