Andreessen Horowitz is backing startups that threaten Facebook's centralized model.
There is an image I cannot get out of my mind. It is of Facebook CEO Mark Zuckerberg telling a plucky employee in a giant inflatable Pikachu costume that Facebook “is not a democracy.”
The Halloween showdown was described in a recent, excellent New York Times feature about Zuckerberg’s consolidation of power at the company he founded in his Harvard dorm room 16 years ago. Under fire from antitrust regulators, grandstanding politicians, and proponents of truth and democracy the world over, Zuckerberg has recently adopted a more aggressive style of leadership. He considers himself to be at “war,” as the Wall Street Journal reported in the fall.
In the Facebook foxhole, Zuckerberg is god-king. With his majority ownership of super-voting shares, he is practically infallible. Lately, Zuckerberg has tightened his stranglehold on the firm by swapping out five disfavored board members for more amenable minions. The move is just the latest of many examples of bigfooting, which started well before Zuckerberg’s decision in 2018, just reported by the Journal, to ignore much of the company’s own internal research about Facebook products sowing division.
All this was on my mind a few weeks ago when I interviewed Chris Dixon, an investor at the Silicon Valley firm Andreessen Horowitz, at Ready Layer One, a virtual conference catering to blockchain-based businesses. During our fireside chat, I asked whether cryptocurrency-focused startups, such as the ones Dixon invests in, might get beaten at their own game by incumbents like Facebook. Zuckerberg, after all, has a mounting interest in decentralization, privacy, and digital currencies, like Libra (also an Andreessen investment).
It’s clear that Dixon, who just finished raising a second cryptocurrency fund, has qualms about the status quo in the tech industry. “Why should a small opaque product committee at a social network be deciding who gets access to that platform?” he said, before rattling off a number of increasingly pressing existential questions facing Facebook and its peers. “Who gets demonetized? Or monetized? How do rankings work? Which news organizations are allowed? What is fake news?”
Each of these questions represents a major headache for management teams. At Facebook, the solution so far has been to punt responsibility to an independent content moderation committee. But Dixon presents an alternative vision in which the participants of a network would get to make all the decisions themselves.
Picture, Dixon urges, “a community-owned-and-operated Twitter” governed by—shocker—voting!
In this scenario, cryptocurrency would replace fleeting “likes” and “favs” as compensation for network activity. (Reddit’s new experiment with cryptocurrencies is an interesting step in this direction.) Whether blockchains are necessary to enable this utopian techno-political system—and whether the platforms could avoid becoming cesspools of Internet bile—is open to debate.
But Dixon’s ideas are worth considering, especially his conviction that DAOs, or “digital autonomous organizations,” software-coordinated co-ops designed to replace corporations, are the way of the future. Beyond just social media, ride-hailing drivers with their own DAO could control the conditions of their work and reap the biggest financial rewards for it, instead of, say, Uber Technologies Inc. In such an idealized world, the distinction between “owner” and “user” would evaporate.
I recommend reading the condensed Q&A version of our conversation, or watching a video recording of the chat here. Given the choice between Zuckerbergian supremacy and the democratic dreamscape Dixon promulgates, the choice is obvious, at least to me.
I choose you, Pikachu.
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Speaking of social networks, my co-chairs will be kicking off the first Fortune Brainstorm Finance Community Conversation tomorrow. The event is invitation-only, but if you’re an executive who’d like to attend, send us an email. I’ll be moderating a discussion with top executives at Google, Square, and Robinhood about how fintech is faring on the front lines of the pandemic. You don’t need to dress up like a Pokémon to participate, but it is encouraged.
Robert Hackett
