— Value Chains for the Rest of Us

An open source co-op to connect you directly with the best experts available.

Joy's Law: The best expert for your most important project doesn't work in your company. - Bill Joy, Co-Founder, Sun MicroSystems

In the debate about the Digital Divide and inequitable rewards from the New Economy, few have discussed the possibility of a sweeping, technology-driven change in how people work and are rewarded. The assumption is that we are stuck with historic social constraints and economic inequities, even though the record of technical progress is that new communication tools unleash sudden large changes rather than incremental ones. Such a change may be imminent. Value Chains are the means by which originators get rich in a market economy—they are combinations of producers, distributors, middlepeople and retailers. Value Chains have always been hard to forge, defend, manage and collect from, which is why they're so profitable. The Internet is poised to combine productive individuals into value chains which reward their participants as richly as traditional value chains do their originators and manipulators.

We have observed that:

The economy we are used to is simply an Operating System with protocols for collecting money and describing obligations. Every feature and requirement has been invented one rule at a time over the last 5,000 years.

This old economy is a hacked-together collection of poorly written, mostly proprietary legacy code. Every routine in the economy has been written by a seller, with rare instances of consumer-oriented code imposed by competition or the courts but always implemented by sellers.

The seller-managed economic code base is overdue for a drastic revision or outright replacement by an Open Source successor.

The big payoffs in the old economy are to those who create flourishing "value chains."

Whether comprising one or many companies, the winning value chains add people and productivity rapidly.

The originators of successful value chains are rewarded disproportionately to their actual contribution. This inconsistency is worshipped by capitalists and resented by the individual producers of value.

Even big projects at the largest companies are usually produced by small teams of individuals.

The managers of value chains ensure that their individual production teams are hidden behind a communications firewall so an illusion of anonymous organizational productivity is kept alive. Think of them as "Hidden Value" chains.

Internet protocols are intrinsically disruptive to conventional "hidden value" chains:

The Internet is built to 'route around' inefficiencies, using redundant data and multiple routes to provide the effect of a direct, permanent connection between nodes.

The Internet community 'routes around' litigation and intellectual property claims which slow down the Internet's application to the community's requirements.

The Internet responds to any request equally; no request gets preferential treatment.

The Internet has no time for punishment. It simply reports the offender's actions.

Therefore we believe that:

The Internet is a conversation.

And that Markets are conversations, as described by the folks at ClueTrain.

Work and its Reward is primarily a conversation about quality: money is just the punch line.

The quality of the work-reward conversation, not money, is the best benchmark for a 'New' Economy.

Internet protocols are the best model for a quality-based, more even-handed Economic Operating System.

Establishing a quality-based Economic OS requires no new laws, technical standards or protocols, so it needs nobody's permission.

A quality-based Economic OS is technically trivial to implement.

Any group may establish any set of economic rules to use among themselves.

If new rules become broadly adopted by like-minded users, new economic protocols can evolve into a viable option for those who feel limited by the old one.

New economic rules can be as even-handed as the Internet, if they are uniformly applied. "Symmetry" is another description of uniform.

Symmetry requires a single class of participant.

Symmetry requires decentralized record-keeping.

Decentralized record-keeping requires open, redundant, distributed datasets.

Every productive node in a new Economic OS (whether an individual or company) must have resources and processes MORE powerful than most nodes in the Old Economy:

• Easier access to new markets

• Better global visibility based on the current quality of output rather than a domain name or brand based on old news or recent hype.

• Better ability to increase output quickly without sacrificing quality.

• Faster compensation for high-quality output.

• More detailed visibility into every transaction.

• Greater monetary rewards to those who increase the availability of quality work
  (corporate-level value chain rewards that may be huge by individual standards)

We propose that:

Transactions must be graded and commented on by the buyer and the producer.

Transactions that receive poor grades are discounted.

Payment is immediate and final.

The records of all producers and buyers are universally available, allowing everyone to seek out high quality producers and buyers and shun low quality participants.

Records are published in the open on each participant's web space, not behind the scenes on a data server.

Mentors are universally available to teach new users how to:

• get and give good grades and publish their complete record

• earn significant income

• support the distributed data model

• mentor other new users in these techniques

...and to maintain and co-publish (mirror) a copy of their new users' records

Effective mentors should be rewarded disproportionately for value chains they inspire, especially during the early adopter phase.

Mentors who train effective customers are as valuable as mentors who train effective producers.

Mentors may use freeware forms to publish their new users' records and products instantly on the web, indexed so that an excellent record at an obscure domain will outshine a merely good record at the biggest domain.

There is no basis for time-wasting regulations or litigation when:

• each transaction is visible

• the reward for the transaction varies with its quality

settlement is immediate and final.

Quality is simply the comparison of a promise to an outcome.

The web-based forms to record and publish users' records are open and freely available.

Developers are encouraged to create improved versions with enhanced usefulness.

The Xpertweb Co-op is our technical means to realize these goals