AI transcript
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0:00:10 tax or investment advice or be used to evaluate any investment or security and is not directed
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0:00:19 For more details, please see a16z.com/disclosures.
0:00:22 Hello everyone and welcome to the A16Z podcast.
0:00:24 I’m Amelia.
0:00:29 Today’s episode is all about the past, present, and future of the web, featuring a conversation
0:00:34 between two people who have played key roles in shaping how the Internet has developed
0:00:35 to date.
0:00:42 A16Z general partner, Chris Dixon, is interviewed by the founder and CEO of BuzzFeed, Jonah Peretti.
0:00:47 The conversation originally took place at our most recent annual innovation conference,
0:00:51 the A16Z summit, and it was also previously released on YouTube if you’d like to check
0:00:52 it out there as well.
0:00:55 Hello, good to see you all.
0:01:00 So I am very excited to have a conversation with Chris today.
0:01:06 I first met Chris back in the New York tech scene.
0:01:11 Chris at the time was running this company called Hunch, and it was a company that was
0:01:16 really sparking a lot of thinking among all of the New York tech entrepreneurs.
0:01:23 I feel like Chris was very much in the scene in New York, and Hunch was a company that opened
0:01:28 people’s eyes to new possibilities and a kind of shift in the web.
0:01:33 Could you maybe give a little overview of what the Internet was like back then and what
0:01:34 Hunch was doing?
0:01:39 Yeah, so the way I think about the web, and I think the title of this talk is past and
0:01:40 future of the web.
0:01:41 So we’ll try to cover all of that, I guess.
0:01:46 But I think of it as sort of the web one era, which was in the ’90s, where really a lot
0:01:50 of what was going on, similar to a lot of forms of new media, where you look at early
0:01:54 films and early films, they were just sort of film plays.
0:01:58 And then eventually they figured out, okay, you can have a close-up, you can have an establishment
0:02:02 shot, you can have a sort of new grammar, and now, of course, films look totally different
0:02:04 than plays and much better.
0:02:09 And so early web was kind of like people were taking their magazine or their brochure and
0:02:10 putting it on the web.
0:02:13 I mean, there were exceptions and things like eBay and other things, but for the most part,
0:02:15 that was sort of the dominant thing.
0:02:19 So it was exciting, I think, when you and I got started as entrepreneurs in the early
0:02:24 mid-2000s was this idea that people were starting to realize that the web was fundamentally
0:02:28 a two-way or a multi-way communication device.
0:02:32 And what were all the new design possibilities that you could create, right?
0:02:39 And so that was a big sort of the, you know, Twitter and Facebook and all of the kind of
0:02:42 tagging and all these other new kind of concepts, like every week there was like this new kind
0:02:46 of concept to when we come up with like tagging or, you know, if you remember like Delicious
0:02:51 and Flickr and all these other cool things, and it was sort of this relatively small group
0:02:57 of people because I think the conventional wisdom at that time was outside of Google,
0:03:01 you know, the web was this great invention, but wasn’t a great business for the most part.
0:03:05 You know, people were still getting over the hangover of the dot com period.
0:03:08 But it was a great, in my mind, it was a great period of experimentation, right?
0:03:11 And then like Wikipedia as an example, which I still think of, I think it’s still kind
0:03:13 of an underappreciated marvel.
0:03:18 Wikipedia, by the way, for years and years was just, was trashed.
0:03:22 I wrote a blog post about this for you and should I went back and found all of the negative
0:03:23 thing.
0:03:26 It was actually like banned in schools, like it was going to destroy young minds.
0:03:27 It was so inaccurate.
0:03:32 There was finally, in 2007, there was a study done that said it was actually as accurate
0:03:33 as encyclopedia Britannica.
0:03:35 It was like a nature study and that was like a big revelation.
0:03:39 Of course, fast forward to today and like all the other things are bankrupt and Wikipedia
0:03:42 is sort of the dominant thing and this idea that you could have like users could come
0:03:46 together and collectively, like the interesting thing about Wikipedia is it’s something like
0:03:53 there’s like 100,000 per day, 100,000 sort of attacks on Wikipedia, people spamming it,
0:03:54 changing it.
0:03:57 But per day, there’s also more than 100,000 people fixing it, right?
0:04:02 It’s this big kind of ocean of like errors and hacks and mistakes and then these other
0:04:06 kind of counter force of like people doing good things and fixing stuff, right?
0:04:10 It’s like wrong, but for 15 minutes and it’s right for five years.
0:04:11 That’s right.
0:04:17 And so, so that to me, that was sort of the really kind of the big story of that decade
0:04:18 of the 2000s.
0:04:21 But then, you know, the next year, which you were deeply involved with, I remember you
0:04:25 talk, I remember you telling me like, I think it was like 2000, like it was pre iPhone,
0:04:32 I believe you said some day people are going to read their news on smartphones via social
0:04:33 networks.
0:04:36 And at the time, like, you know, we had our like our StarTech phone or whatever it was
0:04:38 and it sounded like completely insane.
0:04:42 I had a sidekick for a little while, it was pretty cool.
0:04:50 But then in my mind, that was the next wave, right, which, which I think even at the time,
0:04:54 we all knew the iPhone, like we probably, I had an iPhone, you probably had an iPhone.
0:04:59 But the idea that it was going to be as big as it was, like even like, even essentially
0:05:04 if you look back, like even like Clay Christensen said the iPhone is not a disruptive technology.
0:05:07 As he said, it’s just a high end rich person smartphone.
0:05:13 What he didn’t realize is it actually was disrupting the PC and those things.
0:05:19 He likes disruption from the bottom, moving up and a fancier phone with bells and whistles
0:05:24 isn’t disruptive, but a cheap computer that you can take with you everywhere is disruptive.
0:05:29 So but then, yeah, but that was the era that you, you were, you know, kind of help pioneer.
0:05:35 Yeah, I mean, I would say like, it’s hard in retrospect because we take the internet
0:05:36 for granted today.
0:05:42 But if you, if you look at early internet, there, there was still this long period of
0:05:46 everyone figuring out what you could do with the internet to your point about film, figuring
0:05:48 out the grammar film.
0:05:53 And so I think initially it was like, oh, you can use the internet as a way of doing,
0:05:58 you know, make a portal, which is kind of like a newspaper and everyone sees the same
0:06:02 thing and there’s no personalization, there’s no two way connection.
0:06:04 And then I think people started to realize all these things you could do with the internet
0:06:06 you couldn’t do in traditional media.
0:06:08 So it’s instantly global.
0:06:09 So that was one thing.
0:06:13 It’s like, oh, you put something online and people read it all around the world.
0:06:15 Then people started realizing, oh, it can be social.
0:06:17 Like you can share the content with a friend.
0:06:21 If you read a newspaper, I mean, some of you maybe have like a grandparent who will like
0:06:25 cut out a newspaper article and send it to you.
0:06:29 So it’s possible to share, but with the internet it became really easy to share.
0:06:32 It was possible to see the data of the users.
0:06:36 So like early HuffPost, we just did something super simple, which was a click meter on every
0:06:40 headline and we could just see which headlines were people clicking and which ones weren’t
0:06:41 clicking.
0:06:45 If there was an important story and no one was clicking it, we’d rewrite the headline.
0:06:50 So having this two way data connection was another piece.
0:06:52 The instantaniousness of it was another one.
0:06:58 Like it used to be, you get a newspaper with yesterday’s news on your doorstep, or you’d
0:07:03 read Time or Newsweek, which would have news from a week or longer in the past.
0:07:06 And now you just instantly get a push notification.
0:07:12 So I think we keep seeing new things you can do with the internet, and it keeps surprising
0:07:13 people.
0:07:19 And so I guess one sort of question for you is, what are the surprises that the internet
0:07:21 still has in store for us?
0:07:28 If it’s over the course of 15 years, we figured out it’s global, and it’s social, and it’s
0:07:34 personalized, and it’s instant, and it has all of these characteristics that have really
0:07:38 changed lots of industries, are we going to discover new things about the internet in
0:07:41 the next few years that are going to open up new businesses and markets?
0:07:42 Yeah.
0:07:43 So that’s a great question.
0:07:46 I think to me that’s the big question right now, is sort of like, how will the internet
0:07:47 evolve?
0:07:48 And I’ll take that in a few parts.
0:07:52 Like, the first thing I’ll say is, so I think the kind of conventional view I would call
0:07:57 it, is if you read a book like Tim Wu’s Master’s, which is a very good book, but I would describe
0:08:01 that as sort of the conventional view, which is the internet is like every other form of
0:08:05 media in the past, which is it starts off, and it’s sort of the wild west, and then eventually
0:08:11 a few incumbents emerge, you know, ABC/CBS, radio, cable, and then it’s sort of, okay,
0:08:14 those incumbents control it, and it’s sort of game over, and they’re the gatekeepers,
0:08:15 and that’s it, right?
0:08:16 And that’s kind of the conventional view.
0:08:21 Yeah, and that book, by the way, I think the thing that felt most analogous to the internet
0:08:27 was radio, because radio was started by a bunch of hobbyists who would put up an antenna
0:08:32 and broadcast in their local area, and it was a lot of hobbyists who were hacking radio
0:08:39 and building things out, and then slowly it ended up being consolidated into CBS as a national,
0:08:43 you know, media conglomerate that had lots of control over radio, so it kind of went
0:08:44 from hobbyists to —
0:08:48 I think of that as, the way I describe that is there’s technologies that have an outside-in
0:08:52 adoption pattern and inside-out, and so outside-in like open source would be the conical example,
0:08:58 right, where it’s completely fringe stuff, I mean it’s Richard Stallman, extreme libertarian
0:09:03 statements in the 80s at MIT, and now it’s 95% of the operating systems in the world,
0:09:04 right?
0:09:08 So completely on the fringes, whereas like the iPhone, that was inside-out, it was Apple
0:09:10 in, you know, Cupertino, and a lot of —
0:09:16 Really early Apple was — the PC was outside-in, smartphone was inside-out, right?
0:09:20 A lot of it has to do with — you needed probably a billion dollars to build a proper
0:09:23 iPhone and to market it and everything else, and supply chain, and there’s a whole bunch
0:09:26 of complex reasons why that had to be crypto, which we’ll talk about, I think it’s very
0:09:30 much an outside-in kind of movement, and sort of these hackers and hobbyists and smart
0:09:31 people doing it on a weekend.
0:09:34 And you like the outside-in movements generally?
0:09:39 I mean, yes, I do like them, I think that they — well, I think from a startup investor
0:09:42 point of view, both as an entrepreneur and as an investor, those are where the bigger
0:09:43 opportunities are, right?
0:09:48 Because it’s much harder — if it’s an inside-out and it’s going to require a new game console,
0:09:51 like it’s just the reality of the economics of it, it costs five billion dollars probably
0:09:56 to build that, to market it, to do all the exclusives, like, you know, it’s a very expensive
0:09:57 proposition.
0:09:58 So —
0:09:59 You have enough funds under management to cover that, right?
0:10:04 Yeah, I guess we’re getting there, hopefully, but from an entrepreneurial perspective, it’s
0:10:08 these kind of disruptive things that, you know, I like to say, they start off looking
0:10:13 like a toy that are sort of hackers on the weekends, right?
0:10:19 There’s a deep reason why — like, I think there’s a deep reason why so many of these
0:10:25 technology movements were done sort of by hobbyists, and it’s not just sort of a cultural
0:10:29 thing, you know, that technologists like to wear flip-flops and hang out or something
0:10:30 like this.
0:10:37 Which is, you basically have — nine to five is governed by business people, right?
0:10:40 Nine to five is governed by — like, what you do during nine to five work hours is governed
0:10:45 by people that generally have a one- to three-year time horizon, right?
0:10:48 They have to, like, unless they’re the — you know, maybe Jeff Bezos is an exception or
0:10:51 something, but, like, for the most part, like, you want to keep your job as a manager of
0:10:54 a company, and you’ve got to manage to a one- to three-year time horizon.
0:10:59 So, where does the ten-year away stuff, the five- and ten-year away stuff, happen, right?
0:11:04 It happens when the smartest people get to vote themselves with their time, right?
0:11:08 And that’s why it happens on the — that’s why, like, I have always done, if you go back
0:11:12 and read history, like, so much of the — I was — there’s a great book about Henry Ford
0:11:17 I read recently, and you look at early cars, it’s, like, exactly like, you know, SOMA 2015
0:11:18 or something.
0:11:19 They were in Detroit.
0:11:20 They were hacking.
0:11:24 You go read, like, I was reading the old — it was — a horse-less age was, like, the hot
0:11:26 was a tech crunch of the era.
0:11:28 It’s now — actually, car and drivers, the same magazine.
0:11:31 And if you go read the old ones, it was all, like, oh, my God, this, like, cool new carburetor.
0:11:35 And, of course, what did they do, like, today we think Henry Ford, you know, is wearing
0:11:39 a suit — no, he was, like, lying down, trying to race as fast as he could with his friends
0:11:40 and whoever could do the fastest car.
0:11:44 He’s, like, these pictures that covered an oil, like, you know, it was going 70 miles
0:11:47 an hour, the things, like, practically blowing up, you know, it was basically like it was,
0:11:51 like, Wozniak and, like, you know, and these other hackers.
0:11:55 So, yeah, so I think — and so I think the big question — going back to the Tim Luthor thing,
0:11:58 I think the big question with the web right now is, is it going to be like that?
0:11:59 Is it Comcast?
0:12:00 Is it over?
0:12:01 Is it sort of Google?
0:12:02 Apple?
0:12:03 And that’s it.
0:12:04 Or is it different?
0:12:05 I would argue it’s different.
0:12:09 The Internet is a very different type of medium than, let’s say, radio or cable, in that it’s
0:12:11 software-based.
0:12:15 The design of the Internet is you have a very, very deliberately very simple, you know, core
0:12:18 protocols, like Internet protocol.
0:12:22 And then all of the smarts live on the edges, and the edges can upgrade themselves, and
0:12:27 they’re constantly — it’s a constantly evolving organism, and it evolves according to incentives.
0:12:31 And one of the very powerful things, and one of the reasons I’m so excited about the whole
0:12:37 kind of crypto blockchain movement is it — the whole thing is around how do you design incentives
0:12:42 to get people to kind of upgrade and change the code they’re running on the Internet.
0:12:45 And so, to me, a huge question right now is just sort of, you know, is it going to be
0:12:50 like the last things, the last kind of radio, TV, etc., where it’s sort of, this is it,
0:12:54 and now startups just get sort of pick up the scraps, or maybe they’re — or maybe, you
0:12:59 know, there’s — by the way, there’s — I don’t want to — there’s plenty of other — one
0:13:01 interesting thing about tech is there’s so many different movements happening, right?
0:13:03 So this is sort of the core Internet.
0:13:06 Meanwhile, there’s all this interesting stuff happening in enterprise software, in fintech,
0:13:08 so that’s all going full speed ahead.
0:13:11 I’m talking more of just sort of the core Internet architecture structure.
0:13:15 I think another really interesting thing, if you look at past historical trends, is there’s
0:13:19 always sort of a first order and second order effect of any major new technology, okay?
0:13:23 So what I mean by that is, like, the car comes along, and the first order effect is you can
0:13:25 drive from point A to point B faster, right?
0:13:28 The second order effect took 50 years to play out.
0:13:34 It was suburbs, trucking companies, e-commerce, what — I don’t know, mechanized warfare.
0:13:39 Like, there’s just thousands of, like, kind of secondary second order implications of
0:13:41 this new technology, right?
0:13:43 But it took a really long time to play out.
0:13:47 And I think the thing that we’re seeing right now is with social media and the Internet,
0:13:51 and we’re in that kind of, I don’t know, if it’s a car, we’re probably in 1915.
0:13:55 But at, you know, 1950 or something, we’re still very early on.
0:13:58 We’re seeing the effects on the media landscape.
0:14:02 We’re seeing the effects on the political world.
0:14:06 I think things like cryptocurrency, for example, in many ways, it’s a consequence of social
0:14:07 media.
0:14:10 If 20 years ago, someone invented Bitcoin, you’d have, like, couple New York Times articles
0:14:13 quoting some Yale economists, “This is stupid.
0:14:14 It’s over.”
0:14:18 Maybe it’d be, like, a zine or whatever, like, you know, like some weird hobbyist magazine
0:14:19 you could read.
0:14:20 But that’d be it, right?
0:14:25 And now you’ve got an army of, I don’t know, probably 100 million plus cryptocurrency enthusiasts
0:14:29 who have, they have Twitter followers, they have blogs, they have GitHub accounts, they
0:14:34 have Reddit karma, and they’re out proselytizing, and, you know, it’s the fifth estate.
0:14:36 Like, the fifth estate loves it, right?
0:14:37 The fourth estate doesn’t.
0:14:38 The fifth estate loves it.
0:14:40 And it turns out they have a lot of influence these days, right?
0:14:45 And so that’s, like, another example of something that, you know, is this sort of unexpected
0:14:46 second-order effect.
0:14:50 And what will those other second-order effects be, I guess is, to me, a big question.
0:14:53 So this concept of the fourth estate and the fifth estate, basically the press and the
0:14:59 public on, or active people on social media and public sentiment.
0:15:05 One thing about the press that I feel like has happened in the last, you know, really,
0:15:10 Trump was maybe an inflection point, but it was a larger thing, which is, there feels
0:15:16 to be now a lot more fear in the press about decentralized networks.
0:15:21 And the fear seems to be, well, if there’s not a gatekeeper, there’s not someone checking
0:15:25 the facts, or if there’s not someone making sure that information has integrity, that you
0:15:31 might end up with, you know, fascist movements, populist movements, separatist movements,
0:15:38 people being driven by emotion and not facts, sort of post-truth where politicians can
0:15:43 just say whatever they want and just spread it on social media and kind of bypass the
0:15:45 press, kind of go direct to consumer.
0:15:52 And I think that that fear probably also has influenced press about crypto because it’s
0:15:58 a, the promise of crypto is similar to the internet in that it is democratizing and giving
0:16:03 more people a voice and more decentralized.
0:16:10 And so what’s legitimate about those concerns, what are the press missing, like how should
0:16:15 the press and the public be thinking about the value of decentralized systems?
0:16:18 I think it, by the way, not just crypto in the blockchain sense, but crypto in encryption
0:16:19 sense.
0:16:22 Like I wouldn’t be surprised if we head into another era similar to the ’90s where there’s
0:16:23 real battle.
0:16:26 I mean, we see with Apple and the FBI and things like this, just like encryption in general.
0:16:32 I mean, it used to be in the ’90s, they were classified as munitions, like the RSA algorithm
0:16:33 and things.
0:16:35 And so, and then this whole clipper chip thing anyway.
0:16:39 So like that, like encryption alone, like Zuckerberg says they’re going to go to private
0:16:41 messaging and end in encryption.
0:16:44 And, you know, so forget about blockchain, just like that alone is going to be a hot
0:16:45 button issue.
0:16:47 And the reality is you’re going to have bad stuff.
0:16:52 And even within Facebook, there was a lot of disagreements about should we have everything
0:16:56 being encrypted to protect privacy or should we have content not being encrypted so we
0:17:02 can scan the content for child pornography or terrorist activity or abuse or other kinds
0:17:03 of things.
0:17:08 I mean, you know, like, what, you know, look, take the telephone was to have bad things
0:17:12 happen using a telephone, like probably a lot of bad stuff has happened using a telephone,
0:17:13 right?
0:17:17 We decided as a society that we wanted to put pretty strict privacy controls over telephone
0:17:18 use, right?
0:17:22 Like in court transcripts, whenever you see call me, you know, something bad was going
0:17:24 to happen on that, on that phone conversation.
0:17:29 Yeah, because we, we decided like, we just, knowing, knowing laughs in this audience.
0:17:32 From a regulatory perspective, though, we decided to make that trade off, right?
0:17:37 We try, like, we decided to make the trade off that, that we wanted to preserve the,
0:17:42 you know, people’s feeling that this was a private feeling that probably more of a feeling
0:17:48 but the feeling that was a private medium and decided to regulate as such.
0:17:49 And I think that’s going to be a big question.
0:17:51 And look, there are going to be trade offs like the New York Times in the one week will
0:17:56 have an article about how these, you know, Google, etc. are surveilling you in the next
0:17:59 week we’ll have one about how they’re allowing terrible stuff to happen.
0:18:00 And so where do you draw the line?
0:18:01 It’s really hard.
0:18:06 I think, you know, I think that one of the great things about the internet in the first
0:18:10 era was the fact that it was sort of community governed and controlled.
0:18:14 And the second era, what was great is that we got amazing web services that were free
0:18:16 for billions of people.
0:18:21 And I, what my hope is in the third era, we could find kind of a happy medium where we’d,
0:18:24 we’d recapture some of the kind of community controlled aspects.
0:18:29 So instead of, so, so for some of these issues, you know, should political ads be allowed
0:18:30 on a social network?
0:18:34 Like, should this be decided by a single company or should it be decided by a community?
0:18:39 The way that decisions around DNS, for example, the naming service for the internet was always
0:18:40 a community thing.
0:18:41 It was run by a non-profit.
0:18:45 It was like a community, you know, standards, it was done in an open way.
0:18:48 This is not, you know, when I, it sounds very utopian.
0:18:52 It was actually reality until recently, you know, how the internet was governed.
0:18:55 And so the question for me is, I believe that what we can do now is, and we now have the
0:18:57 technology where we can have kind of the best of both worlds.
0:19:00 I mean, why is everyone so upset on Twitter, right?
0:19:01 There’s a bunch of reasons are upset.
0:19:05 But I think one of them is, you know, they helped create that platform.
0:19:10 I mean, I was early on Twitter, you were early on Twitter, and then you feel like, you know,
0:19:11 you helped create it.
0:19:14 And then suddenly all these new rules are getting imposed.
0:19:17 Like, you kind of felt like you sort of felt like an owner in a lot of these cases if you
0:19:18 were early on these networks.
0:19:20 And then you realize later on, you’re not.
0:19:23 You’re just setting up a platform for Kim Kardashian.
0:19:24 Basically.
0:19:29 And so, and it’s not just users, by the way, it’s people like you, like it’s, I mean companies
0:19:31 like yours, like media companies, right?
0:19:34 You have a partnership and the rules change and like next week, the rules are different.
0:19:38 And like, you know, should you have a seat at the table deciding that, right?
0:19:42 To me, that’s a right that doesn’t mean it’s anything goes.
0:19:45 It just means you have a community kind of governed process.
0:19:48 And that’s the core value of the whole kind of crypto blockchain world.
0:19:49 Everything is open source.
0:19:51 Everything is community governed.
0:19:54 It’s a very deeply held belief.
0:19:59 And you know, and it really comes from the open source movement.
0:20:04 I think of it as an extension of open source and what we were talking talking backstage
0:20:10 about the difference between a city and Disneyland.
0:20:16 And you know, if you’re if you’re in Disneyland, the every everything is is controlled.
0:20:20 There’s not bad areas where there’s crime or those things like that.
0:20:23 But also everything feels a little fake.
0:20:27 And if you’re in a vibrant city, there’s lots of, you know, dynamic things.
0:20:29 Buildings, building and creating things and making things.
0:20:30 There’s good parts.
0:20:32 There’s bad parts.
0:20:36 And that can be a metaphor for, you know, what what different kinds of visions of the
0:20:41 internet do we want the the wall guard and Disneyland internet, or do we want the more
0:20:44 vibrant city internet, even with some some of the downsides?
0:20:45 Yeah.
0:20:49 And I think until so to me, like one way to think of what a blockchain is a simple way
0:20:50 to think of it.
0:20:56 It’s the first time that we’ve had a concept of a community owned and operated web service,
0:20:59 one that’s truly owned by a community, right?
0:21:02 And so I kind of think of it, if you think of analogy to the real world, like you have
0:21:06 an iPhone that’s kind of like your home, it’s like your personal computer, you have you
0:21:09 can rent a computer at AWS, and it’s kind of like your office, right?
0:21:13 And then you have things like Facebook and Google, which are shared services that feel
0:21:16 like public spaces, but are actually controlled by a company.
0:21:20 And now we have the ability to create things that are kind of more like parks or like cities,
0:21:23 or community controlled public spaces.
0:21:28 And you can, it’s a very interesting kind of new thing that that allows.
0:21:31 And you know, the rules aren’t going to be changed because the rules are written into
0:21:32 the rules.
0:21:33 That’s right.
0:21:34 The rules are written.
0:21:35 That’s actually the core feature of a blockchain.
0:21:40 The way I would define a blockchain is it’s a computer where there are game theoretic strong
0:21:44 guarantees that the code will run as designed and the rules won’t change essentially.
0:21:47 Like that’s fundamentally what it is.
0:21:53 And so until now, you know, if you were using a public computer, if I was on Facebook, just
0:21:58 by virtue of the fact that that computer is controlled by that company, they can change
0:21:59 the code.
0:22:00 They can change the rules, right?
0:22:01 This is the first time you had that.
0:22:02 Now there’s trade offs.
0:22:07 Like it’s, you lose performance and you, there’s a whole bunch of like kind of weaknesses with
0:22:10 this architecture that I think we’ll get fixed over the next few years and we’re investing
0:22:14 in a lot of these things to try to improve it is still, you know, early and evolving.
0:22:18 But that’s a very powerful concept and it means you can have a commons and so you can
0:22:24 have a social graph, for example, you know, like, actually, if you go back for people
0:22:29 that are interested in the history of this, like RSS was a real contender for a while.
0:22:30 So RSS is a protocol.
0:22:36 It’s like a sort of a blogging protocol that was a real contender for a while to compete
0:22:39 with the proprietary social networks.
0:22:42 But the problem with RSS, in my view, I was involved in this and invested in a bunch of
0:22:47 companies around it is that it didn’t have, you couldn’t make a user experience the way
0:22:50 you could with Facebook or Twitter or something like this because you had to do all this kind
0:22:53 of weird technical stuff and set up your domain and do all and have these.
0:22:58 So we back, back in these days, we did a project that was an open source project called Reblog.
0:23:05 And Reblog would take, it was a server side RSS reader where you get all, you could subscribe
0:23:10 to all the sites you wanted, you get this information and then you could press a button
0:23:18 to repost anything you liked and it would say, “Chris has reblogged this.”
0:23:21 And that was a long time ago.
0:23:25 I don’t remember the exact year we did it, but then David Karp saw that and I had reblogged
0:23:30 a Tumblr and then Tumblr and then Twitter’s community saw sort of Tumblr having this
0:23:35 functionality and then they added that to Twitter where originally when you would retweet something
0:23:38 you would just write RT and retweet it and it wasn’t built into the software.
0:23:42 Actually Twitter then built it into the software and then Facebook added the share button kind
0:23:44 of looking at Twitter.
0:23:48 And so it was really to your point about RSS not being able to have a functionality.
0:23:56 We saw this need to make content social, you know, way before Buzzfeed and made it through
0:24:06 using RSS which is this open platform and it was, and like maybe 15 to 25 people installed
0:24:10 the reblog software and there was like a little network where they would like reblog to, you
0:24:15 know, and they had sites that maybe got a few thousand readers and so we would sometimes
0:24:19 have something get reblogged like three or four times and so you sort of saw this is
0:24:24 how it should work, but to make it really good and for a user, the Facebook and Twitter
0:24:28 model was a lot better and we never tried to make it into a company, but had we tried
0:24:31 to make it into an open source company we would have been at a disadvantage compared
0:24:32 to…
0:24:37 Yeah, there was no way to have a community like controlled place to store things like
0:24:38 to store social…
0:24:40 Like just simply the technology wasn’t there yet.
0:24:45 There was a wired article, I have a blog post I wrote about it where they, in 2008 or something
0:24:50 they tried to create a open source social, you know, kind of Facebook competitor and
0:24:54 they said like basically the problem is there’s nowhere to store the social graph or something.
0:24:57 Now what we have today is we have these public commons, we have these publicly shared databases,
0:25:00 community controlled databases, so what can we do with it, right?
0:25:06 And we’re in a very exciting period, I think, where like I always think of it as like the
0:25:11 history of technology is every 10 to 15 years there’s a major new computing cycle, so main
0:25:16 frames, you know, PCs, internet, smartphones and now today, what are we, you know, what
0:25:17 is the cycle?
0:25:24 I obviously have my beliefs, but what you have is with each of those periods you have kind
0:25:29 of a kind of gestation phase where people are sort of experimenting, so the early smartphones
0:25:34 you had Sidekick and Blackberry and Trio and it was sort of, you know, they had a scale
0:25:37 of like, you know, Blackberry was more successful, the rest are like on the scale of like a few
0:25:42 million, you know, maybe 10 million users and then eventually you kind of get to the
0:25:46 point where you have like kind of a breakthrough device and then you have this amazing golden
0:25:55 period where entrepreneurs flock to this new platform and then very rapidly explore
0:25:58 what I would call like the design space, like what can you do with this, right?
0:26:03 So like the smartphone comes along and, you know, if you ask people in 2007 what are you
0:26:06 going to do with a smartphone, they probably would have taken a lot of the ideas of what
0:26:07 happened with PCs, right?
0:26:13 They wouldn’t have thought like the killer thing will be calling a car or sending a vintage
0:26:17 looking photograph to a network of people or like, like it wasn’t, like you may have
0:26:21 been on your list of 100 things, but it probably wasn’t, you know, if you look at a ephemeral
0:26:26 message, I need, this will be the killer app for this, like, you know, I mean, they’re clearly
0:26:29 the entrepreneurs who believe that, but there were, you know, 10,000 credible attempts to
0:26:35 create mobile startups and of that, probably, you know, 10 of massive significance kind
0:26:37 of emerge.
0:26:41 And so I think that we, I believe, we’re on the precipice now, not just crypto, I think
0:26:45 AI and virtual reality and there’s a bunch of really exciting things happening, but we’re
0:26:49 about to hit that point where you get kind of the iPhone moment and then you get all
0:26:53 sorts of interesting experiments that get run and out of that, it’ll be a lot of chaos,
0:26:58 a lot of train wrecks, you know, so there’s pain in this process as well.
0:27:03 The other thing that I think happens is trends converge that you didn’t expect, you know,
0:27:09 so I think just as an analogy, when BuzzFeed started, the iPhone didn’t exist yet.
0:27:15 And then when the iPhone first started getting used, people were only consuming really text
0:27:18 content, maybe images on it and it wasn’t great for video.
0:27:21 And then there was this digital video trend.
0:27:26 So there was this digital video trend and this mobile trend and this social trend.
0:27:27 And so there’s three sort of different trends.
0:27:30 And by the way, I would add cloud to that too.
0:27:34 Like if it wasn’t for the work that Salesforce and AWS did, you couldn’t have stored all
0:27:36 that data so cheaply.
0:27:42 So there’s really, yeah, four different trends, you know, cloud, mobile, social, digital video,
0:27:50 and then it turned out that those trends all converged into mobile social, you know, being
0:27:55 on a mobile device on a social platform, watching digital video that streamed from
0:28:01 the cloud, you know, so all those things converge and then make something seem just
0:28:06 like one simple thing, which is like I’m scrolling through a feed and watching video.
0:28:11 And so I think you’ll see the same thing with crypto and, you know, where the other trends
0:28:21 you mentioned, AI and VR and crypto, you know, it’s hard to predict how those trends will
0:28:24 converge and end up making something that is more than the sum of its parts.
0:28:28 I actually think I would even go further and I would say not only, I think, are we about
0:28:33 on the cusp of multiple major technology breakthroughs converging.
0:28:36 So probably AI, but then I would call kind of new devices.
0:28:42 So that’s everything from talking speakers, to cars, to VR, to blockchain and crypto.
0:28:45 And I think those will be kind of like cloud, mobile, social and reinforce each other.
0:28:48 I think in addition to what else is happening right now, we’ve got, what is it, like three
0:28:51 to four billion people with smartphones, that’s going to go to eight billion.
0:28:55 In addition to that, the hours per day spent on these devices is going to continue to go
0:28:56 up.
0:28:59 So you’re just going to have essentially like two X the time spent, if not more.
0:29:05 Number three, you now have major areas of the economy that were previously relatively
0:29:10 untouched by technology, namely finance, education, healthcare.
0:29:16 I think now entrepreneurs have now figured out ways to kind of bring modern technology
0:29:18 into those industries.
0:29:25 So I kind of think like, if you combine like number of engaged users, level of engagement,
0:29:32 plus unlocking what’s basically 70% of GDP with these new kind of markets, plus what
0:29:36 I think is kind of like multiple major new trends coming together.
0:29:37 It’s not quite there.
0:29:41 The technology is still like all these things, like even the, you know, I mean, like Lex
0:29:45 is awesome, but like, you know, auto correct breaks half the time, like it’s still not
0:29:47 quite there, but it’s very, very close.
0:29:50 And the, if you, if you go and same with the crypto blockchains, like it’s slow and
0:29:53 Bitcoin has its issues and everything, it’s not quite there.
0:29:55 It’s still the sidekick era.
0:29:59 You know, it’s, it’s not the iPhone era, but I, yeah, I think those three things will
0:30:02 converge and you have these other kind of macro trends now.
0:30:05 And you have these, and the economics too, like the, you know, like the cable bundle
0:30:08 is going to break at some point, I think soon, right?
0:30:11 But at some point, like the economics, which like fundamentally, like it will no longer
0:30:12 work to have the cable bundle.
0:30:15 I think that’s relatively near future.
0:30:20 And then there will be this sort of massive, you know, wave of people and dollars shifting
0:30:23 over to, to digital technology.
0:30:27 My earlier comment about all the things the internet enables, TV hasn’t gotten the benefit
0:30:28 of those things.
0:30:34 Now, except for Netflix and now all the digital, all the big media companies, traditional media
0:30:38 companies are moving over and they’re going to have the advantages of, of the internet.
0:30:42 Like for example, you know, the idea that you would flip through the channels, hoping
0:30:47 something good is on was a way that traditional media has historically worked and as opposed
0:30:52 to what is the best content for me that has ever been produced in the universe.
0:30:54 I’m going to, you know, watch that.
0:30:58 And so now that’s possible with Disney, it used to be that was possible with Netflix
0:30:59 archive.
0:31:00 Now it’s possible.
0:31:03 You know, so, so we’re, we’re seeing, we’re seeing a lot of big industries that are slower
0:31:06 to change starting to adopt, adopt.
0:31:07 Yeah.
0:31:12 I mean, if you think about the, I mean, the, it’s kind of surprising 25 years into the
0:31:16 internet that the only industries that have been really, quote, disrupted have been, I
0:31:21 think media, maybe transportation and, and maybe starting to happen as retail, right?
0:31:24 And then the rest, I mean, if you look at the list of incumbents and every other industry,
0:31:26 it hasn’t changed that much.
0:31:27 Right.
0:31:28 And even the media world, right?
0:31:30 Like still the vast majority of people, like they sit there and they, you know, they watch
0:31:35 whatever reality TV and on a regular cable box and like, it hasn’t changed that much
0:31:36 yet.
0:31:37 Yup.
0:31:38 Yup.
0:31:39 It’s slow.
0:31:40 It’s slow for these to change.
0:31:43 There are also times when I feel like the converging trends end up creating some kind
0:31:47 of a Frankenstein situation where, where the trends are in conflict with each other.
0:31:53 The goal of being the future of media and recommending content to people and the goal of being a place
0:31:59 for people to connect with their friends in a private, you know, way with close friends
0:32:00 feels to be in conflict.
0:32:02 So you end up having Facebook.
0:32:05 It’s almost like we’re having a phone conversation and then you say something interesting and
0:32:08 then it’s like, oh, we’re going to show that to a million people.
0:32:12 You know, it’s a little weird if you’re talking with your friends and, you know, sharing content
0:32:15 with the, with the small group that that could end up reaching tons of people.
0:32:20 And there are trends that kind of smash into each other in a way that causes problems and
0:32:25 yeah, we’re, it feels like we’re in a very interesting time now with all of the so much
0:32:30 attention on these platforms and, you know, the decisions they’re making and, and just
0:32:35 the like, I don’t feel like we’ve, I mean, maybe you have insight into it, but I don’t
0:32:43 feel like we fully understand how to, you know, the, the, the, the etiquette, the personal
0:32:48 etiquette, you know, like, is it okay to, you know, talk a certain way on Twitter or
0:32:53 go find somebody’s old tweets or, you know, should the plot, like all these things are
0:32:54 being figured out, right?
0:32:56 Like it’s, it’s, and it’s very confusing.
0:33:02 And I think kind of my view at least causing a lot of upheaval, kind of social upheaval
0:33:03 or something.
0:33:04 Yeah.
0:33:09 People don’t know how to interact with each other or people know how to figure out what,
0:33:13 what information they should pay attention to.
0:33:20 And I definitely think there’s and, and then I feel like when you look at the, the press
0:33:25 coverage of all this, there’s just so many trade-offs that it’s, you know, and reporters,
0:33:29 I mean, I know this because we have Buzz, you know, Buzzfeed news covers this stuff.
0:33:33 And reporters are not in a, you know, it’s not really the job of a reporter, at least
0:33:37 classically, to read everything and make a policy recommendation.
0:33:42 They’re just trying to say, oh, there’s this like, here’s a leaked, you know, document or
0:33:45 here’s some information people didn’t know or, oh, this company’s struggling with deciding
0:33:50 between these two different, you know, possibilities.
0:33:55 But it doesn’t feel like there’s a, there’s a clear sense right now of, of this is where
0:34:00 society is headed and this is how technology is part of progress.
0:34:05 And, and is there, is there a way to get more of that back where, where people see the benefits
0:34:10 of technology and, you know, both to the economy, but also to people’s lives and to society
0:34:11 and.
0:34:12 Yeah.
0:34:13 That’s a great question.
0:34:18 I think, I mean, my view is partly this feeling of, I do, I, this is again, going back to
0:34:21 my main area of interest, the crypto stuff, but the, this is feeling, I think a lot of
0:34:25 people have that it’s sort of this bait and switch, you know, that, that they help build
0:34:29 up these networks, you know, whether it be a marketplace or a social network.
0:34:33 And then the benefits go to other people, the governance goes to other people.
0:34:40 And so I think having more, you know, new architectural designs that provide incentives
0:34:44 and are more inclusive can, can help with that.
0:34:48 Now that getting that message out, like it is very hard because there’s a lot of like
0:34:55 negative, I think misunderstandings around, you know, going back to Bitcoin and crypto
0:34:56 in general.
0:35:00 And like it’s actually like a very kind of utopian meritocratic technology, but that’s
0:35:04 that’s very hard to explain to people, you know, I think some of the, some of it from
0:35:09 the fifth estate is you’ll see people on social media being like, you know, triple your money
0:35:10 right now.
0:35:15 And like trying to basically pump an altcoin or something like that.
0:35:20 And how much has that driven progress in, you know, the fact that people are trying to make
0:35:22 money is in its powerful incentive.
0:35:27 How much has that driven progress in, in crypto and, you know, blockchain and how much is
0:35:28 that like holding it back?
0:35:36 And is there a way in a, in a more decentralized thing, you know, a system to, to shift the
0:35:41 narrative towards things that will lead to the overall benefit of the total community?
0:35:42 Yeah.
0:35:47 I think it’s definitely a good point and like there was this big run up in 2017, where a
0:35:52 lot of people kind of, you know, sort of had this get rich quick kind of mentality.
0:35:59 The, I do think what’s really important about it is there’s the negative side as you highlighted.
0:36:04 The positive side is, it’s a business model that doesn’t depend on advertising and tracking
0:36:05 users, right?
0:36:10 So, Mark Andreessen talks about this, how the original, there’s actually an error code.
0:36:12 You know, people are probably familiar with error code four or four.
0:36:16 There’s a, you know, when you go to a webpage, it’s not there, there’s error code for two,
0:36:17 which was never implemented.
0:36:18 It said payment required.
0:36:21 And so the original idea with the original internet was to actually have like money as
0:36:22 a native unit.
0:36:24 Right now, of course we have credit cards and things.
0:36:25 It took a long time, by the way.
0:36:30 And in fact, it was very controversial SSL, you need SSL for credit cards.
0:36:34 And that was actually almost regulated away because people thought, well, who would want
0:36:36 encryption except for bad people?
0:36:38 But it turned out you needed for banking and things.
0:36:42 Anyway, so we’ve now grafted on kind of the legacy financial payment systems onto the
0:36:44 internet and it sort of works, right?
0:36:48 But still the vast majority of these big companies are funded through advertising.
0:36:53 So I think one other utopian idea is that, is that, you know, I think one of the reasons
0:36:57 people are disillusioned is they feel this sense of like, they’re not part of it.
0:36:59 They aren’t included.
0:37:04 And the business model they feel like is extractive.
0:37:07 And you know, and we see this with GDPR, and I think there’ll be similar kinds of stuff
0:37:11 happening in the U.S. around sort of privacy.
0:37:17 And so, you know, I think there’s this huge, I mean, in my sort of corner of the internet
0:37:23 with digital media, there’s a huge number of intermediaries who are skimming money in
0:37:24 the ad tech space.
0:37:33 And oftentimes the main value they’re providing to an advertiser is surveilling and tracking
0:37:38 users where if users had the choice to say, do I want to be tracked this way or not?
0:37:40 They would almost always say no.
0:37:47 And these are companies that don’t actually make content or create apps or build things
0:37:49 that consumers value.
0:37:53 So there’s some hope that blockchain could help with that.
0:37:57 I think right now what I think a lot of what we’re feeling is, and why people are upset,
0:37:58 is they don’t feel like the interests are aligned.
0:38:01 And the question for me is, can, is there a way to realign that?
0:38:02 Or is it just too late?
0:38:03 And that’s just the state of things.
0:38:07 And maybe that’s the pessimistic view and it’s just going to be, you know, one trend
0:38:08 we have seen at BuzzFeed.
0:38:13 If you had asked me a couple of years ago, I would never have guessed the transformation
0:38:17 that’s happened in our business from advertising revenue being essentially the only kind of
0:38:25 revenue to now having so many of our, so much of our audience is looking to transact.
0:38:30 And so 500 million in GMV where people are seeing, you know, products we might recommend
0:38:37 or things that we’re talking about, and, you know, multiple of that of other kinds of transactions
0:38:39 that were indirectly influencing.
0:38:45 But we’re seeing that, you know, again, to this convergence of trends that used to be
0:38:48 content shifted to mobile, but people weren’t transacting on mobile.
0:38:52 They were going back to their desktop to do their shopping where they could, you know,
0:38:55 type in information and do things more easily.
0:38:57 Now it’s better to shop on mobile.
0:38:59 That’s where more people want to shop.
0:39:03 You can double click and buy stuff, your credit cards integrated in.
0:39:08 And so we’re seeing a huge shift where media has become much more transactional, where
0:39:11 people are looking to be inspired to do something.
0:39:15 Go on a trip or buy a product or try a new experience.
0:39:20 And I think a lot of it is also just these online marketplaces are starting to dominate
0:39:22 the entire economy.
0:39:23 And there’s infinite choice.
0:39:27 If you’re Gen X, Y, or Z, or anyone actually who’s using the Internet, you’re used to
0:39:36 being able to watch any show on the streaming services, listen to any song on Spotify, go
0:39:40 to any travel destination with Airbnb or one of the OTAs.
0:39:45 And so you’re looking for some culture and content and vicarious experience and something
0:39:49 that will inspire you to choose which option out of all of these options are worth doing.
0:39:52 And now with your phone, you can just transact.
0:39:58 And so I think that there is this larger shift towards just transactional media as opposed
0:40:02 to impression-based, advertising-based sort of thing.
0:40:11 And also, I’m wrong, but also the sort of the adjacent, like so using Tasty to build
0:40:17 a brand and then partnering with retailers to sell products related to that, right?
0:40:21 So instead of like new models like that, where you’re inserting yourself into the kind of
0:40:22 the purchasing experience.
0:40:23 Yeah.
0:40:26 There’s like a hundred skew line of Tasty products at Walmart.
0:40:30 So when you see a video where people are cooking, they’re like, “Oh, I can actually make that
0:40:33 recipe and I can buy the pots and pans,” you know, like connecting.
0:40:39 I feel like what one sort of shift is just connecting the Internet to people’s actual
0:40:43 lives and the things that they’re doing, you know, every single day.
0:40:47 And I think that, you know, crypto and blockchain can help people do that in a way where there’s
0:40:54 more trust and more security and that they’re more a part of it and can build it as part
0:40:55 of a community.
0:40:59 All right, we’re out of time.
0:41:04 I only asked the first question though, so I don’t know if we have a couple more hours,
0:41:07 but thank you, Chris, and I’m going to make that one.
0:41:08 Thank you, John.
0:41:09 Thank you, John.
0:41:09 Thank you, everyone.
0:41:12 (audience applauding)
0:00:10 tax or investment advice or be used to evaluate any investment or security and is not directed
0:00:14 at any investors or potential investors in any A16Z fund.
0:00:19 For more details, please see a16z.com/disclosures.
0:00:22 Hello everyone and welcome to the A16Z podcast.
0:00:24 I’m Amelia.
0:00:29 Today’s episode is all about the past, present, and future of the web, featuring a conversation
0:00:34 between two people who have played key roles in shaping how the Internet has developed
0:00:35 to date.
0:00:42 A16Z general partner, Chris Dixon, is interviewed by the founder and CEO of BuzzFeed, Jonah Peretti.
0:00:47 The conversation originally took place at our most recent annual innovation conference,
0:00:51 the A16Z summit, and it was also previously released on YouTube if you’d like to check
0:00:52 it out there as well.
0:00:55 Hello, good to see you all.
0:01:00 So I am very excited to have a conversation with Chris today.
0:01:06 I first met Chris back in the New York tech scene.
0:01:11 Chris at the time was running this company called Hunch, and it was a company that was
0:01:16 really sparking a lot of thinking among all of the New York tech entrepreneurs.
0:01:23 I feel like Chris was very much in the scene in New York, and Hunch was a company that opened
0:01:28 people’s eyes to new possibilities and a kind of shift in the web.
0:01:33 Could you maybe give a little overview of what the Internet was like back then and what
0:01:34 Hunch was doing?
0:01:39 Yeah, so the way I think about the web, and I think the title of this talk is past and
0:01:40 future of the web.
0:01:41 So we’ll try to cover all of that, I guess.
0:01:46 But I think of it as sort of the web one era, which was in the ’90s, where really a lot
0:01:50 of what was going on, similar to a lot of forms of new media, where you look at early
0:01:54 films and early films, they were just sort of film plays.
0:01:58 And then eventually they figured out, okay, you can have a close-up, you can have an establishment
0:02:02 shot, you can have a sort of new grammar, and now, of course, films look totally different
0:02:04 than plays and much better.
0:02:09 And so early web was kind of like people were taking their magazine or their brochure and
0:02:10 putting it on the web.
0:02:13 I mean, there were exceptions and things like eBay and other things, but for the most part,
0:02:15 that was sort of the dominant thing.
0:02:19 So it was exciting, I think, when you and I got started as entrepreneurs in the early
0:02:24 mid-2000s was this idea that people were starting to realize that the web was fundamentally
0:02:28 a two-way or a multi-way communication device.
0:02:32 And what were all the new design possibilities that you could create, right?
0:02:39 And so that was a big sort of the, you know, Twitter and Facebook and all of the kind of
0:02:42 tagging and all these other new kind of concepts, like every week there was like this new kind
0:02:46 of concept to when we come up with like tagging or, you know, if you remember like Delicious
0:02:51 and Flickr and all these other cool things, and it was sort of this relatively small group
0:02:57 of people because I think the conventional wisdom at that time was outside of Google,
0:03:01 you know, the web was this great invention, but wasn’t a great business for the most part.
0:03:05 You know, people were still getting over the hangover of the dot com period.
0:03:08 But it was a great, in my mind, it was a great period of experimentation, right?
0:03:11 And then like Wikipedia as an example, which I still think of, I think it’s still kind
0:03:13 of an underappreciated marvel.
0:03:18 Wikipedia, by the way, for years and years was just, was trashed.
0:03:22 I wrote a blog post about this for you and should I went back and found all of the negative
0:03:23 thing.
0:03:26 It was actually like banned in schools, like it was going to destroy young minds.
0:03:27 It was so inaccurate.
0:03:32 There was finally, in 2007, there was a study done that said it was actually as accurate
0:03:33 as encyclopedia Britannica.
0:03:35 It was like a nature study and that was like a big revelation.
0:03:39 Of course, fast forward to today and like all the other things are bankrupt and Wikipedia
0:03:42 is sort of the dominant thing and this idea that you could have like users could come
0:03:46 together and collectively, like the interesting thing about Wikipedia is it’s something like
0:03:53 there’s like 100,000 per day, 100,000 sort of attacks on Wikipedia, people spamming it,
0:03:54 changing it.
0:03:57 But per day, there’s also more than 100,000 people fixing it, right?
0:04:02 It’s this big kind of ocean of like errors and hacks and mistakes and then these other
0:04:06 kind of counter force of like people doing good things and fixing stuff, right?
0:04:10 It’s like wrong, but for 15 minutes and it’s right for five years.
0:04:11 That’s right.
0:04:17 And so, so that to me, that was sort of the really kind of the big story of that decade
0:04:18 of the 2000s.
0:04:21 But then, you know, the next year, which you were deeply involved with, I remember you
0:04:25 talk, I remember you telling me like, I think it was like 2000, like it was pre iPhone,
0:04:32 I believe you said some day people are going to read their news on smartphones via social
0:04:33 networks.
0:04:36 And at the time, like, you know, we had our like our StarTech phone or whatever it was
0:04:38 and it sounded like completely insane.
0:04:42 I had a sidekick for a little while, it was pretty cool.
0:04:50 But then in my mind, that was the next wave, right, which, which I think even at the time,
0:04:54 we all knew the iPhone, like we probably, I had an iPhone, you probably had an iPhone.
0:04:59 But the idea that it was going to be as big as it was, like even like, even essentially
0:05:04 if you look back, like even like Clay Christensen said the iPhone is not a disruptive technology.
0:05:07 As he said, it’s just a high end rich person smartphone.
0:05:13 What he didn’t realize is it actually was disrupting the PC and those things.
0:05:19 He likes disruption from the bottom, moving up and a fancier phone with bells and whistles
0:05:24 isn’t disruptive, but a cheap computer that you can take with you everywhere is disruptive.
0:05:29 So but then, yeah, but that was the era that you, you were, you know, kind of help pioneer.
0:05:35 Yeah, I mean, I would say like, it’s hard in retrospect because we take the internet
0:05:36 for granted today.
0:05:42 But if you, if you look at early internet, there, there was still this long period of
0:05:46 everyone figuring out what you could do with the internet to your point about film, figuring
0:05:48 out the grammar film.
0:05:53 And so I think initially it was like, oh, you can use the internet as a way of doing,
0:05:58 you know, make a portal, which is kind of like a newspaper and everyone sees the same
0:06:02 thing and there’s no personalization, there’s no two way connection.
0:06:04 And then I think people started to realize all these things you could do with the internet
0:06:06 you couldn’t do in traditional media.
0:06:08 So it’s instantly global.
0:06:09 So that was one thing.
0:06:13 It’s like, oh, you put something online and people read it all around the world.
0:06:15 Then people started realizing, oh, it can be social.
0:06:17 Like you can share the content with a friend.
0:06:21 If you read a newspaper, I mean, some of you maybe have like a grandparent who will like
0:06:25 cut out a newspaper article and send it to you.
0:06:29 So it’s possible to share, but with the internet it became really easy to share.
0:06:32 It was possible to see the data of the users.
0:06:36 So like early HuffPost, we just did something super simple, which was a click meter on every
0:06:40 headline and we could just see which headlines were people clicking and which ones weren’t
0:06:41 clicking.
0:06:45 If there was an important story and no one was clicking it, we’d rewrite the headline.
0:06:50 So having this two way data connection was another piece.
0:06:52 The instantaniousness of it was another one.
0:06:58 Like it used to be, you get a newspaper with yesterday’s news on your doorstep, or you’d
0:07:03 read Time or Newsweek, which would have news from a week or longer in the past.
0:07:06 And now you just instantly get a push notification.
0:07:12 So I think we keep seeing new things you can do with the internet, and it keeps surprising
0:07:13 people.
0:07:19 And so I guess one sort of question for you is, what are the surprises that the internet
0:07:21 still has in store for us?
0:07:28 If it’s over the course of 15 years, we figured out it’s global, and it’s social, and it’s
0:07:34 personalized, and it’s instant, and it has all of these characteristics that have really
0:07:38 changed lots of industries, are we going to discover new things about the internet in
0:07:41 the next few years that are going to open up new businesses and markets?
0:07:42 Yeah.
0:07:43 So that’s a great question.
0:07:46 I think to me that’s the big question right now, is sort of like, how will the internet
0:07:47 evolve?
0:07:48 And I’ll take that in a few parts.
0:07:52 Like, the first thing I’ll say is, so I think the kind of conventional view I would call
0:07:57 it, is if you read a book like Tim Wu’s Master’s, which is a very good book, but I would describe
0:08:01 that as sort of the conventional view, which is the internet is like every other form of
0:08:05 media in the past, which is it starts off, and it’s sort of the wild west, and then eventually
0:08:11 a few incumbents emerge, you know, ABC/CBS, radio, cable, and then it’s sort of, okay,
0:08:14 those incumbents control it, and it’s sort of game over, and they’re the gatekeepers,
0:08:15 and that’s it, right?
0:08:16 And that’s kind of the conventional view.
0:08:21 Yeah, and that book, by the way, I think the thing that felt most analogous to the internet
0:08:27 was radio, because radio was started by a bunch of hobbyists who would put up an antenna
0:08:32 and broadcast in their local area, and it was a lot of hobbyists who were hacking radio
0:08:39 and building things out, and then slowly it ended up being consolidated into CBS as a national,
0:08:43 you know, media conglomerate that had lots of control over radio, so it kind of went
0:08:44 from hobbyists to —
0:08:48 I think of that as, the way I describe that is there’s technologies that have an outside-in
0:08:52 adoption pattern and inside-out, and so outside-in like open source would be the conical example,
0:08:58 right, where it’s completely fringe stuff, I mean it’s Richard Stallman, extreme libertarian
0:09:03 statements in the 80s at MIT, and now it’s 95% of the operating systems in the world,
0:09:04 right?
0:09:08 So completely on the fringes, whereas like the iPhone, that was inside-out, it was Apple
0:09:10 in, you know, Cupertino, and a lot of —
0:09:16 Really early Apple was — the PC was outside-in, smartphone was inside-out, right?
0:09:20 A lot of it has to do with — you needed probably a billion dollars to build a proper
0:09:23 iPhone and to market it and everything else, and supply chain, and there’s a whole bunch
0:09:26 of complex reasons why that had to be crypto, which we’ll talk about, I think it’s very
0:09:30 much an outside-in kind of movement, and sort of these hackers and hobbyists and smart
0:09:31 people doing it on a weekend.
0:09:34 And you like the outside-in movements generally?
0:09:39 I mean, yes, I do like them, I think that they — well, I think from a startup investor
0:09:42 point of view, both as an entrepreneur and as an investor, those are where the bigger
0:09:43 opportunities are, right?
0:09:48 Because it’s much harder — if it’s an inside-out and it’s going to require a new game console,
0:09:51 like it’s just the reality of the economics of it, it costs five billion dollars probably
0:09:56 to build that, to market it, to do all the exclusives, like, you know, it’s a very expensive
0:09:57 proposition.
0:09:58 So —
0:09:59 You have enough funds under management to cover that, right?
0:10:04 Yeah, I guess we’re getting there, hopefully, but from an entrepreneurial perspective, it’s
0:10:08 these kind of disruptive things that, you know, I like to say, they start off looking
0:10:13 like a toy that are sort of hackers on the weekends, right?
0:10:19 There’s a deep reason why — like, I think there’s a deep reason why so many of these
0:10:25 technology movements were done sort of by hobbyists, and it’s not just sort of a cultural
0:10:29 thing, you know, that technologists like to wear flip-flops and hang out or something
0:10:30 like this.
0:10:37 Which is, you basically have — nine to five is governed by business people, right?
0:10:40 Nine to five is governed by — like, what you do during nine to five work hours is governed
0:10:45 by people that generally have a one- to three-year time horizon, right?
0:10:48 They have to, like, unless they’re the — you know, maybe Jeff Bezos is an exception or
0:10:51 something, but, like, for the most part, like, you want to keep your job as a manager of
0:10:54 a company, and you’ve got to manage to a one- to three-year time horizon.
0:10:59 So, where does the ten-year away stuff, the five- and ten-year away stuff, happen, right?
0:11:04 It happens when the smartest people get to vote themselves with their time, right?
0:11:08 And that’s why it happens on the — that’s why, like, I have always done, if you go back
0:11:12 and read history, like, so much of the — I was — there’s a great book about Henry Ford
0:11:17 I read recently, and you look at early cars, it’s, like, exactly like, you know, SOMA 2015
0:11:18 or something.
0:11:19 They were in Detroit.
0:11:20 They were hacking.
0:11:24 You go read, like, I was reading the old — it was — a horse-less age was, like, the hot
0:11:26 was a tech crunch of the era.
0:11:28 It’s now — actually, car and drivers, the same magazine.
0:11:31 And if you go read the old ones, it was all, like, oh, my God, this, like, cool new carburetor.
0:11:35 And, of course, what did they do, like, today we think Henry Ford, you know, is wearing
0:11:39 a suit — no, he was, like, lying down, trying to race as fast as he could with his friends
0:11:40 and whoever could do the fastest car.
0:11:44 He’s, like, these pictures that covered an oil, like, you know, it was going 70 miles
0:11:47 an hour, the things, like, practically blowing up, you know, it was basically like it was,
0:11:51 like, Wozniak and, like, you know, and these other hackers.
0:11:55 So, yeah, so I think — and so I think the big question — going back to the Tim Luthor thing,
0:11:58 I think the big question with the web right now is, is it going to be like that?
0:11:59 Is it Comcast?
0:12:00 Is it over?
0:12:01 Is it sort of Google?
0:12:02 Apple?
0:12:03 And that’s it.
0:12:04 Or is it different?
0:12:05 I would argue it’s different.
0:12:09 The Internet is a very different type of medium than, let’s say, radio or cable, in that it’s
0:12:11 software-based.
0:12:15 The design of the Internet is you have a very, very deliberately very simple, you know, core
0:12:18 protocols, like Internet protocol.
0:12:22 And then all of the smarts live on the edges, and the edges can upgrade themselves, and
0:12:27 they’re constantly — it’s a constantly evolving organism, and it evolves according to incentives.
0:12:31 And one of the very powerful things, and one of the reasons I’m so excited about the whole
0:12:37 kind of crypto blockchain movement is it — the whole thing is around how do you design incentives
0:12:42 to get people to kind of upgrade and change the code they’re running on the Internet.
0:12:45 And so, to me, a huge question right now is just sort of, you know, is it going to be
0:12:50 like the last things, the last kind of radio, TV, etc., where it’s sort of, this is it,
0:12:54 and now startups just get sort of pick up the scraps, or maybe they’re — or maybe, you
0:12:59 know, there’s — by the way, there’s — I don’t want to — there’s plenty of other — one
0:13:01 interesting thing about tech is there’s so many different movements happening, right?
0:13:03 So this is sort of the core Internet.
0:13:06 Meanwhile, there’s all this interesting stuff happening in enterprise software, in fintech,
0:13:08 so that’s all going full speed ahead.
0:13:11 I’m talking more of just sort of the core Internet architecture structure.
0:13:15 I think another really interesting thing, if you look at past historical trends, is there’s
0:13:19 always sort of a first order and second order effect of any major new technology, okay?
0:13:23 So what I mean by that is, like, the car comes along, and the first order effect is you can
0:13:25 drive from point A to point B faster, right?
0:13:28 The second order effect took 50 years to play out.
0:13:34 It was suburbs, trucking companies, e-commerce, what — I don’t know, mechanized warfare.
0:13:39 Like, there’s just thousands of, like, kind of secondary second order implications of
0:13:41 this new technology, right?
0:13:43 But it took a really long time to play out.
0:13:47 And I think the thing that we’re seeing right now is with social media and the Internet,
0:13:51 and we’re in that kind of, I don’t know, if it’s a car, we’re probably in 1915.
0:13:55 But at, you know, 1950 or something, we’re still very early on.
0:13:58 We’re seeing the effects on the media landscape.
0:14:02 We’re seeing the effects on the political world.
0:14:06 I think things like cryptocurrency, for example, in many ways, it’s a consequence of social
0:14:07 media.
0:14:10 If 20 years ago, someone invented Bitcoin, you’d have, like, couple New York Times articles
0:14:13 quoting some Yale economists, “This is stupid.
0:14:14 It’s over.”
0:14:18 Maybe it’d be, like, a zine or whatever, like, you know, like some weird hobbyist magazine
0:14:19 you could read.
0:14:20 But that’d be it, right?
0:14:25 And now you’ve got an army of, I don’t know, probably 100 million plus cryptocurrency enthusiasts
0:14:29 who have, they have Twitter followers, they have blogs, they have GitHub accounts, they
0:14:34 have Reddit karma, and they’re out proselytizing, and, you know, it’s the fifth estate.
0:14:36 Like, the fifth estate loves it, right?
0:14:37 The fourth estate doesn’t.
0:14:38 The fifth estate loves it.
0:14:40 And it turns out they have a lot of influence these days, right?
0:14:45 And so that’s, like, another example of something that, you know, is this sort of unexpected
0:14:46 second-order effect.
0:14:50 And what will those other second-order effects be, I guess is, to me, a big question.
0:14:53 So this concept of the fourth estate and the fifth estate, basically the press and the
0:14:59 public on, or active people on social media and public sentiment.
0:15:05 One thing about the press that I feel like has happened in the last, you know, really,
0:15:10 Trump was maybe an inflection point, but it was a larger thing, which is, there feels
0:15:16 to be now a lot more fear in the press about decentralized networks.
0:15:21 And the fear seems to be, well, if there’s not a gatekeeper, there’s not someone checking
0:15:25 the facts, or if there’s not someone making sure that information has integrity, that you
0:15:31 might end up with, you know, fascist movements, populist movements, separatist movements,
0:15:38 people being driven by emotion and not facts, sort of post-truth where politicians can
0:15:43 just say whatever they want and just spread it on social media and kind of bypass the
0:15:45 press, kind of go direct to consumer.
0:15:52 And I think that that fear probably also has influenced press about crypto because it’s
0:15:58 a, the promise of crypto is similar to the internet in that it is democratizing and giving
0:16:03 more people a voice and more decentralized.
0:16:10 And so what’s legitimate about those concerns, what are the press missing, like how should
0:16:15 the press and the public be thinking about the value of decentralized systems?
0:16:18 I think it, by the way, not just crypto in the blockchain sense, but crypto in encryption
0:16:19 sense.
0:16:22 Like I wouldn’t be surprised if we head into another era similar to the ’90s where there’s
0:16:23 real battle.
0:16:26 I mean, we see with Apple and the FBI and things like this, just like encryption in general.
0:16:32 I mean, it used to be in the ’90s, they were classified as munitions, like the RSA algorithm
0:16:33 and things.
0:16:35 And so, and then this whole clipper chip thing anyway.
0:16:39 So like that, like encryption alone, like Zuckerberg says they’re going to go to private
0:16:41 messaging and end in encryption.
0:16:44 And, you know, so forget about blockchain, just like that alone is going to be a hot
0:16:45 button issue.
0:16:47 And the reality is you’re going to have bad stuff.
0:16:52 And even within Facebook, there was a lot of disagreements about should we have everything
0:16:56 being encrypted to protect privacy or should we have content not being encrypted so we
0:17:02 can scan the content for child pornography or terrorist activity or abuse or other kinds
0:17:03 of things.
0:17:08 I mean, you know, like, what, you know, look, take the telephone was to have bad things
0:17:12 happen using a telephone, like probably a lot of bad stuff has happened using a telephone,
0:17:13 right?
0:17:17 We decided as a society that we wanted to put pretty strict privacy controls over telephone
0:17:18 use, right?
0:17:22 Like in court transcripts, whenever you see call me, you know, something bad was going
0:17:24 to happen on that, on that phone conversation.
0:17:29 Yeah, because we, we decided like, we just, knowing, knowing laughs in this audience.
0:17:32 From a regulatory perspective, though, we decided to make that trade off, right?
0:17:37 We try, like, we decided to make the trade off that, that we wanted to preserve the,
0:17:42 you know, people’s feeling that this was a private feeling that probably more of a feeling
0:17:48 but the feeling that was a private medium and decided to regulate as such.
0:17:49 And I think that’s going to be a big question.
0:17:51 And look, there are going to be trade offs like the New York Times in the one week will
0:17:56 have an article about how these, you know, Google, etc. are surveilling you in the next
0:17:59 week we’ll have one about how they’re allowing terrible stuff to happen.
0:18:00 And so where do you draw the line?
0:18:01 It’s really hard.
0:18:06 I think, you know, I think that one of the great things about the internet in the first
0:18:10 era was the fact that it was sort of community governed and controlled.
0:18:14 And the second era, what was great is that we got amazing web services that were free
0:18:16 for billions of people.
0:18:21 And I, what my hope is in the third era, we could find kind of a happy medium where we’d,
0:18:24 we’d recapture some of the kind of community controlled aspects.
0:18:29 So instead of, so, so for some of these issues, you know, should political ads be allowed
0:18:30 on a social network?
0:18:34 Like, should this be decided by a single company or should it be decided by a community?
0:18:39 The way that decisions around DNS, for example, the naming service for the internet was always
0:18:40 a community thing.
0:18:41 It was run by a non-profit.
0:18:45 It was like a community, you know, standards, it was done in an open way.
0:18:48 This is not, you know, when I, it sounds very utopian.
0:18:52 It was actually reality until recently, you know, how the internet was governed.
0:18:55 And so the question for me is, I believe that what we can do now is, and we now have the
0:18:57 technology where we can have kind of the best of both worlds.
0:19:00 I mean, why is everyone so upset on Twitter, right?
0:19:01 There’s a bunch of reasons are upset.
0:19:05 But I think one of them is, you know, they helped create that platform.
0:19:10 I mean, I was early on Twitter, you were early on Twitter, and then you feel like, you know,
0:19:11 you helped create it.
0:19:14 And then suddenly all these new rules are getting imposed.
0:19:17 Like, you kind of felt like you sort of felt like an owner in a lot of these cases if you
0:19:18 were early on these networks.
0:19:20 And then you realize later on, you’re not.
0:19:23 You’re just setting up a platform for Kim Kardashian.
0:19:24 Basically.
0:19:29 And so, and it’s not just users, by the way, it’s people like you, like it’s, I mean companies
0:19:31 like yours, like media companies, right?
0:19:34 You have a partnership and the rules change and like next week, the rules are different.
0:19:38 And like, you know, should you have a seat at the table deciding that, right?
0:19:42 To me, that’s a right that doesn’t mean it’s anything goes.
0:19:45 It just means you have a community kind of governed process.
0:19:48 And that’s the core value of the whole kind of crypto blockchain world.
0:19:49 Everything is open source.
0:19:51 Everything is community governed.
0:19:54 It’s a very deeply held belief.
0:19:59 And you know, and it really comes from the open source movement.
0:20:04 I think of it as an extension of open source and what we were talking talking backstage
0:20:10 about the difference between a city and Disneyland.
0:20:16 And you know, if you’re if you’re in Disneyland, the every everything is is controlled.
0:20:20 There’s not bad areas where there’s crime or those things like that.
0:20:23 But also everything feels a little fake.
0:20:27 And if you’re in a vibrant city, there’s lots of, you know, dynamic things.
0:20:29 Buildings, building and creating things and making things.
0:20:30 There’s good parts.
0:20:32 There’s bad parts.
0:20:36 And that can be a metaphor for, you know, what what different kinds of visions of the
0:20:41 internet do we want the the wall guard and Disneyland internet, or do we want the more
0:20:44 vibrant city internet, even with some some of the downsides?
0:20:45 Yeah.
0:20:49 And I think until so to me, like one way to think of what a blockchain is a simple way
0:20:50 to think of it.
0:20:56 It’s the first time that we’ve had a concept of a community owned and operated web service,
0:20:59 one that’s truly owned by a community, right?
0:21:02 And so I kind of think of it, if you think of analogy to the real world, like you have
0:21:06 an iPhone that’s kind of like your home, it’s like your personal computer, you have you
0:21:09 can rent a computer at AWS, and it’s kind of like your office, right?
0:21:13 And then you have things like Facebook and Google, which are shared services that feel
0:21:16 like public spaces, but are actually controlled by a company.
0:21:20 And now we have the ability to create things that are kind of more like parks or like cities,
0:21:23 or community controlled public spaces.
0:21:28 And you can, it’s a very interesting kind of new thing that that allows.
0:21:31 And you know, the rules aren’t going to be changed because the rules are written into
0:21:32 the rules.
0:21:33 That’s right.
0:21:34 The rules are written.
0:21:35 That’s actually the core feature of a blockchain.
0:21:40 The way I would define a blockchain is it’s a computer where there are game theoretic strong
0:21:44 guarantees that the code will run as designed and the rules won’t change essentially.
0:21:47 Like that’s fundamentally what it is.
0:21:53 And so until now, you know, if you were using a public computer, if I was on Facebook, just
0:21:58 by virtue of the fact that that computer is controlled by that company, they can change
0:21:59 the code.
0:22:00 They can change the rules, right?
0:22:01 This is the first time you had that.
0:22:02 Now there’s trade offs.
0:22:07 Like it’s, you lose performance and you, there’s a whole bunch of like kind of weaknesses with
0:22:10 this architecture that I think we’ll get fixed over the next few years and we’re investing
0:22:14 in a lot of these things to try to improve it is still, you know, early and evolving.
0:22:18 But that’s a very powerful concept and it means you can have a commons and so you can
0:22:24 have a social graph, for example, you know, like, actually, if you go back for people
0:22:29 that are interested in the history of this, like RSS was a real contender for a while.
0:22:30 So RSS is a protocol.
0:22:36 It’s like a sort of a blogging protocol that was a real contender for a while to compete
0:22:39 with the proprietary social networks.
0:22:42 But the problem with RSS, in my view, I was involved in this and invested in a bunch of
0:22:47 companies around it is that it didn’t have, you couldn’t make a user experience the way
0:22:50 you could with Facebook or Twitter or something like this because you had to do all this kind
0:22:53 of weird technical stuff and set up your domain and do all and have these.
0:22:58 So we back, back in these days, we did a project that was an open source project called Reblog.
0:23:05 And Reblog would take, it was a server side RSS reader where you get all, you could subscribe
0:23:10 to all the sites you wanted, you get this information and then you could press a button
0:23:18 to repost anything you liked and it would say, “Chris has reblogged this.”
0:23:21 And that was a long time ago.
0:23:25 I don’t remember the exact year we did it, but then David Karp saw that and I had reblogged
0:23:30 a Tumblr and then Tumblr and then Twitter’s community saw sort of Tumblr having this
0:23:35 functionality and then they added that to Twitter where originally when you would retweet something
0:23:38 you would just write RT and retweet it and it wasn’t built into the software.
0:23:42 Actually Twitter then built it into the software and then Facebook added the share button kind
0:23:44 of looking at Twitter.
0:23:48 And so it was really to your point about RSS not being able to have a functionality.
0:23:56 We saw this need to make content social, you know, way before Buzzfeed and made it through
0:24:06 using RSS which is this open platform and it was, and like maybe 15 to 25 people installed
0:24:10 the reblog software and there was like a little network where they would like reblog to, you
0:24:15 know, and they had sites that maybe got a few thousand readers and so we would sometimes
0:24:19 have something get reblogged like three or four times and so you sort of saw this is
0:24:24 how it should work, but to make it really good and for a user, the Facebook and Twitter
0:24:28 model was a lot better and we never tried to make it into a company, but had we tried
0:24:31 to make it into an open source company we would have been at a disadvantage compared
0:24:32 to…
0:24:37 Yeah, there was no way to have a community like controlled place to store things like
0:24:38 to store social…
0:24:40 Like just simply the technology wasn’t there yet.
0:24:45 There was a wired article, I have a blog post I wrote about it where they, in 2008 or something
0:24:50 they tried to create a open source social, you know, kind of Facebook competitor and
0:24:54 they said like basically the problem is there’s nowhere to store the social graph or something.
0:24:57 Now what we have today is we have these public commons, we have these publicly shared databases,
0:25:00 community controlled databases, so what can we do with it, right?
0:25:06 And we’re in a very exciting period, I think, where like I always think of it as like the
0:25:11 history of technology is every 10 to 15 years there’s a major new computing cycle, so main
0:25:16 frames, you know, PCs, internet, smartphones and now today, what are we, you know, what
0:25:17 is the cycle?
0:25:24 I obviously have my beliefs, but what you have is with each of those periods you have kind
0:25:29 of a kind of gestation phase where people are sort of experimenting, so the early smartphones
0:25:34 you had Sidekick and Blackberry and Trio and it was sort of, you know, they had a scale
0:25:37 of like, you know, Blackberry was more successful, the rest are like on the scale of like a few
0:25:42 million, you know, maybe 10 million users and then eventually you kind of get to the
0:25:46 point where you have like kind of a breakthrough device and then you have this amazing golden
0:25:55 period where entrepreneurs flock to this new platform and then very rapidly explore
0:25:58 what I would call like the design space, like what can you do with this, right?
0:26:03 So like the smartphone comes along and, you know, if you ask people in 2007 what are you
0:26:06 going to do with a smartphone, they probably would have taken a lot of the ideas of what
0:26:07 happened with PCs, right?
0:26:13 They wouldn’t have thought like the killer thing will be calling a car or sending a vintage
0:26:17 looking photograph to a network of people or like, like it wasn’t, like you may have
0:26:21 been on your list of 100 things, but it probably wasn’t, you know, if you look at a ephemeral
0:26:26 message, I need, this will be the killer app for this, like, you know, I mean, they’re clearly
0:26:29 the entrepreneurs who believe that, but there were, you know, 10,000 credible attempts to
0:26:35 create mobile startups and of that, probably, you know, 10 of massive significance kind
0:26:37 of emerge.
0:26:41 And so I think that we, I believe, we’re on the precipice now, not just crypto, I think
0:26:45 AI and virtual reality and there’s a bunch of really exciting things happening, but we’re
0:26:49 about to hit that point where you get kind of the iPhone moment and then you get all
0:26:53 sorts of interesting experiments that get run and out of that, it’ll be a lot of chaos,
0:26:58 a lot of train wrecks, you know, so there’s pain in this process as well.
0:27:03 The other thing that I think happens is trends converge that you didn’t expect, you know,
0:27:09 so I think just as an analogy, when BuzzFeed started, the iPhone didn’t exist yet.
0:27:15 And then when the iPhone first started getting used, people were only consuming really text
0:27:18 content, maybe images on it and it wasn’t great for video.
0:27:21 And then there was this digital video trend.
0:27:26 So there was this digital video trend and this mobile trend and this social trend.
0:27:27 And so there’s three sort of different trends.
0:27:30 And by the way, I would add cloud to that too.
0:27:34 Like if it wasn’t for the work that Salesforce and AWS did, you couldn’t have stored all
0:27:36 that data so cheaply.
0:27:42 So there’s really, yeah, four different trends, you know, cloud, mobile, social, digital video,
0:27:50 and then it turned out that those trends all converged into mobile social, you know, being
0:27:55 on a mobile device on a social platform, watching digital video that streamed from
0:28:01 the cloud, you know, so all those things converge and then make something seem just
0:28:06 like one simple thing, which is like I’m scrolling through a feed and watching video.
0:28:11 And so I think you’ll see the same thing with crypto and, you know, where the other trends
0:28:21 you mentioned, AI and VR and crypto, you know, it’s hard to predict how those trends will
0:28:24 converge and end up making something that is more than the sum of its parts.
0:28:28 I actually think I would even go further and I would say not only, I think, are we about
0:28:33 on the cusp of multiple major technology breakthroughs converging.
0:28:36 So probably AI, but then I would call kind of new devices.
0:28:42 So that’s everything from talking speakers, to cars, to VR, to blockchain and crypto.
0:28:45 And I think those will be kind of like cloud, mobile, social and reinforce each other.
0:28:48 I think in addition to what else is happening right now, we’ve got, what is it, like three
0:28:51 to four billion people with smartphones, that’s going to go to eight billion.
0:28:55 In addition to that, the hours per day spent on these devices is going to continue to go
0:28:56 up.
0:28:59 So you’re just going to have essentially like two X the time spent, if not more.
0:29:05 Number three, you now have major areas of the economy that were previously relatively
0:29:10 untouched by technology, namely finance, education, healthcare.
0:29:16 I think now entrepreneurs have now figured out ways to kind of bring modern technology
0:29:18 into those industries.
0:29:25 So I kind of think like, if you combine like number of engaged users, level of engagement,
0:29:32 plus unlocking what’s basically 70% of GDP with these new kind of markets, plus what
0:29:36 I think is kind of like multiple major new trends coming together.
0:29:37 It’s not quite there.
0:29:41 The technology is still like all these things, like even the, you know, I mean, like Lex
0:29:45 is awesome, but like, you know, auto correct breaks half the time, like it’s still not
0:29:47 quite there, but it’s very, very close.
0:29:50 And the, if you, if you go and same with the crypto blockchains, like it’s slow and
0:29:53 Bitcoin has its issues and everything, it’s not quite there.
0:29:55 It’s still the sidekick era.
0:29:59 You know, it’s, it’s not the iPhone era, but I, yeah, I think those three things will
0:30:02 converge and you have these other kind of macro trends now.
0:30:05 And you have these, and the economics too, like the, you know, like the cable bundle
0:30:08 is going to break at some point, I think soon, right?
0:30:11 But at some point, like the economics, which like fundamentally, like it will no longer
0:30:12 work to have the cable bundle.
0:30:15 I think that’s relatively near future.
0:30:20 And then there will be this sort of massive, you know, wave of people and dollars shifting
0:30:23 over to, to digital technology.
0:30:27 My earlier comment about all the things the internet enables, TV hasn’t gotten the benefit
0:30:28 of those things.
0:30:34 Now, except for Netflix and now all the digital, all the big media companies, traditional media
0:30:38 companies are moving over and they’re going to have the advantages of, of the internet.
0:30:42 Like for example, you know, the idea that you would flip through the channels, hoping
0:30:47 something good is on was a way that traditional media has historically worked and as opposed
0:30:52 to what is the best content for me that has ever been produced in the universe.
0:30:54 I’m going to, you know, watch that.
0:30:58 And so now that’s possible with Disney, it used to be that was possible with Netflix
0:30:59 archive.
0:31:00 Now it’s possible.
0:31:03 You know, so, so we’re, we’re seeing, we’re seeing a lot of big industries that are slower
0:31:06 to change starting to adopt, adopt.
0:31:07 Yeah.
0:31:12 I mean, if you think about the, I mean, the, it’s kind of surprising 25 years into the
0:31:16 internet that the only industries that have been really, quote, disrupted have been, I
0:31:21 think media, maybe transportation and, and maybe starting to happen as retail, right?
0:31:24 And then the rest, I mean, if you look at the list of incumbents and every other industry,
0:31:26 it hasn’t changed that much.
0:31:27 Right.
0:31:28 And even the media world, right?
0:31:30 Like still the vast majority of people, like they sit there and they, you know, they watch
0:31:35 whatever reality TV and on a regular cable box and like, it hasn’t changed that much
0:31:36 yet.
0:31:37 Yup.
0:31:38 Yup.
0:31:39 It’s slow.
0:31:40 It’s slow for these to change.
0:31:43 There are also times when I feel like the converging trends end up creating some kind
0:31:47 of a Frankenstein situation where, where the trends are in conflict with each other.
0:31:53 The goal of being the future of media and recommending content to people and the goal of being a place
0:31:59 for people to connect with their friends in a private, you know, way with close friends
0:32:00 feels to be in conflict.
0:32:02 So you end up having Facebook.
0:32:05 It’s almost like we’re having a phone conversation and then you say something interesting and
0:32:08 then it’s like, oh, we’re going to show that to a million people.
0:32:12 You know, it’s a little weird if you’re talking with your friends and, you know, sharing content
0:32:15 with the, with the small group that that could end up reaching tons of people.
0:32:20 And there are trends that kind of smash into each other in a way that causes problems and
0:32:25 yeah, we’re, it feels like we’re in a very interesting time now with all of the so much
0:32:30 attention on these platforms and, you know, the decisions they’re making and, and just
0:32:35 the like, I don’t feel like we’ve, I mean, maybe you have insight into it, but I don’t
0:32:43 feel like we fully understand how to, you know, the, the, the, the etiquette, the personal
0:32:48 etiquette, you know, like, is it okay to, you know, talk a certain way on Twitter or
0:32:53 go find somebody’s old tweets or, you know, should the plot, like all these things are
0:32:54 being figured out, right?
0:32:56 Like it’s, it’s, and it’s very confusing.
0:33:02 And I think kind of my view at least causing a lot of upheaval, kind of social upheaval
0:33:03 or something.
0:33:04 Yeah.
0:33:09 People don’t know how to interact with each other or people know how to figure out what,
0:33:13 what information they should pay attention to.
0:33:20 And I definitely think there’s and, and then I feel like when you look at the, the press
0:33:25 coverage of all this, there’s just so many trade-offs that it’s, you know, and reporters,
0:33:29 I mean, I know this because we have Buzz, you know, Buzzfeed news covers this stuff.
0:33:33 And reporters are not in a, you know, it’s not really the job of a reporter, at least
0:33:37 classically, to read everything and make a policy recommendation.
0:33:42 They’re just trying to say, oh, there’s this like, here’s a leaked, you know, document or
0:33:45 here’s some information people didn’t know or, oh, this company’s struggling with deciding
0:33:50 between these two different, you know, possibilities.
0:33:55 But it doesn’t feel like there’s a, there’s a clear sense right now of, of this is where
0:34:00 society is headed and this is how technology is part of progress.
0:34:05 And, and is there, is there a way to get more of that back where, where people see the benefits
0:34:10 of technology and, you know, both to the economy, but also to people’s lives and to society
0:34:11 and.
0:34:12 Yeah.
0:34:13 That’s a great question.
0:34:18 I think, I mean, my view is partly this feeling of, I do, I, this is again, going back to
0:34:21 my main area of interest, the crypto stuff, but the, this is feeling, I think a lot of
0:34:25 people have that it’s sort of this bait and switch, you know, that, that they help build
0:34:29 up these networks, you know, whether it be a marketplace or a social network.
0:34:33 And then the benefits go to other people, the governance goes to other people.
0:34:40 And so I think having more, you know, new architectural designs that provide incentives
0:34:44 and are more inclusive can, can help with that.
0:34:48 Now that getting that message out, like it is very hard because there’s a lot of like
0:34:55 negative, I think misunderstandings around, you know, going back to Bitcoin and crypto
0:34:56 in general.
0:35:00 And like it’s actually like a very kind of utopian meritocratic technology, but that’s
0:35:04 that’s very hard to explain to people, you know, I think some of the, some of it from
0:35:09 the fifth estate is you’ll see people on social media being like, you know, triple your money
0:35:10 right now.
0:35:15 And like trying to basically pump an altcoin or something like that.
0:35:20 And how much has that driven progress in, you know, the fact that people are trying to make
0:35:22 money is in its powerful incentive.
0:35:27 How much has that driven progress in, in crypto and, you know, blockchain and how much is
0:35:28 that like holding it back?
0:35:36 And is there a way in a, in a more decentralized thing, you know, a system to, to shift the
0:35:41 narrative towards things that will lead to the overall benefit of the total community?
0:35:42 Yeah.
0:35:47 I think it’s definitely a good point and like there was this big run up in 2017, where a
0:35:52 lot of people kind of, you know, sort of had this get rich quick kind of mentality.
0:35:59 The, I do think what’s really important about it is there’s the negative side as you highlighted.
0:36:04 The positive side is, it’s a business model that doesn’t depend on advertising and tracking
0:36:05 users, right?
0:36:10 So, Mark Andreessen talks about this, how the original, there’s actually an error code.
0:36:12 You know, people are probably familiar with error code four or four.
0:36:16 There’s a, you know, when you go to a webpage, it’s not there, there’s error code for two,
0:36:17 which was never implemented.
0:36:18 It said payment required.
0:36:21 And so the original idea with the original internet was to actually have like money as
0:36:22 a native unit.
0:36:24 Right now, of course we have credit cards and things.
0:36:25 It took a long time, by the way.
0:36:30 And in fact, it was very controversial SSL, you need SSL for credit cards.
0:36:34 And that was actually almost regulated away because people thought, well, who would want
0:36:36 encryption except for bad people?
0:36:38 But it turned out you needed for banking and things.
0:36:42 Anyway, so we’ve now grafted on kind of the legacy financial payment systems onto the
0:36:44 internet and it sort of works, right?
0:36:48 But still the vast majority of these big companies are funded through advertising.
0:36:53 So I think one other utopian idea is that, is that, you know, I think one of the reasons
0:36:57 people are disillusioned is they feel this sense of like, they’re not part of it.
0:36:59 They aren’t included.
0:37:04 And the business model they feel like is extractive.
0:37:07 And you know, and we see this with GDPR, and I think there’ll be similar kinds of stuff
0:37:11 happening in the U.S. around sort of privacy.
0:37:17 And so, you know, I think there’s this huge, I mean, in my sort of corner of the internet
0:37:23 with digital media, there’s a huge number of intermediaries who are skimming money in
0:37:24 the ad tech space.
0:37:33 And oftentimes the main value they’re providing to an advertiser is surveilling and tracking
0:37:38 users where if users had the choice to say, do I want to be tracked this way or not?
0:37:40 They would almost always say no.
0:37:47 And these are companies that don’t actually make content or create apps or build things
0:37:49 that consumers value.
0:37:53 So there’s some hope that blockchain could help with that.
0:37:57 I think right now what I think a lot of what we’re feeling is, and why people are upset,
0:37:58 is they don’t feel like the interests are aligned.
0:38:01 And the question for me is, can, is there a way to realign that?
0:38:02 Or is it just too late?
0:38:03 And that’s just the state of things.
0:38:07 And maybe that’s the pessimistic view and it’s just going to be, you know, one trend
0:38:08 we have seen at BuzzFeed.
0:38:13 If you had asked me a couple of years ago, I would never have guessed the transformation
0:38:17 that’s happened in our business from advertising revenue being essentially the only kind of
0:38:25 revenue to now having so many of our, so much of our audience is looking to transact.
0:38:30 And so 500 million in GMV where people are seeing, you know, products we might recommend
0:38:37 or things that we’re talking about, and, you know, multiple of that of other kinds of transactions
0:38:39 that were indirectly influencing.
0:38:45 But we’re seeing that, you know, again, to this convergence of trends that used to be
0:38:48 content shifted to mobile, but people weren’t transacting on mobile.
0:38:52 They were going back to their desktop to do their shopping where they could, you know,
0:38:55 type in information and do things more easily.
0:38:57 Now it’s better to shop on mobile.
0:38:59 That’s where more people want to shop.
0:39:03 You can double click and buy stuff, your credit cards integrated in.
0:39:08 And so we’re seeing a huge shift where media has become much more transactional, where
0:39:11 people are looking to be inspired to do something.
0:39:15 Go on a trip or buy a product or try a new experience.
0:39:20 And I think a lot of it is also just these online marketplaces are starting to dominate
0:39:22 the entire economy.
0:39:23 And there’s infinite choice.
0:39:27 If you’re Gen X, Y, or Z, or anyone actually who’s using the Internet, you’re used to
0:39:36 being able to watch any show on the streaming services, listen to any song on Spotify, go
0:39:40 to any travel destination with Airbnb or one of the OTAs.
0:39:45 And so you’re looking for some culture and content and vicarious experience and something
0:39:49 that will inspire you to choose which option out of all of these options are worth doing.
0:39:52 And now with your phone, you can just transact.
0:39:58 And so I think that there is this larger shift towards just transactional media as opposed
0:40:02 to impression-based, advertising-based sort of thing.
0:40:11 And also, I’m wrong, but also the sort of the adjacent, like so using Tasty to build
0:40:17 a brand and then partnering with retailers to sell products related to that, right?
0:40:21 So instead of like new models like that, where you’re inserting yourself into the kind of
0:40:22 the purchasing experience.
0:40:23 Yeah.
0:40:26 There’s like a hundred skew line of Tasty products at Walmart.
0:40:30 So when you see a video where people are cooking, they’re like, “Oh, I can actually make that
0:40:33 recipe and I can buy the pots and pans,” you know, like connecting.
0:40:39 I feel like what one sort of shift is just connecting the Internet to people’s actual
0:40:43 lives and the things that they’re doing, you know, every single day.
0:40:47 And I think that, you know, crypto and blockchain can help people do that in a way where there’s
0:40:54 more trust and more security and that they’re more a part of it and can build it as part
0:40:55 of a community.
0:40:59 All right, we’re out of time.
0:41:04 I only asked the first question though, so I don’t know if we have a couple more hours,
0:41:07 but thank you, Chris, and I’m going to make that one.
0:41:08 Thank you, John.
0:41:09 Thank you, John.
0:41:09 Thank you, everyone.
0:41:12 (audience applauding)
How can we evolve the web for a better future? Has the web become a mature platform — or are we still in the early days of knowing what it can do and what role it might have in our lives? Just as “social/local/mobile” once did, what are the new trends — like crypto and blockchain networks and commerce everywhere — that might converge into new products and experiences?
Chris Dixon (general partner at a16z and co-lead of the a16z crypto fund) discusses all things internet with Jonah Peretti (founder and CEO of BuzzFeed). Their conversation ranges from the early days of the web to the way innovation happens (what Chris calls “outside-in vs inside-out”) to the promise of a community-owned and operated internet, and more.
Together they explore the possibilities that could co-evolve and converge are we enter into the next era of the web, and they share how we might not be quite as far removed from the “wild west days” of the internet as we imagined.