Erik Torenberg's Quotes

"DAOs aim to create all the benefits of democracy — both on the ownership and the governance level. In politics we call this direct democracy."

— Erik Torenberg

"Direct democracies are impractical: if everyone has to argue about every single issue, it simply takes too long to get anything done."

— Erik Torenberg

"Direct democracies also suffer from information problems. Voters have little incentive to educate themselves on the issues. It’s actually irrational for them to spend much time investigating any given democratic choice, because the odds that a single vote matters (breaks a tie) are very low."

— Erik Torenberg

"evolution from democracy to oligarchy is known as the Iron Law of Oligarchy."

— Erik Torenberg

"the Iron Law of Oligarchy states that all organizations, including those committed to democratic ideals and practices, will inevitably succumb to rule by an elite few (an oligarchy)."

— Erik Torenberg

"The theory states that true democracy can't happen mechanically, because a large number of people cannot coordinate or organize. Only small groups can organize."

— Erik Torenberg

"America was famously established as a republic, or a representative democracy, not a true direct democracy. They designed Congress and the presidency to be offsets to what would otherwise become a mob."

— Erik Torenberg

"Monarchy (rule by one): Monarchies are efficient because one person can make all of the decisions quickly. However, if the monarch is bad or ineffective, this can lead to poor outcomes."

— Erik Torenberg

"Oligarchy (rule by a few): Oligarchy is rule by the elite few. Because no one person can make decisions, it is difficult for oligarchies to make radical changes. While oligarchy is the most stable form of government, oligarchies tend to serve themselves and not the entire population. This is closest to representative democracy we have today."

— Erik Torenberg

"Democracy (rule by many): Direct democracy is the least stable of the governance forms. Information costs are high (does your average person know much about intricate monetary policy?), and decision-making is cumbersome."

— Erik Torenberg

"there is an evolution between monarchy, oligarchy and democracy. The Greeks called this cyclical theory of governance anacyclosis."

— Erik Torenberg

"Over time, the oligarchy develops values that are at odds with its regular members. Elites become higher status, and feel that they must have some way of differentiating themselves from the democratic masses. They slowly begin to push for things that are good for elites but not necessarily good for the rest of the group."

— Erik Torenberg

"any democratic governance structure you put together for your DAO will lend itself to becoming an oligarchy over time. Is it possible to slow down this process through financial incentives and pre-programmed rules within the DAO? Maybe! But it’s worth knowing that the default within most democratic organizations is to trend towards oligarchy."

— Erik Torenberg

"The pure democracies of web3 are going to have the same problems that democracies of every other period for the last 500 years have also had: that while they might start as democracies, they won’t stay that way."

— Erik Torenberg

"A personal moat is a set of unique and accumulating competitive advantages in the context of your career."

— Erik Torenberg

"your personal moat should be a competitive advantage specific to you that's not only durable, but compounds over time."

— Erik Torenberg

"You must find something special—specific to you—that drives increasing, compounding value overtime."

— Erik Torenberg

"Ask others: What’s something that’s easy for me to do but hard for others? What's something I have that’s very difficult for people to reverse engineer?"

— Erik Torenberg

"Ikigai: the intersection of what you love, what you’re good at, and what the world needs."

— Erik Torenberg

"In the internet economy, what has become scarce are things like specific knowledge and rare & valuable skills."

— Erik Torenberg

"if you’re trying to build a moat, don’t enter the rat race unless you’re the fastest rat!"

— Erik Torenberg

"We talk a lot about “passive income,” but not as much about “passive social capital” or “passive knowledge gaining” — that’s what you gain if you build an asset that grows over time without intensive constant effort to sustain it (h/t Andrew Chen)."

— Erik Torenberg

"Some other hacks to build moats include picking something that isn’t big now, but will be in the future (e.g. crypto in 2016), something that relies on exclusive relationships that you can access (e.g. enterprise healthcare, access to LPs), or something that is legibly impressive or valuable but has no playbook. (e.g. Tyler Cowen, Tim Ferris, Elad Gil examples)"

— Erik Torenberg

"Should you specialize or generalize? Either could work, but you have to actually be good at something. That’s a key concept. If you’re a generalist, you want to be the best at the intersection of a few different skills"

— Erik Torenberg

"You want to be at least great at one thing, and then apply that lens or skill to other categories. Some people who you think are generalists have also specialized."

— Erik Torenberg

"discover what’s easy for you but hard for others, then get so good they can’t ignore you, and then leverage that to accrue social and financial capital."

— Erik Torenberg

"If you were magically given 10,000 hours to be amazing at something, what would it be?"

— Erik Torenberg

"When I am alone for extended periods of time, I feel closer to others. When I am offline, away from devices, I feel like I am connected to something bigger than myself."

— Erik Torenberg

On Solitude

"“Labor is a craft, but perfect rest is an art.”"

— Erik Torenberg

On Solitude

"the key is to not to judge yourself during the process."

— Erik Torenberg

On Solitude

"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."

— Erik Torenberg

"financial capital is easier to accrue than social capital. So when you spend your social capital, it means a lot."

— Erik Torenberg

"It’s this “belief capital” that matters disproportionately, and it matters across more domains than just careers & angel investing."

— Erik Torenberg

"Enter “The Hunter Economy” — a whole class of startups that'll be built to incentivize & reward early adopters both economically & socially."

— Erik Torenberg

"With crypto involved, you could also be financially incentivized to be a curator."

— Erik Torenberg

"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."

— Erik Torenberg

"If you make a law that says it's illegal to do X, but it's still profitable to do X, companies and governments will still do X."

— Erik Torenberg

"Abundant things become economically worthless, even if they’re foundational for life. Scarce things make people rich, even if they’re meaningless."

— Erik Torenberg

"Anti-rivalrous games are the opposite; they’re “positive-sum” — either we both win together, or we lose together. These games are anti-fragile since everyone’s incentives are aligned"

— Erik Torenberg

"From the Mayans to the Greeks to the Romans, we’ve seen history repeat itself time and time again — civilizations rise and fall, except now things are different because we have exponential technology."

— Erik Torenberg

"One of the root causes of societal collapse is the presence of and our participation in rivalrous or “zero-sum” games."

— Erik Torenberg

"A rivalrous good is valuable because it’s scarce, like gold or Bitcoin. An anti-rivalrous good is valuable because it’s abundant, like language."

— Erik Torenberg

"When things that should be positive-sum become zero-sum, bad things happen."

— Erik Torenberg

"We know there has to be a structure whereby actual innovation is rewarded in proportion to its value in a way that rent seeking is eliminated entirely and the reward takes into account externalities produced by innovation."

— Erik Torenberg

"We need a change in consciousness that acknowledges the interconnectedness of our fates. When we identify as interconnected parts of an interconnected universe (rather than separate discrete things) we inherently become more positive-sum. In effect, we stop thinking there is any definition of success for oneself that isn't also success for the whole."

— Erik Torenberg

"understanding the interconnectedness of our society helps solve the rivalry problem, because zero-sum games require a separate sense of self, leading to rivalrous competition for some scarce asset."

— Erik Torenberg

"the world is organized around scarcity. Technology increases access to scarce things by helping us do more with less, helping orders of magnitude more people enjoy something for a fraction of the cost."

— Erik Torenberg

"Abundance inevitably leads to new forms of emergent scarcity that are hard to predict in advance."

— Erik Torenberg

"In a world of scarcity, supply constraints are paramount. In a world of abundance, demand is king. In other words, capital and production are no longer the scarce resource—attention and loyalty are."

— Erik Torenberg

"Ben Thompson’s idea of aggregation theory: Pre-internet, you captured profits by controlling supply. Post-internet, you capture profits by aggregating demand."

— Erik Torenberg

"Unbundling and rebuilding happens in every industry that gets influenced by software. Songs get unbundled from CDs and then rebundled into playlists. Articles get unbundled from newspapers and then rebundled into social media feeds. Curation becomes more important."

— Erik Torenberg

"Education, housing, healthcare are areas among others where technology will make a massive difference."

— Erik Torenberg

"in the world of bits, there are much fewer barriers to communicating, finding products, or getting work done — so the fundamental variable is not the unit of production or the unit of capital; it’s the unit of demand."

— Erik Torenberg

"The stuff that happened on Sunday morning at church or synagogue is still important to human beings and we believe it's still something humans need. So they're now looking elsewhere, and finding that fulfillment in communities, particularly online."

— Erik Torenberg

"The decline of organized religion, and an ongoing search for meaning, identity, and community in modern life (see: Peloton)."

— Erik Torenberg

"Nearly a third of our current team were hired from one of the On Deck communities."

— Erik Torenberg

"each new program contributes a specific ""supply"" that meets an existing ""demand"" we identify within our network. For example, our founders, angels, and talent fellowships are tightly interwoven."

— Erik Torenberg

"On Deck uses its program revenue to hire the best talent and invest in creating exceptional experiences. This in turn helps build reputation and drives new member demand, enabling further investment in R&D, acquisition, and distribution."

— Erik Torenberg

"the first generation of ""ed-tech"" (MOOCs, etc) failed to live up to the hype. Learning from their shortcomings, On Deck ""re-bundles"" community with curriculum. We build the tools and culture that makes peer to peer education rewarding and personal."

— Erik Torenberg

"Top Fellows exhibit strong “repeat buying” behavior: 25% of our first “Writers” cohort had previously participated in ODF, and several have signed up for their third and fourth programs."

— Erik Torenberg

"Our NPS consistently polls around 65-70. Even better: customers actually ""walk the talk,"" making over 2,500 referrals in the past twelve months."

— Erik Torenberg

"Of 2,000 people in the Founder Fellowship (""ODF"") Slack Channel, 72% are active 3 months later, even after completing the 10 week program"

— Erik Torenberg

"On Deck is riding a series of (at least) four ""macro"" waves / tailwinds"

— Erik Torenberg

"The decline of traditional higher education and rise of ""ed-tech 2.0,"" which anchors around the ""re-bundling"" of virtual curriculum and community."

— Erik Torenberg

"A shift to distributed living/working as the new norm — as accelerated by the COVID-19 pandemic. On Deck is ""Silicon Valley in the Cloud."""

— Erik Torenberg

"Uncertainty is a catalyst for opportunity. New norms create new needs."

— Erik Torenberg

"“In the long run, the ideal is to offer utility to your userbase... it's the most stable, long-term competitive advantage that you can have. However, it's also true that a lot of network-based utility is only realized at some level of scale. And so the question is, how do you get to that scale?”"

— Erik Torenberg

"“The old approach startups took was to sell or license their new technology to incumbents. The new, ‘full stack’ approach is to build a complete, end-to-end product or service that bypasses incumbents and other competitors.” - Chris Dixon, a16z"

— Erik Torenberg

"Learning is defined by who you learn with – the respect and perspective you develop among the camaraderie of the “classroom.”"

— Erik Torenberg

"According to The Rise of Universities, the term “university” simply refers to any group of people who came together for the purpose of learning. Curious individuals, learning together."

— Erik Torenberg

"Software eats the world, and everybody stops noticing it."

— Erik Torenberg

"The biggest impact of COVID-19 may be remote work. Pre-pandemic, roughly five percent of full-time employees with office jobs worked primarily from home."

— Erik Torenberg

"That figure is likely to settle at 20-30 percent in the new normal, with variation across occupations and industries. Tech in particular makes clear that location will become less important in hiring."

— Erik Torenberg

"In a Futarchy, governments can do the following: 1) allow citizens to democratically vote on which metrics to optimize for and 2) create markets to let the wisdom of the crowd inform how to reach those goals. Democracy tells us what we want while speculators bet on how to get it."

— Erik Torenberg

"Prediction markets combine the Wisdom of Crowds with the Efficient Capital Markets hypothesis (stating asset prices reflect all available information providing the best estimate of intrinsic value)."

— Erik Torenberg

"“The economic problem of society is thus not merely a problem of how to allocate “given” resources — if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”"

— Erik Torenberg

"“The pace of scientific progress may be hindered by the tendency of our academic institutions to reward being popular, rather than being right.” — Robin Hanson"

— Erik Torenberg

"If we believe that more accurate information is net positive an improvement in accurately valuing certain possibilities can lead to stronger governance and management."

— Erik Torenberg

"prediction markets are truth-seeking machines. By forcing people to put their money where their mouths are, people now focus on being correct, rather than being liked, popular, or diplomatic."

— Erik Torenberg

"Gambling incentives are not perfect, to be sure, but by helping aggregate more information, decision markets might allow us to more accurately estimate the consequences of important decisions"

— Erik Torenberg

"One of the most interesting applications of prediction markets popularized by Robin Hanson is Futarchy: Government run by prediction markets."

— Erik Torenberg

"Nowadays, politicians don't win by telling the truth or making reasonable arguments. Under a Futarchy, there would at least be some market for truth-telling politicians."

— Erik Torenberg

"If we think about why things do or do not happen in our society, the typical drivers of change are the powerful (e.g., wealthy families, leading corporations, and political leaders)"

— Erik Torenberg

"The powerful typically act in their own self interest to hold on to their power in whatever form it is in."

— Erik Torenberg

"While this could improve society as a whole, it could worsen the standing of the powerful."

— Erik Torenberg

"In terms of implementing prediction markets, there are two major factors to consider: (a) the cost of running & maintaining the markets and (b) the clarity of the markets & associated outcomes."

— Erik Torenberg

"if prediction markets are run completely decentralized, how do you prove that an outcome truly occurred"

— Erik Torenberg

"The proliferation of markets might mean everyone is operating under monetary incentives and the future becomes effectively deterministic because the crowd can not just predict, but also affect the future."

— Erik Torenberg

"Another example of luddism is around job-loss. Sure, every tech revolution has destroyed old jobs (farmers have gone from 70% to 2% of our economy, for example), but every revolution has created more jobs than they destroyed."

— Erik Torenberg

"People love an idealized version of nature. They like nature without lions roaming, or nature that’s somehow replete with western medicine, a fast internet connection, and a warm bed at night to sleep in."

— Erik Torenberg

"Fear mongering tends to be the default pattern with new technologies — they get scapegoated for society’s current problems."

— Erik Torenberg

"The fact of the matter is that people have been complaining about new communication technologies since forever."

— Erik Torenberg

"The Luddites were a 19th century group of English textile workers who opposed new technology. As a means of protesting technological progress, they’re best known for destroying the textile machines on which they worked."

— Erik Torenberg

"What luddites fail to realize is that humans are, in their very nature, a technological species. We build tools to make our lives easier and better."

— Erik Torenberg

"The simple fact is that how we used to live may have fit a world of 10 million people but won’t fit a world of 8 billion."

— Erik Torenberg

"once you get technology growth going, it's pretty hard to stop it from eating the world. It’s hard to tell billions of people who want access to food and clean water and warm beds that there's no more room."

— Erik Torenberg

"Human needs are infinite."

— Erik Torenberg

"Not only does technology create more jobs, but better ones too. We automate the boring and painful parts of the job so we get to do more meaningful work"

— Erik Torenberg

"That’s not to say we shouldn’t make it easier for people to re-skill, relocate if needed, and recover via a strong safety net. We should."

— Erik Torenberg

"from that came a radically new way of thinking about the world, the idea that our ancestors laid the foundation we could build on top of, based on the premise that we could build better things than our ancestors in the first place. This mentality created the world we have today"

— Erik Torenberg

"One way to move past nostalgia and embrace the future is to realize that everything about us, from the clothing we wear and the music we listen to, to the technology we use — every single thing we are and do is something that a previous generation thought was bad."

— Erik Torenberg

"Anything invented after you're thirty-five is against the natural order of things"

— Erik Torenberg

"from a fan perspective, the prospect of being able to profit from early support of an artist is a strong incentive to become a supporter in the first place, which means it will expand the total amount of supporters."

— Erik Torenberg

"The best business model pre-internet was to charge for content. In the internet age, I think the rest of the world will become more like video games — give away the base layer, and let the internet do its thing, supercharging viral marketing to monetize the complement."

— Erik Torenberg

"whoever creates the value (often by generating demand) captures the value, proportionate to the value created"

— Erik Torenberg

"it’s not just the artists who are getting screwed, it’s that the industry at large is undermonetizing as well. The whole music industry is something like $20B. Compare it to video games, a $140B market, and you see the discrepancy."

— Erik Torenberg

"Crypto enables new ways for musicians (and other creators) to directly capture the value they create in a couple key ways"

— Erik Torenberg

"Crypto enables new ways for musicians (and other creators) to directly capture the value they create"

— Erik Torenberg

"What’s valuable about Facebook and Twitter is the unique data they have, data that we have users have provided. Yet we see nothing from it."

— Erik Torenberg

"Crypto networks will be as big of a step function improvement over joint stock corporations as joint stock corporations were over what came before them."

— Erik Torenberg

"The problem with co-ops has always been structural barriers preventing them from accessing capital markets."

— Erik Torenberg

"Crypto networks make it easier to raise money and get customers by making those same people investors. They make the financial incentives work for all stakeholders."

— Erik Torenberg

"Crypto, as we just discussed, helped creators and collectors realize, “Hey, I can own a piece of the internet value I create, and I can capture that value directly by selling to my audience, and charge them in a granular way that makes more money per fan and financially incentivize them in a way that makes it likely I’ll have more fans.”"

— Erik Torenberg

"For startups today, the opportunity is massive: platforms that are built, operated, and owned by their users can grow to be much bigger, much faster than their institutionally owned counterparts."

— Erik Torenberg

"for the first time ever, we can have community ownership and network alignment completely consistent with capitalism."

— Erik Torenberg

"Maybe the ownership economy is what will makes capitalism more palatable to a wider audience."

— Erik Torenberg

"In the ownership economy, capitalism becomes positive sum in a legible way"

— Erik Torenberg

"The “death of the middlemen” however, is the idea that whoever generates the demand captures the value, and middlemen get commoditized as markets become more efficient."

— Erik Torenberg

"the internet creates a barbell effect: we see both consolidation and fragmentation. Or, more precisely, aggregation and specialization."

— Erik Torenberg

"Pre-internet, you captured profits by controlling supply. Now, post-internet, you capture profits by aggregating demand."

— Erik Torenberg

"the best companies win by providing the best experience, which earns them the most consumers/users, which attracts the most suppliers, which enhances the user experience in a virtuous cycle"

— Erik Torenberg

"value capture will more precisely reflect value creation, and the best will make 10x+ more than they are now."

— Erik Torenberg

"VCs were suppliers, and the internet commoditizes suppliers"

— Erik Torenberg

"as the market becomes even more efficient, it may replace middlemen altogether (e.g. venture studios)."

— Erik Torenberg

"That’s how much power the star has over the middlemen; if only they’d choose to exercise it."

— Erik Torenberg

"If players teamed up and started a new league, I’m sure fans would switch and pay for it directly. That’s the mindset shift."

— Erik Torenberg

"Middlemen who merely route supply and demand without adding significant value along the way will get squeezed out."

— Erik Torenberg

"we’ll discuss why the internet reshapes industries to fit a barbell distribution curve, and why this results in “the death of the middle.”"

— Erik Torenberg

"People today either want the mass market stuff, or the highly niche bloggers (as we see with the prominence of Substack)"

— Erik Torenberg

"the internet is changing our preferences — we’re getting more interested in either exactly what we want, or whatever’s most frictionless."

— Erik Torenberg

"give people everything they want or the one thing they need. Everything in the middle gets slaughtered."

— Erik Torenberg

"Our main decision as internet consumers has become a flat out no, unless we’re getting exactly what we want, in which case that no becomes a yes. We only want the very specific thing, or the good thing that’s most convenient and consistent."

— Erik Torenberg

"you’d think removing friction creates a more level playing field — if it’s easier to find & purchase someone’s products, you’d think consumers would pick the easiest option. But that’s not always the case."

— Erik Torenberg

"When you remove friction, more people default to either hyper-targeted “if” options, or default “else” options. When this happens, you get winner-take-all effects, or at least winner-take-most, in the “else” category. This is why on a street with three coffee shops, Starbucks will be crowded, and on a street with ten coffee shops, Starbucks will be even more crowded."

— Erik Torenberg

"The key lesson is that the magnitude of outliers in Extremistan is much larger than that of those in Mediocristan."

— Erik Torenberg

"when we add technology & startups to the equation (along with other things dictated by the power law) we move to a world of abundance where the middle no longer satiates our demands."

— Erik Torenberg

"in a rainforest, with its abundantly available water, sunlight, and nutrients, two types of plants thrive: the tiny, highly differentiated plants on the forest floor, and the giant trees that form the canopy. It’s hard to be in the middle."

— Erik Torenberg

"Go as differentiated as possible and serve the customer exactly what they want. Power law everything — don’t pick the winners; have the winners all pick you."

— Erik Torenberg

"As a startup, if you’re in the middle, it’s possible you’ll find customers, but nothing will give you pricing power over the giants, nor the agility to outrun a thousand different little plants (competitors)."

— Erik Torenberg

"Should you specialize or generalize? Either could work, but you have to actually be good at something. That’s a key concept."

— Erik Torenberg

"It’s important to know that moats change over time as conditions change."

— Erik Torenberg

"Hard to learn and hard to do (but perhaps easier for you) Impossible without rare and/or valuable skills Unique to your own talents & interests Legible, in the sense that your expertise should be easy to describe, easy to share, and makes people want to do both for you"

— Erik Torenberg

"Another concept is Ikigai: the intersection of what you love, what you’re good at, and what the world needs."

— Erik Torenberg

"Here's a quick litmus test: If there is a solid Quora post with step by step instructions on how to do something, or if thousands of people have done it, then it’s likely not a durable or a unique personal moat. If there’s a playbook for it, then how defensible is it?"

— Erik Torenberg

— Erik Torenberg

"It could be a combination of expertise, relationships, sensibilities, and skills that you’ve accumulated over the years."

— Erik Torenberg

"You want to be at least great at one thing, and then apply that lens or skill to other categories."

— Erik Torenberg

"In conclusion, discover what’s easy for you but hard for others, then get so good they can’t ignore you, and then leverage that to accrue social and financial capital. Don’t skip steps 1 & 2."

— Erik Torenberg

"the most important news will always spread faster on Twitter, but the opposite is also true — the most toxic behavior on Twitter can (and probably will) be mimicked elsewhere."

— Erik Torenberg

"Whoever you think influences the ""real world"" — journalists, media companies, educators — they're all strongly influenced by Twitter. Everything begins on Twitter and then branches out."

— Erik Torenberg

"what the explosion of truth did was expose the superficiality of existing media institutions, create a ""public"" that could challenge the elites directly and create platforms for individuals to effectively become legible institutions and develop one to many relationships."

— Erik Torenberg

"It’s the multiple voices that causes distrust. If there's only one voice and it's broadcast, then no one can argue with the voice. But if there’s a cacophony of voices and they’re all arguing with each other telling they’re side of the story, it’s hard to know who to believe"

— Erik Torenberg

"Social media flattened the relationship between the elites and everyone else — it gave the public a voice."

— Erik Torenberg

"A journalist, instead of being the sole arbiter of truth, is now just another person on social media. The public, not a group of elites, determined who was an *actual* journalist."

— Erik Torenberg

"Some would call this the ""post-truth"" era, but that would be misleading — there's more truth than ever. So much so that we don't really know how to process it, since many truths contradict each other."

— Erik Torenberg

"Generally speaking, whoever runs the OODA loop the fastest wins — the idea being the faster you move through the loop, the harder it is for your opponent to understand reality, thus hurting their decision making ability."

— Erik Torenberg

"one of my theories is that the internet offers a hyper-accelerated OODA loop, and Twitter is the fastest loop across the entire internet. As a result, Twitter has the ability to disrupt all other forms of reality perception. Which means what you see take off on Twitter will also take off (or influence) what you see elsewhere."

— Erik Torenberg

"was pre-internet journalism better than what we see today?"

— Erik Torenberg

"I'd say the same social media platforms that changed the business of journalism also changed our perceptions of it. Was past journalism actually better? Or was it the same quality, but we called it great out of ignorance?"

— Erik Torenberg

"The fragmentation will lead to new cultures, ways of thinking, new ideas, and ultimately more cultural innovation."

— Erik Torenberg

"the truth is that the internet ate media, and there’s no going back."

— Erik Torenberg

"Hard to learn and hard to do (but perhaps easier for you)"

— Erik Torenberg

"Legible, in the sense that your expertise should be easy to describe, easy to share, and makes people want to do both for you"

— Erik Torenberg

"Impossible without rare and/or valuable skills"

— Erik Torenberg

"Unique to your own talents & interests"

— Erik Torenberg

"Ideally you want this personal moat to help you build career capital in your sleep."

— Erik Torenberg

"You want to build a competitive advantage that will endure over time. You don’t want to build a competitive advantage that is fleeting or that will get commoditized."

— Erik Torenberg

"It could be the intersection of a few skills. Scott Adams popularized the idea of finding the intersection of 2-3 things you’re best at even if you’re not best at any of them individually."

— Erik Torenberg

"Should you specialize or generalize? Either could work, but you have to actually be good at something. That’s a key concept."

— Erik Torenberg

"How can you find your personal moat?"

— Erik Torenberg

"We talk a lot about “passive income,” but not as much about “passive social capital” or “passive knowledge gaining”"

— Erik Torenberg

"Should you specialize or generalize? Either could work, but you have to actually be good at something."

— Erik Torenberg

"Think of the best people you’ve ever worked with—your endorsement of them is a credential that you haven’t yet created."

— Erik Torenberg

"My bet is that P2P Credentials will emerge as something that will supplement and unbundle the college credential."

— Erik Torenberg

"Think about someone you didn’t take seriously until someone you respect told you that they think highly of them—how many missed opportunities are there because people miss out on this information?"

— Erik Torenberg

"The first angel investors in Facebook have a ton of status, but what about the people who discovered Mark even before the angel investors who didn’t have capital to invest—the people who invested their social capital?"

— Erik Torenberg

"Cosigning someone is essentially like being the first social capital in."

— Erik Torenberg

"Which in some cases is just as valuable as the first dollar. People always remember the first people to believe in them."

— Erik Torenberg

"The premise of the product was that people could cosign other people and thank people who had cosigned them. It turns out to be pretty viral behavior on Twitter."

— Erik Torenberg

"People want to thank people who’ve helped them as a way to build the relationship and boost their own status"

— Erik Torenberg

"In a world where talent is globally distributed, where we’re losing confidence in the power of our credentialing institutions, a cosign can make all the difference."

— Erik Torenberg

"so why haven’t P2P credentials taken off before?"

— Erik Torenberg

"LinkedIn recommendations exist already and...they’re not great. The challenge with LinkedIn recommendations is that there is no scarcity to them, so there’s no real signal. People endorse friends left and right with no consequence. Because there’s no scarcity, there’s no cost to doing so, reputationally or otherwise. Cosign would have scarcity built into it. On LinkedIn there’s also no way to “rate the raters”. Cosign would have to figure out that part as well."

— Erik Torenberg

"If they had proprietary information on someone, wouldn’t they keep it to themselves, especially if they’re hiring or investing? Maybe in some cases, but I suspect this will go the way of blogging and sharing information:"

— Erik Torenberg

"P2P credentialing will also enable P2P marketplaces."

— Erik Torenberg

"P2P credentials will enable people search engines and matchmaking companies, so that more people can find their people."

— Erik Torenberg

"In conclusion, one of my favorite things is finding people who are great and unknown— high aptitude, low credential— and amplifying, connecting, and working with them."

— Erik Torenberg

"Right now, angel investing is the way to demonstrate your ability to discover this type of talent."

— Erik Torenberg

"Soon, Cosign and P2P credential platforms will democratize talent discovery at scale, enabling people all over the world to discover the next Mark Zuckerberg or Sheryl Sandberg (And others in other industries) without having to write a check to prove their talent discovery abilities."

— Erik Torenberg

"For the rich, money is easier to reacquire with high social capital. But social capital is a different story — it’s much harder to build up."

— Erik Torenberg

"Reputations, like stocks, have P/E ratios. Someone’s P/E ratio is effectively measuring the substantive value of X and the multiple above that we’re evaluating X at."

— Erik Torenberg

"CEOs who are good at building hype (e.g. Elon Musk) effectively have high P/E ratios that afford them cheap cost of capital, lower CAC, and better recruiting pipelines. As a result, people with high P/E ratios also earn social capital or knowledge at a rate far above their peers with lower P/E ratios. One’s P/E ratio is effectively measuring ""what's the substantive value of X and what is the multiple above that we’re evaluating X at?"""

— Erik Torenberg

"Consider a “reputation ponzi scheme”: the idea of building up a reputation based on affiliations with other impressive people with nothing tangible to back it up."

— Erik Torenberg

"Other social capital bubbles: If there are just more people willing to vouch for more people, then you end up with too many bad ideas getting funded."

— Erik Torenberg

"Other market failures exist too: Nepotism is a credit market for reputation rather than cash. Like financial banks, there are social capital ""banks"" willing to lend social capital to ppl who don't need it and not willing to risk social capital on new & risky people."

— Erik Torenberg

— Erik Torenberg

"Except unlike financial markets there is no global Fed that can step in. It all happens locally."

— Erik Torenberg

"So: reputation markets are inefficient, which means we need to find ways to incentivize social capital investing. What could an AngelList for social capital investing look like? P2P credentialing could be one approach."

— Erik Torenberg

"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)"

— Erik Torenberg

"“There are different kinds of positional scarcity, as Alex Danco aptly describes:"

— Erik Torenberg

"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)"

— Erik Torenberg

"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?”"

— Erik Torenberg

"So what exactly is The Hunter Economy?"

— Erik Torenberg

"Angel investing is high status partly because it implies wealth, but also because it implies good access and taste."

— Erik Torenberg

"s we explained in the reputation markets post, this access & taste manifests as social capital — which may be worth more than financial capital."

— Erik Torenberg

"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?"

— Erik Torenberg

"the desire to be the ""first social capital in,"" which in some ways is more valuable than the first dollars in."

— Erik Torenberg

"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!"

— Erik Torenberg

"For example, everything you subscribe to could list your place in line so you could demonstrate how early you were."

— Erik Torenberg

"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."

— Erik Torenberg

"Basically prediction markets without the yes/no prediction — you’re making a seed bet on a person or concept getting more popular over time."

— Erik Torenberg