We're circling the same thing from different directions. I came at it through Coase and the firm. You came at it through the individual and the community.
You put something I hadn't been able to name: "Distance is what enables extraction." I've been working with large organizations for years trying to help them restructure into something closer to what you're describing.
The NYT profiled a guy last week who built a $1.8 billion company with two employees. All AI. His confession at the end: "I kind of want to hire people because I'm lonely."
Your practice economy is the answer to that loneliness. I just wonder how many people can find their way there without the forty years your newspaper friend put in.
Thanks for this note. I was happy to find your article. So many people seem to be avoiding the question. It’s a complex problem we’re circling, isn’t it? The challenge I think for many people is that developing a practice requires significant investment of time and effort before you see a return. Like farming. You have to survive somehow while the plants are growing and it takes patience, whereas a job pays on day one.
The farming point is the hard part nobody wants to talk about. A job pays day one. A practice takes years before anything grows. Most people can’t afford that gap. That’s the question I keep getting stuck on too. Glad our pieces found each other, Dave.
Serious food for thought. And I'm wondering what we should be steering our youth towards now (further education, trade schools.)? Oh to see apprenticeships return 🤔
This is the best framing of the external work that comes after the internal work of #TheGreatRepurpose I’ve found so far. An exceptional historical perspective on the role of small business in our new AI powered world order. And without calling it entrepreneurship. Instead, speaking plainly.
Focusing on the fact that work, the work of creating, managing, and maintaining profitable customer relationships. REAL Relationships as I’ve written. That this is delivered with an intention behind every interaction that goes beyond concern for the transaction. With an intention of providing not just value, but recognition of our shared humanity. Recognition that we are all in this together. That the owner of a practice cares about the people and the communities they serve. At a personal, not global scale.
Yes. The practice economy describes human scale business perfectly. Don’t you agree?
Dave, this is a powerful framing—the idea of compression really lands.
Where I pause is on what comes next. I don’t think this resolves into a clean return to the practice economy. It feels more like a split.
Some will move toward practice—relationship-driven, local, reputation-based.
Others will operate in highly leveraged, AI-augmented systems with fewer people and higher expectations.
The gap between those paths may widen.
I’ve been thinking about this as an intelligence wealth dynamic. Those who use AI to extend their thinking will compound capability. Others will drift into substitution, where the work gets done but the skill erodes.
That divide could show up in both worlds.
Your point on “creating a customer” is the anchor either way—that muscle only gets more valuable from here.
I don’t disagree. Corporations aren’t going away any more than farms or factories went away. Compression doesn’t mean they disappear. The work still gets done, just more efficiently. What you describe as highly leveraged, AI-augmented systems is what I think corporate work starts to look like under compression. Starting a corporation focused on providing goods or services at scale will remain a viable alternative, and probably a good one for those who are low on people skills.
We have a lot of learning, relearning and unlearning to do, so that work is relational again, not just transactional & extractive. I’ve never had a corporate job and live in a pretty small community where things look like what you described -to some degree at least- and I think it might weather the storm better. But we’ll see.
This post is a really great framework for comprehending the AI phenomena and then (hopefully) thriving in it. And just to think we are at the very beginning of one of these compression cycles. It's so huge and "silent" like the inside of a hurricane that you can't see the immense danger.
The graph helped me understand this phenomena better and got me thinking of what kinds of thinking to do and actions to take. Thanks Dave.
I liked your post but not the reality it introduces. It's how Neo might have "liked" the red pill. Once down the rabbit hole, there is no coming back. Am I "the one" to become a Practitioner?
The comfortable "corporate job" I had hoped to find is probably just a construct in the Matrix as I float peacefully in one of those pods.
This is fantastic Dave. I've never thought about disruption cycles as a "compression", and I love the contrast of compression and the practice economy / community as essential and incompressible.
Brilliant article Dave, a little bit frightening but a whole lot more inspiring.
Love this Dave. Great writing and pointing to some hard truths.
So happy to be part of shaping new possibilities with you and the rest of the school.
Also, was at an event last night where ‘compression’ was used in a similar but different way. Still stewing on all that.
We're circling the same thing from different directions. I came at it through Coase and the firm. You came at it through the individual and the community.
You put something I hadn't been able to name: "Distance is what enables extraction." I've been working with large organizations for years trying to help them restructure into something closer to what you're describing.
The NYT profiled a guy last week who built a $1.8 billion company with two employees. All AI. His confession at the end: "I kind of want to hire people because I'm lonely."
Your practice economy is the answer to that loneliness. I just wonder how many people can find their way there without the forty years your newspaper friend put in.
Going to sit with this one, Dave. Thank you.
Thanks for this note. I was happy to find your article. So many people seem to be avoiding the question. It’s a complex problem we’re circling, isn’t it? The challenge I think for many people is that developing a practice requires significant investment of time and effort before you see a return. Like farming. You have to survive somehow while the plants are growing and it takes patience, whereas a job pays on day one.
The farming point is the hard part nobody wants to talk about. A job pays day one. A practice takes years before anything grows. Most people can’t afford that gap. That’s the question I keep getting stuck on too. Glad our pieces found each other, Dave.
Me too.
I really enjoyed this Dave!
A great read and a really useful framing of this next shift.
As someone 20 years into a micro business it resonates - the shortened feedback loop and the incremental building of value through work well done.
Thank you for writing this. It found me when I needed it.
So glad to hear that! I’m actually going to be having a live chat about this with my publisher later this month. It’s free to join, you’re welcome to come. https://rosenverse.rosenfeldmedia.com/videos/connection-community-and-the-future-of-work
Serious food for thought. And I'm wondering what we should be steering our youth towards now (further education, trade schools.)? Oh to see apprenticeships return 🤔
This is the best framing of the external work that comes after the internal work of #TheGreatRepurpose I’ve found so far. An exceptional historical perspective on the role of small business in our new AI powered world order. And without calling it entrepreneurship. Instead, speaking plainly.
Focusing on the fact that work, the work of creating, managing, and maintaining profitable customer relationships. REAL Relationships as I’ve written. That this is delivered with an intention behind every interaction that goes beyond concern for the transaction. With an intention of providing not just value, but recognition of our shared humanity. Recognition that we are all in this together. That the owner of a practice cares about the people and the communities they serve. At a personal, not global scale.
Yes. The practice economy describes human scale business perfectly. Don’t you agree?
Dave, this is a powerful framing—the idea of compression really lands.
Where I pause is on what comes next. I don’t think this resolves into a clean return to the practice economy. It feels more like a split.
Some will move toward practice—relationship-driven, local, reputation-based.
Others will operate in highly leveraged, AI-augmented systems with fewer people and higher expectations.
The gap between those paths may widen.
I’ve been thinking about this as an intelligence wealth dynamic. Those who use AI to extend their thinking will compound capability. Others will drift into substitution, where the work gets done but the skill erodes.
That divide could show up in both worlds.
Your point on “creating a customer” is the anchor either way—that muscle only gets more valuable from here.
Been exploring related themes here:
https://davidarmano.substack.com/p/the-intelligence-wealth-gap
And similarly on compression of creative craft here
https://davidarmano.substack.com/p/the-compression-of-creative
I don’t disagree. Corporations aren’t going away any more than farms or factories went away. Compression doesn’t mean they disappear. The work still gets done, just more efficiently. What you describe as highly leveraged, AI-augmented systems is what I think corporate work starts to look like under compression. Starting a corporation focused on providing goods or services at scale will remain a viable alternative, and probably a good one for those who are low on people skills.
Great stuff, Dave. A pleasure to read. You have a new subscriber!
Thanks Pete!
Great line - "The practice economy is what keeps a community running. It’s knitted together through relationships, reputation, and service."
Thoughful and thought-provoking.
We have a lot of learning, relearning and unlearning to do, so that work is relational again, not just transactional & extractive. I’ve never had a corporate job and live in a pretty small community where things look like what you described -to some degree at least- and I think it might weather the storm better. But we’ll see.
This post is a really great framework for comprehending the AI phenomena and then (hopefully) thriving in it. And just to think we are at the very beginning of one of these compression cycles. It's so huge and "silent" like the inside of a hurricane that you can't see the immense danger.
The graph helped me understand this phenomena better and got me thinking of what kinds of thinking to do and actions to take. Thanks Dave.
Thanks Fred, I'm glad you liked it.
I liked your post but not the reality it introduces. It's how Neo might have "liked" the red pill. Once down the rabbit hole, there is no coming back. Am I "the one" to become a Practitioner?
The comfortable "corporate job" I had hoped to find is probably just a construct in the Matrix as I float peacefully in one of those pods.
Haha project NEO well-named
This is fantastic Dave. I've never thought about disruption cycles as a "compression", and I love the contrast of compression and the practice economy / community as essential and incompressible.
Great text! I think you are spot on. Thanks Dave!
Thanks Jan!