4 ms·

The Trillion-Dollar Vision of Dee Hock, the Radical Who Organized Visa (2012)

45 points by JoachimS 11y ago

Animats 11y ago
It's a fascinating story, told better in Hock's book, "Birth of the Chaordic Age". Visa is unusual in that it is a organization of competitors who need to cooperate on some standards for the system to work. The Visa model would be a useful model for Internet governance. Visa is a network operator of a big network which predates the Internet. They run data centers and switches all over the world. There are other organizations with similar organizational problems. Most are financial clearing houses, such as Depository Trust Company. In the past, the Association of American Railroads acted as a clearing house for railroad cars. (When a railroad car is not on its "home road", the borrowing railroad pays a daily rental to the owning railroad. One of the AAR's functions was being the clearinghouse for that and other inter-line billing issues.) The AAR is still the standards organization for railroad equipment. It's owned by the big railroads. That's typical of industry organizations; they're dominated by the big companies. Visa was a chaord because the US used to have a lot of small banks, and the small banks wanted a system that wasn't controlled by the big banks. As the financial industry consolidated, this became less of an issue. Visa International is no longer a chaord; it went public a few years ago.
- mseebach 11y ago
  > The Visa model would be a useful model for Internet governance I disagree on that. The Visa model works because at every single turn there is a clear, shared understanding of what the single purpose of the whole thing is: Process payments. The same is emphatically not true for the internet, just look at net neutrality. That's a pretty simple but very fundamental concept, and there's nowhere near consensus on the matter. Or even without considering NN, the fact that Netflix and Skype are eating the lunches of the very companies that own and operate most of the consumer internet (telcos and cable cos). It's hard to imagine a similar conflict at Visa, yet the internet's history is riddled with them, and the fallout from their incomplete resolutions. Incidentally, this clarity is also why Visa would probably be fundamentally ill-suited to deal with an existential threat, e.g. of the sort some people imagine bitcoin to be.
  - empath75 11y ago
    Yeah it seems like it would mostly be effective for cartels, rather than corporations. It would probably be useful for something like W3C, perhaps.
- buro9 11y ago
  > Visa is unusual in that it is a organization of competitors who need to cooperate on some standards for the system to work. The Visa model would be a useful model for Internet governance. Experience suggests this doesn't work so well in practise. An example: Visa are beholden to their members for funding and the largest members hold disproportionate power. Barclaycard in the UK is one such member and routinely prevent Visa from adopting new standards, or marketing on behalf of the entire group, for fear that it would weaken the dominance of Barclaycard in the UK. Which is why, for UK readers, you never see Visa advertising and only ever see bank/lender advertising... whereas elsewhere in Europe you'll see Visa advertising directly (for the benefit of all members). The structure that they have has contributed to holding the industry back as a whole, almost as much as it pushed things forward in the early days.
- zekevermillion 11y ago
  I was a low-level corporate drudge around the time of the Visa IPO. I remember at the time that the Wall St. analysts would say things to the effect that Visa needed to implement a clearer org chart, empower the CEO, etc. (completely ignorant of the fact that Dee Hock had intentionally designed Visa to devolve power where it's needed). Even post-IPO, though, I think Visa must be influenced by its roots.
deathtrader666 11y ago
Hock's book "Birth of the Chaordic Age" is one deep read! Modelling organic growth of a company according to biological growth, is quite mind-bending.
ZenoArrow 11y ago
Interesting article, Dee Hock could be onto something very useful for society at large. On initial reading, I wondered if an analogy could be made with the organic growth of computer technology through developing protocols and standards, looking at the growth in USB devices as an example. There are probably finer details that I'm missing out on, would be interested to learn more about the chaordic approach to building social structures.
MaysonL 11y ago
1996, not 2012!
- esw 11y ago
  Yeah, I was really confused as to how a 67 year old could be the founder of Visa.
Adlai 11y ago
Today, Hock is on the advisory board of Xapo, claiming that "Bitcoin is one of the best examples of how a decentralized, peer-to-peer organization can solve problems that these dated organizations cannot." How about that pivot! https://blog.xapo.com/announcing-xapos-advisory-board/ https://blog.xapo.com/announcing-xapos-advisory-board/

45 points by JoachimS 11y ago

It's a fascinating story, told better in Hock's book, "Birth of the Chaordic Age". Visa is unusual in that it is a organization of competitors who need to cooperate on some standards for the system to work. The Visa model would be a useful model for Internet governance. Visa is a network operator of a big network which predates the Internet. They run data centers and switches all over the world. There are other organizations with similar organizational problems. Most are financial clearing houses, such as Depository Trust Company. In the past, the Association of American Railroads acted as a clearing house for railroad cars. (When a railroad car is not on its "home road", the borrowing railroad pays a daily rental to the owning railroad. One of the AAR's functions was being the clearinghouse for that and other inter-line billing issues.) The AAR is still the standards organization for railroad equipment. It's owned by the big railroads. That's typical of industry organizations; they're dominated by the big companies. Visa was a chaord because the US used to have a lot of small banks, and the small banks wanted a system that wasn't controlled by the big banks. As the financial industry consolidated, this became less of an issue. Visa International is no longer a chaord; it went public a few years ago.

mseebach 11y ago
> The Visa model would be a useful model for Internet governance I disagree on that. The Visa model works because at every single turn there is a clear, shared understanding of what the single purpose of the whole thing is: Process payments. The same is emphatically not true for the internet, just look at net neutrality. That's a pretty simple but very fundamental concept, and there's nowhere near consensus on the matter. Or even without considering NN, the fact that Netflix and Skype are eating the lunches of the very companies that own and operate most of the consumer internet (telcos and cable cos). It's hard to imagine a similar conflict at Visa, yet the internet's history is riddled with them, and the fallout from their incomplete resolutions. Incidentally, this clarity is also why Visa would probably be fundamentally ill-suited to deal with an existential threat, e.g. of the sort some people imagine bitcoin to be.
- empath75 11y ago
  Yeah it seems like it would mostly be effective for cartels, rather than corporations. It would probably be useful for something like W3C, perhaps.
buro9 11y ago
> Visa is unusual in that it is a organization of competitors who need to cooperate on some standards for the system to work. The Visa model would be a useful model for Internet governance. Experience suggests this doesn't work so well in practise. An example: Visa are beholden to their members for funding and the largest members hold disproportionate power. Barclaycard in the UK is one such member and routinely prevent Visa from adopting new standards, or marketing on behalf of the entire group, for fear that it would weaken the dominance of Barclaycard in the UK. Which is why, for UK readers, you never see Visa advertising and only ever see bank/lender advertising... whereas elsewhere in Europe you'll see Visa advertising directly (for the benefit of all members). The structure that they have has contributed to holding the industry back as a whole, almost as much as it pushed things forward in the early days.
zekevermillion 11y ago
I was a low-level corporate drudge around the time of the Visa IPO. I remember at the time that the Wall St. analysts would say things to the effect that Visa needed to implement a clearer org chart, empower the CEO, etc. (completely ignorant of the fact that Dee Hock had intentionally designed Visa to devolve power where it's needed). Even post-IPO, though, I think Visa must be influenced by its roots.

deathtrader666 11y ago

Hock's book "Birth of the Chaordic Age" is one deep read! Modelling organic growth of a company according to biological growth, is quite mind-bending.

ZenoArrow 11y ago

Interesting article, Dee Hock could be onto something very useful for society at large. On initial reading, I wondered if an analogy could be made with the organic growth of computer technology through developing protocols and standards, looking at the growth in USB devices as an example. There are probably finer details that I'm missing out on, would be interested to learn more about the chaordic approach to building social structures.

MaysonL 11y ago

1996, not 2012!

esw 11y ago
Yeah, I was really confused as to how a 67 year old could be the founder of Visa.

Adlai 11y ago

Today, Hock is on the advisory board of Xapo, claiming that "Bitcoin is one of the best examples of how a decentralized, peer-to-peer organization can solve problems that these dated organizations cannot." How about that pivot! https://blog.xapo.com/announcing-xapos-advisory-board/ https://blog.xapo.com/announcing-xapos-advisory-board/