If there's one thing Bitcoiners get, it's time preference. As a rule, we prefer to delay present consumption in exchange for a future greater return. This is one of the reasons the fiat economy is so problematic for us--it incentivizes consumption, rewards those with high time preference (aka short-term thinking), and punishes those with a long-term outlook.

Of course, we all understand this. It’s one of the major reasons many Bitcoiners arrive at Bitcoin in the first place. Stay humble, stack sats. Life's good.

Or is it?

Especially for Bitcoiners running start-ups and leading their teams, it's sometimes easier to talk about low time preference than it is to execute. We've grown up, had careers in, and continue to be surrounded by a fiat world that won't just disappear overnight. With that reality, is it any surprise that sometimes we might possess suboptimal mental models that complicate growth and long-term success? These patterns and tendencies can in turn lead us to optimize, and not even necessarily intentionally, short term thinking. This will have downstream impacts on our teams, our customers, and our business.

What would it look like if a business was set up to stack the most sats, not over the next month or even next year, but next decade or century? There is no one path to business success, but there are some timeless principles which we can pull from when making decisions. These concepts and principles transcend an industry or a company and have been discovered, rediscovered, articulated, and modified across many academic disciplines and business sectors.

One of our favorite management philosophies at Satoshi Pacioli, and the one we utilize the most, was developed by Charles Koch and his team at Koch Industries. It’s called Principle Based ManagementTM (PBM), which they define as:

“A framework based on the principles of human progress that enables individuals and organizations to succeed long term by creating superior value for others.”

— principlebasedmanagement.com

This isn’t a new fad in business consulting. PBM is the result of decades of experimentation and refinement, rooted in real economic theory and business strategy, applied to one of the most successful private companies in history. Koch Industries grew from a $20 million | 173 BTC valuation in 1967 to over $120 billion | 1,040,971 BTC in revenue today.1

And here’s the kicker: Bitcoiners already resonate with many of the principles that are core to the PBM framework.

Both Bitcoin and PBM are built on the following truths:

Decentralization matters.

In Bitcoin, consensus is achieved without a central ruler, as a result of the spontaneous coordination of individual action. In PBM, decision rights flow toward those closest to the action, or in other words, the people with the local knowledge to make the best calls that add value to the business and the customer.

Spontaneous order beats central planning.

Austrian economist and sound money advocate, Friedrich Hayek showed us that complex systems can self-regulate when incentives and feedback loops are clear. That’s true for monetary systems, as Bitcoiners know, and as Koch Industries has proven, it’s also true for management systems inside of a business.

Emergence is powerful.

In society at large, value is created not by top-down Soviet style mandates but by enabling people to discover and act on opportunities as they best see fit (entrepreneurship). The results are clear: entrepreneurship is more dynamic and rapidly responds to signals from the market to satisfy consumers. Bitcoin’s network has emerged over the past sixteen years to become one of the strongest networks in the world, yet it is completely peer-to-peer and decentralized. The common theme of emergence runs through the Bitcoin ethos and the PBM approach.

Low time preference is the foundation of durable success.

In Bitcoin, we delay consumption to preserve and grow wealth, eschewing tempting fiat games that promote short-term consumption. In business, we do the same by building capabilities, relationships, and systems that scale over decades, not just the next month or the next quarter. The PBM Vision dimension “directs an organization to select the opportunities that, given its capabilities, will enable it to maximize its long-term success.”2

Austrian roots run deep.

PBM draws heavily from economists like Friedrich Hayek and Ludwig von Mises, who championed bottom-up order, the dignity of the individual, and the idea that prosperity emerges when we remove distortions and let people act freely with good information. Many Bitcoiners also share a deep affinity for the ideas of the Austrian school of economics as they also provide the best criticisms of Keynesian monetary theory.

Why A Principled Approach Matters for Bitcoin Companies

Bitcoin is a tool for building a better world. But the world won’t be rebuilt with hope and memes alone. It will be rebuilt by high-agency people, running high-integrity businesses, on top of sound money using principles that have stood the test of time.

And the good news is that Bitcoin is winning the game, becoming increasingly accepted among individuals and institutions. As this continues, more companies will emerge, pioneering the Bitcoin ecosystem and help the world realize a future beyond fiat. As this evolution occurs, Bitcoin business owners and leaders need a mature and proven management approach that matches our conviction in Bitcoin as the protocol of the future. We need operating principles that align with our values and scale under pressure.

That’s where developing a management approach grounded in core principles, such as the PBM framework, can give us an edge.

Bitcoiners are in a unique position to take these ideas even further by building sound companies on top of sound money. As more Bitcoin-native companies emerge, the question becomes: now that we have better money, how can we have better companies?

If Bitcoin fixes the money, then a low time preference, principle-based approach helps us fix the businesses built on top of that money.