I predict the market cap for all of the JobCoin Tokens deployed during the next 5 years will exceed $100 Billion. I'm confident about this prediction not because of some "Dr. Evil-like" desire to make "$100 BILLION DOLLARS" but because the advent of crypto-currency tokens like Bitcoin, Ethereum and KIN have provided the world with the raw materials for inventing a new method of customer acquisition and wealth-creation.
Before dismissing this prediction as hyeperbole from a crypto-currency fan boy or the pipe dream of a JobCoin founder, please read this entire post to understand why WorldShop / ShopO is not only going to be worth that lofty valuation but it is also showing how other startups can use their same DAC -powered DAO technique to crystallize consensus, coordinate collaborations and change the world. In addition, you many want to read this supporting post on the why the author's next $100 billion prediction is credible.
JobCoin will have all of its 100 billion tokens deployed and fully trade-able during the next 5 years. These tokens have a guaranteed base value of $0.01 per token (i.e., a floor under which the price cannot fall) which implies a base market cap for these 100 billion JobCoins of $1 billion. As this occurs, all of the holders of these tokens will have a shared interest in seeing their value increase from $0.01 to $1.00 or higher. The collective alignment of interests in an increasing price for a mutually held currency will cause the holders of JobCoins to support their common interests.
In the case of JobCoin and ShopO, this $1 billion growing to $100 billion represents a huge amount of "free" marketing funds from between $100 to $10,000 per customer that can be used to reward ShopO Circle Leaders who help ShopO grow to 2 billion ShopO Circle Members using their services. This level of growth brings us on par with Facebook's 2 billion users which they monetize at a level justifying their current market cap is $500 billion via advertising. Therefore, it is reasonable to believe that ShopO can monetize this same sized group $100 billion via commissions and membership fees.
The following chart shows one method of achieving the $100 billion valuation based on 24% year over year growth. However, due to the special dynamics of a DAC-based token system coupled with a set of blockchain-constrained maximum allocation rules, this price may actually be achieved earlier than the 20 quarters shown below.
While these are just predictions which anyone could make, the rationale for them is provided below along with the history of the author's last prediction about a company being worth $100 billion 5 years prior to their IPO.
KIN's Lessons for The Little Red Hen
What if the Little Red Hen could have ensured that everyone helped her?
In the classic children's book, the Little Red Hen ends up mad because she had to plant her wheat, harvest her grain, grind her flour and bake her bread all by herself and then must deal with her neighbors' requests that she share with them her loaves of bread -- even though they all refused to help her when she needed them the most.
Imagine if instead of doing all the bread making work herself, the Little Red Hen had created 100 tokens that she could pass out to her helpers with the promise that they could later exchange the 1 token that each earned for 1 loaf of bread. In this case, she would have had "paid helpers" to share the workload and thereby avoided the need to do it all by herself. In addition, she would have created a fair allocation method for the wealth that she envisioned as the entrepreneur and that she and her team created.
This is an example of how a token-based reward system can be used as a startup funding source and as the payoff mechanism for virtually any Dominant Assurance Contract or DAC (see the key paper on The Private Provision of Public Goods via Dominant Assurance Contracts here: https://mason.gmu.edu/~atabarro/PrivateProvision.pdf by Alex Tabarrok from 1996 that explains in academic terms how his DAC invention works).
The Beauty of DACs
In short, a DAC is an innovative method of influencing a group of people to act in their common interest or to earn a personal benefit that only comes into existence when a sufficiently large group acts together. What makes a DAC a dominant strategy is that it will work even when each prospective participant is highly skeptical that a sufficiently large group of fellow participants will ever commit to acting together.
A DAC improves on the familiar Groupon "deal tipping" concept (i.e., a plain old Assurance Contract) because with a DAC the Groupon-like deal not only tips (i.e., creates a "winning payoff" for all members) when a threshold number of participants sign up within the required time frame but also provides for a smaller but still valuable “failure payoff” to each participant who signs up even if the minimum participation threshold isn’t reached.
This guarantee of a “failure payoff” causes more folks to take the time to sign up (even if they believe the chance of the deal tipping is a long shot) because their acts of signing up are underwritten by the guarantee of a “failure payoff.” So, all that is needed to make almost any deal tip is that the group value the “failure payoff” enough to warrant their time in applying for the “winning payoff” and that there be someone who is credible enough to back the “failure payoff.” (NOTE: Tabarrok calls this person the “Entrepreneur” but I prefer to call this person the "Sponsor" because it may be that this funding partner is distinct from the Entrepreneur who is typically more focused on delivering the "winning payoff").
A side-benefit of the DAC structure is that if the deal tips the “failure payoff” never needs to be paid by the Sponsor. This is important because it allows the Sponsor to be generous in the creation and size of the "failure payoff."
Using our Little Red Hen (LRH) example, the Entrepreneur guarantees that 1 LRH token is worth 1 entire loaf of bread if and when all the necessary workers sign up, do their parts and the planned-for outcome is achieved and the Sponsor guarantees that 1 LRH token can be exchanged for 1 cracker which is chosen from the Sponsor's adequately stocked cracker barrel if and when the LRH eco-system fails to create enough loaves to cover the total obligation represented by the issued LRH tokens.
In addition, the Sponsor is also happy to exchange 1 LRH for the 1 cracker "failure payoff" at any point in the growing season or bread making process when any participant is feeling like they no longer believe in the likelihood of the "winning payoff" occuring in a time frame that is meaningful for their own needs. In essence, a DAC based on a token-exchange model with a valuation floor as a "failure payoff" provides a very flexible model that works for aligning the interests of an entire eco-system.
How the Bitcoin Eco-system is a DAC
Likewise, what Satoshi did with his Bitcoin white paper was to find a way of using a hypothetical virtual currency with a maximum allocation of tokens to create a DAC that would have both a “winning payoff” of 21 million issued tokens as part of a new global currency that increases in value based on Bitcoin’s adoption by more and more participants and a “failure payoff” that promised to reward the Bitcoin miners and fiat-currency traders with sufficient increases in ownership and/or currency value to establish ready-made exit ramps for any of them who wanted to take all or a portion of their Bitcoin holdings and receive their “failure payoff” for leaving the Bitcoin eco-system early.
Like any form of money, the Bitcoin eco-system relies on the “collective acceptance” and “collective intentionality” of the participants. Thanks to Satoshi, Bitcoin has given the world a new “man on the moon” moment in that many new things now become possible because the Bitcoin global experiment has worked. Specifically, huge value can be created without the ongoing support of a competent, visible, human being actively driving the process forward (i.e., there is no CEO of Bitcoin who has to hire a team and manage a company).
To use a construction analogy, Satoshi was an architect who used his Bitcoin white paper to document his vision for a new type of skyscraper. The white paper also provided the rules for an eco-system of individuals whose collective acceptance of his vision of the completed skyscraper (and the future rents that it would generate) provided the ongoing funding mechanism necessary to reward the workers who choose to help build the skyscraper. While that may seem like an unlikely leap of faith on the workers' part, we are comforted by Bitcoin's market cap of over $87 billion which has been built based on a similar belief in a shared vision by tens of thousands of individuals who chose to spend their time and money as miners to earn a future reward.
A New Model for the Growth, Engagement and Monetization of Startups
In a way, Satoshi’s Bitcoin-powered, Decentralized Autonomous Organization (DAO) is a new model for what any startup can now do. The first step is for the startup to envision an end-state that would be fairly easy to realize if they only had either $1 billion to implement their plan (or whatever amount of funds are sufficient to directly compensate an eco-system large enough to achieve the goals of the startup) or millions of users already actively supporting the startup's product. The key to this new approach is to first publish this vision in a white paper showing how the to-be-raised funds will be allocated to the participants who help the “little red hen” to plant her wheat, harvest her grain, grind her flour and bake her bread.
When a sufficient number of participants commit to help and/or actually help out they are given tokens that will deliver to them the “winning payoff” when the grand vision is realized. In the meantime, late arriving participants to the system are allowed to increase their number of tokens and therefore their relative stakes in the eco-system by using cash to buy tokens directly from current token holders. This provides early monetization opportunities in the form of “failure payoffs” to those who have already earned tokens but who don’t want to let their entire holdings ride until the ultimate determination of the “winning payoff” amount.
The genius of Satoshi’s model that wasn't demonstrated directly in the Bitcoin example is that the rewarded activities don’t have to be solely related to token infrastructure management (e.g., paying hardware miners for solving the math problems needed to update the blockchain). They can also be directed to reward activities that support the actual growth in the size and utility of the startup’s eco-system. WorldShop's launch of the ShopO Suite of app which are powered by JobCoin is a great example of this.How the JobCoin Economy is a Better DAC
Over the coming years, WorldShop / ShopO and JobCoin will deploy 100 billion JobCoins in the following manner:
Total supply of JobCoin: 100 Billion Tokens
10% allocation: 10 Billion tokens will be sold in the Token Distribution Event (TDE) and be used to fund WorldShop / ShopO operations and to deploy the ShopO Suite of Apps and to develop additional apps and features. The company will sell 10 billion JobCoin tokens for $100 million through the TDE. Of that amount, $20 million is being sold in a pre-sale, with 0% discount, comprising 2 billion JobCoin tokens (investors included _________, _________, and __________). The rest will be sold for $80 million during the TDE, comprising 8 billion Kin tokens. This price of $0.01 per JobCoin token is a guaranteed floor and either JobCoin or the Sponsor of the JobCoin TDE will stand behind this guarantee with sufficient liquidity to buy up any JobCoins offered for exchange. This guaranteed floor price equal to the TDE price dramatically changes the risk profile associated with participating in the TDE.
30% allocation: 30 Billion tokens will be allocated to WorldShop / ShopO as the founding member of the JobCoin Economy and first popularizer of JobCoins by virtue of the ShopO Suite of Apps. In exchange, WorldShop / ShopO will provide start-up resources, technology, and a covenant to integrate with the JobCoin crypto-tokens and brand. They will be unlocked and distributed to WorldShop / ShopO at 10 percent per quarter, for 10 quarters.
60% allocation: 60 Billion tokens will be used to attract and compensate the members of the ShopO Influence Graph who are beneficiaries of the JobCoin Rewards System which will work as follows:
ShopO == $100 Billion Company Prediction
Given the fact that JobCoin is being dropped into an eco-system of 2 billion Facebook users and 4 billion cell phone users, my belief is that ShopO will become the next $100 billion company based on the strength of JobCoin and that JobCoin will have at least a 100x growth from their TDE price. If one doesn’t participate in the JobCoin TDE or buy JobCoin with cash shortly thereafter, the smart play is to start doing things to grow the JobCoin Economy and earn your share of each day’s worth of JobCoin allocation.
What interests me most about this model is how the ShopO Circles and ShopO Leaders apps become the beneficiary of an army of participants in the JobCoin Economy with no dilution from either the JobCoin token distribution event or the ShopO-friendly token distribution system. This represents a very entrepreneur-friendly method (i.e., 0% dilution) of funding any startup that requires a large number of financially-motivated participants (i.e., the people we used to call employees, contractors vendors and sometimes even customers) with a cash alternative that comes from these early participants’ belief in the future value of the currency.
With a few modifications, something similar could have been created in a traditional Silicon Valley startup if all the employees were to receive only options in the company (i.e., no cash salaries) and they all were to wait for their “winning payoffs” to occur via an IPO. In addition, there would need to be something like a pre-IPO, secondary-market in this startup's options that would allow the employees to cash out a little bit of their equity along the way to pay their bills by selling some options to a Sponsor. Although the SEC won’t allow such an option-only, compensation approach for US-based startups, Satoshi and others have found a way around this.
Kudos to them and kudos to those of us who find a way to apply token-powered DACs to our attempts to crystallize consensus, coordinate collaborations and change the world.
(c) 2017 Altura Ventures Inc.