Back in 2007, I started working on an exciting startup planning to build a decentralised network of customer-support-agents all working across several shared telemarketing or political campaigns. Like early days for startups in India, it was something new for all of us. Young and passionate, we were all trying to make it big ('change-the-world' euphoria) in the startup world, driven primarily by technological innovation beyond monetary benefits. Still remember several all-nighters (naively destroying our health and 'gut', now if we look back) and many many weekender - collaborative coding sessions sparkled with lightening fast progress and fun. Yes, like everywhere else we were conferred with stock-options beyond the cash-based salary. Stock option is a great way to incentivise motivated employees and executives alike. But the problem is - without an "exit" (IPO or M&A) these stocks are valueless. Sure it could be valued privately at several PE/VC funding rounds, but it may not be applied to employees. And unless the startup is really popular (like Uber), it's hard to create a secondary market (less demand) for stocks of these private companies. So the core problems are -
- In absence of "exits" or liquidity of employee-owned private stocks/RSUs, how to monetise start-up employees economically ? It would be years before such an "exit" occurs. (Of course, you can always negotiate a higher salary component, but the problem remains)
- Beyond economic benefits, how we should attribute values to those 'trapped' employee reputations and commitments ?
- How those reputations can be carry forwarded to other companies employee may join later, taking care of privacy, sensitivity and authenticity ? Many-a-times, employees don't really care whether they can "cash out" those stock options or not. Having an ability to carry over those fozen reputation 'currencies' along their career, is all they need and it's a fair demand.
Reputation on Ledger
Blockchain can offer some interesting possibilities around this. As there is a need to "carry forward" reputation tokens across the public domain companies, a shared ledger would be necessary. As Ethereum is designed for financial transactions, we need to look for a different kind of public distributed ledger. What that could be ?