The Ownership Economy: Crypto & The Next Frontier of Consumer Software – Variant

The Ownership Economy: Crypto & The Next Frontier of Consumer Software – Variant

In today's digital landscape, ownership has become a central focus for users. The advent of cryptocurrencies and blockchain technology has revolutionized the way we think about ownership, particularly in the realm of consumer software. The innovation of tokens, akin to packets for value, has paved the way for new software platforms that can be built, operated, and funded by individual users. But what sets these platforms apart is that they are also owned by the users themselves.

One of the key driving factors behind this shift towards user ownership is the realization that the economic interests of major internet platforms are often poorly aligned with their most valuable contributors – the users. These platforms have traditionally concentrated the majority of the value they generate in the hands of their founders and investors, leaving little for the users who contribute to their success. However, this traditional model is being challenged by the rise of user-owned platforms.

When users have a stake in the platforms they contribute to, they have a greater incentive to participate in deeper and more meaningful ways. This can manifest in various forms, such as contributing ideas, providing computing resources, writing code, or even building communities around the platform. By embracing a more cooperative economic model, platforms can ensure better alignment with their users over time. This, in turn, leads to larger, more resilient, and more innovative platforms.

Interestingly, the history of protocol adoption follows a pattern. Early adopters leverage new protocols to do things that were previously impossible. As these new technologies empower them, they become the catalysts for broader adoption. For founders and entrepreneurs, the winning strategy lies in building products that make these new models more accessible to a wider audience.

Bitcoin and Ethereum, the pioneering user-owned and operated networks, exemplify the success of the idea of user ownership. Instead of the value being concentrated in the hands of a platform's inner circle, these networks allow users to earn the majority of the value generated from their collective contributions. This shift in ownership has not only disrupted the traditional economic model but has also fueled the growth and success of these platforms.

However, one of the biggest challenges that startups and new technologies face is adoption. Without a critical mass of users, even the most groundbreaking ideas can fizzle out. This is where the opportunity lies – to build more accessible products and protocols that can bootstrap adoption and participation through better economic alignment with users.

Recently, Literati, a book club platform, raised $40 million in funding. The founder of Literati, Jessica Ewing, highlights an important aspect of ownership when she says, "Books are aspirational. No one aspires to play more video games, people aspire to read more... People want their books to be recommended by someone a little bit smarter than they are." This sentiment rings true in the context of user ownership as well. When users have ownership stakes in a platform, they feel a sense of aspiration and connection. They want to be part of something greater and be associated with individuals who are more knowledgeable and experienced.

In conclusion, the ownership economy is transforming the landscape of consumer software. By embracing user ownership, platforms can harness the power of their users' contributions and align economic interests more effectively. To capitalize on this trend, founders and entrepreneurs should aim to build accessible products and protocols that foster adoption and participation. In doing so, they can create platforms that are not only larger, more resilient, and more innovative but also embody the aspirations and desires of their users.

Actionable Advice:

1. Embrace user ownership: Consider how you can incorporate user ownership into your product or platform. Find ways to incentivize and reward users for their contributions, and align their economic interests with the success of the platform.
2. Foster community engagement: Build a strong and supportive community around your platform. Encourage users to share ideas, collaborate, and contribute in meaningful ways. This will not only deepen user engagement but also create a sense of ownership and belonging.
3. Prioritize accessibility: Make your product or platform accessible to a wide audience. Simplify the user experience, remove barriers to entry, and provide clear value propositions. By making your product more accessible, you can increase adoption and participation, driving the success of your platform.

By following these actionable advice, you can position your product or platform at the forefront of the ownership economy, tapping into the immense potential of user-owned and operated networks.