- [ ] #Write ## The Traditional Corporation The traditional corporation held at its core a central tension. On the one hand, internal infrastructure was needed to execute, since coordination costs were high outside the firm. On the other hand, human nature limited the size of a group that could work together.[^1] As a result, the tree org structure was formed. The tree structure addressed this central challenge by creating small functioning teams supported by a large organization that could supply key resources. Though this structure had its inefficiencies and challenges, especially when it came to innovation, it was the best available option at the time. ## A Changing World Technology has changed this equation. The internet, AI, big data, blockchain, and cryptocurrencies have brought down coordination costs outside the firm. Trustless networks are becoming more efficient. These technologies are empowering a new type of structure to be born -- the unbundled firm. ## The Modern Unbundled Firm Today, individuals, or small specialized teams, are increasingly supported by a stack of software services and networks.[^2] Instead of aggregating infrastructure within a corporation, the infrastructure can now be housed on a public network and in software. Each of us will now become an individual node on the network, working together the way components of a market economy do. See also: [[The internet is humanity's collective nervous system]] %% ##### Scraps alt title: Invisible "small team" thesis - One is that companies will inevitably slow down as they grow larger, no matter how hard they try to keep their startup mojo. It's a consequence of the tree structure that every large organization is forced to adopt. - Or rather, a large organization could only avoid slowing down if they avoided tree structure. And since human nature limits the size of group that can work together, the only way I can imagine for larger groups to avoid tree structure would be to have no structure: to have each group actually be independent, and to work together the way components of a market economy do. ![[Pasted image 20220126115930.png]] Small enough teams to function, but a large enough organization to internally supply all key resources. Though this structure was inefficient and moved more slowly the larger it got, compromising innovation and flexibility, it was the best available option at the time. to externalize it. On the one hand, human nature limits the size of a group that can work together. On the other hand, a lot of infrastructure was needed to execute on a company's mission and coordination costs we too high to externalize it. Human nature limits the size of a group that can work together, which is why large organizations have traditionally been forced to adopt a tree structure. But this structure is inefficient. (And this structure, slows the organization down.) Coordination cost outside the firm used to be high, but technology has lowered that friction, making it more efficient. Coordination cost outside the firm used to be high, but technology has lowered that friction, making it more efficient. Luckily, times are changing. Technology is increasingly enabling firms to cloud computing, machine learning, and we can now put that infrastructure on the network. Each of us is a node on the network, working The unbundling of the firm vertical software stacks support independent workers (or small teams with core expertise), connected together through networks. Individuals, or small specialized teams, supported by a stack of software services and networks. knit together by software and networks to have each group actually be independent, and to work together the way components of a market economy do. Each of us are a node on the network. ```query "§ The Unbundling of the Corporation" ``` %% [^1]: http://www.paulgraham.com/artistsship.html [^2]: https://future.a16z.com/solo-workers-software-stack/