How do new blockchain/crypto business model incentives differ from old school companies like Facebook?
I recently read Chris Dixon's article at WIRED titled "BLOCKCHAIN CAN WREST THE INTERNET FROM CORPORATIONS' GRASP" found here https://www.wired.com/story/how-blockchain-can-wrest-the-internet-from-corporations/.
The article was a fun read but it was very high level and left me with questions about how the incentives for founders, investors, customers, and the employees change in this new world (i.e. when governance is provided by the community versus the company). For example, if you compare the company Facebook to a NewCCo like a steemit.
I listed my assumptions in the table below after reading the article. It would be great for this community to help contrast the changes between models (also apropos given this is posted on steemit and I'm spending some time learning the platform as well as the new crypto/blockchain models that have momentum like this platform).
Please comment on what is right/wrong or needs to be better articulated in the table below...
|Facebook (Governance provided by the Company)||NewCo’s (Governance provided by the Community)|
|Founders invest time and $ upfront and are rewarded by pay in $ and exit (sale or IPO) in $ of shares they own||Founders invest time and $ upfront and are rewarded by pay in $ from ICO/STO and from an increase in the token price of held back tokens which are eventually sold for $ |
Note: Founders hold back tokens that they personally own that are valued and can be sold on an exchange for $ once vested
Change= Founders can sell tokens for $ once tokens vest versus at exit or IPO
Risk: From day 1 the company is public which comes with a great deal of overhead; Founders can also cash out once vested.
|Investors buy shares or debt in company in series A, B, C etc for $ and get rewarded by increased share price (over time) which in turn is sold for $ upon exit||Investors buy tokens (example: STEEM, SP or SBD) in company at any time for $ and get rewarded by increased token price or interest on debt (ex:SBD)which in turn is sold for $ |
Change = Investors buy tokens at any time versus shares in the company
|Company provides proprietary service at no-cost and sells advertising and get rewarded with $ |
Change = Company gives proprietary service away for free versus an old school MSFT model where proprietary software is sold for $
|Company provides open-source service at no-cost and sell nothing and get no reward (other than token appreciation in the market) |
Note: Company holds back tokens from market to be sold for $ and used to run company
Change = Company sells nothing
Change = Company reward is 0
|Employees help company make proprietary service; sell advertising and get rewarded with $||Employees help make & sell open-source service and get rewarded with pay ($ from held back tokens); Community helps company make open-source service and gets rewarded with tokens which can be sold for $ |
Change=Community helps develop open-source code
|Customers get proprietary service and pay with their data and get rewarded with value||Customers get open-source service and pay with activity and get rewarded with value and tokens which they can sell for $|
What others report:
From TechCrunch: Tokens (versus options) can better incentivize startup employees than equity "One of the largest differences between tokens and equity is that tokens are immediately liquid, assuming that they have already been listed on an exchange."--however, as commenters to the article point out easy liquidity for employees can be bad for a startup. It can also cause tax issues for the employees.
From CoinDesk: The Biggest Problem for ICOs? In 2018, It Was Their Own Investors" Instead of treating individuals who make early contributions as merely financial investors, projects that are truly pursuing decentralization should recognize them as more akin to employees who receive stock options (and can actively contribute to the network from outside the organization) and adopt a philosophy of ‘compensation through the protocol’ to leverage them." -- ‘Proof of Contribution’