Since starting Zaratan, we have not only acquired a beautiful old home and converted it into the 9-bedroom Sage House, but also designed and implemented a governance model that keeps costs low and retention high. What’s more, we did all of this entirely bootstrapped, with no outside investment.1 It has been a challenging, exciting, and at times harrowing experience — and easily one of the most significant of my life. This essay will reflect on this experience, and share a few lessons learned.

Everything here is my own opinion based on my experiences of the last few years, and is not meant to represent the views of current or past housemates.

We’ll frame the discussion by sharing an operational snapshot from the past few years, as well as the project’s internal timeline, to give a sense of scale and scope.

The operating data tell a compelling story — one of high demand, strong operations, and the concrete achievement of once-aspirational goals.

The timeline tells another story — one of perseverance and tolerance for risk. As my friend Shane put it, “you didn’t give up, and you didn’t run out of money.” Just barely.

The last few years have taught me a lot — about managing expectations, navigating ownership, sustaining community, and growing an organization. Let’s get into it.

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Managing Expectations

One of the biggest lessons of being an operator, instead of a thinker or builder, is how important expectations are to shaping behaviors and outcomes. Sage was envisioned as a high-trust, permissive environment that would also open and welcoming to new people — and making that work meant getting everybody on the same page.

If someone moves into Sage thinking it’s a dorm, they’ll expect it to behave like a dorm, with high-touch services all along the way. If someone moves into Sage thinking it’s a punk squat, they’ll expect it to behave like a punk squat, and resent any perceived limits on their freedom. And if one person moves in thinking it’s a dorm, and another person moves in thinking it’s a punk squat, then they’ve formed a set of expectations that are collectively impossible to fulfill.

Psychologists use the concept of schema to describe social scripts we use to navigate recurring interactions. The reason you can walk into an unfamiliar coffee shop and order an oat-cap is because you’ve learned the schema for coffee-shop interactions, just as you’ve learned schemas for job interviews, first dates, and so on. With Sage, there was no single schema to draw on — we were genuinely trying to do something new — which invited early housemates to form all kinds of expectations.2 And because our emotional reactions are shaped less by events themselves and more by how they line up with our prior expectations, misalignment creates not only confusion, but disappointment.

Most of the friction we experienced at Sage in the early years can be traced back to misaligned expectations, and part of my own leadership development has been learning to take more responsibility for setting expectations appropriately. It’s unfair for me to present the house as a place where “you have the freedom to do what you want,” only to later (from the housemate perspective) assert arbitrary boundaries.

In fairness, I was learning as I went along.

I had relevant experience, but the specifics — who the house would attract, and what dynamics would form — were a mystery to me. My growth in this area has come in a few ways. The first was overall improvement in personal communication — learning to be aware of my own projections and emotional triggers. The second was two practices: continually improving the “Welcome Letter” given to new housemates, which provides useful context and establishes expectations for varieties of issues, and instituting the practice of a biannual “unconference” where major changes can be discussed in-person.

When managing expectations, a question arises: manage them towards what?

There’s no obvious answer. Our approach has been to try and manage them towards a level of engagement that cultivates initiative without creating over-identification. If engagement is too low, housemates struggle to contribute and the environment declines. If engagement is too high, tribal attitudes emerge and influence accrues to those who stoke “us versus them” sentiment, taxing coordination.

We do this by emphasizing the economic goals of affordability and mutual aid over the pursuit of peak experiences. This was a choice made intentionally. In Alienation and Charisma: a study of contemporary American communes, sociologist Benjamin Zablocki observes (emphasis added):

“… comparison with the achievements of small cooperative business enterprises, for example, leads to the conclusion that even under optimal conditions communal partnership is far more difficult to sustain than economic partnership. Some small cooperative business do succeed, against the odds, in reaching a stable equilibrium with stated goals achieved. It is rare to find even such a basic accomplishment among communes.”

Motivations for forming community broadly fall along a spectrum. At one end is community as affinity group: burning bright while feelings last. At the other is community as infrastructure: less glamorous, but slow-burning and durable. By organizing expectations around relatively objective goals of low costs, high quality, and predictability, it is easier to sustain collaboration over long periods of time.

Navigating Ownership

Arguably the biggest change this project has brought to my daily life came from owning and operating property.

I’ve been thinking about property ownership for a long time. As an undergraduate, I studied the works of Henry George, and the Karls Marx and Polanyi, all of whom have strong opinions on the relationship between land, labor, and capital. Through my work with various cooperative organizations, I came to appreciate the value of shared ownership as a way of aligning agency, stake, and context. My own father is a property owner, who holds the peculiar honor of being the first-ever opposition candidate elected to Santa Monica’s Rent Control Board. As a millennial, I have watched my entire cohort struggle with housing undersupply.

These questions are very alive for me.

I have also increasingly come to appreciate the often-fraught relationship between owners and renters — a dynamic which, many theorists argue, goes back centuries.3 It is a dynamic shaped by economic misalignment and caricature, where a discourse run largely off anecdotes stokes mutual hostility.

I believe that there’s room to reimagine this relationship, and to create new lines of alignment.

There is a saying among entrepreneurs that “every startup has a secret” — something that it knows but others do not. For Zaratan, there are two: that the population of people who would like to live in coliving houses is larger than the population of people able to start them, and that with the right structure, diverse residents can be consistently brought into productive collaboration with each other and with the organization as a whole.

Sustaining that collaboration requires carefully structuring how agency, stake, and context are shared between owners and renters. The foundation of this alignment is a shared context around finances. Here is a variation on a chart shared with new housemates, illustrating the short- and long-term financial dynamics of a typical rental property:

This chart illustrates the context gap between owners and renters: owners attune to the large up-front capital outlays and operational risk (red), while renters attune to the perceived profit owners receive through rent (green). Owners must navigate unpredictable (and unavoidable) maintenance and compliance costs, working towards a long-term benefit that may never come.4 Renters, lacking clarity on costs, can easily form exaggerated views of owners as wealthy, powerful, and extractive. The result is a relationship characterized by hostility and distrust.

One way Zaratan establishes context is through transparency. Every resident gets a quarterly breakdown of house finances, divided into three categories: expenses, debt, and revenue. Each category has an explicit target as a percent of income: 35% expenses (taxes, utilities, i.e. consumables), 50% debt (improvements, expansion, i.e. durables), and 15% revenue (return to investment, i.e. labor and capital). Targets are set relative to industry baselines and make it easy to benchmark financial health.5

The choice to fix a revenue target, rather than try and maximize income, helps maintain alignment. Owners typically try to keep improvement costs fixed, to maximize revenue. In our case, we try to keep revenue fixed, to maximize the funds available for improvements. This means that lower operating costs contribute not towards our own bottom-line, but to improving the property — arguably the only realistic shared goal between owners and renters, benefitting owners in terms of a more reliable asset, and benefitting renters in the form of a higher-quality daily life.

While achieving total alignment is not possible without more fundamentally shared ownership, greater transparency and credible commitment towards shared financial goals makes it possible to achieve higher levels of alignment than is typically possible between owners and renters. The net result is higher engagement, lower churn, stable expenses, and more beautiful built environment.

Sustaining Community

I’ve been thinking about communal sustainability for a long time. In the fall of my sophomore year at UC Berkeley, I proposed this concentration in my application to the selective Political Economy major:

In the years since, I have continued to engage these questions. During that time, two themes emerged: the fragility of charismatic authority, and the risk of a rising cost of administration. Durable sustainability, then, would come through reducing the reliance on heroic leadership, as well as the cost of simple, recurring tasks.

With Zaratan, I wanted to challenge myself to create an organization that was sustainable in exactly these ways. Financially sustainable, with income covering the long-term cost of operations, improvements, and capital. Socially sustainable, with operations not depending on either charisma or exploitation. These ideas are larger than coliving, but apply to coliving all the same.6

Regarding financial sustainability: As I’ve written about in “Coliving’s Political Economy” and “The Tragedy of Microapartments,” there are two equilibria for professional coliving: high-cost, high-touch, high-churn, and low-cost, low-touch, low-churn. While neither is inherently better than the other — the principle of discounted cash flows shows that large, volatile cash flows can be equivalent to small, stable ones — the approaches imply different organizations and experiences. I personally gravitate towards the latter, because I believe it is more resilient, and also because it leaves me more time to write ponderous essays and pretend to make art.

Our approach to financial sustainability was mostly covered in the last section and won’t be rehearsed here.

Social sustainability is more subtle, but broadly involves reducing the “bus factor” of a community, by making it easier to flexibly fill key roles. While most organizations are structured around the idea of fixed and stable leadership, one of the lessons of the cooperative movement is that leadership is not some special quality possessed by a few, but a latent quality possessed by everybody. The key is ensuring that leadership can emerge when and where it is needed.

That same semester I applied to Political Economy, I was living in Casa Zimbabwe, a 124-bed house in the Berkeley Student Cooperative known for its lively and irreverent culture. The student-elected management team — “a biker gang,” in one housemate’s words — would tolerate destructive behavior, including a practice of throwing glass bottles off the balcony into the courtyard below. People were unhappy with the situation, but few felt they could take action. Over several months, I watched a group of residents cohere into a political bloc, unseat the incumbents, and clean up the broken glass.

This experience of political awakening and agency in a coliving house was not a one-off, but a feature of the model. Arizmendi Bakery founder Tim Huet’s “A Cooperative Manifesto” names this explicitly (emphasis added):

… members of worker cooperatives learn democratic skills and ways of interacting with each other — and the confidence that comes from taking control over your life — that have benefits for their families and larger communities, and can carryover into the political realm. … In addition to producing bread, bicycles, etc., we produce hope and inspiration.

Leadership is always latent, but not all structures let it emerge.

When doing research for Zaratan, I read Raph Koster’s “The Trust Spectrum,” which explores power-sharing in the context of multiplayer games. In soccer, leadership is fluid, and responsibility shifts between players depending on the situation. In football, by contrast, roles are rigid and concentrate responsibility on a few key players. At CZ, housemates were stuck until the next election. Better governance would facilitate a fluid movement of power, enabling people to contribute when and where they have the most to offer — while continuing to mitigate the risk of capture and disengagement.7

The following chart provides some intuition for thinking about the ideal role of structure and of leadership: invisible during good times, stabilizing during bad times.

In any group, some will care more than others. This can be a good thing — enthusiastic participants are a source of inspiration, and outsized contributions can become a source of meaning for those who make them. But unevenness of contribution is a risk when it leads to burnout — the abrupt departure of an overcommitted leader creates a resource gap that others may struggle to fill.

This perspective applies to labor as well as leadership. Many coliving houses solve the problem of chores by hiring cleaners — a straightforward fix for a common source of friction. Less often examined is the assumption this solution depends on: the continued availability of a low-cost labor pool. If that pool disappears — due to higher wages, or immigration restrictions — these communities may struggle to adapt. Groups able to internalize their regenerative labor are better equipped to navigate these shocks.

Leadership and labor share a common risk: exploitation. Stripped of its moral connotations, exploitation simply describes contributions that exceed compensation, and in that sense, functions as a hidden subsidy. Groups that rely on such “subsidies” — whether from heroic leaders or underpaid workers — are structurally exposed to circumstances beyond their control.

In the final analysis, financial and social sustainability are linked, describing a group’s ability to sustain the conditions of its own existence. The more a community is able to meet its own needs, the more resilient it will be over time.

Growing an Organization

Over the last six years, two things have become increasingly clear to me.

The first is that Zaratan’s approach is more or less spot-on. Our thesis — that new institutions can make coliving more accessible, robust, and sustainable — has been largely proven out.

The second is that Zaratan is too small. As a solo founder operating a single house, every decision feels acutely personal. With my last six years so bound up with a house full of other people, it can even feel as though I’ve lost the right to tell my own story. At a larger scale — five or ten houses, two or three staff — Zaratan would evolve from being my personal project into a brand capable of carrying the weight of people’s expectations — while giving everybody more room to breathe.

To give an analogy, Zaratan is like an ungrounded electrical outlet. Small tensions build up, leading to tiny “shocks” as minor interactions get experienced through the compound lens of my many roles: homeowner, system designer, property manager, thought leader, financier, handyman. There’s no place for excess energy to go. A larger Zaratan would be like a grounded outlet, with surplus energy going safely back to the earth. More staff would allow for clear separations of roles, and I could continue my advocacy without anybody feeling like they were personally under a microscope.

I think this is achievable. As readers of this blog know, one of the goals of this “new institutions” approach is to enable exactly this kind of scale without creating the kind of out-of-control operational costs which brought down so many others. Resident self-governance, lean operations, and intentional growth all point towards a future of more houses within a shared framework — a future of more housing, more connections, and more abundance.

This growth does not necessarily need to come from us. I will admit that when I first started this project, I had a secret plan. We’d do the first house — pay for everything, on our own terms — to prove the model. We’d work in public, tell everyone how we did it, give the tools away for free. Slowly, people would start to copy us. One house would become fifty and then five hundred, and a wave of naturally affordable coliving would sweep the country.

That hasn’t happened, and on some level it’s a shame. People talk constantly about the need to reduce housing costs, to revitalize democracy, to tackle the problems of loneliness and isolation. I’m often tempted to say “Hey, look over here! We’re doing it, everything you want. Not theory, but practice — for years! It even makes money. We wrote it all down, you can just copy us — we’ll help you.”

Nobody’s biting. On the contrary, folks are skeptical. When I talk to real estate people, they’ll tell me that Sage is a fluke, or that it only works because I am so “high-EQ.” They think coliving is a headache, too complicated, a dead end.8

On some level, I get it. I see the implications, but for most people Sage is a quirky one-off. Unless you’re already bought into a vision of new institutions — and not jaded by the last thirty years of globalization, or tech, or crypto, or burning man, or any other aspirational movement which failed to bring durable social change — skepticism makes sense. I don’t think there’s been a moment in my lifetime where these ideas have been less fashionable. But that doesn’t mean they’re wrong.

Behavioral change is hard, and aspirational behavioral change which runs against prevailing moods is harder. It’s not that things aren’t working — people love the house, the writing, the tools — it’s just that the broad impact I hoped for will take longer than I wanted it to. As interesting as Sage is, there are genuine confounds — maybe the location was just perfect, or the housemates (all 24 of them) were exactly the right ones, or despite all efforts, my personal charismatic authority is still essential to keeping things running.9 As long as these questions stay open, observers may, reasonably, attribute outcomes to circumstance rather than to design.

While all of these questions can be resolved, the process will not be quick — ironically, it seems as though building the house might have been the easiest part.

On balance, this project has given me a lot. I’ve shown I can pursue a complicated project from start to finish, preserve capital, and navigate legal, regulatory, and financial obstacles. I’ve gotten to translate complicated ideas from theory to practice, and design and implement tools that real people use. I’ve learned how to work with lawyers, lenders, contractors, and bureaucrats, to communicate better, and to manage my emotions under stress. I’ve seen that my judgment, while not perfect, is generally pretty good. And most importantly, I’ve learned who my friends are, and how to be a better friend to them.

For better and for worse, there has not been one moment in the last six years when my life wasn’t defined by this project. I’ve experienced fear of failure — of things falling apart, of going bankrupt, of being proven a fool. I’ve also experienced the fulfillment which comes from whole-heartedly pursuing something deeply aligned. There were times where I wish I had never done this, and times where I felt grateful to have been able to devote myself so fully to a vision. As my dad would often remind me, none of this happened by chance — I went to great lengths to put myself in exactly this circumstance.10

As this blog makes abundantly clear, I believe in the power of well-designed and well-run institutions to bring about greater inclusivity and abundance. In its own small way, I’ve hoped that this project could be an example of just that. Six years in, something real has been built — and there’s still much more to do.

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Last month I was invited to give a workshop at the Community Living Wisdom Exchange, an annual conference for community-builders held in San Francisco and organized by the Modern Family Institute.

I had spoken the previous year, presenting Chore Wheel as part of a series of lightning talks about internal systems.1 This time, I wanted to keep the narrative going: moving from systems to sensibilities and framing the workshop as a group exploration of the implicit expectations which often emerge in coliving settings.

The workshop, “Community Metaphysics” (see slides), came together as a fun and whimsical exploration of beliefs around technology, conflict, and affordability.

About 25 people participated, and everyone seemed to enjoy themselves. This essay records my notes from the workshop, summarizing the questions and main takeaways from each conversation.

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The Setup

The workshop opened with some background on Zaratan — its motivations, guiding ideas, and early lessons. The problem is summarized in this slide, articulating an “inconsistent triad” of community living:

The contention is that communities are always navigating trade-offs between access, efficiencies, and outcomes. One can pay for services, raising the bar to entry; one can keep process lightweight, accepting more chaotic outcomes; or one can take on more work, increasing the risk of burnout. Each path carries risks which must be managed.

This framing is simplistic; experienced communities can achieve better outcomes than these trade-offs imply. But I do think (and others agreed) that this is a legitimate characterization of tensions which appear often among those living collectively.

Chore Wheel was framed as part of a “new institutions” approach to community governance: helping communities get “three of three” through better structure and process. After seeing data from Sage House’s first three years, the audience seemed willing to entertain the argument.

Setting up the workshop’s central questions, I shared some experiences talking to people about Zaratan and Chore Wheel, hearing similar questions and comments about technology, conflict, and affordability:

At first, this surprised me — surely community-builders would be as excited about new institutions as I was! But nearly six years after starting Zaratan, it’s become clear that it was my thinking which needed to evolve.

Ultimately, new tools are relevant only to the extent that an audience is culturally prepared to adopt them. The problem was no longer conceptual, but cultural: understanding the implicit social frameworks we are actually operating in.

With the setup complete, the workshop began. We spent about 15 minutes on each question: five minutes of frame-setting, five minutes of small-group discussion, and five minutes of whole-group sharing.

About Technology

The first provocation was about technology. In “The Magic Circle,” I showed how many are drawn to coliving out of a romantic desire to create a sacred space of relationality — which often seems to involve the rejection of “technological” structures for mediating those relationships.

My contestation is that “technology” here is being conceptualized only partially, as digital technology only, when in fact technology can be understood more broadly as tools for processing information. These communities in fact are using “technology” without calling it such, and are thus drawing a somewhat arbitrary and limiting line.

The goal of this provocation was to encourage the audience to conceptualize technology more broadly, and to see digital technology less as a distinction of kind, but rather of degree — as a useful evolution in our ability to communicate.

The discussion surfaced valuable take-aways. The most important was that people are not resistant to technology per-se, but rather to the kind of intrusive and controlling internet technology which over the last twenty years has come to dominate our public sphere. This evolution, recounted by Shoshana Zuboff in The Age of Surveillance Capitalism, has been the subject of substantial inquiry and is one of the key social and economic dynamics in contemporary American life.

Having spent time in radical political and technological circles, I was familiar with these critiques. Over the years, my views on technology have come largely in line with those of countercultural figures like Stewart Brand, who through the Whole Earth Catalog advocated for liberating “soft technologies” expanding human agency.

Most of my career has been spent designing such tools — and with it, developing an appreciation that their impact depends as much on cultural climate as it does on the tools themselves. Listening to the discussion of the participants, it was clear that the techno-optimism of the ‘60s is gone, and new technologies will need to answer not only for themselves, but for decades of promises broken by others.

About Conflict

Next came conflict. As I discuss in “The Boundaries of Belonging,” the way communities handle conflict largely determines their long-term outcomes. There is a tendency among those new to communal living to avoid conflict; as they gain experience, they increasingly understand the importance of conflict management.

This conversation revolved around the work of Frederic Laloux, who wrote the popular Reinventing Organizations about self-managing organizations. For Laloux, conflict management is one of an organization’s most important capacities — but it is also one that participants must ultimately learn by doing. While technology can make this easier, there is no substitute for the willingness to hold somebody accountable.

During the discussion, the participants expressed fairly positive views about conflict. For many of them, conflict was seen as a way to get closer to somebody; by confronting and resolving disagreements, people come to know each other on deeper and deeper levels.

What people did not like, however, was unstructured conflict — which makes sense. From philosophers like René Girard to biologists like George R. Price, scholars across disciplines have understood the importance of structure and ritual in containing conflict within socially productive bounds. Groups able to structure conflict enjoy greater generativity and adaptibility to changing conditions; groups which cannot are likely to implode under stress.

There are many ways to structure conflict — through appeals to authority like an owner or manager, through peer accountability processes like those advocated by Laloux, or with the aid of tools like Chore Wheel, which offer structured pathways for resolving conflict. There is no right answer, only the right answer for you — and the participants (an admittedly self-selected crowd) seemed to intuitively grasp this.

About Affordability

Last, we turned to affordability. As I argued in “The Tragedy of Microapartments,” coliving is one of the best paths towards large-scale housing affordability in this country. Having come up through the leadership of Berkeley Student Cooperative (BSC) and then the North American Students of Cooperation (NASCO), coliving and mutual aid are for me fundamentally intertwined, with community emerging organically through shared effort.

But not everybody sees it this way. Through conversations and getting to know people inside of the “meta-community” (the community of people working on community), I’ve found that affordability is often at best a nice-to-have, and certainly not the goal of the collective effort.

This discussion was framed through the image of the “Rubin Vase,” an optical illusion featuring an ambiguous figure and ground. Are we looking at a vase, or at two faces?

Not all the participants accepted the framing. Some said it was a “false dichotomy” and that you could indeed have both community and affordability. This is certainly true — and often you do. But if something had to give, what would it be?

To my surprise, most of the participants came down on the side of community. The goal of the conference attendees was to build a more relational life for themselves, and were in many cases willing to put in extra effort, in both time and money, to achieve this goal. When affordability emerged, as it often did through shared food purchasing or tool use, it was seen as a nice to have, not a sine qua non.

A second undercurrent emerged: for better or worse, those able to pay more were often preferable to live with, being typically more highly educated and socially connected. It is arguably more important to consider the inverse: that those looking for cheap rooms are more likely to exhibit anti-social tendencies. There is nothing inherently wrong with using price and positioning as a way to filter for community members, but I do believe this approach limits coliving to a niche lifestyle choice for the affluent or well-connected. For coliving to play a larger role in America’s housing landscape — increasingly important as rising generations face the reality of downwards mobility — affordability will need to be emphasized.

After the session, a fellow NASCO alum took me aside and confided a subtler reality: that much of the Bay Area coliving world runs on a tacit network of patrons, who subsidize community houses out of a personal generosity.2 Without connections to wealth networks, many of these houses might not even exist. Again, there is nothing inherently wrong with this — but it is important context.3

Conclusions

Overall, the workshop was useful for me and well-received by the participants. Some observed (correctly) that all three questions were quite leading (which they were), but that they had nonetheless enjoyed the discussion and found it thought-provoking.

The experience deepened my understanding of the views and values of an important subset of the coliving world, for whom community is an end in-and-of-itself, and for whom creating a refuge from the modern world is as important as trying to innovate within it. My conviction in Zaratan’s approach of making tools that are both powerful and human, and of making community more accessible through institutional design, has only grown stronger after engaging with these tensions more directly.

Civilization is part technology and part culture, and while technology advances in fits and starts, culture advances one conversation at a time.

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Earlier this March, I found myself back on New York City’s housing market. I had just ended a three-year relationship, and needed a new place to live.

Leaving my partner’s Greenwich Village apartment, I was lucky to be welcomed in by my uncle and his family on the Upper West Side. During the few weeks that I stayed with him, I scoured WhatsApp groups, Discord servers, Craigslist, and a motley of other sources to try and find a permanent new place.

After six weeks of searching, including some false starts and dead ends, I found myself in a two-month sublet in a four-bedroom apartment in Brooklyn’s Bedford-Stuyvesant neighborhood. The apartment was managed by a company called SettleLiving, which rents whole units then sublets individual rooms through a coliving model.

Having spent the last five years running Zaratan Coliving as a mostly solo founder, I thought it would be a good opportunity to see how other people did things.

The rest of this essay will talk about my experience navigating the housing market and spending two months at Settle.

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The Housing Market

While staying with my uncle, I spent many hours per week searching for housing. My first stops were the existing networks for community housing in NYC. I would regularly check Discord servers and WhatsApp groups, letting folks know I was looking and exploring inventory on offer. I think I’m easy to live with — curious, conscientious, empathetic — and was optimistic about what I’d find.

Overall, I was disappointed. Coliving rooms were expensive — I was offered a lofted bed in Bushwick for $2,000 per month, and an 80 sqft room in Boerum Hill for about the same. More upscale coliving houses had rooms starting at $2,500 and going up to $4,000 or more — roughly the price of a one-bedroom in Chelsea. As someone who thinks a lot about housing affordability — and sees coliving as one of the best paths toward it — the lack of “affordable” options was striking.1

The most affordable option I found was a bohemian commune, which offered me a room in a converted kitchen for $1,500 plus a $400 community fee and eight hours of monthly chores and meetings. They expected me to practice radical honesty and told me that my first three months would be “probationary” while they decided whether I was a good fit long-term. Even for someone who believes strongly in process, that level of ritualized vulnerability — and prospect of eviction — felt intense.

My Craigslist experience wasn’t much better. The pricing improved — beds ranged from $1,200 – $1,800 — but communication was awful. I encountered one obvious scam, but mostly people were just flaky. The majority of emails I sent got no response, or I’d get ghosted in the middle of a text exchange. The few places I did visit were uninspiring; I wasn’t desperate.

Eventually, I found a long-term place I was happy about, run by one of New York’s “corporate” coliving companies. They had a web presence, good communication, nice spaces, and fair prices. I was able to find a building in my preferred location of Clinton Hill, walking distance from my new job. There was one catch — the room wasn’t available for two more months.

Not wanting to restart my entire search, I turned to Settle.

Moving In

Similar to the first operator, Settle had a website where I could search for rooms by location, and see pricing up-front. This made it easy to find a room I wanted and to start a conversation. Having spent several weeks combing through group chats and getting ghosted on Craigslist, that value proposition had never felt more clear.

The application and leasing process was standard, if a bit quirky. After reaching out through their website, I had a Zoom call with one of their staff, a friendly Filipina woman who I assume lived abroad. Less than ten seconds into the call, she asks me point-blank: “are you crazy?” I would later find this was common practice for Settle. Unconventional screening technique or housing law violation — you be the judge.

After passing the “screening” I was sent a lease, which was pretty standard, with some charming color:2

It was clear to me what SettleLiving was: a capital-light subleasing operation, where the company takes out long-term leases on class-B apartments, furnishes them, and then ekes out a margin by offering month-to-month sublets at marked-up prices — with rent paid via PayPal.

My impression had not been of sophistication, but it had not been of fraud either — and to their credit, the room was well-priced, sub-$1,500 including utilities. I needed a place, and thought that if nothing else, it would be a good learning experience to see how other people did things. I signed up.

Life at Settle

The apartment was a third floor walk-up on a lively stretch of Bedford Avenue, with four bedrooms (one of which was a converted study) adjoining a windowless living room and kitchen, all sharing a single bathroom. The living room was plain, the knives were dull, the bathroom was cramped, and the rooms were 90 square feet:

My roommates were three women in their mid-twenties: two Irish girls on work visas, and a redheaded actress from Arkansas. They were friendly and welcoming, and we developed an easygoing rapport — over the next two months, I would hear many stories of the Irish girls’ happy-hour escapades and the redhead’s evolving polycule.

There was no meaningful structure among the roommates — folks would clean up, take out the trash, and buy supplies whenever they saw fit. There were only four of us, and everyone was fairly conscientious, so it worked out fine — but it was definitely a “reactive” style of organization. Everything was ignored until someone cared enough to deal with it, and things nobody cared about were never done. The result was a slow accumulation of grime and periodic shortage of toilet paper:

I rarely used the kitchen and spent most of my time in my room. About once a week I would run into some of my roommates and we’d have a chit-chat; one memorable night I came home to a dozen Irish girls, who invited me to have a drink with them and hear about their experiences of America.

For those unfamiliar with coliving, the idea of “living with strangers” can seem strange — but these interactions capture exactly the lightness that coliving offers. I could have spent more money on a private sublet and come home every night to an empty apartment. Instead, I got real moments of human contact, glimpses into lives different from my own, and a sense, as small as it was, of not being completely alone.

Bedford Avenue was always meant to be temporary, and on balance I got exactly what I needed: a decent place to live, on flexible terms, in my preferred location, at an affordable price-point. I had pleasant interactions, contributed to the apartment’s maintenance, and was able to keep my life moving forward.

Moving Out

I left the apartment after two months to transition into my long-term place in neighboring Clinton Hill. A few weeks after leaving, the reality of SettleLiving became clear. They did not want to return my deposit.

It was subtle at first — slow responses, “we’ll get back to you” texts, and so on. About a month after moving out, I started to get that sinking feeling in my stomach. While there are legal means for recovering security deposits, many of Settle’s residents are young internationals who by-and-large are not going to be able to navigate the American legal system. I began to suspect that Settle purposefully slow-walked refunds, knowing that a large proportion of their residents would eventually give up.

I looked up their Facebook page, where my suspicions were confirmed:

I had to open disputes with PayPal and threaten legal action before I got my deposit back, a process which took forty-two days.

I can’t say conclusively that SettleLiving is committing bad-faith withholding — their slow-walk gives them plausible deniability, and my funds were ultimately returned. But I suspect that many of their international residents never got their deposits back.

Conclusion

I moved into the Bedford Avenue apartment because I needed housing, but also because I wanted another data point about coliving broadly. How do other organizations do things? Is there some secret sauce they have that I don’t? Who exactly is the market, and what is it that they want and need?

Reflecting on the experience, I can draw two clear (and contradictory) conclusions.

The first is that there is still far too much room for abuse between landlords and tenants. That an organization like SettleLiving could acquire a portfolio of apartments with no up-front capital, sublet rooms at marked-up rates, manage them poorly, and then withhold deposits from vulnerable foreigners — without experiencing any real consequences — strikes me as deeply wrong.

Having been on both sides of the table, as both a renter and an owner, it’s clear how much distrust exists on all sides. Incentives are fundamentally mismatched: renter horizons are short-term, while owner horizons are long-term, leading to “prisoner’s dilemma” style outcomes where each party tries to avoid being the sucker to the other. Society copes through a mix of market-distorting regulations and exclusionary heuristics like “fit.” It’s a bad situation, and everyone is losing.

With Zaratan, we have tried to move this needle through operational innovations which better align residents and owners: a revenue-share through which operational savings are returned as rent credits, and a resident-directed food and supplies budget so that high occupancy translates into greater discretionary spending:

The second is that despite all of Settle’s shortcomings — from sloppy operations to bad-faith withholding — they filled a real need in the housing market. As a renter, being able to search for rooms based on price and location, and to have a consistent point of contact for leasing and move-in, made all the difference in a market otherwise defined by high costs and poor communication.

Coliving is an important and underserved niche, and operating it correctly requires a certain amount of specialization and sophistication. But even mediocre operations can provide value.

SettleLiving solved for access but not for trust, whereas Zaratan tries to build trust directly into operations, through process innovation and incentive alignment. To give an analogy, SettleLiving is an inefficient coal engine, belching externalities but still doing economic work; Zaratan at its best is a clean-energy alternative, doing similar work with much greater efficiency.

Overall, my time at Settle only strengthened my conviction in both the importance of coliving as a housing model and in Zaratan’s approach to advancing that model.

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As I often do in these situations, I brought up my work with Zaratan. I am always curious to get the perspective of people in the industry, and to better understand how our model of naturally-affordable, lightly-managed coliving fits into a broader vision of housing development.

Ian was intrigued, and seemed genuinely impressed by Zaratan’s operational innovations. When I finished my pitch, he hit me with this:

Seems cool, but do people really want this?

Ian shared that at his firm, leadership is much more interested in microapartments (one-person units in the ~200–400 sqft range) than in coliving. Among real estate developers, these high-efficiency units are seen as a potential answer to the cost-of-living crisis, letting builders deliver housing at lower price-points while side-stepping the messy human challenges created by the relationship-centric coliving.

In my view, this is a tragedy: compared to coliving, microapartments cost more and deliver less. The rest of this essay will contrast microapartments and coliving along four dimensions: density, build cost, operating cost, and desirability — and make the case for coliving as the better path to housing affordability.

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The Example of Carmel Place

In 2016, New York saw the opening of Carmel Place, the city’s first microapartment building. Here is a sample floor plan:

This ~300 sqft unit offers a convertible living/bed area, kitchen sans range, and 3/4 bath, with large windows and high ceilings creating a feeling of space. The units were priced on par with regular studios, with the higher cost-per-sqft justified by way of building amenities. 90% of units leased within two months of opening.

This leads us to the natural question: what could it have looked like as coliving?

Microapartments vs. Coliving

Let’s walk through a hypothetical high-density project, modeled either as microapartments or as coliving. In both cases, we take a 60x40 (2,400) floor plate as our starting point. Our goal is to create as much quality housing as affordably as possible, with quality defined broadly as “a place people don’t immediately want to leave.”

We'll evaluate the models across four dimensions:

1. How many rooms can we create?

2. How much will they cost to build?

3. How much will they cost to operate?

4. How appealing will they be to renters?

I: Space Efficiency

Here is our 2,400 sqft floor mocked up as 270 sqft microapartments:

Each of these units is identically laid out, with a 120 sqft bedroom, 30 sqft bathroom, and 10 ft Pullman kitchen, with the rest being generic “living” space. Bedrooms take up 40% (960 sqft) of the total space, while 10% (240 sqft) of the floor is hallway, unrentable space which generates no value.

These layouts were designed to reflect a “reasonable” living situation. A 120 sqft bedroom is a nice space — noticeably bigger than a 90 sqft “cramped-but-livable” efficiency room. A 30 sqft bathroom can accommodate a tub and does not feel “tiny.” Overall, these are meant to represent comfortable places people are willing to stay in long-term, versus churning out of at the first opportunity.

Now here is the same 2,400 sqft floor mocked up as a single large coliving space. The bedrooms and bathrooms are identically sized as in the previous example:

In this example, we have lined ten 120 sqft bedrooms along two walls, placed a single 300 sqft kitchen at the back, and added four bathrooms in the hallway, arranging everything around a large central living space. In this setup, bedrooms take up a full 50% (1,200 sqft) of the total space, while only ~8% (200 sqft) of the floor is hallway.

A few things jump out at us:

The first is that we have created two additional 120 sqft bedrooms compared to the microapartment layout. Per square foot of buildable space, we have achieved 25% greater density (10 vs. 8). This is significant.1

The second is that we have created much more common space for the residents. The 300 sqft coliving kitchen is ten times as large as the Pullman kitchens built into the microapartments. Rather than a single hot-plate and small refrigerator, the kitchen can now accommodate multiple gas ranges, fridges, appliances, and prep surfaces. Every resident gains access to better resources, raising the ceiling on what kinds of cooking becomes possible both individually and collectively.

The living space is also larger. A key part of coliving’s appeal is the promise of “luxury and abundance, at craigslist prices.” Creating a place that feels precious and has emotional resonance is what drives the community dynamic: people want to spend time at home, and with each other.2 Pure cost optimization risks creating the type of “down and out” SRO environment that people rightly avoid.

The third is that residents are sharing bathrooms. Bathrooms can be a complex and charged topic; for now we’ll say that a ratio of 3:1 people per bathroom is about the limit of “quality.” The proposed layout has a ratio of 2.5:1, comfortably below that max.

II: Development Costs

Let’s assume the following hypothetical construction costs:

• $150 / sqft baseline cost (framing, electrical, drywall, etc)

• +$10,000 per kitchen and bath, for plumbing and fixtures

• +$5,000 per bath, for tiling and waterproofing

Real costs will vary widely, but this should be directionally correct.3

In both examples the baseline construction costs are the same: $360,000 ($150 x 2,400 sqft). In the microapartment example, an additional $80,000 ($10,000 x 8) goes to kitchens, and $120,000 ($15,000 x 8) to bathrooms, for an all-in cost of $560,000, or $70k per bed. In the coliving example, the kitchen and bath costs are lower: $20,000 goes to a single larger kitchen (doubly-programmed, so $10,000 x 2), while $60,000 ($15,000 x 4) is spent on bathrooms, for an all-in cost of $440,000, or $44k per bed. The end result is a 21% cost savings vs. microapartments — while providing 25% greater density.

Taken together, for every $100,000 of investment, we get 2.3 beds of coliving, versus only 1.4 beds of microapartments — an efficiency gain of 64%.

While this example is simplified, the dynamics are real. Thesis Driven’s Brad Hargreaves, founder of Common and long-time housing innovator, has written about the challenges of realizing cost savings through microapartments:

[The] affordability benefits of microapartments versus typical studio apartments tend to be modest until unit sizes get quite small. After all, the most expensive parts of construction—the [mechanical, electrical, and plumbing] and fixtures that come with kitchens and bathrooms—are just as costly in microapartments as they are in normal apartments.

In terms of both density and quality of housing, coliving beats microapartments hands-down.

So - what’s the catch? Why aren’t we all living in affordable coliving mansions?

It’s time to talk about operations.

III: Operational Complexity

Operational expenses — maintenance, management, taxes, and insurance — typically consume 30–40% or more of a building’s income.4 The ability to control these costs makes or breaks a housing project.

With microapartments, every unit houses one person. While the building might offer shared amenities — lounge, gym, etc — the units revolve around individuals. As such, let’s assume microapartment operational expenses are at the high end of typical, around 40–45%.

In contrast, coliving units house many people, who share kitchens, bathrooms, and living areas. This introduces complexity which, if not handled well, can devolve into low resident satisfaction, high vacancies, and foreclosure.

Among the grassroots coliving communities profiled by the excellent Supernuclear, these complexities are mostly handled through social filtering. Vacancies are shared on private networks, with roommates chosen based on existing relationships. While this does help manage complexity — roommates are pre-selected for interpersonal compatibility and shared values — it limits the viability of coliving as a general model.

Further, “lightning-in-a-bottle” approaches to community-building deter investment. A community with a 10% chance of breakdown in any given year is likely to fail within 7 years — an unappealing prospect to an investor looking to make a 30-year commitment. For coliving to be a buildable housing category, it must be able to integrate individuals across large social distances, be less dependent on heroic personal leadership, and be able to easily and reliably reconcile differences of preference and opinion.

Broadly, there are two ways to achieve this:

Coliving-as-hostel (type I)

The first and most common approach is to treat coliving as a type of hospitality, framing the coliving “experience” as a product to be sold. The property management is a high-overhead, employing staff to clean common spaces, “create community” through event programming, and resolve interpersonal conflicts. These extra costs can push rents up to or even above market, as the cost savings of density are redeployed towards services. In this model, coliving operating expenses can consume 50-60% or more of rental income — up to 1.5x more than microapartments.

This is the approach taken by organizations like Cohabs, who cater to young renters looking for hostel-esque experiences, offering 80 sqft rooms in Brooklyn for $2,000 per month.5 While this model works, it can be brittle, as high costs often lead to churn. The now-defunct Campus failed in part due to its residents forming friendships and moving out into cheaper apartments, leading to high vacancies.6

Ultimately, this approach risks falling into the vicious cycle of high costs → high rents → high churn → high costs.

Coliving-as-cooperative (type II)

The second approach is to treat the coliving house as a true cooperative, emphasizing self-governance and mutual aid.7 This approach puts a higher expectation on the residents to handle the logistics of their day-to-day, including cleaning, community building, and conflict resolution, while also allowing more of the cost savings of density to be passed on to the residents.8 Under this model, operational expenses are closer to that of traditional multifamily — around 40% of rental income.9

Traditional cooperatives often rely on parliamentary or sociocratic organizational structures (meetings and committees) to make decisions. These models work, but can be prohibitively time-consuming.10 An alternative approach, often taken by the grassroots communities mentioned earlier, is to minimize explicit structure and rely more heavily on social filtering to maintain group consensus, which limits accessibility.

A third approach, less common but potentially more effective, is to leverage contemporary systems thinking to create collaboration tools which are both simple and powerful: helping residents handle basic coordination without frequent meetings. While this might look like technology, it is fundamentally about communication. Zaratan has pursued this approach both in theory and practice — Sage House has maintained 98% occupancy for three years with minimal outside management — and believes it is the key to establishing coliving as a housing category.

In contrast to the previous approach, this one aims to achieve the virtuous cycle of low costs, low rents, and low churn.

To be clear, we do not believe that there is a single “perfect process” which can be all things to all people. There will always be a need for management, meetings, and social filtering. We do believe that it is possible to reduce the dependence on any one of these approaches, and to get better outcomes with less effort, and more consistently.

IV: Cultural Perceptions

Assuming a reliable and low-cost operating model, the unit economics of coliving become undeniable. What other barriers exist to wide-scale coliving adoption?

Ian, again:

Me, enthusiastic: part of rent goes to a shared fund, for food and supplies!

Ian, skeptical: shared purchasing? Sounds culty. What are they buying?

Me, deflated: eggs.

Coliving sits on the fringe of America’s cultural imagination. Unlike in Europe, where coliving emerges from the continent’s backpacker-hostel culture and evokes a sense of worldliness and adventure, American coliving is grounded in the West Coast counter-culture of cults, and communes. As such, the practical economic benefits of coliving are frequently obscured by these (often negative) cultural associations. If Americans do have another cultural referent for coliving, it is college dorms — managed environments for not-quite-independent young adults.11

These perceptions have consequences. Inasmuch as housing is not merely a basic necessity, but a way to signal status, this impression deters those who would otherwise benefit from coliving’s affordable rents, better housing, and opportunities for connection out of fear of social stigma.

After all, if someone could get their own place, shouldn’t they want to?

Fortunately, this problem is tractable. The benefits of coliving are so clear, and the reservations so superficial, that a compelling cultural narrative could meaningfully shift public perceptions. If our taste-makers could convince us that milk would make us strong, and that diamonds would lead to happy marriages, they can surely convince us that coliving reflects emotional maturity and financial wisdom.

Coliving doesn’t need to be for everyone. Families have different needs for private space than mobile singles, the demographic coliving best serves. But that market alone is huge — there are over 50 million people in the US aged 22–35. Assuming rent of $1,250 per month, just 10% of that population choosing coliving adds up to an annual demand of 75 billion dollars.

While cultural perceptions of coliving may be suppressing demand today, they tell us little about the potential demand for coliving tomorrow.

Conclusion

As someone who studied mathematics at the graduate level, I truly cannot imagine a straighter line than the one which runs from America’s housing-affordability and social-cohesion challenges to large scale coliving adoption.

Microapartments represent a local maximum — a decent solution to a challenging problem, but one constrained by limiting assumptions. Coliving represents a superior maximum — offering better housing at lower cost — but requires critically interrogating assumptions which often go unchallenged.

America is collapsing under the weight of increasingly unaffordable housing, rapidly deteriorating social capital, and diminished economic prospects for young people. Coliving — offering abundant, affordable housing and ample opportunities to form meaningful relationships — is an obvious solution.

We are sleeping on an enormous opportunity for both affordability and abundance, and that is a tragedy. Stop building microapartments, Ian. Build coliving.

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Last month’s essay explored the concepts of the magic circle, and the sacred and profane, linking them to the history of intentional communities — who tried to protect themselves from the dehumanizing effects of industrial capitalism by creating and inhabiting “magic circles” of sacred relationships.

The implications of these ideas are broader, however, and get at the heart of our collective effort to build a vibrant and complex society: learning how to scale complexity, while preserving the human substrate.

The Limits of Structure

One domain where these questions have attracted vigorous interest is web3 governance. Many, myself included, were drawn to web3 out of an aspirational desire to build better institutions, only to be disillusioned as we repeatedly watched web3’s ideals struggle against the realities of bad actors and hard problems.

Web3 leaders have long wrestled with this challenge. The argument roughly goes:

1. Game theory lets us design economic systems which encourage, if not outright guarantee, desirable behaviors and outcomes.

2. However, these guarantees go away if participants are able to collude outside of the system, going “around” the rules as written.

3. Financialized (extractive, zero-sum) outcomes occur in the absence of collusion prevention, as positions of influence can be sold to the highest bidder.1

4. The challenge is to create and sustain a “civil society” outside of crypto-mechanisms, where social values (e.g. fairness) can be consistently upheld.

This line of thinking echoes Karl Polanyi’s landmark argument in The Great Transformation: industrial capitalist society marked the shift from a world where markets were embedded in social life — a small part of a larger whole — to one where society itself became subject to market logic. Structures and systems allow greater complexity, and thus greater abundance, but the replacement of relationships with transactions creates opportunities for exploitation and abuse.

In his 2021 essay on the limits of cryptoeconomics,2 Ethereum founder Vitalik Buterin concludes that “financialized systems are much more stable if their incentives are anchored around a system that is ultimately non-financial.” The task before this generation of institutional builders is to articulate a design framework for repeatably weaving together transactional (short-term) and relational (long-term) systems into deeper and richer new wholes — thereby capturing the benefits of structure, such as greater freedom and robustness to discrimination and bias, without losing the psychological benefits of meaningful relationships.

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Engineering the Sacred

A question that has long interested me is how technical systems can be embedded into social contexts in a way that supports, rather than undermines, the social body — much as the skeletal system both supports and is supported by the body’s soft tissues.

Over the last several years, I was fortunate to work on two projects — Colony and Zaratan — which attempted to put these ideas into practice. The rest of this essay will draw case studies from these projects, and synthesize design principles of embeddedness and orientation for building socio-technical systems.

Mechanism design is often framed as a discipline under economics and game theory. We might be better off treating it as anthropology, with culture and values as first-class citizens. Let’s explore what that looks like in practice.

Colony’s reputation system

For six years I was a core contributor to Colony, a pioneering web3 DAO platform (“ants, not empires”), developing mechanisms for helping distributed teams more effectively work together. One of Colony’s primary innovations was a contextual reputation system in which reputation was 1) earned by doing work, 2) could not be sold or transferred, and 3) decayed automatically over time. Unlike the fully financialized token-governance schemes then (and still) prevalent in web3, Colony’s system incorporated aspects of what we might consider “the sacred” — in which decay reflects an underlying sacred time, rather than being the result of unoriented human action.

Earning contextual reputation through peer-reviewed labor embeds the score in a relational network (the “magic circle” in this case being the intra-firm arena). The loss of reputation over time makes the number meaningful and keeps the global reputation distribution dynamic.3 Inasmuch as these mechanistic elements map analogously to real-world reputation dynamics — hard-earned, relational, recency-biased — this design lets emotional resonance to accrue to reputation in a way that it simply cannot to a fully financialized token, whose directionless fungibility precludes the emergence of a relational play-space.

Colony’s reputation system was first presented in late 2017, in the middle of the ICO boom, and was both prescient and remains relevant to this day.

Chore Wheel’s “Hearts” system

In early 2020 I founded Zaratan Coliving to tackle the housing affordability crisis, and have been working to establish it as an innovative voice in its various ecosystems. Recently, the bulk of that effort has gone into Chore Wheel, our open-source suite of community governance tools, and a key part of what has allowed Sage House to sustain high occupancy and low rents for almost three years.

Early in the project, a lot of thought was put into how different pieces of information would be made explicit (represented symbolically), or left implicit and thus dependent on an evolving intersubjective understanding. Our intuition was that the more that could be left implicit, the more easily the formal system could be grounded in a relational context. The challenge was introducing just enough structure to be load-bearing, without inadvertently displacing — and ideally meaningfully integrating — the human substance.

The Hearts system is an example of this dual-layered design. All residents begin with 5 hearts, earn hearts by doing chores and receiving karma, and lose hearts for shirking chores or violating group norms. Every month, residents with more than five hearts “fade” ¼ hearts, while residents with less than 5 “regenerate” the same. A resident with many hearts gains special affordances, such as a lower approval threshold for purchases, while a resident who loses all their hearts pays a resident-determined fine, operationalizing Elinor Ostrom’s principle of graduated sanctions.4

While the number of hearts a resident has is explicit, the conditions for gaining and losing hearts are embedded (in multiple ways). As a chores accountability structure, hearts are derived from peer assessment of objective contributions; as a norm-setting tool, hearts emerge more fluidly from evolving culture and values. The homeostatic return-to-baseline orients the mechanism around forgiveness over time, allowing hearts to support meaningful emotional repair. By combining computational bookkeeping with human judgment, we expand the relational play-space without subjecting participants to a cold, transactional logic.

Chore Wheel’s “Chores” system

If Hearts provides a long-term accountability system, the Chores system helps coordinate daily regenerative tasks. Instead of an inflexible chore schedule, unreliable bragging board, expensive cleaning staff, or invisibly-laboring chores cop, residents do chores for points. The value of a chore rises with neglect, and residents can steer points towards higher-priority tasks, mixing individual contribution with collective determination. At the end of the month, points reset to zero, preventing compounding accumulation (or debt).

When developing the system, we initially tried to link points to rent, with the idea being that residents could do extra chores for lower rents. Imagine: an aspiring artist, in lieu of a second barista job, could contribute more around the house, while a busier professional could “buy back their time” in exchange for higher rent, all organically and dynamically. From a rational-actor perspective, it seemed like a great concept.

In the end we dropped the idea, for both legal and social reasons, and in retrospect I’m glad we did. While nice in theory, the points-for-rent would have undermined the “magic circle” of communal life by introducing external wealth disparities into an otherwise relational space. Chore points would have ceased to be a community currency representing mutual care, but simply have been “dollars with extra steps” — embedding the house in the larger economic market, instead of creating a miniature “chores market” embedded in the social relationships of the residents.

By keeping points socially embedded, we created a system to structure and motivate a vigorous process of culture-building, where residents engage in focused discussions about how to best leverage these mechanistic affordances to better live together.5

Design Principles

From these examples, we synthesize two design principles for socio-technical systems: that of embeddedness and orientation.

Embeddedness

Embeddedness is the idea that a system should be responsive to human thoughts, feelings, and values, instead of imposing machine values onto people.

Colony, Hearts, and Chores all rely on human review—Polanyi’s “embedded markets” in miniature—to keep reputation, hearts, and points grounded in real relationships. Instead of, for instance, mounting a camera over the sink and using computer vision to decide if the dishes were done (a real suggestion I received), or running a large-language model over a work product to produce an automated assessment of quality, participants verify each other’s claims.6 While arguably “inefficient,” the reliance on peer judgment keeps the explicit symbols (reputation, hearts, points) grounded in a mutual intersubjectivity, instead of being imposed exogenously by a (potentially misaligned) technical system.

As neural networks continue to mature, and practitioners in every industry are exploring ways to leverage these tools to augment and automate manual processes, the question of where to automate, and where to embed, decision processes will become increasingly critical. Leaders like Audrey Tang and organizations like the Collective Intelligent Project are doing key work in this area.

Orientation

Orientation is the idea that the system should be built with an innate sense of direction and momentum, defined as much by what it can’t do as by what it can.

This idea connects to our discussion of the sacred. The sacred is a fixed point — the pillar of the temple, the hour of the festival — around which experience revolves, while the profane, uniform and relative, drifts without orientation. The sacred precedes and defines us; the profane follows and is defined by us.

In our examples, meaning and relationality are preserved through an orientation, an asymmetric limitation on what a symbol can do. A fungible token has no orientation — it can be sent up or down, left or right, forward or back. This homogeneity means a token can accrue no meaning or history, apart from financial value.

Contrast this with Colony’s decaying reputation, or the idea of a non-transferrable “soulbound” token: their deliberate, asymmetric restrictions allow these symbols to acquire both meaning and history, enabling a deeper relationality

Conclusion

Here is a screenshottable (wink) summary of these concepts:

Designing Sacred Machinery

Principles

• Embeddedness

  • Ground assertions in intersubjectivity, avoid gameable sensors

• Orientation

  • Fundamental asymmetries encourage meaning and memory

Provocations

• Homeostasis over hoarding

  • Ephemerality deters whales and preserves dynamism

• Protect the circle

  • Keep the profane (money) out of sacred (relational) spaces

• Create culture through ambiguity

  • If possible, under-specify rules and let culture fill the gap

The major trend in crypto-economics today is to acknowledge the limits of economic incentives, but to nonetheless try to compensate with even more explicit structure.

Perhaps the better answer is to strategically under-mechanize, and instead deploy principles of embeddedness and orientation to design socio-technical systems where norms, values, ritual, and culture emerge organically as first-class citizens. This lets us build systems as complex as we need, without losing the humanity we built them for.

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This question was posed during a session on coliving hosted by Dialog.org, a group that organizes off-the-record roundtables for industry leaders.

It got me thinking.

The Magic Circle

In his 1938 Homo Ludens, Dutch historian Johan Huizinga argues that play is a necessary component of generating culture. “In the absence of the play-spirit, ” he writes, “civilization is impossible.” In play, the substance of civilization is formed.

For play to be possible, humans must create a “magic circle” — an intersubjective space in which the “real rules” of reality are suspended, and the “game rules” are all that matter. Within this magic circle, players are able to experience profound states of flow as they engage deeply with the game’s challenges — whether kicking a ball down the soccer pitch or competing in the virtual stadiums of contemporary Esports.

Huizinga, along with game designer Raph Koster and neuroscientist Kelly Clancy, argue that play is an essential part of personal development. Through play, humans are able to experiment with new strategies and behaviors, and develop important social skills, without the real-world consequences of failure, such as physical harm or social embarrassment. If we cannot play, society suffers.

The integrity of the magic circle is paramount. If the boundaries of the circle are broken — a phenomenon often understood as “cheating” — then the social contract underlying the game is broken as well.1

Critically, one thing that must be kept out of the magic circle is material interest (i.e. money). When money enters the magic circle, the game collapses, as every game element is re-interpreted through the lens of financial value. As Piers Kicks observes in his discussion of the history and future of gaming, once monetary value is assigned to an in-game item, it becomes difficult to assign to that item any other value.2

This does not mean that there cannot be financial interest in the outcomes of games — people gamble on sports all the time. The key distinction is that these financial interests are kept strictly outside of the magic circle.3 It is perfectly fine for an athlete to know that money is on the line, as long as the outcome is determined only by what exists within the magic circle — the player’s skill in the game.

The boundaries of a magic circle do not enforce themselves. The bigger and more consequential a game becomes, the more pressure is put on the boundaries of the circle — as evidenced by the prevalence of cheating in sports.

Maintaining the integrity of magic circles is a major social design challenge.

The Sacred and the Profane

In his seminal 1957 The Sacred and the Profane, Romanian historian Mircea Eliade discusses the nature of religious experience. For the religious person, Eliade argues, the sacred becomes as a “fixed point,” a central frame of reference, around which their lived experience revolves.

To quote Eliade:

Revelation of a sacred space makes it possible to obtain a fixed point and hence to acquire orientation in the chaos of homogeneity, to “found the world” and to live in a real sense. The profane experience, on the contrary, maintains the homogeneity and hence the relativity of space. No true orientation is now possible, for the fixed point no longer enjoys a unique ontological status; it appears and disappears in accordance with the needs of the day.

The profane, mundane world, is fungible, homogenous — every day, every bag of wheat, every transactional counter-party is indistinguishable from any other. It is only in the presence of the sacred — the sacred space of the temple, the sacred time of the festival — can the religious person find anything “real” through which to orient their experience of the world. Eliade writes that “Life is not possible without an opening toward the transcendent; in other words, human beings cannot live in chaos.”

His startling thesis is that for the religious person, the sacred is the only thing that is real. The profane world, lacking orientation, is incapable of holding meaning — and is thus hostile to human life.

The Utopian Socialists

These ideas of the magic circle, and the sacred and profane, emerging from cultural and religious history, can shed light on an ostensibly economic historical experience: that of the utopian socialists.

The 19th and early 20th centuries were busy times for social and cultural thinkers, grappling with the disruptions and implications of industrialization. Broken social units, overcrowded cities, dangerous work environments, and the erosion of traditional sources of meaning, identity, and belonging pushed many to experiment with alternative social forms.

Both the Fourierist phalanstères of the mid-19th century United States and the kibbutzim of Israel’s early-mid 20th-century pioneer era sought to create better worlds through the practice of new forms of organization — a concept known today as “prefigurative politics.” Putting higher ideals above mundane realities, these communities sought to create “sacred spaces” of relationship and community set apart from the “profane” world of money and markets.

In essence, these communities sought to create “magic circles” where material realities — such as the financial value of one’s labor — were excluded, and relationships of mutuality privileged. These early idealists worked long hours for low pay, motivated by their philosophy and belief that through hard work and sacrifice they could bootstrap their aspirational visions into reality.

The strategy worked, for a while.

In the case of America’s Fourierist communities, the harsh realities of 19th century agricultural life, combined with the logistical complexity of self-government, caused the average phalanstère to shut down after little more than three years (source). In the case of the Israeli kibbutzim, increasingly attractive career prospects in the country’s growing cities meant that the children and grandchildren of the founding members saw less and less of a reason to make the personal sacrifices their parents had been so eager to make. As I often joke, “ideology gets you two generations.”4

In both examples — American phalanstères and Israeli kibbutzim — the early pioneers sought to establish a “magic circle” in which sacred communal ideals could be set apart from profane realities, providing metaphysical orientation in a world that felt increasingly harsh and devoid of meaning.

Unfortunately, in both examples, that sacred center could not hold, and participants defected to pursue better material opportunities elsewhere.

Breaking the Circle

In their classic 2000 paper, “A Fine is a Price,” Israeli behavioral economists Uri Gneezy and Aldo Rustichini ran a peculiar experiment. At several day-cares in Haifa, Israel, they observed that parents would sometimes be late to pick up their children. Reasoning, as economists do, that a financial penalty might encourage the parents to arrive on-time, they asked the day-cares to start charging parents who arrived late.

Famously, the fines had the opposite effect: parents started arriving even later.

Rather than see the fines as a punishment to be avoided, the parents instead saw the fines as a “price” which they could freely pay in exchange for extra childcare. Whereas beforehand the parents had been punctual out of respect for the staff, they now saw themselves as “buying” a service, and felt less of a need to be on time.

Critically, once the fines were removed, the parents did not start arriving earlier.

This study underscores a key dynamic of magic circles: once broken, they can be difficult or impossible to repair. Before the fine, parents came on time out of a sense of mutual dependency and respect for a type of “sacred” social contract. Once the “profane” material of money was introduced, the circle was broken.

Removing the fine did not repair the circle; once something sacred has been profaned, it must be re-sanctified — at potentially great cost.5

Sacred Play

It should be clear by now where this is going: communal living requires creating and preserving a magic circle in which the “sacred game” of relationship can be played.

It may feel odd to characterize community as a game, but recall Huizinga, Koster, and Clancy. It is through ritualized play that skills are built, relationships are formed, and, ultimately, civilization is created.

Today, many are drawn to communal life, as were the early socialist pioneers, out of a sense that the “profane” world of homogeneity — of time, of place, and of people — is hostile to human flourishing. They often look to create a world-in-miniature — a sacred magic circle — where relational logic prevails.

Within these magic circles, relationships become the axis mundi, sacred centers around which reality revolves. The cultivation and enjoyment of relationships becomes a form of play, possible only within these carefully crafted containers.

To introduce profane material too casually would violate the integrity of these circles, and undermine the value of the relationships formed within them. To answer the question posed at the top of this essay: communal living may be feasible among those who make different amounts of money, but that material inequality must be carefully kept out of the communal social sphere. To the extent that money defines communal relationships, the sacred play-space will be characterized as much by power hierarchies as by interpersonal connection.6

Those looking to build coliving communities within a market society must stay keenly attuned to the ways material realities shape relationships. To succeed, they must make conscious choices to structure communal life in ways that privilege human connection over economic circumstance. In practice, this means keeping personal wealth out of view and creating a “magic circle” in which the quality of a person’s character has the freedom to play.

This essay is the first in a two-part series. The next installment will explore how these same tensions — between the sacred and the profane, the magic circle and the market — play out in the design of governance systems and digital institutions.

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We often view questions of inclusion, rights, and protections through the lens of nations — as fights for universal franchisement, or civil rights. It is less common, but arguably more interesting, to consider these questions at much smaller scales — namely, in housing communities, and their choices about who to include or exclude. In these intimate settings, the questions are less abstract, and more human.

Understanding these dynamics is a matter of deep personal interest. I have often experienced the tension between connection and autonomy — craving acceptance, yet bristling at the limitations of groupthink. The challenge of navigating these tradeoffs has shaped both my work and my worldview.

Every sovereign (i.e. non-oppressed) community must be able to determine its own membership. The key question is how they navigate these choices. Over the course of three examples, we will trace out an evolution of eviction processes, from instinctive tribalism through to more sophisticated institutional practices — and explore what this progression reveals about how to better live with difference.

Example 1: Vibes & Tribes

The first case represents instinctual governance — an unstructured, reactive process that prioritizes group cohesion over fairness. The example comes by way of the site formerly known as Twitter, in which a disgruntled housemate reposted this message:

There is a lot to unpack here.

First, it is important to acknowledge that the other housemates are not being hostile, and are clearly trying to be sensitive to Rob’s feelings. This is not a mean message: from their perspective, they are kindly asking someone to leave so that they can continue working towards their vision of an ideal culture.

Unsurprisingly, Rob did not feel the same way, and took his story online. Many came out to his defense, while others would criticize his actions.

From the perspectives of his critics, the housemates had done nothing wrong — they had invited Rob in on a short-term basis, only to decide that Rob was not a “fit” with the culture the leaders were hoping to create. In the context of cultivating a certain “vibe and tribe,” Rob’s eviction was arguably essential.1 By getting upset, Rob was proving that he didn’t “get” what the house was going for.

And yet, there is clearly a disconnect. If the house had done nothing wrong, then why did Rob feel compelled to air his grievances? Why did people come out to support him?

In his 1944 The Great Transformation, Hungarian political economist Karl Polanyi famously framed housing (specifically, land) as a “fictitious commodity.” We treat housing as something we can buy and sell, when in reality it represents something deeper — a feeling of rootedness and security. Housing is not merely an address and monthly rent, easily exchanged for another in at most 30 days. Rather, it is a social and emotional anchor.

By arbitrarily evicting Rob, the housemates had undermined his sense of connectedness and safety, positioned him as an “other” in the context of his housing community, and left him no recourse other than starting an online flame-war.

We lead with this example because it arguably represents the “default” for a group of humans. Without structure, process, or extensive personal development, this is what we do. In this case:

1. The group had no clearly-defined processes for asking someone to leave

2. The group decided post-hoc, with no transparency, that Rob did not belong

3. Rob now finds himself unhoused, with no recourse other than to cause drama

4. Everyone loses: both Rob and the housemates come away looking bad

Ultimately, the “vibes and tribes” approach to community-building undermines itself when it fails to deeply honor the experience of its “others.” Once someone has moved into a space, they are — for better or worse — a part of that community. Removing them should be done only with great care.

Put even more bluntly, if you create a shared living space with the expectation that residents will have no reaction to being (in their view) arbitrarily evicted, you are putting yourself in danger.

Example 2: Chaortica’s “Offboarding”

The second case introduces more structure, but muddies the boundary between policy and cultural norms, complicating enforcement. The example comes from the now-defunct Chaortica in San Francisco, who developed an “offboarding” procedure later open-sourced as their “Conditions of Membership & Crisis Response Policy.” This guide was shared with me early in the process of developing Zaratan’s legal documents, and was a useful point-of-reference. Here is an excerpt:

When compared to the first example, Chaortica’s offboarding process shows a significantly richer appreciation of notions of rights and protections, as well as a more robust premeditation on the interpersonal challenges involved with asking someone to leave a community. Another excerpt, attempting to pro-actively set expectations:

We recognize that excluding the member-in-question will always feel easier to the rest of the community. We also recognize that what is easiest may not also be the most just. It will not always be clear how much inclusion is correct and we must trust in each other’s good intentions. Generally, in non-emergencies, the process should be completely transparent.

The document is also very specific about steps to be taken in cases of emergency:

If any housemate feels personally challenged by another member in a way that meets the definition of emergency above then they (and only they) are responsible for initiating the offboarding process:

1. Create a private Slack channel that excludes the member-in-question. The purpose of the channel is to:

   1. announce and summarize the emergency

   2. coordinate any immediate actions that need to be taken

   3. schedule an in-person meeting

   4. ONLY discuss and share to the extent that is absolutely necessary; i.e. NO gossip, speculation, editorializing, etc.

We wrote a lot of this type of policy — narrative-heavy and prescriptive — during my time at the Berkeley Student Cooperative. Over time I became disillusioned with this style of governance, as I saw how easily it was disregarded in practice. Time after time, other leaders and I would labor over specific policy language, only to watch members “wing it” when faced with unexpected situations. Putting procedures into writing does not necessarily mean that they will be followed.

Looking at Chaortica’s offboarding process, it is useful to distinguish between what is functional policy and what is only “best practice.” It is easy to write the words “NO gossip,” but it is hard to enforce them in practice, limiting their value.

In my opinion, the functional policies include:

• Establishing the role and expectations of the community steward

• Providing clear voting rules and timelines for the removal processes

• Explicitly identifying an emergency contact for each resident

Even if the behavioral prescriptions go out the window during an incident, these “hard” policies will be useful in helping maintain structure in the offboarding process. Further, “best practices” language, while not policy, can be a useful reference point — residents can point to the document, and use it to help reiterate group norms.

What separates “functional policy” from “best practice” is the ease of enforcement, relative to the complexity of the policy. Complex behavioral prescriptions (e.g. around communication and tone) with no enforcement mechanism is not policy, but best practice. On the other hand, a signed document saying you will voluntary leave within 30 days of a “consensus-minus-one” vote, with an emergency contact ready to help enforce, is much closer to a useful policy one could (for instance) bring as evidence in court.

On balance, while somewhat limited in practical enforceability, the “offboarding” process’ sensitivity to the experience of the person being evicted represents a clear step up from the previous “vibes and tribes” approach.

Example 3: Chore Wheel’s “Hearts”

The third case uses digital tools to separate decision-making processes from social dynamics, allowing for accountability without arbitrariness. The example comes from Hearts, part of Zaratan’s Chore Wheel suite of governance systems. Hearts is a reputation/strikes system, used to both recognize people going above-and-beyond, and to provide clear and objective accountability for those not upholding their commitments. Not explicitly designed for evictions, Hearts can be — and recently was — used as part of a larger process of removing someone from a community.

Hearts was heavily influenced by American economist Elinor Ostrom’s Nobel-prize-winning work on common-pool resource management, in particular the idea of “graduated sanctions” for rule-breakers, and the need for easily-accessible systems of conflict resolution for participants. The following is an excerpt from her landmark “eight principles” of effective institutions for shared-resource management:

5. Sanctions for those who abuse the commons should be graduated. Ostrom observed that the commons that worked best didn’t just ban people who broke the rules. That tended to create resentment. Instead, they had systems of warnings and fines, as well as informal reputational consequences in the community.

6. Conflict resolution should be easily accessible. When issues come up, resolving them should be informal, cheap and straightforward. That means that anyone can take their problems for mediation, and nobody is shut out. Problems are solved rather than ignoring them because nobody wants to pay legal fees.

One goal of Hearts was to overcome the shortcomings of overly-narrative policy-making by more clearly separating policy from process. Hearts aims to provide a general-purpose mechanism for accountability, while imposing few hard limits on how that mechanism can be used.

This is an advantage, as the process of establishing cultural norms is more clearly separated from the process used to enforce those norms. Unlike Chaortica’s “offboarding,” Hearts works regardless of how motivated housemates may be to uphold shared values — valuable during times of crisis, when the sense of unity might be weaker. Further, Hearts does not prescribe in advance all actions which might be necessary during an eviction process, leaving room for housemates to adapt to circumstances on the ground, rather than feel restricted by, or choose to ignore, irrelevant premeditated procedures.

Further, unlike Chaortica’s offboarding, Hearts allows for gradual accountability, making it harder for minor conflicts to escalate into full-blown crises. By centering processes of rehabilitation and feedback, situations which might otherwise culminate in a painful and disruptive removal can instead become opportunities for growth and (re-)connection. Where repair is not possible, the person being evicted feels respected — the outcome was not a surprise, nor was it arbitrary.

A few months ago, Sage House used Hearts was used to remove someone from the community. At a high level, what happened was:

1. Someone moved in who was a “bad fit” for the space — not conscientious, poor communication, dodged accountability. This was obvious to everybody.

2. Over a period of several months, people lost patience with the housemate, who did not accept feedback or make any effort to change their behavior.

3. The housemate started losing hearts, mostly due to not doing chores. At first slowly — and then more quickly.

4. Eventually they ran out of hearts, and received a fine. I got involved, negotiating a move-out in exchange for waiving the fine.

This was the first time that Hearts has been used to remove someone from a house. On balance, I feel as though the system worked well — empowering the majority of the housemates to make a collective decision, while ensuring the outgoing housemate retained a voice and a role in the process.

The process was not perfect — the housemates took a long time before they began giving sanctions, and once they did, they expected me to intervene in unrealistic ways. In this specific case, the separation of “structure” and “culture” created a gap in expectations, which will need to be closed going forward.

Overall, the Hearts system offers a structured yet flexible framework—one that allows communities to balance accountability with fairness, and enforcement with respect. Communities relying on written policies, or who have no system at all, should consider adopting these more advanced and dynamic techniques. If that sounds like you, please be in touch.

Discussion

Looking at these three cases, we can position them roughly in a continuum of separation between “structure” — rules and procedures, and “culture” — norms and values. In the first case of “vibes and tribes,” structure and culture were largely co-incident: people made up rules as they went along, based on their intuitions and feelings. In the second case, of “offboarding,” there was a written procedure which mixed both specific process and personal values. In the third case, of “Hearts,” the structure of the Hearts system was distinct from the norms and values of the residents.

When structure and culture are fused, decisions feel intuitive but are prone to bias and exclusion. When they are loosely connected, policies exist, but hinge on individual willingness to enforce them. Only when they are fully distinct can institutions function independently of personal whims, ensuring both fairness and adaptability.

I am an institutionalist, and believe it is important to know how to live with difference. I do not believe, as Rousseau did, that people are inherently “good,” and made evil by society. Nor do I believe, as Hobbes did, that people are inherently “bad,” and require a strong leader to enforce order. Rather, I believe that people are generally kind to their “in-group,” and cruel to their “out-group.”

This is a critical point.

We humans are many beautiful things — rational, creative, empathetic — but we are also fickle, status-seeking primates. We are quick to ally with power, shun the weak, and forget our promises. However, as American philosopher John Rawls famously argued in his 1971 A Theory of Justice, we should not be too content with our own position. The lines separating “us” and “them” are drawn in sand, and over the years many have found themselves suddenly and unexpectedly on the wrong side of history. We protect the minority and welcome the stranger, not because they are the “right” things to do, but because we can never know when we might wind up the minority or the stranger ourselves.

I know from personal experience how easily tribal lines can be re-drawn — one day everybody’s favorite, the next day thrown under a bus. Acute social dislocation causes real trauma.

In his 1945 The Open Society and its Enemies, British philosopher Karl Popper reflects on the nature of tribal consciousness:

Surrounded by enemies and dangerous or even hostile magical forces, he experiences the tribal community as a child experiences his family and his home, in which he plays his definite part; a part he knows well, and plays well.

Globally, we are witnessing a return to tribal attitudes. As the cultural center decoheres — due in part to the spread of poorly-designed communications technologies, as well as the failure of global liberalism to bring broad prosperity — people are closing ranks.

Tribalism is not the answer. But neither can we overlook the ways our systems have failed. Rather, we must learn to build new kinds of institutions — digitally-enabled, expressive, transparent, and neutral — and use them to explore new possibilities for living with difference.

A process for removing someone from a house may not, at first blush, seem remotely connected to these larger themes. On a closer look, however, we see that they are intimately linked. Instead of heated debates about immigration policy, reflect on how you, personally, might ask someone to give up their housing. How much respect, empathy, and firmness could you bring to that encounter? How much difference are you personally able to tolerate? What can these examples teach us about our world at large?

We are quick to mourn the open society, but slow to acknowledge the part we have played in its demise. By expanding our own ability to tolerate discomfort, embrace difference, and lead with both firmness and empathy, we lay the foundation for a better world — not through abstract policy debates, but by how we treat the people closest to us.

We have more agency than we think.

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Throughout the book, Clancy maintains a steady through-line: the models we develop to understand our world inevitably reach back around to shape that very world, and not always for the better. By applying a critical eye to these histories, à la Yuval Noah Harari, we create the possibility of different futures.

This essay will provide chapter summaries of the book, as well as commentary linking the material to the broader themes of this blog.

I. How to Know the Unknown

The book’s first section focuses on the history of gaming’s fundamentals: the science of dopamine in the brain, and the early history of probability.

1. The Play of Creation

Clancy introduces her central theme of games as world-building tools

The book opens with the example of Rithmomachia, an early chess-like game based on the ideas Pythagoras, and ancient Greek philosopher. While popularly known for his eponymous theorem, the historical Pythagoras was more a religious leader than a scholar, preaching that numbers hid secrets of the divine, and that their study could lead to mystical insight. These (incorrect) beliefs were encapsulated in and reinforced by this popular game and, in Clancy’s view, held European scholarship back for centuries.

Games, in Clancy’s view, shape our minds, as they require players to play in order to win. Every game is a simple model of the world, and rewards players to the extent that they are able to inhabit that model. As “systems furnished with a goal,” games help players learn to navigate the unknown, can connect people across language and culture, and provide an important source of satisfaction. As game designer Raphael Koster has observed: “fun is just another word for learning.”

Clancy argues that games have been central to the evolution of intelligence: “play expanded nature’s search strategy of randomness into the behavioral realm. … Play is to intelligence as mutation is to evolution.” Through play, humans can rehearse and prepare for hypothetical real-world scenarios, helping them thrive in a dynamic and uncertain world. However, as compelling as a play experience might be, a game is never more than a well-defined mathematical object. By allowing our thinking to be shaped by imaginary constraints, we may ultimately limit our ability to navigate messy and complex reality.

Commentary

The example of Rithmomachia provides a compelling hook, in particular through the way that the game’s misconstrued assumptions ultimately constrained the thinking of its players. I have long been a fan of Raphael Koster, whose book A Theory of Fun in Game Design would have a big influence on the design of Chore Wheel.

2. How Heaven Works

Clancy weaves the discovery of of dopamine into the early history of AI

The chapter opens with a history of the “sleeping sickness,” the mysterious illness which plagued thousands in the years after WWI. In searching for a cure, scientists discovered dopamine. Initially understood as the neurotransmitter aiding movement, over time dopamine became understood as a general driver of behavior: “what is movement ultimately for, save the pursuit of reward and avoidance of punishment?” Later studies took the argument further: dopamine is not about reward per-se, but beliefs and expectations of reward. It was during this era that psychologists like B.F. Skinner would speculate about the possibility of socially-engineered utopias.

Clancy introduces the counterpoint of games as a measure of intelligence and a tool for education. Early AI research made explicit the link between random action and reward, as seen in he example of MENACE — a physical computer system which learned to play tic-tac-toe by reallocating beads throughout various matchboxes, based on game outcomes. Over time, this idea of reinforcement learning would emerge as a prediction-based approach to computational learning.

Over time, these two threads would come together, with a collaboration between computational and neuroscience researchers resulting in a “set of now canonical papers suggesting that dopamine serves to broadcast the brain’s reward prediction error” — a landmark achievement linking two scientific disciplines.

Clancy reflects on the incredible human ability to construct rewards systems for events far in the future (planting crops for harvest) or even purely hypothetical (the promise of life after death), allowing for complex coordinated behavior to emerge. She leaves the reader with an invitation, foreshadowing some later chapters of the book: to improve predictions, either the participant’s mental model can be improved, or the world can be made more predictable.

Commentary

This chapter introduces Clancy’s characteristic style, weaving the stories of some of history’s most brilliant minds. This chapter also introduces one of Clancy’s main themes: the interaction of psychological and computational research throughout the 20th century.

3. Dice Playing God

Clancy reviews the history of probability theory

This chapter opens with a survey of divination in early cultures. Augury, whether through animal entrails or cracked bones, was a widespread practice in early societies. Clancy speculates that these techniques, while seemingly pointless to modern observers, were in fact an early source of randomness, helping participants break free of limiting cognitive biases. Bones would over time evolve into dice and lots, seen as "revealed technology for gods will” and means of accessing heavenly insight.

Games of chance would prove consequential for societies, for better and for worse. Among Native American tribes, gambling would become a way of reallocating resources across social classes. It was also addictive, with ubiquitous gambling regularly destabilizing societies. Writing about the late Roman empire, historian Andrew Steinmetz observed that “every inhabitant of that city, down to the populace was addicted to gambling.” Writing about the French revolution, he writes that “at the death of Louis XIV, three-fourths of the nation thought of nothing but gambling.”

In a fascinating discussion, Clancy asks why a mathematical treatment of probability did not arrive until the Renaissance. She argues that the ancient Greeks were fundamentally philosophical, not experimental, in their views. The idea that empirical methods could help answer questions of reality was simply not available to them. Further, the empirical techniques necessary for a science of uncertainty did not arrive in Europe until the middle ages, with the import of the Indian numbering system.

Tracing this history, Clancy describes the first formalization of probability by Gerolamo Cardano in the 16th century, then developed further by Antoine Gombaud, Blaise Pascal, and Pierre de Fermat in the 17th century, with the first calculations of the expected outcomes of a series of dice throws. This emerging field quickly gained momentum, with concepts of decision-making under uncertainty, marginal utility, and of bayesian learning coming in the years that followed. These statistical techniques were soon applied to questions of public health and social policy, leading to widespread benefits.

Clancy closes with a discussion of why gambling is so addictive. It is not merely about the reward, she reasons, as people do not crowd around vending machines. Rather, the allure of gambling is that of exploring the unknown. Recalling the previous chapter, Clancy explains that dopamine release is highest when the odds of winning are 50%. Evolutionarily, this motivated humans to persevere in the face of failure. But a science of probability can also allow us to delude ourselves, convincing ourselves we know more than we do by assigning numbers to our uncertainty.

Commentary

Clancy argument for the social advantages of divination is refreshing. The idea of early augury not as pure superstition but as an actually useful technique for reducing bias is fascinating, as is her interpretation of Native American gambling as a mechanism of wealth redistribution. Her characterization of ancient Greek thought as empirically myopic is equally striking, and I have long been fascinated by the history of numeral systems.

II. Naming the Game

The book’s second section focuses on the history of war-games, from chess to the groundbreaking Kriegsspiel through to the development of game theory. Clancy emphasizes how simplified models of “rational actors” often come up short.

4. Kriegsspiel, the Science of War

Clancy traces the historical development and influence of war games

Chess originated over 1,500 years ago in India, and came to Europe by way of Arab trade and conquest in the centuries which followed. A highly abstracted model of war, 18th century mathematician Johann Hellwig would attempt to enrich the game by modernizing the pieces, enlarging the board, and incorporated dice to determine attack damage. A few decades later, the father-and-son team of Georg Leopold von Reisswitz and Georg Heinrich Rudolf Johann von Reisswitz, both Prussian military officers, would take this work further. Eager to serve their king, they transformed Hellwig’s game into the beginnings of a “war computer,” incorporating to-scale maps, realistic terrain, weather effects, and a data-driven scoring table. Players had separate boards, modeling the uncertainty of fog-of-war. A full game could take weeks.

The game debuted in 1824 and was a hit among the military aristocracy, with senior officials using the game to refine and develop their own military strategies, going on to win real battles. The game’s effectiveness was validated by Wilhelm I’s successful military unification of Germany, and afterwards became increasingly popular. Over time, complex rulebooks were replaced by professional umpires, making games faster and easier to play. As the game more accessible, strong gameplay became a way of advancing officers, making the military as a whole more meritocratic.

As Clancy is keen to remind us, the game had its limits. Germany’s invasion of Belgium in World War I, while tactically sound, was politically disastrous, bringing Britain into the war and leading to Germany’s defeat. Kriegsspiel, sadly, had no diplomacy module.

In the years following World War II, Kriegsspiel would become the inspiration for tabletop games like Warhammer, Settlers of Catan, and the classic 1974 role-playing game Dungeons & Dragons, and ultimately become the basis for the text-based and graphical computer games we play today.

Commentary

There is nothing quite like a secret history. The father-son von Reisswitz team were product visionaries before such a term even existed, and would likely have felt at home at Xerox PARC or Bell Labs. Their legacy is vast, with their work having shaped not only the course of European military history, but contemporary game design itself.

5. Rational Fools

Clancy reviews the historical origins of game theory

Armed with an emerging science of probability, mathematicians in the 18th and 19th centuries would begin attempting to formalize popular games, in order to discover winning strategies. This expression reached its apotheosis in Jon von Neumann, the legendary Hungarian mathematician who, inspired by his advisor David Hilbert’s vision of systematizing mathematics, as well as by the rise in antisemitism in Europe, would attempt to describe “laws” of human nature.

In 1926, von Neumann published a paper proving that for any two-player zero-sum game, there a single best solution — the so-called rational strategy. This strategy, known as “minimax,” involves each player attempting to minimize their opponents maximum gain — as when a child cuts a cake evenly to minimize the size of their siblings piece. In later work, von Neumann found that when the number of players increases, the stable strategy becomes unpredictable due to the introduction of possible alliances and coalitions — a version of the famous “three-body problem.”

Simultaneously, Oskar Morgenstern was developing his own foundations for economics, which he felt was too reliant on unrealistic assumptions. To Morgenstern, economics was “a fragmented field whose practitioners were asking the wrong questions with the wrong tools, offering useless and static models built on a foundation of impossible assumptions.”

Von Neumann and Morgenstern would team up and write the classic “Theory of Games and Economic Behavior” in 1944, laying the foundations of game theory. By formalizing economist Paul Samuelson’s insights about “revealed preferences” and incorporating notions of decision-making under uncertainty, the pair was able to develop a consistent theory for predicting participant strategies and choices.

The work was initially ignored by economists, who found the material too formal, and the results too narrow to be useful. It was John Nash’s 1951 introduction of his eponymous equilibrium, providing a stable solution for games involving many players and many possible outcomes, which made game theory palatable to economists. The ideal of “economic equilibria” was adopted by conservative economists, becoming the basis of market fundamentalist thinking. Selfishness, Clancy observes, made people predictable.

In the present day, game-theory-influenced market designs pervade our economy. Clancy writes:

It is hard to argue with the willful naiveté of a theorist whose model agrees with their ideology. Free-market fundamentalists contend that markets offer a kind of ethical alchemy. Selfishness is held up like a philosopher’s stone, capable of transmuting what was once considered a sin into economic virtue.

However, while optimal in theory, these markets have not delivered widespread abundance in practice. Driving her point home, Clancy argues that this is largely due to the narrow assumptions about human beings that these models require.

Commentary

Here Clancy continues building momentum in her arguments. In recounting the story of these legendary mathematicians, Clancy reminds the reader at every turn that these mathematical models bear only the most incidental relationship to actual human behavior. The “3 body problem” of collusion remains an ongoing concern to this day.

6. The Clothes Have No Emperor

Clancy mounts her major critique on game theory.

Despite its elegant mathematics, game theory has been deeply flawed in practice. Based on mathematical tautologies, game theory’s many failed predictions are never seen as limitations of the theory, but rather as “proof” that human beings are fundamentally irrational, unwilling to play ball.

A classic example is the famous “prisoner’s dilemma”, developed by RAND mathematicians Merrill Flood and Melvin Dresher in 1950. Purporting to disprove Adam Smith’s notion of an “invisible hand,” this thought experiment demonstrates that, at least in some cases, rational self-interest leads to collective harm. This influential model would go on to influence the behaviors of corporations, governments, and militaries across the globe. And yet, as Clancy points out, the model’s predictions are often bunk. Participants frequently cooperate, engaging in “tit-for-tat” behaviors to “train” defectors to play nice.

The field of behavioral economics emerged in part as a response to these “mistakes,” seeking to document the many ways that humans are irrational — but often only producing irreproducible results. As Clancy points out, physicists eagerly update their models in response to new data. Economists do not.

Game-theoretical models show that people should frequently defect; in practice, people cooperate, and punish defectors. Much of this discrepancy can be attributed, Clancy argues, to the way in which beliefs affect player choices. As economist Herbert Gintis notes, norms and beliefs “choreograph” player actions, and cooperative norms may have emerged as a way of helping humans survive in their early environments. Clancy notes that cooperation releases dopamine — ergo, being nice is its own reward. Rather than modeling humans as greedy optimizers, Clancy suggests, perhaps we could model them as dynamic learners looking to make increasingly better predictions.

The prevalence of zero-sum views, largely the influence of game-theoretical attitudes, drive zero-sum behaviors. Clancy makes the striking contrast between the 1968 publication of Garret Hardin’s infamous “Tragedy of the Commons” — a theoretical statement of coordination failure — with Elinor Ostrom’s earlier 1965 PhD dissertation empirically documenting the ways that real communities actually manage shared resources. Quoting Ostrom: “People collectively work out globally beneficial outcomes by cleaving to values like reputation, trust, and reciprocity — not by discarding these values.” Ignored for decades, Ostrom would go on to win the Nobel Prize in 2009.

Closing the chapter, Clancy reminds us that human nature is fundamentally plastic. Beliefs about rational-self interest will drive people to be selfish, while beliefs about the value of cooperation will drive people to behave cooperatively. She writes: “people will only be as good as the games they’re incentivized to play.”

Commentary

Here Clancy provides the substance of her critique: obsession with game-theory created cultural beliefs which would go on to produce deeply sub-optimal outcomes. By telling people they are selfish, Clancy argues, they are more likely to become so. In contrast, Ostrom’s work, a major influence on Chore Wheel, would show that people are not actually that selfish in practice, as long sufficient structure was in place to help organize behaviors.

7. A Map that Warps the Territory

Clancy sharpens her critique, exploring the way game theory has shaped warfare.

Advances in military technology have shaped the course of history. From the “greek fire” of the Byzantines, crossbows in Europe, gunpowder in China, through to dynamite in Europe and ultimately to nuclear weapons in America. Every advance sparks a brief flash of hope that the devastating new weapon might finally convince people to stop fighting, but society inevitably adapts to a higher level of violence.

With the development of nuclear weapons in the 1940s, game theory began extending its influence into the military realm. The staggering scope of the nuclear threat convinced policy-makers to cede more judgment to operations researchers. The idea of a Nash equilibrium would lead to the doctrine of M.A.D. — Mutually Assured Destruction — and the logical consequence, the need for an enormous nuclear arsenal. Whereas traditional diplomacy called for an ethical standard of mutual regard, the logic of game theory insisted on mutual selfishness.

In fairness, Clancy admits, the strategy was not a failure, with the Cold War famously characterized by its lack of total war. However, the resulting arms race drove the cost, and risk, of random error sky-high. We must never forget that at one critical moment, the outbreak of war was averted by the judgment of a single officer.

This optimizing, operations-research mindset would continued to shape US foreign policy during the Vietnam war, as Robert McNamara was appointed the Secretary of Defense. As Clancy recounts, McNamara was “enamored with numbers” and would privilege his own technical analyses over the judgment of military leadership. This would infamously lead to disaster during the war, with the US consistently failing to achieve military objectives despite a staggering loss of life. Recalling chapter 5’s “three-body problem,” the models ultimately failed to account for actors — in this case the Vietnamese — with very different beliefs and values.

The popularity of game theory would decline. Grim military simulations like Proud Prophet and films like the iconic WarGames would shape and reflect a public opinion which increasingly saw game theory as a faulty tool of out-of-touch elites. Yet, game theory remains prevalent. Computational strategy models would form the basis of drone piloting systems, and combat simulators remain popular entertainment. As war becomes increasingly abstracted, Clancy reminds us, human costs are concealed.

Commentary

Clancy concludes up her critique by detailing the extent to which game theory would come to influence military policy, and the staggering cost of this influence. Building on her arguments in previous chapters, Clancy shows how the “logic” of game theory would compel decision-makers to put aside their own best judgment and engage in risky, destructive, behaviors.

III. Building Better Players

The book’s third section turns towards evolutionary biology and artificial intelligence, and the way that biologists have employed game-theoretic models to understand evolutionary dynamics.

8. Chess, the Drosophilia of Intelligence

Clancy frames evolution as a type of learning process.

Throughout the 20th century, chess was seen as a gold standard for measuring intelligence. In a game of chess, agents have goals — desires — and can be better or worse at pursuing those goals. Desire is a prerequisite for intelligence, Clancy argues, with arguably the most fundamental desire being the desire to survive. As such, evolution — the process of life continuing to survive — can be seen as a type of intelligent learning process.

In general, life is no more complex than the demands placed on it by its environment. As Clancy writes, “the complexity of an environment limits the level of intelligence that its inhabitants can attain.” And yet, as organisms co-evolve, their collective complexity increases. As such, evolution can be seen as a type of learning: “[tuning] the gene pool, which orchestrates a cell’s protein machinery, to the requirements of its environment.” Over time, organisms developed methods for adapting more quickly than genetic evolution could allow, through a general ability to learn new behaviors through transmission and play.

Humans evolved big brains to allow them to manage complex social relationships. However, the popular theory that more relationships requires more brains is not supported by data — among the social insects, more relationships often leads to more specialization. In a touching turn, Clancy offers a countervailing theory: larger brains are needed for pair-bonding — developing a deeper relationship with one person. This enhanced affective capability could then radiate outwards, allowing for a greater number of social bonds in general.

Commentary

This short chapter sets up the book’s next section, introducing the idea of evolution as a learning process bootstrapping itself up the intelligence hierarchy. She re-iterates her theme of play as an aide to learning, and suggests that larger brains let us empathize more deeply.

9. The End of Evolution

Clancy traces the development of evolutionary biology and the puzzle of altruism

Before Darwin, “teleological” arguments for intelligent design were widespread. Inspired by Malthus and his own fieldwork in the Galapagos, Darwin would famously discern that life is not a static balance, but a dynamic flux based on individual natural selection. “Group selection” and altruistic behaviors broadly would remain a puzzle.

Eventually, Gregor Mendel’s studies with peas would allow statistician Ronald Fisher to formalize the process of random recombination. In his 1930 The Genetical Theory of Natural Selection, he framed group selection as an equilibrium point in a game. Decades later, biologist W. D. Hamilton would read Fisher and develop the idea of “kin selection” as a formal model to accounted for altruistic behavior, within limits.

Against this backdrop, Clancy introduces us to George Price, an “academic dilettante” who was involved with both the Manhattan Project and later Bell Labs. She writes that “his career was one great frantic digression, pinballing between major technological breakthroughs of the era … desperate to make his mark in science.” Reflecting on his own failed family, Price wanted to better understand the origins of the parental care instinct, and began studying Hamilton’s work.

Inspired by Hamilton’s analytic approach, Price would develop, along with John Maynard Smith, a groundbreaking game-theoretic model of animal conflict, in which, limited, but not total, war leads to the best outcomes. Published in 1973 as “The Logic of Animal Conflict,” the paper introduces the now-famous analogy of “hawks” and “doves” and shows that while a hawk may individually dominate a dove, the dove strategy in the long-run is more resource-efficient. Equilibrium — the “evolutionarily stable strategy” — involves a dynamic balance of both populations.

Price wanted to go further, dissatisfied with the theory of kin selection as an explanation for altruism. Working from first principles, he developed his eponymous equation modeling very generally way how population traits change in frequency over time. This equation would become very influential due to its ability to describe inheritance, be it physical or cultural, in a concise and general way.

Unfortunately for Price, even altruism, in his model, could be seen as “selfish.” This pushed Price over the edge. He gave away all of his possessions and began walking the streets of London, offering to help strangers in any way he could — desperate to prove that “real” altruism existed. He soon lost his housing, and within months, was dead. Hamilton would later describe Price’s life as “a completed work of art.”

Clancy closes this chapter with a meditation of the way that games precede brains, and also create them. To quote: “we do not play the game of life; the game of life is what plays us into being.” By way of increasingly complex environments, modern humans evolved. She is not without criticism of biology’s game-theoretic approach, in particular for enabling the ideas of eugenics, but acknowledges it as a “theoretical backbone” that propelled the field forward.

Commentary

This epic chapter revolves around the Shakespearean tragedy of George Price, driven mad by his own quest for knowledge. Having been unfamiliar with this history, I found his story very moving. The subtext of the chapter underscores Clancy’s theme: altruism is always the “missing piece” these models leave out.

10. Nous Ex Machina

Clancy picks up her history of game-playing programs

Claude Shannon and Alan Turing are two of the biggest names in the history of computing. Shannon would invent information theory; Turing would formalize the idea of computation. Both were enchanted with the idea of a computer that could play games. Games, they both understood, were about searching through possible moves and selecting the best one — a reasonable approximation for intelligence.

Both developed simple game-playing systems, on the basis of von Neumann’s “minimax” strategy. While none were particularly strong players, these early systems acted as benchmarks for measuring progress, and research into game-playing systems would lead to many spin-off discoveries and greatly enrich the field of computer science. Clancy pauses to point out that “other forms of genius — physical, emotional, linguistic, musical—are difficult to measure or model, and so were ignored.”

A few decades later, things would pick up again. In 1983, at Bell Labs, UNIX inventor Ken Thompson would create Belle, a brute-force chess program and the first to become a US national master. In 1989, mathematician Jonathan Schaeffer would develop Chinook, a checkers program along similar principles, which would nearly beat the game’s world champion. A few years later, Feng-hsiung Hsu would take Belle’s design, invent a faster chip, and join IBM to create the legendary Deep Blue, which would famously beat world chess champion Gary Kasparov in 1997. Reflecting on this history, Clancy notes that Deep Blue’s success was not due to any conceptual breakthrough, but rather a prodigious increase in computing power.

It would take the development of consumer video games, beginning with Nolan Bushnell’s Atari in 1972 and continuing through the personal computing revolution led by Apple Computer, to push computational game-playing forward. When compared to board games, Clancy argues, interactive computer games provided a richer environment for developing a game-playing program, while still providing the clarity of a win or a loss. Consumer demand for better graphics would spur the development of GPUs, which would — in a striking coincidence — prove to be extremely useful for training large neural networks. In 2013, DeepMind would be the first to put these pieces together, using reinforcement learning to train powerful neural networks to play a library of early Atari games.

Clancy’s history of the co-evolution of computer science and game-playing programs is compelling, and leaves us to ponder: what is the nature of this new intelligence? In her words: “it was clear, however, that human thought looked nothing like these elaborate equations drifting down the complex topology of minimax gradients.” Is there an ineffable je ne sais quoi to human intelligence which can never be achieved by machines? Or is that simply what we’d like to believe?

Commentary

As someone who played a lot of computer games as a child, it is validating to see the way that this field has had such an impact on technological progress writ large. The idea of a co-evolution of game complexity and program complexity underscores Clancy’s themes.

11. Cogito Ergo Zero Sum

Clancy extends this history to the present-day

Stanisław Ulam was a professor at the University of Wisconsin-Madison when he was recruited to the Manhattan Project in 1943. Working with John von Neumann on the bomb’s implosion process, Ulam realized that in lieu of modeling the “combinatorial explosion” of atomic trajectories occurring during a real explosion — an impossible task at the time — he could instead model a random subsample of paths, and use them to extrapolate the total behavior:

Instead of following quadrillions of paths through all possible outcomes, they’d follow a random subset, sampled in proportion to the known probabilities of events. They’d estimate the statistic of the full population by calculating the statistics of an unbiased representative sample.

This technique would become the basis of what is now known as “Monte Carlo” sampling.

Following Deep Blue’s victory in 1997, the frontier of machine intelligence moved from chess to Go, which was seen as too complex for brute-force alone. In 1992, Bernd Brügman would develop a Go-playing engine using a technique known as Monte Carlo tree-search, which would choose moves by randomly playing a subset of games before every turn, and choose the move which led to the greatest number of victories. In 2012, a related program called Zen would be the first to win against a top-ranked human player. Only four years later, DeepMind’s AlphaGo, which combined MCTS with reinforcement learning to enable learning through self-play, would defeat Go world champion Lee Sedol. Clancy reflects that “learning games build judgment through experience, and games are precisely this: generators of fictive experience.”

Following AlphaGo, partially trained on human gameplay, DeepMind would develop AlphaZero, which learned via self-play alone. The result was the emergence of “alien” playing styles which challenged and subverted common beliefs about Go strategy. AlphaZero would beat Stockfish, the world’s leading brute-force chess program, demonstrating the power of AlphaZero over even cutting-edge brute-force techniques. Clancy cautions:

Does the ability to maximize a narrowly-defined “objective function” truly reveal intelligence? Or can maximizing an immediately measurable quantity lead to unintended outcomes? … How can we trust what goes beyond our comprehension?

The idea of learning through competitive play continues to shape AI research. In 2006, Fei Fei Li established the ImageNet competition, which set the stage for major breakthroughs in computer vision in the 2010s. The biennial CASP contest in protein-folding would lead to Foldit, and later AlphaFold, for modeling the behaviors of novel proteins. Neural networks are often built as “generative adversarial networks” in which two networks are trained through an ongoing competition to confuse each other. Large-language models are trained on the game of “predict the best response to the user’s query.” Little of this “gameplay,” Clancy cautions, is grounded in any notion of “reality.”

Unsurprisingly, Clancy takes a dim view of the exuberance currently felt among AI researchers. In a rush to optimize narrow metrics, she warns, “we often harm the system we’d hoped to improve.” Unlike machines, humans can reflect on their inner worlds. Humans have the ability to transfer knowledge between domains, learning from a handful of examples instead of thousands. Perhaps the true test of intelligence, Clancy wonders, lies not in beating games, but in designing them.

Commentary

Having been in graduate school at the time of AlphaGo’s victory, this history feels personal. I remember studying Monte Carlo techniques and reading DeepMind’s papers as they came out. I also connect with Clancy’s critique — outside of the well-defined worlds of game-playing, data is noisy and signals are correlated; a model trained on bad data will do bad things.

IV. Building Better Games

The book’s fourth and final section looks at contemporary game design and asks whether a critically-informed deployment of mechanism design can cultivate better collective outcomes.

12. Simcity

Clancy introduces the game as metaphor for society

For centuries, people understood society as a type of organism. Then, in the 13th century, Dominican friar Jacobus de Cessolis released the Book of the Customs of Men and the Duties of Nobles, adopting chess as a metaphor for a society based on complementary and rigid social roles. Clancy writes that “Cessolis offered a more dynamic metaphor: society was a game governed by rules… Chess soon replaced the body as the reigning literary metaphor for European society.”

Seven centuries later, game designer Will Wright would take this metaphor further, with his groundbreaking (and best-selling) 1989 SimCity. Inspired by the equations and models of libertarian management theorist Jay Forrester, SimCity gave players unprecedented access to a (simplified) experience of social engineering. Forrester, who in 1969 had published his models in a book called Urban Dynamics, had inspired a generation of urban planners and a series of mostly failed experiments. As Clancy notes, Forrester’s models were not backed either by theory or data, with “models [that] could be used to support the conclusions of statists and libertarians alike, depending on what aspects were included. What mattered was who wielded them first, and more forcibly.” Despite these flaws, simulation games, from the useful SimRefinery to the deeply misleading SimHealth, would hold much popular appeal.

Commentary

This short chapter sets up the book’s final section, introducing the idea of “society as a game” and some early experiments in “social game design.” Unsurprisingly, these chapters contain much that is relevant to Zaratan.

13. Moral Geometry: Playing Utopia

Clancy explores the ways that games can teach morality

The popular children’s game Snakes and Ladders was created centuries ago in India to teach children about morality. Through rolls of the dice, children ascend ladders of good karma or succumb to snakes of vice. Through this and other games, Clancy argues, children learn social norms, and over time “playing children learn to replace the respect of authority with the mutual respect of other player’s wills,” leading ideally to a healthy civic culture.

With Leviathan in 1651, Thomas Hobbes would famously advance a “game-theoretic” argument for the state: by sacrificing individual agency, collective peace is ensured. Philosopher Jean-Jacques Rousseau would introduce the idea of a “stag hunt” as a complement to the prisoners dilemma, in which two hunters cooperative to catch a hearty stag. In 1977 philosopher Edna Ullmann-Margalit would write The Emergence of Norms, detailing the ways that social norms can transform a prisoner’s dilemma into a stag hunt. Weaving in her discussions of dopamine and altruism, Clancy writes that “acting in accordance with one’s values often feels like a reward of its own, and this is exactly how norms might change the reward payoff.”

In the 1950s, game-theorists would discover that some games allowed for an infinite number of stable strategies, as long as all the players were willing to play along. This “folk theorem” can help explain the emergence of fairness and efficient strategy overall: “fairness can be thought of as a heuristic that helps people choose among infinite feasible strategies the one that benefits the largest number of players. Morals, by another name, are just smart plays.”

In recent decades, there has been increased interest in using game design to improve social institutions. This technique, known as “gamification,” promises that “desk jobs will be alchemized into entertaining affairs, education will be made effortless, and even the most tedious tasks will become enjoyable.” The reality has been less rosy:

In practice, it’s been hijacked by corporate thought leaders and business interests, applied in the most uninteresting ways imaginable. Many were originally designed to make games more addictive rather than more pleasurable, developed to enthrall players to game platforms.

Taking her critique further, Clancy notes that not everyone playing these games consented to play them, nor were they designed with all players in mind, arguing that “if we explicitly model our social and financial systems as games, we must ensure they are games that all members of society agree to play, and ones in which everyone can win.” As it stands, many of these games provide only narrow criteria for victory and encourage socially-harmful strategies, such as the toxic behaviors common to social media platforms.

Clancy defends games, however, for providing feelings of agency. This can help protect our mental health, even if it cannot solve the underlying social ills:

Games give players a sense of control, which is no small merit. The sense of agency is a critically overlooked part of psychological health. … A bullied child may take pride in being an expert in-game archer. Yet this doesn’t change the reality that the child is being bullied.

Warning that a fixation on shallow rewards can distract us from real erosions — a là Ready Player One — of our rights and standards of living, Clancy concludes with a call for going beyond narrow game worlds and developing a broader and more universal sense of interconnectedness and empathy.

Commentary

There is a lot going on in this chapter, which Clancy weaves together her discussion of game-theory in part II with her discussion of evolution in part III. Where game-theory would preach a doctrine of selfishness, the evolutionary models would carve out increasingly more room for cooperation.

14. Mechanism Design: Building Games Where Everyone Wins

Clancy introduces mechanism design for intentionally developing social systems

In 1983, recognizing the demand for organ transplants, Dr. Barry Jacobs pioneered the idea of an “organ market.” Immediately, those in poverty were pressured to sell their bodies for cash, and within a year these markets were banned. Unfortunately, the alternative mechanisms for coordinating organ transplant were haphazard and ineffective, and led to many avoidable deaths.

Eventually, in 2003, researchers Alvin Roth, Tayfun Sönmez, and M. Utku Ünver designed a novel mechanism of “kidney clearinghouses” which matched donors and receivers across long chains of exchange, significantly improving health outcomes. Reflecting on this history, Clancy recalls Oskar Morgenstern, who “hoped that game theory would provide economists with a more expressive mathematical language, empowering them to go from describing institutions to inventing new ones.”

The foundations of mechanism design were laid by Leonid Hurwicz in the 1960s, who built on Hayek’s famous articulation of the free market as a distributed computer by introducing the idea of “incentive compatibility.” Participants often have an incentive to bend rules in their favor, and so mechanisms should be designed such that selfish and selfless behaviors are closely aligned: consider the example of splitting the cake. Clancy explains: “the mechanism designer’s goal, then, is to invent games that reward payers for being truthful.” Mechanism designers, unlike game theorists, plan for rule-breaking.

A landmark example of mechanism design in action is in the case of the electromagnetic spectrum. Markets for radio spectrum throughout much of the 20th century were poorly designed, with consequentially bad outcomes. In 1994, the in-debt Clinton administration worked with Pacific Bell and economists Robert Wilson and Paul Milgrom to design a new auction system for wireless frequencies, looking to both raise money for the federal government and allocate spectrum more efficiently. The system worked, raising billions for the federal government and diversifying access to the wireless spectrum. And yet, Clancy reminds us, there was still abusive behaviors among major telecoms, and the market remains highly consolidated. No mechanism is perfect.

Mechanisms have limits. Economist Kenneth Arrow would famously prove in 1950 that, under certain conditions, a “perfect” voting system is logically impossible; there will always be competing trade-offs. As in chapter 5, the problem of the measurement of preferences remains fundamental. Contemporary economists like E. Glen Weyl have advanced the field through innovations like “quadratic voting,” which deploys notions of budgets and escalating costs to meaningfully structure decision problems.

The introduction of blockchains over the last two decades has added an additional dimension to the problem of designing safe and reliable institutions. Bitcoin, Ethereum, and the chains which followed introduced novel types of computational substrate, allowing wholly new classes of mechanisms to come into being.

The question of power pervades mechanism design, both in terms of the power of the participants, and the power of the designers themselves. Citing Cory Doctorow, Clancy argues that “software protocols have become a battleground over what values are included or codified into our realities, dictating the games we’re forced to play as end users.”

Clancy concludes with a warning. Powerful actors can bend rules to benefit themselves, and excessive reliance on rules and structures can lead to an ossified cultural life. In contrast, Clancy notes “the preponderance of cultures with a Carnival season, loosening social restrictions to allow for new interactions across the social hierarchy.” Mechanisms can help create new games, but they can’t replace the actual playing. It is through balancing rules and subversion, structure and play, that we will imagine and iterate towards a better world.

Commentary

Having been designing mechanisms professionally since 2018, this chapter speaks to me and the professional community I am a part of. I wrote about Arrow’s theorem in my master’s thesis, have published several papers describing novel mechanisms, and have written many articles analyzing voting, reputation, and budgeting systems. I am also a participant in the Summer of Protocols research group studying the power dynamics surrounding protocol design. Given the scope of this book, it is obviously flattering to find oneself situated so neatly in the conclusion. If anyone would like to discuss these topics in more detail, be in touch.

Epilogue

Clancy draws her sober conclusion

Grounded in her broad professional expertise, and writing in a spirit of critique, Clancy encourages us to appreciate the potential of these evolving techniques while never losing sight of their fundamental limitations.

Games are compelling, Clancy acknowledges, while reminding us that “relentless maximization is the logic of a cancerous tumor, not of health.” While people often display strong responses to short-term rewards, they “are motivated by many things besides money: they joy of discovery, production, security, a stable family life, the company of their colleagues.”

As rich as a game world can be, something will always be left out, and Clancy warns that “we should be wary of trading our autonomy for entertainment.” Games are tools for building skills of connection. We should use these tools, without forgetting what they were designed for.

Commentary

This book is an achievement. Weaving together centuries of history and dozens of major figures, Clancy constructs an elaborate argument for both how and why games evolved, demonstrating gaming’s incredible potential as well as its serious risks. While Clancy is often critical, her message is deeply optimistic: people can be fair and good, and we can create institutions to encourage more of both. This is exactly what we are trying to do at Zaratan, and we are grateful to be doing this work.

Nowhere are these experiments more compelling than in the domain of housing. By living in close contact with others, whether as neighbors or housemates, people have opportunities for the repeated casual contact which forms the basis for deeper connection. While many of these experiments are informal and small in scope, there have been attempts to institutionalize these patterns into “professional” organizations, both non-profit and for. Institutionalizing communal living offers the promise of making the benefits of this model — lower housing costs and higher quality of life — accessible to millions.

Unfortunately, many of these attempts have failed, leaving behind an “elephant’s graveyard” of disappointment. From Campus, Ollie, and Starcity to OpenDoor, Quarters, HubHaus, and Common, for-profit coliving organizations have struggled to escape the doom spiral of narrow margins and high operational complexity.

This essay will explore the “political economy” of coliving — the interactions of people, power, and capital — to help understand why professional coliving remains a challenging proposition, and what might be done about it going forward.

Shared Housing Models

Shared housing models can be broadly placed into three categories: cooperatives, grassroots coliving, and professional coliving, the last of which can be further divided into managed and collaborative approaches.

These approaches vary along two key axes: first, whether the physical spaces are owned by residents or by “capital” — a landlord — and second, whether daily life is organized primarily by residents or by outside management. As we will see, these choices have major implications for how the environment is likely to behave.

Cooperative

A housing cooperative is housing that is owned and operated by its members, who make decisions democratically. “Cooperative” is a technical term and only organizations adhering to certain rules can legally refer to themselves as cooperatives. This definition includes compliance with the “Rochdale Principles,” a set of seven democratic principles developed in Rochdale, England in 1844.1

Cooperatives are incredible organizations. Much of my early career was influenced by my time on the boards of the Berkeley Student Cooperative (BSC) and the North American Students of Cooperation (NASCO), as well as through my encounters with worker cooperatives throughout the Bay Area. I met Seth Frey, one of my collaborators in designing Chore Wheel, through NASCO, and Arizmendi co-founder Tim Huet’s “Cooperative Manifesto” remains a major inspiration for me.

Housing cooperatives have high start-up costs, including raising capital, buying assets, and establishing elaborate democratic governance processes. But for groups willing and able to put in the work, the results, in terms of building life-long relationships and securing permanently affordable, high-quality housing, are compelling.

Grassroots Coliving

In contrast to housing cooperatives, where ownership and occupancy are tightly linked, coliving models allow for a separation of ownership and occupancy.

While the focus of this essay is on organizations attempting to turn coliving into sustainable, professional businesses, there are myriad groups across the country engaging in grassroots experiments with communal housing. Organizations like The Embassy, District Commons, and The Neighborhood in the Bay Area, Fractal in NYC, both develop coliving houses and serve as hubs for sharing knowledge and best practices among those looking to “live near friends.”

The term “grassroots” does not imply a lack of professionalism, but rather a lack of centralization. These groups are sophisticated and regularly experiment with approaches to making communal living more accessible, enjoyable, and sustainable. Supernuclear, written by Phil Levin and Gillian Morris, is a great entry point into this world:

Supernuclear

Co-buying property with friends

[Note: I gave a webinar on this topic in July. You can find that recording here…

Read more

6 years ago · 49 likes · 1 comment · Phil Levin

Grassroots coliving initiatives share two major characteristics: residents typically lease an entire space as a group, and expect to play active roles in establishing and maintaining their housing. The obligations placed on participants, in terms of time, effort, and risk, can be high, along with expectations for co-creation and participation in a shared culture and values.

As with the formal housing cooperatives, this style of communal life can be deeply fulfilling, but also similarly prohibitive in terms of the time and effort needed to sustain it. In addition, their relatively informal and ad-hoc nature means that they remain niche in the context of the larger housing market, often accessible only to those already within these social networks.

In simple, albeit reductive terms, we could say that with grassroots coliving, the community comes before the space; the space exists to fulfill the community.

Managed Coliving

Professional coliving-as-a-business begins with a different assumption: that for better or for worse, the population of people willing and able to create and sustain the infrastructure for communal housing, and the population of people willing and able to live in it, are different. By assuming the risk and complexity of creating and operating housing, and by renting rooms individually, entrepreneurs can “normalize” coliving: making the benefits of shared living accessible to a broader audience, while unlocking new housing stock through higher density.

To continue our reductive analogy, we can say that with professional coliving, the space comes before the community; the community exists to fulfill the space. In a sense, professional coliving is less like a tribe and more like a state, with the problem of socially integrating a disparate group coming increasingly to the fore.

Fundamentally, the business opportunity stems from the ability to realize a rental premium, on a square foot basis, through higher density. The business risk stems from the additional operational complexity caused by that higher density. Professional coliving organizations fail when the cost of managing that complexity exceeds the rental premium realized by the density.

In the idealized chart below, we demonstrate how the density achieved by coliving can increase the amount of “value” (broadly defined) realized per square foot. However, while some of that surplus accrues to capital, higher operational complexity limit the surplus accruing to the management organization.

The central challenge to professional coliving emerges directly from its ostensible advantage: namely, by being relatively more accessible, participants are relatively less invested in the long-term health and success of the community. The relatively transactional nature of the relationship between residents individually, and between residents collectively and management, increases operational risk. Lacking the pre-existing social ties characteristic of grassroots coliving, interpersonal conflicts in professional coliving settings are externalized onto the organization in the form of vacancy losses and high operational expenses.

Professional coliving operators often assume these dynamics are a given. Across the board, coliving operators charge management fees far above industry standards,2 and levy hefty “membership fees” on top of base rents.3 The result is that managed coliving rooms can run significantly above market; as a consequence, operators often present coliving as a premium option justifying a higher price-tag, emphasizing convenient, shorter-term leases or novel social experiences. These economics ultimately limit the model’s impact on the broader housing market: a niche option, not a general solution.4

Ironically, these high fees are often not high enough. When presenting coliving as “community as a service,” it becomes nearly impossible to manage and fulfill resident expectations of housing quality and social cohesion. Both Common (now defunct) and Bungalow (still active) have come under fire in recent years for problematic business practices, including unresponsive management, poor maintenance and lax tenant screening. Managing interpersonal dynamics can be prohibitively expensive: OpenDoor, operating in the Pacific Northwest, went under in part due to the spiraling costs of resident mediation services.

To be fair to these operators, this is largely not their fault: structural relationships have set them up for failure. When “managed” coliving operators present community as a commodity, they create expectations which are impossible to fulfill. No rent premium can truly support the relational work that these companies implicitly promise to perform. When these companies succeed, it is through good management and a fortunate mix of residents; they remain sensitive to fluctuations in both.

Collaborative Coliving

There is an alternative. In The Art of Coliving, Gui Perdrix describes a niche of coliving operators who experiment with using technology to meaningfully integrate residents into daily operations. Done successfully (see chart below), the higher operational complexity created by density can be internalized to the residents, reducing organizational costs and leaving a surplus which can accrue to residents in the form of lower rents, better amenities, or both. As a consequence, successful collaborative models can outperform managed models in terms of both price and quality.

Sage House, Zaratan’s first coliving house, is an example of this model, operating for 2+ years at 98% occupancy, with management costs more in line with low-touch conventional housing than high-touch managed coliving.

laborative coliving is appealing in theory. However, the model can be challenging to put into practice: it is not as straightforward as simply “putting housemates in charge.” Brad Hargreaves, founder and former CEO of Common, discusses the failure of Campus to pursue just such a strategy (emphasis added):

About a week after we closed our first round of financing for Common, Campus abruptly shuttered and filed for bankruptcy protection. While this came as a surprise to many, the early Common team wasn’t shocked: we had watched them struggle with vacancy, operations, and other problems. And many of their problems could be traced back to the amount of decision-making power and control they had given their residents.

…

But from a business standpoint, handing control of their leasing process to existing residents spelled Campus’s doom. Even if those residents were fully aligned with Campus’s goals—and they weren’t—it’s unreasonable to expect that a group of busy individuals with full-time jobs and lives could effectively conduct their own tenant vetting and selection process. (Not to mention the fair housing concerns.) And as the master lessee of most of its buildings, Campus’s financials suffered as resident communities dithered over approving new members.

Successfully practicing collaborative coliving requires managing complex sets of cultural and institutional trade-offs. There are many ways one could approach these problems. In the next section, we will explore Zaratan’s approach to putting this model into practice.

Practicing Collaboration

Synthesizing the dialectic of capitalism and community is Zaratan’s animating purpose. Our project from the beginning has been to develop and refine a functional and replicable model of organization, collaborative coliving, through which light-touch management supports a resilient, autonomous community of residents.

Successfully practicing collaborative coliving requires thoughtful leadership and fundamental innovations in organizational process. We developed and refined a number of practices during Sage’s first few years, as we navigated the occasionally-bumpy process of creating and sustaining a coliving community.

These practices can be bundled into two categories: those facilitating decision-making among residents, and those supporting positive-sum interactions between Zaratan and the residents.

Handling Internal Governance

Unlike grassroots coliving, where residents typically have pre-existing ties, professional coliving must continually integrate those who were not previously known to each other. Achieving this requires practices which can flexibly handle a wide range of issues, while being simple enough for a new person to pick up quickly.

Legacy organizing patterns like meetings and committees are not the answer. As Oscar Wilde allegedly quipped, “The trouble with socialism is that it takes up too many evenings.” In the course of his intentional community research, Brad Hargreaves makes the following observation:

While residents would fiercely defend their communities, they didn’t always seem to be happy with their role in them. From interviews with intentional community participants, it became clear that a lot of their time was taken up by various decision-making processes, internal politics, and committees. Infighting abounded, and it felt like the more intentional the community, the more participants’ time and emotional energy was dedicated to petty grievances.

We built Chore Wheel to help solve to this problem, taking the latest thinking in digital governance and applying it to the specific domain of coliving houses. Avoiding general-purpose solutions and focusing instead on specific solutions to specific problems, we created systems that were both intuitive and effective.

Chore Wheel currently consists of three tools, all plugging into a shared Slack workspace. Broadly, the goal of each tool is to achieve a “Pareto effect” in its domain, solving the most common 80% of problems with only 20% of the effort.

Chores

Chores is the most sophisticated of the tools, making it easy for residents to coordinate chores. While it is easy to dismiss the idea of “residents doing chores” as naïve, in practice it brings tremendous benefit.

Cleaning is often depicted as an amenity that is “basically free.” This depiction belies the implicit assumption that domestic labor has a very low price. In reality, cleaning is expensive, and if it were priced fairly, it would be even more so.

Chores also act as a basis for social ties. In a managed coliving setting, people can isolate in their rooms, or become dependent on a “community manager” to coordinate events. Here, residents communicate and cooperate, are seen contributing, and are held mutually accountable to their commitments.

Internalizing the complexity of cleaning to the housemates not only lets them more directly shape their culture, but significantly reduces operational cost and complexity.

Hearts

Hearts is a system for mutual accountability that helps structure recognition and disagreement between housemates. Inspired by the organizational designs of Frédéric Laloux, Hearts makes it easier for untrained individuals to access best practices for conflict resolution.

By enabling residents to more easily reward contributions and resolve conflict, the potentially high cost of interpersonal conflict is internalized to the residents.5

Things

Things is a purchasing system, through which housemates access the house account. Residents can propose purchases, with bigger purchases requiring more upvotes to pass. Integrated directly into the house’s communications platform, residents are able to discuss, plan, and save for major purchases.

Monthly Circle

Not every practice needs to be operationalized through software. The Monthly Circle is an in-person check-in, through which housemates can vibe-set and find alignment on a wide variety of topics. This monthly low-tech practice complements and augments the “high-tech” tools used daily, creating a space to resolve novel issues not otherwise handled by the apps.

Creating a Social Contract

On a basic level, a collaborative coliving environment requires residents and management to believe in the possibility of positive-sum interactions, and be willing to coordinate behaviors in the service of a common benefit. This means co-creating and co-enacting a “social contract” over-and-above the transactional and often-adverserial relationship characteristic of rental housing.

There are many ways to create and sustain positive-sum relationships. Zaratan has operationalized this social contract in several ways: a shared house account, a welcome letter, and through financial engagement.

House account

The primary way that Zaratan operationalizes the idea of a “residents share” of value is by returning a percentage of base rent back to residents via a “house account.” Purchasing shared staples out of this account simultaneously lowers the effective cost of housing, gives housemates significant autonomy over their personal space, and internalizes the complexity of inventory management to the housemates.

Residents use these funds to buy cleaning supplies like dish soap and toilet paper, as well as food staples like eggs, rice, and oat milk. Chore Wheel’s Things app lets residents easily replenish shared supplies, or make special one-off purchases. Residents internalize the complexity of managing inventory, with Zaratan performing the low-complexity tasks of reimbursing housemates or placing bulk orders.

The (relatively) large shared fund creates a feeling of abundance, and lets residents directly access the surplus that they themselves co-create.

Welcome letter

When Sage opened in the fall of 2022, we deliberately avoided setting too many expectations. The concept was new, and we wanted to leave as much room as possible for residents to define and create their own experience.

This worked to a point. A number of early housemates had prior communal living experience and relished the opportunity to shape a space of their own. Things got rocky, however, when housemate priorities diverged from Zaratan’s, specifically around the planning of major projects.6

Recognizing the value of pro-actively managing expectations, we began sharing a “welcome letter” with new housemates, explaining the structure of the house and inviting residents to help co-create communal life.

Financial engagement

The power relationship between owners and tenants of land is one of the most well-studied, and fraught, in history. The son of a property-rights advocate,7 and having spent the last five years in Los Angeles’s real estate community, I understand the hostility with which society regards its landlords.

These dynamics can be improved, and while these fundamental power relations are bigger than any one project, it is possible to try and innovate at the margins.

One way Zaratan does this is by sharing some of the house’s financials. Housemates can see top-level accounts of expenses, debt, and revenue, and are periodically solicited for input when planning major expenditures. This practice puts prices into perspective, and makes it easier to dialogue with residents about sensitive topics like construction disruptions and rent increases.

Conclusion

In conjunction with the other models described above, “collaborative” coliving is well-suited to help solve some of the critical challenges of the day: social isolation and the high cost of housing.

Collaborative coliving promises more accessibility than grassroots coliving, while avoiding the high costs associated with managed coliving. It does so by engaging deeply with the political, social and economic dimensions of the housing relationship, in order to develop and adopt organizational forms which are better fit-for-purpose.

As Ben Horowitz famously said, “There are no silver bullets. Only lead ones.” Many of the institutional innovations deployed at Sage House could be easily, and incrementally, adopted by others. Chore Wheel is open-source and free-to-try, with ample documentation to help get communities up-and-running. Managed coliving operators could leverage these tools to help control their operational overheads. Grassroots coliving communities could incorporate these techniques, freeing time for more fulfilling activities.

Try Chore Wheel Today

The important thing is to experiment. As philosopher Karl Popper wrote:

It rests with us to improve matters. The democratic institutions cannot improve themselves. The problem of improving them is always a problem of persons rather than of institutions.

Housing exists at the intersection of myriad social, political, and economic forces, and creating and sustaining affordable, high-quality housing for millions will require ongoing innovation. Deepening our understanding of these forces and developing better techniques for managing them will help us achieve this essential goal.

As the Gitcoin community is fond of saying, “public goods are good.”

Public goods are defined by economists as goods (“useful things”) which are both non-excludable (anyone can use them) and non-rivalrous (my use doesn’t prevent your use), classic examples of which include knowledge, clean air, lighthouses, and open-source software — obviously valuable things.

The classic problem posed by public goods is that while anyone can enjoy them, no-one has a reason to produce them. Under vanilla capitalism, people invest to earn a return; ergo, projects must have some way of returning capital to investors. Public goods have fewer ways of making money, the story goes, so go under-funded. Known as the “free rider” problem, the challenge of articulating and producing public goods has puzzled economists for years, producing a large body of literature.1

The Web3 community, flush with cash and dependent on public software goods to grow, has over the last five years invested significant time and energy into this problem, with impressive results and tens of millions of dollars distributed to open-source projects. Broadly framed as “grants programs,” large institutional-scale donations are channeled through innovative allocation mechanisms towards hundreds of public-goods projects.

Eschewing centralized grant committees in favor of a distributed “wisdom of the crowds,” these programs rely on large online communities to allocate resources. As such, a key component of these programs are the mechanisms or sets of mechanisms used to determine final allocations of funding. Every mechanism represents a set of tradeoffs and beliefs; the choice of mechanism has major implications for the experience and outcomes of the program.

This post will discuss and compare two approaches to public-goods funding used by the Web3 community: that of quadratic funding, and of pairwise preference. Both produce the same result: an allocation of funding (defined as some percent of the total going to each project), but by very different means. The goal of this analysis is not to advocate for one mechanism over another, but rather through the act of contrast gain greater insight into the underlying problem.

Quadratic Funding

Theory

Initially described in this December 2018 paper by Vitalik Buterin, Zoë Hitzig, and E. Glen Weyl, Quadratic Funding (QF) adapts existing ideas of Quadratic Voting to the capital-allocation setting.

A QF process consists of three parts: 1) a set of projects, 2) a large matching fund, and 3) a set of participant donations to individual projects. The donations are taken as representing the “collective intelligence” of the community, and used to determine the allocation of the matching funds to the projects, by calculating the percent of total individual donations going to each individual project.

The catch is that the individual donations are not summed up directly, but rather taken to the square root before being added together (hence “quadratic”). The effect is to privilege small donors over large, and thus “correct” for the plutocratic and self-interested tendencies of capitalism-as-usual.

Practice

Quadratic Funding is both theoretically optimal2 and useful in practice, having been used by the Gitcoin Grants community and others to allocate tens of millions of dollars over several years to dozens of projects (including ours). The quadratic constraint encourages participants to spread their attention and resources over multiple projects to maximize their individual influence over the final allocation.

See here and here for discussions of past QF-based Gitcoin Grants rounds, and here for a more in-depth analysis of the use of QF in public-goods-funding broadly.

Further, inasmuch as “budgets are policy,” we can argue that QF has done more than most to advance the broader practice of “DAOs” by evidencing mechanisms for the pro-social coordination of distributed, independent actors.

Limits

Inherent to the goal of privileging smaller voices, QF requires a strong identity system to function. And given a sufficiently strong identity system, QF nonetheless remains vulnerable to collusion among participants, with research showing that “there are no bounds on how much money can be illicitly extracted from a [QF process] if even two agents are capable of coordinating.”

Fortunately, QF has benefitted from hundreds of hours of collective research into these vulnerabilities, resulting in powerful pre- and post-processing techniques such as sybil-resistant identity “passports” and connection-oriented cluster matching (COCM) for penalizing colluding or dishonest actors.

In reality, no identity system is perfect, and projects have every incentive to try and coordinate their contributions to maximize their benefit. As such, every layer of intermediation adds complexity and new challenges. In their retrospective of the community round they ran as part of Gitcoin Grants 21, Open Civics observed that:

Upon reviewing the cluster matching results, we observed discrepancies between the expected matching results and the actual outcomes. This discrepancy was traced back to a parameter within cluster matching that reduces the matching for wallets that only donate to a single project. While this serves as a useful Sybil protection mechanism, it also unintentionally penalized grantees with unique donor bases mobilized specifically for their projects.

We see how the anti-collusion mechanism, while effective at suppressing a specific type of undesirable behavior, creates knock-on effects which must be addressed.3

Future Directions

QF is supported by an active community of researchers, practitioners, and advocates, with a well-understood roadmap: continued improvements in sybil-detection and collusion resistance, better UI and UX, and a larger body of case studies to deepen the experience of practice.

Widely used and well-resourced, it is likely that QF will become increasingly useful and influential in the years to come.

Pairwise Preference

Theory

Initially described in this December 2018 paper by myself, Aron Fischer, and Jack du Rose, Pairwise Preference (PP) adapts a variation of Google’s PageRank algorithm to the capital-allocation setting.4

Like QF, a PP process consists of three parts: 1) a set of projects, 2) some funds, and 3) a set of participant pairwise preferences between the projects. The pairwise preferences are used to determine the allocation of the grant fund, by constructing a large “graph” of preferences and “flowing” allocation through the graph until a steady state is achieved.5

The essential insight of PP is that while valuing the absolute merit of an individual project is cognitively demanding, evaluating the relative merit of two projects is cognitively simple. With the help of PP, a large community can be meaningfully engaged in the project of collective allocation. Further, when compared with QF, PP is less dependent on strong identity systems or matching funds — direct participant contributions may suffice.6

The deeper difference, however, between QF and PP is that QF inputs are objective contributions to individual projects, while PP inputs are subjective preferences between pairs of projects: instead of “$25 to A” it is “A over B.” By bringing decisions “closer to the (phenomenological) metal,” PP can be seen as a machine for transforming subjectivity to objectivity, with the advantage being a more intuitive and engaging experience for the participant, and the higher attentional efficiency this implies.

Practice

General Magic (GM) developed an implementation of PP called Pairwise for use in Optimism’s RetroPGF program, which featured in RetroPGF rounds 3, 4, and 5.

In RetroPGF 3, Pairwise was used to help participants create and share “lists” of high quality projects to facilitate the final direct allocation process. In their retrospective, GM observed the following (emphasis added):

• The gamification and choosing between two choices was really fun

• The community responded positively, showing excitement about the voting mechanism

• It was easy to discover and appreciate unknown smaller name projects with Pairwise because of the categories and being compelled to compare them against other projects.

GM continued iterating Pairwise for RetroPGF, extending its use further down the process pipeline. In their retrospective on RetroPGF4, GM observed that:

In general, wallets, privacy dapps and governance projects performed better on Pairwise than in the purely metric based round and meme coins and DeFi projects with relatively lower metrics performed significantly worse.

This suggests that PP can help participants cut through hype to more clearly discern underlying value. Finally, in a voting data analysis of RetroPGF5, Carl Cervone observed that:

… many of the voters who used [Pairwise] had a higher coefficient of variation than those who didn’t. This suggests that Pairwise helped voters develop more nuanced distribution preferences. … It's worth exploring additional applications of Pairwise in future rounds (eg, in eligibility reviews, determining consensus picks, etc).

Limits

While users appreciated the interface, some found the paradigm shift jarring. Consider this observation by the GM team:

Many badgeholders created their own assessment system in spreadsheets and Pairwise was difficult to integrate into that system.

and this user feedback:

“It’s very hard to convert the relative preferences of an individual into an absolute allocation of tokens. I struggled a lot with this step.”

PP makes a different ask than other mechanisms: rather than provide a structured way of thinking through absolute allocations, it provides a structured way of thinking through relative priorities, promising to return an absolute allocation incorporating that relative knowledge.

For participants used to submitting ratings directly, this may feel like an unacceptable loss of control. Getting participants to trust that the final allocations fairly reflect their underlying values and intentions remains an ongoing UX challenge.7 Until this challenge is resolved, PP may be limited to more peripheral use-cases.

Future Directions

A common critique of PP is that it results in more, albeit smaller, decisions; constraining the problem size via a pre-processing step is useful in practice. For example, in Retro PGF5 GM experimented with a pre-processing step in which participants rated each project on a 1-5 scale, sorting the projects into quality tiers and facilitating ease-of-comparison within tiers.

Another approach, however, would be to leverage voting information within the voting process itself. Specifically, in lieu of presenting voters with pairs at random (drawing from a large set of O(n^2) possible combinations), project pairs could be presented in a way that maximizes the marginal information of that particular input. A project which is consistently voted down can be shown less often, reflecting the relatively little information to be gained from another downvote. Instead, a pair of projects which consistently receive alternating preferences can be shown more often, engaging limited voter attention in more nuanced discernment. By leveraging available information to adaptively group and surface projects in a way that continually reduces total uncertainty, the same allocation can be reached with fewer votes, perhaps even O(n) in the number of pairs.8

Discussion

Using this juxtaposition as a entry point, we can briefly consider a few broader questions about public-goods-funding mechanism design in general.

Output unpredictability

With both mechanisms, users have reported frustration with the way that final outcomes diverge from prior expectations, experiencing the results “unfair.” In the QF context, the issue partly stems from the way that the sibyl-resistance and anti-collusion processes opaquely adjust participant inputs. In the PP context, the issue partly stems from the iterative and non-linear process used to convert subjective inputs into absolute allocations.

While it is hard to call surprising outcomes a feature, neither are they fully a bug. Rather, they are an invitation to reframe the problem. Notable game designer Raph Koster has observed that (emphasis added):

Cheating is an apparently advantageous violation of player assumptions about the game. When those assumptions are satisfied, all apparently advantageous methods are fair. When they are violated, no apparently advantageous methods are fair.

Koster’s insight is that perceived fairness is less a result of actual mechanics than it is participant expectations of those mechanics. By encouraging the public-goods-funding community to view each round as an iteration of a long-running evolutionary processes, we create more room for experimentation and learning.

There will inevitably be tradeoffs to make between the often-contradictory goals of predictability, fairness, correctness, and security. As we saw in the example of QF collusion-resistance, while each additional layer of complexity has the potential to create an overall more effective system, every intervention has downsides. The question is not “how can we avoid these tradeoffs” but rather “how can we manage these tradeoffs pareto-optimally over the long-run.”

One could dismiss this thinking as lazy or defeatist, and argue that grants programs can and should do more to align allocations with proven impact. Meaningful work is being done to make “objective” metrics more accessible and legible. Yet, as the authors of the 2024 State of Web3 Grants report write (emphasis added):

Programs are starting to think more about how to measure the long-term impact of their grants, but there’s still a lot of work to do in this area. It’s important to note that this is by no means a challenge solely in web3, but in fact is a common challenge for just about all grant programs.

It is important to acknowledge that, fundamentally, there is no knowable correct allocation for a grants round, no external “ground truth” to benchmark against. Being slightly over- or under-funded relative to expectation becomes part of the experience: occasional disappointment to some, occasional windfall to others.9 The community should embrace a certain degree of “chaos magic” and focus on engaging as many participants as possible in the process of collective sensemaking, trusting that better information and process will lead to course-correction over time.

Preference intensity

A perennial and irresistible debate among decision theorists is that of ranked vs. rated voting, with numerical rating (cardinal) methods providing greater capacity for both information transmission and measurement error when compared their purely ranked (ordinal) counterparts.

For profound epistemological reasons, there is no single answer. After making historical contributions to the theory of ranked voting, Kenneth Arrow famously conceded that “I'm a little inclined to think that score systems where you categorize in maybe three or four classes probably (in spite of what I said about manipulation) is probably the best.”10 That said, data show that while rating scales can be useful for small groups, they easily collapse into binary thumbs up / thumbs down systems in pseudonymous online settings where participants are motivated to vote strategically.

The question of ranked vs. rating is thus highly context-dependent. Ratings should be introduced to the extent that they can be made robust to divergent interpretations.

QF models numerical intensity directly via quadratically-constrained contributions, the sine qua non of the mechanism. PP does not model intensity by default, but can be easily extended to do so. The choice of how and when to consider ranked vs. rated inputs should be made by the practitioner based on their assessment of the audience.

Continuous processes

A subtle but important property of these allocation mechanisms relates to the validity of their inputs over time. To what extent does participant input remain relevant as circumstances change and projects evolve? In the economics literature, this is known as the “Independence of Irrelevant Alternatives” (IIA), related to the Plurality concept of “contextual integrity.”

While both QF and PP judgments are fundamentally relative, PP models that relativity explicitly. A preference for project A over project B is valid regardless of the presence (or absence) of projects C, D, and E. A user’s inputs, then, remain valid (“contextually integral”) even as the set of total projects evolves over time. Under QF, however, this relativity is implicit and the results are thus somewhat more ephemeral: it could very well be that the introduction of project C in a future iteration would affect the user’s chosen contribution to project A; every contribution decision is thus conditional on the entire set.

One implication is that while pairwise preferences can be persisted across funding iterations, quadratic contributions must be generated anew at every iteration. Thus, PP more naturally accommodates long-lived, continuous funding processes over evolving sets of items,11 something tricky but not impossible to do under QF.

Conclusion

An allocation mechanism can be seen as a measurement process, with the goal being the reduction of uncertainty concerning present beliefs about the future. An effective process will gather and leverage as much information as possible while maximizing the signal-to-noise ratio of that information — aims which are often at odds.

It is crucial to recognize that this process is fundamentally speculative, and design mechanisms according to this reality. Rather than chase the goal of a single perfect round, public-goods-funding leaders should instead work to cultivate an engaged and enthusiastic community of participants, a diverse and growing ecosystem of projects, and a deep pool of committed institutional donors.

This sensibility will become increasingly important as the community works to overcome the limits of attention in the public-goods-funding ecosystem. In their retrospective of RetroPGF 3, the Optimism team observed that:

The sheer volume of applications that needed to be processed by each badgeholder was overwhelming.

while sharing this user feedback (emphasis added):

“Spray and pray is a natural reaction to cognitive overload and limited bandwidth. However, our focus shouldn't be solely on creating more efficient tools for spraying. A new feature like a CSV upload button would make the work go faster, but it still encourages us to spray. What we actually need are better ways of designing, iterating, and submitting complete voting strategies.” - Carl

As the world grapples with the detrimental effects of information overload, it may be worth thinking more boldly and radically about the ways we use and leverage attention to make decisions. Applying information-theoretic frameworks to the analysis of these systems may provide great insight.

Ultimately, the most important thing to do is to keep experimenting, and to cultivate a culture which welcomes experimentation. As Ostrom’s law states, “a resource arrangement that works in practice can work in theory.” By continuing to broaden and deepen its collective experience of practice of Quadratic Funding, Pairwise Preference, and other allocation mechanisms, the Web3 public-goods-funding community will also advance the theoretical understanding of these mechanisms, pushing the ecosystem — and the world — forward.

This essay will look back on the creation of Chore Wheel, its launch, adjustments and pivots made over the first two years, and where the project might go from here.

Imagining Chore Wheel

The seeds of what would ultimately become Chore Wheel were planted in late 2016, beginning with my voting systems research as a graduate student at Columbia. My thesis, An Analysis of Pairwise Preference, was a broad investigation of the possibilities of “pairwise preferences” — a single choice between two options — as building-blocks of more complex voting and decision systems. The work was well-received, earning an A+ and a profile on my department’s website.

After graduation, I put the idea to the side, focusing on my new job as a machine learning engineer at Foursquare.1 However, my father, a property manager and housing advocate, would miss no opportunity to encourage me to consider a career in housing. While initially dismissive, over time I began to see ways my more recent academic interests might combine with my earlier experiences with housing co-operatives to create something truly innovative and impactful.

In May 2018, after a year-and-change at Foursquare, I left New York, moved abroad, and got a job as a research engineer at Colony, developing experimental voting and budgeting systems. Having been interested in web3 for a while, I jumped at the chance to work in the field.

It was a good fit. Within a few months of joining I was invited to London for a “research summit” where, along with my colleagues Jack du Rose and Aron Fischer, we developed BudgetBox, an early public-goods-funding mechanism.2

BudgetBox combined the computational techniques initially developed for pairwise preferences with new ideas of continuous funding emerging out of the DAO ecosystem to create a complete mechanism for collectively managing shared resources. Ultimately, BudgetBox would go on to form the core of Chore Wheel’s chores system.

Web3 is full of people with revolutionary zeal, hoping to use their new technology to reform world governments and transform global economies. I felt differently, wanting to explore ways these tools could be used locally, solving everyday problems for regular people.

With frequent conferences in Europe, there were many opportunities to meet and mingle with cypherpunks in Paris and artists in Berlin; it was a heady time of pre-pandemic exploration and discovery, and of gathering influences: around interface designs, reputation systems, engineering techniques. I had big plans, and wanted to get things right.

Developing Chore Wheel

In summer 2019 a friend sent me an article about a coliving startup doing interesting things with technology; it felt like the moment had arrived. I had a rough plan: buy and renovate an old house, and use it to pilot this experimental governance system.

In February 2020 I pulled the trigger and moved back to my hometown of Los Angeles, where I thought my odds of success would be the highest. What I hoped would be an exciting adventure quickly became a harrowing ordeal, as the pandemic quickly set in. “Alea iacta est,” I said, and threw myself into the project.

At this time, I entered into ongoing collaboration with two friends: Seth Frey, a professor and computational social scientist, and Joseph DeSimone, a brilliant game designer. I knew I needed feedback on my ideas, and recruited them to advise me.

From 2020 - 2022, we refined the mechanisms that would form the core of Chore Wheel and wrote the Mirror Whitepaper.3 It was a productive and engaging collaboration; I often joke that I came into our work with most of the mechanisms fairly well developed out, and that Seth and Joe’s job was telling me which of my ideas were the least bad. As is often the case, apparent simplicity often conceals substantial complexity. Through an extended series of letters, we worked through many possible scenarios and circumstances. There was something charming and “Federalist Papers”-esque about our collaboration: discursive epistolary explorations of politics, power, fairness, and freedom. We had fun.

One significant piece of advice that Seth gave was to begin as simply as possible. To paraphrase, “if you start with many interacting mechanisms, it will be difficult to figure out why things are going wrong. If you start with only the essentials, it will be a lot easier to refine and expand the system.”

With that in mind, we planned to launch with what I saw as the three core mechanisms of Chores, Hearts, and Things.

Launching Chore Wheel

In September 2022, the month Sage opened, I started implementing Chore Wheel in earnest. My goals from a software perspective were to create something that was auditable, robust to error, minimally complex, and adaptable.4

The plan was to implement the tools as Slack bots. As discussed in our research paper, we drew explicit influence from Discord’s gaming communities, who have long used chat-bot integrations to perform internal governance tasks, such as sorting members into raiding groups or helping victory parties fairly divide in-game rewards.

It was a busy month; I had to implement three separate products while simultaneously navigating the in-person experience of Sage House. It was also a special time: three eager new housemates having the run of a big beautiful house, enjoying the novelty of the experience and looking forward to good times ahead.

The “bare essential” functionality was still a long list: the ability to define, value, and claim chores; the ability to update group priorities; the ability to “take breaks” and reduce one’s obligation; the ability to vote on claims; the ability to initiate and resolve conflicts; the ability to give good karma; various automated “heartbeat” features; and so on.

On balance, implementation went smoothly. I had set a goal of launching Chore Wheel before our fourth housemate arrived in October. After a few weeks spent implementing, and a few days configuring Amazon Web Services, we were live.

Iterating Chore Wheel

In some ways, launching Chore Wheel was like putting a rocket into space: a complex endeavor with many moving parts, many factors beyond my control, and very few chances to try again if things didn’t go right. If the system failed, it would be very difficult, if not impossible, to get the buy-in to try again.

Fortunately, whether by luck, skill, or mystical synchronicity, everything worked more-or-less right out of the gate. People figured out how to claim chores, understood the idea of earning points, and got comfortable using Slack to communicate. There was very little resistance to using a new system, folks clearly saw the value, and there were relatively few bugs in the experience. To say I felt relief would be an understatement.

That said, there was ample room to grow. New housemates frequently had suggestions on how to improve the system, often challenging my own assumptions about that Chore Wheel should or shouldn’t be. Helping housemates develop these ideas and integrating them into the tools became an ongoing process:

Adaptations and improvements

Chore gifting

One of the earliest changes we made was adding support for “gifting” chore points. Making points transferable achieved two things: first, it made it possible for people to “split” chores, and second, it made it possible for people to gain points for making contributions outside of the constraints of the pre-defined chores list.

Chore editing

A more complex change was adding the support for housemates to edit the chores list themselves. Initially, the list was updated manually, with no way for housemates to make changes on their own. While this was done initially out of expedience, over time it became clear that a proposal-editing flow would allow me to shift more decision-making to housemates and ultimately increase the legitimacy of the system.

Ongoing explorations

Points minting

A frequent request was to make it possible to “mint” points via a vote, in order to recognize special or one-off contributions. I have been resistant to such requests, on the grounds that this would throw off the balance of the points economy, in two ways.

First, a key concept behind the chores system is that the amount of points available is fixed, at 100 points per person per month. Points are not a currency to be accumulated, but an ephemeral token for contribution accounting. The fixed amount of points allow for a continuous flow “from source to sink” through which points accrue in chores, are claimed by housemates, and evaporate at the end of each month.

Point minting would imbalance this “steady state” by introducing more points into the system than people need to meet their obligations.

Second, a concern is that point minting would introduce a political dimension to the chores system which is currently, and thankfully, absent. If point minting were an option, then the door would be open for housemates to request points for arbitrary contributions, introducing significant mental and emotional labor in evaluating and discussing the relative merit of this vs. that contribution.

None of these issues are insurmountable — as long as point minting was offset by a commensurate reduction in continuous point accrual, and the system’s steady-state was preserved, then in principle this functionality could add a useful layer of nuance.

Chore prioritization

The distributed chore prioritization system is Chore Wheel’s most innovative component. The underlying process, by which pairwise preferences are aggregated to create a total prioritization over all chores, has been largely unchanged since launch. What has changed, and changed often, is the interface around the mechanism.

I believe — and have believed for many years — that the mechanism of resource allocation via pairwise inputs is an innovation with paradigm-shifting potential. The biggest challenge at this point is iterating and refining the interface to the point where casual users can both intuitively grasp and fully leverage the mechanism. Getting there in the context of Chore Wheel has been an ongoing process:

• Initially, all preference updates had to be one pair at a time, discouraging housemates from making larger changes. An update was made allowing many pairs could be submitted at once.

• Initially, less engaged housemates were given “implicit preferences” which limited the influence of more engaged housemates, a well-intentioned choice which ultimately discouraged more engaged housemates from participating. An update was made reducing the implicit preference, such that individual housemates have more noticeable impact.5

• Initially, preferences could only be expressed as the binary “all or nothing.” An update was made allowing for more levels of preference: mild, corresponding to a 70% preference, and strong, corresponding to 100%.

• Initially, housemates would not see the effect of their updates until after submission, creating a confusing experience. An update was made providing a “preview” screen showing the effect of the proposed change, allowing housemates to iteratively revise their update prior to submitting.

  

• Initially, the mechanism was presented in a formal and academic tone, which was off-putting to some housemates. An update was made presenting the preference updating flow in a more narrative style, intuitively guiding housemates through the decision process.

The Future of Chore Wheel

After two years of continuous operation and with over 2,000 chores claimed, it is fair to say that Chore Wheel works. Looking forward, there are two main opportunities:

• Growing the base. The work now is to learn how to reach more communities, groups who struggle with domestic issues but don’t know about Chore Wheel or can’t envision how it might become a part of their day-to-day. More communities using Chore Wheel means more perspectives to help inform development.

• Adding nuance. While the fundamental mechanisms of Chore Wheel are proven, there are often situations which call for more flexibility and nuance. Adding this subtlety will make Chore Wheel more useful for more people.

Creating Chore Wheel has been a journey of many years and a labor of love, and I look forward to seeing where the journey goes.

You can learn more about Chore Wheel and try it for yourself here.

When I was 21 years old and a Junior in college, I got a rare opportunity: to be President of the Board of Directors of the Berkeley Student Cooperative, the largest and oldest student housing cooperative1 in the country.

At 90 years, 20 properties, 20 full-time staff, 1300 student members, and an eight-figure annual budget, the BSC was and remains a significant operation. Founded during the Great Depression, the whole board of directors is drawn from the students living in the cooperative houses.2

I was first turned on to the BSC, referred to simply as “the co-ops” by the undergraduate population, my freshman year. Out of my parents’ house and excited by everything, it wasn’t long before my freshman-year friends started taking me to “co-op parties,” opening up new horizons of sights, sounds, and smells for my 18-year-old self. For an undergraduate at UC Berkeley, reading Hegel and Marx and drinking deeply from the countercultural cup, a student-run housing organization was just about the coolest thing I could have imagined. After a brief but worthwhile detour through Greek life, I moved in to a 124-person house called Casa Zimbabwe my Sophomore year.

Finding Leadership

A curious and ambitious student, I double-majored in Cognitive Science and Political Economy — wanting, as I put it — a little bit of everything. Having at that point spent several semesters studying history, economics, psychology, and political philosophy, my interest turned to leadership while sitting in on my first board meeting.

The first half of the meeting consisted of procedural business; I listened in while trying to get my bearings, seeing who was in the room and how the group fit together. About halfway through the meeting, a key issue came up and the board took a “roll call” vote, in which every house’s representative voted one-by-one.

Watching this council of student leaders vote was deeply inspiring. The 20 units are a mix of all shapes, sizes, and personalities: big party houses, small studious ones, queer, Black, vegetarian, and women-only themed houses, grad-student houses, and everything in between. Going around the room, watching 30+ diverse student leaders casting votes, I may as well have been watching the Council of Elrond. I was completely smitten.

I joined the Board the next semester as a “Cabinet Member-At-Large,” a junior position which sat on the Cabinet — the executive committee of the President, six Vice Presidents, two senior staff, and two members-at-large, meant to represent the “views of the average member.”

I loved being on Cabinet. I was in awe of the student leaders and the staff, who seemed to me the smartest and most passionate people I had ever met. I wanted to earn their respect, and so I started reading anything I could get my hands on — the written history of the organization, and its entire policy manual. I particularly enjoyed the historiography of the policy manual — different policies written by different authors, in different contexts and styles. Counterintuitively, this written policy book made the organization feel more human to me, not less. And to my nascent legal mind, the idea that I could grasp an entire organization by simply reading its rulebook had tremendous appeal. Soon enough I started getting attention — out of nowhere, this energetic member-at-large had policies and procedures memorized that even seasoned leaders couldn’t quite remember.

At the end of my first semester as member-at-large, I ran for President, and won. Running against a VP (and friend) with far more experience, I won because of my emphasis on fairness and process above any particular agenda; a message which resonated with the board’s cooperative values.

I served as President for one year, receiving strong reviews, and stayed on for a second years as a vice president before graduating and moving on. It was a heady, formative, and often tumultuous experience in my life, influencing the development of my identity, friendships, interests, and values in a way that can be clearly seen today: in my work with Colony, Zaratan, Chore Wheel, and beyond.

The rest of this essay will share seven lessons learned from my experience as a student leader of the Berkeley Student Cooperative.

Seven Lessons

1) Process first

When I first gained access to the president@bsc.coop email address and started looking through old archives, I was struck at how disorganized the records were. Meeting minutes were frequently missing or kept in random folders. Being tech-savvy and (circa 2010) “very online,” I spent the first few months of my term overhauling the board’s record-keeping. I developed a set of Google sites (remember those?) for the various board committees and encouraged the various VPs to adopt consistent record-keeping practices. During my second semester, the internal affairs committee followed my lead and moved the board’s entire policy manual onto a wiki, making the organization even more transparent and accessible to membership. As of this writing, both systems are still in use.

Beyond record-keeping, I improved board meeting process. When I first started attending board meetings, I witnessed drawn-out discussions in which participants would make long, rambling “quomments” (comments masquerading as questions). Conversations would drag on, participants would disengage, and the board would frequently find itself tabling discussions to future dates. In the first semester of my term, we developed a more efficient format in which the agenda and updated discussion summary were projected onto a wall during meetings, and a VP with a stopwatch kept participants accountable to one-minute comment limits. These process improvements made meetings more productive and engaging, encouraged people to articulate their points clearly, and allowed us to achieve more in less time.

When I reconnected years later with a student leader from another era, she shared how the professionalization I had brought to the board allowed them to successfully tackle thorny and challenging issues, long after I had gone. My take-away was that in grassroots-led organizations with high leadership turnover, building a consistent and effective process will have impact far beyond any individual project or person.

2) Nobody cares like you do

Leaders almost by definition care more about their organizations than participant in general. It is easy for new leaders, full of vim and vigor, to imagine what would be possible if everyone was as motivated as they are. This is a trap, and can lead to burnout and resentment.

People generally want things to be predictable, like things to “just happen” without them personally having to work too hard, and will avoid what they perceive as “extra” responsibilities. They will also be skeptical of those in leadership positions and will rarely appreciate how much work it takes to keep things running smoothly.

As a leader motivated to make positive change, there are a few ways to handle this:

• Make participation fun. During my year in office, a talented board member (who became President after me) decided to organize a regional co-op conference. She rallied volunteers and organized a weekend-long event without spending a dime. She did this by making participation fun (going out for drinks after planning meetings), and framing the conference as a cool event to be involved with.

• Make participation easy. As a leader, your secret weapon is leverage. You have more reach and more resources, and you can use them to set other people up for success. Rather than expecting people to plan and plant a garden all by themselves, take the initiative to find a gardener and schedule a planting day, so all anyone has to do is show up. And bring breakfast.

• Make everyone a leader. One of the best ways to improve trust between leaders and everyone else is to give everyone the chance to be a leader. By taking on a leadership role, even briefly, people get a sense of what leadership “takes.” At Sage House, we rotate facilitation of the monthly house circle, so that every housemate takes a turn running the meeting. By sharing this responsibility, we avoid putting any one person in the position of “boss” and cultivate a broad-based appreciation of the effort needed to keep a community running.

3) Knowledge is power

As an unknown member-at-large with no prior leadership experience, I earned respect by mastering the policy manual. I wasn’t asked to do it — I did it on my own initiative, enthusiastic and excited about the organization I was getting involved with. Over the period of only one semester, I became a go-to person for idiosyncratic details about procedure and history. People went to me for advice because I was the local authority. Ultimately, I was invited into leadership because people felt like I would be a resource for them.

Titles do not automatically confer respect. By making yourself a subject-matter expert, people will naturally come to respect to your insights, opinions, and judgments. Conversely, if you come off as uninformed, ignorant, or foolish, people will look to others for guidance, regardless of your position. By constantly investing in your knowledge and skills, it will be easy for others to trust your judgment.

4) Facilitation is a skill

As a young and idealistic student leader, I was inundated with friendly faces trying to get on my good side. Eager to prove myself, I would bend over backwards trying to make everyone happy, and I learned the hard way that people sometimes try and manipulate those in power to achieve personal goals.

One of the powers we give to leaders is discretion, and so the key to effective leadership is facilitation: knowing how much time, space, and energy to give to any one person or priority. Facilitation can occur in the context of a meeting — deciding who speaks next, and for how long. But “facilitation” can also be seen as a broader leadership skill — knowing how much attention to give to one person over another, and how to balance the needs of a vocal minority with the often silent majority. This can mean giving someone extra time, or it can mean shutting someone down in a way that might at first feel rude. Inevitably, someone will feel picked on.

Ultimately, your goal is to be of service to as many as possible, and to be savvy enough to realize that while most people are simply preoccupied with their own wants and needs, some can be outright manipulative. As a leader, you have to use your best judgment in balancing all of the personalities and desires that come your way, being firm when necessary, and making sure that the organization as a whole continues to move forward.

5) Support other leaders

As discussed earlier, those who have never held leadership positions often underestimate what it takes to be a leader: the sacrifice, the skepticism, the endless thankless tasks. In “The Laws of Online World Design,” game designer Raph Koster writes about the plight of the in-game admin (emphasis added):

Yet the fact remains that no matter how scrupulously honest he is, no matter how just he shows himself to be, no matter how committed to the welfare of the virtual space he may prove himself, people will hate his guts. They will mistrust him precisely because he has power, and they can never know him. There will be false accusations galore, many insinuations of nefarious motives, and former friends will turn against him.

This is the sad reality of leadership, and one of the worst things you can do as a leader is publicly take sides against other leaders. By all means, provide critical feedback, but do so privately.

I made this mistake. Our Executive Director at the time was a dedicated, conscientious woman with high integrity, who would often push back against what she saw as self-serving behaviors on the part of the (non-student) professional staff. The staff, accustomed to minimal oversight by a transient student population, resented this accountability and took every opportunity to make her life miserable. During the annual ED review, which as President I led, I received several anonymous comments accusing the ED of various bad behaviors. In my idealism and drive for justice, I gave these anonymous critiques significant airtime during the review, asking our ED to respond to them in front of the entire student board. Instead of focusing on her many achievements and contributions in her role, I instead reduced the ED, one of my most consistent supporters and mentors, to tears. It was a major leadership failure on my part, and one I still regret.

6) Know when to move on

My year as President was defined by crisis. The summer before I took office, a student overdosed in his room. His mother sued, on the grounds that we had created an unsafe environment for her son. Millions of dollars were on the line and the entire organization was in danger.

Much of my year in office was spent responding to the fallout from the overdose and lawsuit. I worked actively to rehabilitate the co-ops image, writing op-eds in the student paper and regularly meeting with administrators. I worked actively with other leaders to develop an improved drug policy, which balanced empathy and support with safety and boundaries. It was a stressful time, and I developed an acute resentment of “scene kids” — students who came to party, offload consequences onto others, and make fun of people who actually “gave a shit.”3

After finishing a successful year as President, I made the (in retrospect) poor decision to continue in leadership as Vice President of Education and Training. My hope was to leverage my reputation and relationships to make specific improvements to the organization’s recruitment, education, and training procedures, making it harder for “scene kids” to cause harm and keeping the organization on a more even keel.

My second year was not a success. The new President resented my sometimes forceful attempts to pursue my personal agenda at the expense of her own. I struggled to work effectively with other student leaders, who had fewer reasons defer to my opinions and judgment. I finished that second year having accomplished few of my goals and having lost some of the respect I had earned in the previous year.4 In retrospect, while I felt strongly identified with the organization, everyone would have been better off had I stepped back and let a new cohort take the reins. I could have focused on myself, friends, and new opportunities for growth, rather than try and prolong a commitment which had been largely fulfilled.

7) Stay humble

Being the highly-visible leader of a large organization can be a heady experience, even more so at the tender age of 21. People respect you, they do what you tell them, they tell you how great, smart, good you are. Strangers want to befriend you; strangers want to sleep with you. It is exciting, but it is also not quite real.

What was “real” was that I had attained a position of high status in the context of my university and social circles. By most accounts, I did my job well, demonstrating high levels of empathy, intelligence, conscientiousness, and humor. I showed a lot of professional promise. As a nerdy child who had been well-liked, but socially marginalized, in adolescence, becoming a center of attention and admiration in early adulthood was impactful. Instead of constantly doubting myself, I learned to be confident. Instead of waiting to be called upon, I learned to take initiative. Instead of assuming that I was wrong, I learned that often, I was right. All generally good things.

The challenge emerged once I entered the (much larger) working world. Intellectually, I knew better than to identify with past success,5 but humility-in-practice required a level of maturity I did not yet have. My energy and enthusiasm brought me many opportunities in my early career, but I fumbled more than a few by refusing accept that in these new contexts, there was much I had yet to learn.

It is a delicate balance; as someone who grew up doubting himself, I can’t say that building self-confidence is a “bad thing.” But intense formative experiences can lead to behavioral over-corrections which themselves take time to fully unwind. By all means, pursue experiences of leadership. They will make you a better person. But never forget that it was your humility which allowed others to trust your leadership in the first place. Never forget the people who liked you for you. And never stop growing.