Aligning Value Creation, Value Capture, and Virality: Unleashing the Power of the Ownership Economy

Aligning Value Creation, Value Capture, and Virality: Unleashing the Power of the Ownership Economy

Introduction:

In today's digital age, the traditional business models are being disrupted, calling for innovative approaches to value creation, value capture, and viral marketing. This article explores the concept of aligning these three elements to empower creators, foster community ownership, and drive growth. By examining the potential of cryptocurrencies, the undermonetization of the music industry, and the different types of virality, we can uncover actionable insights for businesses and individuals alike.

Aligning Value Creation and Value Capture:

In the pre-internet era, the prevailing business model was to charge for content. However, the advent of the internet has transformed the landscape. The internet's ability to supercharge viral marketing and generate demand has given rise to a new approach - giving away the base layer and capturing value through complementary means. This shift not only applies to artists but also highlights the undermonetization of the entire industry. Comparing the music industry's $20B market to the $140B video games market, it becomes clear that there is a significant discrepancy.

Crypto's Role in Direct Value Capture:

Crypto networks present new opportunities for musicians and creators to directly capture the value they generate. By leveraging cryptocurrencies, artists can sell their work directly to their audience, charging them in a granular way that maximizes revenue per fan. This financial incentive not only benefits the creators but also incentivizes fans to support them, ultimately leading to a larger fan base. Additionally, crypto networks enable community ownership and alignment, making capitalism more palatable and positive-sum for a wider audience.

The Ownership Economy and Virality:

To achieve viral success, it is crucial to understand the different types of virality and choose the right strategy for each product. Word-of-mouth virality occurs when a product is so exceptional that users naturally share it with their friends. Making the product easy to remember and describe enhances its chances of gaining traction. Demonstration virality relies on the product's inherent ability to be shown off, such as Instagram's photo filters or Pinterest's pinboard. Infectious virality, on the other hand, works by incentivizing users to invite others, making the product better for both parties. However, it is important to ensure that infectious virality is only pursued when it is applicable and adds value to the user experience.

Actionable Advice:

• 1. Foster Community Ownership: For startups, consider building platforms that are owned and operated by users. This model can lead to accelerated growth, surpassing institutionally owned counterparts.

• 2. Leverage Cryptocurrencies: Explore the potential of cryptocurrencies to directly capture the value you create. By selling to your audience and incentivizing them financially, you can maximize revenue and build a dedicated fan base.

• 3. Choose the Right Virality Strategy: Understand the different types of virality and select the strategy that aligns with your product. Whether it's word-of-mouth, demonstration, or infectious, focus on getting users to actively use and engage with your product.

Conclusion:

The convergence of value creation, value capture, and virality presents a unique opportunity for creators, businesses, and individuals in the digital age. By aligning these elements effectively, we can unleash the power of the ownership economy, where community ownership and network alignment coexist with capitalism. Embracing cryptocurrencies and leveraging the right virality strategy can pave the way for success, enabling the creation of value and the capture of that value directly. With the ownership economy, capitalism becomes positive-sum in a way that resonates with a wider audience.