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As the world is shaken up, a 60-year “mega-

trend” quietly emerges
Michael Simmons Follow

Feb 19 · 19 min read

We know we’re living in the next generation’s history book. We just don’t know the name
of the chapter… yet.

It’s hard to see past the fog of the moment amidst all of the conflicting daily updates.
Right now, it feels like our world is falling apart. But when future commentators look
back, they’ll see the world that emerged more than the one that was lost. The ups and
downs that obsess us now will be smoothed out by time.

Inspired by @Behaviorgap

As someone who teaches mental models, I study trends, cycles, and the lessons of
history for a living. I’ve deliberately tried to rise above the noise and think from a larger
historical perspective. To do so, I’ve studied several books which discuss past economic
collapses, technological cycles, and pandemics. I also helped co-create the largest list of
second-order effects of the coronavirus.

The reason I spent hundreds of hours reflecting is to get above the noise and uncertainty
in order to make important decisions that will impact me and my community for years to
come and to help you do the same. We’re at a turning point collectively and individually.
I believe that the people who shape the future will be the ones who most deeply
understand the present.

By the end of this article, you’ll have the equivalent of night vision goggles in the
darkness and fog of this moment and into the future.
With that said, I believe when future generations look back on this moment, they will
call it…

The Great Digitization

The actual coronavirus is a catalyst rather than the main event. Instead of primarily
creating a new reality, the pandemic accelerates the more significant trends toward
digitization. We see this trend in more people working from home, more people learning
online, growth of e-commerce and deliveries, and increased job loss due to automation.

We’re seeing industries, processes, and companies that have held back digitization
suddenly become digitized because the law, employees, and/or customers are
demanding it.

Digitization is the process whereby we turn physical things into digital bits. Digitization
is almost always underestimated because the first step is so innocuous…

Turning a physical product into a digital product (a physical book into an ebook,
a CD into an MP3)

Turning a physical process into a digital process (working from the office vs work
from home, paying in person vs. paying online)

Not much changes at first. Companies keep the same processes, org chart, and workflow
except employees work remotely, for example.

However, don’t be fooled. Because, ultimately, digitization always leads to complete

and utter transformation of everything it touches. Governments. Industries. Business
models. Careers. Our day-to-day lives.

For example, let’s just take music. 25 years ago, most people bought music as CD albums
in retail stores and listened to it on CD players. Today, most people access music digitally
on an unlimited basis via subscription and listen via their smartphone.
Not only that, now we’re even seeing song choruses broken down into clips and used as
soundtracks for hundreds of millions of videos created by TikTok users.

So now we understand that digitization reinvents whatever it touches, a new question

arises…

How will digitization reinvent knowledge work?

Imagine a world where one person could create an article that is read by billions of
people in days or design an app that is worth a billion in weeks. Or someone who could
become a fashion mogul overnight by uploading their designs for people to 3D print.

This is where high-level knowledge work is going, and we can already see harbingers of
this shift. One song has 7 billion views just on Youtube. One podcaster was able to
license his catalog for $100 million. One app with just 13 employees was sold for a
billion dollars.

For many people the idea of digitization is familiar and perhaps obvious. However, few
have actually taken the time to understand its second-order and third-order effects.
What many call digitization is just inning one of a nine-inning ball game. To succeed in
the future, it’s important to better understand what innings 2–9 look like. And, even
more important, to understand how to thrive in those innings and know where the
“opportunity windows” are. That’s what this article is about..

Although we may not know the specifics of who, what, when and where, we can know
digitization’s direction. And by knowing the direction, we can skate to where the puck is
going, putting ourselves in a position to “score.”

Fortunately, digitization is a process that has been happening in some industries for
decades, so we can look back and notice patterns rather than guess.
What we can now say for sure is that what’s required to succeed in the digital world isn’t
the same as the physical world. The world of digitization has new laws of physics, which
require a completely different way of acting and thinking.

Stanford researcher, W Brian Arthur, one of the world’s leading experts on the
implications of digitization, captures the situation in a classic Harvard Business Review
article…

“These two worlds operate under different

economic principles. [The physical world] is
characterized by planning, control, and hierarchy. It
is a world of materials, of processing, of
optimization. The increasing-returns world [digital
world] is characterized by observation, positioning,
flattened organizations, missions, teams, and
cunning. It is a world of psychology, of cognition, of
adaptation…

The two worlds (increasing returns vs. diminishing

returns) have different economics. They differ in
behavior, style, and culture. They call for different
management techniques, strategies, and codes of
government regulation. …

Success goes to those who have the vision to foresee,

to imagine, what shapes these next games will take.”
While there are many implications, I chose to simplify them down to the three largest
ones that you need to know…

1. Creators will be the new wealthy. The “execution” needed to turn an idea into
reality drastically diminishes. In addition, many middlemen are removed. Therefore,
the relative value of creativity and skills increases.

2. The value of being great will skyrocket. Digitization creates global winner-take-
most markets. As a result, the blockbuster effect becomes even stronger.
Simultaneously, being good enough is no longer good enough.

3. Knowledge will be the new money. Digitization leads to dematerialization and

demonetization of physical matter and to the increased value and fungibility of
knowledge.

For the rest of the article, I will unpack each of these…

#1: Creators Will Be The New Wealthy

When many people think of the word “creator” they have two connotations:

Starving

Artist

In the digital singularity, the new word connotations will be:

Thriving

Creative

Creators will be the new wealthy for a few reasons…

First, digitization removes middlemen.

In other words, it reduces the relative importance of manufacturers, publishers,

distributors, suppliers, wholesalers, and retailers and empowers platforms and creators.
This happens because, in a digital world the product doesn’t need to be physically
manufactured, stored, or shipped. Rather, it only needs to be created and then sold.

This pattern was first noticed in the computer industry by the founder of Acer, Stan
Shih, and it’s called the smiling curve. The big idea of the smiling curve is that the two
players that capture most of the value in a digital value chain are those focused on
creating new intellectual property and those marketing the value of that intellectual
property to customers and servicing customers.
 Credit: Bondsai Blog

With digitization, the curve now looks more like the chart below…
Platforms are companies like Netflix, Apple, Google, Facebook, and Amazon. Platforms
aggregate suppliers (i.e., movies, tv shows, apps, websites, products) and then create an
interface for creators to reach those customers. Many of the largest companies in the
world are platforms. For example…

Creators can reach customers directly or through platforms. They are anybody who uses
digital skills and creativity to create an idea or product. Below are a few examples…
Secondly, It’s easier than ever for creators to get started.

Creators no longer need permission to create. They don’t need to convince editors,
publishers, wholesalers, or retailers to work with them. Instead, they can now focus on
the customer.

In addition, creators don’t need to raise money or be wealthy in order to create. The
tools available for creators are growing cheaper, more numerous, and more useful.

The shifts to no longer needing money and permission are really important, because
when you look back at history, these were the main limiters. Now, the main limiters are
the skills and creativity of creators.

For example, forty years ago, if I wanted to write an article, I had to submit it to a
newspaper or magazine to get published. So, I needed their permission. If I wanted to
publish it myself, I had to hire a printer and pay for shipping in order to get each
magazine read.
Third, today’s creators get analytics on their customers, which helps them learn
faster.

Digitization leads to new sources of data, which can be your competitive advantage.

In the past when I wanted to improve at writing, I looked at articles and books by “so-
called experts.” Many of these experts were not world-class, and many of them shared
techniques that had worked for them at one time and place, but didn’t reflect the global
best practices.

In 2013, I realized that there was a better way to fast expertise.

When I started writing for Forbes, I was looking for ways to quickly improve my writing.
I had no list and no brand. And, I didn’t want my writing to disappear into the Internet
ether like 99.9999% of content.

Around this time, I came across Buzzsumo, which provides access to the meta-data on
900M+ articles.

This meta-data includes the following which can be exported into a spreadsheet and
analyzed…

Titles

Images

# Shares

Author

Publish Date

I immediately saw the opportunity. Rather than having to guess what spread online or
rely on the advice of others, I could see for myself.

So, I spent hundreds of hours doing two things…

Analyzing patterns and testing them. (Over the years, my team and I have tested
4,000+ titles)
 Finding authors who were consistently writing viral articles and paying for their
coaching and consulting. Having data allowed me to specifically find people who
were successful because of skill, not because of luck (one hit wonders).

In addition, as an online writer, I also get access to analytics on my own articles. While
this may not sound like a big thing, it is when you compare it to a newspaper writer from
the past who would get no data on their article’s performance and what resonated. Now,
all online creators get this data.

These two data shifts accelerated my learning curve for online writing by 10x. As a
result, within a few years, my average article online attracted 150,000+ views.

Finally, creators are antifragile.

Creators are what Nassim Taleb calls “antifragile.” People who are antifragile actually
become stronger with uncertainty and stressors rather than weaker.

Most people are employees who sell their time for a “reliable” salary. Their risk is getting
fired and losing potential income for a period of time. While employees have reduced
risk in the short-term, their gains are capped by their salary.
Then there is the entrepreneur. The entrepreneur takes on more risk with both their
time and money in return for potentially larger gains. But all businesses are not created
equal, some have both higher risk and low potential upside than employees. Taleb gives
an example in a Tweet…
What makes creators unique is that they have limited cost and huge upsides. The cost is
typically the cost of software to operate the business, their cost of living, and their time
to develop and use their skills. In addition, the creator can typically operate from
anywhere. The rewards, if their idea is a hit, are huge.

Let me give you a counterintuitive example to drive home the surprising power of
the modern creator and how the definition of a creator is changing.

Let’s say you were a chef. In the past, if you wanted to get your food to market, you’d
have to open a restaurant. This meant you’d have to find the right space, take out a huge
loan, perhaps find investors, design the space, and hire a staff. Much of your time would
need to be focused on managing the business rather than creatively exploring and
testing recipes. In fact, most restaurants barely test out new recipes.

Today, there is the advent of cloud kitchens and online ordering.

When someone orders online, you get data on who they are and what they ordered. This
allows you to understand your customer, target them better in your advertising, and
create personalized recommendations.

When ordering moves online, location matters less. The customer never sees the store.
So rather than having to locate in expensive, high-traffic areas, chefs can locate in low-
rent areas. Furthermore, rather than having to hire waiters and waitresses, they can just
hire kitchen staff. They need less space because they don’t have a dining room.

Finally, a whole new type of company is emerging that helps chefs — cloud kitchens.
Cloud kitchens offer chefs commercial kitchens located in low-rent spaces that are ready
to move into. So, a chef today only has to worry about:

Leasing a cloud kitchen (much less hassle than leasing, staffing, and furnishing a
dining room)

Creating a menu (and iterating it based off of feedback)

In other words, the chef needs less money to start and can focus his or her time on
creating the best menu possible. Because the chef can see demand trends, they can
quickly axe items from their menu. Furthermore, they can explore opening new types of
“restaurants” (Mexican instead of sushi) by simply creating a new brand and menu.

#2: The Blockbuster Method Is Your Solution To Winner-Take-All

Impact Of Digitization
Digital markets 10x the Matthew Effect of the rich getting richer.

This happens for a few reasons…

First, in a world with limited attention, people will choose the best option available
to them.
The research of Harvard professor, Anita Elberse, shows that blockbuster content is
receiving a larger percentage of the attention pie than ever in all entertainment
categories including publishing, TV, music, sports, movies, comedy, and opera: “Our
research also showed that success is concentrated in ever fewer best-selling titles at the
head of the distribution curve.”

Increasingly, the top media companies are focusing on fewer, high-quality titles and
those titles are monopolizing attention and being enjoyed more.

The same goes with skills too: the best knowledge workers can be 100x more valuable
than average knowledge workers. Therefore, at the top of the skill ladder, the largest
companies in the world compete for the few best workers and are willing to pay a
premium for them, driving up their wages. The opposite happens on the other end of the
spectrum.

Therefore, in your career or business, your main strategy should be to become the
best or close to the best in your niche. The companies, employees, influencers and
entrepreneurs that succeed will be those who have a strategy to be the superstar or learn
the blockbuster skill or create the blockbuster product, and then work backwards from
there.

As time goes by, I’ve come to believe in the power of the blockbuster more and more in
my own business. And, I’ve come to see its importance across any industry that is
touched by digitization.

For the past seven years, I’ve been laser-focused on creating blockbuster content, even
though I started from no list, no brand, and little writing experience. Choosing a
blockbuster strategy worked better than I imagined. The articles I’ve written have been
viewed tens of millions of times in publications like Forbes, Business Insider,
Entrepreneur, Inc., Fortune, TIME, and the Harvard Business Review.

If you can combine your skills and creativity to learn blockbuster skills and create
blockbusters, you have the potential to attract millions of views/dollars and change the
behavior or mindset of millions of people.

On the other end of the spectrum, there is what economists call over-crowding.
 For every rock star, there are many thousands of
“wannabes.” The focus on relative performance and
resulting asymmetric payoffs tend to draw into the
competitive field more contestants than may be
warranted on any rational calculation of benefits
and the probability of winning. All of this leads to
“tragedy of the commons” in that too many also-
rans depress the per-capita compensation for them.
Frank and Cook point to a variety of causes of
overcrowding, such as overconfidence; thrill-
seeking; status-seeking, or intrinsic joy in the
activity.
Overcrowding and winner-take-most mean that being just good enough is no longer
good enough.

Second, digitization leads to global markets.

200 years ago, if you were the best musician, the only way you could scale is by traveling
to new locations by horseback and delivering live performances. 50 years ago, your song
would have had to be encoded on to a tape, duplicated, and then shipped around the
world at significant cost. Now, with digital markets, it is not uncommon for a hit to be
listened to hundreds of millions of times in a matter of weeks or even days. Hits are
transmitted digitally and globally instantly and at zero cost to the creator.

Third, digital markets are still growing very rapidly. So, hits will keep getting
bigger.
Only 59% of the world population is connected to the Internet. With companies like
Internet.org, Loon, Starlink, and other initiatives, the entire Earth will be blanketed with
low cost internet in the next 10 years. Thus, the winning songs, software, movies,
articles, and books will win even bigger in the future. Furthermore, the United Nations
estimates that the world population will grow to 8.5B by 2030 from 7.6B today. To put
those numbers in context, that’s about 300M+ Internet users per year. Finally, cultural
barriers could be removed as there’s increasingly more English speakers, reducing the
friction for ideas to spread globally. Ultimately, bigger markets mean bigger hits.

If you’re interested being blockbuster (vs. being just good enough), here’s what you need
to do next…

#3: Knowledge Is The New Money

“Intellectual capital will always trump financial

capital.” Paul Tudor Jones, self-made billionaire
entrepreneur, investor, and philanthropist
We spend our lives collecting, spending, lusting after, and worrying about money — in
fact, when we say we “don’t have time” to learn something new, it’s usually because we
are feverishly devoting our time to earning money via our job, but something is
happening right now that’s changing the relationship between money and knowledge.

We are at the beginning of a period of what renowned futurist Peter Diamandis calls
rapid demonetization, in which technology is rendering previously expensive products
or services much cheaper — or even free.

This chart from Diamandis’ book Abundance shows how we’ve demonetized $900,000
worth of products and services you might have purchased between 1969 and 1989.
This demonetization will accelerate in the future. Automated vehicle fleets will
eliminate one of our biggest purchases: a car. Virtual reality will make expensive
experiences, such as going to a concert or playing golf, instantly available at much lower
cost. While the difference between reality and virtual reality is almost incomparable at
the moment, the rate of improvement of VR is exponential.

While education and health care costs have risen, innovation in these fields will likely
lead to eventual demonetization as well. Many higher educational institutions, for
example, have legacy costs to support multiple layers of hierarchy and to upkeep their
campuses. Newer institutions are finding ways to dramatically lower costs by offering
their services exclusively online, focusing only on training for in-demand, high-paying
skills, or having employers who recruit students subsidize the cost of tuition.

Finally, new devices and technologies, such as CRISPR, the XPrize Tricorder, better
diagnostics via artificial intelligence, and reduced cost of genomic sequencing will
revolutionize the healthcare system. These technologies and other ones like them will
dramatically lower the average cost of healthcare by focusing on prevention rather than
cure and management.

While goods and services are becoming demonetized, knowledge is becoming

increasingly valuable.
 “The central event of the twentieth century is the
overthrow of matter. In technology, economics, and
the politics of nations, wealth in the form of physical
resources is steadily declining in value and
significance. The powers of mind are everywhere
ascendant over the brute force of things.” — George
Gilder (technology thinker)
Perhaps the best example of the rising value of certain forms of knowledge is the self-
driving car industry. Sebastian Thrun, founder of Google X and Google’s self-driving car
team, gives the example of Uber paying $700 million for Otto, a six-month-old company
with 70 employees, and of GM spending $1 billion on their acquisition of Cruise. He
concludes that in this industry, “The going rate for talent these days is $10 million.”

That’s $10 million per skilled worker, and while that’s the most stunning example, it’s
not just true for incredibly rare and lucrative technical skills. People who identify skills
needed for future jobs — e.g., data analyst, product designer, physical therapist — and
quickly learn them are poised to win.

Those who work really hard throughout their career but don’t take time out of their
schedule to constantly learn will be the new “at-risk” group. They risk remaining stuck
on the bottom rung of global competition, and they risk losing their jobs to automation,
just as blue-collar workers did between 2000 and 2010 when robots replaced 85 percent
of manufacturing jobs. I explain this phenomenon more in 5-Hour Rule: If you’re not
spending 5 hours per week learning, you’re being irresponsible.

In short, we can see how at a fundamental level knowledge is gradually becoming its
own important and unique form of currency. In other words, knowledge is the new
money. Similar to money, knowledge often serves as a medium of exchange and store of
value.
But, unlike money, when you use knowledge or give it away, you don’t lose it. In fact, it’s
the opposite. The more you give away knowledge, the more you:

Remember it

Understand it

Connect it to other ideas in your head

Build your identity as a role model for that knowledge

Transferring knowledge anywhere in the world is free and instant. Its value compounds
over time faster than money. It can be converted into many things, including things that
money can’t buy, such as authentic relationships and high levels of subjective well-being.
It helps you accomplish your goals faster and better. It’s fun to acquire. It makes your
brain work better. It expands your vocabulary, making you a better communicator. It
helps you think bigger and beyond your circumstances. It connects you to communities
of people you didn’t even know existed. It puts your life in perspective by essentially
helping you live many lives in one life through other people’s experiences and wisdom.

If you want to learn more about turning learning into a deliberate habit, I recommend
reading my article, The No. 1 Lifelong Habit Of Warren Buffett: The 5-Hour Rule.

In summary, to fully take advantage of the great digitization, you can do a few things…

1. Become a creator: Apply your skill to create something amazing (business, article,
app, blog, song, book, recipe, etc). Structure your compensation so you’re paid for
creative output rather than your time. This allows you to get rewarded if your
creation takes off.

2. Identify a blockbuster skill you want to master: After making the decision to be
great, the next important decision is what to be great at. Becoming great takes a lot
of time. Therefore, we can only be great at a few things in our life.
 3. Make time for learning every day (use the 5-Hour Rule): To become great at
anything typically requires a minimum of thousands of hours. Therefore, if you want
to be great, you need to find a minimum of an hour a day for learning.

And, to end, remember this…

How We All Can Thrive In The Great Digitization

Like the ghost of Christmas Future in A Christmas Carol, we have been shown our future.
Covid and the resulting economic shock are our stress test.

When you look back several years from now, how well you fared in the pandemic will be
a telling indicator as pointed out by Nassim Taleb in the following quote…

How you did in this pandemic, as a country, a

village, a business, a group, or an individual,
whether emotionally, economically, or morally, is an
indication of how robust you are and how fit you will
be for the next decades.” — Nassim Taleb
The good news is that we have time to prepare. The bad news is that we don’t have a lot.

In the next decade, we will likely see cashierless physical stores, autonomous vehicles,
and automated robot factories and warehouses all go mainstream.

These innovations will destroy tens of millions of jobs. Like Ebenezer Scrooge seeing into
the future and learning no one cares when he dies, that is the gloomy part.

But, like Scrooge, we can come back from the future and change our behavior in the
present. That’s the more cheerful news.

Will you be ready?

To help you be ready for the great digitization, I created a free course to help you
implement the ideas in this article.
Each of the five lessons took me over 50 hours to research and write, and is based on my
experience reading over 2,000 books, building multiple 7-figure businesses, and
teaching thousands of students how to learn faster.

In this free course, you will learn…

How to identify the blockbuster skill you want to become great at

A proven tip to immediately find time for learning every day (even if you’re busy,
overwhelmed, tired)

How to become a creator by sharing your lessons learned

Each lesson comes with a summary video and free worksheet to help you apply the
lesson.

Get immediate access to the free course >>

This article was written with love and care using the blockbuster mental model.

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