Sam Ragsdale, Ryan Sproule, Mason Hall
January 16, 2025
Innovation's New Engine
We live in an era where software rules the way we trade, communicate, and build new ideas. It's the latest stage in humanity's long tradition of inventing tools that reshape entire societies. Where ships once broke open trade routes, and the telegraph shattered distance, now code speeds up how we connect and create on a global scale.
Why Software Changed Everything
Software has a magical property: it can be copied and shared at almost no cost. Entire teams spread across the world can work on the same project at once. This leads to lightning-fast progress—but it also reveals a big problem. Our current systems for guiding and funding such massive collaborations are old. They rely on outdated market signals and force brilliant creators to scramble for resources. Meanwhile, the biggest leaps in knowledge demand vast networks of contributors, each playing a piece of the puzzle. Our current innovation engine is clogged by inefficient models that no longer fit our global reality.
Learning from History
When we reached for the Moon, rockets sometimes blew up because of miscommunication at the interfaces—places where different teams or companies handed off components. The solution was tighter teamwork and information sharing. Open-source software takes that idea one step further by inviting everyone to see and improve code at every level. This fosters the kind of collective genius needed to build truly robust systems. Yet even with this potential, most of the open-source world still depends on two shaky funding methods: venture capital (which needs huge returns fast) or Big Tech subsidies (which often come with hidden agendas).
Where We Get Stuck
This outdated approach drains real innovators. Many must either chase exponential profits that don't match their steady-value projects or rely on large companies who only support free software as a strategic advantage. As a result, critical infrastructure ends up underfunded and fragile—sustained by volunteers burning the midnight oil or corporate sponsors who might cut funding anytime.
A Better Way Forward
Imagine a new kind of digital commons—where everyday market forces, not uncertain subsidies, drive invention. A world where software builders can earn a fair share and move fluidly between projects, bringing fresh perspectives everywhere they go. We already see glimpses of this future in open-source successes like Linux, browsers, Bitcoin, and AI platforms. These global efforts started as small experiments at the edges but grew into the backbone of technology.
Merit Systems
Sustainable open source economics start with automated ownership. Merit adds rich attribution information to software version control systems like Github. It allows capital sources to route funds to codebases and incentivize builders directly. Tying this capital to impact creates a dynamic market where innovation thrives and builders flourish.
As corporate hierarchies direct resources with nested layers of middle management, Merit distributes capital to builders in a distributed ecosystem programatically. Over time clear merit-based incentives will attract the best builders to projects where they can maximize their agency and impact.
We at Merit Systems are life-long builders. We've done our time in big tech and venture capital and are intimately familiar with the latent potential of individuals trapped in corporate hierarchies. We want open source to flourish because of the tremendous gifts it has provided us. Merit is for the builders, those who build because they want to improve mankind's lever over nature, to increase human abundance.
Join the Revolution
Modern firms are cybernetic organisms—human and machine intelligence united by shared incentives. The open source ecosystem is a larger such organism, a fractal of smaller entities woven together. Yet this magnificent organism lacks the coordination mechanisms to reach its full potential.
As AI approaches the frontiers of human knowledge, one truth remains constant: human ingenuity, properly aligned and incentivized, is civilization's most precious resource. At Merit Systems, we're building the infrastructure for this future—a system where builders truly own what they build, where attribution and ownership are enshrined by default, and each contributor is rewarded in proportion to their merit.
Beyond improving how software is built, we're redesigning the fundamental architecture of human collaboration. Merit creates the conditions for humanity's collective intelligence to flourish.
The future belongs to those who build it. Join us.