The Teaching Economy

This summer I had the opportunity to visit the NYC headquarters of Managed by Q, “The Operating System for Offices”, founded by my cousin Dan Teran. I sat in on a meeting where the major focus of the marketing team’s presentation was on creating content that would teach people how to better clean their offices. Why would a cleaning services company teach people how to not need their services? From a classical economics angle, where agents are vying for limited capital, this doesn’t make any sense. Yet it works - there are numerous examples of successful companies that spend significant resources teaching the world how to “compete” with them: RedHat, 37Signals, Managed by Q (to name a few). Enter the teaching economy.

From World After Capital:

Capital is no longer scarce but…attention now is. [T]his constitutes the third major shift in scarcity in the history of humanity. The first shift was from food to land when we went from the Forager Age to the Agrarian Age. The second was from land to capital when we went from the Agrarian Age to the Industrial Age.

While Wenger’s thesis around the attention economy is not particularly original (see Kevin Kelly,Yochai Benkler,Michael Nielsen,Seth Godin,Wiki), he offers a nice summary of the transition that has occurred and succinctly presents many of the issues at stake going forward. Kevin Kelly put it more bluntly:

The only factor becoming scarce in a world of abundance is human attention.

Google is the harbinger of the shift to an attention-based economy. Google is an amazing educational tool, one could argue that every search result is teaching you something about the information on the internet. (You are also teaching their AI, but that’s for another post.) As the internet grew to influence a greater portion of the economy, the value of attention skyrocketed. The problem is that the attention economy is now saturated. Have we hit peak entertainment? Hulu and Netflix and Amazon Prime are scared - they’re just waking up to the fact that they have saturated the market.

Attention is nice, but what companies really want is engagement. Engagement = sustained attention. The current buzzword is “content marketing”. Create, curate, and share content that will get customers to engage with your brand. I would argue that we’re already at a point of diminishing returns with typical content marketing strategies. As it is currently practiced by most companies, content marketing is, simply put, lame. Most of the content “teaches” you some list of factoids, with the obvious conclusion that you should “learn” to buy their product. This is not education, it is manipulation. Your customers are too smart, they deserve more than this.

The teaching economy is necessarily a subset of the attention economy. (I would argue that you need someone’s attention to teach them something.) Other subsets include the fear economy (news), the fantasy/entertainment economy (Hollywood, porn), the FOMO/superego economy (social media). In the never-ending arms race to harvest your eyeballs, clearly the tactics that address our more primal instincts of sex, fear and hunger are amongst the most successful. The problem is that those markets have matured. They aren’t going away, but they are becoming increasingly saturated with content - it is really tough to get users to engage through these tactics without a very large budget, or at least a very large database of nude photos.

The other important aspect of the shift from a capital-limited economy to an attention-limited economy is that many people are now living much further up the ladder, in terms of Maslow’s hierarchy of needs. This is a good thing for society as a whole, but it comes with its own challenges. The problems of the vast majority of the people reading this post are largely existential: the desire for a meaningful career, the need to love and to be loved, etc. If we want to engage with people at this level, we need content that sparks creativity, ignites debate, cultivates curiosity, invites dialog and collaboration.

We’re getting much better at taking care of our biological needs. We clearly have a long way to go in terms of taking care of our psychological needs. These interactive graphs show that we (or, more accurately for these datasets, EU citizens) are moving up Maslow’s hierarchy. I would argue that they also suggest that our transition into this attention economy has been accompanied by serious new challenges in mental health. (See Death by Notification)

Some of the most successful business models in the teaching economy are built around what I will call “sandbox products”. A sandbox product encourages exploration, typically has a higher learning curve than a simple tool, and invites the user to create, invent, collaborate inside of the walls of the sandbox. Some examples of sandbox products I have enjoyed include Legos, Gary’s Mod for Half Life 2, programming languages, Burning Man, and music production software. These sandbox products are more than simple tools, in that the use case is not always well-defined. (Yes, you can use a saw to make music, but with a sandbox product there is often no “proper use case”.) Many of these products are complex enough that they support multibillion-dollar ecosystems of experts to teach others how to use them.

Monome Grid

For me, there has been one sandbox product in particular that has made a really huge impact on my life: the monome grid. In my mind, monome sets the gold standard in their commitment to the teaching economy. For context, monome was one of the first companies to release a grid-based musical controller with programmable lights behind the buttons. This might not sound like a big deal now, because every single electronic instrument company in the world quickly copied their design. How has monome survived for more than a decade, after going from 100% to 0% market share in the product category that they created? By teaching. I think it is fair to say that the early customers of monome did not simply “buy” their grids, they “learned” their grids. At the time, there wasn’t any definition of open-source hardware, but monome took the lead. In a 2008 interview, they predicted, “our best protection is our openness”. Unsurprisingly, the competition did not copy their openness, these other controllers are locked and tethered to the manufacturer’s (expensive) software. If you redefine the product category to only include open-source electronic instruments - monome is in the lead by a strong margin. More importantly, they’ve built a thriving community including an all-star cast of customers such as Nine Inch Nails, Imogen Heap, Deadmau5, Daedelus, and Sylvan Esso.

I could write for hours about my experience with the monome grid: how I learned how to solder, how to program, how to organize a meet-up, how to mix and master music…all just to interact with this product and the community of people using it. I’ll save that for another post, but there is one very personal detail that I want to share, to make my point about how deeply the open-source business model of monome engaged my psyche. While I was in college, there were a few times that I experienced lucid dreams, in that I felt awake enough in my dream to consciously control some of my actions. During the very first of these lucid dreams, I was in a large gray structure talking to Brian Crabtree, the inventor of the monome grid. Talk about brand engagement! I’m hesitant to even use the word ‘marketing’ here, but I’m sure that every marketer’s dream is to have their customers dreaming about their products and founders. I learned so much from monome that I continue to engage with their community more than a decade later. I really can’t think of much else that has sustained my “brand loyalty” over that same time period, save maybe the MacBook Pro and Ableton Live. But I certainly don’t check Apple or Ableton forums multiple times per week.

The difference is engagement versus attention, teaching versus tricking. If you want to truly engage with your customers, to build not just loyalty, but community - you need to teach them something. In teaching, you are actually changing who they are and how they think. In teaching, you can build a connection that is existential rather than material. In teaching, you can build a community that is anchored around purpose rather than product. If you really teach someone something of value, you’ll have a customer for life.