Business As A Bridge To Peace

"The best way to predict the future is to create it." - Abraham Lincoln

Blind To Wisdom

We humans have been on a long and difficult path to discover what is true. Our failures have been evident, but there have also been deep veins of wisdom unearthed and applied to the way we have structured our tribes, communities and our nations. Imperfect to be sure, but the key issue we seem to face today is not the lack of wisdom, but that so many of our current social, political and economic institutions and structures appear to be blind and deaf to the wisdom and simple humane values that already exist, and in many cases played a key part in how those institutions and mechanisms were built.

Unbridled by wisdom, the wild dogs of greed, resentment and self-centredness run rampant and undermine these institutions, and undermine our communities. We do not need to look far to see the evidence of this.

Business - A Peace Builder

It is my view that of all the institutions and systems in today’s world, changes coming in the way business will be done are poised to play a central positive role in forming new networks and communities across the globe that support peace.

Of course business in not the only framework in our world that needs to change to usher in peace, but I believe it will be a critical catalyst. If I compare the potential for change in business to the likelihood of change in political and social institutions, or to governments moving the leavers of power more towards peace; business is best placed to move effectively.

There are three significant factors, among many, that give credence to this view:

• The thirst for a more equitable distribution of wealth.?
• Web 3 Technology and blockchain.
• Crowdfunding and the fractionisation of equity.

The tension between the haves and have nots in our world has historically been a source of conflict, unrest, pain and sometimes war. The problem with wealth and power is not the scarcity of it, but the inequitable distribution of both. Business can now play a positive role in changing this. It begins in the right use of new technology and a different approach to ownership and agency.

Luckily there are many people, much smarter and more technically gifted that I, putting a great deal of energy into the changes coming. I will do my best here to at least touch on what I see as the key threads at work. We will expand on these threads more in future posts, and I encourage you to take your own deep dives into the work in this arena.

So many see business as the problem not the solution. Whether it becomes part of the solution or part of the problem depends primarily on whether the technology and wealth is managed with wisdom or by greed. The technology and the desire to create wealth is not the issue, the guiding principles and values are.

In this respect, let me begin with my conclusion. The arc of history trends towards the reflection of the essential wisdom innate within us. Business will facilitate this trend in the coming era. I am not blind to the tragedies of history, we cannot be, but I encourage you to consider the possibilities here.

Blockchain - The Magic Carpet

The transformation of the internet from its Web 2.0 form, to the new Web 3.0 form is well and truly underway. Blockchain technology is at the heart of this transformation. One way to characterise this transforming evolution of the internet is the movement from an information platform (Web2.0) to an interactive relational platform (Web 3.0) that will reach into just about every interaction humans participate in.?

From the perspective of business, blockchain technology will facilitate and underpin every element of business relationships in a fast and technically transparent manner. The principles and values of those that design this technology will determine if the technology contributes to the good, and is safe. Simple or complex relationships will be impacted. By its very nature these interactions will be almost instantaneous, international and directly between the parties involved.

Many of you reading this will have already embraced the technology and will understand it from a technological and efficiency perspective. In the context of the capacity for business to impact the structures of our world and to promote peace and sustainability, one of the most significant impacts of web 3.0 technology will be seen in the monumental changes in how businesses will raise and distribute capital and returns.

The Crowd Speaks. Investor Models Built In The Crowd

Although blockchain technology will significantly impact existing businesses, and our everyday lives,?its more revolutionary impact will initially be on new businesses. New businesses will be the leading edge of the fundamental restructuring of how businesses access capital and finance their operations.

Many many thousands of new business ideas are launched every day in the world. After their initial establishment work, the founders and those working with them will then need to attract capital to progress the business. They will first most likely reach into their own savings, and then out to family and friends.? On whatever level they are successful in that step, in the current system they will likely then need to step into the essentially broken venture capital environment.?

In the current venture capital environment the founders will need to prostrate themselves before venture capitalists, and their institutions, to beg for the capital to succeed. In this case almost all the power lies in the hands of the venture capital provider. They know well that without them the business will fail. They also know that even with their capital, the data confirms that a very significant number of these new businesses will fail, probably in the first three to five years.? The combination of the risk profile and the critical needs of the founders enables venture capitalists to extract painful levels of equity in the business they invest in. The current system not only underpins a disproportionately wealthy and powerful venture capital industry, but by definition excludes the active participation of a much wider group of potential investors…we can call those potential investors, the crowd.

Enter Equity Crowdfunding.

The “crowd” is you and me and millions of others. We are the humans in the marketplace of life, looking to increase our wealth and our capacity to make a difference in our families, communities and in the world.?

Currently most economic structures in the world do not support the capacity of everyday citizens to participate easily or effectively in the growth of their capital, or for them to support with their energy, time, money and expertise the things, ideas and projects they love or believe in.?

The doors of change in crowdfunding are about to fly wide open and enhance and expand dramatically the participation of the crowd.

In the early onset of the digital world, basic crowdfunding models were created, mostly to provide funds for small projects and individuals. These models have developed, aided by the expanding sophistication of the digital environment. Today, many crowdfunding platforms enable investments in property and new business ventures. Though some of these are significant and successful, they are still dancing on the margins of the venture capital environment.

Web 3.0 is about to change this, and profoundly and permanently alter the face of venture capital, investment and ownership. Along with these changes will come even more significant changes to the distribution of wealth and power in our societies.

Fractional Equity And Tokens - A World Full Of Owners

As the number of fully licensed and compliant equity crowdfunding platforms grows around the world, potential investors in the crowd will become more comfortable with the process. The early adopters are already operating on current platforms. The expansion of investors in equity crowdfunding will expand at both ends of the current bell curve. At one end, smaller investors will finally have found a way to increase the reach of their money by investing small amounts in the projects and businesses they believe in. At the other end, sophisticated investors and eventually institutional investors will recognise communities of interests growing on these platforms with a diversity of investment opportunities open to them not seen in the current environment. Additionally these networks will have provided a level of user information and feedback that surpasses any market testing and consumer data techniques currently in use.

The stabilisation of these platforms, where trust in the safety of the compliance structures, and trust in the effectiveness of the technology, will have the following incredibly important impacts on the capital markets and the very nature of investing and business:

1. Founding teams of new businesses will be empowered to fund their business growth without sacrificing large chunks of equity to a few major investors. They will maintain a level of control and management commensurate with the idea (intellectual property) and effort they put into their business.
2. The equity contained within the business entity will be able to be fractionalised and expressed as digital tokens, directly connected to the value in the business.?
3. Investors will acquire tokens. As the volume and stability of the platforms grows, a natural secondary market will develop. This secondary market will give greater flexibility and comfort to investors who may need to turn their equity (token) into cash, and also give greater flexibility to founding teams who may also want to liquidate some of their equity without needing to wait for some uncertain and often long awaited equity event or buy out.
4. With a strong secondary market, founding teams and new businesses can compensate those who have the expertise or passion to work in the business with slices of tokenised equity. The positive impact on business cash flow and the level of commitment, passion and resilience of those working in the business in return for equity, will be profoundly important.
5. Naturally and inevitably, as the doors of investment and involvement become wider and available to larger and larger numbers of investors and supporters, networks and communities of common interest will develop. For example, those passionate about resolving the issues of climate change will gather together virtually, not only to share their passion, information and expertise, but to have access to new climate change businesses to invest in and support. Over time, these virtual networks will connect, or even create local networks and communities underpinned by resources to do more locally.
6. In time, larger and well established businesses will recognise the value of tokenising some of their equity to gain access to the crowd. Those who were previously called consumers and customers will now become investor-consumers. A far more loyal, active and involved participant in the business.?
7. Growing networks of small and larger investors will make decisions based on their perception of the trustworthiness of anyone, including a business, who seeks to be involved in their area of interest and passion. A huge network of people interested in and committed to, say, climate change issues, will scrutinise not only the financial bottom line of businesses entering the market, but their climate impact bonafides.

Equitable Distribution of Wealth.

Currently the distance between the haves and have nots in our societies is a disturbing source of tension. Historically, resentment fuelled by often a profoundly uneven distribution of wealth, is at the root of much of the breakdown in political and public institutions in the west and in increasing the grip of totalitarianism elsewhere. Clearly there are those, who seek change and or to gain more power, who use the flames of resentment to meet their ends. They are happy and ready to stoke those fires of resentment and victimhood.

Whatever your view about how accurately the disproportionate distribution of wealth is portrayed or measured, the experience of many who feel they do not have access to wealth, and therefore the agency over their lives they long for, is a source of despair, and a ripe field of manipulation by the unscrupulous.?

The tragic bloodbath of hundreds of millions of people murdered in the twentieth century in pursuit of marxist utopias fuelled by resentment, did nothing to mend the real issue of wealth and power distribution. Even a society like the United States, a historically critical experiment in democracy and the sharing of power, teeters on the brink, because of the inability or unwillingness of those gifted power and influence by the many, to address the issue of the fair distribution of wealth, power and agency.?

For some of the reasons we have spoken about above, though business has often been seen as a villain in enriching the few at the cost of the many, it can become a vanguard of change in wealth distribution.

Change, aided by technology and the increased role of the crowd, can, from the ground up, influence changes in critical institutions. The window for this to occur is still open in democratic countries. Elsewhere the levers of totalitarianism shackle the internet and access to business equity. There is a need to move quickly. Businesses, particularly new businesses, still have that agility and flexibility to move quickly. They will need to do so.

The two key elements of this wave of redistribution will be the capacity of new businesses to fractionalise portions of their equity, and the capacity of blockchain to open even further the safe and compliant movement of funds internationally.?

Currently the clearest example of the use of blockchain technology connected to the movement of funds is cryptocurrencies like Bitcoin. This is unfortunate and misrepresents the essential good blockchain technology will support.

The fundamental problem with the current cryptocurrency system is that there is no direct link between the currency and any asset of intrinsic value. Therefore at best it is only available to people or institutions with a high risk tolerance. At worst it is a ponzi scheme with a race to get in and get out at the “right” time. Therefore this system is not safe enough for the overwhelming number of consumers and investors.

New equity crowdfunding platforms will emerge that play within the established legal and compliance structures of countries with relatively free markets. The assets on these platforms will be actual businesses or properties with a demonstrable asset value. Tokens using blockchain technology will be attached to that demonstrable value of assets on the platforms.

Over time, founders, businesses and investor-consumers will begin to trust the asset value mechanisms and the technology working within legal and compliant networks. There will be a tipping point. Look at the growth of credit cards and debit cards. Initially many many people were reluctant to let go of the use of cash, and the cost of using the cards was a barrier to entry.? But over time, as what people understood to be trusted institutions like banks distributed them,?and recognised businesses started accepting them, and convenience increased, the cost of use came down, and an explosion of use occurred. We now have a situation where cash is the exception to the rule. It is likely the use of tokens will follow a similar path.

Early adopters are already on equity crowdfunding platforms. The safe use case is already being made. As the technology takes hold and moves beyond borders, and as tokens become, in the minds of everyday people, like credit and debit cards, change will happen quickly.?

Currently building the foundations of wealth redistribution are something like that of building a skyscraper. For a long time it looks like a hole in the ground. It is hard to imagine the structure that will at some point emerge. But once the foundations are in place the tower takes shape, often at great speed.

The foundations of these significant changes in wealth distribution are beginning to form. They begin with establishing the basic technology on the equity crowdfunding platforms, and secondly developing the international networks of compliance to enable investors of all kinds, large and small, to invest safely.?

These Changes Need Wisdom, Not Resentment

These changes coming do not require us to tear down or trash the old. The old will need to embrace the change, or will naturally atrophy.

Movements for change that have resentment and anger at their heart create only new systems of anger and resentment. History is replete with the tragic consequences of revolution forged by resentment and hatred. We need change reflective of our essential wisdom, not our fears.

We often feel overwhelmed by the despair that technology will enable disproportionately the powerful and the wealthy who will use it for their own unenlightened ends. I beg to differ. I am encouraged by my own experience, that each one of us has an innate wisdom within, and that we are by nature aware of the connection we have with every other human and creation. This is true for you and I, and you and I include the wealthy and the powerful.

We are in a window of opportunity.

Our challenge is to facilitate the meeting of the ancient veins of wisdom with the rich veins of new ideas that businesses and founders bring to the table of our lives.

Business is by no means the only source of good and important ideas, but the blend of great ideas and putting those ideas into sustainable action lies at the heart of the best in business.

In this new window, we will vote not only with our feet, but with our energy, money and values. My hope and expectation is that we will do it well.

___________________________________________

Thank you for reading this. If you would like to read more please go to my Substack site. https://theclearmindway.substack.com/