Network Bonding Theory is at the heart of how networks get formed. Years ago, we could see the effects of network effects, but we couldn't see exactly how they were constructed, like Legos - piece by piece. Now we can, because of Web3. We've been able to see the software and the math and the people and the nodes of the networks interacting. Now that we can see it, we can put language to it and describe it and make it a tool for us to build our startups.

Software used to be the hard part about your startup. Software is getting a lot easier. What's hard now is community building. It's building the network and getting people to bond to your network, the network of your company, because your company itself is a network. Companies have forever made implicit decisions about what to compensate people, how to pay nodes to bond to their network, particularly in the form of shares and salary compensation. At the beginning of a company, you will pay someone a lot more equity to bond them to the network and over time you pay less and less, a power law of geometrically declining rate at which you give out equity in your company, because once that network gets bigger and stronger, more and more people will join to that network.

What I'm proposing is that by being able to put language to it and see it and understand it, we can make it a tool for building your companies. We want to take these historically implicit calculations that networks are making and make them explicit.

Single Player vs Multiplayer

There's a mindset shift that you need to have in order to see what I'm talking about, which is, you've got to go from the idea of a single player game to the idea of a multiplayer game. If you're building a game of solitaire, that's a single player game. If you're selling a SaaS tool to an enterprise company, they buy your tool and use it for their data. That's it, that's all it is. But if you think about how to turn everything you're doing into a multiplayer game, or think of how, what you're doing is a multiplayer game and you didn't see it that way, you will start to see. That's the easiest way I've learned to help founders see what I'm talking about, which is how do I add other people into this game with me? What am I compensating them? What are they getting? What are they giving? What's the implicit arrangement we have with each of the nodes in the network we're bonding into this multiplayer game?

Keep that in mind as we walk through the examples I'm talking about, how we can turn everything into a multiplayer game, particularly your company. We'll start with a network that you're familiar with, which is your startup. You've got people you want to bring in, employees, you've got customers you want to bring into your company, you want recognition in form of press, or social media talking about them, and you want investors, you want people to bring capital into the business so that you can grow it. These are four nodes. There's more, but lets focus on these 4 groups you're trying to bond to your network. You call it a company, but it's really a network. At the beginning of that process, you might find a co-founder, and you split the company 50/50. So you've basically given 50% of the company to the very first node that's willing to join with you. The third person that comes along, how much equity do you think you're going to give them? Maybe, 8%? And then the fourth person, what do you give them? 4%? Fifth person, what do you give them? 2%. What you can see is there's this asymptoting declination of your willingness to pay people to join onto your network.