Years ago, I read a Sci-Fi book called The Unincorporated Man. It was only so-so as a work of fiction, but it had a core idea that I am super interested in. Trade-able shares of individual people.
I love markets in everything. Well, the truth is that everything already is a market if you broaden the definition, it’s just that most are very bogged down with bad information, bad incentives, and inefficiency. Institutional monopoly interventions and prohibitions cause lots of really clumsy markets, where they could be orders of magnitude better. Allowing exchange of everything, even money instruments, in markets we don’t associate with money, just allows better ways to express and attain desires and allocate resources.
So shares of you. What’s the idea?
You are “Me, Inc.” You will produce and create a ton of value in your life. And you’ll capture as much of it as you can. But you might have a cashflow problem. When you produce it may not line up with when you need or want to capture it. What if you could access the value you produce on your entire life timeline at different times?
What if you could securitize your future value as a tradeable asset?
I started thinking about this about a decade ago with small businesses. There are so many successful small businesses with great revenue and profit margins whose owners are getting older and have no clear succession or exit plan. SMB’s are hard to exit, and furthermore, most owners don’t want to exit entirely yet, but they’d love to be able to take a chunk of the value they’ve built off the top and buy a vacation home and spend a little less time at the office. But there’s no large market for selling shares of an SMB. In other words, their value is not liquid.
When I launched Praxis in 2013, my original idea for tuition was a $5K downpayment then 5% of starting salary for 5 years. I didn’t go with it because it seemed complicated and there weren’t many instruments that helped make it easy. I also found it hard enough to sell the idea of skipping college, and selling a new funding mechanism was also confusing the early customers I asked. Now the world has come a long way and everyone knows you don’t need college. Now the payment structure including a cut of future earnings is in use with many code shools and has investors set up to make it work. They’re called Income Share Agreements (ISAs).
ISAs so far are tied to specific services. You get accepted to a code school, then sign an agreement to pay a percentage of future earnings to the holder of the agreement. The school sells that agreement to a pool of investors to get the money to serve you, and the investor collects later when you’re hired.
But what if it didn’t have to be tied to a specific school or program? What if we could individualize it, and free it entirely from intermediaries?
What if you could go directly to investors and show them evidence of your future earning potential and sell some shares in it and get the money directly to use for whatever you want?
What if you could IPO?
There are many ways to trade future value for current, over many different lengths of time with different risk factors and upside. It could be a share of your income for length of time. Or it could be a percentage of your will upon death. (An aside: I know a guy who used to buy life insurance policies then sell them to others so they’d pay the annual premiums but collect the payout when he died. He’s an old guy and jokes about all the people who want him dead. Strange, but not a bad idea!) People could own a chunk of the equity in your home. It could be any number of things. You could sell your shares, and buy them back. A true liquid market in your individual value.
But don’t just think about it from the seller standpoint.
Imagine being able to invest in up and coming YouTube star? Imagine a fund of 100 AAU baketball players?
My mind gets going on this and the possibilities are endlessly exciting. The entire structure of life and career could open up with so much more flexibility. And of course, no one would have to sell any shares. But true self-ownership means ability to exchange your value, services, and property. Expand the scope and make it easier!
Of course, this would require a way to show your value and prove why your shares are worth buying and your current market price. A dynamic profile to showcase what you’ve done, your ability, interests, skills, connections, etc. (Oh, hello!:-)