One of the things that I’ve always found compelling about web3 is the concept of user-owned networks. In web2, many networks were built on the backs of their users and developers. As the famous Chris Dixon example goes, networks and platforms do what they can to attract and cooperate with ecosystem participants early on. Then, as they hit the tops of their growth S curves, they pivot to value extraction and compete with the complementary applications that got them there in the first place. Web3 companies work to avoid this dynamic by giving the participants who help build and grow the network ownership in it. This is a powerful concept and an important ideal. It helps bootstrap networks and creates trust, guarantees, and aligns incentives.
They do this to strengthen their network effect. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows.
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One of the things I am interested in is web2 companies applying this web3 superpower to their domain. I am beginning to notice more of it in the wild. There are different flavors of this ranging from profit sharing to owning actual equity in a company. Bookshop.org gives 80% of its profit margin to independent bookstore in its network. It doesn’t have to do this, but it strengthens its network and creates preference in both buyers and sellers on the platform. When I buy books online I make sure to do it on Bookshop. YouTube has done an exceptional job nurturing its community of creators by famously awarding them 55% of the network's ad revenue.
With regards to equity, Nebula TV has taken a bold approach awarding the creators who produce content for the platform with 50% ownership. And while it may have been more of a marketing stunt than a thoughtful distribution of ownership, NuBank awarded $11.2m in stock to its depositors when it went public. I am sure there are plenty more instances of this happening, and I want to learn more about them.
I find these examples exciting because they are representative of a movement that distributes ownership of internet properties across a broader set of constituents. I hope that this type of practice becomes commonplace because the people who supply the products that power networks - whether books, content, money, or otherwise - should have incentive to stick around and participate in the upside. I don’t think all companies need to give away majority chunks of ownership to their network participants, but token gestures go a long way in establishing trust and preference.
I would like to see more of this, particularly companies that are able to harness this superpower and deliver it to users in a way that abstracts away the complexity of crypto rails. The concept is one of the most powerful things that can drive incentive alignment and value creation on the internet, and I think it can help web3 cross the mainstream chasm.