Part V – Designing a Startup Society and Building a Network State

Designing a Startup Society

“The historical/moral/ethical angle just might be the missing ingredient to build startup societies.” Balaji Srinivasan

Designing a startup society does not mean creating a comprehensive political ideology or social operating system. Tackling too many problems at once would be overwhelming and likely result in failure. Starting a new country the network state way means discovering a “nation” of people with a specific problem that a new approach could solve.

A new startup society founder looks for a broken aspect of the World, writes a history of the failure, and then builds an opt-in community to solve the problem. To innovate socially, morally, and legally, network state designers need history. Challenging broken aspects of the status quo requires founders to understand the “legitimizing stories” that form the foundations of broken institutions better than the proponents of those institutions do.

Once startup society founders discover the history of the failure, they look for alternative social arrangements in history that produced better results.  They then boil the solution down to a single commandment which flows from this historical research.  Consider the US FDA food pyramid, for example. It states that carbs and sugar are healthy.  A startup society disagreeing with the wisdom of the US FDA food pyramid can create its own space outlining what it views as healthy, explaining why, and innovate upon the idea.  This  innovation draws new citizens to the startup society and allows for focused testing of the innovation.  Network state founders  provide a different “story” of history along with a moral vision leading to a better future.

Example Community Themes – not requiring government approval

  • Digital Asset Registry/Regulator – See next section
  • Truth Union – See next section
  • Digital Workers Guild – See next section
  • Sugar Free Zone
  • Health Community (removes chemicals or other items seen as negative to health)
  • Peaceful Parenting Zone – no hitting kids
  • No Plastic Zone
  • No Car Community
  • Sustainable Farming Zone
  • Eco Villages
  • Cultural Community – an online “nation” for nationalities without a state.
  • Religious Community – Connect and organize religious groups scattered across the world

Example Community Themes – requiring government approval

  • Digital Asset Zone – A digital asset bank and on/off ramp to the fiat currency world.
  • FDA Free Zone

Building a Network State

“If you can bring the Network to bear on an issue, it will often be the most powerful force.” Balaji Srinivasan

Building a network state includes seven steps divided into three phases:

Phase 1 – Build a Network Union

  1. Found a startup society as an online community
  2. Use a network union to organize for collective action and mutual benefit
  3. Build trust offline and a crypto-economy online

Phase 2 – Build a Network Archipelago

  1. Crowdfund physical nodes bringing people together
  2. Digitally connect physical communities
  3. Build an on-chain census

Phase 3 – Build a Network State

  1. Gain diplomatic recognition

After designing a startup society, setting up a network union involves developing an online community capable of coordinated action. Initial technology is built including mechanisms for tracking if and how members support the community initiatives. The startup society founder plays a key role here in helping coordinate action. One early goal should be to engage members in actions that fosters connections and trust. The community must also seek opportunities for developing a demonstrably meaningful economy online. In the future, the startup society will need to provably demonstrate economic impact to potential partners.

When discussing the idea of network states, people often move quickly past the creation of a network union.  There seems to be a rush to negotiate with governments and purchase land. It is the network union, however, that holds the power of change in the near term.  Network unions are the birth of a new kind of institution for the digital age. They are a completely fresh approach to collaborating on shared action in a decentralized, open and trustless manner. Once a network union accumulates followers, builds an online economy and a live census to track progress, the community is in a much stronger position to crowdfund land and move into the second phase, a network archipelago

A network archipelago is the startup society’s initial  venture into the physical world.  At this stage, the startup society operates in compliance with all local laws.  A network archipelago the size of an apartment building or cul-de-sac is not running its own police force or operating at odds with the local government. If a community’s one commandment does not cross any legal boundaries (ex. sugar free zone, no plastic zone), the community can live in harmony with the government and nearby non-members.  In the event the network archipelago seeks to go beyond the host country’s existing regulatory framework, however, it would require status as a special zone prior to purchasing land.

Once the community matures and successfully navigates through the network union and archipelago phases, it might elect  to negotiate for diplomatic recognition and become a true network state. Skeptics balk here.  They say, “Why would a nation state grant diplomatic recognition to a network state?” Startup society interaction with nation states, to date, has not been great.  As startup societies utilize novel approaches and technology to enhance their value proposition to states, however, governments will change how they see and interact with startup societies. Network states represent a giant leap forward in how startup societies create value for and relate to governments.

Inevitably, many network states will fail. Projects will start, merge, fork and be discarded in a Cambrian explosion of governance innovation. Ultimately, however, enough will succeed in creating parallel institutions differing in many respects from society as we currently know it. The results will speak for themselves and eventually lead to comprehensive governance stacks people voluntarily choose.