The Frictionless Economy
A mental model for predicting the future...
A mental model for predicting the future...
The directional arrows of progress is a mental model for predicting the future
• E.g. Directional arrows of progress for computers
• The computer gets more powerful, smaller, and closer to our bodies - so you can guess the next evolution will follow the trend. H/T @wolfejosh
• E.g. Directional arrows of progress for computers
• The computer gets more powerful, smaller, and closer to our bodies - so you can guess the next evolution will follow the trend. H/T @wolfejosh
The directional arrows of the internet point towards one thing:
We are moving from the friction economy to the frictionless economy.
Every year we are reducing the friction of the online economy.
There is still SO MUCH friction in the system.
We are moving from the friction economy to the frictionless economy.
Every year we are reducing the friction of the online economy.
There is still SO MUCH friction in the system.
Friction economy: Buying online is slow.
1. See product you like
2. Add the product to cart
3. Continue to checkout
4. Enter card details
5. 2FA with your bank
There's so much effort to get through the funnel. Businesses lose so many customers.
1. See product you like
2. Add the product to cart
3. Continue to checkout
4. Enter card details
5. 2FA with your bank
There's so much effort to get through the funnel. Businesses lose so many customers.
Frictionless economy: Buying online takes 1 second or less.
1. See product you like
2. Face ID or Thumbprint
No effort to get through the funnel. Businesses gain so many customers.
1. See product you like
2. Face ID or Thumbprint
No effort to get through the funnel. Businesses gain so many customers.
Friction: Money feels like money
The realer the money feels, the more friction there is.
Cash and pin numbers act as friction.
People who pay via contactless payments are more likely to underestimate what they spent.
(H/T @richardshotton study)
The realer the money feels, the more friction there is.
Cash and pin numbers act as friction.
People who pay via contactless payments are more likely to underestimate what they spent.
(H/T @richardshotton study)
Frictionless Economy: Money feels like casino chips
Casinos give you chips because you're detached from the real value.
Contactless and crypto are creating casino chips as a 2nd order consequence.
Anyone who's bought NFT's knows 0.5 eth sounds a lot cheaper than $2100.
Casinos give you chips because you're detached from the real value.
Contactless and crypto are creating casino chips as a 2nd order consequence.
Anyone who's bought NFT's knows 0.5 eth sounds a lot cheaper than $2100.
Friction economy: Long and expensive global shipping.
To launch in new geographies is tough.
There are high delivery fees, long wait times, and logistics headaches.
To launch in new geographies is tough.
There are high delivery fees, long wait times, and logistics headaches.
Frictionless Economy: Quick and cheap global shipping.
3D printing reduces the shipping burden for physical products.
Software continues to eat the world as the demand for digital products explodes.
3D printing reduces the shipping burden for physical products.
Software continues to eat the world as the demand for digital products explodes.
Friction: 40% of the global population doesn't use the internet
Due to age or poverty, only 60% of the world actively uses the internet.
Think of all the brainpower we're missing out on.
Due to age or poverty, only 60% of the world actively uses the internet.
Think of all the brainpower we're missing out on.
Frictionless economy: 100% of the population uses the internet
There's so much future talent and money about to enter the game when friction is removed.
There's so much future talent and money about to enter the game when friction is removed.
Friction: Adblockers and Apple killing online advertising
60% of users have opted in for iOS 14.5 reducing the effectiveness of ad platforms.
Users get nothing but a free service for being advertised to.
60% of users have opted in for iOS 14.5 reducing the effectiveness of ad platforms.
Users get nothing but a free service for being advertised to.
Frictionless economy: Web3 advertising models
Outcome 1: Users get paid for every personalized ad they watch - increasing data sharing with advertisers.
Outcome 2: Companies don't need to advertise because word of mouth naturally spreads due to users holding tokens.
Outcome 1: Users get paid for every personalized ad they watch - increasing data sharing with advertisers.
Outcome 2: Companies don't need to advertise because word of mouth naturally spreads due to users holding tokens.
The frictionless economy is coming.
Even if no new businesses get created, simply reducing the friction that exists will increase digital GDP.
Even if no new businesses get created, simply reducing the friction that exists will increase digital GDP.
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