I want to be excited, I really do.

But the Terms of Use before accessing Chaucer were a bucket of cold water.

20% niche renewal fee

That means if your niche makes more than 375 USD in the year, your fee will become 20% of your yearly income for the niche.

Lets call this something more descriptive than a "renewal fee".  It is a tax, and a very significant one at that.  Remember we'll have to pay taxes to our governments on our income for our niches too, AFTER the Narrative has taxed us 20%.  Some folks are in countries with tax brackets that go above 50%!   Those folks would be left with a third of their niche income after both the government tax man, and the network have plundered them.  Even if you're in a more reasonable 30% tax bracket, you'll still be losing very nearly half your revenue.

This seems truly excessive...  If it has always been in the white paper, then my bad for missing it, but it does not change the excessive nature of it.

 

I know of no business in which you're told you own something, but the same person telling you you own it takes 20% of your income issuing from that possession every year, AND forbids you to sell what you 'own'.  If you owe a debt to the mob, perhaps you'd feel in a similar position.  You'd be an owner on paper, but you'd have to pay periodically when the enforcer comes by, or else lose it all...  I don't like making this comparison.

A niche bringing in 20,000 USD per year would have a whopping 4000 USD renewal fee.  Refuse to pay?  You lose your niche.  Can't pay because you've had a momentary reversal of fortunes?  You lose your niche.  The one you 'bought' at auction.

Can we open some dialogue about this?  

Words matter.  We should stop calling "niche ownership" this way, and start calling it "niche leasing".  We should stop calling "$75 minimum niche renewal fees" this way, and start calling it a 20% network tax with a $75 minimum.  To do otherwise is deceptive.  I see no upside to calling important aspects of this venture names that misrepresent what they actually are.  The only thing it can achieve is to deceive, and I'm starting to want to be given some demonstration that deception is not the intention.  If it isn't, lets call things by their name.

Once we're willing to talk more plainly, then perhaps we can deal now, well before general launch, with the real nature of what is being proposed for the Content Economy.  I intend to put a lot of effort into my niches, if I lease any, but an economy in which an "owner" cannot sell their "possession", and pays cumulative network taxes and government income taxes of up to more than 65
%, is not a great target.  We need to be real about this now while things are still relatively conceptual.

Niche deactivation via nebulous appeals process

"While niches are subject to Community approval prior to the start of the auction process for a new niche, approved niches may also be revoked at any time via the appeal process in Narrative. Community members may appeal to the Tribunal (the governing body of the Narrative Network) to deactivate an existing niche. Such reason may include duplication (a similar niche exists), violation of the AUP, or any other reason. The Tribunal will consider all such appeals and may take action that leads to either another Community review or unilateral action to deactivate the niche. "

The appeals process is not described anywhere.  People looking for reassurance that their (potentially very expensive niche) won't get deactivated unfairly, have nowhere to find such reassurance.  Should we fear deactivation because of something someone posts to the niche violates a third party's copyright, for instance?  When approving content, are niche owners going to be responsible for insuring against copyright infringement?  

Seriously, we need some clarity here.  You want folks to bid against each other to buy a space on an as-of-yet non-existent platform, and you don't think it necessary to determine the circumstances under which said niche could be unilaterally taken offline?  Really?  

Would anyone lease a car for thousands of dollars up front, if the contract says the leasing company can ground the car unilaterally for any reason?

It is good to believe in the goodness of people, but people are also capable of corruption, and giving a Tribunal made up of human beings unilateral power, without explicit safeguards, will backfire.

 

Liability limited to 1 month

"COMPANY’S LIABILITY TO YOU FOR ANY CAUSE WHATSOEVER, AND REGARDLESS OF THE FORM OF THE ACTION, WILL AT ALL TIMES BE LIMITED TO THE AMOUNT PAID, IF ANY, BY USER TO COMPANY UNDER THIS AGREEMENT DURING THE ONE (1) MONTH IMMEDIATELY PRECEDING THE DATE ON WHICH SUCH CLAIM AROSE."

I've never seen anyone attempt to impose a one month statute of limitations on a significant capital expense claim.  It probably isn't legal in some countries, to do so.

So imagine you pay $20,000 USD in NRVE for a shiny niche.  By the time the platform launches 6 months from now, if the company destroys your ability to earn from that niche, there will be no legal recourse, because your 1 month will have expired long ago.

Imagine the platform grows in popularity, and 5 years from now, you buy a niche for 100,000 USD.  Same deal - no liability after the first month of owning the niche?  The company decides to shut down the service arbitrarily, or commits gross negligence in its operation, resulting in its demise and you're left holding the bag?  This appears abusive to me and further cements that niche ownership is anything but.  The fact is, what we pay for a niche cannot be refunded under any realistic scenario, no matter who slips up nor how badly, and it only rents the niche for a year, and can be subject to deactivation for any reason.  Help? 

++++++++++++++++++

I am still holding out the hope that the Team's intentions are honest, but that still leaves the huge concern about what I'm seeing here?

Please Narrative, or other members - can you elucidate some of the thinking behind this?  

Its a long road to release.  Lets use it to take a hard look at what is shaping up, if we want it to shape up better than what is already out there.

If I have misread things, or if some sort of genuine explanation is given that rectifies the trend I'm seeing, I would invite the team to subsequently remove this thread.  We're still in an intimate setting here, and if there is a Narrative worth participating in, I don't want it to be hurt by an early instance of miscommunication.

Regretfully, and looking forward to happier Narrative days,

Malcolm

 

 

Original Post

For comparison of the 20% niche network tax -  consider Uber.

Uber also charged 20% (I believe it might now be 25%).

But Uber drivers don't have to bid against each other to lease a license to drive for Uber.  And that tax/fee is substracted from each fare, so the driver will never reach the end of the year facing a big bill to the company that could end his activity if he comes up short.

I think a good test of fairness here is for someone, anyone, whether team member or Founder or general member, to come up with a business model like the one being proposed and describe it here.

Bryan offered the example of NY hot dog stands, which are leased every year - and this comparison could seem appropriate on the surface.  But the guy who leases a stand doesn't have to build a clientele.  Foot traffic in NYC guarantees hordes of people will buy his hot dogs.  Narrative literally needs to be built from the ground up, before foot traffic remotely comparable will float the boats of niches.  Not to mention that, though it is perfectly honourable as a profession, I doubt people who invested as Founders in Narrative pictured their involvement as comparable to operating a hot dog stand.  We're building a new social networking platform and The Content Economy, right?  Not leasing street corners to sell hot dogs.

I propose that those who participated in the token sale be exempt of the 20% renewal fee, because these are literally the people who have funded this venture, and who will be working hard to make it profitable alongside the team.  The renewal fee for them could be instead a sliding scale with a minimum, and a reasonable maximum.  And failure to pay should not automatically result in losing the niche.  The fee should come out of future revenue if necessary, in the case where the niche leasee wishes to keep the lease but has a temporary cash flow issue.  

I think the 20% fee is excessive even for subsequent niche holders, but it is even more so for us investors in the platform who have to bid to pay 'market price' for niches we are told we will be 'owners' of.

This consideration would not address the remaining issue of leasing, vs true ownership, but it would be a beginning.  

Harj posted:

Malka you must take this all into consideration when you bid on a niche dont pay more than you can potentialy make bro :I

Its for more complex than that Harj!

Nobody knows what can potentially be made.  Nobody.

There are several interconnected problems here, and your comment only addresses the shot in the dark that is the initial punt, by urging conservatism.  

What about niche leasees who rock their niches, but one year come up against financial hardship, and can't pay the fee in time to keep the niche?

 

Hey @Malkazoid I appreciate your thinking on this. It definitely feels a little cart-before-the-horse to be discussing Niche management/ownership with no place (yet) to manage it.

It's also a little eerie to be getting glimpses of a project at such an early, might we say pre-natal, stage. There's still a lot of formation that still needs to happen. And, this thing will evolve over time.

Regarding the 20% fees, I look at that as the cost of doing business. If you make $1000, you pay $200 for the privilege and collect $800. This seems as reasonable as leasing office space, buying computer equipment, etc.

The tax burden is a real thing, though... and for that, I'd suggest (if someone plans to make a living off their Niches) to incorporate under a business license and mitigate that 20% as a business expense, and not get taxed on it. 

Disclaimer: I am NOT an accountant or even particularly good at Maths. 

Bryan posted:

Hey @Malkazoid I appreciate your thinking on this. It definitely feels a little cart-before-the-horse to be discussing Niche management/ownership with no place (yet) to manage it.

It's also a little eerie to be getting glimpses of a project at such an early, might we say pre-natal, stage. There's still a lot of formation that still needs to happen. And, this thing will evolve over time.

Regarding the 20% fees, I look at that as the cost of doing business. If you make $1000, you pay $200 for the privilege and collect $800. This seems as reasonable as leasing office space, buying computer equipment, etc.

The tax burden is a real thing, though... and for that, I'd suggest (if someone plans to make a living off their Niches) to incorporate under a business license and mitigate that 20% as a business expense, and not get taxed on it. 

Disclaimer: I am NOT an accountant or even particularly good at Maths. 

You are right - it IS the cost of doing business.  But that can be said of legitimate costs, and excessive costs, and of good business propositions, and very bad ones.

The hot dog stands give you a ready made clientele.  Uber gives you a ready made clientele.  Narrative, for us pioneers, does not.  We're supposed to go out and build our clientele ourselves, and Narrative will benefit from it.  I think the least we can ask in return is more reasonable renewal fees than a full 20% of earnings.  

Like I said - find me any business model out there that matches the proposed model for niches, and calls it ownership, and if that model is considered fair and is well accepted, I'll concede.

Imagine New York city is mostly muddy riverbanks and forests, with some early constructions sites, and someone tries to orchestrate an auction of hot dog stands site LEASES on streets that don't exist yet.  Sound a bit like trying to sell someone a bridge?  Well, that's because we're walking a fine line here, and bridge-selling is clearly in view, to one side of it.

It doesn't work that way.  At a stage where the entire business model of a niche, or any other enterprise, has to be built from the ground up, you get to own, and can sell it later.  Any local taxes are minimal, any unpaid taxes only result in the loss of the land if the failure to pay is recurring and unrepentant.  Income will be docked before confiscation occurs.

Lets not call it ownership if it isn't ownership.  That much, everyone should be able to agree on.  A lot of the jargon of this venture is predicated on half truths at best.  Founders are supposed to be owners at the outset of a venture.  But not here. 

Whoever set out to build a business from the ground up, knowing he's only leasing that business?  The only comparable thing I can think of is a franchise, but a franchise gives you so much from the outset: the only way they are able to sell frachises is because they have built a remarkably successful business ALREADY, so the person buying into the franchise is in fact just operating an existing, proven business.  The differences are fundamental, and stark.

 

I hear you. Business expenses aren't all rosey-cheeked. I think one difference re: the Muddy-River-Bank-Hot-Dog-Stand-For-Streets-Yet-To-Exist-Proposition (and henceforth let it be known by no other name!) still works if one doesn't have to pay a fee if they don't make any money. 20% of nothing is still nothing. 

If one is paying $20,000 USD in NRVE for their Niche, that means they made $100,000. So, they keep $80,000. My efforts will be to minimize how much of that goes to taxes. 

I don't think there is an intention to deceive. Plus, 85% of the collected Niche fees goes back in to the community... so that will help pay content creators, etc...

I am glad you're here, asking these questions. I believe it will help the Narrative team (and community) externalize some of their own thinking and/or assumptions on how things might work on paper vs. what happens in reality. Sometimes they'll go smoothly, and sometimes they might need some adjustments. 

Malkazoid posted:

Lets not call it ownership if it isn't ownership.  That much, everyone should be able to agree on.  A lot of the jargon of this venture is predicated on half truths at best.  Founders are supposed to be owners at the outset of a venture.  But not here. 

Whoever set out to build a business from the ground up, knowing he's only leasing that business?  The only comparable thing I can think of is a franchise, but a franchise gives you so much from the outset: the only way they are able to sell frachises is because they have built a remarkably successful business ALREADY, so the person buying into the franchise is in fact just operating an existing, proven business.  The differences are fundamental, and stark.

 

One more thought: I agree on the nomenclature. "Ownership" is a tough pill to swallow if it has no properties/entitlements of ownership. I've always suggested "Manager". 

Also, we hire rain-makers on commission. They go out in the world, their own wits as their only resource. Everything is percentage-based. They make a sale, they get paid. Only, usually the values are reversed. We take 80% and they keep 20%, with bonuses for incentives, etc. 

The rain-makers don't go out under the guise that they are building up their own business, however. They are working for us. It's the sales game. If they land a huge client, that brings in tons of cash, they get compensated. But, if they leave, and go somewhere else... well, they have to start over. (Contractually there are time limits and all that, non-competes, and the like.) But, they are under no illusion that they are an "owner" of that book of business simply because of their efforts.

I don't know that I'm agreeing, or disagreeing with you. I think maybe I just don't have the hangup on the distribution stuff. Maybe because I (at least for now) don't see how to make Niche ownership a full-time job. I mean... who, besides @David Dreezer is going to read my twice-daily articles on clams?

Bryan posted:

I hear you. Business expenses aren't all rosey-cheeked. I think one difference re: the Muddy-River-Bank-Hot-Dog-Stand-For-Streets-Yet-To-Exist-Proposition (and henceforth let it be known by no other name!) still works if one doesn't have to pay a fee if they don't make any money. 20% of nothing is still nothing. 

If one is paying $20,000 USD in NRVE for their Niche, that means they made $100,000. So, they keep $80,000. My efforts will be to minimize how much of that goes to taxes. 

I don't think there is an intention to deceive. Plus, 85% of the collected Niche fees goes back in to the community... so that will help pay content creators, etc...

I am glad you're here, asking these questions. I believe it will help the Narrative team (and community) externalize some of their own thinking and/or assumptions on how things might work on paper vs. what happens in reality. Sometimes they'll go smoothly, and sometimes they might need some adjustments. 

I'm glad you're here too Bryan.

There are levels of deception - not everything is an outright lie - right?
The term 'niche owner' has continuously sent the wrong signals to my brain, and I think it has fuelled what is probably a deluded sense in me that at some point, the project would align with the words it chose.

I think the level of comfort others might have with this comes from a sad acceptance that real ownership is perhaps becoming a privilege of a shrinking class of people in our day and age, and many console themselves with believing the term even when it is misapplied, in an attempt to romance something that is simply not ownership.   

I dislike it because it is so easy to do things differently.  It is a choice.  We could choose to make those who 'buy' niches at auction actual 'owners'.  Or we could choose to call them what they are: lessees.  Instead, the choice has been made, deliberately, to make them lessees, but call them owners because it sounds better.  Its the kind of marketing many of us frown at several times a day.  We endure it.  But it is a downer to realise it has to be endured in a venture one is funding oneself, and proposing to be an active community member of.  

At the dawn of a new world like Narrative, it is hard not to want to aspire to something better.  

And then there are the economical ramifications of leasing vs ownership.  They carry real consequences for the Content Economy Narrative aims to become.  We've been around this block together.  Owners tend to be better care-takers.  Outside the digital world of Narrative, most of us live in capitalist societies where real ownership and capital gains are not only possible: they are (still) the norm.  Narrative's proposal, when the dust settles, may not be able to compete with other models out there in the real world.  Other options for people to invest their energies.  And indeed, other digital content economies who may choose to heed these facts, and propose real ownership and capital gains in their ecosystem.

Do you have children?  If you build a brilliant niche on Narrative, you will not be able to pass it on to your children.

All of us should be concerned about these things.  Not just the members, but the Team first and foremost.  If we're setting out to build an attractive economy, we should be thinking like economists?

Anyway - Narrative is what it is.  I'd be a fool to try too hard to make it into something it isn't...

Bryan posted:
Malkazoid posted:

Lets not call it ownership if it isn't ownership.  That much, everyone should be able to agree on.  A lot of the jargon of this venture is predicated on half truths at best.  Founders are supposed to be owners at the outset of a venture.  But not here. 

Whoever set out to build a business from the ground up, knowing he's only leasing that business?  The only comparable thing I can think of is a franchise, but a franchise gives you so much from the outset: the only way they are able to sell frachises is because they have built a remarkably successful business ALREADY, so the person buying into the franchise is in fact just operating an existing, proven business.  The differences are fundamental, and stark.

 

One more thought: I agree on the nomenclature. "Ownership" is a tough pill to swallow if it has no properties/entitlements of ownership. I've always suggested "Manager". 

Also, we hire rain-makers on commission. They go out in the world, their own wits as their only resource. Everything is percentage-based. They make a sale, they get paid. Only, usually the values are reversed. We take 80% and they keep 20%, with bonuses for incentives, etc. 

The rain-makers don't go out under the guise that they are building up their own business, however. They are working for us. It's the sales game. If they land a huge client, that brings in tons of cash, they get compensated. But, if they leave, and go somewhere else... well, they have to start over. (Contractually there are time limits and all that, non-competes, and the like.) But, they are under no illusion that they are an "owner" of that book of business simply because of their efforts.

I don't know that I'm agreeing, or disagreeing with you. I think maybe I just don't have the hangup on the distribution stuff. Maybe because I (at least for now) don't see how to make Niche ownership a full-time job. I mean... who, besides @David Dreezer is going to read my twice-daily articles on clams?

I will read your clam articles, but I agree that won't pay your bills...

Rainmaker, or manager would be perfect.

Look, I don't necessarily want to rob folks of their rose-colored glasses.  I guess I'm just expressing my lack of them.  In any other circumstance, if someone offered me this sort of paradigm and tried to tell me it is ownership, I'd consider them a scam artist.  But here, because of the romance of a new world that we can 'found' together, and because of the charming 'mom and pop' feel from the Team, even I am confused by the conflicting directions I feel pulled in.  It makes me want to implore them to act like the benevolent figures they seem to be, and ignore the fact that we're replicating so many avoidable flaws already (and we've barely gotten underway).

 

Yeah, there is still room for improvement! And, I've always opposed the term "owner". But, because I haven't ever thought of it as "ownership", I've never thought of selling it, or passing it on to my kids. Which I do have... (ungrateful little— )

Where was I? Oh yes, clams. No, Niches! So, the only thing that troubles me (if I think about it a certain way) is this: 

If I cultivate/manage a Niche into prosperity, I can acclimatize to the Niche fee that I'll have to pay every year. As the Niche grows, so does the fee, so do my earnings, so does my ability to pay the fee. However, when I'm done with it, I elect NOT to renew my fee (thus improving my final year of earnings by 20%) and let it diminish and sail off to the West*.

But now what? A new person, probably/hopefully from within that Niche community, steps up to manage the plate. He/she is starting from zero revenue momentum and has to pay a 20% fee on a Niche that has matured. (Here's where I think my hot dog cart analogy becomes more relevant.) They will have to pony up the NRVE to become the new Niche manager. That's a steep price to pay, which may exclude the minnows. But, with the potential of a 5x return the following year... it might just be worth the investment. It's no longer a muddy river bank. It has streets and foot traffic. It becomes an annual investment.  

Or, before I go, I want to pass it on to one of my kids... there's no reason I couldn't "gift" them the NRVE required to meet the Niche fee... that would put them in a better position to bid on it... maybe the Niche owner gets to assign the right-of-first-refusal to the next in line. The king is dead, long live the king. There are kinks, but they aren't insurmountable. 

*depressing Tolkien elf reference

Wow, very heated and passionate discussion, and I agree: the business model is not good. All these disclaimers and hidden rules, plus the ridiculous fees that one has to pay... I am quite disappointed of the project so far, and everything I read make me feel worse about investing so much in it.

One is already forced to bid for one's own Niche ideas, which is unfair (and could end up being super expensive, IF you get the Niche.) Then you have to build it from the ground up, gain traction, visits, authors, etc. And when you are finally done, you risk to either losing it for lack of money or because somebody on Narrative decided to, for whatever reason, pull the plug?

I think I want my NEO back.

Kyle Kidd posted:

Maybe it would better to charge the fee on a monthly or even daily basis.  That would lessen the risk of losing a niche at the end of the year due to a lump sum payment.  I personally see it as more of an operational/support fee than a tax.

Or maybe we should get 8-9% return on our Niches instead of 10%, and not pay any fee/tax at all.

Who is the 20% fee going to? Is it going to fund the running cost of the network or is it going the team behind Narrative?

From what I understand, both.  It is part of the revenue of the site, so gets split up between the team and the network rewards fund.

Consider the following claim of Narrative:

Midleman

That rings true at first when you initially hear 85% of revenue goes back to users.

It does not ring so true when you realise you don't own the niches you 'buy', rather you lease them.  You have to pay the 20% of niche revenue back to the network every year.  That definitely makes the network a middleman, and it changes the revenue claim too.

It is a form of double taxation: the Narrative company takes 15% off the top of all revenue, and pays 10% of all revenue to niche owners, but then taxes 20% of that 10% for niche owners, and helps itself to 15% of that 10%.

The Narrative company is a middleman, and it is practicing a form of double taxation. 

 

Eduardo Hernández posted:
Kyle Kidd posted:

Maybe it would better to charge the fee on a monthly or even daily basis.  That would lessen the risk of losing a niche at the end of the year due to a lump sum payment.  I personally see it as more of an operational/support fee than a tax.

Or maybe we should get 8-9% return on our Niches instead of 10%, and not pay any fee/tax at all.

Exactly.  Like Uber.  So there is never the jeopardy of not being able to afford the renewal during a difficult financial year.  Otherwise every year we'll lose good niche managers (I refuse to call them owners anymore, it is doing my head in), simply because they hit a rough patch.  Owners that will feel ripped off because they potentially paid, at auction, multiples of the one year revenue in order to take up the lease.

Imagine it is year 5 and the network is well atteneded.  Imagine you bid for the Politics niche, and pay $100,000 to take up its lease.  Imagine the yearly revenue hovers around $20,000.  At the end of year one, you'll be asked for $4000 dollars to renew your lease.  Lets say your brother has had cancer and you've had to remortgage your house to help cover his medical bills.  You can't afford the lease renewal fee that very first year after leasing the niche.

RESULT: you've spent $100,000, earned back $20,000, and lost the niche because of a short sighted policy of the network.

Malkazoid posted:

Who is the 20% fee going to? Is it going to fund the running cost of the network or is it going the team behind Narrative?

From what I understand, both.  It is part of the revenue of the site, so gets split up between the team and the network rewards fund.

Consider the following claim of Narrative:

Midleman

That rings true at first when you initially hear 85% of revenue goes back to users.

It does not ring so true when you realise you don't own the niches you 'buy', rather you lease them.  You have to pay the 20% of niche revenue back to the network every year.  That definitely makes the network a middleman, and it changes the revenue claim too.

It is a form of double taxation: the Narrative company takes 15% off the top of all revenue, and pays 10% of all revenue to niche owners, but then taxes 20% of that 10% for niche owners, and helps itself to 15% of that 10%.

The Narrative company is a middleman, and it is practicing a form of double taxation. 

 

@Malkazoid First off I have always appreciated your well thought out and articulated posts  and I hope they will continue! 

I am still processing a lot of what you have said but I did want to try and get some clarity on the claim of double taxation.  My understanding is as follows:

I'm a spreadsheet guy

I don't see an issue with niche owners retaining 80% of the rewards generated by their niche. Niche owners get paid based on the popularity of their niche hence why it is a rewards system. Additionally, niche owners will only be taxed by the government on the 80%.

I see your point on the term Owner though as the 20% is basically rent so you don't actually own the land your niche sits on, just the content. 

Also, with it being a community powered by the people and a voting system, even if the tribunal starts abusing their power, the community can replace them, but seeing how it is the community who originally voted them in, I would like to think the community at large will elect those that are worthy.

Again, I always appreciate your thoughts as it forces me to think more deeply.

 

Attachments

Photos (1)

Add Reply

Post
×
×
×
×