Business Model Innovation
I’ve shared my views on this before here at AVC. I believe business model innovation is more disruptive than technical innovation.
A good example of this was moving from web apps to mobile apps, which was largely a technical innovation. While the move to mobile certainly created some new companies, it largely strengthened the market position of the big Internet companies because there was little to no business model innovation.
Compare that to the move from desktop computing to the web. We saw massive disruption as we went from a licensed software business model to an advertising supported business model, which has evolved into an advertising/subscription freemium business model.
I am excited about the move to crypto based business models supporting decentralized apps for this very reason. I think it opens up the possibility that some very large new companies will be created that innovate largely on entirely new business models.
An area that is particularly ripe for this kind of innovation is user generated content or, more broadly user generated products and services.
If you think about something like Instagram, the software is great but could fairly easily be replicated. But the network of users and the content they create is impossible to replicate. That is where the value is created. Or think about Reddit where the community creates the content. Or think about Waze where the users generate the data about which way has the least traffic.
In these sorts of businesses, the ideal model would remunerate the users for creating the content and allow them to take their content elsewhere if a better deal were to emerge.
That is precisely what a decentralized application built on an open data protocol would do from a technology perspective. And the remuneration of the user is what a token incentive model would offer in terms of a new business model.
So why have we not seen this emerge yet? Bitcoin has been around for over ten years. People have been mining Bitcoin and earning tokens for doing so for more than a decade. This new business model is sitting there in plain sight.
Well first of all, quite a few entrepreneurs have tried. Steem is a decentralized Reddit with a token incentive model and it has been around for a while now. There are over 150 decentralized apps in the Blockstack app store (Blockstack is a USV portfolio company).
So it is not for lack of trying.
I believe the primary inhibitor to this business model innovation is that it requires users to own crypto-assets and store them in a wallet somewhere and be comfortable using them to access decentralized apps. That has not gone mainstream and we need a killer app to make that happen. That is why USV has gotten behind Libra. We think it could be the thing to get mainstream users there.
But if not Libra, I am confident it will be something that gets billions of users holding and using tokens on our phones. And when that happens, a wave of business model innovation will be upon us. I’m super excited for that.
I don’t disagree with you on Libra Fred as valuableI am not as much a believer that the ease of onboarding is the major holdback in consumerizing the segment.Just as scarcity is not the same as value, ease of use is not the same as behavioral motivation either.If you 10X the number of people with CK accounts as it is today would that translate to success for the game.Dunno.Find something that people must have, really want to play or participate and they will crawl through solid walls to get there. Early days of gaming is the best example that i lived through when I build endless tech support offices for Creative.Ease of use will help and damn well better get there but it is not the end game, want is, behavioral reflex is.To me at least.
I don’t think that friendly wallets are what’s holding users from switching, even if they are getting rewarded for that. Steem had a very easy to use built-in wallet that came automatically with signing up. Users only switch if there is pain, and not just increased gains. The psychology of change is such that people are risk averse in the domain of gains and risk seeking in the domain of losses. Owning your own data and being rewarded for your actions has been a long time blockchain value proposition. And I’ve written about that for a while. What might move users faster is a catastrophic event that hurts them, not just annoys them. Or something entirely different, that you can’t do on the web today.
Disagree.That is true in applications, not in my experience in gaming or communities.Negative ramifications never (really never) are the impetus for mass adoption, positive response is.Sure negative consequences like 911 drove Meetup but in from my opinion in the most positive way.Joy is more powerful than pain for market creation.One of us will invariably be right.Doom and gloom is boring even at the hands of the best writer.
I’m referring to users’ behaviors for trying new applications. (which was this post’s topic)The psychology of change has been studied and known. People change out of fear/pain more rapidly than from the promise of some incremental gains. If you are wearing a t-shirt and it’s sunny and I offer you another better one, you will be less inclined to take it, versus – if it’s raining, and I offer you an umbrella that you don’t have, you will likely take it.
I am talking about change for the sake of experience and joy, not incremental economic gain.I just think of it differently.It’s like trying to sell an enterprise package that saves money over one that creates an extended market with growth.The later is where you want to be.i just don’t think you can mash up gaming, privacy, trading and whatever into one basket. They are different markets each with their own behaviors.We approach markets differently is all.
Yes, we are ripe for business model innovation, and not just from blockchain. The shift toward the Relationship Economy is just beginning, and it will take us back to a more human capitalism, to the kind of more friendly customer relationships that existed before the past century of mass-marketing brought a narrow transactional focus to commerce.As you suggest, blockchain has promise to facilitate more equal relationships as well. My latest blog post outlines how relationship-centered commerce can evolve. It includes some discussion of the opportunity for a relationship layer to be added on top of a blockchain base, by tracking relationships and providing a new kind of flexibility in micropayments to enable volume discounts, and customer participation in value adjustments.
remember that 1//9/90 UGC ‘rule’ of creators/’remixers’/lurkers.For 99% of a potential audience crypto token renumeration is all but completely irrelevant as the sum total of their potential earnings will be diddly squat.So the potential market is the 1%.Question then is can the 1% be sufficiently motivated to jump ship and move their content elsewhere on the back of token renumeration – AND will the 99% follow suit.Not sure.Patreon offered this functionality and seem to have hoovered up some A-list creators. I’m not sure YT is worried about them.
Clearly not. Or they would have replicated the business model on their platform. I expect they will at some point
Both points are true one believes: there is need for easier usage plus some sort of catastrophe could accelerate the move into cryptos. But so could the emergence of enormous opportunities as a result of the crypto economy.The Deutsche Bank crisis, the way it is evolving could create a global crisis.In the very short term, a jump in Bitcoin prices above the recent highs would be confirmatory.
DB won’t be contagious at all. This is not 2008 redux. Recall even in 2008 when certain banks went under, there were ready buyers for all their market positions. Futures positions were transferred seamlessly. Of course, the price was different.
I believe the opposite. Instead of any financial catastrophe accelerating the move into crypto, it will have the opposite effect and reduce the move to crypto (which is already small compared to the global currency or asset markets).
Yes, people will crave more stability / accountability.
.The Deutsche Bank “crisis”?DB tried to merge with Commerzbank back in 2017 and got formally kicked in the nuts in April 2018.The DB CEO announced in May 2018 that there would be “tough cutbacks” in the immediate future. This was at the annual meeting.DB paid $2.7B to the US DOJ for bad acts in the MBS marketplace from before the 2008 finanancial crisis.DB paid $630MM to the DOJ to settle charges of Russian money laundering.DB paid the US and the UK $2.5B to settle charges of interest rate manipulatiion and market rigging.DB is looking at a Q2-2019 loss of E2.8B — Euros.Plus, DB banks the Trump Organization.DB came to the US with great fanfare saying it would slug it out with the Wall Street big boys. To do that, you have to get your name on the cover of a lot of red herrings.Why would Wall Street cooperate with someone who has no US underwriting experience, no distribution network — one reason, mullet money.There is no DB crisis — they are exiting US and German investment banking while using it as an excuse to unload 20-25% of their overhead (much more than those involved in IB-ing).[BTW, the layoffs started this morning.]The mullets are going home, licking their wounds, exiting a business they suck at, and using it as an excuse to take a meat ax to their organization — something very difficult to do under German law.DB is the 15th largest bank by assets and isn’t a pimple on the world’s financial ass.The ripple impact? Uhh, not so much.JLMwww.themusingsofthebigredca…
Remunerate. Not Renumerate. (paragraph 7)Remuneration. Not Renumeration. (paragraph 8).
Girish Mehta:There is no doubt the majority of contributors except (sic) (accept-what an oversight can do) Fred’s mental spellchecker didn’t catch it and meet remuneration. Fred definitely doesn’t require us to defend him on grammer. He is much more literate than at least the principal here.We are the first to highlight any disparities in anyone’s business and social foundation we disagree.The entire last paragraph regarding Libra ♎ and his intent is accepted but not agreed on. Similar to a good character in a movie you enjoy then realize that is the villian.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
I did not understand what you said, but [email protected]:disqus almost always likes to correct any typos in his post and has mentioned that before….have been observing this for many years.In this case, there is also a certain pov (not mine) that renumerate can be a word and is not simply a typo, which might muddle up the meaning of “renumerate the users” in the post.
Girish Mehta:Plain and simple there was so much you could have provided in a pov that it didn’t make sense for you to get caught up on renumerate. But we understood your response.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
My “point of view” is pointless (pun intended) because there is a fundamental difference in the premise. Fred’s premise is that ease of use/onboarding is holding back consumer adoption of crypto. I have disagreed with that here before and have said that the primary issue is the absence of significant unmet consumer need or want.edit: These can seem difficult to differentiate because one can argue that “the reason consumers don’t want something is because it is hard”.But, there is a difference.Thanks for the clarification.
You say there are many examples where Fred likes people pointing out grammar mistakes.Perhaps you can renumerate the examples like remunerate.
I could, but there is a difference between what I can do and what I will do.Why don’t you see Fred’s response above and that he immediately corrected the typos today.What I actually said was, and I quote – “fredwilson almost always likes to correct any typos in his post and has mentioned that before….have been observing this for many years”. It’s simple – Why don’t you ask Fred if that is an incorrect statement?
I know Fred likes when people point out typos. Just an attempt at humor. 🙂
Girish Mehta:Thank you for that clarification!We now can plainly see with the eye glasses (insight) you provided.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
Thanks!!! Crowdsourced copy editing. I need a model to remunerate those of you who regularly so this for me.
Touche ! (For the correct use in your response…)
Did you plant a 2nd typo on purpose 😉 ? “who regularly so this for me…” —> regularly *do* this for me.
Most of us have been far too polite over the years to ever dream of pointing out your typos and grammar bombs.
To start this concept would 1) leverage the capability of decentralization 2) offer a use case not accessible through traditional currencies. For a stable and liquid crypto currency.
“we need a killer app to make that happen.”- there will be several killer apps enabled by Libra, not a single one.Libra itself will be a killer ecosystem, probably destined to become among the top ones out there, at the Bitcoin and Ethereum scale level.
Marking this down. See you in 24 months on this one.
When the opportunity cost of not holding crypto becomes larger than the cost of holding, people will gravitate to crypto. There isn’t a compelling reason to own crypto now-and Libra doesn’t make a strong case that it is going to be the answer based on the initial comments by both pro and anti Libra camps.
Micro payments didn’t work 15 years ago. A new platform won’t change that.
Micropayments 15 years ago were not truly micropayments. With crypto like XLM, it’s possible to do global instant transactions with near zero cost (less than 100th of a cent).A new platform is already changing the game – http://www.masmic.com 🙂
To push back, why won’t they work? Digital books didn’t work and then they did. Venmo works. It’s really about fiat vs crypto right now I think.
Management cost. Everyone seems to think that everyone wants to manage 100 crypto currencies where you are building the equivalent of a cop of joe once a year for your tweets or pics….
I believe “catastrophe” is already happening. Perhaps not in the worlds of those who have the ability to sit and read this during their morning coffee routine. HOWEVER catastrophes are happening. Infrastructure build out needs to happen for mainstream adoption. Cell phones needed to get to the corners of developing worlds before they were adopted and utilised. Facebook is already there so unfortunately Libra might be the centralised crypto for the masses that will succeed but it might just be that middle stepping stone to open up decentralised crypto usage. *When crypto can be used for obtaining goods (bread, flour, sugar, water) and services (communication, electricity etc) for everyday use quickly and easily then the use of crypto will spread like a wild fire.*
Have you or anyone started to read Fall or Dodge in Hell? http://www.nealstephenson.c…A post Blockchain world!!
Interesting how you relate a “coffee routine” to “wealthy”.My reference “ability to sit and read” was to those who are not forced to shovel mud, put out a fire, fetch water, etc. In the mountains of Nigeria, Columbia and the hills of Indonesia I have had opportunity to sit and drink amazing coffee but had electricity, plumbing, transportation readily available because I paid for it with either a fiat currency or another type of local and centralised asset ie. Soap, Coca Cola, petrol.
Kelly LeValley Hunt:Understood! Misunderstood initially.Enjoy your coffee ☕.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
.Crypto is flirting with the “if you have an erection for more than five years, call your doctor” territory.Crypto has been enthusiastically touted as the “next big thing” by some very smart people for a long, long, long time. The cleverness of the people involved is the only thing that prevents me from calling it a scam and holding out hope that there is a rainbow scheduled for tomorrow.Today, Freddie says the magic words — “…we need a killer app…” that many have been saying for a long time.Crypto has gotten a regulatory response from both the IRS and the SEC.Dissect for a second the implications of Freddie’s anecdote about paying his caddy in bitcoin some time ago.That was a taxable event to the caddy — no surprise there, right? But under current rules, he would have to value it to establish basis and recognize that basis as income.It was a taxable event to Freddie. He has to identify the specific bitcoin he spent, identify its unique financial basis, and recognize taxable income on the appreciation in value between his original basis and the value of the transaction.On the other hand, he could have handed the guy a Benjamin and had a summer shandy and called it a day.Facebook, et al, cannot be trusted to hold our data. Now, we want to wiggle into bed with them?A basket of diverse currencies is supposed to give us freedom from our Libra asset backed concerns? Isn’t that just a multitude of volatile assets. There is a reason why the entire oil business settles in USD.We have seen this movie some years ago. The projector burned up.Any idea has to be tested by the aspirin v vitamins test. Is it a pain reliever — an aspirin? Does it enhance our health — a vitamin?I am not seeing Libra doing anything to relieve any pain of mine nor improving my financial health.The sovereign nations of the world are not going to allow a cross border digital currency to circumvent their tax, securities, money laundering, and criminal laws. Not. Going. To. Happen.This is starting to feel a little desperate. Call the doctor.JLMwww.themusingsofthebigredca…
I call it flirting with the “Marxism has not succeeded yet” territory.Person A: Marxism has not succeeded.Person B: No, Marxism has not succeeded yet.Another way I think about it is as the “time axis” version of the No True Scotsman argument. Can’t argue against it.
.OK, so do you know who David P Goldman is? He used to write for the Asia Times under the name “Spengler.”He often used that “no true Scotsman” analogy when explaining intelligence matters and how the spooks got almost everything wrong by superimposing their own logical fallacies into their analysis.He did not reveal his identity until 2009. He was widely thought to have been a high level American, MI6, or Mossad officer for his keen insights into the Middle East.Many in the game consider him to be the brightest intel analyst in the current time. He routinely writes about geo-ecoomics and geo-politics.JLMwww.themusingsofthebigredca…
No I didn’t know of him till now. I see now that he has written a book.Not surprised about the logical fallacies of intelligence analysts.
Doctor says: if you’re not sick, I don’t need to see you. Let other real patients see me. – so maybe you’re not the right patient for the blockchain medicine 😉
.Same doctor, a psychiatrist, says: “Watch out for the people who think they’re normal. The only normal people in the world are the ones we don’t know very well.”The logic behind crypto — normal?JLMwww.themusingsofthebigredca…
The psychiatric patient pokes his head over the fence of his hospital and sees people on the street. He asks: And how many of you are in there?
.Haha, that’s an old joke, but funny. Of course, the big question is — are you the patient or the public?Right now, crypto looks like the patient.JLMwww.themusingsofthebigredca…
My father, who was a psychiatrist for twenty-six years, used to tell the same joke to his patients. “How many psychiatrists does it take to change a light bulb? Just one, so long as the light bulb wants to change.”
And patient says…”Physician, heal thyself”.
‘ ideal model ‘ = ‘ better mouse trap ‘ .
The current “user interface” for people monetizing their own content is very cumbersome. Just look at the number of videos explaining “how to monetize your content on YouTube!”. Etc. It is very painful, and yet lots of people are figuring this out. Facebook you are essentially donating your content to the company.I see no reason Youtube could not be completely disrupted by another site that allows content creators to monetize instantly and easily. Same with search. But how do you get the eyeballs? Especially when Google owns the “platform” that you view on?
From a friend who dates a former Instagramner – ‘ it’s roughly a buck a month per follower. ‘Constant – constant! – production and posting over a year for them to 17,000 followers and when the posting stopped….the views stopped and the $ stopped.Dead in water idea.De minimus.
“…we need a killer app…”or.. a killer hardware form factor.
I was at a startup in 2000 that was trying to start a giant UGC marketplace and provide the biggest/most popular contributors with a % of revenues. The challenge then, of course, was that nobody had the bandwidth to make this kind of content sharing viable. There were tons of contributors but no consumers because it was just too tedious to try and consume the content over slow connections.As a run of the mill user, paying me in crypto for my little contribution to a network or platform isn’t going to be that exciting. It’ll only be a true incentive for the over performers and the cheaters who find ways to game the system (like YouTube now). What’s more interesting is being paid for my attention/consumption (vs my content). Content *consumers* in my experience are much harder to come by than content creators.I keep thinking that the beach head for consumers specifically for decentralized apps is with non-enterprise users who are extremely motivated around security and privacy. And I think one of those markets could be political parties/campaigns/orgs and similar entities in that universe.
Management effort not worth reward.Charlie Munger – ‘ show me the incentives and I will tell you the behaviour. ‘
If we were to do a factor analysis as to why crypto based business models for powering UGC based networks have not taken off, there would be three major factors in the following order:1. Most users simply do not care enough for the monetary upside. How many are willing to try a Waze alternative to make $1-2 per month? And ironically, the ones who care too much can hurt the network through over-participation and reducing quality of content. So, the absence of a searing unmet pain/need is real. After all, the free ones work mighty fine. The lack of privacy and agency are annoyances, not strong triggers for change. (some exceptions here like credit are interesting. Bloom is something to watch out for)2. The ones who might care just enough but not too much will still need to navigate the hells of crypto on-boarding and usability and they likely give up. But 1 is the bigger problem, not 2.3. Aside from the bitcoin SoV opportunity, crypto to reduce payment friction and ease international remittances is likely the more accessible opportunity in the near term. The Web3 crypto revolution might still unfold in the longer term, but how long is the long term is unclear.And as much as I hate to say it, Facebook Libra is the best shot to make crypto go mainstream, at least for payments and remittances. Is it really decentralized? No. Will it satisfy the purist? No. But 2.4 B MAUs is a really big deal.
If Libra is the best shot to make crypto go mainstream, that is bad news for crypto because Libra is not going to happen the way Facebook envisions. Sovereign nations across the world cannot allow it to happen.The Facebook FreeBasics disaster in India is a case study of how out-of-touch multinational corporations can be. Facebook thought it was well set with FreeBasics, upto the point where it got killed.https://www.theguardian.com…
You might be right on this and I understand the freebasics fiasco well. But we will also be wise to not under-estimate facebook, its user base, and the influence of its consortium.
Very well put.
At Blockstack, we gave an internal name to such an app i.e., the first app that gets hundreds of millions of users. We call it the Apollo app. We’re explicitly creating the conditions for such an app to exist. It includes removing friction from sign-up and making it easy for people to hold crypto assets.BTW, most of the 170 apps listed there are built in the last six months. So they’re all very new and in early stages. It’s exciting to have so many independent teams experiment with decentralized apps!
Love what you guys are doing at Blockstack. There are some great apps on the platform with UI/UX that I’d stack up against anything. Yet, even someone like me who’s super interested has trouble switching from, say, Google docs to Graphite (which I think is excellent). Switching is the hardest thing! It really doesn’t feel like the breakout app will be a straight replacement for something that already exists.I think it might come from a market that is highly motivated to keep their data secure and want something open source (I’m thinking political parties, candidates, groups). That market will create the bridges to mass adoption as they bring their friends and families into the picture.
Thanks for your support!I think it’s similar to how mobile apps were initially. First we got the “mobile version” of what was already available on the web and then we started getting mobile native apps.Smart contracts are a crypto native functionality and with our Clarity language we’ll likely start seeing crypto native functionality in these apps.
You know, the mobile analogy is really interesting, and I’m going to think more about it.The iPod was an improvement on the Walkman. Then they put a phone in the iPod. Then they put apps in the iPhone. So arguably the most important innovation in technology so far in our lives has essentially been a daisy chain of improvements upon existing user behaviors.So while switching is hard, upgrading might be almost easy.I’ll have to go check out Clarity now 🙂
The # of apps sounds like a vanity metric, and I imagine many already existed but were simply ported to Blockstack?On HackerNews I read some comments re: how Blockstack monetizes by switching out referral codes and perhaps other dishonest practices – can you speak to that to clarify?
It’s a metric for developer traction of independent teams actively building on the platform and actively participating in our App Mining program.No, these are largely new apps. Barely a handful ported over from traditional web.Referral codes? Dishonest practices? Sorry but what are you talking about? We do not monetize anything related to apps or referral codes. At all.Broadly speaking we have no such monetization practice in place whatsoever .
I wasn’t saying they’d be ported from traditional web.Re: Referral codes, etc – If you want to manage perception of Blockstack better, you or someone likely needs to browse HN comments and other places as they’re happening to then jump in to interact/engage with when people are making these claims then.
This post reminds me of something I wrote seven years ago: “Facebook as Attention Banking Infrastructure“https://brucewarila.com/ech…
Rewarding users for the content they create? Okay. Fine.IIRC, to some extent YouTube does that now, and, gee, amazing that they have been able to do that with without blockchains, its tokens, open protocols, and distributed implementation and apps.If Reddit wants to, Instagram, Facebook, Disqus, AVC.COM, letters to the editor of the NYT, …, fine. For open, just reward people with US dollars. They work for me!I can see a content creator moving, for their newly created content, say, from Instagram to Disqus, but for taking their past content with them I don’t really see that: If some one submits 50 cat videos to YouTube and wants to move to, say, some arrangement on Bing, in what sense will they be “taking” their past content with them? Besides, blockchains have trouble enough with performance without handling TBs of videos of cats.I don’t see YouTube, Bing, Instagram, Facebook, Disqus, Reddit, etc. sharing much of anything; I don’t see them sharing “open protocols”, reward techniques, etc.I can believe that rewarding users for the content they create and contribute is possible. And if the creations and/or creators are really good, then both of them can become famous and, maybe, generate big bucks — the recorded music business does that. But I see no significant positive role for blockchain, tokens, distributed, or open protocols.Again, relational database software is very capable and highly polished. Similarly for server farms, the communications networks, etc. All that infrastructure is fully ready to do really well rewarding content creators.Sorry, but I’ve got a much better idea: For all that great content out there from really talented and hard working content creators, 1000s of them, millions, help their audiences FIND them. We’re also potentially talking lots of niche content and audiences. How ’bout that! And why is that a good business? Because a good solution to that problem will be of high interest (from the CONTENT) to nearly everyone in the world with access to the Internet and will not be easy to copy due to the crucial core technical secret sauce. Basically it’s a math problem — sorry ’bout that!!! And, really, no new business models needed!Ah, maybe people think of pop tarts when they can’t imagine hot dogs; hot dogs when they don’t know about hamburgers; those when they have never learned about BBQ; that because were missing charcoal grilled T-bone steaks; those instead of a great beef stew; that instead of the T-bone steaks with sauce Bordelaise and Chambertin.
The idea is already live: http://www.masmic.com – makes Q&A fun and rewarding using crypto’s ability to enable smart-contract based global instant micropayments.
However, it’s based on the hypothesis Crypto’s value proposition in terms of Internet of Value (frictionless global value transfer) is more important than decentralization which is often touted.
Fred, do you remember in the late 90s when we got a pitch for the search engine that paid users for every search in the form of a lottery ticket? They would give away a certain amount of money every day via this lottery? We passed, but CCP did it (co-founder was a CCP employee, cant remember his name, and the other cofounder was head of marketing for the NBA). They made money on the deal, I think CBS bought it, but then the business disappeared. The search was same quality as others because they private labeled the search. The only difference was the incentive of these micro-payments. But ultimately it wasn’t strong enough to overcome inertia/brand/whatever. It also created an audience of people who really cared about micro-payments. I remember Jerry saying his son and friends would do searches over and over and over again trying to win the lottery. I.e. the audience were people who had more time than money. And advertisers want people who have more money than timeLots of bad ideas from the past become good ideas in the present because of some small micro change that actually changes everything (think of the failed ad-supported email we tried to do 10 years before Gmail!). So maybe paying people to do something they’re currently doing for free might be a great idea, but in reading your post my mind went back to those cheesy TV commercials for the lottery driven search engine that we passed on (Jim Gaffigan was in one of them, and he was funny!)
The next major disruption is of the VC industrial complex – and the models that it allows and perpetuates, models that are wasteful and less efficient than good governance and trusted leadership.It’s naive, ignorant, to think that the business model described above of “move your content elsewhere if there’s a better deal” isn’t already unfolding. This is all possible without blockchain, and already happens. A business model of making it easier might have the demand, however it doesn’t need blockchain or crypto-“currencies.””I believe the primary inhibitor to this business model innovation is that it requires users to own crypto-assets and store them in a wallet somewhere and be comfortable using them to access decentralized apps” – This is a scapegoat. The main resistance are the people who are honest about the costs associated with these false crypto-“currencies” – that the most popular ones are structured as Ponzi-Pyramid schemes, and that we trust democratically elected governments vs. companies and global brands like Facebook who have already been terrible stewards and leaders with countless examples that can be cited.The lack of critical thinking, taking the full picture into consideration in a balanced way, by the majority of the the crypto-“currency” community is abhorrent – though not surprising as that’s the primary function, the allure and structure of a Ponzi-Pyramid scheme.Look at all the damage you’ve already done to society by trying to bypass financial and regulatory mechanisms – the problem is you’re going to be disconnected from the suffering and harm caused from those who have lost money “investing” in crypto-“currencies” – in fact you’re likely excited by it, as this is another one of mechanisms that makes this even more dangerous and powerful than traditional Ponzi or Pyramid schemes: those who bought whatever crypto-“currency” at a price than it currently is are now all incentivized for them to get adopted by society, and by manipulative, hype, dishonesty, or whatever nefarious means only a single or handful of people need to be heartless enough to carry out – political manipulation, lobbying, bribery, murder – whatever the mafia or organized bad actors partake in. Being blind and not wanting to take this into your consciousness as part of the equation, part of the problem to solve, is dishonest and blissful ignorance to the core.If a single token currency will exist, it will be a legitimate currency deemed so by the democratic nations that work together to try to unify into a single unit.
This is orthogonal to the main point re crypto, but I’d take the other side on the point re mobile and lack of business model innovation.Google’s development and promotion of Android as a wedge for gaining share of mobile search was fantastically innovative.Mobile-native startups like Uber were very innovative and have carved out major market positions.Meanwhile FB almost blew mobile by clinging to wrong strategy, only turning it around by embracing native apps and abandoning platform aspirations.Contrast that with those who didn’t innovate such as Yahoo.Thiel made a comment circa 2011 that mobile would be a simple linear move from desktop. He cited Yelp ie “the Yelp of mobile will be Yelp.”Yelp got that memo, didn’t innovate their model for mobile, and has seen a flat stock price despite having had pole position in a massively growing market (mobile/local).
You should have a look at Kin business model. Exactly the innovation you are talking about.kin.org
I’d be interested in your thoughts on whether there’s enough money to go around to “pay” people for their user generated content. To use your reddit example, would someone active on reddit make $1.50 or $50 or $1500 per month? In aggregate, the $1.50 per user is worth a lot to reddit and could amount to billions, but once you divide it so many ways on the network, is the monetary reward of the divided value really an incentive for users? Seems like it could be a disincentive if I’m getting paid $1.50 for the hours I’ve spent on someone else’s site. Once you put a monetary value on something, it can mask the non-monetary benefits of participating.
Having recently done a thesis on a similar topic, I see Libra as the best bet for making crypto mainstream. Although the monetary upside is insignificant to most users, the important thing with Libra is the pre existing network, which is where most other crypto & blockchain based solutions have struggled. A second matter of concern is the adoption of crypto itself. However, decentralization and blockchain can be separated from crypto, as has been done by DeBeers for their diamond blockchain. In this matter, combining the decentralization and security of blockchain, and more traditional monetary solutions might be a good middle ground, albeit it will not satisfy the purists in any way. Another interesting way to approach this may be to look at the insignificant monetary upside, and convert it to something rather intrinsically significant for the users, things like causes for social impact, and the gamification of these ‘contributions’. This in itself solves multiple purposes for facebook as well.There are multiple possibilities for business model innovation in a move to content/data contribution economy, but the participation of already existing mega-networks is the key to the success of these, which in turn means that most of the benefits of such a move would go to existing incumbents.
– will Facebook start compensating users for posting, liking, and commenting?if they do, they would be shooting themselves in the head, because that would disrupt the essence of their current business model: advertising. If they really wanted to give users a share of their attention’s value, they could have done it already, without crypto.That said, possibly other apps/sites could offer that within FB…only if FB lets them. Same as Apple taking 30% of whatever App revenues are. Question becomes: will FB allow content to be monetized inside their walled garden without taxing it?
Cost and friction and…. Crypto opens up a whole new ‘fourth dimension’ for data generation and flow powered by ‘sub atomic’ micro payments. Imagine every electron on the web paired with a base level micropayment unit. It’s the new frontier. It just requires imagination to harness it.
These are media companies.Do you want your life to be a media business? I bet not,
Dicey indeed if they split revenues that way, but worthy of an experiment perhaps.
Paying people based on what metrics? Engagement? We’re going to be incentivizing hype artists and shit posters then vs. high-quality content.I think it’s the wrong tree to be barking up to try to monetize everyone’s content they post. Our value and currency really is our skill, talent, our character, and perhaps our reputation – and if the whole world sees something amazing you’ve created, so long as you have been given credit and links for easy access to you so your true fans can follow or engage with you – or perhaps hire you – then you’ll move up in the world of possibilities.