What is an hour of your life worth?
Building things and providing services takes time - time that is spent from the lifetime of each participant in a project. Sometimes time is spent well, sometimes it's spent poorly, but the fundamental fact is that once it has been spent, there is never another opportunity for the spender to have chosen to do something else with those expended moments of their life. Time is the great equalizer - the time that each of us has to allocate is unknown, but what we all know is that it's finite, and relatively short. And so, at a base level, the amount of time spent working on a project is a good baseline for the cost - the opportunity cost - that they've incurred by choosing to work on the project.
In an aftok, the baseline compensation rate for all contributors must be equal, simply because there's nobody "in charge" to decree whose time is worth more to the project, and whose is worth less. Now, this isn't to say that we shouldn't have a way to appropriately compensate for differences between high performance and low - we do! But discussion of how these differences are accounted for will have to wait for a bit; we'll cover that in the varying compensation section.
At its core, aftok.com is just a rather fancy time-tracking tool. It enables the participants in a project to log their work, and then uses the time logged as the basis for a whole slew of things, from revenue distribution to the influence accorded to each user in collaborative decisionmaking processes. In this article, we hope to convince you that this is an effective and natural approach to solving the problem of appropriate compensation in a leaderless organization.
When an individual is invited to join an aftok, they're actually being invited to track their time spent working on the project against that aftok's time log. Each hour recorded is equal in value to any other hour recorded by another person at the time that the hour was logged, and represents the portion of their life that they have invested in the project. Within an aftok, time is the fundamental currency.
The italicised segment above — at the time that the hour was logged — is particularly important. If we allocated revenue and influence to contributors strictly according to the aggregate time that they'd contributed over the lifetime of the project, it would quickly become impossible for new contributors to join a project; the accrued time of earlier contributors would vastly outweigh any new time contributed, and the new collaborator could never reach parity with the rest of the company. They could never become a "full partner". For this reason, the value of an hour contributed is not constant. Instead, the value of an hour decays according to a tunable function of time elapsed since the hour was logged.
To give an example, after 6 months from the time of the original contribution, an hour contributed may begin to depreciate at a rate of 2 minutes per month, such that after 5 years the value of the hour has been completely exhausted and when revenue is distributed that hour will no longer be compensated. Of course, each contributor's time-share of the aftok is also subject to constant dilution as more contributions are continuously being made.
In addition to the practical reasons for time depreciation, there is an additional, more philosophical reason for the decay function: contributions made in the distant past should not justify compensation in perpetuity. Companies, and the services they provide, must change over time in order to stay relevant and competitive. On a long enough timescale we're all manufacturers of buggy whips and steam engineers; while people in these professions created value long ago, in the present day their contributions have been incorporated into the overall fabric of human progress, and we need no longer compensate them (or in particular their descendents) for the work performed long ago. It has become a part of the shared treasury of human effort from which we all benefit.
At this point it's important to point out that, even though a collaborator may cease contributing to a project (or may have forked the project and be contributing on a different branch) the value of their contribution up to the point when they stopped contributing does not immediately go to zero, as it would be the case when someone stops getting paid when they leave a traditional corporation. Instead, the value of their logged time is respected according to the ordinary schedule, with the combined forces of dilution and depreciation eating away at the share of revenue and influence they receive. The reason for this is that, while they may no longer be permitted to contribute new work, the value that they produced in the past should still be recognized and compensated.
You might be thinking at this point that, with time being so valuable, that it's really important to be able to trust your collaborators to track their work honestly. And this is absolutely the case! If you don't feel that you can trust your collaborators, you're probably better off working with someone else. This isn't unique to the aftok structure though; poor performers can exist (and can often persist) in any kind of organization.
The number of people whom an individual can really trust is necessarily small; even in traditional corporations, most tasks are carried out by small teams of people who can operate at a scale where trust relationships can hold. This is because trust is necessary in all collaborative work. Once you reach a scale at which trust relationships can no longer hold, it's better to rely on economic exchange for relationships between entities. We'll discuss these kind of relationships more in later sections, but for now let's investigate revenue sharing a little more.
See how to put these principles into action