In Defense of Goofy Startup Culture

I’ll be the first to admit that the world of internet startups — in general — is in need of an attitude adjustment. In fact, that’s not really me “admitting” anything, because I’ve been yelling about it for the last few years while dealing with VCs and “the valley” and “product-market fit” and all that. 

You don’t need me to run through the list of issues. It’s pretty standard stuff at this point, as indicated by the fact that there’s a semi-popular HBO show about these exact problems, and it even seems like a majority of people get the jokes. With so much of the economy either inaccessible to the masses, stagnant, or both, we’re way too dependent on internet-things for our daily sense of entrepreneurialism and innovation. In a better world, we’d be seeing wild new innovations in customer service from industries we deal with every day, as we go to the bank, buy a car, or watch TV — it’s just that those industries (and many others) are often limited by not-quite-monopolies, protectionism, and other depressing things. 

So we turn to the web, and watch a thousand different services battle for our love, often without having to pay for any of them, and for a minute, it feels like capitalism is working for the average consumer again. Unfortunately, even this last bastion of competition probably won’t last forever, and today we’re a lot closer to watching the internet become like everything else; risk averse, excessively dependent on huge amounts of capital, and ultimately uninterested in the customer experience. 

This is because the internet — or more accurately, the collection of things we use that live on the internet — is relatively new, and eventually that stops being the case. In the 1990s and early 2000s, everyone building something for the web was, at least mentally, or culturally, a startup. They lived in the regular world, and tried to fix a regular world problem by building something that leveraged the internet. There was so much work to do to make the web useful that trying to consolidate access, or restrict how problems were solved quickly seemed crazy and infeasible. AOL was the only successful company truly ballsy enough to unofficially declare that they had figured the internet out, that they effectively OWNED it. That worked for a little while, but eventually, as huge usability issues continued to be solved on the open web (access speed, highly functional web applications, better content, etc.) that argument became obviously ridiculous no matter how loudly they made it. 

For a while, I thought this was just the nature of the internet, and it’s one of the reasons I love the concept so much. It appeared to simply evolve too fast for proper, traditional rent-seeking methods to work. For better or worse, it destroyed cartels like the music and newspaper industries, and made traditional protectionism (again, for better or worse) like IP and copyright — at least in many cases — laughably ineffective.

Now, though, I’m not so sure — maybe AOL just came along a few years too early. With “the internet” so usable that many of us don’t even know when we’re using it (through mobile apps, DVRs, etc.), consolidation is back, and this time it’s much more likely to win. Today, huge public companies like Google, Facebook, and Comcast aren’t trying to solve a real-world problem by using the internet as much as they’re trying to BE the internet, period. The problem they’re going to solve is the same one they’re going to create — that you’ll need to pay them money to get on the internet and do whatever it is you want to do there, provided it’s something they are okay with you doing. This is exactly what AOL tried to do (and did, for a little while) except, as I said, it was too obviously untrue for consumers or even regulators to take seriously.  

Google may have the goods to actually pull this off (invisible URLs, replaced by Google searches), and Facebook always seems to come up with transparently bad-faith attempts to take control (standard mobile app-links that all run through a Facebook protocol), but to me, Comcast is the real threat because they’re moving the most methodically and are the most rooted to traditional, consolidated-business tactics. In other words, Google and Facebook are giant companies trying to pull off a classic, giant-company consolidation play, but their startup roots are showing — they’re still trying to do it by creating value. That means you have to do something so great that it causes people to consolidate themselves for you, and that’s really, really hard. Apple sort of did it with the iPhone (they’ve completely consolidated the App Store, but they put gates around their own creation, not something built by others), but even that has to compete with other ecosystems, and it was a brilliant, revolutionary idea that took years of research, vision, and big gambles.

Comcast knows better — they’re like a 19th century railroad. Classic consolidation fights aren’t won by building, or “failing fast” — they’re simply won by destroying or eating everyone who resembles you, and then taking what they used to own for yourself. It’s not complicated. If all of these guys are aliens trying to conquer Earth (a.k.a., the internet), Google and Facebook are the pod-people running an elaborate conspiracy. Comcast are the insect aliens from “Independence Day”. They don’t have a clever plan, a secret weapon, or an ideology. They have one thing — unmatched firepower (money), and the only reason they haven’t used it in the past is because they hadn’t found Earth (again, the internet) yet. 

Well, they’ve found it now, and here they are, in their big-ass ship. You can’t reason with them, or create some kind of power-sharing agreement. You fight them, or they kill you. 

I wonder, for example, if Facebook or Google would actually want a law preventing people from creating alternative search engines, or social networks.  Believe it or not, when I really think about it, I don’t think they’d want that, because I’m convinced they want to actually win by thinking of something new (even if it’s just as anti-competitive in the end). That’s what Valley arrogance does — what still having founders around who pride themselves on being smarter than everyone else does.

But Comcast? Not only would they accept a law — I guarantee you they already have one written they’re just waiting for the chance to pass someday. Comcast is a 100% percent monopoly play. They don’t have a better way for any of this to work, and the only reason they’ll even pretend to have considered trying to come up with one is that, at least for now, it’s a necessary component of getting past anti-trust regulation. If they can overcome that by throwing money at it, they’ll stop pretending. There is no ideology here, no vision for a better internet. There is only money.

Web startups — again, in general — have lots of flaws. However, the culture is still opposed to (or at least uncomfortable with) building things that have literally no greater purpose than making money. You can laugh at that if you work in law, or finance, or hospitality, or other older industries, and that’s perfectly understandable. And while yes, cynical pure money plays absolutely exist, they’re often obvious, and derided by the more interesting people in the industry. I’m not saying it’s even logical, just that it’s what I’ve experienced, and I think the weird, intellectual path the Googles and Facebooks of the world are taking towards consolidation reflect that. Their corporate natures inevitably drive them towards consolidation as the only path to sustainable growth, but they can’t shake the cultural need to find it in some innovative way no one else could pull off. They’re too young, too arrogant, and still too idealistic to truly embrace telecom-style cynicism.

So no matter what the rest of the world says, irritating Valley idealists — keep fighting the good fight. Ride your scooters and drink your microbrews and wear your dorky internet glasses, and do what you think is right. Because an internet without the goofy startups we love to mock is most likely an internet run by Comcast, where the end goal is a field of human batteries like in “The Matrix”, all hooked up to “Xfinity”, watching low-budget NBC talent shows on-demand for eternity.