Pop-Up Enterprise, the Schrödinger Fund and Self-Owners
Next: Impacts of Open Sourcing Designs
It’s time to wrap the series on decentralised organisations with three more examples.
In previous posts we’ve go through intro and short examples of decentralised organisations (like plantoid, IP-NFTs), covered different types of tokens and what a minimum viable organization is, and covered various old and new decision making models. Previous post was a simple example covering the full gamut.
Web3 brings new capabilities and using them to replicate what the centralised organisations do seems a little bit wasteful. But it is easy to understand why people go that way. A more interesting question is: what does web3 allow that was not possible before. Here we go though two examples - organisations that are very short lived by design and organisations that have no employees and could last for hundreds of years or even millennia. Say hail to the pop-up enterprise and the Schrödinger Fund.
TL;DR Schrödinger Fund = Autonomous organisation requires no permanent staff and can wait long periods for funds to accrue before it springs into action
Pop-Up Enterprise = a company can exists only for a fleeting moment and still be useful.
Pop-Up Enterprise
A pop-up enterprise is a very short-lived organisation that typically does one thing and then ceases to exists. An example could be one set up to organise a festival. The participants create a legal entity, register, create brand etc. It gets money from founders and collects fees, hires people and venues and runs the festival, makes payments, makes first and only financial statement, pays taxes and then ceases. This orchestrated by smart contracts with the help of ready made legal templates and out-bound integrations and by contracting staff.
In same manner people wanting to buy some expensive items might collect a big bunch of interested parties and make a pop-up enterprise for the negotiations with vendors. So rather than using a group-buy platform, group purchases could be a short-lived enterprises. Cut out the middle-platform.
A small exercise for the gentle reader: can you think of a very short lived pop-up enterprise example, say one that lasts only 10 seconds?
Could one make sense in the field of high speed automated trading? A fund that collects money, forms a legal entity, rents a machine learning model that seems to be performing well today, makes the transaction and repatriates the earnings. The issue with regular brokers is that they want you to keep re-investing your winnings because every time you do a transaction, they collect a fee. A company that is about to be dissolved cannot possibly do this as they will no longer exists after a short while. It must pay you your earnings.
Not a good one, because the contribution to society of high speed trading is questionable, but perhaps you can think of a better one?
Schrödinger Fund
The Schrödinger Fund can be implemented in two different ways
Plantoid model, collecting money and launching activities when the funding threshold is reached
Infinite Treasures Model (see below) where collected money is first invested, interests re-invested. Finally from the compound income some amount is then used to fund the cause.
The end result in both cases is an eternal organisation. Plantoid alternates between sleep cycles and periods of activity. A little bit like many animals go to hibernation during winter or dry periods. Infinite Treasures can have a long initial hibernation period before it kicks into more long lasting action.
The results of the funds can be open sourced so that future cycles and other projects can benefit from them. A general open sourcing strategy allows Schrödinger Fund also to piggyback on work done by other similar organisations.
What problems could this model solve that are currently unsolved and what effects does such a continuous open sourcing have?
But before that, an oldie but goldie funding variant
Inexhaustible Treasures
The Fund can be made a notch smarter with a small change – with compound interest. The core concept is first to collect money to the fund and invest it. Then the interest gained is again invested creating a snowball effect. Once there is enough revenue generated, part of it is used to fund the mission of the fund. This is a slow starting method but once it gets rolling, it is nearly unstoppable churning out one open-sourced design after another.
This is an old concept that monasteries used thousands of years ago. Then it was called “Inexhaustible Treasures”. Endowments to pay for moral debts accrued by members through life were invested by monasteries into land and businesses, then interest invested until finally a cut was taken to fund the operations.
You may naturally ask where those funds are today. Sad fact is that passing armies and rulers have looted all. One particularly bold ruler in Afghanistan called Harsa even appointed a “Superintendent for the destruction of Gods” to loot monasteries to keep his expense account solvent at all times.
Schrödinger Funds for User Centered Designs
Since Schrödinger Fund is customer funded model, the designs it produced will be made starting from the needs of the customers.
If you think about any everyday product or even business appliances or tools, they tend to last shorter and shorter time and are impossible to repair or too expensive to repaid. This is called “planned obsolescence”. When products are designed to break after warranty period, customers need to rush to shop to buy another making business flow smoothly.
This may not last forever as small-scale manufacturing tools like CNC machines, 3D printers are maturing and this allows local production from digital designs. 3D printers today are capable of printing plastics, wood, metal etc. A complete set of such tools is too expensive for individuals to own but in near future a self-driving vehicle could bring a small, mobile factory to you when you need. Facilities can also be built to libraries or be in mini-factories nearby.
One can use an autonomous fund model to first collect money and then use to design everyday appliances and tools that are:
Made to last (think 100-year light bulb)
Easy to repair
Easy to recycle
Can be manufactured locally
The funds can release the designs to open source so anyone. When produced nearby we get the local production benefits:
Almost immediate delivery
No need for spare parts warehousing or logistics saving costs and environment
Materials can be recycled locally
Local employment; need to order from the other side of world where children or (political) prisoners manufacture it
With privacy included
Privacy is another aspect that the fund model can add to products. Take TV for example. Most today are so called smart TVs that connect to the net.
Connected TV allows vendors to realise additional revenue by analysing user patterns: what content the user is streaming, what channels they watch etc. Simple clues like are they channel hopper or do they focus on specific programs for long time give valuable clues to the viewers personality (impulsive buyer or not).
This linked to their identity (if available) adds one more dimension to comprehensive understanding of the person. If they browse images or view home videos on TV, image analytics built into the smart TV can tell what their family relationships are, how often they travel on holidays, where, how much they spend on dinners and specific type of entertainment they like amusement parks, do they enjoy outdoors or water sports, what’s their alcohol intake and beverage of preference.
Customers do not want random foreign governmental agencies and advertisers to have such detailed know-how. It is better to opt for products that have been designed with privacy in mind. Open sourcing software code and designs allows independent verification. It also makes finding vulnerabilities easier. Adding reward for people who find faults in design that can disclose private information adds one more layer of protection.
Helping Local Adaptations
Mass manufacturing aims to create a product that meets the needs of as many people as possible. Adaptability is offered to small degree like personalising colours etc.
When designs are open sourced, this allows different user groups to modify the general design for their own needs and preferences leading to divergence and ultimately to new products.
This modification process can in some categories be automated with machine learning as an option. Idea is simple: collect feedback from users and use it to let machine learning algorithms designs future versions. As example AIbrew has created “learning beer” that adapts to the taste buds of its drinkers. https://aibrew.fi/en/hei-ihminen-english/
Self-owning assets
Smart contracts and the eternal Schrödinger Fund enable completely new types of organisations and even products that can own themselves. We’ll return to this in the chapter on public organisations but as starters think about content that owns itself.
It could starts with a fund backed by fans of a particular genre. The fund sets up an automated content publishing house - book publishing, movie studio or music publisher, whatever. It publishes content and uses profits for further projects. This can start so that fans own governance tokens and steer its development, but the fans could decide to “burn” all their tokens allowing the publishing house to own itself.
The question naturally is that how does an automated organisation know that the copy editors, editorial assistants etc. being hired are good and specialise in this genre? Either integration with some external “oracle” using a reputation service is needed or the initial funders also select the initial team and the “genesis” team then are responsible for hiring replacements as time goes by.
Fans could still step in for further investment during setbacks (i.e. a self-owner can have an interface for accepting support).
In spirit this becomes very close to crowdfunding, except it is fan initiated. Both aim to create something long lasting.
Lazy Schrödinger
If the assumption that popular crypto-tokens with limited supply like Bitcoin tend to go higher in value with time, one could devise also a Lazy Schrödinger Fund that gets started by an initial investment of Bitcoins (or similar) locked in a contract. Then it just waits for their real time value to raise to a level where the ultimate aim of the fund can be paid for. The smaller the initial sum, the longer the wait.
The fund naturally needs to keep track of changing value of its crypto coin comparable to the general costs. This periodic checking activity via oracles will bear some regular costs that need to be counted for in the final design.
As of this writing a crypto-winter seems to be starting, so wait times can become long in an increasingly unpredictable world. But on the other hand, Lazy Schrödinger is not in a hurry.
That’s it for decentralised organisations this time.
As an after-burner from this post series, next we’ll take a swipe at what changes open-sourcing designs will have.
Next: Impacts of Open Sourcing Designs