Dusty blackboards and working code
In the last week, with the blessing of my co-founders and most of our investors I’ve been working on un-startuping our startup.
I’m going to kick off this new blog series by trying to explain why. But first, we have to talk about..
The power of myth
Mythic archetypes and legends motivate so much of what we do.
For example, it’s barely possible to be ‘in a band’ without engaging the mythical archetype of ‘rock star’. The second you pick up that electric guitar you immediately imagine signing to a major label and smashing furniture on tour. Will you be the kind of rock star that develops a major drug addiction and tragically flames out? Or will you get clean, retreat to your mansion, and come back for a critically acclaimed second act? The point is, those myths and ideas are swimming in the very air you breathe when you step into that space. Or perhaps we should say legends — because, like legends, these archetypes are actually based on truth. Amy Winehouse is a real person, after all. But at the same time, they are a very powerful set of ideas. Sometimes a micro-economy can develop around the power of these archetypes. Venues barely need to pay for musicians desperately chasing ‘exposure’ and limo drivers must be kept on retainer at the record label. Regardless of who you are, and where you are at, you’re already swimming in the effects of these mythical archetypes. You don't even have to believe in them yourself, the archetypes have real-world economic effects in terms of how you are perceived by others and in the ecosystem that exists around you.
So — can an organization exist outside of these archetypes? Not really. The best you can do, really, is to be aware of and choose your archetypes carefully.
Startup myths to choose from
Cashless Society is currently conceived as a ‘mission-driven startup’.
But we are realizing that perhaps that archetype is not flexible enough or strong enough to get us to where we want to go.
For Cashless, let’s get the lie of the land in terms of archetypes that might apply to us, organisationally.
Archetype 0: The “fast startup”
The fast startup is a company that, like fast food, moves fast, makes a million dollars, and may or may not have any ‘real’ substance.
To create a fast startup, you must have an idea, pitch your team and your angel investors. Then, get started on that MVP! Find traction! But now you are out of money, you must go back to investors for the pre-seed - but as you do, keep an eye on the runway you’ll need for that seed round, and then the Series A to come. Always think two steps ahead and keep up the pace. Make sure you ‘look right’ to investors. Work on your traction, your funnel, your customer discovery, and — if you are very lucky — maybe even work on your product every so often. Grow fast and adjust course as needed. Your one guiding star is product-market fit — adapting your business to sell widgets that people want. The key is to find something people want, and then double down on that and make it at scale. Scale fast so you can make a million nuggets of data (or chicken) at one-tenth of the price. That’s the idea, anyway.
The underside of this myth — less often expressed, but just as real - is that you must also adapt your pitch to the changing whims of investors. You have to be ‘on trend’ if you want to attract money from investors motivated by a fear of missing out on the ‘next big thing’. You can end up building something that looks investable instead of building a product that is actually game-changing. Even after your raise, you must always be looking to the next one. Your investors at round X only want to hear the compelling story as to how their investment can get them to round X+1 and beyond. Always progressing to the next rung on the investment ladder until you get bought out or go public. If you are mission-driven it can be very hard to hang on to this deeper vision in the face of investors who demand a simple product that fits within a vision that they (not you) will define.
Archetype 1: The Decentralized Organization
Then we have the mythic legend of the decentralized organization, or its more extreme cousin the distributed autonomous organization.
Like some fantastic futuristic cyber creature, the decentralized organization inhabits a world in which code itself can become a legal entity. Unlike the ‘fast startup,’ the decentralized organization gives credit to the idea that sometimes it takes time for a programmer / architect to think long and hard, to build code and contemplate edge cases till their whitepaper and their new protocol. The myth is that one needs merely to spring this whitepaper on the world and it will magically spring into life. And, like all the best legends, it is, of course, based on truth. Vitalik Buterin is a real person, after all. Satoshi Nakamoto too, probably ;)
It can seem like a more efficient structure than a classic start-up, with less pressure to hit arbitrary milestones than a classic startup but that makes it no less of a mythical archetype. A series of ideals that carry with it, not only the hopes and dreams of many an aspiring entrepreneur - but also an ecosystem of platforms, investors, and a community (or should I say subculture) of developers and code within which such archetypal ‘decentralized startups’ exist. It can seem a great idea — but just like any archetype, it has downsides. Second-tier token driven organizations are notorious for cases of unrestrained and anti-social greed — sometimes on the parts of their founders who take off with the money and treat their staff terribly. Also, sometimes (mostly), legions of retail alt-coin investors who care nothing at all about the underlying tech or the vision but are just chasing the next ‘alt coin’ pump. Beautiful websites with futuristic graphics sometimes seem to have sprung from a fantasy world in which programmers don’t need to eat and smart contracts can play completely unrestrained by regulation in a futuristic cyberspace free from the pesky ministrations of lawyers or accountants.
Archetype 2: The mission-driven Social Enterprise.
Ah, the legend of the mission-driven Social Enterprise.
Like all legends, this idea is based on real-world truth but at the same, it carries with it a lot of myth and story building. In practice, it can be amazing or, sometimes, disappointing — often a bit of both. But most of all it's about stating the dream that you can create an organization that is both charity-like and a business at the same time. A business that runs on 100% open source but is also profitable. An organization driven by a clear mission to make the world a better place but also sufficiently attractive as a ‘merely’ economic investment to attract an army of impact investors looking to change the world for the better and make money (for themselves) at the same time. This is a big part of the archetype we were trying to build within, so far. It’s a strong model but it also has some significant downsides. One problem is that when you talk to enough impact investors you realize that, when push comes to shove, they are all too often more focused on the investor part than the impact part. Another concern is when you try to build a mission-driven startup, you frequently get buffeted by the need to looking like a fast startup if you wish to attract investment.
Archetype 3: Revolutionary fervor
We do know our mission — to create a kinder, stronger, and better peer-to-peer credit. We know we want to fight inequality, and help communities become more self-reliant, abundant, and autonomous, and free ourselves collectively from the monopoly on credit within our centralized banking system.
So. Heck. Is that not revolutionary? I’m sorely tempted to try and define our archetype with a firey political statement. Something with a bit of revolutionary passion centered around the idea of communities fending for themselves and throwing off the yoke of the banks.
And don’t get me wrong, many of us are, at least partly, motivated by a similar ambition. But the thing is — it ain’t so easy. Maybe I’m getting old, but before we rush the barricades how confident are we that what we are proposing will actually ‘work’? Because understanding money is, really not that simple. This is too important in my view to become secondary to ‘mere’ politics.
Discussions around money and ‘alternatives to money’ have always been driven, largely, by politics. Struggles over power, especially during a crisis often center around defining (or arguing about) how exactly money works. Since well before FDR declared ‘we have nothing to fear but fear itself’, and since well after the oil shocks of 1974, the definition and understanding of money itself has been a part of the landscape on which many of the political forces of the day resolve their differences. Capitalism versus Communism. Socialism vs Austerity. Libertarian cryptocurrency vs progressive mutualism. All of these battles are fought over larger and more important issues but they take place on the landscape of ideas and specifically ideas about how money works. And in the midst of all the fighting — especially during a crisis — it can be awfully hard to take a moment to look down and study the nature of the landscape itself.
So, for now, let us put politics aside, and concentrate on understanding the nature of money *in of itself* and the history of money *as it actually is*.
Choosing an archetype
So which archetype is right for Cashless?
Well, for now, we don’t know. What we do know is that Cashless Society will no longer live exclusively within the archetype of the fast startup alone. Pitching investors can no longer be allowed to detract from building the idea we’ve come here to build. A compelling business model is important but it cannot be more important than our mission.
It’s going to be a bit of a journey to get to the right model. And hopefully, we’re going to choose to create our own myths as we do so.
I’m looking forward to doing that and hope we can do that together, publically, here on this blog.
A sketch of where we are going.
Our ultimate form is likely to take aspects from all of the archetypes above, and a few others besides.
We’re especially excited by concepts such as governance tokens and exit to community but we don’t want to set up incentive structures that turn us into ‘just another token’ — and certainly not one motivated solely by greed. We definitely want a strong mission statement and we are committed to building an investable proposition that can grow strongly and be sustainable in the long run. This will probably take the form of a governance token of some kind but the details here are very tricky. We will probably incorporate aspects of start-up culture (such as customer discovery and ‘finding a problem worth solving’) but also want to incorporate aspects of crypto-culture (such as being borderless, and non-hierarchical).
So. Stay tuned for the longer-term organizational archetype. But for now, we need an archetype to be getting on with.
Dusty blackboards and working code ✓
Given all the above, “Dusty blackboards and working code” seems like the perfect ‘archetype to be getting on with’ while we figure out the bigger picture.
Where the focus is:
- Examining the protocol itself. A principled, academic, examination of money and in particular credit. With a narrow focus on clarifying the ideas we’ve come up with in our startup phase.
- Rough consensus and working code. Building a real MVP with real users helps ground our theory in practice and this can strongly inform the development of a protocol and a business that works at both a human and technical level
- Doing things in public. This blog post is the first of (I hope) many. I’ll try to blog every week in an attempt to give you an update on our progress. Opinionated through my eyes, sometimes speculative and sometimes only half complete ideas, but, I hope, an interesting journey.
Where the focus is not
- Constantly refining and revising our pitch
- Revising our ‘business plan’ to fit the perceived need of investors
- Being an investable and economically sustainable organization is critical in the longer term, but for now, we are very fortunate to have enough capital and time to put this question on hold for a while, so we can concentrate on the core questions.
- Designing our organizational structure is also vital, as discussed above, but this will take time and, could be very distracting. So I hope that we can design this slowly, but try not to let it distract from our core work in the coming months.
Looking forward to reporting on progress again, next Sunday!
- Miles, Co-Founder, Cashless