Why We Need Community Focused Business Models with Yonatan Ben Shimon 

Yonatan Ben Shimon is an Israeli crypto entrepreneur and an alumnus of Forbes “30 Under 30.” He started his career as a securities analyst, but in 2013, he entered Crypto and created projects including, Beam, Collectorshub and Celocamp.

Now, Ben Shimon has founded his own advisory investment firm, YBS Capital, as “a social investment bank that focuses on exit to community transactions.”

I recently sat down with Ben Shimon to find out more about his take on the emerging concept of community-focused business models and why they’re so important for today’s startup founders. 

First up: What are community-focused business models? 

As he explains: 

“The general idea is to help people turn their social capital into financial capital.” There are various ways of achieving this, but the premise is developed around the idea that there is value in communities, which applies to individuals as much as companies. When an individual or a company distributes a financial asset to their community, in the form of shares, equity, or token ownership, people feel invested. They’re then more likely to contribute their own efforts to furthering the project or company in which they’ve invested.”

Ben Shimon outlined a few different examples of how this can happen. For instance, using a Patreon-style model, an online creator could distribute personal tokens which convey special privileges such as the right to view paywalled content or even shares in virtual digital art

Further along those lines is tools such as unite.community and dfame.app which is helping crypto projects distribute tokens for work, social activity and development as well as creating gated content for a limited community members 

Similarly, open source project leaders could offer tokens to developers that contribute code or code reviews, whereby the tokens offer rights to one-on-one coaching sessions to help programmers with their own projects. 

However, Ben Shimon sees significant value in the “exit to community” model, one of the strategies on which his firm YBS Capital is focusing. As he explains it:

“A traditional exit strategy involves either selling a company to private investors or taking the company public in an IPO. Exit to community involves handing the project over to its users, bringing them the financial benefits and social benefits. In my view, an exit to community approach gives projects a better chance of succeeding under their community members who have a psychological as well as a financial investment. This investment equates to greater value.”

So how did Ben Shimon come across this innovative new exit strategy and distribution models? 

“I was always interested in new financial assets and always played around the idea of how to create financial value out of work, as a result I helped crypto projects enable better value distribution. This just puts a name to what I’ve always been fascinated by.”  

What kind of investments is YBS Capital looking to make?

Ben Shimon explains that his firm offers a combination of services to companies and communities. M&A services connect protocols and companies with tools and communities of traders or developers that don’t have a business model. He helps them transfer ownership to the community. 

YBS Capital also offers advisory services helping crypto projects exit to the community and helping in the design and execution of token distribution. They also invest in tools that facilitate distribution mechanisms.

Finally, the company also invests in companies and platforms that have implemented exit to community strategies to help them along the earlier part of the journey. 

Ben Shimon elaborates that while blockchain and token distribution are powerful tools, there are many other ways to implement community-based business models. Traditional companies have long been using such methods, through employee share purchase or share distribution plans. It’s also possible for an IPO to execute into a cooperative model. He cites one example of a Dutch high-street retailer launching fractional share ownership for loyal consumers.

Which kind of companies should be keeping an eye on these community-focused business models? 

Ben Shimon believes that it applies to all companies, but crypto companies in particular are already heavily involved in distributing value to their communities. In particular, the trend for decentralized finance has seen the rise of liquidity mining, where tokens are distributed to communities who contribute liquidity. Developer mining allocates tokens according to developer participation, while social mining rewards those who provide social engagement. 

How does he see this concept of community-centric business models playing out in the next year to the next decade?

Ben Shimon states: 

“I hope to help create a new reality where people have a choice of new ways to make a living, and billions of people are rewarded from work they are doing for internet platforms, protocols, and companies.”

He goes on to elaborate that once companies understand that “giving away part of the cake” isn’t a limiting exercise but can actually make the cake itself bigger, the idea of community-based models will gain significant traction. He sees himself as being one of the pioneers in this space. 

For that reason, he extended his willingness to discuss value distribution and exit to the community strategies with project founders interested in implementing the concept for their own communities. Anyone interested can visit the YBS Capital website for more information about the firm. 

Angela Scott-Briggs: Editor, TechBullion.com | Interested in Innovations in Business, Finance, and Technology .
Related Post