30 Business Ideas for Network State Startups

This post has been marinating for a while, and “The Network State” conference in Amsterdam is happening soon on Oct 30, so here it is.

Here are the things I’ve thought about we should build.

In a future post I could rank those ideas by: Difficulty, Urgency, Impact, Scalability, Timing, the below are just an unfiltered mix.

It includes controversial ideas, and isn’t necessarily an endorsement - whether you like it or not, keep Jessica Livingston’s adage in mind: „People like the idea of innovation in the abstract, but when you present them with any specific innovation, they tend to reject it because it doesn't fit with what they already know.“

One set of ideas are actual startup societies, the other set of ideas is “downstream” of startup societies, i.e. things that are possible with a different legal OS (see here).

Governance and Nation States now

Right now we have constitutional nation states, and subdivisions into federal states, county, city etc. All of these are done non-profit and monopolistic, which is why innovation is needed in the first place - monopolistic non-profit have little incentive to improve, which is why they loose money and have low customer satisfaction.

The problems for more competition are:

• High switching costs for demand, i.e. residents and people (due to e.g. travel costs, opportunity costs to leave family/friends/work)

• High barriers to entry for supply (high fixed costs or time-to-market to get jurisdiction, scaling / interoperability with other jurisdictions) 

• Legitimacy for supply (recognition by large businesses, countries, more mainstream audiences requires years/decades of trust-building)

Prospera and the “Free Private Cities” book by Titus Gebel have proposed a model for for-profit cities (not entirely a new idea, private cities existed before), this is a big innovation underway already - like it or not, the jury is out whether it’s successful.

Here are a couple of more ideas to address the above challenges further:

• Refugee Cities strategically located in areas with high migration flows (described e.g. here) with extremely low barriers to entry

• Ex-post immigration process (fast admission, fast eviction): the pre-market approval for people doesn’t make sense, I don’t believe for a second that the bloated immigration bureaucracies are filtering for bad actors well; instead the make the lives of the 98-99%+ of the good actors harder; maybe be more loose letting them in and invest instead in tracking bad behaviour after

• Floating Cities have been the dream for a while but have cost problems: keep watching materials & energy technology, maybe you’re spotting the right timing

• Energy Innovation Zones as proposed by Maxwell Tabarrok, the political climate with the YIMBY, e/acc and supply-side progressivism movements could be right

• The Visa Fast-Track, e.g. a government grants an approved company or an SEZ the right to give fast-track visas, e.g. for medical tourism this would be massive. The government of Montenegro discussed ideas like these with us in Zuzalu.

• Futarchy City: Robin Hanson would like to run the governance of a city like that, i.e. you don’t vote for your leader, instead you do conditional bets (see here)

• Mushroomland: a place optimised for safe psychedelic treatments, this is a much needed solution that I get asked about from time to time; the problem is that it can’t be done in any existing zones (e.g. Honduras), so this is a market need 

• Criminal law innovation: check the work of David Friedman e.g. here

Downstream of Better Legal OS

This is a topic I think a lot about, since it’s what my VC fund Infinita is all about. There are so many things that we could build now or likely in the next 5 years.

“Bits reopen innovation in atoms. Innovation in areas like biomedicine, robotics, and energy is not upstream of the network state, it’s downstream of it.”

Balaji S. Srinivasan

Healthcare

Healthcare is easily the highest-potential since it’s enormously overregulated all over the world and a product that needs delivery in the physical world.

• Medical: if you extrapolate from “Eroom’s Law”, there are 20.000 missing drugs & treatments, i.e. there is an enormous amount that can do by e.g. reducing the time-to-market and fixed cost for new drugs & treatments to pre-1962 levels

• Healthcare + Life Insurance: to create the right incentives, i.e. to keep you alive and healthy, Robin Hanson proposed to bundle life insurance and healthcare into one provider. It’s a simple idea that’s hard to realise because of regulatory.

• Reproductive technologies, e.g. genetic selection, surrogacy, see my episode with Malcolm Collins, many of these are outright banned

• Organ markets: it’s an economist favourite tale to shock non-economists. You can show clearly and logically that everyone involved would benefit from orderly markets where you can sell e.g. your kidney. Maybe airlift via drones?

• Human challenge trials: similar to organ trade this is a shocker. Have people voluntarily contract covid-19 for experimentation? Yet it makes a ton of sense if you think the ethical arguments through, like Jessica Flanigan has here

• “Accredited Ingestor”: one of the key problems of the current medical innovation system is medical paternalism, i.e. you’re doctor and health authority can forbid you from making certain decisions. Maybe make the idea of “informed consent” very explicit and have a process for obtaining it. Under “right to try” laws this is basically the process, if you take it far enough and make it an easy product experience, maybe this can overcome medical paternalism in a practical way

• Longevity Dividend Fund: I had a couple hours conversation with chatGPT about it and I still can’t find what’s wrong with it. It’s bit complex to explain so I will save this for another time. In brief: what if you invest in future treatments that are in development, with a guaranteed appreciation of 1x per year (i.e. if you investment 10k now, you’ll get 100k in treatments later). It’s basically a voucher, potentially a security, so it would run into all sorts of financial regulation.

Education 

• MBC instead of an MBA: master of business creation not administration. You could do it now, but in places like Catawaba DEZ or Prospera it would lower barriers to entry and a culture where that would be a great sell. You start the class with creating a business, and your goal is to make it profitable by the end.

• Talent Agencies: this already exists widely, you bring people from a low-income country and upgrade them to earn money in a high-income country. It’s mostly done via universities that find highest IQ people around the world; however, it’s still expensive for many of them to come and we know university education is overrated, so why not have an agency specialised in the skills that startup societies need and find the talent in lower-income countries to staff them?

• Research clusters: we know university education is overrated, but pure research is still important. Universities and “independent research” still confers prestige, maybe that’s not a bad thing. Much research will be done by e.g. a healthcare x life insurance company for-profit (just like Google & AI papers), but having an independent review that’s trusted by the public could be a good market solution.

Finance 

• Dominant assurance contract platform for investment in new zones or new projects (see Alex Tabarrok here); this is a simply mechanism to encourage investment in new projects by offering a guaranteed small return if the project is below a milestone for funding; not sure if anything prevents them really but seems like a worthwhile thing to do (a better Kickstarter really)

• B2B securities marketplace - you don’t want to be regulated by the SEC because of the risk of overreach and the bureaucratic overhead, and the pernicious thing is you don’t even have to be US-based, it’s enough if you *could* sell to Americans; this forces compliance costs worldwide; an intra-jurisdictional marketplace in Prospera and CDEZ or any other zone could overcome this

• Relocation Insurance: this is again a big one, what if you take the idea “defend people not territory” seriously and when there’s a threat you have a fund to relocate people to safe places that you have partnerships with? The fund would be incentivised to invest in diplomacy that maintains peaceful relations. It could also invest in defensive weapons technologies to deter attacks.

• Holding legal wrappers - if you’re not entirely sold on the whole DAO play (I’m maybe 50% there, so not really) then you need companies registered in jurisdictions to transact; based on my experience it seems to me holding companies are a low-hanging fruit, I have one in Prospera myself

• Wrappers to tokenise other entities, e.g. Delaware companies; see above, I have a Prospera holding that holds a Delaware company - I haven’t talked to a lawyer but from my legal experience I don’t see a problem with just tokenising the Prospera entity and indirectly sell shares in my Delaware companies this way

• Crowdfunded public goods, e.g. roads, monuments, nature conservation. The idea is kinda cool that the community could own the Eifel tower equivalent of the place where they live, or crowdfund new art, museums, roads etc. this way. It’s often said there is not enough incentive for “philanthropy” to fund these public goods, but I don’t believe that because we’re not seeing real competition

• Decentralised property registry: basically that’s what Ethereum and other cryptos do. There is no reason NFTs or tokens couldn’t replace property title registries currently maintained by governments. The technical challenges here are limited, it’s more a legal challenge for jurisdictions to accept those.

Energy 

• Tokenised power contracts (e.g. nuclear, solar panels) - you could have contracts in an open market, i.e. you create a prediction market for security of supply & accuracy of demand; with sufficient volume this could reduce energy shortages and fund new power generation projects, maybe coupled with dominant assurance contracts too before the project is fully funded

• Nuclear fission is a silver bullet for clean energy - the problem is cost; quite possibly much of the high cost is due to market design created originally by utilities regulation (forcing large power plants, security contracts etc.); in new jurisdictions you could start from a clean slate without that baggage of fear-driven regulation or the regulatory capture by the industry (see here)

Transport 

• Airports - this is a big one; airports are local monopolies because supply is constrained by heavy regulations or government involvement. They also have to follow stupendous security processes mandated by the state. Check this bloat:

Currently I don’t see a way for new jurisdictions to build airports, maybe because I don’t understand the industry well enough yet; however, maybe there’s an MVP:

• The “Network State Airlift”: travels around the world & picks people up where there is enough demand, e.g. the next Zuzalu, Prospera or Zanzibar or wherever; this airlift negotiates with local airports, maybe small and private ones, and this way develops a corridor for routes between these locations; as demand increases you buy more planes, and eventually you have a whole airline business

• Jet packs: just like drones, it would take enormously long for mainstream acceptance to reach consumer markets; also unlikely drones, jet packs right now are really, really dangerous to fly with current technology. Of course you want them to be safe before consumers use them (ideally autonomously), but once they are, new jurisdictions could be the main launchpad for early adopters

• Space stations: the biggest challenge for the space industry is security clearances & export/import restrictions; this limits most countries mostly to their domestic pool of labor. It’s probably not easy, maybe impossible to buy the equipment to build rockets for a station outside the US or China, but maybe a clever entrepreneur finds a loophole for an MVP that’s possible

This is just the tip of the iceberg. Once you realise how much of an impact the legal OS of society has on your ability to create innovative businesses, your mind opens up to endless possibilities of how it could be different. J. Storrs Hall’s “Where is my Flying Car?” gives a sense of all the beautiful tech & science out there that’s held back.

Let’s discuss these and more of your ideas in Amsterdam!