In pursuit of a more equitable and innovative internet, I'm launching something new 🚀
@VariantFund is early-stage venture capital for crypto networks and founders building The Ownership Economy.
Whats that? I explain here: variant.fund/the-ownership-…
Thread 👇
@VariantFund is early-stage venture capital for crypto networks and founders building The Ownership Economy.
Whats that? I explain here: variant.fund/the-ownership-…
Thread 👇
One of the most remarkable things about the technology we use everyday is the degree to which it is built, operated and even funded by its users.
Think of open source software, user-generated content, marketplaces, crowdfunding.
The Ownership Economy is what comes next.
Think of open source software, user-generated content, marketplaces, crowdfunding.
The Ownership Economy is what comes next.
Ownership has been a powerful tool for incentivizing talented people to dedicate their skills to building startups in Silicon Valley.
While this model has been incredibly successful, it hasn’t been accessible to all.
While this model has been incredibly successful, it hasn’t been accessible to all.
Now, new technologies are shifting the future of work and distribution of ownership value to internet-native models.
From developer to consumer facing platforms, ownership is becoming a new tool for bootstrapping products that are increasingly operated by their users.
From developer to consumer facing platforms, ownership is becoming a new tool for bootstrapping products that are increasingly operated by their users.
Beyond being a positive social endeavor, this more cooperative model taps into one of the strongest market incentives to build adoption & network effects.
The result is platforms that can grow larger and be more resilient and innovative over time.
The result is platforms that can grow larger and be more resilient and innovative over time.
While most prevalent in crypto today, The Ownership Economy is expanding into other areas in tech.
To understand why, we can look to recent history and observe how protocol innovations often expose disruptive new models that, when productized, can go on to impact billions.
To understand why, we can look to recent history and observe how protocol innovations often expose disruptive new models that, when productized, can go on to impact billions.
Protocol → Product innovation cycles fit a pattern:
First, early-adopters use new protocols to do things that were impossible before the technology breakthrough enabled it.
Then, a winning formula for founders is to build products that make the new model more accessible.
First, early-adopters use new protocols to do things that were impossible before the technology breakthrough enabled it.
Then, a winning formula for founders is to build products that make the new model more accessible.
A good example is BitTorrent, the protocol innovation that underpinned the streaming revolution.
While Netflix was mailing DVDs, the breakthrough peer-to-peer technology allowed consumers to access media in real time.
By 2004, it comprised one-third of all internet traffic.
While Netflix was mailing DVDs, the breakthrough peer-to-peer technology allowed consumers to access media in real time.
By 2004, it comprised one-third of all internet traffic.
One person who saw an opportunity was @eldsjal, founder of Spotify.
As CEO of µTorrent, one of the most popular BitTorrent clients, Ek understood that piracy wasn’t about stealing—it was about access.
So they delivered a clean UX around the experience of "every song ever."
As CEO of µTorrent, one of the most popular BitTorrent clients, Ek understood that piracy wasn’t about stealing—it was about access.
So they delivered a clean UX around the experience of "every song ever."
Crypto tokens are the latest protocol innovation to expose a disruptive new model.
Just as BitTorrent allowed us to exchange packets of information instantly and without an intermediary, crypto tokens let us distribute value in the same way.
Just as BitTorrent allowed us to exchange packets of information instantly and without an intermediary, crypto tokens let us distribute value in the same way.
This technology breakthrough highlighted a new model for networks that are entirely built, operated, and *owned* by users who contribute.
This idea — user ownership — is at the core of the success of Bitcoin and Ethereum, the first community owned and operated networks at scale
This idea — user ownership — is at the core of the success of Bitcoin and Ethereum, the first community owned and operated networks at scale
The early BTC & ETH communities were technologists and devs, among the first to recognize tokens as a powerful ownership incentive.
But now, user ownership is crossing the chasm.
The Ownership Economy is playing out in dev infra, fintech, marketplaces, social, and more:
But now, user ownership is crossing the chasm.
The Ownership Economy is playing out in dev infra, fintech, marketplaces, social, and more:
Ownership doesn't always mean a literal distribution of tokens or equity. It also doesn’t mean an app needs to be entirely built on a blockchain.
Rather, ownership can be a keystone of new user experiences, with plenty of design space to explore.
Rather, ownership can be a keystone of new user experiences, with plenty of design space to explore.
Some Examples:
In payments, @CeloOrg is making digital dollars accessible to anyone with an internet connection via a blockchain that, like Ethereum, is entirely user owned and operated.
In payments, @CeloOrg is making digital dollars accessible to anyone with an internet connection via a blockchain that, like Ethereum, is entirely user owned and operated.
@CompoundFinance, a P2P money market, recently completed its journey of progressive decentralization to become a community-owned marketplace for borrowing and lending.
More here:
More here:
@UniswapProtocol, a crypto exchange, has a business model similar to Coinbase—a fee on transactions.
But rather than a company capturing that value, it’s distributed to the traders that provide liquidity & make the product useful.
More here:
But rather than a company capturing that value, it’s distributed to the traders that provide liquidity & make the product useful.
More here:
In social, @reddit recently announced they will reward valuable subreddit contributors with community currencies, the value of which derives from paid membership, tipping, and badges.
More here:
More here:
Consumer marketplace @withFND is transforming the Kickstarter model by allowing creators to tokenize projects.
Tokens can be bought, sold or redeemed, and this form of programmable, digital ownership unlocks new revenue streams from resale for creators & buyers alike.
Tokens can be bought, sold or redeemed, and this form of programmable, digital ownership unlocks new revenue streams from resale for creators & buyers alike.
In consumer, upstart house-of-brands, Arfa, is rewarding customers who contribute to product development with a 5 percent share of company profits.
They hope direct economic incentives can help build a more loyal customer base with lower marketing costs over time.
They hope direct economic incentives can help build a more loyal customer base with lower marketing costs over time.
Platforms like @BirdRide and @DumplingUS combine the scale of software-driven marketplaces with equity value accrual for supply-side operators by allowing suppliers to run franchises that they truly own.
Software ate the world.
So its no surprise that narratives around economic empowerment online are resonating more than ever.
And as the barriers to professional connectivity have fallen dramatically, so too have the hurdles for more equitable distribution of economic value.
So its no surprise that narratives around economic empowerment online are resonating more than ever.
And as the barriers to professional connectivity have fallen dramatically, so too have the hurdles for more equitable distribution of economic value.
Crypto exposed the power of ownership as a way to drive users to contribute to new protocols in deeper ways.
Now, the opportunity is to build more accessible products (and protocols) that bootstrap adoption & participation through better economic alignment with users.
Now, the opportunity is to build more accessible products (and protocols) that bootstrap adoption & participation through better economic alignment with users.
I'm excited to partner with entrepreneurs as the earliest possible stages to help build The Ownership Economy @VariantFund
If you're a product-driven founder who understands how ownership experiences can be a cornerstone of new networks, I'd love to hear what you're building :)
If you're a product-driven founder who understands how ownership experiences can be a cornerstone of new networks, I'd love to hear what you're building :)
