Greetings. I’m Mitch Ratcliffe, recently invited to join the pre-Supernova conversation here. For a long time now, I have been writing about the Net and starting companies that build on the Internet Protocol and the human activity it spawns.

Something quite curious happens when people start using a network. They make it human, turning cold communications technology into warm, growing masses. We’ve described this as “emergence,” “evolution” and, lately Douglas Hofstadter has written about the “strange loops” that animate systems, making them, if you’ll forgive the coinage “iware.”

Iwareness, let’s agree, is the capacity to reflect on experience and change in response to that reflection without the executive control of an individual or small group of managers.

Self-awareness has been a criteria for consciousness for millennia. The iware system has no center that can act on its own, but is a collection of centers of conciousness—people—who can act together or separately, with or without coordination. Yet, somehow, the iware system manages to respond to events in its own interest, sometimes putting it on a collision course with the people who ostensibly “own” the system in the traditional sense that the operator of a computer is said to control the data stored on that computer.

A recent example was the uproar at Digg over the distribution of the key that unlocks DRM systems on HD-DVD discs. Initially, Digg management tried to block the information, but users reacted and out-voted management with thousands of postings containing the code. Digg’s Kevin Rose ultimately gave in to members and agreed not to try to erase the code when it was posted.

Leadership is still very much in evidence in iware systems, far more than credit is given when we talk about the “wisdom of crowds” and “blink” decisions. However, the novelty is that leadership can come from anywhere within the system, rather than just from the top down or from the “owners.” In fact, it is hard to say who actually owns an iware system, since anyone can begin a catastrophic collapse of iwareness by revoking their participation.

The challenge, then, that I’d like to set out for the speakers at Supernova is how to finance and launch a company built on iware systems.

Traditional ownership roles are besnargled by the value inherent in each participant’s contribution that adds up to the value of the whole system. This means that the “asset” traditionally thought to be owned by investors is only a part—and, typically, a small part—of the value people come to expect from the site, service or product that is the iware system.

Three features of the iware system challenge that we need to discuss and understand are:

1.) New systems of ownership need to evolve to provide value at the time of a sale or other transaction to all participants in the iware system. The problem is how to create a stake for members in the continued success of the company growing an iware system.

2.) An individual’s customer information and identity is not an asset that should be owned by a company, because it represents only a fraction of the user’s total value and identity. When cut off from the rest of its self, the part of a person contributed to an iware system languishes and dies, so companies must figure out how to address the whole user, even when serving only a small fraction of them—which means user identity must become much more fluid. But, how to do that when most companies think of “owning a customer”?

3.) What happens when an iware system liquidates? Unlike, for instance, one’s banking records, which become useless if there is no bank, the contributions to iware systems may be valuable without the corporate entity that hosts them. Do companies therefore need to place the content of their service in a kind of escrow that ensures user contributions will be available after the company dissolves? Would users “pay” for that in some way?