Big Tech has been allowed to operate with little scrutiny or oversight — to disastrous effects, in the form of social media harms, anti competitive practices, and more. Despite recent efforts to rein them in, a small handful of mega companies continue to wield enormous power in our economy and in Washington
Garry, I’m a bit confused. I totally agree with the sentiment, but isn’t YC part of the whole machine? Seed funding to VC to Wall Street IPO exit to big billion dollar corporation? Sam Altman is a product of YC culture, he ran the place, same as you do now.
I wanted to join YC in the past 12 years and applied multiple times. We never made it to the interview, but I have gotten an outsider’s perspective on the industry and the root causes of the problems you currently really want to solve with government. Instead what if I told you YC under YOUR leadership can solve them worldwide and far better? Hear me out…
Peter Thiel who invested the first $500K into Facebook famously taught that “competition is for losers, build a monopoly”, and I imagine the lessons to capture and extract maximum value from the ecosystem for shareholders has affected many founders, including Mark Z:
https://www.wsj.com/articles/peter-thiel-competition-is-for-...
Mark Zuckerberg was an open source guy on the east coast. He open sourced Synapse instead of selling it to Microsoft. He wanted to make Wirehog, a peer to peer file sharing system, but Sean Parker and the VCs “put a bullet in that thing”. I was there at TC Disrupt in NY where Parker proudly told the story: https://techcrunch.com/2010/05/26/wirehog/
Sean Parker himself learned that lesson bitterly when his company disrupted a different but similar industry that was about owning and monetizing intellectual property - RIAA, MPAA, etc. After Napster was defeated he opened Plaxo and learned to play the “correct game”. He wanted to make sure Mark didn’t follow his open sensibilities too far, letting the public share stuff too freely, because shareholders need profit!
We are LUCKY that Mark Z still retains some of his original open source sensibilities because his company has been the only one giving away models trained for large amounts of money, to the community. Ok maybe Llama research edition leaked but they OWNED that thing, and became to openness what Apple is to privacy.
I mean when Silicon Valley Bank collapsed (set off by the same Peter Thiel), we found out that most VCs even banked at the same bank! There has been a LOT of centralization.
This article goes into more depth than my post can, about how the incentives to enrich shareholders leads not just to enshittification of their own ecosystem but surveillance capitalism, and generally externalizing cost to society. Across the board! Teen girls have highest rates of depression. Adult men are on opiates and 20% of middle-aged women are on antidepressants. Elderly are in nursing homes and kids are in public schools (which pg once compared to prisons) and medicated for ADHD to sit still while their parents work long hours with less and less job certainty. Some even just do the gig economy, while Instacart ir Uber collects HALF of every driver’s fare for its shareholders!
Our society is perpetually angry now because algorithms select for more engagement, and it turns out clickbait and outrage maximizes it even more than sex. So the market selects for one sided stories that evoke outrage, and publishers pick an audience to pander to. While social network algorithms produce echo chambers and radicalization. And this is before we get to any AI bot swarms.
I believe there is ONE WEIRD TRICK that YC can do to help society at large A LOT over the next decade. I would like to see a way to transition shareholders organically to utility tokenholders before the public offering. Kind of like the differenc between Disney Dollars and shares of Disney Corp. Disney’s shareholders don’t live in Disneyworld and thus dont have the incentives that customers and workers do. They become an everpresent landlord class extracting rents forever, holding earnings calls even after the original investors had sold their shares. Same with other ecosystems.
The founders don’t need THAT machine necessarily, to be handsomely rewarded to the tune of billions of dollars and have the startups become worldwide movements that serve humanity. YC and VCs could still have their exits while preventing the parasitic rent extraction from getting out of control post-IPO. YC being upstream of most VCs could operate a HUGE lever, and like Archimedes, could move the world towards a better system, as you once did with SAFE notes! That’s would solve a lot of the incentive problems without the need for heavy-handed government regulation!
Two years ago, a different very ambitious and politically connected Sam — Sam Bankman Fried - also went around begging for his space to be regulated. But the incentives inherent in shareholder profits (instead of stakeholder accounting) and competition (instead of cooperation) are what leads to negative externalities, in many ways, and that includes pollution, ecosystem collapse, factory farms and much more. You guys can consider introducing that one SMALL change — transitioning shares to utility tokens gradually.
I would be very happy to come meet and explain more if it is of any interest. Just reply to my message and let me know how to reach out if you see potential here.
PS: In addition to utility tokens, open source and protocols help create maximum value for the world, through collaboration over competition. For decades, the US government wielded its mighty antitrust regulations over Ma Bell and the phone companies it split them into. And yet long distance calls were still $3 a minute. Then, VOIP open protocols democratized the pipes and turned the telcos into dumb replaceable infrastructure. It was open protocols that brought the cost of not just calls but video and broadcasting down to near-zero, something government couldn’t do. Wikipedia beat Britannica. The Web beat AOL and all closed systems. I could go on, but open and free beats closed in the end, AND each open platform (Linux, the Web, etc) leads to far more wealth creation than when gatekeepers extract rents. That’s another aspect. And meanwhile, since 2014 people have discovered that utility tokens can help to monetize open source and digital content including journalism, in healthier ways than ads and surveillance capitalism. As my VC friend Albert Wenger from Union Square ventures wrote a book along the same lines: https://worldaftercapital.org
Garry, I’m a bit confused. I totally agree with the sentiment, but isn’t YC part of the whole machine? Seed funding to VC to Wall Street IPO exit to big billion dollar corporation? Sam Altman is a product of YC culture, he ran the place, same as you do now.
I wanted to join YC in the past 12 years and applied multiple times. We never made it to the interview, but I have gotten an outsider’s perspective on the industry and the root causes of the problems you currently really want to solve with government. Instead what if I told you YC under YOUR leadership can solve them worldwide and far better? Hear me out…
Peter Thiel who invested the first $500K into Facebook famously taught that “competition is for losers, build a monopoly”, and I imagine the lessons to capture and extract maximum value from the ecosystem for shareholders has affected many founders, including Mark Z: https://www.wsj.com/articles/peter-thiel-competition-is-for-...
Mark Zuckerberg was an open source guy on the east coast. He open sourced Synapse instead of selling it to Microsoft. He wanted to make Wirehog, a peer to peer file sharing system, but Sean Parker and the VCs “put a bullet in that thing”. I was there at TC Disrupt in NY where Parker proudly told the story: https://techcrunch.com/2010/05/26/wirehog/
Sean Parker himself learned that lesson bitterly when his company disrupted a different but similar industry that was about owning and monetizing intellectual property - RIAA, MPAA, etc. After Napster was defeated he opened Plaxo and learned to play the “correct game”. He wanted to make sure Mark didn’t follow his open sensibilities too far, letting the public share stuff too freely, because shareholders need profit!
We are LUCKY that Mark Z still retains some of his original open source sensibilities because his company has been the only one giving away models trained for large amounts of money, to the community. Ok maybe Llama research edition leaked but they OWNED that thing, and became to openness what Apple is to privacy.
I mean when Silicon Valley Bank collapsed (set off by the same Peter Thiel), we found out that most VCs even banked at the same bank! There has been a LOT of centralization.
https://www.laweekly.com/restoring-healthy-communities/
This article goes into more depth than my post can, about how the incentives to enrich shareholders leads not just to enshittification of their own ecosystem but surveillance capitalism, and generally externalizing cost to society. Across the board! Teen girls have highest rates of depression. Adult men are on opiates and 20% of middle-aged women are on antidepressants. Elderly are in nursing homes and kids are in public schools (which pg once compared to prisons) and medicated for ADHD to sit still while their parents work long hours with less and less job certainty. Some even just do the gig economy, while Instacart ir Uber collects HALF of every driver’s fare for its shareholders!
Our society is perpetually angry now because algorithms select for more engagement, and it turns out clickbait and outrage maximizes it even more than sex. So the market selects for one sided stories that evoke outrage, and publishers pick an audience to pander to. While social network algorithms produce echo chambers and radicalization. And this is before we get to any AI bot swarms.
I believe there is ONE WEIRD TRICK that YC can do to help society at large A LOT over the next decade. I would like to see a way to transition shareholders organically to utility tokenholders before the public offering. Kind of like the differenc between Disney Dollars and shares of Disney Corp. Disney’s shareholders don’t live in Disneyworld and thus dont have the incentives that customers and workers do. They become an everpresent landlord class extracting rents forever, holding earnings calls even after the original investors had sold their shares. Same with other ecosystems.
The founders don’t need THAT machine necessarily, to be handsomely rewarded to the tune of billions of dollars and have the startups become worldwide movements that serve humanity. YC and VCs could still have their exits while preventing the parasitic rent extraction from getting out of control post-IPO. YC being upstream of most VCs could operate a HUGE lever, and like Archimedes, could move the world towards a better system, as you once did with SAFE notes! That’s would solve a lot of the incentive problems without the need for heavy-handed government regulation!
Two years ago, a different very ambitious and politically connected Sam — Sam Bankman Fried - also went around begging for his space to be regulated. But the incentives inherent in shareholder profits (instead of stakeholder accounting) and competition (instead of cooperation) are what leads to negative externalities, in many ways, and that includes pollution, ecosystem collapse, factory farms and much more. You guys can consider introducing that one SMALL change — transitioning shares to utility tokens gradually.
I would be very happy to come meet and explain more if it is of any interest. Just reply to my message and let me know how to reach out if you see potential here.
PS: In addition to utility tokens, open source and protocols help create maximum value for the world, through collaboration over competition. For decades, the US government wielded its mighty antitrust regulations over Ma Bell and the phone companies it split them into. And yet long distance calls were still $3 a minute. Then, VOIP open protocols democratized the pipes and turned the telcos into dumb replaceable infrastructure. It was open protocols that brought the cost of not just calls but video and broadcasting down to near-zero, something government couldn’t do. Wikipedia beat Britannica. The Web beat AOL and all closed systems. I could go on, but open and free beats closed in the end, AND each open platform (Linux, the Web, etc) leads to far more wealth creation than when gatekeepers extract rents. That’s another aspect. And meanwhile, since 2014 people have discovered that utility tokens can help to monetize open source and digital content including journalism, in healthier ways than ads and surveillance capitalism. As my VC friend Albert Wenger from Union Square ventures wrote a book along the same lines: https://worldaftercapital.org