Repost from:

I previously wrote about the topic of federated ecosystems which I am proposing as a successor to Web2 corporate structures. I personally do not see a reason why a corporation with more than 1,000 employees should exist ever again. In the same way that remote work has reshaped large cities, I believe the argument for “wanting or needing to stack humans vertically” has declined dramatically.

It’s all about energy. The most energy efficient structure will win.

Building 50 story skyscrapers and asking employees to drive hours per day wastes energy over remote work. The more energy efficient structure will prevail and the other will fade (or be replaced with a new model of high density live / work structures).

So to tell the story about why large corporations seem doomed, we need to model things in terms of energy.

Where do large corporations seem to waste tremendous amounts of energy and how can Federated Ecosystems avoid these energy loss situations?

Here is my list:

  • Churn and hiring: Corporations as constructed today are built with high turnover in mind deliberately. They are run like a grist mill, finding and processing a large stream of hires. Over the years the effect has grown to a point where it is common to talk about “Tours of Duty” of 1.5 year stints at corporations like Netflix.
  • Mafias: Corporations reward a lack of freedom of speech and enforced conformity and cannot tolerate arguments, disagreements or conflicts beyond a narrow range. As a result, only people who do not hold opinions and are not creative typically last long. These types of low openness individuals tend to form mafias designed to gain power and maintain the structure above any other value.
  • Innovation: As mentioned, the narrow range of allowed speech prevents innovation and favors lower quality and less innovative average employees in comparison to startups

So my list may not be complete but we can see that the biggest energy losses come in the form of favoring the less innovative over the more innovative outcomes.

Imagine if you could recreate a large corporation structure but with the following changes:

  • Freedom of expression is very high. Argumentation does not end the structure and major issues are hashed out through open fighting.
  • Churn is eliminated. New talent which is brought into the system and trained is not lost to competitors.

Federated Ecosystems are able to offer significantly greater freedom of expression while reducing churn.

These two together mean that it is only a matter of time before federated ecosystems overtake most large corporations.