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I’ve seen it time and time again: the argument that the internet is a meritocracy - a system in which the most talented and able are rewarded. This argument is especially popular in the world of startups, where we're told that the best and brightest rise to the top.

I recently read an article in Forbes, The Fable Of Market Meritocracy, which addresses the concept of meritocracies in markets generally. It got me thinking about the internet, and whether or not the internet really is a meritocracy.

In theory, meritocracies are a nice idea. But as Shikha Dalmia explains in her Forbes opinion piece, merit is a problematic concept. After all, merit is an intrinsic, subjective characteristic, but one that doesn't always produce results in the real world.

In my opinion, the internet is not a meritocracy. You may be brilliant, but that doesn't mean you're going to succeed. While there are plenty of examples of highly-educated people making big money on the internet, there are plenty of Average Joes, dropouts, hobbyists and teenagers who have struck it rich too.

Taking the concept of merit to the product level is even more instructive. Your UI may be gorgeous, your application may be brilliantly architected, you may offer ten times more functionality than the competition, and you may have an innovative business model. But none of these things mean that you deserve to be -- or will be -- successful.

What truly matters? The value your product delivers. Nothing more, nothing less.

Arguably, the internet is perhaps the best reminder of that. Some of the most successful online properties aren't works of wonder. From Craigslist to Plenty of Fish, the web is littered with 'ugly' and/or simple websites that beat out slicker, more robust websites built by more 'talented' and 'capable' competitors. At the same time, the web is littered with beautiful websites started by smart people that really haven't gone anywhere, despite all the 'merit' they had.

Take, for instance, Pownce, a service some argued might be a Twitter killer when it launched. It sported a far more robust feature set, and was founded by well-known Silicon Valley entrepreneurs. The New York Times wrote that it had the "potential to be powerfully disruptive". If there was ever a startup with 'merit' on multiple levels, Pownce was it. But for all of its merit, the market failed to reward Pownce and it failed. Clearly, there wasn’t enough merit to make up for the lack of value.

None of this, of course, means that you shouldn't focus on your user interface, application architecture and feature set. Or that it doesn't help to be brilliant. All of those things have the potential to be a part of the value creation process. But you can't expect to compete on merit alone. You have to actually deliver value. Unfortunately, tech entrepreneurs are often lured into focusing more on playing up their supposed merits than on building things that offer value. This is especially true of those who get too caught up in the echo chambers controlled by popular tech bloggers and the Twitterati.

That's a mistake. Value comes in many shapes and sizes, and can be created by people from all walks of life. The great thing is that the internet has made it possible for even more people to create value in new ways. You don't need a Stanford computer science degree, and you don't even need a pretty website. That's far more powerful that any meritocracy.

Patricio Robles

Published 22 February, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Andrew Lloyd Gordon

Andrew Lloyd Gordon, Digital Marketing Expert, Speaker and Trainer at New Terrain Limited

I think that the Web is a meritocracy. Or, at least, it provides a more level playing field in terms of business and communications than at any other time in history.

That does not mean, of course, that it is a perfect system.

As with every other sphere in human life, those with the greatest talent or 'merit' and those deserving the greatest success, don't always rise to the top.

As you point out, you don't need a PHd in Computer Science or Silicon Valley funding to succeed. But boy, it really helps?!

So when we see new and better websites emerge we're not seeing the whole picture.

We don't know the calibre of the business and web team. We don't know how well they're managed and if they've got the passion and determination to succeed. We don't always know whether there is sufficient funding in place to capitalise on initial success or sustain during the tough times.

We also don't know if an organisations's marketing is up to scratch. And whether their sales, marketing and PR people have the energy to create a buzz in the marketplace.

There are also more prosaic business factors such as 'first mover advantage' and the natural tendency of people to stick with what they know rather than switch to a new entrant.

Finally, as 'the digiterati', perhaps we have to be careful that we don't become too clever for ourselves and sneer at what we think are 'lesser' online platforms. We may not always know better than the masses.

Human beings are irrational. Markets are made up of people and are, therefore, also irrational.

Markets/people don't always pick what many of us would consider to be 'better' websites and services. All we can do is to offer that value you talk of, provide superb service and keep telling the world about our mousetrap until they do come!

over 6 years ago

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Steve James

It's a "survival of the fittest" market.

Where "fit" is defined as "the most suitably adapted to meet a niche".

over 6 years ago

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rubken

It depends on where the merit lies with a website or service. Craigslist is hideous but it is useful. Merit is not just in the design or even the functionality it is somewhere in the usefulness of the site.

Facebook is an awful web service. It's slow, ugly, cumbersome but it has a gravity due to the size of its membership that will be very hard to overcome for any competitor. Google Buzz has been getting lots of attention since its launch, but I have seen lots of posts on there reading, "This is just FriendFeed but clunky." That's true but it's inside Gmail and lots of people use that.

Andrew is right, what the digeratti think is good is often not what the greater mass of net users think is good. Yes Pownce is a great implementation of microblogging but not enough people cared to make it thrive.

Merit has a kinetic component too. It is about how the site works and continues to develop over time. There is scope to develop great sites and services with very little initial investment compared to traditional offline businesses though. So at least the threshold is low.

over 6 years ago

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laszlo kovari

Unless I miss something I think the whole article argues that talent is not enough you must deliver value as well.

Of course. The only thing I'd add that it takes talent to recognize and deliver value. In other words: there is merit in delivering value! It requires different talent than engineering, but it is definitely talent. (note: the two types of talent are not necessarily mutually exclusive).

Also: what's wrong with dropouts, hobbyists and teanegers? BTW: if they recognized and delivered value, probably they were not average Joes...

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Andrew,

As you point out, you don't need a PHd in Computer Science or Silicon Valley funding to succeed. But boy, it really helps?!

What leads you to believe that?

Finally, as 'the digiterati', perhaps we have to be careful that we don't become too clever for ourselves and sneer at what we think are 'lesser' online platforms. We may not always know better than the masses.

But the digiterati are concerned with merit. When evaluating a service, popular tech bloggers, for instance, are looking at 'merit'. Who is behind the site? What are its features? How pretty does it look? What's the technology under the hood? There's far less discussion of value. After all, how many digiterati actually use the services they critique on a regular basis?

When you say "Markets/people don't always pick what many of us would consider to be 'better' websites and services", this is exactly the point. Markets reward those who offer value. Success reflects that value was offered, merit alone does not. From this perspective, I think markets are far more rational than you give them credit for being.

Rubken,

When you say "Craigslist is hideous but it is useful", the useful part equates to value. Not merit.

Laszlo,

In her article, Dalmia addresses the fallacy of innate talent.

In short, 'talent' is subjective, and in many cases only assigned to people after the fact. But there are plenty of people who have struck it rich online who few would have recongized as obvious 'talents' beforehand.

I know several people who have made hundreds of thousands of dollars selling domain names, for instance. One has become a good friend of mine over the years. He readily admits that he was lucky and when he started buying domains, never had any idea just how much his little domain name 'empire' would net him over the years. His first big sale came after somebody emailed him offering a significant sum to acquire on of his names.

In short, my friend didn't need any talent. He was in the right place at the right time and was fortunate enough to invest in 'assets' that would later hold significant value to others.

over 6 years ago

Andrew Lloyd Gordon

Andrew Lloyd Gordon, Digital Marketing Expert, Speaker and Trainer at New Terrain Limited

Hi Patricio

What makes me believe that having a Phd in Computer Science helps?

Well, the founding of Google for one and Facebook for another. Although I'm not sure if any of those guys actually finished their studies. But they were, or are, very clever computer/programming geeks.

And the reference to Silicon Valley funding?

Well, whilst the term 'Silicon Valley' has broadened from its original geographic reference, many of the key web platforms that dominate (Google, Facebook, Twitter etc) have all secured Silicon Valley funding in their early stages.

As has been commented on many times, there are few places on Earth that match Silicon Valley's combination of academic excellence, sources of funding and entrepreneurial energy.

I didn't say that the digiterati aren't concerned with merit.

I said that we - recognising how arrogant I now sound by labelling myself as a member of the digiterati - can fall into the trap of sneering at 'ordinary people' who don't "understand the Web" as much as us clever people :0

On the point of markets being irrational I'd repeat that human beings are not rational (just check out the amount of research demonstrating this in fields as diverse as psychology, economics, finance and politics).

Markets cannot therefore, in the truest sense, be 'rational'.

Just look at the crazy situation we find ourselves in now because of 'rational' financial markets. And as someone who got into this business during the dot com boom, I, like many others, remember how poor markets can be at understanding value.

over 6 years ago

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social bookmarking

Thank you so much for this post. The truth is gatekeeping is well and alive, and the gatekeepers are often those who are getting paid to preach that Web 2.0 is all about participation, openness, democracy and collaboration.

over 6 years ago

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laszlo kovari

Hi Patricio,

I agree, there is no merit in the opportunistic approach to buying up domains at all.

When it comes to money-merit relationships there is probably a reverse analogy in place: the more qualitative values one produces, the less monetary value the "mass" (the market) attaches to it.

The markets' perception about value differs largely from the "elits" perception about it. This implies that the less qualitative value one offers/has, the more aligned one is with the markets (as always, there are of course notable exceptions especially in technology).

Cheers,

Laszlo

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Laszlo,

In the final analysis, value is inherently quantitative. If you offer a product or service, that the product or service is of value is reflected in dollars and cents. Whether you sell e-widgets to consumers or eyeballs to advertisers, the value of what you're selling can always be measured by what someone else is willing to exchange for it, and in what volume such exchanges take place.

Elites often concern themselves with merit alone. They readily conflate value with merit, but that's a semantic mistake. At the end of the day, it's quite simple: sometimes those with merit do create value. But to offer value, you don't necessarily need to have merit.

over 6 years ago

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Neale Gilhooley

I tend to disagree - I feel that the internet IS a meritocracy but just not for every product or service. Many of our websites are great business tools for their owners, especially the ones who have the right expectations of the site. Many site owners punch well above their weight. But people who espect the earth & more from any site in a highly competitive arena are in for a bumpy ride. 

Also late entrants are going to find it very tough or expensive to build a brand but the same applies in the High Street.

Hard but not impossible.

over 6 years ago

Andrew Lloyd Gordon

Andrew Lloyd Gordon, Digital Marketing Expert, Speaker and Trainer at New Terrain Limited

Hi Patricio I just wanted to clarify a couple of points as you seem to be making assumptions about what I'm saying. Which is, I guess, a problem with this type of dialogue. As I said in my original post, I think that the Web IS a meritocracy. Therefore, I am NOT saying that it's only Stanford graduates and geeks who can make it. However, what I am pointing out is that Google, Facebook, Twitter, Flickr etc have all common roots and similarities (geeks plus Silicon Valley funding etc). I work with or have worked with several entrepreneurs and organisations who make money on the web. But name one of these 'small time' operators who has as much influence, power and reach as Google et al and I think you'll struggle. Again, on VC funding, I'm not quite sure why my post generated your point. All I was saying is that 'Silicon Valley' offers web entrepreneurs a unique mix of academic excellence, sources of funding, networking opportunities, a talent pool of creative people and a huge business drive. All I would say is that I don't think VC's would describe their investing as 'spray and pray'. I think they would claim that their investments are made a little more carefully. However, they recognise that whilst they see merit in an idea the market may not value it or understand its value. On your point of 'rational financial markets' then the description of why we're in this economic mess doesn't sound rational to me. Of course, if what you're saying is that these people and organisations engaged in risky financial transactions because they knew they'd be bailed out is one thing. It's 'rational' but only in the tiny bubble of their world. Because if taking these actions eventually brings whole economies to their knees, puts people out of work, destroys lives and damages society then, in the widest sense, it's not rational behaviour. It's just plain irresponsible. Finally, when you say that, "The average entrepreneur has everything he needs to assess whether or not he's offering value..." misses the point completely. As I said, read the research (check out the books 'Predictably Irrational' or 'Nudge' for example) and you'll learn that all of us THINK we're acting rationally. But we're not. As human beings, we can't help but be irrational. It's how we're designed. Which is why an entrepreneur will assess that they're offering value precisely because we all lack the mental tools to be truly, objectively, rational. Finally, thanks for an interesting post that has certainly made me, and many others, think. Rationally. Of course ;)

over 6 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

On Google, et. al., Google is successful because it offers value. Not because its founders hailed from Stanford. As they say, correlation is not causation. Do smart, educated people create things that offer value? Yes. Do you need to be a smart, educated person to create something that offers value? No.

As for 'small time' operators, your point about influence is moot because we're not talking about influence. Google's founders are billionaires because Google has been able to offer its customers immense value. Nothing more, nothing less. But as it relates to the concept of meritocracy, I'd again point out that there are people with no obvious 'merit' who have acquired far more wealth than the vast majority of Stanford grads, or Silicon Valley entrepreneurs. For the internet to legitimately be called a meritocracy, those who have the best formal credentials would always need to be those who succeed financially. That's not the case.

On the other points, we'll agree to disagree. Quite rationally. :)

Thanks for the great discussion!

over 6 years ago

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Deri Jones, CEO at SciVisum.co.uk

Pablo > For the internet to legitimately be called a meritocracy, those who have the best formal credentials would always need to be those who succeed financially. Can you support that? Why are 'formal qualifications' your sole metric of 'merit'. What about a good old fashioned protestant work ethic? What about the EQ skills which many say matters more than IQ does. Why is 'formal qualification' more important than 'real industry apprenticeship' -which you can argue in a new fast-moving sector is more relevant than academic programs which may lag some years behind what is happening in the industry. Kind of reminds of something I read years ago about the selective FastTrack graduate management programmes at major companies: research showed that 10 years later, the highly successful folk were no more likely to have been in the FastTrack : and those who'd been in FastTrack had not risen in their career on average any more than the other graduates. But maybe someone has some more recent facts on that, than my vague recollection...

over 6 years ago

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Deri Jones, CEO at SciVisum.co.uk

Whoops - posted again, as the formatting got screwed in your portal the first time....

Pablo said:

For the internet to legitimately be called a meritocracy, those who have the best formal credentials would always need to be those who succeed financially.

Can you support that?

Why are 'formal qualifications' your sole metric of 'merit'.

What about a good old fashioned protestant work ethic?

What about the EQ skills which many say matters more than IQ does.

Why is 'formal qualification' more important than 'real industry apprenticeship' -which you can argue in a new fast-moving sector is more relevant than academic programs which may lag some years behind what is happening in the industry.

Kind of reminds of something I read years ago about the selective FastTrack graduate management programmes at major companies: research showed that 10 years later, the highly successful folk were no more likely to have been in the FastTrack : and those who'd been in FastTrack had not risen in their career on average any more than the other graduates. But maybe someone has some more recent facts on that, than my vague recollection...

over 6 years ago

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social bookmarking service

I firmly believe, There is potential to develop great sites and services with very low initial investment compared to traditional companies outside themselves. At least the threshold is low.

almost 6 years ago

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seo services uk

The web has opened up opportunity for those with ideas for business but no idea how to run one (as in "bricks and motar" business) to get started cheaply and create a huge audience for their ideas. Simply amazing.

over 5 years ago

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