is there hope for the middleman?

one of the biggest jumps in the internet age has been the redress of information imbalance towards ordinary people (or at least those that are technologically enabled.) aggregation of data, the creation of ever more user friendly and intuitive interfaces, and the rise of competition have created increasing value for shoppers across the board, whether it is finding a new TV or car insurance.

this value has overwhelmingly come from the removal of middlemen from the process, whether it is the salesmen in high street retail units, or the innumerable brokers of specialist insurance products, or the endless ranks of phone operatives dealing with confused potential customers who don’t really know what they are looking for.

whilst in countries like the UK this jump has been fairly inconspicuous, in some markets in the world it has been truly radical.

a technology as simple as the mobile phone has totally radicalised the economics of farming in Africa. the vast majority of farm production in Kenya for example is located in relatively small holdings run by an owner/farmer. the constant needs of his lands and animals mean that the farmer is totally tied to his home town the whole year round. this means that he has historically been totally reliant on the middlemen who take the produce to the city.

as a result, these middlemen have been able to get rich by relying on the farmer’s inability to genuinely know what price his produce is selling for in the frequently highly inflationary city markets. the mobile phone has destroyed this at one stroke – mobile phone penetration in Kenya is almost ubiquitous and as a result any farmer can check prices at any time. over time this should hopefully rebalance the power of society a little more in favour of those who pursue the hard life of agricultural production in tough circumstances.

so this surely spells a pretty grim future for the middleman, with customer value being constantly created by the removal of middlemen wherever possible. so as a kind of middlemen, should i be worried?

well, yes obviously. so whilst consultants in any area of expertise seem to be amongst the last to go in any changing industry (someone needs to tell you how things are changing) the media industry will inevitably march towards a more information rich, interface driven future, and the media industry, even as a traditional trading business, will continue to change immeasurably. nothing can halt the relentless flow of the blood of middlemen.

but then you come to New York.

a city that seems to be built on the most complex web of middlemen that you can possible imagine.

for example, if you are looking for an apartment in New York, there can easily been a chain of middlemen that include the property company, my broker, a realty company, a landlord’s broker, a building manager and a landlord – and that’s before we even get into any legal or financial questions.

and what’s more, at least for the moment, this doesn’t seem to be going away. for one, it is built into the city’s culture, from its tipping expectations to its very specific job titles. and what’s more, you get the feeling this is getting more complex over time, not simpler, which seems to play against all expectations. if you want an LA-based example, check out Larry David’s agony over the prospect of tipping the ‘Captain’ in a restaurant in the first season of Curb your Enthusiasm…

this seems to be a society actively defending at every turn the role and value of multiple levels of middlemen – and seeing their role as a focal point for economic growth, patriotic feeling and a civilised lifestyle.

to be sure, for an English person this can be confusing, and sometimes not a little frustrating. but i think the crucial thing is to separate those middlemen who add no significant value (those who prey on ignorance and take the margin) from those who can act as crucial mentors, editors and facilitators who add value to life. walking the streets with a broker who understands the history of an area of houses  could add much more value than a website that simple lists lots of information. (as long as he doesn’t activelly make the process of renting longer and more expensive…TBC…)

we need editors, commentators, illustrators and guides more than ever, to help us make sense of the world around us and to bring it to life. this is the kind of middleman you need to be if you want to survive…

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1 Comment

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One response to “is there hope for the middleman?

  1. I’ve always said, never trust a man with ‘agent’ in his job title.

    I think editorship is crucial these days and at the moment there is a crucial role for intermediaries to play. It’s interesting though to contrast the editorship in something like the Encyclopedia Britannicca and Wikipedia.

    The former – active and from an individual authoritative source; The latter built into the sites ethos and evolved.

    There will surely always be a role for a middleman. Its just a question of for how long that middle man is living and breathing and to what extent he gets replaced by shifting goalposts.

    Maybe us middlemen should start looking for concepts reliant on old style middlemen, mechanise them and make some money.

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