8 ms·

The Locust Economy

YokoZar 13y ago
While I understand the author's point comparing a wave of groupon-only customers as a swarm of locusts moving from deal to deal, I don't agree with lumping AirBNB in there. If a business is offering a groupon at a loss on the hope of spurring future customers, the deal-hunters can act like locusts by breaking that hope, causing a net loss of value. AirBNB, by contrast, is creating new supply, and that supply is in turn only being sold to AirBNB users. As an AirBNB host, it would be very good for me if I was constantly full of people making one day stays and then disappearing forever. Similarly, if the businesses offering groupons were still profiting from them at the margins even without assumptions of repeat business, then these "locusts" wouldn't be taking value away either.
- graeme 13y ago
  Completely agree. I searched the article for airbnb to see if he ever expanded on that point. Nope. He lumped them in with Groupon as if it were a foregone conclusion.
  - fennecfoxen 13y ago
    Yes. Color me skeptical. Groupon seems like a mediocre idea in practice (certainly not worth its original market cap) but for the others? We have these services which reduce transaction costs and barriers to entry into the marketplace. Those are the textbook preconditions of an efficient market. These service help deploy capital more efficiently... and then people take advantage of that, instead of lavishing their money on the ever-so-noble "9% / Jeffersonian middle class", and we're going to say that they have the morality of locusts? Gee, I really like comparing people to insects, because insects have no brains, then I can pretend that I know better than everyone else out there how their money ought to be spent for their own good! Which I guess involves spending extra to support unnecessary capital investments, like hotel-oriented real estate (AirBnB) or cars or what-have-you? "To the extent that your belongings are a logical expression of your genes and memes sharing them amounts to allowing others to eat them." WHOA DUDE!!! Renting out my house is like HAVING SOMEONE EAT MY SOUL??!? Give me a break. I won't even get into the rest of the tendentious assumptions; that one's enough.
    - Retric 13y ago
      Insects have brains more importantly groups of insects can have highly complex behaviors. Also, AirBNB feeds off of the community at large by avoiding paying taxes. Consider, hotel taxes are often used to pay for the reason people want to visit in the first place ex: convention hall. That's not to say longer stays have the same issues just part of there profitability comes from people avoiding hotel regulations.
      - YokoZar 13y ago
        Hotel taxes are almost universally applied because it's one of the only ways for local governments to raise revenue without taxing their own residents. This is not something to laud and praise.
    - seiji 13y ago
      how their money ought to be spent for their own good! It's not for their own good. It's for the greater good. I fear for the world if everybody starts modeling their world view based on SF-visionary "me me me only me me me no taxes ever me me me" attitudes espoused around here. As Retric mentioned, all of this airbnb money transfer is completely cheating local taxes. You pay airbnb fee tax instead of local travel taxes, thereby turning airbnb into some sort of defacto municipal overlay around the entire world.
      - guard-of-terra 13y ago
        It's not so hard to regulate. You can have AirBNB handing over their list of renters to the country's authorities in order to tax the renters. But you should be adamant that you're going to tax them not close them, otherwise it won't work.
      - fennecfoxen 13y ago
        In the absence of externalities, their own good is the greater good. AirBnB's neighbors are the only ones I know of with a decent case for that (and in multi-tenant buildings, at least, there are surely some provisions for resolving such conflicts already...)
- anigbrowl 13y ago
  As an AirBNB host, it would be very good for me if I was constantly full of people making one day stays and then disappearing forever. Yes, it's like running a hotel with none of those bothersome permit, regulatory, or customer service issues.
  - deleted 13y ago
    [deleted]
  - noonespecial 13y ago
    OTOH, AirBNB in this mode might be a response to those permit, regulatory, or customer service issues becoming too bothersome and routing around them like a broken wire.
  - guard-of-terra 13y ago
    Hotels are a 'meh'-style business. They are either expensive or shabby. And they don't match modern lifestyle that much. Hotels are lame. Why should one back hotels' profits?
    - seiji 13y ago
      That's a wide mischaracterization. There's a very continuous spectrum from eight room highway roach motels to $8,000+/night vegas penthouse suites. It's not either dirt or gold. Most middle-ground hotels end up being okay (Best Western, La Quinta, Holiday Inn, Red Roof Inn: http://www.theonion.com/articles/red-roof-inn-announces-new-suicidal-suite,33084/ http://www.theonion.com/articles/red-roof-inn-announces-new-... ). Why should one back SF over-indulgent startupwankers' profits by participating in their closed marketplace (instead of paying for a service employing local workers who are happy to have a job to support their family/drug habit/whatnot)?
      - bjterry 13y ago
        I believe his point about 'meh' style business is that there is a wide range of prices, but that hotels are largely similar at every given price range. They lack real differentiation that might make any of them particularly compelling for a particular type of consumer at a given price level (hence don't match modern lifestyle).
- deleted 13y ago
  [deleted]
- deleted 13y ago
  [deleted]
pshc 13y ago
Wow. This post is a journey. I haven't digested it enough yet, but I'm loving the trip! EDIT: found http://www.ribbonfarm.com/for-new-readers/ http://www.ribbonfarm.com/for-new-readers/. Onto the Kindle you go.
- jjsz 13y ago
  Thanks, if it wasn't for your comment I wouldn't have subscribed. On Feedly [0] he only has 2k subscribers. If anyone knows similar blogs like this, I'll like to know where I can find them. There really needs to be a Discovr [1] Blogs. It would be just as great if they get pinged and they say they're working on it :-). Currently I'm subscribed to H+ [2] and Singularity Hub [3]. I made a Reddit post asking the same question recently. [4] [0] http://cloud.feedly.com/ http://cloud.feedly.com/ [1] http://discovr.info/about/ http://discovr.info/about/ [2] http://hplusmagazine.com/ http://hplusmagazine.com/ [3] http://singularityhub.com/ http://singularityhub.com/ [4] http://www.reddit.com/r/Cyberpunk/comments/1iq9qx/ http://www.reddit.com/r/Cyberpunk/comments/1iq9qx/
  - msutherl 13y ago
    Hang out at Ribbonfarm and you'll come across occasional links to other blogs in a similar vein. Venkat is top notch though.
gbraad 13y ago
I do not completely agree with the usage of the term, as Locust economies are economies like in China. When they do not have enough resources of themselves, they will swarm and find these abroad and cause lots of issues. For example with the needed infant formula (milk powder, esp after the milk problems in China with melanine) they will swarm to foreign countries and buy these in massive amounts and cause shortages in the country of origin. This even concerns building materials (steel), energy resources (oil), etc etc. The milk powder issue for example happened in the Netherlands and in many other countries; partly caused by producers not knowing how to deal with this, but also by people within the country shipping large amounts (seen as smuggling), selling on Taobao.com. Just google for "Dutch milk powder China". This is just one of the examples... There are now even export restrictions between Hong Kong and China for the amount of cans you can take across the border. Just look at some of the pictures on http://badcanto.wordpress.com/2012/07/08/hong-kong-netizens-on-new-zealand-milk-powder-shortage/milk/ http://badcanto.wordpress.com/2012/07/08/hong-kong-netizens-... related to this. Note: relating to the article I believe the vision is narrow since it only talks about Groupon... Also, his point is not a survival means as the grasshopper/locust metaphor would indicate.
- lukifer 13y ago
  Take the term "locust" (and Venkatesh's writing style in general) with a grain of salt. Long-time Ribbon Farm readers know that he tends to declare "local variables" with his terminology, pegging down certain metaphors for the purposes a specific discussion. That need not collide with or invalidate other uses of the same word or idea.
  - lurker14 13y ago
    Indeed. In ribbonfarm's series about "The Office" model of office politics, the term 'Loser' referred to people who had a job that enabled them to live a life they enjoy without any work-related threat.
  - klibertp 13y ago
    When someone uses a specific, pejorative, widely associated with disaster (plague of Biblical scale, no less) word for a "local variable" he's being intellectually dishonest, or manipulative, or both. One generally can't just read a word locust and think "harmless", "cute", "needed" and such as a first thought - and that's exactly what this rhetoric aims for. That's the reason why I won't read the article. It's perfectly possible to use neutral language for presenting a point convincingly; I can't be bothered to read authors that didn't even try to do so.
zanny 13y ago
So don't offer discounts and avoid the swarm? I won't lie, a huge portion of my grocery spending is under coupon books and the like, or in the long term pattern matching when stuff is cheapest, but this is another case of, as an individual, I can exploit mechanisms in the system to be better off. And hell yes I will take advantage of any economic mechanism I can to save money. You have to, or else you are less prosperous than your peers that don't. It is charity to spend more than you have to on something, and the end of the day bottom line of your business interactions isn't your personal concern. It might be a long term societal concern of unsustainability low prices strangling businesses but they can't increase them in the short term or their competitors, who are also suffocating, get all the customers. So you can't blame people for swarming. It is a natural economic process, and I don't think it is as do or die as the grasshopper metaphor. Even my rich relatives will jump at discounts just to feel like they are "winning" or "saving".
- anigbrowl 13y ago
  Well, there's two other things to consider: the opportunity cost of the time you spend couponing (vs taking your business to somewhere that offers everyday low prices and no coupons, like Trader Joes instead of Safeway in the supermarket sector), and the tragedy of the commons that results from unsustainably low prices. That's not just a long-term societal concern (ie not an individual's one), but a quite present one, because once margins fall too low for a small merchant to profit they'll rationally just exit the market. This leaves you as a consumer with less choice and competition than you had before, in addition to the increasingly bimodal income distribution that plays out over the longer timescale.
- YokoZar 13y ago
  It's entirely plausible they still profit from your couponed purchases, just not as much as if you had paid full price. Price discrimination is generally the motive behind issuing coupons (which still have marginal profits), as a "loss leader" strategy can be more effectively done through means other than coupons Which, incidentally, is one reason why you shouldn't be offering things at a loss on groupon.
  - 13y ago
marshray 13y ago
Maybe I'm missing it in the bulk of the article somewhere, but I thought this claim could have used a little more support: In a locust economy, the Jeffersonian middle class is a terrible place to be. It is no accident that the worst-hit victims of the locust plagues of the 19th century were small farmers living the Jeffersonian dream handed to them by the Homestead Act of 1862.
spiritplumber 13y ago
This is really intersting stuff.
loopdoend 13y ago
I fail to understand what Zipcar has to do with the sharing economy. Zipcar provides short term car rentals. The "sharing" bit is pure marketing genius, no actual sharing is involved. If I were to be incorrect here, then hotels would be part of the sharing economy too.
ronaldx 13y ago
Interesting but rather long. tl;dr version: 90% of people are like locusts/zombies, always preying on the best deals. 9% are Jeffersonian middle class - “small, local and independent” entrepreneurs. Whenever they offer anything less than the best deal, locust swarm will retreat, for example to Groupon and Starbucks. As such, small non-scalable businesses are most often loss-making and generally not sustainable. The 1% of people are like vampires, it's implied that they manipulate the 90% against the 9%.
jejones3141 13y ago
Sounds to me like the converse of the left arguing about the evil of companies who have the gall to try to minimize labor costs, especially as new laws drive the cost of labor up. How dare consumers look for deals! Let's give them a label with nasty connotations. If making Groupon/DealChicken/etc. offers is as self-destructive for businesses as the author says, it will be self-correcting.
Taek 13y ago
I felt like the 9% were unfairly painted as the victims of the way our economy works, but almost everything mentioned were vulnerabilities that the 9% deliberately opened themselves up to. By putting a deal on Groupon, they invited the locusts to swarm them. By opening up a cheaper coffee shop next to Starbucks, they made the business assessment that there was a market for cheaper coffee (or whatever experience they are trying to sell). If they were wrong, then they have fallen victim to what is normal business. If they can't operate without using a self-defeating service, they probably shouldn't be operating. But there's plenty of room for smart business at the Jeffersonian level without making yourself vulnerable to swarms. It's one of the reasons my area has almost as many family owned diners as it does chain restaurants.
guard-of-terra 13y ago
I can see how music scene can be an example of the locust economy: There is more and more bands, each of those have smaller and smaller listener base to the point that most listeners are musicians. Therefore musicians consume each other ("eat each other") and not much money is involved. This leads to proliferation of musical styles (I particularly like something loosely described as female frontend fantasy rock, a tiny niche obviously), which is a good thing; but we don't get universally recognized good hits from good bands anymore, which is a bad thing. Anyway, locust economy is a call for Basic Income.
ExpiredLink 13y ago
Isn't this just sociology of the masses a la Ortega y Gasset?
TheMagicHorsey 13y ago
Look guys, this author just falls in love with his own analogies and leaves reality far behind. The Jefersonian Middle Class (as he calls them) isn't made up of a bunch of Groupon-client failures. They don't survive on business that has been aggregated by swarming platforms like Groupon and Living Social. Small businesses are built on relationships, consistent delivery of value, and return customers. The author seems to understand that there are business that don't give a shit about Groupon ... but I can't understand we he treats them like rare special birds. I don't know who he is, but maybe he is an academic, or some sort of isolated professional that doesn't have much experience or contact with small businesses. People don't abandon their usual vendors, partners, and suppliers for some Groupon deal that they know isn't sustainable. Also, people don't abandon the local cafe, diner, restaurant, and bar, because they occasionally use a Groupon deal. These swarming platforms might be a problem for non-performers or those that don't deliver a good product or service, but for those that do, businesses isn't like the horror story the author describes. This is the case of a bullshit story, well written, and designed to climb the Hacker News ranking ... while having absolutely no relation to reality. A lot of fancy analogies ... and absolutely no substance. This guy clearly wants to coin some term that gets picked up by the press and by the community, so he can have some fame as the guy who coined "The Locust Economy" or some shit like that.

While I understand the author's point comparing a wave of groupon-only customers as a swarm of locusts moving from deal to deal, I don't agree with lumping AirBNB in there. If a business is offering a groupon at a loss on the hope of spurring future customers, the deal-hunters can act like locusts by breaking that hope, causing a net loss of value. AirBNB, by contrast, is creating new supply, and that supply is in turn only being sold to AirBNB users. As an AirBNB host, it would be very good for me if I was constantly full of people making one day stays and then disappearing forever. Similarly, if the businesses offering groupons were still profiting from them at the margins even without assumptions of repeat business, then these "locusts" wouldn't be taking value away either.

graeme 13y ago
Completely agree. I searched the article for airbnb to see if he ever expanded on that point. Nope. He lumped them in with Groupon as if it were a foregone conclusion.
- fennecfoxen 13y ago
  Yes. Color me skeptical. Groupon seems like a mediocre idea in practice (certainly not worth its original market cap) but for the others? We have these services which reduce transaction costs and barriers to entry into the marketplace. Those are the textbook preconditions of an efficient market. These service help deploy capital more efficiently... and then people take advantage of that, instead of lavishing their money on the ever-so-noble "9% / Jeffersonian middle class", and we're going to say that they have the morality of locusts? Gee, I really like comparing people to insects, because insects have no brains, then I can pretend that I know better than everyone else out there how their money ought to be spent for their own good! Which I guess involves spending extra to support unnecessary capital investments, like hotel-oriented real estate (AirBnB) or cars or what-have-you? "To the extent that your belongings are a logical expression of your genes and memes sharing them amounts to allowing others to eat them." WHOA DUDE!!! Renting out my house is like HAVING SOMEONE EAT MY SOUL??!? Give me a break. I won't even get into the rest of the tendentious assumptions; that one's enough.
  - Retric 13y ago
    Insects have brains more importantly groups of insects can have highly complex behaviors. Also, AirBNB feeds off of the community at large by avoiding paying taxes. Consider, hotel taxes are often used to pay for the reason people want to visit in the first place ex: convention hall. That's not to say longer stays have the same issues just part of there profitability comes from people avoiding hotel regulations.
    - YokoZar 13y ago
      Hotel taxes are almost universally applied because it's one of the only ways for local governments to raise revenue without taxing their own residents. This is not something to laud and praise.
  - seiji 13y ago
    how their money ought to be spent for their own good! It's not for their own good. It's for the greater good. I fear for the world if everybody starts modeling their world view based on SF-visionary "me me me only me me me no taxes ever me me me" attitudes espoused around here. As Retric mentioned, all of this airbnb money transfer is completely cheating local taxes. You pay airbnb fee tax instead of local travel taxes, thereby turning airbnb into some sort of defacto municipal overlay around the entire world.
    - guard-of-terra 13y ago
      It's not so hard to regulate. You can have AirBNB handing over their list of renters to the country's authorities in order to tax the renters. But you should be adamant that you're going to tax them not close them, otherwise it won't work.
    - fennecfoxen 13y ago
      In the absence of externalities, their own good is the greater good. AirBnB's neighbors are the only ones I know of with a decent case for that (and in multi-tenant buildings, at least, there are surely some provisions for resolving such conflicts already...)
anigbrowl 13y ago
As an AirBNB host, it would be very good for me if I was constantly full of people making one day stays and then disappearing forever. Yes, it's like running a hotel with none of those bothersome permit, regulatory, or customer service issues.
- deleted 13y ago
  [deleted]
- noonespecial 13y ago
  OTOH, AirBNB in this mode might be a response to those permit, regulatory, or customer service issues becoming too bothersome and routing around them like a broken wire.
- guard-of-terra 13y ago
  Hotels are a 'meh'-style business. They are either expensive or shabby. And they don't match modern lifestyle that much. Hotels are lame. Why should one back hotels' profits?
  - seiji 13y ago
    That's a wide mischaracterization. There's a very continuous spectrum from eight room highway roach motels to $8,000+/night vegas penthouse suites. It's not either dirt or gold. Most middle-ground hotels end up being okay (Best Western, La Quinta, Holiday Inn, Red Roof Inn: http://www.theonion.com/articles/red-roof-inn-announces-new-suicidal-suite,33084/ http://www.theonion.com/articles/red-roof-inn-announces-new-... ). Why should one back SF over-indulgent startupwankers' profits by participating in their closed marketplace (instead of paying for a service employing local workers who are happy to have a job to support their family/drug habit/whatnot)?
    - bjterry 13y ago
      I believe his point about 'meh' style business is that there is a wide range of prices, but that hotels are largely similar at every given price range. They lack real differentiation that might make any of them particularly compelling for a particular type of consumer at a given price level (hence don't match modern lifestyle).
deleted 13y ago
[deleted]
deleted 13y ago
[deleted]

pshc 13y ago

Wow. This post is a journey. I haven't digested it enough yet, but I'm loving the trip! EDIT: found http://www.ribbonfarm.com/for-new-readers/ http://www.ribbonfarm.com/for-new-readers/. Onto the Kindle you go.

jjsz 13y ago
Thanks, if it wasn't for your comment I wouldn't have subscribed. On Feedly [0] he only has 2k subscribers. If anyone knows similar blogs like this, I'll like to know where I can find them. There really needs to be a Discovr [1] Blogs. It would be just as great if they get pinged and they say they're working on it :-). Currently I'm subscribed to H+ [2] and Singularity Hub [3]. I made a Reddit post asking the same question recently. [4] [0] http://cloud.feedly.com/ http://cloud.feedly.com/ [1] http://discovr.info/about/ http://discovr.info/about/ [2] http://hplusmagazine.com/ http://hplusmagazine.com/ [3] http://singularityhub.com/ http://singularityhub.com/ [4] http://www.reddit.com/r/Cyberpunk/comments/1iq9qx/ http://www.reddit.com/r/Cyberpunk/comments/1iq9qx/
- msutherl 13y ago
  Hang out at Ribbonfarm and you'll come across occasional links to other blogs in a similar vein. Venkat is top notch though.

gbraad 13y ago

I do not completely agree with the usage of the term, as Locust economies are economies like in China. When they do not have enough resources of themselves, they will swarm and find these abroad and cause lots of issues. For example with the needed infant formula (milk powder, esp after the milk problems in China with melanine) they will swarm to foreign countries and buy these in massive amounts and cause shortages in the country of origin. This even concerns building materials (steel), energy resources (oil), etc etc. The milk powder issue for example happened in the Netherlands and in many other countries; partly caused by producers not knowing how to deal with this, but also by people within the country shipping large amounts (seen as smuggling), selling on Taobao.com. Just google for "Dutch milk powder China". This is just one of the examples... There are now even export restrictions between Hong Kong and China for the amount of cans you can take across the border. Just look at some of the pictures on http://badcanto.wordpress.com/2012/07/08/hong-kong-netizens-on-new-zealand-milk-powder-shortage/milk/ http://badcanto.wordpress.com/2012/07/08/hong-kong-netizens-... related to this. Note: relating to the article I believe the vision is narrow since it only talks about Groupon... Also, his point is not a survival means as the grasshopper/locust metaphor would indicate.

lukifer 13y ago
Take the term "locust" (and Venkatesh's writing style in general) with a grain of salt. Long-time Ribbon Farm readers know that he tends to declare "local variables" with his terminology, pegging down certain metaphors for the purposes a specific discussion. That need not collide with or invalidate other uses of the same word or idea.
- lurker14 13y ago
  Indeed. In ribbonfarm's series about "The Office" model of office politics, the term 'Loser' referred to people who had a job that enabled them to live a life they enjoy without any work-related threat.
- klibertp 13y ago
  When someone uses a specific, pejorative, widely associated with disaster (plague of Biblical scale, no less) word for a "local variable" he's being intellectually dishonest, or manipulative, or both. One generally can't just read a word locust and think "harmless", "cute", "needed" and such as a first thought - and that's exactly what this rhetoric aims for. That's the reason why I won't read the article. It's perfectly possible to use neutral language for presenting a point convincingly; I can't be bothered to read authors that didn't even try to do so.

zanny 13y ago

So don't offer discounts and avoid the swarm? I won't lie, a huge portion of my grocery spending is under coupon books and the like, or in the long term pattern matching when stuff is cheapest, but this is another case of, as an individual, I can exploit mechanisms in the system to be better off. And hell yes I will take advantage of any economic mechanism I can to save money. You have to, or else you are less prosperous than your peers that don't. It is charity to spend more than you have to on something, and the end of the day bottom line of your business interactions isn't your personal concern. It might be a long term societal concern of unsustainability low prices strangling businesses but they can't increase them in the short term or their competitors, who are also suffocating, get all the customers. So you can't blame people for swarming. It is a natural economic process, and I don't think it is as do or die as the grasshopper metaphor. Even my rich relatives will jump at discounts just to feel like they are "winning" or "saving".

anigbrowl 13y ago
Well, there's two other things to consider: the opportunity cost of the time you spend couponing (vs taking your business to somewhere that offers everyday low prices and no coupons, like Trader Joes instead of Safeway in the supermarket sector), and the tragedy of the commons that results from unsustainably low prices. That's not just a long-term societal concern (ie not an individual's one), but a quite present one, because once margins fall too low for a small merchant to profit they'll rationally just exit the market. This leaves you as a consumer with less choice and competition than you had before, in addition to the increasingly bimodal income distribution that plays out over the longer timescale.
YokoZar 13y ago
It's entirely plausible they still profit from your couponed purchases, just not as much as if you had paid full price. Price discrimination is generally the motive behind issuing coupons (which still have marginal profits), as a "loss leader" strategy can be more effectively done through means other than coupons Which, incidentally, is one reason why you shouldn't be offering things at a loss on groupon.
- 13y ago

marshray 13y ago

Maybe I'm missing it in the bulk of the article somewhere, but I thought this claim could have used a little more support: In a locust economy, the Jeffersonian middle class is a terrible place to be. It is no accident that the worst-hit victims of the locust plagues of the 19th century were small farmers living the Jeffersonian dream handed to them by the Homestead Act of 1862.

spiritplumber 13y ago

This is really intersting stuff.

loopdoend 13y ago

I fail to understand what Zipcar has to do with the sharing economy. Zipcar provides short term car rentals. The "sharing" bit is pure marketing genius, no actual sharing is involved. If I were to be incorrect here, then hotels would be part of the sharing economy too.

ronaldx 13y ago

Interesting but rather long. tl;dr version: 90% of people are like locusts/zombies, always preying on the best deals. 9% are Jeffersonian middle class - “small, local and independent” entrepreneurs. Whenever they offer anything less than the best deal, locust swarm will retreat, for example to Groupon and Starbucks. As such, small non-scalable businesses are most often loss-making and generally not sustainable. The 1% of people are like vampires, it's implied that they manipulate the 90% against the 9%.

jejones3141 13y ago

Sounds to me like the converse of the left arguing about the evil of companies who have the gall to try to minimize labor costs, especially as new laws drive the cost of labor up. How dare consumers look for deals! Let's give them a label with nasty connotations. If making Groupon/DealChicken/etc. offers is as self-destructive for businesses as the author says, it will be self-correcting.

Taek 13y ago

I felt like the 9% were unfairly painted as the victims of the way our economy works, but almost everything mentioned were vulnerabilities that the 9% deliberately opened themselves up to. By putting a deal on Groupon, they invited the locusts to swarm them. By opening up a cheaper coffee shop next to Starbucks, they made the business assessment that there was a market for cheaper coffee (or whatever experience they are trying to sell). If they were wrong, then they have fallen victim to what is normal business. If they can't operate without using a self-defeating service, they probably shouldn't be operating. But there's plenty of room for smart business at the Jeffersonian level without making yourself vulnerable to swarms. It's one of the reasons my area has almost as many family owned diners as it does chain restaurants.

guard-of-terra 13y ago

I can see how music scene can be an example of the locust economy: There is more and more bands, each of those have smaller and smaller listener base to the point that most listeners are musicians. Therefore musicians consume each other ("eat each other") and not much money is involved. This leads to proliferation of musical styles (I particularly like something loosely described as female frontend fantasy rock, a tiny niche obviously), which is a good thing; but we don't get universally recognized good hits from good bands anymore, which is a bad thing. Anyway, locust economy is a call for Basic Income.

ExpiredLink 13y ago

Isn't this just sociology of the masses a la Ortega y Gasset?

TheMagicHorsey 13y ago

Look guys, this author just falls in love with his own analogies and leaves reality far behind. The Jefersonian Middle Class (as he calls them) isn't made up of a bunch of Groupon-client failures. They don't survive on business that has been aggregated by swarming platforms like Groupon and Living Social. Small businesses are built on relationships, consistent delivery of value, and return customers. The author seems to understand that there are business that don't give a shit about Groupon ... but I can't understand we he treats them like rare special birds. I don't know who he is, but maybe he is an academic, or some sort of isolated professional that doesn't have much experience or contact with small businesses. People don't abandon their usual vendors, partners, and suppliers for some Groupon deal that they know isn't sustainable. Also, people don't abandon the local cafe, diner, restaurant, and bar, because they occasionally use a Groupon deal. These swarming platforms might be a problem for non-performers or those that don't deliver a good product or service, but for those that do, businesses isn't like the horror story the author describes. This is the case of a bullshit story, well written, and designed to climb the Hacker News ranking ... while having absolutely no relation to reality. A lot of fancy analogies ... and absolutely no substance. This guy clearly wants to coin some term that gets picked up by the press and by the community, so he can have some fame as the guy who coined "The Locust Economy" or some shit like that.