Letters to a Young VC: Letter Thirteen
March 19th, 2022

A collection of letters encompassing simple insights and recognition of foundational shifts that any bright minds trapped within the old norms of a VC mindset can use to break free, whether they are just starting their journey or reflecting back on what they wish someone had told them in their early days.

Is a cow a security because it makes milk which can then be used to make derivative goods like cheese, yoghurt, and butter?

Is pizza a security because it is made from multiple component parts and can be fractionalized to be sold by the slice?

Keep the chickens, sell the eggs.

We’re not raising money, we’re raising cattle. Not just going around in circles on a cycle to score points that serve no purpose other than keeping us complacent and locked in to the artificial appearance of sovereignty over our actions.

Raising cattle implies real agency.

Should all property ownership be subject to regulatory pre-approval and require bureaucratic permission for how it is used?

Most cows are physically bigger than other livestock, so they require more space and infrastructure than other ruminant animals like sheep and goats. Even mini cows are a larger financial upfront cost when it comes to maintenance, management and good records of operation.

Besides the purchase of your start up cattle herd, your daily work also includes mixing medication into their feed or injecting it under their skin, monitoring the herd for signs of illness, assisting with calving, performing artificial insemination by hand, shoveling manure and dealing with deadstock, and overseeing the day to day work on the farm. This work may involve extreme temperatures and other sorts of varying weather conditions. You'll need to start early, before dawn, and take important safety measures when working with these large and potentially dangerous animals.

Most small commercial farms will also mean that you will have to manage and direct employees and be responsible for marketing the cattle, transporting the sales stock, maintaining the farm equipment and facilities, and baling hay or pasturing the land for use as feed. How much pasture land do you need to raise a cow? It depends on the level of salad bar that you have in your pasture. Another thing that cows need is water. They need lots of water. Your average full grown cow will drink anywhere from 20-50 gallons of water per day.

Why are we talking about cattle?

The types and amount of work involved in raising cattle –– and in the actual practice of animal husbandry and agriculture in general — are one of the closest analogies for what is actually involved in the operation of digital machines which have come to replace traditional machinery nearly entirely and unavoidably throughout the global economic system.

Some of the issues that have risen up most starkly as we transition from pre-digital to fully digital machines can be traced back to nearly a century of lag in processing and understanding what the use of fast evolving forms of computation mean in everyday human terms.

There is a misunderstanding of digital machines being an extension of complex, abstract arrangements and agreements notationally recorded on paper and the way those paper representations of value can be bundled and stacked. And while digital machinery certainly improves our ability to do that too, what's far more interesting and valuable within what is really happening is that our ability to do work or operate work routines of any kind has been radically enhanced.

This is the fundamental lag in understanding that corrupts our regulatory frameworks.

No one argues that sincere oversight of complex inter party agreements isn't necessary for a common market to thrive or against small players having protection from the abuses of large players in markets, governments and societies. What is argued is that the shape, type and execution of regulatory rules of the road must be overseen in itself also and ensured to maintain the highest standards of integrity and efficacy. Being nearly a century out of date won't cut it.

Digital machinery and the assets they generate as routine output it turns out are far more alike to raising cattle, or keeping chicken to sell eggs, than they are even to tamagotchi. Yet, the popular imagination of decentralised digital assets in particular still lags far behind –– limited to some near ancient fever dream of moving around bits to gain fake high scores that are then traded in the same kinds of opaque bundles that Wall St used to trigger the GFC.

No, authentically Web3 assets, from currencies to staking to NFTs, are not flourishes of accounting sleight of hand –– they are structural representations of actual work done and the mechanistic capacity to do more.

This difference between direct gain from the real work we do ourselves or band together with others to accomplish and enhance through the use of machinery, physical and digital, vs fake work where we still expect to get away with the gains is even more clear when we look at where the hyper-regulatory approach naturally leads.

Micropayments for breathing?

There’s a perverse strain in some factions of regulatory thinking that would love a world, whether they realize the implications of their intentions or not, where soviet gatekeepers would police micropayments for every action you take. From each breath you take in and out, to the precise amount of toothpaste you use, because of the investment-to-return relationship promised in all forms of work. This slippery slope, which has been satirized in Black Mirror episodes and impotently rallied against throughout AAA gaming, is already sliding us pretty far along without even needing to consider the rise of systems like China’s social credit score or the dystopian nightmare offered by CBDCs.

The sharp dividing line between a world where our every thought is subject to validation and authorized access, with micropayment gates, and any semblance of a life where we are free to stake and pioneer our own destinies is, put simply: who gets to decide the work we do and how much of the benefit we gain by our own hands?

With the transition from a pre-digital to a total global digitally connected way of life, we have a choice to make and our own self-sovereignty to fight for.

It’s in the difference between the rise of the computer surveillance state vs the power digital tools can have in the hands of free people.

And what does a better job of delivering that freedom?

The inherent right to implement and operate machinery within the property we own and to delineate, sustain, and secure it with our own actions and capital at stake.

It can go wrong if there isn't a secure mechanism in place to ensure broad and open access for anyone who practices their right to participate in the direct means of production.

Proof of Stake at many levels is that mechanism.

We'll break more of that down in the next letter.

Any value brought in from sales of NFTs minted through this article will be used for building out the F₃M Realm treasury, which will eventually be governed and coordinated by the DAO, furthering to decentralise the web3 fashion capital stack.

F₃Manifesto (F₃M) is a rally flag for the entire web3 fashion movement. It’s a label and realm that is built for so much than just the digital and physical threads and collections that it will spin up and release.

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