The Operational Primitives: M₀ and the Voluntary Exchange Constraint

Any science requires irreducible units of measure to transition from observation to prediction. Identifying the "Unit Act of Commerce" is the mandatory prerequisite for any scaling effort. Without a defined, unit-simple exchange, adding personnel or technology merely accelerates the accumulation of systemic disorder.

M₀: The Unit Act of Commerce

The fundamental unit, M₀, is the smallest complete bilateral transaction that produces commercial value. For a transaction to be "unit-simple" and scalable, it must meet four structural criteria:

Formal Definition (Measurable, Falsifiable)

For M₀ to qualify as a unit-simple, scalable exchange, it must satisfy four structural criteria. These constitute the formal definition because each is directly measurable and any violation is falsifiable:

1. Bounded Time: The exchange completes within a defined temporal window.

2. Bounded Variance: Outcomes fall within a predictable range across instances.

3. Bounded Exception Rate: The proportion of non-standard cases remains below a threshold.

4. Individual Independence: The exchange does not require extraordinary individual talent to complete.

If any of these four conditions is violated, the transaction is not unit-simple, and the system will not scale. This is the falsifiable core of M₀.

Diagnostic Checklist (Observable, Interpretive)

Nine behavioral conditions serve as observational indicators that M₀ is functioning as designed: Reciprocal, Timely, Relevant, Contextual, Authentic, Accurate, Actionable, Consistent, and Stage-Appropriate. These are diagnostic, not definitional — they carry a different epistemic status because several resist precise measurement and require interpretive judgment.

The Voluntary Exchange Constraint (VEC)

The VEC is the master regulator of the commercial system. Grounded in Nash's bargaining theory and Hart/Holmström's contract theory, the VEC dictates that the customer — not the vendor — is the ultimate authority.

The Value Equation

Perceived Value = (Impact − Cost) × (1 − Risk)

where Risk is normalized to [0, 1]. This corrected multiplicative form replaces the original ratio form which produced a mathematical singularity as Risk approached zero. The derivation draws from Nash Bargaining (bilateral surplus defines the negotiation space), Hart/Holmström Incomplete Contracts (the buyer faces residual uncertainty), and proper boundary conditions (Risk=0 yields full net benefit; Risk=1 yields the Nash Disagreement Point).

This also explains the documented 85% meeting failure rate in enterprise sales — a Nash Disagreement Point where organizational noise reduces (1 − Risk) toward zero, triggering the customer's outside option to walk away.