The Urbit Founder Equation

value-creation.md

All serious Urbiters today are on a spectrum from pure builder to pure founder. This is not a problem—it's related to Riva Tez's remark that Urbit is a network of priests who need merchants. It's something like the employer/employee divide (at the extremes), but most of us are a bit more awkwardly in the middle of that span.

Becoming a founder means living in a world with an asymmetric payoff matrix. To found something means the opportunity to create massive value (rather than eke out minor value), and likewise to capture all or a significant portion of the created resources or streams.

Urbit seems to be trending towards a world wherein there is a slowly-growing pool of builder–founders that are perhaps housed in relatively fewer organizations. Urbit Foundation is growing in size and scope. Some other organizations have proven unable or unwilling to work within the constraints of building a hundred-year computer. The Aegean vision points towards a concerted effort that likely lives in one or a very small number of coordinating organizations.

This works because Urbit, like all world-changing efforts, is a shared psychological fiction. Urbit envisions a possible world that does not (yet) exist. We have a sufficiently shared vision of a decentralized future of the village green to make coordination viable.

The question, then, is how to create the 10,000× payoff for founder types without needing to spawn new startups and organizations. Right now, Urbit primarily funds itself and its people via address space allocation. Smaller transactions or acts of value creation are remunerated in stars; large investors or major acts of value creation are compensated by galaxies.

Is the payoff for pure address space large enough? Is Urbit actually attractive *enough* for founder types? Or put another way, are there enough seats at the table for founder types?

Pure address space is bounded. That means that it is deflationary, and (assuming success) a galaxy in 2100 will be worth more than a galaxy in 2050. Founder value capture is at risk of becoming rent seeking, in that long-term view. But long before then we have a different problem: can distribution of address space produce sufficient motivation for founders in 2024?

To succeed in a limited operating environment, Urbit must create the same opportunity for outsize value capture that being a conventional founder affords. Can Urbit represent a new mutant form of capitalism, or do we have to find ways of tracing the old routes? What's really missing in a few-company Urbitverse is the chance to create or capture new allocations of “ownership shares” that have open-ended upside. (Naturally higher star/galaxy valuation would help, but that is a follow-on effect of the creation of value rather than an innate worth.) Does one star 10×? Does it 10,000×? Does a galaxy?

If we move beyond address space, then there are chances to build other forms of value. %chain/$TOKEN and other blockchain-related proposals create new fungible transaction means for reifying value. L2 NFTs or DAO/OAO shares would help as well. Obviously conventional company ownership stakes are an attractively comfortable model, but I suspect people are tempted to pursue this because of the outsize capture payoff rather than a fundamental need to operate that way. It's also good to have a free hand and be your own man.

Urbit has to balance this approach moving into its next phase. We're in a critical phase of demonstrating value to persist the project forwards, but we also have to focus on the creation of new sources of value, things we haven't paid attention to or even imagined yet.

The shift to an institutionally smaller ecosystem will permit the cats to be herded.

The bounded address space and cryptographically secured nature of address space is one version of value capture, and that creates a "sit on your deflationary ass(et) to wait for other people to add value to the network" effect. But I think it is similarly important for contributors to recognize what arena they are playing in with the digital gold rush that tech is experiencing today (some blend of SaaS, crypto, and AI). That is, what we are building with urbit is a useful tool to exact one's will within the world. It is not merely a tokenized representation of some totally-not-a-security asset, but rather the thing that individuals and small organizations will use to create things in the world. "Value Capture" I would reframe to "Utility Creation". This implies too that some people will use, and care for, and enhance their tools such that their valuation may 1,000x. Others may abuse and misuse them, driving their valuation to zero. Leaning into the non-fungibility of address space is likely a good solution here. Reputation, data markets, and service provision come to mind here.

Helpful to remember here that the brand from the 1850s that people still remember today is Levis. and they were just making denim pants.

Part of the point is that the Levis might have 10,000x'd but there aren't that many of those but lots of people still got rich and built cool things along the way; the only focus shouldn't be the 10,000x'ers, but remembering that you get the 10,000x wins by helping millions to 10x themselves.