To continue on the theme that I have started with Middlemen America, America’s Trade Problem, and The AI Article, I want to posit a new idea that I think is proliferating in society today.
For a long time, hyper-specialization was key. It still is in many scientific arenas, but more and more we are seeing that smart people can be super successful in multiple domains. One of my favorite books is Range by David Epstein. He talks bout how there are different ways of becoming an expert. There is the Tiger Woods path of specialization from birth, and there is the Roger Federer path of playing many different sports before finding the one that you excel at the most. Had Tiger Woods picked up a different sport early on, it is likely that he would have been very good, due to his focus and natural athletic ability, but it is almost certain that he would not have been an all-time great the way he was at golf. He got lucky in the sense that his early specialization so perfectly matched his natural gifts. Federer had tennis coaches as parents, but had he not played a variety of sports at a high level, he would not have developed the free-flowing style that drove him to such heights.
Many academics and high school guidance counselors still push heavily for the Tiger path, because they see hyper-specialization as the best bet, or least risky path to success. It sounds logical on the surface. Pick your major around the same time you are allowed to drink alcohol legally, and stay in that lane compounding success as an “expert” over many decades. By choosing a narrow path, and never straying, you will “know more” about your field than outsiders. This guarantees success because the specific knowledge you hold, that others don’t, is the value. Knowledge is power. Simply by being the only one who knows something, all must kowtow to your prowess. Military Generals utilize this tactic when engaged in battle; tyrants when in power struggles. Limiting the enemy’s intelligence is the key to dominance. "All warfare is based on deception", as Sun Tzu said. The economy is sometimes a battleground, a competition of ideas, rather than a marketplace of one.
The data now show that there any many paths to being elite, and actually hyper-specialization is not the highest probability. In fact, it is only by dabbling in many different arenas that you can truly find what you are good at. By hyper-specializing too early and never veering off path, you may secure proficiency and employment, but fail to provide yourself the chance at greatness (or true happiness). The sheer volume of types of careers grows each year, and with it the probability that you can make a living doing something you love. This is a generational divide that seems to have bloomed with Millennials and probably will be taken to the max by Gen-Z. There is too much money in the world, and too many ways to make that money, to settle for something that doesn’t spark joy in your life. Boomers will caw over how hard they had to work, and they are right, there was a lack of opportunity of choice. Had Professional YouTuber been a career option in 1969, you can damn well be sure people would be lining up to take a shot at it.
Putting happiness aside, what we are really all interested in is making money.
To make money, all you have to do is be employable. It seems easy enough, but don’t take that for granted (especially if you are trying to find happiness and are not good at the thing you love). To move up in the world you have to be proficient. Again, don’t take this for granted, many people work in the same career for years and never actually learned the basics. To be great though, you need to be an expert.
Take a look at this cute gif I made:
I promise I will try to make more cute gifs.
Assume that I am a person (I am) and that these are 10 different career options for me and my level of aptitude with each (they are not). The three dotted lines represent the level of aptitude or proficiency I would need to be employable, promotable, and great.
The internet was already commoditizing knowledge, and by virtue proficiency. You can see that with the internet, an unemployable musician becomes employable (probably by watching YouTube instructional videos). The internet makes the novelist promotable (maybe gaining distribution). You can see the talent unlock that the internet provided. Now, with natural language AI, the trend continues, turning the novelist and painter from promotable into great. This could be through refinement of technique, inspiration, muse, or just leveraging their existing talent.
(Note: these professions and proficiencies are merely for illustrative value.)
The point here is that more as more people develop their “Range” and find what they are good at, they are going to find that they are good at a lot of things. And what’s more, they are going to find that they can be come employable, and promotable, and maybe even great at multiple things. What does this mean for society and the economy writ-large?
The same way COVID amplified the pre-existing brick and mortar to eComm trend, AI is amplifying the commodification of personal proficiency. If anyone can learn anything, the value of proficiency degrades over time. The problem is people who don't (and may never) recognize the difference.
If all of a sudden anyone can do anything, what does tenure and experience matter anymore? What do job titles mean? Do the lines of proficiency get shifted north? Of course they do. Supply and demand will solve for that. If you have used to have 75 people able to do a job, and now you have 100, and you only have 75 jobs to go around, the level of proficiency required to get that job will go up. What’s more, is that out of those 75 people, some will level up their efficiency so that only 50 jobs are needed. Now you have 100 people competing over 50 jobs.
This is not even close to being an overnight problem so don’t worry too much. The bureaucracy is always here to save you. If you don’t feel like leveling up your skills or finding your range, you can count on the Middlemen. They will continue to misdiagnose issues, promote their friends and family, and have a general lack of understanding about the shifting proficiency lines. Unemployables will continue to be seen as promotable, and the greats will be indistinguishable from the lot. “Staying in your lane” will triumph short term, as “multi-laners” evoke feelings of disbelief (how could someone know math and art), or worse be seen as job threatening grim reapers (as they should, because they are).
Eventually though, as greatness compounds over time, aptitude levels become more apparent. Slowly, over multiple decades, the “merely proficient” who haven’t developed orthogonal skills must come to terms with their true value. If you are running any kind of company that has board oversight or cares about profitability, you will need to be as lean and efficient as possible. This is nothing new, it is the basic concept of business. However, as knowledge work becomes commoditized and you are still investing in the single-human-single-job, “stay in your lane” mentality, you will be paying 2-4x more than your competition for talent. That is an incredible obstacle to overcome in a highly competitive free market.
How to get ahead of the trend? Obviously, develop orthogonal skills. If you are a manager invest in broadening the skillset of your existing people, or find people capable of broadening their skills. These are age old practices that are becoming exponentially more important every year. To try to sit on the sidelines, or extract value as a middleman will only last until you are found out. Not investing in your employee’s broadening of skills is setting them up for future failure.
Businesses late to react to the obvious trend away from brick and mortar and towards eComm were decimated when COVID hit. The internet has been slowing doing the same to the commoditization of knowledge, and AI is cranking up the dial of intensity. Jeff Bezos quit his job on Wall Street to start Amazon because he heard that Internet usage was growing 2300% per year. It’s lucrative to get on the right side of a trend.
Thanks for your thoughts. The Ari quote was great. Hey - do you mind linking to the image you used in the preview thumbnail, the surreal one with the huge stack of books? I want to find out who the artist is.