As I’m busy working on furthering the development of autonomous agents (by building a proof of concept for storage), I’m wondering how I can continue pursuing this next year? I love the area, and I absolutely love the concept.
Asking for seed funding is an idea. Before I do that, it feels I need more conviction on how I will make money, or at least have a roadmap that will get there. At the moment I’m just exploring it. I do however have conviction that the future will entail rapid automation of programs, and building tools and service to facilitate this, is exciting, and needs to happen. (Thanks to new innovations like Bitcoin).
However, going the approach of a traditional company feels perhaps outdated. You sometimes have to keep some part closed, perhaps destroying potential innovation from the larger open source community. As a company you have to provide something on top of the open source technology. This is the current open-source model that we see being employed. Look at Ubuntu, Meteor or Mongo. Ubuntu is open-source, but Ubuntu provides support. Meteor is open-source, but plans to in the future to provide enterprise level deployments for Meteor apps within companies. 10gen (makers of Mongo DB), provide management services, as well consulting and training.
What their competitive advantage is, is that these companies are usually the experts in the area… because they developed it. I can run my own Mongo management service, but I’ll probably have to get Mongo experts… which 10gen already has.
However, these companies are still a central “entity”, with an open-source tool. Going even further decentralized, you find you are actually veering into interesting territories: you have Bitcoin. (This is not my idea. I don’t recall where I first read this analogy).
The shareholders are the owners of Bitcoin. It is just very liquid stock. The products are not just Bitcoin itself, but all the applications that are being developed on top of it (exchanges, wallets, etc). The employees are the contributors to this ecosystem (all the other companies, and open source projects). The customers are the people at the end of the chain that gets benefits from the technology (they can thus also be stakeholders. In the future people might use Bitcoin without ever owning any). Starting something like Bitcoin back in 2009, you can make to make money if you had enough ‘burn rate’ to last you to 2011/12. If Bitcoin was started by a group of developers that are ‘open’, much like Meteor for example, then the capital investment from seed funding or a Series A, would’ve already paid off. If that was the case as well, development would’ve been sped up considerably, and Bitcoin could’ve taken off perhaps sooner. (There is a separate argument where you can say that the fact that Bitcoin had no real ‘figure’ or ‘group’ or ‘profit incentive’, it got to where it is today, but I’ll discuss that perhaps in a later blog post).
Bitcoin as a business model is an interesting one. In order to create something, or bring it into existence, investors will pay money to be an early part of it (perhaps owning some stock in it, such as Bitcoin), but they will mostly pay to keep the developers employed until the whole idea got a greater network effect and can flourish on its own. And through the process of this, they gained value.
Any altcoin functions in a similar way. Launching an altcoin requires the ‘leaders’ to convince the community (its ‘employees’) to get on board.
These are the type of companies that BitAngels are looking for. (Much of this post came from thoughts of this document).
Have a look at Mastercoin (another link). It functions in a similar way to Bitcoin. Mastercoin is a protocol layer on top of Bitcoin attempts to solve issues such distributed exchanges and colored coin functionality, such as smart property. Mastercoin is an organisation is a combination between the extreme of Bitcoin, and the traditional open-source company. Mastercoin, if successful, will also be a ‘currency’. ie, it’s stock will be liquid. There is however a ‘foundation’ behind Mastercoin that as any foundation, directs and steers the development of it. Funding this foundation is what BitAngels have done. They can now thus ‘speed’ up its natural development process by providing things such as 300 BTC coding bounties. The investors can thus own Mastercoins before they get successful (by minting them), and keep the idea going, giving it a kickstart.
This type of company mitigates a lot of what usually ‘kills’ companies. They have immediate access to developers who buy into your product, and you can now even pay them. The developers can also be equally apart of its success by getting their own Mastercoins. They come and go, it is amorphous. Which means, technically… you don’t have such a thing as a traditional employee. The ‘employee’ is basically working for you on a very flexible job contract. They can take as much leave as they want. They can work their ass off. Their incentive is purely: the more stuff is built, the more value their investment will hopefully become. Much like how anyone can be a part of Bitcoin’s success, but just buying some Bitcoin. If, I as a developer, build a web-app that works to the benefit of the whole internet… the internet isn’t giving me money. But with Bitcoin, the incentive is greater. If I build a Bitcoin-related app, not only do I create value for other people, my attribution to Bitcoin as technology is also gaining in value. It is like as if the internet would’ve paid Facebook for being huge.
So, now I’m thinking. For me to want to help usher in an era of autonomous programs, it is actually foolish to not have it completely open-source and thus gain benefit from the massive community out there. I just have to position myself so that I can get bread on the table each day, until it REALLY takes off. I must also position the idea in such a way that the value proposition (or vision) to fellow developers would be a no-brainer.
Lovely thought experiments!
P.S. Vitalik also wrote on autonomous corporations. On the more technical side of how they could function completely autonomously.