Dynamic Ownership and the End of the Internet as We Knew It
The majority of the world’s new wealth is being generated online.
That’s not going to change. If anything, it will only intensify.
However, all of that new wealth is yielding squat in benefit for most of us. It’s not providing the economic progress technological innovation used to provide.
That’s because this new wealth is being held back by an antiquated financial system that was built when people still believed the earth was flat.
Fortunately, things are about to change, and when they do… nothing will be the same.
Soon, most people will be part owners of the companies they do business with or support. Those that don’t off this, do so at their own peril.
Yesterday I wrote about how Reddit’s CEO, Yishan Wong, is planning to issue ownership in Reddit to the users of its site.
It’s a bold move that has a level fairness and integrity we don’t expect from business leaders anymore.
It’s fair because these users are the same people that put the time and effort into making Reddit a great site to visit, and they’ve been doing it for years.
So, why is this going to change everything? It’s the start of something called dynamic ownership.
It’s going to end the free ride Internet companies have had for the last two decades. Companies that are exceedingly profitable because they don’t pay the people that do the work they make money selling.
Once people learn to expect ownership for the work they do online, few will spend time on sites that don’t award it.
Here’s an example.
Let’s say I start a challenger to Yelp. My goal is to build a site that has higher quality reviews, written by verified customers. It’s a win win.
Normally, Yelp would be hard to unseat. They have lots of existing content and people are used to using them. However, they don’t reward reviewers/users with ownership. I do.
So, I start by crowdfunding the venture.
How? I build a prototype site and demo it on Kickstarter (or some site like it).
I then offer the initial group two million shares at a dollar a share, using a loophole in the law that avoids triggering a public offering. Ownership is awarded to this group in the form of a corporate coin like bitcoin.
When I launch the site, reviewers and site users earn ownership (coin) as they contribute to the site drawing from a different pool of stock that uses the same loophole.
Soon, millions of reviews are up and the site is humming. Yelp’s traffic plummets as my revenue shoots to the moon (and given that the system is built in “the cloud” and the ads are run through third parties, the costs of the system are nearly zilch relative to revenue).
It’s not long before the people working on sites like this are able to earn a living from the money they earn this way.
When this happens, we’ll know that this new economy has found a way beyond the silly commercial malware and billionaires in hoodies it produces today.
PS: This is a great example of a win-win-win (everybody involved in making the company a success wins) approach to entrepreneurship. The type of solution that made American entrepreneurs the best in the world for two centuries (and why entrepreneurs from all around the world come here to start companies).