One thing we didn't talk about in Heartcore Capital's consumer technology report is the changing nature of the demand side of the consumer economy.
Heartcore's macro thesis is that the internet-bestowed power of the end user is reshaping all value chains. It's why we're seeing niche use cases support small but cool brands (see Shopify). And why broad use cases are resulting in dominant incumbents of awe-inducing scale, like Amazon. The changed transaction costs coupled with end user empowerment is enabling both.
There are some indicators that we are in the middle stages of a transition to a different kind of middle class wealth-building. Ribbonfarm in their premium mediocre post called it "the terrifying structural boundary of our times"... either you tell the robots what to do, or they tell you what to do."
As we approach increasing automation, the surplus that accrues to those above the API would grow exponentially, while those below the API will be pushed out of work. That's the core argument of UBI.
Real life, and the real economy, turns out to be more complicated. As the last few years have shown, we are quite far from automation in key sectors - autonomous driving is further away than we thought (closer in trucking than taxi). Many areas we thought might be commoditizable - cleaning, maintenance and repairs, beauty/wellness - turn out to be unique services with a high degree of personalization and dependent on the actual service provider. A lot of the Uber for X approaches have failed. I'm happy to get a lead for most of these from Yelp, but I'm also keen to establish a longer term relationship with them when I've found an acceptable one.
On the other hand, highly professional services that were thought to be very protected (legal advice, financial advice, perhaps venture capital) might be more automizable in more use cases than assumed. Transaction contracts can be standardized. Robo-advisors do a decent job for a certain class of investor.
This doesn't solve for inequality of job outcomes, of course. The only things that do that are (1) redistribution (make people give other people their money), like UBI, and (2) restricting labor supply (primarily through stopping unskilled immigration). Those seem to be the battle lines of our politics as well.
Of course, there's a third path: more entrepreneurship. The amount of people that I'm seeing with small companies that are making a good living in online niches is significant. Veils by Lily is a business that sells Catholic women head scarves for church and really driven by trad Catholic Twitter. Talongrips makes stickers that let you grip your firearm better and they got their start on/with YouTube's shooting community. Those are some nichey niches indeed. Neither would exist at their current scale without the internet.
This, of course, along with the hopefuls that move to SF and NYC and Berlin and London in order to get some equity in tech startups is the "bootstrapping logic" that powers our internet-enabled economy. They are the new paths into the middle class.
It's a more precarious route than the previous college-to-corporate path, and it might well require some Uber-driving along the way. But I'm wondering whether automation won't actually enable larger swathes of the population to become unique service providers and thus entrepreneurs in their own way, rather than "slaves to the API." And I'm also wondering whether the ubiquity of being able to easily switch into API-based work won't actually provide a solid bottom for those that fall out of traditional employment.
From a consumer economy perspective, all three new "classes" of consumers are interesting - the very rich lords of the cloud, the middle-class precariat that's working in tech or with tech to try and succeed, and those that are job-takers in an economy that requires them to think more like franchise-owners than employees.
Brands with love and empathy at their core should exist for all three. I'd like to think that Heartcore should back some of them.