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Hi friends 👋 ,
I keep finding myself pulled back to the same question:
This is the third part in an unintentional and ongoing series about how the internet and web3 are shaking everything up. It’s a playbook, developing in real time.
If Power to the Person was about technology empowering individuals, and The Great Online Game was about how the internet blurs the line between work and play, this essay is about how we play the game as teams of individuals or small groups.
Power to the Person was a thought exercise. But just because individuals can accomplish more alone doesn’t mean that we should all sit in a basement, working alone. The Great Online Game isn’t about the endless quest for likes and followers, but about opening yourself up to opportunities online.
Together, those pieces are about the fact that individuals are becoming self-sustaining atomic units, and that work and play are blurring as people spend more time pursuing the things they genuinely love. But we’re not playing alone. The people who play this game best are the ones who play together.
Let’s get to it.
The Cooperation Economy 🤝
Cooperation is the winning strategy in the Great Online Game.
Individuals are becoming more important than institutions. Work is becoming more liquid. People can accomplish more on their own than ever before.
At the same time, though, it’s easier and smarter than ever for talented people to work together. Transaction costs are decreasing. As the atomic unit of commerce gets smaller, there is more surface area for cooperation, more room for more people to pursue the same opportunity as a group. Individuals can cooperate with each other with much less friction than companies can.
This is a tale as old as time: everything is bundling and unbundling.
But bundling and unbundling has always felt a bit Sisyphean to me. It misses the directional element. In this case, traditional employment is becoming unbundled and people are choosing to bundle back up with each other. We’re doing it from a place of increased individual empowerment, with more flexibility and optionality baked in.
The Passion or Creator Economy (used interchangeably here despite subtle differences) is about empowering individuals to do more on their own. The individual is the atomic unit of the internet economy. You no longer need to be a part of a large company to successfully compete with a large company. That’s what Power to the Person was all about; in the not-so-distant future, there will be a trillion-dollar company with just one full-time employee, the founder.
The Cooperation Economy is about what’s possible when many of those individual atomic units recombine in new ways, of their own volition. The Cooperation Economy is emergent; if companies are planned top-down, collaborations form and dissipate as needed. Individuals will come together -- formally or informally -- to create Liquid Super Teams, formed of people with the right set of combined attributes for the task at hand. They might last a day, they might last three years. Then each member will go their own way, until they find the next quest to join.
If we’re playing the Great Online Game, these Liquid Super Teams are our squads. Individual venture capitalists are teaming up to invest in great companies and use their combined skills to help them grow. DAOs are forming to buy NFTs, build products, and even bid on NBA teams. I’m even part of a startup made up of all part-time people.
The ideas in this essay are based on my recent observations and experiences. I write it at the risk of coming off like the pretty girl in a movie who’s new to town and is shocked by how nice and helpful all the town’s men are.
That caveat out of the way, I think the Cooperation Economy, the lightweight convergence of people with differentiated and complementary skill sets around a goal, is here to stay, and isn’t just for influencers.
Participation in the Cooperation Economy requires only something with which individuals come pre-loaded: differentiation. Understand what you’re uniquely good at, how you want to play the Game, and then join forces with people with shared goals and complementary skills.
The Cooperation Economy is an optimistic vision for the future. It’s community at Great Online Game scale, with real financial upside. More liquid co-ops for the internet. Just because we can do more on our own doesn’t mean that we should.
Let’s take a journey to explore the Cooperation Economy:
The Big Smile
LeBron and Super Teams
Liquid Super Teams
The Cooperation Economy in Action
Cooperation as a Strategy
Thanks to the internet, people have more power than ever before. We’re nowhere near as dependent on traditional institutions as we were a century, decade, or even two years ago. Understanding the Cooperation Economy starts by understanding why individuals have advantages over institutions in the first place.
The Big Smile
On the internet, individuals have two key advantages over middlemen: we’re naturally differentiated and more of our revenue drops to the bottom line. We can operate in the niches, feasting on wins that would be too small for companies but can be life-changing for people.
In 2014, early into his run at Stratechery, Ben Thompson wrote two pieces about The Smiling Curve in quick succession. Thompson extended the Smiling Curve, originally “an illustration of value-adding potentials of different components of the value chain in an IT-related manufacturing industry,” to describe the value chain in the publishing business. This chart has stuck with me since:
It shows that, online, value accrues to the Creators and Aggregators, and that the Publishers in the middle get crushed. That same curve can be used to describe almost any industry touched by the internet: the tails are better off, the middle is fucked.
Why does that happen?
On the Aggregator side, the reasons should be clear. If you control the enormous amount of demand on the internet, you have a tremendous amount of power. Aggregators control the flow of information, serve demand with near-zero marginal costs, and take a cut of nearly all internet activity. If you can build and own an Aggregator, by all means, do it.
Most of us, though, are not going to build the next Google or Facebook. That’s OK. Individuals do well online, too. According to Thompson (emphasis mine):
That writer or publication has one unique superpower: they are the only one of their kind. To use the strategic term, they are differentiated, and differentiated people – or products – can charge far more than their marginal cost.
People follow people. Writers are now able to reach the specific group of people interested in their differentiated product -- the content, sure, but also the individual person’s story and personality -- and the ability to form that direct relationship outweighs whatever benefits the publisher is able to provide.
Inside of the publisher, a writer’s differentiation is obfuscated by the publisher’s brand. Fans can only get a little piece of them; their employment agreement or contract cuts off other opportunities for monetization, growth, and expression. If that writer is a rich, colorful, 3D sphere, fans only get the 2D, Flatland version, and the writer only gets the opportunities that come with that sliver of themselves.
Historically, writers made that trade because the publisher provided all sorts of things that they needed and couldn’t afford or attain on their own: distribution, editors, a brand, legal, illustrators, benefits, and a steady income. New tools, from Twitter to Foster to Substack to Mirror to Opolis, deliver those services at a fraction of the cost. The writer can go independent and keep nearly all of the revenue they produce; the publisher is stuck with an unsustainable cost structure.
Increasingly, people with the talent to make it on their own are striking out on their own. This can be seen in the rush of once-employed journalists to Substack, and even in the trickle of veteran Substack writers, like Azeem Azhar, away from Substack to platforms over which they can exercise even more control.
And it can even be seen in the top publishers’ counter-response: brands like the New York Times and Barstool are paying the very top talent salaries and upside on par or above what they would make on their own, and giving them the mic. The media brands that are succeeding are the ones that put the individuals first.
It’s not just publishing. As we’ve talked about here before, new waves seem to crash on publishing and media first, because their models and products are simpler. A text editor and email service provider are easier to spin up than a global supply chain.
Then, those waves spread to the rest of the economy. In Power to the Person, I highlighted a number of “Business-in-a-Box” tools that let solopreneurs spin up everything from online stores to schools to trucking businesses. Influencers are attaching themselves to brands and getting equity upside in the process, a la Charli D’Amelio’s deal with teen neobank Step. There’s been a marked rise in the number of Solo GPs or Solo Capitalists, too, as individuals become venture capitalists and compete with firms. People increasingly want to, and can, do their own thing.
The takeaway is this: individuals have more power than ever before, and they depend on companies for their survival less than ever before. Power to the Person.
In the first inning of this power shift, many people have decided to go it alone. That’s what I’m doing right now, and there are countless others in the Passion Economy who are doing the same. When you taste freedom for the first time, the instinct is to maximize it. But I don’t think the real freedom here is working alone; it’s the freedom to choose how, and with whom, to work.
This presents a big, hairy question: how do talented people, with more options than ever before, each of whom bring different things to the table, choose to organize over time? It’s a wicked problem, one whose “social complexity means that it has no determinable stopping point." Luckily, we have an example of a tame problem to draw on for guidance: the NBA.
LeBron and Super Teams
Player empowerment is a catchall for the fact that the league has done a terrible job of empowering teams. The players have all of the leverage in every situation. I think it’s the worst thing that ever happened to professional sports on all levels.
-- Unnamed NBA General Manager, The New Yorker
That quote is unbelievable. It’s the purest distillation of established institutions’ inner feelings, rarely spoken aloud, towards power shifting to individuals.
This is happening everywhere in the economy -- individual empowerment at the expense of employers. But the economy is a big, hairy subject to tackle, so let’s look at the NBA. The NBA is a good place to start studying this phenomenon because it’s a controlled microcosm. It’s a tame problem. There’s a clear goal -- win the Championship -- and set rules, including how many players each team can sign, how much money they can make, and how often they can switch teams.
Despite the set rules, the trend in the NBA has mirrored the more wicked society at large. Over the past half-century, the balance of power in the NBA has clearly shifted from the teams to the players, from institutions to individuals.
Back in the day, NBA players had almost no rights. A team drafted a player, and the “option” or “reserve” clause in the standard NBA contract bound that player to the team for life at the team’s will. The team could trade that player to another team, or could release them, but the player couldn’t just say, “You know what? I would much prefer to live and work in New York than Milwaukee. I’m going to start looking for a basketball job there.” Whatever city the NBA Commissioner said before calling a player’s name on Draft night is where that player might spend the next decades of their life, find a partner, and raise a family. Pretty fucked up.
In 1970, NBA legend Oscar Robertson, in his role as President of the National Basketball Players Association (NBPA), filed an antitrust suit against the league’s fourteen teams. In 1976, the league settled with the NBPA and established what became known as the “Oscar Robertson Rule.” They eliminated the lifetime team option and modified the draft, giving players the right to sit out a year and re-enter the draft if they weren’t happy with their destination. The Oscar Robertson Rule was the first step towards unrestricted free agency in the NBA.
With free agency, players were able to put their services on the open market and choose among interested teams based on where they wanted to live, who they wanted to play with and for, how much money a team offered, and a number of other factors. Free agency made the NBA’s employment market behave more like a regular employment market (albeit one with a salary cap). In 1975, the average NBA player made $90,000. In 2021, the average NBA salary is around $10 million. Free agency gave players some autonomy and control, if not quite power.
What players have decided to do with that power is the interesting and relevant part.
For the first few decades of free agency, individual players made decisions every few years on where they wanted to play, optimizing for factors like team quality, location, quality of life for their family, and of course, money. They made the best decision for themselves and their families, plugging themselves into existing situations that best fit their needs.
Since LeBron’s “Decision” in 2010, though, the best players started forming Super Teams.
While there have always been dynasties in the NBA -- the Celtics, Lakers, and Bulls all dominated for a decade or more -- the past decade’s Super Teams are different in that they formed because groups of superstar players decided they wanted to play with each other, and then made it happen. Instead of choosing among a set of existing environments, the best players create their own environments, using their influence -- a combination of their on-court value and social media-powered direct connection with fans -- to force teams to make their dreams come true.
LeBron has more control than whichever GM or Coach his team happens to employ. Power shifted to the best players, and the best players decided that they wanted to work together to maximize their chances of success, and their enjoyment.
NBA teams still have it relatively good, though. There are only 30 of them. If players want to play in the best league in the world, they need to play for one of those 30 teams. And there are still multi-year contracts and a salary cap that limits how much a player can make. LeBron makes $39 million per year playing for the Lakers, not bad, but he’s a non-owner employee of a Lakers organization that’s worth $4.6 billion. He can’t just wake up tomorrow, decide that’s unfair, and call eleven friends to start a competing team with him.
In the NBA, while the players may hold more power than ever before, the atomic unit is still the team -- if you’re not on one of the 12 players on those 30 teams, you can’t compete in the NBA -- and the players’ upside is capped (albeit at very high numbers).
In the internet economy, though, the atomic unit is the person, and work is becoming more liquid as people realize that they’re able to flow more freely.
Apple’s remote/location-flexible work policy, and the communication around it, have already forced some of our colleagues to quit. Without the inclusivity that flexibility brings, many of us feel we have to choose between either a combination of our families, our well-being, and being empowered to do our best work, or being a part of Apple.
Last week, Apple told its employees that they have to come back to the office three days a week, and some of its employees said, essentially, “No we don’t.”
Just five years ago, this would have seemed unthinkable. Apple is many peoples’ dream company, it pays well, and when you sign up for a job at Apple, you know what you’re getting -- the company has always had an explicitly in-person culture. Steve Jobs himself designed the company’s $4 billion HQ to maximize serendipitous run-ins.
Today, though, the employee pushback isn’t surprising. Apple is not the only option for a talented person, or even one of thirty. Apple is not an NBA team. Apple employees can leave Apple right now, this second. They don’t need to wait for their contracts to expire. They’re at-will, and California doesn’t enforce non-competes. An employee who wants to leave Apple could go work for thousands of other tech companies, start their own company, consult, or do their own thing in the Passion Economy.
They might even work for themselves and for multiple organizations at the same time. That’s Liquid Work.
Liquid Work is an idea I’ve been obsessed with for a little while. In December, Nick DeWilde asked me to contribute my thoughts to a piece he was pulling together, Nine Trends That Will Shape Our Careers in 2021. He asked for “reflections and predictions about how the events of 2020 will shape our careers going forward.” I thought for a little bit, and wrote this up:
Maybe because I’m a full-time newsletter writer and don’t work for a company anymore, but I can’t shake the idea that careers will become a lot more fluid in the years to come.
Pre-COVID, showing up to the same office every day made it hard to work for a second employer. But when another job is just a Slack workspace away, it becomes much easier to work multiple part-time jobs.
This flexibility will significantly increase the opportunity cost of choosing an exclusive employer. Every decision to spend four years vesting at one company will mean shutting off hundreds of other opportunities.
Investors would never choose to invest in just one company; the risk is too concentrated. Instead, they build portfolios. Over time, workers will invest their time in a similar way.
Currently, liquid employment is largely impractical for workers and employers alike. But the same thing could have been said about remote work at one point. Spreading risk over a few companies makes sense for employees. That means that the companies that want an edge to hire the best people for a given role will eventually adopt it.
When I wrote that, I assumed that people would work for multiple companies at once, in a role somewhere between contractor and full-time employee, and I still think that’s a possibility for many people. But I now think my view was too limited.
What Liquid Work provides above all else is optionality. That may mean working for a couple of companies simultaneously, but it might also mean working for yourself, teaming up with others for time-bound projects, investing as a group, and contributing to a DAO in an area of interest. It’s fluid.
But fluid doesn’t have to mean solo. In the Cooperation Economy, individuals can join forces to create Liquid Super Teams.
Liquid Super Teams
LeBron teamed up with Dwyane Wade and Chris Bosh in 2010 to form the first player-orchestrated Super Team. They won two NBA Championships in four years. It was a success, but there wasn’t anything liquid about it. Each player signed a contract with the Miami Heat to play for that one team for a defined time period. They couldn’t collab with Kobe Bryant one week and Tim Duncan another.
The Cooperation Economy will be marked by the growing prominence of Liquid Super Teams, collections of individuals, each with their own strengths, powers, and network, who combine forces to achieve goals.
“Like a company?” you ask, keenly (and a bit smugly). Nope. These groupings will vary in intensity, objective, length, and commitment. They may come together to build something, invest, create, learn, or just have fun. Plus, just as older NBA dynasties, directed by owners and GMs, gave way to superstar-led Super Teams, a main distinction between companies and Liquid Super Teams is that the latter come together of their own volition.
“Oh, like a founding team at a startup?” you persist. Nope again. Founding a traditional startup is a more formal, long-term commitment in which each person involved gives their all to that one thing for a long time.
Liquid Super Teams are powerful because they increase talent density by lowering the commitment required of each participant. People who would never work for another person again happily join Liquid Super Teams from time to time.
Liquid Super Teams are like bubbles in a lava lamp. People float in and out, join forces when it makes sense to, bounce away when it doesn’t. Some bubbles are big and stick together for a few spins around the lamp, some are tiny and pop off to do their own thing for a while.
Or you can think of a Liquid Super Team like The Avengers.
Each Avenger has an individual identity and unique powers. Each can survive, thrive, and save a city on their own. But when it’s time to do something big, like save the world, they join forces. Each comes and goes as needed, not bound by a formal contract.
Similarly, Liquid Super Teams supercharge the benefits of building something for yourself by creating networks of individuals who are able to enhance each others’ capabilities, while retaining the Power of the Person. They’re the good parts of a company and going solo, rolled into one.
Liquid Super Teams may or may not have a leader, may or may not have a contractual relationship, and may or may not even have a name. They might be a loose group of friends who help each other out from time to time, a creator collective, a DAO, or a startup made up of only part-time employees. People can be on multiple Liquid Super Teams at the same time.
Importantly, Liquid Super Teams allow each individual involved to bring their full powers to bear. They expose each person’s full surface area, rather than hiding away parts inside of a larger sphere. If you compare one big sphere that has the same volume as ten smaller ones combined, the ten smaller spheres have roughly twice as much surface area as the big one.
Similarly, if people follow people, not companies, then bringing together a group of people, all with their own audiences and toolkits, should create more reach and ability, more cheaply, than a company that employs all those people, if they could even hire them in the first place.
When done right, Liquid Super Teams can be a superior alternative to full-time employment for people who want to retain optionality, flexibility, and individualism while leveraging the benefits of an expanded network, specialization, and community.
The Cooperation Economy is the sum of these Liquid Super Teams, which together form a new kind of economic structure and way of working. Let’s look at some examples.
The Cooperation Economy in Action
I didn’t have a definition for the Cooperation Economy when I started writing this, but as Justice Potter said of hard-core pornography, “I know it when I see it.” More and more, I’m seeing people be more helpful to each other than would make rational sense.
There are examples of the Cooperation Economy across the internet and the world. The co-op is by no means a new structure, and is certainly the local predecessor to what we’re discussing on a more global scale today. I’ll give just three examples, and I’d love to hear yours in the comments.
Over the past few years, something similar to the publisher Smiling Curve is showing up in venture capital. In the wildly popular post Playing Different Games, Founders Fund’s Everett Randle, described the winning approaches: you can be a luxury VC (like Benchmark) or a low-cost VC (like Tiger), but if you’re in the middle, you’re fucked.
This is true for larger funds with hundreds of millions of dollars to deploy, but there’s another class that seems to be doing well by playing an entirely different game: solo GPs.
Zooming out, the VC Smiling Curve today looks something like this:
The reason commodity funds are in trouble is the same reason publishers are in trouble: the thing that they offered became a commodity, and their cost structures don’t support their new reality. For publishers, distribution became a commodity. For commodity funds, money became a commodity. There’s another dynamic at play here, too, that’s both similar and different to the publisher’s Smiling Curve: economics.
Commodity Funds and Differentiated Funds need to compete to lead deals. Just as publishers have a lot of costs they need to cover before they become profitable, large funds can’t make a dent in their hundred-million or billion dollar funds if they’re only able to squeeze in a few hundred thousand dollar check. It’s all or nothing. And the differentiated funds -- whether pursuing the luxury or low-price strategy -- will beat out commodity funds nine times out of ten.
Like individual creators, though, Solo GPs, individual investors investing small funds or their own money, are more than happy with small wins. If you have a $5 million fund, you can 5x the fund (generally considered a good return) with one $100k check into a company whose valuation increases by 250x (after dilution). One $100k check in a company at a $4 million valuation can make your LPs very happy if that company has a $1 billion exit, even if all of your other investments go to $0. That same check would be relatively meaningless for a $100 million fund.
That encourages a different kind of behavior: cooperation. While big funds need to have sharp elbows -- they need to prove to founders that their money is better than their rivals’ -- solo GPs can pull together Liquid Super Teams of other solo GPs who, together, would give the company a better chance of success. Companies like Party Round will make this even easier and more common.
It’s hard to imagine the founder of a hot consumer social startup asking a16z for an introduction to Benchmark, but it’s very common for solo GPs and angels to offer to introduce founders to ten other investors. Some solo GPs have even started to raise bigger funds to compete to lead rounds, leaning on the fact that people like working with people, and that they can pull in a network of other solo GPs to make their term sheet more attractive to founders.
One interesting twist on this idea comes from the godmother of the Passion Economy herself, Li Jin. Li’s fund, Atelier, launched a program that teaches creators and influencers how to angel invest. It’s a win-win, the Cooperation Economy at its best: creators learn a new skill and access a way to turn their influence into equity, and Li now has a network of creators, with a combined audience in the tens of millions, who she can bring to bear to get into competitive deals and help her portfolio companies.
Individuals cooperating with each other can iterate more rapidly than organizations competing with each other can, and I think we’ll see continued evolution in this space. I wouldn’t be surprised, for example, if we see more solo GPs forming Liquid Super Teams to compete to lead rounds soon, offering the increased surface area of their combined members as their point of differentiation.
DAOs are internet-native organizational structures, like the modern LLC or C-Corp, designed for liquid online collaboration.
In The Future of Work, Bankless’ David Hoffman describes Digital Organizations (DO), a spin on Decentralized Autonomous Organizations (DAOs) that removes the autonomous and puts humans in control. (Note: I’ll use DAO and DO interchangeably). Hoffman wrote:
DOs are collections of like-minded people with like-minded goals, that work together to make progress towards those goals. Unlike typical employment, DO’s don’t make you sign employment contracts and become exclusively committed to them. DO members are free to fluidly move between DOs, contributing their skills wherever they fit. Rather than rigid, vertical corporate structures, DO work could resemble a flat mesh network of organizations. Interestingly, it’s likely that many DOs will share a significant amount of the same members.
They’re a web3 tool with a very clear need and use case: DAOs make it easier to form, organize, and compensate Liquid Super Teams.
One person can join multiple DAOs, and multiple DAOs can share the same members. Someone could contribute to three DAOs while also holding a traditional job, or while building their own thing as part of the Passion Economy. The existence of DAOs is another step towards making work more liquid, and building new mechanisms for collaboration into the internet itself.
DAOs can become a meta-layer on top of the idea exchanges of the world — a second home for those eager to make strides towards their goals, and know that the way to get there is not by oneself, but in a collective.
She highlighted a few examples:
PleasrDAO brought together a group of people to collectively outbid whales and purchase Edward Snowden’s NFT for $5.4 million.
Anish Agnihotri built PartyDAO to bring together a group of people to build PartyBid, which itself makes it easy for people to set up DAOs to bid on auctions. Anish has a full-time job, as do most if not all members of the DAO. They’re a Liquid Super Team.
She imagined a DAO, built to save the Pizza King pizza shop, that evolved into a way to save all the world’s struggling pizza shop, make a pizza zine, get discounts on good pizza, and reward members financially if the $PIZZA token appreciates.
There’s even a DAO -- Krause House -- whose goal is to buy and run an NBA team, and another, SyndicateDAO, that wants to use the DAO model to upend venture capital by building a DAO-powered version of the informal Solo GP Liquid Super Team. Jarrod Dicker, Tal Schachar, and Jonathan Glick are doing fascinating work reimagining media and cities via DAOs.
For more on DAOs, this Modern Finance episode with collaborators from The LAO and Flamingo DAO is a great listen:
I’m experiencing the magic of DAOs firsthand, as well, as a member of two DAOs -- Seed Club and OpenMeta -- both of which treat investors as project contributors and team members. Both are chock full of impressive people with full-time jobs who are contributing to projects because they want to see them flourish, and because there’s a chance that one day maybe the tokens will be worth something. Seed Club is even using DAO funds to hire employees.
These talented individuals would never all work for the same company, but they’d happily contribute their unique expertise to the same DAO.
Maple: The Potential Part-Time Unicorn
Liquid Super Teams don’t need to be DAOs, and they don’t need to be about investing. Liquid Super Teams can even build startups with billion-dollar ambitions, part-time.
A couple of months ago, I got a series of DMs from Bruno Faviero, who I’d recently met through our mutual friend, Trung Phan. Bruno sold his last company, Synapse, to Palantir, did his time, and was now working on the next thing: Maple.
I was skeptical -- a part-time unicorn obviously sounds crazy -- but Bruno’s smart and I like talking to him, so I took the call. And the plan is actually pretty smart.
Maple is Honey for SaaS. It gives founders access to all of the discounts and offers that they get for participating in programs like On Deck, or YC, for subscribing to Lenny’s Newsletter, or just because companies want to attract startups, all in one browser extension. Because founders have access to so many discounts, in so many different places, they often don’t even realize they have them, or don’t take the best deal available to them. Maple fixes that by automatically scanning for, and applying, discounts when a founder is on a participating product’s website, then makes money on affiliate fees. It’s somewhat difficult to build and grow, but it doesn’t really require a full-time team.
Instead, Bruno pulled together nine people, now including me and Trung, all part-time. Everyone’s doing something they would do for fun anyway. Trung and I tweet, Jack codes, Bruno talks to startups, someone else sells, someone else designs, and so on. No one takes a salary. Everyone is paid in equity. It’s all coordinated over text.
“We’re able to pull together this all-star team of people who would never do this full-time, because there’s no opportunity cost to doing it,” Bruno told me. “It’s just a side hustle, a few hours a week. And because everyone’s doing it for equity instead of salary, we can bootstrap the whole thing, and stay pure instead of chasing growth.”
That’s a Liquid Super Team in action: a team of people with different strengths, most of whom wouldn’t quit their job to work for Maple full-time, committing to work on it a few hours a week. Everyone retains optionality, and everyone has upside.
All of the cases above are different, but they all share something in common: groups of talented individuals who would likely never all agree to work for the same company nonetheless come together on a project-by-project basis to invest, build, and maybe even earn some money. That’s the benefit of Liquid Super Teams: they increase talent density by lowering the commitment required of each participant.
Cooperation as a Strategy
Companies need to compete to win. They need to generate more revenue, or get more ownership in a company, to make their economics work than individuals do. Plus, companies typically move too slowly to take advantage of micro-opportunities in the way that individuals can.
For individuals, cooperation is the winning strategy. There are rarely long negotiations and back-and-forths between individuals. As long as the opportunity cost to trying something is low enough, a DM and a 👍🏻 can seal a liquid partnership. Online, where millions of micro-opportunities pop up every day, speed is a competitive advantage. Try, fail, move on.
Plus, there’s room for more individuals to do well in any given transaction than companies. Let’s go back to the spheres. In the same size jar of opportunity, there’s room for one company or ~9 individuals.
Companies need to fight to be the one big sphere in the jar. People can let a bunch of other people into the same jar. You’ll notice, though, that one person doesn’t fit. That’s both a bug and a feature of the Cooperation Economy.
It’s a bug because transaction costs make it harder for a Liquid Super Team to interact than it is for employees in the same company to interact. They don’t operate as one entity, and that leaves gaps. If they were able to pack into one clean sphere, with no gaps, like the company, they’d actually be able to fit a little more volume in, but the structure is messier, so someone’s left out.
That’s also a feature, though, because the fact that being part of a loose alliance doesn’t guarantee participation. Individuals constantly need to earn their place in new projects and transactions. Without contracts and employment, social norms dictate participation.
That’s where cooperation comes in. You want to bring as many people along as can add unique value, but it’s much easier for a Liquid Super Team to drop freeriders than it is to fire someone at a company. There are no Performance Improvement Plans.
If another investor introduces me to a company and I act badly towards that company, I won’t get the next introduction.
If I act against the interests of the DAO, they can “rage kick” me out.
If I don’t pull my weight on Maple, I can get booted, having earned no money and no equity.
Traditional employment provides a safety net for underperformers. The Cooperation Economy doesn’t. As my friend Dror Poleg wrote in NFTs and the Future of Work, “Technology will make it possible to compensate each person according to their economic value. That’s pretty bad news for most people, and very good news for some.”
That’s the key here: the Cooperation Economy doesn’t suffer freeloaders. It’s powered by each individual bringing their full arsenal to bear. Each participant in the Cooperation Economy needs to provide their own differentiated value -- that could be as small as providing the best possible feedback on a product or as big as coding the whole thing -- and prove their worth on an ongoing basis.
The Passion Economy makes it possible for anyone to start their own business online. Power to the Person means that those businesses, with just one full-time employee, can get really big. The Great Online Game means that everyone can play a meta-game that blurs work and life.
The Cooperation Economy lets us play the Great Online Game together, each bringing our own superpowers, and allows us to pursue opportunities together that none of us could tackle alone.
Thanks to Dan for editing!
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Thanks for reading and see you on Thursday,