The Power of Cards – #2 ft. Azlen Elza

  
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-54:33

Video:

Episode highlights:

  • Designing in nouns and verbs

  • Inside-out vs outside-in design

  • Alien technologies

  • Cards as supernouns

  • Progressive competition

Selected links:

Intuitions about infinity

The idea of infinity is inextricable from the concept of countability.

In other words: there is no notion of the sublime, the cosmos, etc. without picturing some poor sucker trying to make his way up the endless hill, to count the rice on the chessboard, etc.

The infinite is not a standalone quality; it is a failure mode of perception.

There are as many kinds of infinities as there are failure modes we can imagine, plus the one failure mode we can’t imagine.

🏝🏝🏝

I am on an island with as many beaches as there are kinds of infinity.

Ailana Beach is quiet, perfectly still. I pick up a handful of yellow sand and begin to count the grains. By the end of the day I’ve counted two handfuls of sand. I scan the beach and it’s hopeless – there are so many more handfuls of sand than there are days remaining in my life. I’ll never get there.

On Brick Beach I’ve set up a state of the art counting machine that counts the grains incredibly fast. But every wave deposits a new batch of sand, and the sand is accumulating at a rate exponentially greater than the the machine’s counting speed. I’ll never catch up.

Carraway beach is famous for its jet black sand. Each grain has a sleek, almost alien sheen to it. As I pick one up to count it, I realize that this grain is itself a cluster of micro-grains packed so tightly together that there are at least as many micro-grains in a single grain as there are grains of sand on the beach. I put one of the micro-grains under a microscope and see a packed cluster of nano-grains. I’ll never get anywhere.

Duquesne Beach is a tiny white beach. As I approach it my heart leaps; it seems that there are only a few grains of sand on the beach. But as soon as I sit down to count, something strange happens. Every time I look at a grain of sand, more grains pop out of it. Merely trying to count the sand causes it to multiply. There’s nothing I can do.

And so on.

Would retroactive public goods funding fix non-profits?

Having started both for-profit and non-profit ventures, I’ve found that the grass is always greener: for-profits have beautiful machinery for a busted metric (cash), and non-profits have busted machinery for a beautiful metric (impact).

Is there a best-of-both worlds-arrangement? Probably not, but we can certainly do better.

One recent attempt comes from Vitalik Buterin and the Ethereum Optimism team. In their paper, called Retroactive Public Goods Funding, they advance the idea that unrestricted prizes would establish an incentive loop for non-profits that draws inspiration from venture capital-backed exits:

The viability of this loop rests on the following claims:

  • More public good would be done if people had “exit incentives” that compare to venture-backed initiatives. For simplicity let’s just think of exits as unrestricted cash prizes.

  • It’s easier to agree on what was useful than what will be useful. A system for rewarding impactful public goods projects is easier to get right than a system for predicting impactful public goods projects.

  • Prizes for impactful work are possible to quantify and justify. Free, high-quality education for your country; 90% vaccination for eligible people in your city; an open-source, interoperable healthcare API. The question “How much would this be worth if it were real?” should be answerable for governments and organizations.

The mere introduction of a prize, an unrestricted exit for non-profits, would naturally be welcome to its operators. Today, non-profits have to chart a difficult course in which they wean off grants, which are often highly restricted, and make the leap to earned revenue, typically by delivering value in a completely new way. Consider an education non-profit that seeks to make a high-quality education free to anyone, anywhere. The non-profit may initially receive grants from mission-aligned donors. But over time, those donors may no longer wish to “prop up the mission,” or their funding priorities may change, leaving the non-profit vulnerable. So the non-profit seeks earned revenue, for example by selling a package to schools and districts. But this new direction constitutes a major pivot, and in fact is likely to deter new donations.

What’s less clear to me is: who would fund these prizes? An exit rewards not just the company but the original investor. Would a prize reward the original grant-maker in the same way? Buterin’s paper indicates that 100% of winnings would go to the creators of the project. That sounds great for the creators, but seems to fall short of the tightly aligned incentive structure venture capital enjoys.


One thing I love about this loop for non-profits is that it enables mini-loops. And here the public goods framework actually exceeds the venture model. Venture’s “small wins” – raising a Series A-G – rarely achieve liquidity for their employees. Stakeholders conspire to ensure there is one exit. And even that exit often comes with “golden handcuffs” – conditions or gotchas. For a public goods project, one can imagine several off-ramps along the journey. And one can also imagine the ultimate off-ramp: unlike venture-backed companies, public goods projects may actually shut down operations once their mission has been fulfilled (eg., eliminate malaria).

To make this more concrete, let’s say you’re the governor of a state that’s struggling with low COVID vaccination rates. You get together with your various advisors and determine that it’s worth $500 million for the state to achieve 90% vaccination rates. You might come up with something like this:

One need not progress through these loops in order; an accomplished scientist may go straight for the $100m prize and a middle-school student may be satisfied after winning their $100 prize. But packaging them together is, if nothing else, good marketing: it celebrates the impact we can have at different levels, scaffolds a path of lifelong learning, and calls out the open problems for a given field.

But again: where will the money come from? How would prizes ever incentivize funders the way exits do?

One thought: what if philanthropy turned itself on its head and allocated 100% of funds not toward grants but prizes? Would a “grant economy” organically emerge? Banks and other lenders making bets, ie., investments, based on the prospect of participating in the prize winnings?

The Power of Cards – #1 ft. David Cole

  
0:00
-1:09:13

Video here:

Episode highlights:

  • Magic the Gathering: cards that left an impression

  • Can managers use cards to understand and be understood by their teams?

  • David’s prototype using whiteboard cards (!), label-makers, and dice

  • What’s the opposite of cards?

Selected links:

Whose passions belong in the passion economy?

A new category of work is emerging. It’s called the passion economy, and it’s built on the idea that you can turn your interests and passions into a livelihood. In many ways is not a new idea: services like YouTube, Kickstarter, and even Twitch have been around for 10+ years. What’s new is the stack of services and tools that make publishing, audience engagement and revenue much easier to manage.

Like the gig economy, the passion economy promises to remove the gatekeepers from one’s career: no resumes to submit, no hiring managers to impress, no ladders to climb. Work when you want, where you want, how you want.

But these freedoms inevitably come with snares of their own. With the gig economy, we’ve seen sparse protections for workers, incentive structures that require grueling hours (it’s not uncommon for Uber drivers to sleep in their cars), and the flattening of one’s identity down to a first name and a star rating. With the passion economy, we’re starting to see a different set of problems:

  • It requires financial runway. As Li Jin writes in her Case for Universal Creative Income, “the current paradigm in the creator economy of amassing an audience through free content before eventually monetizing locks out creators who are less able to take financial risks.” In other words, creators often have to produce work for months or years before seeing a return.  

  • It’s powered by consumers. Today’s passion economy depends primarily on engaging audiences at scale. That could be generating ad revenue on your gaming tutorials, having a large subscriber base for your fitness videos, or having a small number of clients who pay you for 1:1 coaching.In all cases, consumers are paying with attention, money, or both for a service that benefits them personally. Other kinds of work, like creating public goods, don’t fit in nearly as well.

  • It’s built for superstars. Venture capital is a hit-based system; most VCs count on a small number of mega-hits to offset a large number of failures. Similarly, and probably not coincidentally, the platforms that power the passion economy rely on hits. As Li Jin puts it, the passion economy is missing a middle class. Spotify’s numbers are typical of other platforms like Patreon, YouTube, and Twitch: “[T]he top 43,000 artists — roughly 1.4% of those on the platform — pull in 90% of royalties and make, on average, $22,395 per artist per quarter. The rest of its 3 million creators, or 98.6% of its artists, made just $36 per artist per quarter.”

As a result, today’s passion economy today excludes a diversity of worthy people, passions, and projects.

Since launching Hello World in November 2020, we’ve seen some remarkable young people share their passions. Here are just a few examples from the 80,000 teens who’ve joined so far:

  • Gustavo is trying to save his local lake in Bolivia from plastic contamination.

  • Jennifer is writing an audio narrative about monsters who face prejudice and discrimination, echoing her own experiences with homelessness.

  • Zainab is creating sand art to express the suffering in her homeland of Yemen.

These promising young people do not have the financial runway to focus full-time on producing more content until they grow an audience. They do not offer services; rather, they are creating art and public goods. And while superstardom may await them, they aren’t striving for it.

So: do these projects belong in the passion economy? And if not, where do they belong? What institutions will support them? What tech companies will build for them?

Icons via the Noun Project created by Eucalyp, Flatart, Smalllike.

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