The idea of a “product” began to change its meaning when there started to be “knowledge” or “information” products. What is a knowledge or information product? The US economy is now 80% service sector jobs. This means that 8/10 jobs are involved in knowledge production. This means that these jobs are involved in the development of human relationships.
However, this knowledge production is still coordinated by a profit motive. This means that what coordinates knowledge production is still itself a kind of knowledge. Money currency is not a tangible, material item, it is a kind of knowledge, it is a meta-agreement about how to attribute value.
Knowledge or service oriented organizations are successful when they create value. And so what do we mean by value? Value comes from an interaction between individuals oriented towards some shared end. As a byproduct of this interaction, they create wealth. Organizations become valuable precisely if they facilitate coordinated human activity.
Coordinated human activity is when people feel safe enough to be open and vulnerable with one another. Transaction costs are low. There is a kind of permeable membrane, where ideas can flow between people.
Coordinated human activity is always based on a shared premise, a kind of shared secret, a foundational myth that orients the behavior of the community. This myth is not necessarily literally true, but it is useful if it saves everyone time.
This founding myth saves everyone time by helping people avoid errors. The founding myth is a concise record of practical trial and error. The human being confronts novelty and consequently makes mistakes and has successes, and through this trial and error, refines the original premise to a greater and greater degree.
If we take this to its logical conclusion, the optimal founding myth is the one that compresses the most practical information into the smallest space. This is essentially what organizations compete for. They compete to compress the most varied practical information into the most concise form, in order to save each other time. Value comes from saving each other time. But what is the culmination of people saving each other time?
When we save each other time, the most important things rise to the top. We are no longer as estranged from one another. We become familiar to one another. We build a layer of shared trust. This can only come about if we can properly avoid errors. So we need the most concise possible record of trial and error. We need to compress all of the information about trial and error into the most concise format.
Computers and technology can compress information in the form of storage. But it is also possible to compress information through narrative structures. The wisdom of the ages is distilled into a simple story. These narratives are not “literally” true, the stories told in religion or in science, are not literally true, but they are useful for survival and flourishing, for saving time. Re-telling and synthesizing narrative structures in the proper way, compresses them further and further, to make the most concise possible record of trial and error.
The founding myth evolves and takes on different aspects to successfully contain the environment. Taking bigger risks leads to bigger payoffs and losses, that means more reliable information about survival and flourishing. The more huge payoffs or huge losses one has experienced, the more critical and relevant information for recording trial and error concisely.
From this, we can derive what the optimal founding myth is. The optimal founding myth is that we already compress the most possible practical information into the smallest possible space. The optimal myth is that our own personal experience is essentially the whole of reality. Our personal experience is the entirety of existence. We know this cannot be literally true because our personal experience is partial, limited, and incomplete. But it is the optimal myth because it usefully makes the field of experience maximally meaningful and consequential. All of the layers of time and information get nested into the present moment. Every moment and every decision is absolutely critical.
This is not to say that our personal experience is maximally true, just that it is maximally significant. The way that we confront the problems is not by attributing them to some external cause, but to an internal responsibility to always see things in their most important light.
In this way, the estrangement of people from one another can be overcome through coordination of knowledge. The profit motive is a kind of knowledge, money currency is a kind of knowledge. The entrepreneur seeks to coordinate based on mutual trust, and maximal information liquidity, to create value for others.
The entrepreneur is no longer only competing against other businesses, he is competing against the entire institution of monetary coordination. He is competing against estrangement and alienation. Every new, successful venture is one that could run on money, but is actually more fundamental than money. It must coordinate people more meaningfully than money can, in order to have any monetary value.
The point of entrepreneurship is value creation, and the only sense of value that has any relevance anymore is building communities of total mutual trust, where money is a measure of positive sum games.