Paradoxical Protocols

Posted on July 13, 2017. Filed under: Uncategorized |

We learn early in life that money isn’t everything. My 4 year old niece, operating her first lemonade stand, gets schooled that kindness is more important than profit. At some point…when we grow up a little bit…we face the reality that money may not be everything…but it is obviously something…and it’s something that we tend to want. Each person searches for balance in the tension between doing good and attaining wealth…and everyone lands somewhere on what seems to be a spectrum with those two goals at opposite ends. Yes, there are plenty of companies that crop up, especially these days, that “do well by doing good” or impact investors that use constructs like “good for me and good for the world”…but almost always there feels to be some level of compromise where they are still picking some place on the line that is not a true maximization of both doing good and getting rich simultaneously.

There are many reasons why these two goals sit so far apart on the spectrum, but recently i’ve been thinking a lot about the societal, and more importantly government issued structural paradigms that we use to organize our work. When I graduated from college with my newfound skills, not only was I choosing a market to enter, i was choosing a structure to work in, and my choice would dictate where I sat on this spectrum. Either, I was interested in non-profit work, in which case I was looking for NGOs (non governmental ogranizations like the Red Cross, etc.), or I was looking for corporations, or partnerships, or even government jobs. There was this implicit reality that if I chose NGO to further a cause I’d be forgoing personal wealth, or if I chose a corporate gig I’d be positioning for personal wealth but not advancing causes as deeply as I could.

High level, a corporation’s goal is to maximize profits (both for the entity, and in turn for all those that work for it) and an NGO’s goal is to maximize impact toward it’s cause…but what if there was an organization that existed somewhere inbetween…well, it turns out there is! It’s called a B-Corp, and it’s become quite popular for mission driven companies like say Warby Parker or Etsy, to organize, in the eyes of the government and in turn their employees, shareholders, etc…around principles that optimize for something inbetween profit and impact. In this structure, a graduating senior from college can perhaps escape the tension between wealth creation and impact…but in doing so, i think still chooses something of a compromise as opposed to a rocket ship toward either goal.

One of the most interesting things to me about the blockchain, is that it presents the opportunity to organize work in many more flavors than are available and issued by the government or other societal bodies. It allows you to ask “Can I design a system that optimizes for impact AND tremendous wealth creation for early contributors of work.” It allows you to ask, for example, if it’s ok for the people who begin a deeply impactful mission driven project to become insanely wealth…in fact, is that optimization a key feature that catalyzes early effort and labor in the absense of a brand, large budget, or successful metrics? There is something both fopaux and legally questionable about early contributors to an NGO becoming millionaires in the process…because we already share an understanding of what NGO SHOULD be optimizing for…but it turns out, I can design I system on the blockchain which chooses different optimizations…that lives outside of the 5 flavors of orgnization that the government or society offers me…and you don’t have to like it in order for it to achieve it’s optimal state..the rules are clear…they are encoded into the protocol…they cannot change (at least without going through whatever governence structure i define), and the project will only succeed if there are enough people (you included or not included) who are willing to work for it or fund it…who agree that this unusual optimization shape is possibly impactful, or lucrative, or both…and if there are…liquidity of behavior can be achieved…nobody will get rich if the system doesn’t work…capital investors (in the loosest definition of the word that in this case maybe can include actors that are something between donors and investors) will flow in on speculation and flow out if ineffective/non-useful…early contributors of work will flow in on speculation, both of impact and wealth creation, and flow out if their goals are not being met…and the project will grow in fundraising ability, further speculation from capital markets, and in turn work, if things are accomplished and the system works…and guess what…the earliest workers in the system…rewarded with say a token that appreciates in value as the project succeeds in capital raising, may be getting rich in the process…and that in and of itself…is not a frictional input to liquidity of behavior…

I’ve been sketching out designs for protocols focussed on the organization and administration of mission/ideology driven work that seek to bend the norms of wealth creation and impact…they tend to center around issuing coin for early contribution that appreciates in value with the fundraising success of the project at hand…and they vary in how much of the administrative functions of a traditional org they take on, vs very simple foundational protocol mechanics that can be the infra for some of these upstack functions, but I haven’t landed on a super clean design yet. I’ve also been thinking about the role of that coin as a bridge to the needs and use cases of participants in the capital markets…also bending typical optimizations found in that space, and potentially introducing unique mechanics again at the protocol layer that would feel like new financial products from far away that specifically interact with organizations running on the afforementioned protocol…but again…sketches…not bulletproof thoughts.

I AM very interested in talking to blockchain founders and early contributors who are playing with the structural dimensions of how we organize work, especially where the systems being designed optimize for factors that don’t typically exist alongside one another…maybe i could call this shape of project “paradoxical protocols.” If you are working in the space in the broadest sense…questioning the choices of how we organize and what the systems and structures we work in choose to optimize for, and/or the paths that lead to those optimizations, i’d love to think with you, design with you, and maybe invest alongside you…please be in touch at jordan.cooper@gmail.com

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    About

    I’m a NYC based investor and entrepreneur. I think there is one metric that can be used to measure the value of a human life and that’s impact. How did you change things? How many people did you touch? How different is the world because you lived in it and how positive was the change that you affected? (p.s. i don’t use spell check…deal with it) You can email me at Jordan.Cooper@gmail.com

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