The Stakeholder Economics and Prospects for Collective Ownership | by Scott Belsky | Dec. 2021

Brands have become decentralized – memes, content and the everyday conversations of the masses increasingly define a brand. The next generation of projects and businesses is also on the path to decentralization – where new blockchain-based organizational constructs transform owners and customers into a community of stakeholders. This confluence of decentralization will benefit emerging brands and local businesses, and could prove to be the most disruptive force against the internet behemoths and the global markets that rule the world. Yes, a bold, but naked proclamation with me here …

Scott belsky

The seniority of one-to-many companies

A theme of the last decades in technology has been that of internet-based business giants using theIr pricing power and algorithms to crush local small businesses. Most of us are customers of these companies, but they are owned and operated by a few (of course you can buy stocks, but you’re only there for the ride). Likewise, these companies have long taken advantage of traditional media to define and force their brand on the masses. While I’ve long marveled at the speed and prowess of such endeavors (and appreciate hard-hitting slogans), I also wonder what insight or innovation could make a difference. How could emerging or local businesses compete?

I see two exciting disruptive forces at play that together could change everything. The first has been bubbling up in over a decade: Brands are now collectively determined by mass content generation, as opposed to a creative agency and nationwide advertising buy. Today, for all but the most iconic brands in the world, a brand is only as good and fresh as the latest content and the latest ongoing conversations. In a sense, brands are at the mercy of memes and social sentiments. Brands have decentralized. What your friends say – or even a stranger genuinely expressing satisfaction or disappointment – seems to have more influence than Superbowl commercials. Why? Because we still aspire to the ancestral “small town” of reputation and brands built on trust. The real-time consensus of individuals on social media is powerful. In early 2018, I wrote an article on the idea of ​​Microbrands, thousands of small brands with low overhead, high design products, and extremely effective customer acquisition tactics. In hindsight, many of these brands are no longer ‘micro’, thanks to the organic growth and user-generated content they’ve obtained on social media, from customers and influencers, and often for free. .

The second disruptive force at play is the building of decentralized organizations turning customers (and employees) of businesses into owners. We see this happening in the aptly named “Web3” space. Packy McCormick defines Web 3 as “the Internet owned by builders and users, orchestrated with tokens”. And pioneering all-crypto investor Chris Dixon (also one of my first seed investors for Behance in 2011) further explains:

“In Web 3, ownership and control are decentralized. Both users and builders can own Internet services by owning [or earning] tokens, both non-fungible (NFT) and fungible… Tokens allow network participants to work together towards a common goal: network growth and token appreciation. This solves the central problem of centralized networks, where value is accumulated by a business, and the business ends up fighting against its own users and partners.

While Chris primarily focuses on the benefits of decentralized online services and large platforms, I can’t help but imagine that the same technology is applied to the long tail of small businesses both online and offline. line. Imagine if your favorite online publications, e-commerce brands, and small businesses in your town – from restaurants and laundromats to ice cream parlors and barbers – were able to operate without friction (read: without an ‘IPO’ of one. prohibitive cost or massive infrastructure to manage) distribute ownership to each stakeholder. Could the Benefits of Collective Ownership of Small Businesses Be the Biggest Threat to Large Businesses? If every stakeholder in these companies had a deep incentive to help build, improve, market, and patronize brands, would that become a competitive advantage over the big guys? Would a “many-to-many” business significantly outperform “one-to-many” businesses?

In an economy of actors, each company is its customers

The concept of “stakeholder capitalism” describes a system in which companies are oriented to serve the interests of all their stakeholders. But I think the confluence of decentralized brands and decentralized businesses is ushering in a new era where the boundaries between businesses and their customers are harder to discern. This idea is most powerful where there is the most pain right now: small towns and local businesses.

What could that look like in the future? Maybe we’ll all own some of the many online businesses and marketplaces we frequent, as well as our favorite local restaurant, ice cream shop, and cafe. Imagine that every subscriber to your newsletter becomes a stakeholder as well as a reader, and what would that do to viral marketing? When you like a brand or service, you can buy tokens or earn them by bringing in work in the form of clearly defined and measurable tasks. Our tokens would give us the right to vote on certain decisions (flavors of the month?), Serve as an engagement vehicle, make us passionate and unpaid marketers, and carry (maybe even increase) residual value that can be sold on an open 24. / 7 market to new residents and customers (or speculators looking for exposure to mom and pop stores in stable communities) – or maybe those tokens can even be exchanged for merchandise? Maybe you could buy your ice cream with (chips in) ice cream (shop)?

There are a number of increasingly popular technologies and business models and product experiences that could help make this possible. First, there is the rise of DAO (Decentralized Autonomous Organization) which makes it much easier to build a business and sell tokens (with or without vesting period) to a community of new and interested “owners” who feel encouraged to frequent, improve and develop the company. These DAOs are increasingly turnkey and a wide variety of tools are being created to administer them. Second, the subscription concept could easily be leveraged for local businesses and services and centrally managed in a city subscription app. With the stability of subscription-based revenue (and a modern technology stack and CRM), many small businesses would not only survive, but thrive by doing more packages with other stores and striving to surprise and delight. customers.

The stakeholder economy and the good old days

I have come to call this concept “the stakeholder economy” because the traditional construct of “owners and customers” is being replaced by a much larger and more deeply motivated group of “stakeholders”. which, with the right system design, will give the edge to decentralized markets and businesses with better retention and business stability, and dramatically lower customer acquisition and marketing costs.

Maybe the reason I’m most excited about the stakeholder economy is that it brings us back to the way things once were. In anticipation of the future of technology, I have long subscribed to the technology sentimental reflex that we inherently yearn for the way things once were and, in every transaction and experience, seek a return to the intimacy, relationships and mechanics of small towns. We want to be known, we want to support people we trust and we feel a personal benefit when our community benefits. As a result, our local stores are not only supported by the community, but developed and benefited by a level of dedication felt only by real owners, but on a large scale. Stakeholder economics can restore a sense of small town pride, large scale to the world of brands and business.

As we all have the opportunity to own some of everything we value – whether it’s an online marketplace, a publication, a local ice cream shop, or your favorite beverage business. – the main commercial levers like marketing, sales and distribution will be transformed by the natural tendencies and preferences that we have always had within us. There is nothing more genuine and effective than helping sell something you really love and own.


Continue the conversation and connect with Scott on Twitter, consult others Recent Posts Like “What does the matrix see for product managers? 8 themes for the future of technology, “ get her latest book – The messy environment, Where sign up for an infrequent newsletter.

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