1.0 – The Ownership Economy
While reimagining the UI and transforming Chat with organizational functionality is long overdue. Such enhancements may not be enough to compete with the incumbent Chat platforms. They are too big. The best way to compete is to make them irrelevant. The economic interests of these platforms do not align with their most valuable contributors, their users. And as the role of the individual in value creation becomes more commonplace, the next evolutionary step is toward platforms that are co-owned by users.
Restrictive policies will not level the playing field; they will limit upside or push the winners and their money abroad. Instead, we need to compete by creating better products that leverage revolutionary models. Expanding the number of early stakeholders beyond friends, family, and investors creates the opportunity to avoid the cold start problem. Employee stock options have proven to be a powerful mechanism that start-ups can leverage when competing for talent. And through leveraging the same framework, tokenized ownership –– often referred to as web 3 offers start-ups an unfair advantage when competing for users.
A cooperative (Co-op) is a user-owned and controlled business, where benefits are derived and distributed equitably based on use/contribution (Visa was initially a Co-op). Unlike reward point models where the organization assumes the balance sheet risk, all members participate in the upside and the downside. Although stock options have been highly successful, they haven't been accessible to all. Constrained by geography and legacy financial infrastructure, it has been infeasible to distribute ownership at the scale required to reward every person who participates in value creation.
Crypto networks propose a more efficient model, as blockchain technology has made trust-minimized money (crypto-currencies) possible. We can now achieve verifiable confidence in the form of an immutable public computation rather than relying on blind trust in third parties. Enabling fiduciary interactions/transactions that we previously dared not do on a global public network. Further, commitments to continued cooperation are written in code rather than legal contracts offering two core benefits, cost efficiency & social scalability.
Tokens also have a richer and more frictionless design space than traditional reward mechanisms. They can be distributed programmatically, with the potential to reward participants versus those who buy in; they are effectively free to deploy, and they can transfer value in the same way we transfer information—instantly, to anyone, anywhere in the world.
While tokens are notorious for their ability to raise significant amounts of capital out of 'thin air.' We believe that they are better suited as fuel for network growth. It is common knowledge that companies buy growth via ads on Google / Facebook; however, the spend does not guarantee long-term engagement and loyalty.
In 2015, Facebook's mobile app install advertising business reached $2.9 billion in revenue, comprising 17% of Facebook's total ad revenue. That’s a huge sum of money going into the pockets of an intermediary platform—Facebook—rather than flowing to app developers to invest in R&D and product improvements, or reaching the end-users in the form of lower prices or greater rewards – https://variant.fund/writing/the-ownership-economy-2022
Putting tokens in users' wallets instead of spending money on traditional marketing is a fantastic way to align network contributors via shared ownership and upside. User-owned networks can outperform purely investor-owned networks by ensuring that tokens are more valuable to network participants (users) than financial holders. Does this mean pure financial holders offer no value? No. Token models should also incentivize financial holders to contribute and assist in developing the network.
Braintrust announced a private BTRST token sale of USD$100 million led by Coatue with participation from Tiger Global. Coatue & Tiger's contributions will span far past their financial investments. Coatue manages $48B and has backed Spotify, Instacart, Doordash, Chime, and other transformative projects. BTRST is only its second token-related investment. Coatue brings deep expertise in talent recruitment and, in addition to becoming a client on Braintrust, will be collaborating on new network products and features built for recruiters.