Are Humans Becoming Redundant?
Will crowdfunding, online LP/GP platforms, and digital marketplaces displace human beings in the marketing of alternative investments?
We don’t think so.
Have shopping malls shut down, do car dealerships still exist, do people still use realtors? Rhetorical, obviously; however, it makes the point. Technically these industries shouldn’t exist, yet people, seemingly, still like to interact with humans. Those within these industries have had to adapt to new technologies and new ways to do business, but the industries themselves still exist and people within these industries still play a critical role.
Can the alternative investment community become more efficient? Absolutely. Are there redundant and outdated systems in place? Without a doubt. However, we still think human beings are important. If you were to ask someone on the street what the most important component of the capital raise process is, 9 times out of 10 they would say relationships – today, right now.
It is also important to recognize that we are in the midst of the greatest technology shift that has ever occurred on earth. The 1000s of drones out there staring at their smart phones is evidence of that. The interesting point, many are starting to see this as a problem. Things have swung so far in one direction that a wave is starting to form pushing things in the other direction.
The more information that exists, the less valuable it becomes. The more mature the alternative investment industry becomes, the greater number of similarities there will be across managers. This is already occurring. Good performance is seemingly a homogenous product offered by 1000s of managers.
Our point, most institutional investors are so overwhelmed by the volume of information available to them and the similarities of that information that they are searching out real live conversations with human beings. Yeah, that could stop happening one day, however, if it does, there will be 17 jobs left on earth and we are all screwed.
Go shake hands with someone.
By Kyle Dunn