No The Internet Doesn't Do Away With Middlemen — It Just Changes Their Role

from the enablers,-not-gatekeeprs dept

There’s an idea that’s been popular for a while that the internet somehow does away with “middlemen.” A perfect example of this is NY Times’ Damon Darlin acting surprised at a new middleman business delivering food to various companies from various food trucks and chefs:

Hold on, though, wasn?t that a job description that the Internet was destroying? There was even a 25-cent word for it: disintermediation. The Web, we were told, was eliminating the need for the layers of brokers, agents, wholesalers and even retailers that separate the consumer from the producer.

It’s time for this argument to go away. We’ve been arguing for a while that the internet doesn’t kill middlemen, it just changes what kind of middlemen you need. It gets rid of gatekeepers, but replaces them with enablers. There’s still a tremendous role for middlemen operations that enable buyers and sellers to do more. But there’s no role for someone acting as a “gatekeeper” that blocks what buyers and sellers can do. Of course, gatekeepers hate this, because when they were gatekeepers they were the central player (and could charge monopoly rents). But enablers are not central. They’re there to help the really important players: the buyers and the sellers. And there just aren’t the same monopoly rents. Such is life in modern society. But, let’s drop this claim that middlemen are going away, and admit to the reality: it’s just the gatekeepers that go away.

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Comments on “No The Internet Doesn't Do Away With Middlemen — It Just Changes Their Role”

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Anonymous Coward says:

Tap dancing and weasel wording at it’s finest… WTG Mike.

An “enabler” is also by definition a gatekeeper. Without someone to “enable” what you want, you cannot get it done. If they refuse to do business with you, they have “closed the gate” as it were.

Basically you are just playing around with words. Their job is the same, really.

Gabriel Tane (profile) says:

Re: Re:

Nice creatively-selective definition of “enable”… Or, as you put it, tap-dancing weasel wording. Not all ‘enabling’ is simple ‘allowing it to happen’.

For example: I work for a major insurance company who was, and still is, a major player in the Agent business model. When the Great Big Interweb came along and our competitors started trying to say “see, you can buy it here, no need for agents!”, we shifted what our agents do. Now, they enable the purchase of insurance by providing additional value to the purchase. By answering questions and offering guidance on what and how much to purchase, these enablers are able to make the purchase a better experience for the customer.

In this sense, ‘enabler’ isn’t necessarily the dry, dictionary definition, but the ‘marketing power word’ that means “the people who assist in getting prospects to become customers by giving value to the experience”… which is exactly what the article is talking about.

Anonymous Coward says:

Re: Re: Re:

Gabriel, let’s get real here. This is another one of those attempts to try to slap the “old guard” with a bad name, and to give the “new guard” a snazzy user friendly tag that makes them sound so good compared to those old “middlemen”.

Yet, what do we have? Facebook that gets between you and your friends, and tracks your every move online. Google that does similar and aspires to do more. Twitter that gets between you and your friends. file lockers, torrent sites, and all sort of other things are really just middlemen, making money not on margin on what you want, but on the data that you spew and the ads that you look at.

They are still middlemen, just playing it slightly differently. They have gone from being commissioned salesmen and have “evolved” into being lifestyle spies that sell your every move to the highest bidder.

They can only do it by getting in the middle of everything you do.

Anonymous Coward says:

Re: Re: Re:

“What is lost is the power to keep that gate shut, and charge monopoly rates to open it.”

The government is working hard to ‘correct’ this.

Just like with everything else (cablco monopolies, broadcasting monopolies, IP, laws that effectively deter restaurants and other venues from hosting independent performers without paying parasitic middlemen in fear of getting sued, taxi cab monopolies, paintball authorized recreational establishments, mailbox delivery monopolies, etc…), the government will do everything in its power to establish monopolist middlemen. It does it with just about everything else, why not the Internet. and that’s part of the purpose of these new laws that the govt is attempting to pass, and its attempts to go after Google, it’s to regulate competition out of business with burdensome laws and to establish a hand full of monopolist gatekeepers to contribute to the campaigns of the existing politicians. Free market capitalism simply does not exist in America.

Anonymous Coward says:

Re: Re:

“An “enabler” is also by definition a gatekeeper.”

Not necessarily.

An enabler is someone that makes you able to do something. In short, a facilitator. You don’t *need* enablers to perform something: you can route around them or implement that something yourself. They just make things easier.

Now, a gatekeeper is just a bottleneck in the system. You can’t route around them because they control all the ins and outs of the system at some particular (usually critical) point. They are “useful” only because they are the only ones that are able to perform a certain function, not because they are particularly skilled at it, or the most convenient route, but just because they are the only ones that control the access to that function.

Anonymous Coward says:

Re: Re:

“An “enabler” is also by definition a gatekeeper.”

Words have ascribed meaning. Those meanings evolve over time and they adapt to various contexts. A word can have one meanings in one sentence and a different meanings in another. That’s why when you look words up, you can find multiple definitions for the same word. You must use context to determine meaning. It’s also why words shouldn’t be read by themselves, they should be read in context. Language is ambiguous, but we can reduce that ambiguity by ascribing distinct meanings to different words. That’s what Mike is doing. It makes communication easier.

If one can’t find an exact word for the meaning that he wants, one can perhaps find a similar word and explicitly redefine it within a particular context to meet a communicative intent. If you need to express another concept, one can find another similar word and explicitly define its meaning and discuss the matter further. As long as our audience is made aware of our intended meaning, as long as its communicated to them, that’s fine.

Lawyers define words in contracts all the time. A word in one contract may have a different meaning from the same word in another contract. Words mean what we want them to mean. New words are coined all the time and meanings of words naturally evolve over time as people naturally start to adopt new meanings. Sometimes dictionaries eventually catch up and include the new meanings as well.

We shouldn’t limit what we can communicate to the confines some fixed language. We should adapt language to make it meet our communication needs.

Anonymous Coward says:

Re: Re: Re:

Perhaps a better word Mike can use is facilitator. Middlemen can either be gatekeepers or they can be facilitators. Either way, they can be in the middle, one by necessity (ie: force of law), one by virtue of the fact that they can better facilitate an endeavor because it’s something they specialize and have expertise in.

Scote (profile) says:

If they aren't gatekeepers perhaps they aren't middlemen

“It gets rid of gatekeepers, but replaces them with enablers. “

Then they are no longer between people and the content–no longer in **the middle**.

There definitely roles for “enablers” but I’d say that such a role is no longer quite that of a “middleman”.

I think perhaps Mike *and* Damon Darlin have good points, and that neither of them is completely correct in this instance.

Richard (profile) says:

Re: If they aren't gatekeepers perhaps they aren't middlemen

Yes – but their errors are at most ones of terminology. I’d agree that enablers are not usually middlemen because they do not normally interpose between the parties – but the kind of skills required by the new enablers do overlap with those that the old middlemen.

In some cases they do still interpose. Consider for example the internet lending site Zopa.

It is still a middleman – in that money is channeled from lenders to borrowers through it – and since it performs credit checks etc it does still act as a gatekeeper for borrowers – but it is much less of a gatekeeper than a traditional bank – and of course the people who run it have a banking background and banking skills.

JackHerer (profile) says:

Re: If they aren't gatekeepers perhaps they aren't middlemen

No, i think Mike is right. A good example is used recently is the site i used to arrange moving to London.

They are a middleman type operation between couriers/moving companies and people with stuff to move. The process is kind if a reverse auction. You advertise your stuff and the from and to location. Then there is a bidding process where companies underbid each other to offer the lowest price. This benefits all parties. I got my stuff moved as cheaply as possible, the couriers/movers are able to work much more efficiently by putting together “runs” where they fill up their vans with loads from several people and get more money per run even if they get less per load. Anyvan are happy as they get a cut of what you pay. There is nothing stopping any of these parties “cutting out the middle man” and depriving anyvan of their cut. But why would you because they “enable” a much more efficient and profitable process that benefits all parties. It even benefits the environment because there are fewer half empty vans and trucks taking stuff from the same point a to the same point b.

nasch (profile) says:

Re: If they aren't gatekeepers perhaps they aren't middlemen

eBay, Craigslist, Autotrader, any other similar site between people buying and selling. These are all very common examples of middlemen enablers on the internet, but not gatekeepers. Aggregators, both of news content and other things (such as travel deals and coupons) are another. There are plenty of enablers who really are middlemen – and of course plenty who also aren’t in the middle.

Ninja (profile) says:

I wouldn’t use the word enablers but rather supporters. Their role is to give support for artists and fans to be closer and enable monetary exchange between them. In that sense, more than one supporter may be active at a given time. For instance, Spotify will help you find the artist, Facebook/Twitter/etc diminishes the gap between them making the relation a closer one, PayPal allows you to donate directly to your favorite artist and so on. MAFIAA could fit there providing high quality, easy access to their songs (itunes)…

So it’s supporter. It’s what TPB is for us.

Anonymous Coward says:

Gatekeeper is a loaded word, connoting that without one’s say-so, thou shall not pass. They block, for whatever reason. It is inherently adversarial.

Enabler has a shifty connotation, can be good (enabling progress), can be bad (enabling bad behavior).

I like facilitator, connotes making something possible. And that’s what traditional middlemen are or should be good at, smoothing the way, eliminating hassles between vendors and buyers. A service of convenience, both of which many folks will happily pay for.

Richard (profile) says:

Re: Re:

Most traditional middlemen didn’t/don’t act as gatekeepers – however some of them did have another bad spect. They were paid a proportion of the deal rather than a fee for services rendered. The prospect of what can be a disproportionate reward tends to attract the unscrupulous.

The new middlemen tend more to be paid for what they do – as opposed to a percentage – which is a step forward.

Greevar (profile) says:

Middlemen? Nah...

Enablers are more like liaisons and liaisons do serve a lot of roles that can be defined as “enabler”. Middlemen tend to wedge themselves into their position to intercept the flow of money and skim their portion from the revenue stream. Middlemen, by definition, are the people who come between the producer and the consumer. Liaisons tend more to adding lateral value rather than open connections. They add value to the goods you sell and create awareness, but it isn’t mandatory that you interact with them to reach your customers. can be bypassed and companies can send out their own people (*cough* interns *cough*) to these vendors to purchase lunch orders or they can place orders with the vendors directly. Then the vendors can decide how and by whom they deliver food to their customers, without even being visible to the end consumer. They are service liaisons, not middlemen.

Anonymous Coward says:

Re: Middlemen? Nah...

…. and enablers do not?

Google is the ultimate enabler, but their true goal is to get in the middle of billions of transactions. They want to hold you from the internet, making your searches, your requests, your email, your videos, and your everything else go through their hands on the way.

Enablers are worse than middlemen, because you actually think they are your friend, as they profit on the back side from your information, your privacy, and your actions.

Anonymous Coward says:

Re: Re: Middlemen? Nah...

At the moment I truly prefer Google handling my business than lets say the MAFIAA or Baidu, those 2 are the real dangers.

Can you imagine a world dominanated by a Chinese search engine that would really spy on everyone for the Chinese government? or an Enabler like the MAFIAA that would look at everything you do with an eye on how to charge you for it and use the law to force everybody to comply?

nasch (profile) says:

Re: Middlemen? Nah...

Middlemen tend to wedge themselves into their position to intercept the flow of money and skim their portion from the revenue stream.

Those loaded words “wedge”, “intercept” and “skim” imply that they are doing this by unscrupulous means, are unwelcome in the transaction, and do not add value. That is not necessarily the case. Craigslist is a middleman organization, for example. They get in between a buyer and seller, and thrive by providing great value to both.

Any Mouse (profile) says:

Middlemen are not always the enemy

Let’s give a real life example right here in my town of Toledo. We do not drive, and public transportation is difficult for us to use due to physical limitations. There’s the paratransit service for which you have to schedule at least the day before by 5pm. But we like to eat out when we can. Solution is a company called Order on the Way who will go to the restaurant for us and bring us the food. Yes, the delivery charge is twice that for a pizza (pizza places charge $3 for delivery, now) or a bit more than that, depending on where you go. But we can have that steak dinner for our anniversary without leaving the house. Find a good movie on Netflix and stream it to the television over our Roku device, and we’ve just spent less than we would have for a movie and a dinner out at the theatre.

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