Comparing the shortcomings of P2P with the success enjoyed by the financing platform Kickstarter reveals lessons about where direct is most likely to succeed and the conditions required for direct exchange to live up to its potential.-Kathryn Judge In this excerpt, I explore why one attempt at seemingly direct exchange- peer-to-peer lending, or P2P, a movement that sought to use technology and the wisdom of crowds to cut out banks- failed to live up to its promise. Entrepreneurs and other innovators are most likely to succeed when they understand the challenges a particular middleman arose to solve, how else those can be solved, and how going direct can unlock new types of value that cannot be readily provided in an intermediated exchange. There are many domains where one or more middlemen are helpful, if not downright necessary. The benefits of going direct vary depending on the setting. Nor is direct a one-size-fits-all solution.
The middleman economy is.īut not everything that claims to be direct really is.
#THE MIDDLEMAN COMICS FULL#
In providing consumers, investors, workers, entrepreneurs, and all of us as humans, an outside option, the rise of direct exchange can go a long way in shifting the balance of power even in a world still full of middlemen. There has also been a proliferation of close cousins, including digital platforms such as GoFundMe, Etsy, and Kickstarter, and producers that bypass traditional middlemen, such as Warby Parker, Allbirds, and other direct-to-consumer companies. There has been an increase in true direct exchange, embodied in farmers’ markets, creators selling homemade goods via their own websites, and comic cons replete with small-production graphic novelists hawking their wares. As the drawbacks of trying to navigate the middleman economy grow, so too do the benefits of finding a way around it. It demonstrates how increasing direct exchange and more modest shifts in that direction can help us lead richer lives and contribute to a more resilient, connected, and just economy.ĭirect exchange and its kin are proliferating, for reasons both profound and practical. By comparing today’s middleman economy with the very different ecosystem that grows out of direct exchange-between makers and consumers, investors and entrepreneurs-the book shows how much is at stake in the threshold issue of “through whom” we buy, invest, and even give. The book weaves together data, stories, and theory to show how the middleman economy took hold, the benefits it brings, and the dangers it poses. In my book, Direct: The Rise of the Middleman Economy and the Power of Going to the Source, I explain the rise of the “middleman economy”-characterized by powerful middlemen and long supply chains.
They are just the most vivid examples of a much broader transformation in how the economy works, whom it works for, and where the real power now lies. But there is much more to the rise of these giant middlemen, and the supply chains behind them, than meets the eye. Many of us have become so accustomed to relying on Amazon or Walmart that we take their size and omnipresence for granted. Walmart and Amazon are the two biggest companies in the country. Direct: The Rise of the Middleman Economy and the Power of Going to the Source
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