Carl Cervone

Coffee needs protocol leaders

“Civilization advances by extending the number of important operations which we can perform without thinking about them.”

– Alfred North Whitehead

What are protocols?

A protocol is an established set of rules for an interaction. The rules are so established, you don’t even think about them.

A handshake is a protocol that’s nearly universal. Extending your right hand signifies a greeting. It would be hugely disorienting if I made even a small modification to the handshake protocol, such as using my left hand or approaching you with scissor-fingers.

Languages are protocols. We do not try to think of new characters to represent sounds that we make. In English-speaking countries, children are taught from an early age the 26 letters of the alphabet and the left-to-right writing system. There’s no faction of English speakers advocating for a 29-letter alphabet or reverse writing direction.

Computer networks depend on protocols, notably TCP (Transmission Control Protocol) and IP (Internet Protocol). These were established in the 1970s to guide data transmission. Their existence allows users to navigate the internet effortlessly, without needing to understand the underlying processes, much like we use the letter “B” in writing without pondering its origin.

Protocols as building blocks

The invisibility of protocols allows us to focus on higher-level concerns.

Protocols mean we don’t need to think about lower-level things like data transmission or whether to spell “boy” with a “b” or a “ঞ”. This foundational simplicity enables greater complexity in our actions and thoughts.

Thus, computer networks are building blocks for email and YouTube. Languages are building blocks for history and law. Handshakes are building blocks for friendships and trade.

Protocols seem simple only because they’re so deeply integrated into society. It seems unfathomable to imagine a world before written language or handshakes. But the creation of these new protocols required great foresight and ingenuity.

Protocols in coffee

The coffee sector is rich in protocols too.

The SCA cupping protocol is a building block for price discovery, arbitration, and communicating taste preferences.

The C market is a building block for making contracts, managing risk, and financial planning.

The 60 kg bag is a building block for facilitating trade and statistics.

Coffee also has many localized protocols. Kenya, for example, has its own protocol for fermenting, washing, and soaking coffee. It also has a protocol for grading green coffee into AA, A, TT, etc. Colombia has a protocol for calculating the yield factor between parchment and green. It also has a protocol for determining Excelso from Supremo.

Local protocols are important, but they have less reach than universal protocols.

Grading coffee the Kenyan way is not inherently better than the Colombian way, just as writing left to right is not inherently better than writing right to left. These localized protocols are not in competition but they do create friction. It is easier for Kenyan traders to learn the Tanzanian grading system than the Colombian one. Similarly, it is easier for English speakers to learn to write in Spanish than in Japanese.

Organizations have their own protocols, too. These are even more localized in the sense that they rarely replicate outside the organization. When I worked at TechnoServe, there were protocols for creating lesson plans, running farmer trainings, and installing wet mills. Such protocols are cemented not only in the form of checklists and manuals but also through culture. An organization with a “strong culture” is one where the bosses don’t need to micromanage every decision because people are generally doing the right thing without thinking about it.

Powerful protocols are anti-competitive

A protocol is more valuable the more widely it is adopted. Powerful protocols have very high if not universal levels of adoption.

The idea that something gets more valuable the more people use it is known as a “network effect”. We are most familiar with network effects in the context of social networks and marketplaces. A social network like Facebook or Instagram is more valuable when you have more friends on it. An auction market is more valuable when you have more buyers on it.

Powerful protocols have very strong, self-enforcing network effects.

However, unlike social networks and auction platforms, which are highly competitive, the farthest reaching protocol networks are anti-competitive. They are anti-competitive in the sense that there is extremely strong bottom-up pressure to conform. People will stop you from competing with a powerful protocol.

If a kindergartener mixes up their “As” and “Es”, they will be gently corrected by their teacher and parents. If the child continues to switch the letters in grade school, they will be reprimanded by every adult they encounter and teased by their peers. If the same behavior persists into adulthood, they will be stigmatized. By that point, they would have encountered so many attempts to correct their writing that this deviation from the norm would be a deeply ingrained part of their identity.

All of this is social pressure, not legal pressure. Our “writar” will never receive a cease and desist letter from the Oxford English Dictionary or a summons from the Spelling Czar because there is no such thing.

In coffee, if a large trader started quoting a reference price other than the C market, for example a composite index constructed from oil and fertilizer prices, they would encounter a similar kind of confusion from their business partners. At first, their suppliers, banks, underwriters, and everyone else they tried to transact with would question this new reference price and push back on it. If the trader refused to translate their reference price to the C (e.g., “this shipment is 1 barrel of oil and 1 ton of DAP”), their counterparties would complain openly about it. Eventually, they might start refusing to do business with them. This pushback would happen well before the International Commodity Exchange, the actual operator of the C market, learned of their shenanigans.

In both examples, powerful protocols turn citizens into police officers. They don’t require any top-down enforcement or regulatory backing to become process monopolies.

Good protocols live forever for free

By “good”, I mean a protocol that is good at replicating. Protocols aren’t inherently good or bad. But a good protocol is sticky; it’s hard to get rid of.

Good protocols also have the property that they are cheaper to defend than they are to attack.

Let’s consider the C price again. There have been various attempts to reduce the dominance of the C market as a reference price for coffee. But no one has gone after the International Commodity Exchange. That’s because we know that if the International Commodity Exchange went bankrupt, or if it got out of the business of handling coffee futures, then another exchange would quickly take its place. This has already happened several times in the past, with minimal disturbance to the industry.

We know that the ubiquity of the C price in coffee has little do with the day-to-day business of running an exchange. If one wants to “attack” the C price, they have to go after every entity that relies on the C price as a building block for its business. Such an attack would take an incredible amount of resources and coordination. Meanwhile, there is no need for a coordinated response to uphold the C price. It costs nothing to defend. The C is a good protocol in this sense.

Similarly, if the SCA went bankrupt or stopped maintaining its eponymous cupping form, we wouldn’t expect cupping operations to grind to a halt all over the world. We wouldn’t expect a power struggle between the 350 grammers and the 420 grammers to suddenly break out. We’d expect cupping procedures to live on and continue to evolve independent of the SCA, their former steward.

The ability to live forever for free without a steward is a feature of good protocols. However, this feature is generally not present in more localized protocols, such as the ones that live in individual countries and organizations.

We don’t remember the names of protocol leaders

Enduring protocols do not have enduring central characters. They become a part of everyday life without a central figurehead. Younger protocols may have stewards or organizations that support their adoption, but these entities become less relevant over time.

While it may be possible to trace the origin of a protocol back to an individual, an organization, or a specific event, this is mostly an academic pursuit. The most deep-rooted protocols we live with today, the ones we literally perform without thinking, have no owners.

In business, however, there is often great value to be captured by owning a protocol. When you own a protocol as a business, you usually don’t call it a “protocol” anymore, you call it “intellectual property”. Businesses protect intellectual property with patents and other economic moats.

Protocols and intellectual property come from a shared motivation to innovate. Thereafter, the paths diverge significantly. Protocols gain traction through widespread adoption and societal benefit, whereas intellectual property secures its influence through exclusivity and legal protections.

In coffee, it’s not hard to imagine a world where there exists multiple competing proprietary cupping forms, even though we live in a world with a single dominant non-proprietary form. One could also imagine a world with competing Arabica reference prices, even though we live in a world with one.

One could also imagine a world where we have protocols for making aluminum capsules and sustainability standards, not competing proprietary ones.

These are alternate paths but not implausible paths.

These are all innovations that happened in recent history and were championed, initially at least, by a relatively small number of pivotal people.

These are good reminders that protocols come from people.

Coffee needs protocol leaders

Protocols improve coordination, both across distance and differences. Improving coordination is essential for complex and nuanced industries, like coffee, to progress.

Protocols aren’t filters or simplifiers; they don’t commoditize things further. Rather, they solve low-level problems, giving people mindspace to focus on higher-order, more nuanced problems.

Nowadays, I am more of an onlooker than an active participant in the coffee sector. But my view is that the coffee industry still suffers from a number of low-level problems, where protocols can help. These include setting aside meaningful funding to work on things pre-competitively; getting a proper system for registering exports (e.g., version 2.0 of ICO marks) – and then tracing them from farm to cup; and finding space to have honest conversations about the indignities faced by the majority of producers.

Protocol leaders are people obsessed with solving these types of problems.

Like founding a company, it takes tremendous leadership and vision to give birth to good protocols.

Spreading a protocol requires a humility and form of servant leadership that isn’t written about in Forbes. There will always be politics, but protocol leaders need to be credibly neutral and above the fray. Political baggage makes it hard for existing institutions to steer protocols.

Protocol leaders search for solutions that have universal reach without being owned. This is another reason why it’s hard to create a new protocol: the short-term financial incentives are much better for owning ideas than giving them away.

To be clear, I am not advocating for collective ownership. I am advocating for protocols at lower levels so as to expand the possibilities for ownership at higher levels. Coffee’s brightest future will come from pushing forward protocols that not only solve today’s challenges but also pave the way for tomorrow’s business opportunities.

Coffee has long attracted a disproportionate share of the world’s evangelists, technical thinkers, and do-ers. These are the coalitions needed to form protocols.

Will the protocol leaders for coffee please stand up.