In a previous post we discussed digital signaling. To summarize, the internet turned what was scarce (information + distribution) into something abundant, which, in turn, created new forms of scarcity.
Quoting the piece:
“There are different kinds of positional scarcity, as Alex Danco aptly describes: There’s curation: an abundance of people creating music creates demand for record labels, DJs, and other tastemakers to do the job of picking, “Out of all these options, which song should get heard? (e.g. Product Hunt, Gartner)There’s prestige: an abundance of prosperity makes it harder to preserve and distinguish high status: “Now that everyone has a car, how do I make sure that my car is the most impressive, and everyone knows it? (e.g. Porsche, Tesla)There’s access: an abundance of people all vying for each others’ attention and patronage creates a high premium for moving to the front of that line: “How much would you pay to skip the congestion and get to where you need to go?”
In a world of abundance, scarcity evolves. While pre-internet scarcity was about a physically constrained, or otherwise limited, number of resources, post-internet scarcity is about separating signal from noise.
Similarly, signaling pre and post-internet evolves too. Pre-internet signaling was all about IRL flashiness (a Louis Vuitton bag) while post-internet signaling is about digitally-native flashiness (a Cryptopunk NFT).
Since the prior post was about signaling on the internet, this post will be about IRL signaling — particularly around “The Hunter Economy.”
So what exactly is The Hunter Economy?
Let’s use angel investing as an example, and refer to Alex Danco’s positional scarcity post where he explores the status benefits of angel investing:
“Angel investing is an exercise where rich people spend their money (and occasionally see a return) in order to be able to say, “Look what I curated!”, and earn prestige in doing so. If you were an early investor in Stripe or something, that’s a huge status symbol – not just because it means you’re rich, but because it means you demonstrated excellent curation ability, and that’s a high-status thing to have.”
Angel investing is high status partly because it implies wealth, but also because it implies good access and taste. Not everyone has wealth, but many people like to believe they have access and taste. And as we explained in the reputation markets post, this access & taste manifests as social capital — which may be worth more than financial capital.
It’s this ability to curate that makes us who we are — what do we like/dislike? Who do we like/dislike? How much do other people value our opinions?
(Side note: I’ve always wondered what “angel investing social capital” would look like. Perhaps it’d be some form of peer-to-peer credentials, but we’ve yet to see an implementation that worked at scale. Maybe On Deck will bring back Cosign one day… Only time will tell.)
This tweet is a parody, but it hints at a very real phenomenon — the desire to be the "first social capital in," which in some ways is more valuable than the first dollars in.
As we’ve explained, financial capital is easier to accrue than social capital. So when you spend your social capital, it means a lot.
Think about how it felt when someone important took an early bet on you. Their belief in you probably catalyzed more for you than whatever immediate rewards you got from it. It’s this “belief capital” that matters disproportionately, and it matters across more domains than just careers & angel investing.
So angel investing is a category where people earn economic and social rewards for their curation, and also build their identity around it in the process. And yet angel investing is just one form of curation, so why not extend these benefits for other forms of curation?
Many people want to be the first person to discover a new trend, a new brand, or a new artist (“I liked them before they were cool”). Why not seed-invest, but into things other than tech startups? Think scouts, spotters, agents, A&Rs, VCs, etc.
Receipts could be an interesting data set that has a lot of signal around what you care most about. Imagine all purchases tied to how early you were to buy something relative to other people. Or imagine an AngelList profile, but instead of your startups it’s your travel destinations, your music purchases, the charities you donate to -— it’d be a more comprehensive view of what you care about.
Enter “The Hunter Economy” — a whole class of startups that'll be built to incentivize & reward early adopters both economically & socially. They'll exist for discovering new products, new people, and new ideas. I was going to call this the "Hipster Economy" since it more acutely identifies the phenomenon of taking joy in discovering things early, but it also has a negative connotation I don't imply. But it's essentially that same phenomenon — a joy in early discovery — “I liked it before it was cool” — which will exist everywhere: bands, newsletters, people, you name it!
For example, everything you subscribe to could list your place in line so you could demonstrate how early you were. With crypto involved, you could also be financially incentivized to be a curator. A great example of this is Yup.io, which rewards curators across the internet for liking & commenting on things they care about — things they already do natively in web2.
With projects like this, I’ll soon be able to let people know I was the 30th subscriber to Stratechery, the 50th person to discover Homeboy Sandman, or the 100th person to speculate on the midwit bell curve meme (I wasn’t, but even if I was, I couldn’t prove it!)
I want to take that idea even further and bet on abstract terms or ideas. I’m excited to see a world where someone discovers some meme, idea, or artist and then stakes their reputation on it. Economically it’d look like speculation and socially it’d look like collectibles, effectively quantifying sentiment. You’d go to a website and see that “communism is down 20% today.” Or, in addition to ideas, I’d like to see people speculate on a Twitter or Instagram account, or Google Trends. Basically prediction markets without the yes/no prediction — you’re making a seed bet on a person or concept getting more popular over time.
This is the Hunter Economy: a series of products that will enable people to gain status as hunters and curators, gaining social and financial capital in their favorite people, businesses, and ideas in the process. Product Hunt, Reddit, and Kickstarter may be to the next generation of Hunter Economy startups what Web 2.0 will be to Web 3 more broadly—the inspiration for what was next to come.