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Nov 18th, 2013 Comments: 0

Distributed growth

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As discussed in a recent post, the structure of stock can be the source of much tension in collaborative start-ups, whose main purpose is to connect people who will make business together. Such structures need a certain size to be sustainable, and the growth needed to reach that size requires a lot of efforts. And to achieve these efforts, start-ups raise a lot of money, that they have to pay back with a large retribution. So customers, who are the ones who actually create value in this model, happen to leave a non negligible part of that value only to grow a network that will benefit others. That doesn’t really sound fair.

We discussed an alternative to this funding model. But beyond this question of funding, it might be reasonable to find another way to grow. This is even more obvious when you think that any other functions in an Internet start-up is so scalable. Making a web platform requires very little work. Testing and fixing it is so easy. Hosting costs are negligible. And most functions can be automated. So the web can connect distant people who have no relation to the company to make business in a distributed way, but we should communicate in a highly centralized, hierarchical way?

There may be an alternative. The same way Internet start-ups compete with traditional businesses by externalizing their main service, they can grow by externalizing their sales/communication/community management function to a distributed network of local connectors managing their own community of users. You end up with a “glocal” community, a network of networks. Each single community is a small start-up of its own, managed by a connector. It is linked to the global network on which it relies for the platform development, and coordination. But it can live its own life, grow to any size one likes and have its own animation and culture. This model has the relevance of a small local group, but the strength of a global network.

If the Internet is to make all business models distributed, there is no reason why there should still be hierarchical armies of sales persons to sell those distributed services. It means giving up some money, and also some revenue. There are probably many obstacles on that path, difficulties that we don’t foresee. But it looks like it might be worth giving a try. And we will.

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