(2021-05-09) Torenberg Whoever Generates The Demand Captures The Value

Erik Torenberg: Whoever Generates the Demand Captures the Value. Last week we talked about the death of the middle -- this week we’ll talk about the death of middlemen. (middleman) 2021-05-02-TorenbergTheDeathOfTheMiddle

The “death of the middlemen” however, is the idea that whoever generates the demand captures the value, and middlemen get commoditized as markets become more efficient.

Pre-internet, middlemen thrived because they controlled supply

The internet changed all that. It provided a way for anyone to create and distribute products without depending on middlemen, and, in some ways, allowed creators to circumvent middlemen altogether.

Ben Thompson described this phenomenon in his signature aggregation theory.

Consider publishing for example. Substack illuminates many previous market inefficiencies.

Venture Capital is another interesting example

as the market becomes even more efficient, it may replace middlemen altogether (e.g. venture studios).

let’s consider the NBA. The value chain does not reflect where value is created, namely with the players

NBA players don’t have any equity ownership in their teams or the league.