Better Aligning Value Creation & Value Capture: The Power of Crypto and the Ownership Economy

Better Aligning Value Creation & Value Capture: The Power of Crypto and the Ownership Economy

In today's digital age, the traditional business models are being challenged, and industries are constantly seeking new ways to align value creation and value capture. One industry that has been greatly affected by this shift is the music industry. Artists, creators, and even the industry as a whole are struggling to monetize their work effectively. However, with the advent of cryptocurrency and the ownership economy, new opportunities are emerging for musicians and creators to directly capture the value they create.

Before the internet, the best business model was to charge for content. However, in the internet age, the dynamics have changed. Rather than solely relying on charging for content, the strategy has shifted towards giving away the base layer and leveraging the power of the internet to supercharge viral marketing and monetize the complement. This approach not only expands the total number of supporters but also incentivizes early supporters by allowing them to profit from their early support of an artist.

The music industry, which is currently valued at around $20 billion, pales in comparison to the video game industry, which is a $140 billion market. This stark difference highlights the undermonetization of the music industry. However, with the introduction of crypto networks, musicians and creators now have the opportunity to directly capture the value they create in a couple of key ways.

One significant aspect of crypto networks is the ability to leverage unique data. Platforms like Facebook and Twitter have amassed vast amounts of user-provided data, yet the users see no benefit from it. With crypto networks, this can change. By leveraging the power of blockchain technology, creators and collectors can own a piece of the internet value they create and directly capture that value by selling to their audience. Additionally, they can charge their audience in a granular way, maximizing their earnings per fan and financially incentivizing them, ultimately leading to a larger fan base.

The emergence of the ownership economy is another breakthrough facilitated by crypto networks. Startups that are built, operated, and owned by their users have the potential to grow much faster than their institutionally owned counterparts. This community ownership and network alignment are consistent with capitalism, creating a positive-sum game where all stakeholders benefit.

In the ownership economy, the concept of "liking" something becomes crucial. When individuals develop a liking for something, the efforts they put into it no longer feel like work but more like entertainment. This enjoyment of the process allows for continuous effort and the refinement of one's skills. The saying "好きこそものの上手なれ" (practice makes perfect) holds true in this context. While results are crucial in work, those who genuinely enjoy what they do find fulfillment in the process itself. The absence of a sense of loss or defeat is one of the significant advantages of doing what you love. However, the concept of liking something cannot be forced upon someone or simply commanded. It is something that comes naturally and cannot be bought with money. These intangible aspects hold the greatest value.

To effectively align value creation and value capture in the digital age, here are three actionable pieces of advice:

1. Embrace the ownership economy: Consider building platforms that are owned and operated by the users themselves. By involving the community and aligning their interests with the success of the platform, you can create a positive-sum game where everyone benefits.

2. Leverage crypto networks: Explore the potential of blockchain technology and cryptocurrency to directly capture the value you create. By selling to your audience and charging them in a granular way, you can maximize your earnings per fan and incentivize their support.

3. Find what you truly enjoy: Discover your passions and pursue them wholeheartedly. When you genuinely enjoy what you do, the effort you put in will not feel like work, but rather as entertainment. This will lead to continuous improvement and the refinement of your skills.

In conclusion, the digital age has brought about significant changes in how value creation and value capture are aligned. The music industry, among others, has struggled to monetize effectively, but with the rise of crypto networks and the ownership economy, new opportunities are emerging. By leveraging blockchain technology, creators and musicians can directly capture the value they create and involve their audience in a financially incentivized manner. Additionally, embracing the ownership economy and aligning interests with all stakeholders can lead to exponential growth. Ultimately, finding true enjoyment in what you do and pursuing your passions will lead to a more fulfilling and successful journey.