Building value by building community
Web3 ecosystems that expand beyond the enterprise
Highlights
A cooperative principle is at the heart of Web3, the emerging iteration of the internet that uses decentralized technologies to build value in purpose-driven ecosystems with a range of participants from business, social, and public sectors.
But it’s more than an ethos. Web3 also provides the functional platform on which communities are built—an ideal operational mirror for the organizational structure of decentralized ecosystems.
We believe Web2 enterprises have two options: They can share proactively in the experience of shaping Web3’s final form—or they can wait and adapt reactively after their competitors have defined how the decentralized internet operates.
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The beginning of a decentralized era
“We’re between two ages,” says Tony Seba in the Rethinking Humanity video series produced by RethinkX. “In the 2020s, we’re witnessing the dawn of the age of creation. It’s a dramatically different production system. Instead of it being centralized, hierarchical, extraction- and exploitation-based, it’s actually based on the network and the node, on collaboration, on information technologies, on global design and development but local production, and participation of human beings.”
RethinkX—an independent think tank focused on technology-driven disruption and its implications across society—classifies this transformation on a level with the Enlightenment or the Industrial Revolution. And TCS believes its cooperative principle is at the heart of Web3, the emerging iteration of the internet that uses decentralized technologies to build value in purpose-driven ecosystems with a range of participants from business, social, and public sectors.
Web3 exists in such a nascent stage that enterprises have yet to agree on a precise definition or even a name. You might see it styled as Web 3.0, for instance, or called the Spatial Web, which is oriented to a metaverse that erases physical and digital boundaries. At TCS, we believe it is the ethos and spirit of Web3, rather than technologies or business models, that will define the way it is adopted.
Value for one through value for all
Web3’s ethos encourages us to think beyond the traditional concepts of organizational structure, value creation, and competition. Instead, it brings together diverse participants—partners, competitors, customers, prosumers, entrepreneurs, and more—to collaborate in democratized communities to work toward a common goal and share equally in the economic, social, and environmental value created. In short: Participants win individually when they win as a group.
“A business that co-creates value in an ecosystem signals a different intention to a market—that it is there to grow the community and steward the ecosystem’s purpose rather than maximize its own results,” says David Kish, Ecosystem Advisor, Future of Business at TCS.
But it’s more than an ethos. Web3 also provides the functional platform on which communities are built—an ideal operational mirror for the organizational structure of decentralized ecosystems like that pioneered by Haier, a major Chinese manufacturer of appliances and electronics. To encourage innovation and enhance adaptability in rapidly changing markets, Haier replaced its traditional organizational hierarchy with 4,000 micro-enterprises—each encouraged to collaborate as entrepreneurs with partners outside the company. Other companies making this intentional transition from hierarchies to ecosystems with a Haier model known as Rendanheyi or RDHY include MAQE, Intesa Sanpaolo, and Gummy Industries.
“We’re looking to make MAQE more resilient and adaptive to constant and continuous change,” writes CEO Andreas Holmber at his Medium blog. “Doing so requires that we unbundle the organization, moving from a monolithic to a microservice-type structure. We think RDHY’s focus on platform ecosystems to be particularly valuable in this context.”
Unchained with blockchain
Blockchain is one of the technologies powering the Web3 movement—providing a high level of trust in these ecosystems as it connects members, data, and machines with intelligence, transparency, efficiency, and interactivity. The blockchain’s distributed structure also demands—and guarantees—democracy. Some Web3 participants will have more influence than others, whether an ecosystem’s organizers assume leadership positions or its members gain voting power by accumulating tokens for their contributions. But decisions in each community will always be made through consensus.
The decentralized autonomous organization (DAO) exemplifies this move away from centralized control by investors and corporate executives to governance by the value creators and consumers in a community. Organized as a DAO, Braintrust uses its blockchain-based platform to connect freelance workers with major brands. Over 50,000 freelancers have earned more than USD60,000,000 since the user-owned talent network launched in 2020—keeping all income while Braintrust charges employers a flat 10% fee.
Smart contracts, meanwhile, efficiently automate venture contracting while accelerating decentralized collaboration. Using Haier’s model as inspiration, for instance, Boundaryless created open-source tools that help companies adopt this streamlined approach. And tokens—both fungible and non-fungible—are being used by the likes of Braintrust to strengthen identity and create tribal network effects that incentivize a community’s proliferation.
Revolution, not evolution
This focus on community and cooperation is foundational to Web3. That makes it a radical departure from competitive operating models developed since the early days of industrialization—and their continuous movement toward monolithic structures. While these structures have become more agile, globalized, and digitized with increasing technology, they have also retained various degrees of monopolistic control.
This is most apparent in a centralized power structure that coalesced in the mid-2000s around the digital technologies of a fourth industrial revolution and Web2—the internet’s second generation—as an oligarchy of technology companies gained outsized influence on the use of data and the flow of commerce.
Web2 represented a natural evolution of Web1. With a confluence of technology around the cloud, it transformed the internet from a “read-only” experience to an interactive space of content creation and online commerce. Everyone became a participant as a handful of tech companies—Google, Facebook, and Amazon among them—emerged as hubs through which most online data flowed. This information entered “walled gardens” where participants outside the tech companies couldn’t see data, influence how it was used, or share directly in the value it helped create. This gave tech companies most of the power in online communities and the ability to regulate relationships between various participants.
The emergence of Web3 is a reaction to this oligarchical control of consumer data, capital, and commerce facilitated by the further maturity of technologies. But it’s also a move toward resilience because loosely coupled, decentralized markets have more diversity, duplication, and niches that tend to respond to change more rapidly and contextually.
By enabling an ecosystem’s participants to collaborate and create value outside walled gardens, Web3 represents a revolution toward fairness, inclusion, and markets that are inherently more balanced. "What makes Web3 so intriguing is that it’s challenging the prevailing Web2 funding, ownership, and governance structures,” says Kish. “It focuses on sustaining markets by keeping participants healthy and participating rather than eroding the market through a few dominant players.”
Lean into discomfort—and opportunity
For those who define Web3 as a pivot from firm-centric models to the decentralization and democratization of collaborative models, the earlier they take action, the more influence they’ll have in shaping its final definition and form. And Web3 is moving in sync with consumer zeitgeist. Web2 has given them many features and benefits, but they have increasing concerns about the way their data is used—and their lack of influence in a centralized internet. They’re primed for an online experience that gives them the status of internal stakeholders and a share in the value a community creates.
“Emerging Web3 platforms will aim for building community and getting the consensus protocol right with all the market participants and market infrastructure players,” says Parthasarathi.V, Innovation Evangelist, Enterprise Growth Group at TCS.
This sentiment has tremendous disruptive potential. We’ve seen how consumer embrace of Web2 extended well beyond the digital realm. Apple fundamentally changed the music business. Amazon fundamentally changed the retail business. Netflix fundamentally changed the movie business. Virtually every industry had to adapt—or even reinvent—operating models as Web2’s evolving technology transformed the business landscape. And we have every reason to believe Web3 will make a similar impact.
In this context, we believe Web2 enterprises have two options: They can share proactively in the experience of shaping Web3’s final form—or they can wait and adapt reactively after their competitors have defined how the decentralized internet operates.
And here’s how they can follow through on their choice:
Craft a strategy for Web3 ecosystems that empower and engage people, access new talent, and accelerate innovation.
Experiment with the model pioneered by Haier, which has embraced decentralization without yet being a native Web3 company. Haier isn’t currently a DAO, but its example demonstrates how a traditional corporation can become one.
Explore by investing, enabling, and participating in native Web3 networks and communities to understand the culture and inner workings of decentralized models.
Good for all, not good for some
In Web3 communities, the commitment to purpose—whether economic, social, or environmental—transcends competition. With regenerative economics, Web3 differentiates itself from the competitive orientation of Web2 as value creators view themselves as members and stewards of a cooperative ecosystem. And with trusted collaborators and common goals, Web3 presents limitless opportunities for innovation and value creation.
Further, it dovetails with movements toward democratization like the Indian government’s Open Network for Digital Commerce (ONDC). This platform will enable small, offline companies—including local shops and services—to compete on a level playing field with large, online companies in shopping apps.
The TCS approach to Web3
At TCS, we’ve been exploring how best to embrace Web3’s potential—in particular, by visualizing ways of blending our blockchain know-how with existing networks and platforms that are well-suited to decentralized environments. The TCS CUBO Marketplace, for instance, is a cloud-based platform that encourages collaboration in open ecosystems to create exponential value for all stakeholders. While CUBO was initially conceived for the purpose of developing APIs—650 so far—we’ve recognized how its model can be expanded to other uses.
That’s because CUBO makes it easy for internal and external partners to find or initiate ecosystems, invite participation, and gain rewards for contributions. And since it already operates in the spirit of Web3, CUBO isn’t tethered to the hub-and-spoke organization of current Web2 operations. This potential for transparency, efficiency, and innovation is only enhanced by decentralized technology.
“Our ecosystem model orchestrates opportunities for third-party partners to complement solutions we’re developing as use cases,” says G. Suresh Kumar, Head of TCS CUBO Marketplace. “We’re basing our metrics on how many such outcomes we orchestrate, and how many of those outcomes translate to production versions.”
And then there’s TCS COIN—our Co-Innovation Network established in 2006—which drives the collaborative development of disruptive technology by bringing together startup, academic, venture capital, and corporate participants.
As CUBO and COIN evolve to support Web3 environments with a blend of open and protected IP, these purpose-driven ecosystems might feature increasingly open participation, funding from diverse sources, and micro-communities organized as DAOs, legally compliant DAOs called LAOs, or FairShares Commons that treat all stakeholders on an equitable footing.
With progressive decentralization, these ecosystems might discover product-market fit, build active micro-communities, and transition to community ownership. Valuable members may benefit in a variety of ways, including: building value in tokens that are earned, invested, or staked; developing infrastructure and providing services to network members; or adding solutions and members to the network.
“Web3 gives product and service companies concerned about their ability to succeed with platform strategies a means to spread risk and investment among a community of collaborators,” concludes Kish. “It also enables established platform businesses to give their communities more agency and opportunities to co-innovate.”
