💼 THE FUTURE OF COMPANIES
💼 THE FUTURE OF COMPANIES
A Shift in Talent, Technology, and Corporate Governance in the Digital Economy
What is a “company” of the future? And why policymakers will need to think more like founders.
🎧 chill vibes:
out of time
Do you ever think about: what is a company, exactly?
Henry Adams once observed that a company has a remarkable ability to “condense” social changes.
What he means is that whatever historic shifts are happening in society, you will find people wanting the “company” to reflect their values at the time.
The company was born as a creation of the state, a kind of military and exploratory organization, during the era of colonization and the Dutch East India Company. It became a manifestation of industrialization and mass production, a multinational conglomerate of globalization.
As the company evolved, corporate governance has adapted and been shaped by the ideas and values of society.
The idea is that the company gets some kind of charter, basically permission from the state to operate.
And in exchange for the benefits of getting things from the state–like limiting the liability of the shareholders to assure investors that it was safe to put capital behind a project–the company would in turn provide some benefit to society.
For some, the benefit to society was simply progress itself: better standards of living, more prosperity, and, you know, people having jobs. This is kind of the lineage of thinking from Locke to Milton Friedman.
For others, the company represented the frontline fight for power and interests in a society, involving labor, capital, and the state. It’s what Marx and Hegel, all the way to Piketty, base their criticisms on the structures of power and the overall economy.
And yet, if you believe societal change is happening, we are once again asking ourselves what is the role of the company to reflect our values, particularly in a digital economy?
Stakeholder capitalism? ESG? Re-shoring?
Whatever the answer, the “company” for the next 50 years is not going to look like what we have today.
internet inc.
Technology is changing how a company operates.
Email instead of letters. Zoom instead of an office. Bots instead of workers.
In the wake of this digital upheaval–especially after the acceleration that took place during Covid where before it would have seemed crazy to operate a business with all employees working entirely from home–a shift is happening for how companies operate.
Talent is shifting as well.
Companies can draw from pools of workers outside the traditional, big city hubs because of remote work.
That means highly skilled workers in America can live in smaller cities and metro areas that aren’t New York and San Francisco. This massive migration is well underway.
Part of the story here is Blue City decay, crime, and taxes. But the truth is, this isn’t only an American Blue v. Red States thing.
Global competition for talent is rapidly accelerating.
And it's not just the dev from Boise who can now compete with someone who codes in Brooklyn. It means that a person living in Brooklyn will also have to compete with a coder living in Poland too.
The boundaries of what is a “company” and “employee” are changing.
The ability to consolidate white collar work into project-based assignments seemed unthinkable 20 years ago, but now the same forces of globalization that sent blue collar work abroad are happening today with white collar work.
The concepts of employees, freelancers, and solopreneurs are ushering in a new type of “company,” with the government trying to catch up.
so much trauma
We have seen glimpses of the government response to all of this with the gig economy.
AB5 in California. The recent Labor Department proposal on how employees are classified. The Federal Trade Commission’s rulemaking to ban non-compete agreements.
The push and pull of competition, how much autonomy an individual should have with owners, and the reorganization of what it is to be a “company”-- all are undergoing massive change.
For their part, policymakers will increasingly be faced with a new reality that they will have to compete for global talent.
For sure, the decay of San Francisco is overstated. Amazing AI talent remains there, albeit primarily in the Silicon Valley region, as opposed to SF itself.
But still–there’s a reason that Governor Newsom is prioritizing job creation in CA. He sees the massive outflow of talent leaving the region, and the tax base that goes with it. In fact, the Golden State led the nation in resident departures over the last two years.
As we have written before, the future is going to be policymakers operating more like VCs or founders, in the mode of Mayor Suarez of Miami, constantly trying ways to attract more businesses and talented workers to their regions.
In turn, companies of the future are rethinking corporate governance models and reconsidering where to call “home.”
And they are utilizing tech stacks to more seamlessly navigate the various complexities of legal jurisdictions across the world.
The gig economy, but global.
Of course, the whole issue with the “gig economy” was that workers got the benefits of being their own bosses, but they did not have the benefits of a traditional employee–including health care and equity in the company.
Companies like Deel are leading the remote work revolution by providing HR and tax solutions for decentralized, global, digital companies.
And they are solving not just for making cross-jurisdictional work easier for companies, but also solving for providing benefits that comes with being what we understand as a “traditional” employee.
That’s why their recent acquisition Capbase is so significant because it shows that companies of the future are not just building payroll for more of a freelance economy, but also that the freelancers will have easier access to equity grants and compensation packages like that of traditional employees.
come right back
The key question remains: what do the actual corporate governance structures look like for companies of the future?
You might be thinking: DAOs!
And yes, I think there’s a ton of promise there.
But recently the founder of CityDAO wrote a super insightful blog post that is a must read for understanding the benefits and problems with DAOs.
The key takeaway is that while DAOs might be an incredible way to modernize limited partnerships for co-investment, right now DAOs are lacking as a corporate governance model for an actual company.
DAOs require too many votes, come with too much chaos, and demand too much administration to make it work for operating a company.
Too many cooks in the kitchen.
So if it’s not a DAO, what is a company of the future?
One hint might be at Replit.
Replit recently announced its support for devs in India, it’s second largest developer base and largest mobile developer base on the platform:
The Replit model would be providing a platform not just for teaching a labor force how to code, but also for providing project-based bounties, where teams of devs assemble for a project, complete it, and then either form a startup based on their MVP, or disassemble to find the next opportunity.
Short term, this is magical in terms of accomplishing a project or starting a company while training an entire work force with valuable skills. But it’s not great in terms of the long term infrastructure for being an actual company.
Policymakers who want to compete in this global and decentralized world of highly skilled workers will need to reconsider how to attract talent and support the demands of a company of the future.
The obvious areas are in tax efficiency, supporting workforce mobility, and making it easier for people to start and dissolve a business.
The less obvious, but more important, solution set is designing a legal corporate structure to support companies of the future.
A charter that supports a digitally native, borderless, organization of workers spread across the globe.
The $100 startup?
More like the $100 multinational conglomerate.