The Future of Crypto: Shared Value Creation

First-off, morning everyone! You probably noticed that the newsletter looks a bit different this week. We have migrated our newsletter over to beehiiv, a new newsletter and blogging platform from some of the team from Morning Brew. Excited to give it a try and as always you can find any of the newsletters over at the Talkin' SaaSy site. Let's get into it!

So I had a really fascinating meeting today (9/22/21). I'm starting to write this post to you in the aftermath of that meeting while the information is still fresh in my minds. I usually type these blogs over a week or so, so it might be the following week by the time you are reading this but I think you'll find it interesting. I was in a work meeting (boring, I know) but at the meeting was a former NHL athlete who has since gone on to get a PhD. We were meeting with him to do some customer research on our new venture which I have hinted at with you all. Still not ready to share exactly what it is just yet, but this conversation was fascinating.

What he said to us was how in the sports world, but really in all of business, everything is zero-sum. Businesses look to get consumers to pay for things, they then turn around and use that money to pay employees to do a thing and that is it. It's all very transactional and the value that gets created by those transactions is often shared by a select few at the top and that is the end of it. Everyone really just looks out for themselves, but what if it didn't have to be that way?

What if through blockchain technologies, companies could deploy their own token that was a utility token that could be used to pay for the products or services that the company sold? Instead of paying dollars, customers buy the tokens from the business they are hoping to do business with and then pay for services, priced in USD, but paid for using the token at the current market rate.

A mentor of mine once said to me, "Always invest in the products or services that you buy". If an up and coming company that offers a desirable product and/or service, customers can purchase excess tokens to hold as the value of those tokens should increase as the company becomes more valuable, the token should increase in value. If Bitcoin acts as a store of value, this is the ultimate store, these utility tokens ensure you access to the value delivered by the company you are looking to buy from as well as potentially share in the value creation of the company as the price of the token appreciates.

A tokenized company also helps keep incentives aligned for all parties. Users pay fair market value for the token which they exchange for products/services, or hold as share of the value appreciation if you believe in the company you are buying from. Conversely, the company recieves the USD that you initially had put up to purchase the tokens to help cover overhead and operational costs, but they are then motivated to re-invest some of that capital into building bigger and better products & services that they can charge more to their customer for as well as increase the implied value of their token. The more consumers come in to buy the token on the market, the more valuable it becomes.

Obviously there is a level of complexity that would need to be managed here not to mention securities laws. Given that the value of this token is a direct correlation to the value created by the company which sounds a lot like a stock if you ask me haha. Putting the securities law aside, the complexity of managing a system like this would need some pretty advanced tools to help manage the order book, liquidity, and that doesn't even get in to the accounting side. Would this amount fo complexity be worth it to a startup that has enough to worry about?

While there are certainly still major questions that need to be answered, there is certainly an interesting dynamic that a tokenized company could potentially deliver. The idea that we can share in the value creation simply by doing business with one another. I'm still relatively new to the crypto/web 3 world, but in the 6-7 months we have been doing customer research for our project, I have come across some really amazing technologies that could enable a future that looks like this.

Not only do the tokens act as both an exchange of value, they can also act as governance if you start to think of the tokens that you sell to your customers as a DAO. Put new features and roadmaps out for voting by your most loyal customers who now not only benefit from new features that deliver value to their own business, but they can help you develop a roadmap that will help others want to be become customers and token holders as well. Current and new customers can contribute knowledge and feedback to help bolster the overall success of both the organization and community around it.

Sounds very utopian and yet with current blockchain technology something that is attainable. The hurdles to building and running a company in this modality are purely regulatory and within our own minds, it's easy to talk about giving up control ands haring value creation, but unfortunetlay most of the behaviors I see put into action, including the crypto industry have the opposite intentions. Will we ever get to a point where this open and shared way of building a business is the norm? I certainly hope so, how we get there and what bumps we encounter along the way are challenges that still need answers.

Forwarded this email from a friend or colleague? Hit the signup button below to join our amazing community and get our latest posts delivered directly to your inbox.

We will see you next time, till then, stay SaaSy folks! ✌️