Hypothetical pathways differentiating ectoderm into epidermis or neural ectoderm. In the presence of BMP signaling, epidermalizing transcription factors are generated, leading to the activation of the pathway enabling the cell to become an epidermal keratinocyte. In the absence of BMP signaling, neuralizing transcription factors are produced. These factors activate the gene for neurogenin. Neurogenin acts as a transcription factor to activate the NeuroD gene, and NeuroD acts as a transcription factor to cause the differentiation of the cell into a neuron.