Let’s Talk Software Governance

Whether it’s thinking about the roadmap for an open-sourced project or how a cooperative of constituents and their custodians come together, governance has been a pinnacle aspect of our thinking in setting the foundation for EVERY and the greater ecosystem. We researched many models that could potentially bring us closer to providing a system of self-governance, and in doing so, we solidified our intent to establish specific pillars to create the right incentive structures that are aligned with the underlying philosophy of the blockchain community. What that translates to is the proclamation that the interactions between Brands and Shoppers are pinnacle to EVERY governance and creating the space for them to contribute insights and proposals in guiding that governance is paramount.

We’ve engineered exciting initial rules of engagement for Brands and Shoppers, and have aligned them around the fundamental framework of equitable value exchanges. In a democracy where every Brand and every Shopper has a standalone vote, Co-op Members will be able to come together and collaborate. As custodians, our job is to make it easy, informative, and fun while incentivizing members to participate in determining how the EVERY Protocol, the EVERY Token, and their associated funds and value, respectively, will move forward.

The way that we’ve put this together is a very holistic, intricate, and thoughtful piece of EVERY as a whole. The manner in which EVERY governance will interact with software, people, and processes, will demonstrate a level of authenticity between members, technology and the way their interactions are organized. A fully centralized or a non-distributed governance structure doesn’t match with a distributed piece of software. We could build a typical corporation, throw an archaic model on top of a distributed ecosystem, but not only is that illogical, it goes against the fundamental tenets of the ecosystem we’ve set out to build.

Putting in place strong governance from the outset is so important to EVERY because we’re building something ambitious and we want break the status quo. Our governance system will need to be built to empower and enforce our ability to help Brands, Shoppers, and third party marketplace developers to express their wants, needs, and current pain-points so that others in the ecosystem can respond and adapt. Bringing together these different viewpoints and perspectives to create a more harmonious ecosystem while leveraging the blockchain will require a newfound approach. Our governance system will also need to enable an ever-changing ecosystem and protocol in order to help unlock the mechanisms that enable the ecosystem to organically refine, optimize, and grow more efficient for everybody involved.


Originally published at medium.com on February 12, 2018.

Why A Co-op?

We’ve architected EVERY’s Shopper Cooperative as an entity that reflects the nature of Blockchain, personal data ownership, and participatory governance and reward.

It makes a ton of sense for us to think of ourselves as a member of one ecosystem. If we want to make data available for new kinds of value exchanges, fair approaches to margin and prices, and more opportunity to drive innovation within that ecosystem, participants must be aligned in a new and unique way. Part of the benefit of the emerging technology of blockchain, cryptoeconomics and data tokenization will be to provide a new alignment that the system has never seen before. That doesn’t make sense for us to stuff into a traditional corporation. It makes more sense that that would be birthed out of a co-op — an entity that’s designed to operate for the benefit of all its members. A standard oriented around participants seeing dividends is such a natural fit for our approach.

The co-op model will allow for interesting governance structures by bringing existing data and historical insights from members into the fold. Our team and our capacity to recreate some of the efficiencies at the scale that Amazon has produced doesn’t exist; that’s not inside of our walls. But the insights, motivations, and economic backgrounds of brands and shoppers do surpass the capabilities of an Amazon. As a co-op, we will pool that insight and participation within its framework by creating the right incentive structures and governance workflows. By leveraging that engagement, our native EVERY Token will be able to facilitate mutually beneficiary value exchanges between Co-op Members to direct the roadmap, technology, and business decisions that allow for brands to drive new revenue and shoppers to have great eCommerce experiences.

One of the things that always geeks us out is when we can take the physical world and map it into bits; the Co-op will be the most authentic way of managing a physical real-world structure of people and companies against something decentralized like a blockchain. It’s this manifestation of deliberately not creating a trusted centralized authority to manage the governance structure, how parties interact with each other, or how disputes are remediated. Another thing truly fun and perfect about this fit is most of these governance rules will actually be coded into how the co-op is structured at a software level. While we are bootstrapping and leading a lot of this, it doesn’t give us that undo control over how these entities are going to interact the same way that Vitalik doesn’t have control over how smart contracts are executed on Ethereum. We will be trusting the network to manage itself. It’s such a great synergy between those to concepts.

By operating as a co-op on top of an open-sourced protocol, we will be able to stand up and make a promise to the ecosystem that we’re not another retailer, we’re not another eComm platform, we’re not another centralizing authority that’s going to trick them into consuming all their value while working against alternative motives and agendas. It’s frankly the only model that will maintain that open sourced framework and allow for the community to drive the direction and vision for the Co-op.

This technology is new. The value exchanges and the alignment is new. When a brand says, “Wait a minute, why do I have so much margin to work with? Why am I not giving up ten, fifteen, twenty percent of the transaction to the marketplace as a whole?” When consumers say, “Why do I have so much control over my own information?” It’s an easy answer that they can understand — that this is a co-op and we’re here for you. And you will get to participate in that. It’ll lend itself to adoption.

This is a whole new world. None of us are egotistical enough to try and claim that we know how it’s going to play out over the next twelve, eighteen, twenty-four months. (Ten, fifteen years! However long it is.) We don’t know what they will do with that excess margin and how it will impact the interactions that occur between members of the ecosystem. They will do things that we never thought of before. We will enable all of those great experiences technically but the structure of the organization needs to evolve too to match those changes. By giving that power to all the Co-op Members, we won’t have to worry about how it’s going to happen. We don’t need to foresee innovation — we can let it occur and play out naturally.


Originally published at medium.com on February 7, 2018.

Shopper Demand Generation Across Retail Environments


At the demand end of the retail supply chain where advertising and marketplace experiences occur, there are a couple of key layers that sit between the brand and the shopper. Marketplaces, like Amazon and Walmart, and the networks that create demand against those marketplaces, like Facebook, Google, Adroll, and other social channels, have developed yet another layer of intermediation between the brands and the shoppers. These “bad actors,” as we like to call them, have perfected their monetization strategies against centralizing shopper data, hindering these brands from authentically connecting with those who desire to purchase their products.

Everyone has an opportunity for fair trade and a fair stake in the value that they bring to the supply chain, but inside of advertising and demand generation, I do think that there are archaic models that are being relegated into nothing more than significant consumer data strongholds. The owners of these strongholds continue to compound and re-leverage all that consumer data in order to abstract a brand as far away as possible from the shopper. Specifically, when social platforms look to move eCommerce experiences and more of the shopping funnel inside of their environments rather than facilitating a fair exchange with the brand around an attributable model driving against authentic shopper interest and demand, they continue to cheapen brands against KPIs or ad metrics that are incredibly inefficient. That’s an area that feels very brittle and I think that decentralization and disruption centered around the economic model of a brand, ie driving sales or net new transaction, presents a massive opportunity.

The data that is abstracted from shoppers across ad networks or social channels is significant. I’m not sure an individual shopper would be able to comprehend the amount of data that is stored “on their behalf” and then used against them as they are trying to move through the natural discovery process for products, services, and food that interest them. That level of manipulation under the guise of convenience is not only sustainable, but will only lead to withering out of culture and individual expression.

Why Data Centralization is Bad

First and foremost, data centralization is perceived as great for shoppers. A marketplace like Amazon is the most efficient shopping experience due to product variety and the ability to price shop within an encapsulated environment; its seen as a significant value add to be able to go to Amazon rather than going to an individual brand’s site. As a result, Amazon now owns that trust layer between the brand and the shopper. They’ve developed world class efficiencies at getting us our products swiftly and inside of the terms that make sense for us. But there’s a deficiency that has been occurring for the Shopper over the last several years that’s about to see a significant spike: margin extraction.

In order to continue to extract as much margin as possible out of every transaction, the Walmarts and the Amazons of the world are now having to move rapidly into private line development. For example, as a shopper, one used to be able to go to Amazon to buy Energizer or Duracell, but Amazon Basic batteries now dominate the search query.

We see a lot of testing in the emergence of private development from Amazon through product lines like Amazon Basics. They have dozens and dozens of private lines that operate as independent companies and entities so that they can start to remove all the value from the brands that originally generated the demand. By collecting all data related to the shopper’s response to those brands’ products, they gain insights into the products’ successes and failures. Based on that data, they build out different private lines across diverse product categories, undercutting brands in a variety of incredibly harmful ways.

While a shopper might value the convenience provided over the future of brand, these tactics have a negative impact on them as well. Amazon has shown the tendencies to manipulate pricing once they’ve isolated and controlled the product category. So, a simple example is batteries. Once they own the vertical in the product category, they control the market and are able to dictate online pricing. Its relevant to expect this behavior to increase for shoppers.

While these big detriments of price manipulation and relegated product selection are clearly of importance, the shift to private line development erodes culture. The artisans, the creators, and all the people who put the time into research, those who dedicate years to developing products, understanding products, and creating raw product goods, they are literally robbed of their rewards and creativity. There’s a moral opportunity to make sure and think about giving shoppers legitimate product selection. As these environments move sharply into private line development, the artisans and fashion designers are removed from the workflow. By no means is the private line fashion team at Amazon capable of developing anything like these actual brands and manufacturers can from a creative and culturally relevant standpoint.


Originally published at medium.com on January 20, 2018.

Retail is Broken.

Retail today is Amazon. The efficiency, ease of use and selection for Shoppers has afforded Amazon an unparalleled dominance in modern Retail. Additional marketplaces such as Flipkart and Walmart rely on centralized processes to create and deliver internal value returns. This value creation requires the maintenance of running marketplaces at a substantial cost of capital. With these costs comes an expectation of increased value to Shoppers over time, but where does this value come from? The current centralized ecosystem creates an inescapable obligation to continue to extract margins from Brands, the products they bring to the marketplace, and those most vulnerable upstream.

I believe a Retail marketplace can only be healthy and sustainable if it provides valuable economic engagements for both the Brands and Shoppers. The current landscape of Retail does not reflect this.

With an obligation to external shareholders driven by economically incentivized humans, these centralized marketplaces have developed a business paradigm that drives value extraction by leveraging the exchange that occurs between Brands and Shoppers in order to increasingly consume Brands’ margin and a Shopper’s time and money.

The combination of these strategies driving the centralized system and Brands’ unfortunate tolerance for margin extraction will eventually cripple the ability for a Brand to participate in the marketplace altogether. With this impending reality, existing retail marketplaces have enacted a strategy of margin extraction combined with the leveraging of all data concerning product and related shopper interaction. Holding a superior position in understanding what products will serve the demand Shoppers have, they bypass the Brands they claim to serve by manufacturing private line goods based on that data.

Once Brands have been removed across key segments, selection decreases, price manipulation strategies begin, and the trust that the marketplace once brokered is eroded.

In short, all seems lost for the Brands creating the experiences we desire and for the Shoppers looking for the style, quality, and selection a free market should offer.

WHY RETAIL NEEDS TO DECENTRALIZE.

As someone who’s contributed to this problem personally over the years through my work in eCommerce, I’ve since developed a personal drive to help reverse this trend. To that end, my team has begun building a new open-source blockchain-based protocol (The SHOP Protocol) that will help restore balance to the system by providing a collaborative digital commerce data exchange that supports the transfer of value across Retail, Grocery, and Services supply chains in the following ways:

1. Control Over Their Data: Introducing yet another centralizing marketplace would be extremely fatiguing Brands. Another entity collecting their data within a far too recognizable system of looming fees or alternative monetization tactics would leave them listless and disempowered. We can’t re-centralize their data for our independent intentions and benefit. The opportunity to standardize and organize their data within a co-op environment, one that is built on principles providing them the ability to monetize said data at every step, would only work within a decentralized ledger of data they own and control. Here, Brands maintain their existing independent systems while we maintain interoperability with those systems, allowing for them to move towards unleashing their data within our decentralized framework.

2. Control over the Marketplace: Committing to the scale of building a consumer retail marketplace would be irrational for us to pursue. There is a substantial difference in the level of effort it would take for a centralized entity to create all of the rules, business logic, product determinations and moves necessary to deliver on par with Amazon. However, if Brands have an incentive structure matched with permissioned control over their data, they can dictate said logic, determinations and rules via ‘smart contracts,’ and a reward-bearing complementary governance, thereby removing the need for a centralized organization to fund the humans and processes needed.

3. Product Lifecycle Management: Brands need to better understand a Shopper’s interest in their product to effectively optimize downstream change in subsequent product or product line development. Once they enjoy the benefit of owning their data and understanding how that data moves through physical and digital commerce experiences to reach Shoppers, these Brands will be well positioned to respond with more agility and accuracy as they grow. Practically, this enables brands to intuit to what products to produce next for greater success.

4. True Market Diversification: If we’re left with commoditized Brand value and generic product designs made by the broken retail marketplaces of Amazon, Costco and Walmart, we will continue to see people wearing Kirkland jeans. With the SHOP Protocol we’re not moving Brand and Shopper data down into a new database environment so that they can access it better. By storing their data in a distributed ledger where those who need access to it will be forced to operate off of permissioned datasets rather than ripping off and centralizing the value in the data. We’re shifting the leverage in the equation back to the key participants: the makers (Brands) of the products and people (Shoppers) who want them.

[But how exactly are we going to bring decentralization to the market? We find out in the forthcoming Part II of why retail is broken.]