Hi there, Justin here. I've been thinking a lot recently about two things: the future of work and middlemen. While middlemen like music labels are currently being disintermediated and while middlemen, in general, get a bad rap - I think African talent, in particular, still benefits from and needs talent middlemen.
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A few weeks back, in TFN #101, I wrote about the agent economy. Mobile money agents, for example, have proven to provide more value for telcos than just as "human ATMs". They are not just a distribution channel, but word-of-mouth marketing and trust-building channels, as well.
The thesis is that, despite their bad rap, there's often great utility in agents and middlemen in general, and in African (and emerging) markets, in particular. Markets evolved the way they have for specific reasons. As technology and innovations perpetuate, value chains bundle and unbundle and rebundle.
I've been thinking a lot about the future of work, and the role of middlemen in talent networks. I recently read an article on the "TikTokification" of the music industry - an industry with a long history of agents and labels as middlemen. But their utility is waining in the time of TikTok, music historian Ted Gioia argues. He writes,
With each passing month, record labels grow more attached to TikTok—but it now looks more like addiction. Some have reached the point where they won’t release an album until the music goes viral on TikTok.
Musicians are compelled to build their own audience via TikTok and other social media platforms. But the moment musicians become capable of doing this, they don't need record labels anymore. At the same time, labels know that a large social following is required for success, and only want to back those who have already built a following. While labels used to provide utility from a career development and marketing perspective, that function is now largely outsourced to the platforms. The power of gatekeepers in the music industry is eroding, and Gioia argues that this same shift is happening (or is going to) across creative fields. He concludes,
If this TikTok-ification of the music biz continues, what will be the end result? Here it is, in a single sentence: Only unsuccessful musicians still need a label.
In this case, middlemen like labels can be cut out for two reasons: first, labels have unbundled, and all of the services they provide are available to independent artists, as well. Second, creators building their own audience on social media removes the need for centralized evaluation. Whereas labels had to pick winners in the era of mass media, there is no longer a need for them to do so.
But it should follow, then, that there is still utility for middlemen in scenarios where (specialized) evaluation is required. Whereas on TikTok evaluation and measurement is easy - views and likes - other sectors still require expert assessment.
I also recently read Talent by Tyler Cowen and Daniel Gross, where they write about talent scouting:
In general, the scouting model tends to be effective when talent search is about starting with a very large pool and needing to narrow it down to a much smaller number of plausible competitors. For the final major decisions, however, typically full-time experts are required.
[…] Scouting is also becoming more important because the options for self-education are rising... talent search is changing. With more people trying their hand at various avocations than ever before, that places more and more burden on talent search and allocation mechanisms.
Obviously, talent scouts can play an especially important role in environments where talent is evenly distributed but opportunity is not. In the wage arbitrage context, and where work is becoming more flexible and modular, not only are startups identifying and training talent (to meet market demand), but they're also connecting talent to opportunity. For the demand side, talent scouts and aggregators are providing a vital function in narrowing the list of supply. Their need is more acute when anybody can be a [fill in the blank career], trained at the University of YouTube, and when companies are (open to) hiring from a global talent pool.
And the startups in question fulfilling these functions, as mentioned in the aforementioned wage arbitrage piece, TFN #104, are companies like Andela for software engineering, Hodi for sales reps, Caret for customer success reps, amongst others. Whereas individual talent of a certain caliber can gain access to global opportunities, these companies play an increasingly important role in connecting to more individuals to more opportunities at scale. These companies aren't merely labor marketplaces, but support verticals in sectors where talent has increasing skill, specialty, and complexity, as well.
Over the longer term, however, talent evaluators may become disintermediated too. As Dror Poleg argues, version control tools like GitHub, when paired with machine learning and blockchain technologies, can (or will be able to) track individuals' contribution to a code base, for example, and compensate them accordingly. Technology and gamification alike will automate the evaluation part of the equation in the foreseeable future. But will this disintermediation apply to all types of roles, even creative ones1 Or, will the platforms in question still be able to provide requisite value beyond talent evaluation to fight back the threat of inevitable disintermediation?
Until then - and while there's a current unbundling and disintermediation of labels in the global music context - talent across African and other emerging markets benefits from middlemen aggregating and bundling said talent, and evaluating and connecting to opportunity, as well. And this aggregation - and collective marketing of talent to opportunity (in the global north) - is, I think, presently a good thing for talent in African and emerging markets.