Ep 123: Feelings Check-In with Chris Dixon, Founder and Managing Partner at a16zcrypto

[00:00] Do you think we made dad proud? [00:01] Which dad? Chris Jackson. Yeah. I do. I do. [00:07] Welcome to Boys Club Interviews. This is a show where we bring on people much smarter than us to talk about the new internet. I'm Natasha Hoskins. I'm Dina Burke. And this is Boys Club. Wait, is it just Boys Club? It's just Boys Club. The Boys Club podcast? No. Just Boys Club. [00:24] Guess what? Boys Club is doing our very first conference called Brand New. Dina, what are we going to be talking about? So we're going to be covering a lot of the stuff that we cover on this podcast. Crypto, of course, the new internet, digital culture, emerging technology. We'll be at the Austin Proper on March 12th, and we're pulling in some of the smartest people we know. [00:54] today. Go buy your ticket. Members and zaddy holders get special pricing. And if you aren't a member, you can apply to attend brand new. So go to boysclub.vip backslash brand new link in show notes to get all the details and can't wait to see you in Austin. Yeehaw. Are you feeling read write owned? [01:14] I'm feeling read right on read right on is a it's a whole mood. [01:20] I've been saying it around my apartment to my husband. I've been like, well, you know, I got to go read right out. Like just in context that doesn't make any sense. I'm saying it constantly. We're getting a sub. I'm like, let's go read right out. He's like, what are you talking about?

[01:39] Oh, man. [01:45] This is an interview with Chris Dixon. He just wrote a book called Read, Write, Own, Building the Next Era of the Internet. I'd say it's required reading. [01:54] required reading said this [01:57] in the interview, but I thought it would be homework to read it. And it wasn't, it was, it's an incredible book. [02:02] I have so much respect for him. He needs to hear that from me for sure. [02:11] You know what Chris has been waiting for? He's been waiting for the day that you would give him [02:16] Validation. Yeah. He's just been bated breath. That's why he came on. No, but honestly, it's an incredible book. You should read it. If you care at all about the future of the internet, it is required reading, as Dina said. So it's a great interview. We talk about the book. We talk about the reason why he wrote it. But we also talk about some questions that both of us have, having worked in this industry for you a long time, for me for the last few years, and the pain points that we've experienced, and just a really great conversation around this new internet that we're building here. [02:46] I will also say, if you care at all about the things that we're talking about, [02:50] you should come to brand new in Austin because it's a show don't tell moment. [02:54] around a lot of the themes of this book. One thing that we talk about a lot on this podcast, [02:58] And I think comes through in the conversation with Chris is this idea of building bridges and this idea of crypto not existing in a silo, not existing in its own bubble. Crypto only makes sense in the context of a wider fabric of technology.

[03:14] both technology and culture. And so I think that that's something that we're going to be talking about a lot at Brand New. And so, yeah, if this... [03:23] conversation resonates with you, come to Austin. Hang out with us. March 12th at The Proper. Link in show notes to buy Chris Dixon's book and enjoy. Hey, Natasha. So a question we get asked a lot is, what do you look for in a crypto platform? So let's talk about it. Well, Dina, I look for a secure, no fuss platform that I can dive into right away. That's why I love today's sponsor, Kraken. If you're waiting for the right time to get into crypto, Kraken makes it super easy and intuitive [03:53] client support team that's available 24-7, along with a bunch of educational guides, articles, and videos to help you along the way. If you're ready to check out the simple, secure way to trade crypto, go to kraken.com backslash boys club and see what crypto can be. Not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to US and US territory customers by Payward Ventures Incorporated, PBI, DBA, Kraken. View PVI's disclosure at kraken.com backslash legal backslash disclosures. [04:23] On today's podcast, we have a very special guest, Chris Dixon, general partner at Andreessen Horowitz, founder and managing partner at A16C Crypto and author of Read Right Own, Building the Next Era of the Internet. We're such big fans of the book. And so honored to have you, Chris. Welcome. [04:40] Thank you for having me. We're super excited. I read your book over the weekend. And I got to tell you, I was approaching it like I got to do my homework. Chris is coming on the pod. And I loved it. I feel so inspired to do my work today. And yeah, it's just really put a lot of language to the things that I care about and why we do Boys Club. So just want to start by saying people should read it. It's really good.

[05:10] of this book tour, you've done all of the podcasts from friendly sort of conversations at like a bankless of the world to not so friendly conversations doing God's work with the hard fork dudes and pivot and other podcasts like that. [05:24] You're a New York Times bestseller. There has been a Barbie level marketing campaign for this book. And it's been fun to see. So here at Boys Club, we do this thing called the feelings check in. And so we're going to force you into this. So to start, how are you feeling after a really big month for you on this book? [05:54] there was like this London flu going around. So outside of that, I was sort of knocked out for a week in bed. But and then we had to reschedule like another, we were going to do a Bay Area leg of the tour, which we're going to reschedule. But um, no, but great, great overall. I mean, I like I think what you just said is, you know, is awesome. I really tried hard to write the book for readers. There's a lot of business books that I think are kind of more written. [06:19] for the author maybe or for some other mission. And I really wanted it to be for the reader and, and sort of made every decision based on that and spent a lot of time, which I hope, you know, came through trying to [06:31] really simplify the concepts, not use jargon. The way I think about it, it was like, you know, all these years of thinking about this problem, how can I share that with people in a way that

[06:43] They really understand it. And it's not just sort of like, I think it's particularly around blockchain books, um, [06:48] probably all tech books, but blockchain books, there's a lot of jargon. And people use words like decentralization or trust or other kinds of words that are loaded. And what does it really mean? And so I really wanted to break it down. And that's been great. My mental model for marketing the book is that the step one has to be that the crypto folks – [07:11] both like it a lot and then also, but see it as the book that they kind of recommend to their friends. Um, and then, you know, and then if it, if that, if it can do that, I feel like then it can kind of grow from there. And I feel like that's going really, really well. Like if the reviews just like on Amazon and just on, you know, on Farcaster and Twitter and just like people's feedback has been great. So it's been awesome. I was, I was worried, you know, cause it's a very abstract topic. Like, I mean, it's really a book about networks. And so it was just really hard [07:41] And so that, I think that was my number one concern, was people just be like, [07:46] It's just too abstract or just hard to understand or I didn't get that through. I feel very good about that now just based on the reactions. A lot of it, as you know, was through examples and just trying to make it concrete and tell stories. And sort of mix in the kind of spinach with the fun stuff. There are parts where it's just sort of explaining, but I tried to kind of sandwich that with a lot of stories and concrete stuff.

[08:16] So, yeah, no. So, I mean, I think it's early. I mean, like, it's also a book. Like, my publisher said it takes a few months to start seeing kind of the word of mouth. I've never written a book before. I never, you know, it's not like a website where you just sort of like you put up a website. Refreshing. Yeah. And it's like, you know, and if you go viral the next day or something like with a book, people have to read it and talk about it. [08:36] It takes time to sort of [08:37] you know, [08:39] Fully kind of propagate so so we'll see how that goes over the next few months. Well, congratulations so far. I think it's been a huge success I think one one of the ways that it's been meaningful for me is that we've been here for the past couple years building in a time when it's been really hard and there's definitely been moments where I [08:57] my conviction in [08:59] this industry, this technology, this community has been questioned where I'm like, is this the right path for us? Are we working, putting our life force into the right places? And like, there's been moments that I've been really challenged by that. And I think reading your book really reminded me of this idea of a new era of the internet, one that's more equitable, one that's more creative, one that's more open. And I think that has really underlined like, [09:29] reminded of that and I'd love for any listeners who are maybe new to this worldview if you could give us a [09:36] kind of the two minute elevator pitch on your thesis so that there's a grounding for them in this conversation. [09:41] Yeah, sure. So it's a big topic. There's a lot of different ways to explain it. But basically, the thesis is that the internet has gone through kind of at least two phases, and I think entering a third phase. And so, and I walked through this in the book, but the

[09:53] In the first era of the internet, which I sort of think of the modern internet, the sort of 1990 to 2005 or so, the internet was dominated by open protocols like email and the web. And what that meant was the way those networks were architected, the... [10:09] essentially the money and the control flowed out to the participants of the network, the people that if you make a website, you own and control that website. And you know, if you're an artist, you, you know that, you [10:22] You build a relationship with your audience, you have a direct relationship with your audience. It's not mediated by Facebook or some algorithm that could change the rankings or change the economics. If you're an entrepreneur, as of course Jeff Bezos and Mark Zuckerberg and all the entrepreneurs who famously published, [10:41] build websites in that era, you knew that what you built, you owned. And that, you know, if there were economic value created, that you, you own that and you had a direct relationship with your audience. And so I, you know, I think of that as, as just having a bunch of very positive, both kind of economic and societal consequences, that network design. And for those who were around for that era, [11:02] It was very inspiring. There were, I think, been a little bit lost in time, but there was this huge wave of books and magazines and just kind of cultural movement around this idea that the Internet would kind of, honestly, people thought it would restructure society, economics, culture. And kind of my argument is that then in the next era, sort of the 2000s, after the dot-com crash and kind of rebuilding, which I was an entrepreneur during that era, so I had a very direct experience with it.

[11:32] that there were good things and bad things that happened. On the good side, a new wave of internet services were developed, things like social media, Facebook, Twitter, YouTube. [11:43] which were very powerful, which had a lot of benefits so that, you know, before something like Twitter or Facebook, you would have to go to publish online as an average person. You'd have to go spin up a blog and RSS and all these sort of technical things and it would be expensive. And they subsidized that and made it easy. And that led us to the current moment where we have five billion people who are online and publishing. [12:05] I think that had positive effects in the sense that it sort of democratized publishing and the internet. But the trade that was made in the process of that was that we essentially handed over power to a set of five to ten internet services that were architected in a very different way than the networks of the 90s. They're architected in a way, I call them corporate networks, where all of the kind of money and control goes to the center of the network instead of the edges of the network to the corporate owners. [12:35] 'cause those services for a bunch of cultural and other reasons were kind of still committed to some of the ideals of the early internet and were open and built a level playing field. But then that changed. [12:46] In the book, I kind of walked through it, but I think around 2012, 2013, really sharply started to change. [12:54] And, you know, fast forward today, you can't even put links on Twitter, you know, because they're all of these services are not only fighting for market share, but now fighting to keep you on the websites and they have these opaque algorithms and.

[13:06] You hear stories of creators who build audiences and then mysteriously the next day that audience disappears or is diminished because the algorithm changes. And, you know, I have a chapter in the book about this, the so-called take rates, which is the percentage of the money flowing through the network that goes to the network operators is... [13:24] sort of unprecedented in economic history that like 100% of the money flowing through networks like Facebook and Twitter go to the network operators and not to the users. And so just all of these kinds of promises in the 90s in that sense were lost. And then the kind of the next section of the book, the core argument is that blockchains provide a third way to build networks. So you had these sort of two prior ways. You had these protocol networks that had all these societal benefits. And then you had these corporate networks that built advanced functionality, but [13:54] Kind of the core argument of the book is that blockchains allow you to create new networks that are kind of the best of both worlds that let you have a lot of the societal benefits of protocol networks, but also build advanced functionality. [14:06] that we've come to expect from the modern internet. And then I go through, I think in a lot of detail, I hope, you know, because I'm really trying to not be hand wavy and just really go through, I go through the economics, I go through the [14:17] kind of how they're controlled. I go through how tokens work with tokens. Think of tokens as the, if you want communities to own something, you need a way for them, a mechanism for them to own something. And tokens are that mechanism, right? And so in a well-designed blockchain network, the community owns that network through tokens and has control and economic rights. [14:34] There's a chapter on network governance, which is sort of how do you make decisions around these networks and control. And then at the last section, I try to dive deeply into seven application areas. So this is sort of people often say, like, what problems do blockchain solve? This is too abstract. So I try to go very specifically into seven areas, video games, social networks, financial services, some stuff around AI, and really get specific. That's not meant to be exhaustive because it's a huge topic, but I thought really trying to kind of give it more specific flavor.

[15:04] Some of it is his history, obviously, and then some is the present, the technology, like blockchains and tokens and things. [15:10] And then some of it is about the future. So obviously, I don't have a crystal ball and I'm not expecting people to come away saying this is 100% likely to happen because obviously there's uncertainty there. But [15:19] The main thing I wanted to get through was that [15:21] There's real societal benefits to the technology because of what you were describing, Dina, the last few years, especially with FTX and all these other kind of scandals. I think a lot of people have come away thinking that it's either sort of scams or just a way to make money or number go up, which exists. But my kind of argument is that every technology is multifaceted, has good and bad aspects. [15:51] and bad use cases and sort of try to design the policy to maximize the good and minimize the bad. So I feel like in a lot of the discussions, the sort of good side had been lost and needed to be shared and discussed. But yeah, like to your point of, I think anyone in the space, I would be surprised if after the stuff that happened two years ago, the kind of series of events, you know, [16:11] I would actually say even before the kind of crash, just some of the kind of, I think a lot of the kind of upturn in the market and I forgot what it was, 2021 or something. [16:21] at some point for me transitioned from [16:23] cool and interesting to kind of silly. And then of course, all the things that followed, I think any, anyone who's who cares about the internet would have questions at that point, at least for me, like the book was partly a process of

[16:35] self kind of self-examination and thinking about those questions myself. And I just look at things like AI. And I think, you know, the former engineer in me thinks AI is amazing. I mean, it is amazing. And it's very cool what the people are building, but I don't see short of some counterbalancing force. I really just cannot see a scenario where AI doesn't just lead to more consolidation. And you just end up with this internet that's like three, three, [16:58] basically three services or something or five services [17:01] And the AI just sort of, you just go to your AI in the morning and it does everything and like [17:06] And there's positive things about that, but I think generally, if we don't think through the kind of economic implications and all the second order consequences and all the things I discuss in the book, I don't think that's going to be the right outcome. A very simple question is, do you want an Internet where there's an incentive to be creative, for humans to be creative, and for humans to... [17:25] you know, put their creativity on the internet for free, the way that they are incentivized today. Because that's not the incentive we're creating right now with AI. If you're an artist, why would you put your art up for free, it's going to get ingested into a training algorithm and then used and then and then you're going to be unnecessary, right? [17:42] I don't think we've thought through these incentive systems, and this is exactly what blockchains are good at. So like I came out through the that period, I like you, I think anyone sensible would have questions, but [17:52] But I came out of it after thinking about it a lot, thinking it's in some sense more... [17:58] urgent than ever that we have counterbalancing technologies as things like AI grow in importance. [18:04] Thank you.

[18:06] You touched on this a bit, but while I have you here, ask you some pain points that we've experienced. For context, I got into crypto about two and a half years ago. [18:15] And Dina, for many years of our friendship and working partnership, had tried to get me into crypto. And I was just like, no, thank you. And really, because I only saw the casino side of it. I just saw it as this financial mechanism. And then there was a real aha moment for me around it as an enabling technology, all the things you talk about on your book, a whole new consumer internet being able to be created and reaching the edges of the network. [18:45] People could contribute to something. There would be an economic upside for them in form of ownership that was meaningful and that looked very different than traditional the Internet that I grew up on and how I used it. And so that got me into the space and really excited about building. And I would say two and a half years ago, that vision of the future seemed much more possible than almost today, where because of the regulatory environment in the U.S., it's really hard to imagine that. [19:12] My initial thinking of what collective ownership and what sort of building in a collective looks like. And so in sort of the true sense of the word of ownership, which is so much at the heart of your book. So I'd love for you to just talk about how we overcome that, what your perspective is on that, and what we do as like builders and creators in this space in a time where there's a lot of uncertainty. Yeah, that's a great question. I mean, the policy situation is, we have this weird situation where

[19:38] Under the current approach that sort of the SEC and others are taking, if you create a meme coin like Dogecoin, you know, with absolutely no purpose and just release it on the Internet, that's perfectly legal. People can speculate on it. And the trouble starts when you start to work on improving the network behind the token. And because then there's all these questions, it's to some point like, is there asymmetric information? Is it a security? [20:08] I think, than what we want societally, right? Where you can just, yeah, I mean, like meme coins are perfectly legal. You go to Robinhood and like they will let you trade Dogecoin, they won't let you trade Solana. That's for legal reasons, right? So it's like inverted what it should be. So to your point, that's a real challenge. The way I look at it is sort of in a long term way. So you sort of had this prehistory of kind of Bitcoin and all these things happening prior to 2021. But I think for a lot of mainstream people, like crypto didn't kind of exist for real until that period. And then [20:38] bad incidents. [20:40] and you had this reaction to it. And, you know, the reaction, in some sense, is sensible, given how a lot of bad stuff, you can imagine there's going to be some reaction. But I don't know. I mean, maybe I'm overly optimistic, but I feel like over time we're going to come to... [20:52] like a balanced, proper view of this. And I say I spent a lot of time in [20:57] DC last year and I would say that my experience was positive in that sense and this is bipartisan by the way like all of our efforts are bipartisan and I like a lot of probably spend more time with on the Democratic side and I [21:08] You know, there's a wing of the Democratic Party that obviously hates crypto, but there's a lot of people, I think, who

[21:15] are very kind of reasonable and want to discuss things and have, you know, read books and have staff to read books and like, another thing I'll say is it in tech, it really just takes one great product to transform things. I mean, I think we saw that with chat GPT, you know, in history, you know, with the iPhone, things like this, like, it's a lot of revisionism around like, I remember the iPhone, like their smartphones have been around for 15 years, I had, you know, I had smartphones for years, I had friends doing smartphone startups, you know, [21:43] 10 years before the iPhone. And it was sort of this thing where, you know, you'd almost roll your eyes when someone was doing a smartphone thing, because it was always this thing, you know, but [21:53] I don't know what the numbers were, but like 10 million people had them. So like they were a thing and you'd walk around and see them, but like, [21:59] but it was never kind of broke out right and meanwhile future phones were i don't know what hundreds of millions um [22:05] And, and sort of this question of loomed over it of like, when will it actually break out and how will people justify the expense? Cause it was just, they would be dramatically more expensive. [22:14] I started an AI company in 2008. It literally has an 80-year history. [22:20] If you go to Wikipedia, you'll see there's a 1980s AI bubble, literally a financial bubble in the 80s around expert systems. I mean, they actually talk in AI. They use the same language as crypto summers and winters.

[22:34] And it just took really, I think, one breakout product. So I think on the positive. So I hear you. I think, look, there's a lot of challenges. But I also think... [22:43] I don't know, my experience is that most [22:46] It seems like most policymakers are sensible. They want the best societal outcome. I think we make the case through like lots of things through, you know, obviously things like books and messaging and that kind of stuff. But also, I think really importantly, products. Yeah, I think about it like that way. Like we, you know, we have I would say there's at least 20 very high quality products. [23:08] companies that we're involved with that have products coming out in the next 12 months. And I think any one of them, obviously, on its own is a long shot, but collectively, like, could one of those be a chat GPT kind of moment? I think I think yes. And that can just change it overnight. Like I hear these debates should we rebrand things, NFTs, and I'm just like, look, MP3s, JPEGs, like there's been so many bad names, you know, [23:28] that you know like in the history of tech i mean chat gpt is that a great name it doesn't it just kind of doesn't matter if you have a great product in my view yeah [23:36] And just one great product, I go to DC, like just having something that can just demonstrate all of the benefits of this technology in one product would be such a transformational thing for those discussions. So I don't know. I mean, yeah, like it's not, I do think in some sense we're, we took a step back, as you said, from two and a half years ago, certainly on the messaging side, I think that. [23:57] The other flip side is the technology. I won't go too much into this, but I do think the core technology is very important. And like, well, look, one question is why did AI happen when it happened? I think a lot of it is, I mean, it's, it's got, no one's written a definitive history of it yet, but it's,

[24:09] It's kind of funny, right? It's because the GPUs got so much better. So you could run these bigger models. Why do GPUs get better because of video games? Like it's kind of this, you know, like, so it turns out video games created our AGI overlord indirectly or something. Right. But the point I'm making the GPUs, it's very important because the core underlying infrastructure really does matter. I mean, like, I think as much as Steve Jobs is a genius. [24:31] I think you could argue that-- I would argue that had Steve Jobs not existed, somebody would have created something [24:38] like a killer smartphone in that era, maybe two years later or something. Because you just, fundamentally, if you just looked at the kind of the underlying trends, like semiconductors were getting better, screens were getting better, batteries were getting better. And I think a similar thing you can kind of do with blockchains, where it's like the performance and the security and all the underlying trends are getting significantly better. Like, [24:58] compared to two and a half years ago. So that's another kind of positive sign. So, you know, the timing is always hard to predict, but I do think that the trends are headed in the right direction. [25:07] Until we get that [25:09] breakthrough product as you're talking about maybe it will happen in the next 12 months with one of your projects but i hope from chris's lips to god's ear i hope so uh in the meantime we are in an environment i think with the mainstream media narrative around crypto web three blockchains whatever you want to call it i'd say is skeptical at best and cynical at worst and i think you talk about this in your book about how the mainstream media is cherry picking [25:39] worst of an emergent

[25:40] I do think the [25:42] distinction around casino and computer really breaks that and I think that that's a really useful distinction and can give people language for how these things are different. What do you think I mean, I think you'll probably say a breakthrough product but like, how do we [25:57] How can we get this narrative out into the world? And asking, like, really personally, we're going to South by Southwest in a few weeks, and we're doing a consumer crypto summit. And I'd say South by Southwest, that environment is crypto unfriendly. And it's really hard to be going into that type of environment and trying to create a conversation around like a positive, optimistic, well intentioned, new internet that has things like blockchain at the core of it. [26:27] to help shift that narrative. [26:28] Yeah, I think some, I mean, you would, you would both probably have more insight into this than me, but I think unfortunately somehow crypto got inserted into the kind of culture war. It's interesting. I was just in the UK and we were speaking to some policymakers and it's not, it's not the case there. Like there's, you know, there's obviously. [26:47] you know, proponents and skeptics, but it's not kind of this charged political issue, you know, the way that it is here. And I think it's, you know, I'm not a political expert, but I think it has something to do with the origins of Bitcoin being kind of coded as right wing libertarian. [27:04] you know, the [27:05] kind of articles around the kind of tech bros and the money and and somehow it just got associated with kind of right wing something or other which you know it's obviously not the case i mean it's a blockchain is a software construct like the idea that it's got a political orientation and if anything i think you can argue a lot of the things you one does with a blockchain might code left more than right i think yeah so and you know and i also say like it's unfortunate this happened because we want this to be an inclusive movement we want people from different political directions

[27:35] And now you have this in some, there's some risk of kind of a self perpetuating thing, where if everybody says it's this kind of libertarian right wing thing, then that sort of just feeds into the Bitcoiners and the ones who, you know, like it attracts more of those people and becomes almost self fulfilling prophecy. I don't know how to counter that. I mean, I accept to just get the truth out and have people see it and like, but that's an unfortunate overlay, right? I think the world, I'm honestly, I would love your thoughts on this, because I haven't figured this out. But I also think [28:02] the world is different now around tech and the tech world hasn't fully figured this out, to be honest. So I think an interesting question is, is crypto just the kind of canary in the coal mine or [28:12] In other words, is this the new, like, look what's happening with AI right now, like generative AI. I just saw this Twitter thread and it was like a list of like 10 anti-genitative AI viral Twitter threads, right? That had like 100,000 likes. I think you could argue that this is just the new world, that like everything is political and that tech existed in this kind of sandbox for 40 years. It's just sort of like those nerds over there, ignore them, right? But like it never had these kind of politically charged overtones. [28:42] experience it. Maybe, you know, we'll see. I mean, AI is still early. Like, will it get, will like generative AI get coded? I think in some ways AI could be more politically charged because it's going to take jobs, you know, middle class jobs and also, I don't know, like it just, [28:56] feels like it could just be the very beginning of that [28:59] social media became like this in a lot of ways, right? I mean, it became, I think, post-2016 election, became very politically charged. So I think one question just to your question is like, how do we overcome that? And I feel a little bit like out of my...

[29:11] depth there because I'm not, you know, I don't know how to overcome political issues or politically, you know, [29:17] political animosity. Obviously, the product point is important, like getting good products out there. I think just the I mean, this is why I wanted to write the book so badly is just having like, I had never seen a mainstream explanation of [29:28] Well, just to give you a simple example, the press will often just accept the fact that [29:33] all [29:34] tokens are meme coins, essentially, that there's no underlying economic model. [29:39] Which is simply false. I mean, like, Ethereum has an economic model. You pay to use Ethereum. [29:44] people paid about $2 billion in the last 12 months to use the Ethereum network. That money then goes into this, you know, kind of a little micro economy, including as a way to pay the token holders. Like you can say it's maybe you think it's dumb or whatever, but it has an economic model, right? And it's just a simple fact. It takes five minutes to evaluate that yet. I've never seen that. [30:04] in the discussion and the kind of mainstream discussion of this, like, it's always just sort of like, it's pet rocks, the money comes out of thin air. So I do think I'm maybe I'm being naively optimistic, but I do think like just [30:15] sharing the actual facts. So much of the public impression is shaped by the just the incorrect set of facts that perhaps that can help somewhat. You both would probably have more expertise on this topic. It's time for a more open, inclusive, and transparent financial system. A system that serves nearly everyone, everywhere, all the time. That's why we love today's sponsor, Kraken. Kraken is a crypto platform that provides a super simple on-ramp to the world of crypto

[30:45] Crypto transcends physical and imaginary borders. No matter where you are, you can send funds easily and quickly to almost any part of the world. Plus, forget about waiting times and waiting lines. You can send, receive, and trade crypto anywhere near instantly. See what crypto can be at kraken.com backslash boys club. Non-investment advice. Crypto trading involves risk of loss. Transfers to a third party are not available on Kraken. Cryptocurrency services are provided to [31:15] PVI's Disclosures at kraken.com backslash legal backslash disclosures. [31:21] Yeah, I think for us, it's been interesting for you to put it in the context of sort of a political conversation. And our experience has definitely been that there's been a certain type of person that's been attracted to Boys Club. [31:34] primarily young women who... [31:37] are... [31:38] very disillusioned with the world. [31:40] And... [31:41] very disillusioned with the existing institutions that exist, whether it be political or religious or their workplaces, whatever it is, and they have been actually drawn to [31:52] crypto as this sort of subversive environment that allows for sort of this like blow it up and start over mentality. And I think you also there's like [32:03] touches of that in the EAC movement and people sort of having a deep belief in ideology and connection to tech in a way that I don't, [32:12] at least non-technical, non-engineers have not had, I think, previously. And it's an interesting...

[32:19] thing to witness and be a part of. And I think there's, [32:22] some really positive things about it, where people feel passionate about their work and connected to an industry in a different type of way than just a job. But I also think there are these downstream consequences of when something does look like an ideology and a movement, there is... [32:36] Uh... [32:37] reaction to that that's really visceral. And we've seen that as well, I think. One question around this idea of the casino versus the computer philosophy and something that was really helpful in reading your book was, [32:51] really talking about how the tokenomics and the design around how you incentivize people through tokens is... [32:59] central to the whole network effect working and how, you know, this is all this like beautiful picture of how it all comes together. And I totally see that and I'm excited about that future. But a thing that I witnessed in doing this work and just kept coming back to is it is all sort of tied back to... [33:19] the token and how do you build outside of this casino mindset and how do you attract not mercenaries when you're, [33:29] number go up is baked into the network and baked into the culture around it and crucial to it all working. How do you avoid that lens being so important to the work and to [33:43] building [33:44] the tooling and application layer. Yeah. So that's a great question. And by the way, in my fantasy world, that would be the question we'd be discussing as opposed to some of the others. Like, this is the kind of, honestly, this is a question I think about, like on the weekends is like, I call it kind of financial dampening in my head. I haven't said it public, like I haven't worked out what it should be called, you know, if we talk about it publicly, but like, but the idea just being that, that in some ways tokens are too powerful as a mechanism that there's sort of this

[34:14] nuclear force or something that like if you don't think very carefully about it can just completely overwhelm these services and just as you said become just all about the money and this is where I've come to the policy side of things like I think people might view it as like we're doing policy defensively I actually if you look at our track record we've been calling for [34:32] for policy changes like long before 2021. And for this reason, so just to give you an example, like I think the single biggest thing you can do is time horizons. So meaning like long lockups. So in my ideal world, [34:44] No regular user would ever pay for tokens. They would get them airdropped. That's pretty much the norm now. You earn tokens for doing work. You are an early contributor to a video network and you're uploading video and you're earning some portion of the network or something. Early driver for Uber should have earned some of Uber. Then there's some multi-year kind of [35:04] lock up where you just can't have trading or you've significantly reduced the trading. And you just think about like how tech startups work. People get, you know, they get paid cash, typically market salaries, and then they get some equity on top, but the equity is locked up for a long time. [35:20] And this is how all Silicon Valley works. It's all kind of profit based. [35:25] But it's long-term profit-based, right? Yeah. And what long-term forces you to do is I have this graph, the kind of Gartner hype cycle graph in the book, where it's sort of like every technology tends to get kind of hyped up and then drop and then has this... [35:36] has to rebuild. And the way I think about it is if you have long lockups, [35:40] you're forced to build actual value because you can't sort of go through a hype cycle. So I just think time horizons, I mean, look, our whole business, I'm not claiming ventures, we're not like better people than other asset classes or something. But the fact that it's 10 years, it's kind of forces you to be because our funds are 10 years, our returns are like the average return is probably, you know, 10 years before we see a dollar, it's in that ballpark, just forces you to have a different mindset, like you're not, you have to build something, like you have to build a really important thing that hundreds of millions of people use, right?

[36:10] We can't impose that. When we do investments, we'll say our default is always a year cliff lockup, like four-year lockup essentially, but with a one-year cliff. But if we try to say, hey, there should be a longer one and there should be more restrictive, at some point, entrepreneurs won't work with us. So it really needs to be kind of the quote refs, the policymakers who impose that. A lot of the proposals that we're supportive of also have things like the project has to do a year of security audits. They have to have disclosures. [36:40] like a lot of the behavior you're probably thinking about is behavior that can be mitigated through smart policy. Right. We're still in a relatively early phase of crypto and it's, [36:49] maybe just culturally also dominated more by the number go up people. But I would hope that as it grows, that we'd bring in more people like both of you, I think who are more interested in the kind of product side of it versus the financial side of it. And so I also think hopefully over time there's sort of a cultural shift. I mean, open source software is, I think of as an analog in some ways, [37:10] It began very politically in the 80s, and it was a sort of a left-wing, anti-racist. [37:15] capitalism movement, and then morphed into a much very pragmatic kind of [37:21] technology movement. And that made a lot of people overlook it in the 90s, because it was still seen as this kind of radical thing. And so, you know, I think [37:30] Potentially that kind of cultural change can happen as in some ways it has to happen as you grow right because you just get more normal mainstream people and yeah, totally. I think this is like even a tiny microcosm example but at boys club there's been a few moments since we started where we were like, well, should we create token and.

[37:48] Ultimately it came down to two things one is [37:51] we were like, neither one of us wanted to go to jail. We were just not prepared to do any prison time. And then the second thing was, [37:59] We've seen other examples where you do launch a token and it creates a hyper financialized environment around something that isn't ready to be financialized. And I think that creates weird outcomes, especially for like media and communities where it starts to be speculative and mercenaries and like people come in like fruit flies for some sort of. [38:17] AirDrop and don't believe in the product or the mission or whatever it is. And so I think that, yeah, that's been like a thing that we've come back to a couple different times. But I do think a token lockup could help in that. But I wonder also, like, if this is sort of the mechanism for... [38:33] all of this working, the blockchain working, like, [38:35] how you strike that balance. So for example, like nouns, Dow is maybe an example where, you know, you have a, I think a community that's less financialized, there is that financial elements. And I think it's partly because you know, this NFTs, it's not, I think the fungible tokens create more of a financial [38:51] financialization. Partly it's just the kind of culture and the people you [38:54] you know, you kind of get involved. Another example is, so we have a portfolio company called Blackbird, which is a restaurant, if you know them, but it's a really talented entrepreneur, Ben Leventhal, who was a founder of [39:05] Resi before, you know, popular restaurant. He's a friend of the pod. He's doing some really interesting stuff, you know, where it's, you know, you sort of get loyalty points with restaurants as and they're delivered as NFTs. But

[39:20] at the beginning, they're, you know, they're non transferable and they're, you know, kind of, um, restricted in some of the functionality. It's early and we'll see how it evolves. But that's just like one of a number of examples now where I think people are taking kind of more nuanced views of this and really trying to put the emphasis on [39:37] ownership and not speculation. And so, you know, I, one way to think about it is there's sort of different, like, what does ownership mean? There's sort of different verbs that it implies, right? Like one is trading. That's, of course, what people have focused on. But the other is switching is an example, which means like, [39:52] That's sort of the Farcaster use case where you can use a social network, but because you own your name, you can switch. You can switch clients. You can switch software. It ships the power to the user, right? Right. [40:05] And so I think the product question becomes, how do you use [40:09] like I think this is what Blackbird and Farcaster and some other of the newer products are exploring is how do you kind of explore [40:16] ownership in the [40:18] the other verbs around ownership, like switching, like a sense of real connection with the like, in the case of the restaurant, like you're trying to create an authentic connection, as opposed to the trading aspects, right? I think just to double down on that, I think that that's a really great point. Because I think also, while we were reading your book, another thing that came up for us was like, do people care about do they understand this idea of digital ownership? This is [40:42] new. We've been trained as consumers over the past 10 years to be buying subscriptions to things. And [40:48] that [40:49] Training runs really deep so that now if you're just off the street,

[40:54] gal and you're, there's some product that's purporting some degree of ownership, digital ownership. I think that that's, that's really abstract for folks. And yeah, [41:03] that kind of feels like a prerequisite for any of these networks. [41:07] to work [41:07] I think, yeah, no, so I think you're right that like, I think people that say like people don't care about ownership per se, that's correct. But like, for example, they do care about, [41:16] economics. And so in a web two style social network where everyone's kind of locked in, right? What that means is that if you're a creator on those networks, you're completely subordinate to the network, you know, they decide how much money you get, right. And you know, people that have big tick tock followings, for example, they're doing all of these kind of what I would consider gymnastics to make money, like sponsorships and selling physical products, which is, I think it's absurd. They should just be making money [41:42] through the network, right? The way that if you have an email subscriber list, you would just put up ads and subscriptions and do whatever and make money off your list. Like you don't need to go, you don't see people with a million email subscribers who, [41:54] trying to go do these kind of side deals they can just go direct and so if for example we have which i hope in the next couple of years [42:03] growing decentralized social networks, the fact that you can, [42:08] build a direct relationship with your audience and have 100% of the economics and control, like that will be meaningful to people, right? That'll take time and you have to build these [42:17] software developers. So for those who are around, like 2008 through 11, the way people are talking about AI now, they were talking about

[42:25] building... [42:26] The hot thing in Silicon Valley was building services on top of Facebook and Twitter. And then that kind of got shut down by those networks because they decided that wasn't in their interest. I think that there's all of this latent energy among the software developer community to [42:39] to build on top of internet services. And that if we start to provide them with new platforms where they can build their own clients and analytic services and monetization system, whatever, it's just like it becomes a platform the way that the web is a platform or emails a platform. [42:53] I think that will get people really fired up. So to your point, I don't think people are going to say, I'm switching because of digital ownership. They're going to switch because there's better software, there's better economics. There's a tangible benefit. Right. [43:05] But that's a consequence of the ownership, right? [43:08] But that does make it trickier for us to [43:10] sort of explain this and market it. And again, I keep going back to the product thing. I don't want to be a broken record. But like, ultimately, it comes down to like, I can only say this so many times, like someone needs to, you know, we need to have the products out there. Yeah, [43:22] that really make show don't tell right but like the economic point like so i just keep coming back to the economic point like [43:28] When I talk about network control, like Twitter having control, I think the shadow banning and the political things are overplayed in a lot of ways. It matters, obviously, if you're banned, you don't like it. [43:40] The real consequence of these networks and the way they're architected is economic. Social networks make $150 billion last year in revenue. [43:48] And that money, there's just no question, had RSS beat out Facebook and Twitter as sort of this underlying substrate for social networking, that $150 billion would have gone to the edge of the network. Like that is a hugely consequential swing. And you could say it's depressing, but it's also an opportunity, right? Which is, in a lot of ways, those companies are vulnerable. They're taking $150 billion that they aren't really earning and that they don't.

[44:11] it's relatively easy to build alternatives that have the same functionality. [44:15] And the only thing keeping them there is sort of inertia and network effects. And maybe that's strong enough to defend them. But I think, you know, just from a capitalist kind of venture capital point of view, that's a really kind of juicy, soft target to go after because they just sort of just taking all this money that they aren't really earning. To your point, I think people are going to care about the money, the control, the quality of the software more than direct ownership. But hopefully in that process, they realize that ownership is a thing that. [44:41] is enabling all of it. Okay, so just track with me here because there's a few pieces to this question. It runs from what you were just saying in Tatina's question. So one of the points you make around and a main theme of these... [44:55] networks is that [44:57] How they differ from corporate networks is that you're making promises. [45:02] in [45:02] the foundation of them. [45:04] and [45:05] that [45:06] In the case of, let's say, decentralized social, there's promises that are made and the user... [45:12] is incentivized to switch maybe because of those promises long-term. And what I'm struck by is how... [45:20] much more [45:21] early products and early building [45:24] You don't know what you're doing until you're doing it. And this is emergent space. This is emergent technology. How do you make those hard things? [45:31] promises and fixed rules of a network, [45:35] when you don't know what you're doing, basically, and you don't know how people are going to use it. And then, [45:40] In the same vein...

[45:42] there's the promise of let's use the OpenSea blur example. [45:45] where [45:46] They had this downward pressure... [45:49] And because the switching costs are low in NFT marketplaces, everybody moved to Blur. [45:54] and [45:55] That was great because the take rates got smaller for people and that was a positive outcome in many ways. But who lost in that was creators and royalties and the, [46:05] Because that wasn't built into the rules of the network to begin with. So would love your insight into those problem areas of network building. [46:15] Yeah, no, it's a great question. I mean, the question of, okay, so like you, one of the benefits of a blockchain, right, as you mentioned, is that you can make these, you can write code that kind of commits to how it will behave long term. [46:26] but it's hard upfront to know what that will be. That's also just one of the things that hopefully time solves like now, just to give you a simple example, we have a bunch of [46:34] blockchain based games that are [46:37] that are sort of early stage that we've invested in the last year or two. And they're just a lot more sophisticated than the ones three or four years ago, because they got to see the lessons from those from that era. Right. So some of it just takes time. Like you have to see kind of mistakes made essentially. And then part of it is in the design, like in the governance systems of these networks, some of them, I think, like I usually recommend to the extent possible to leave some flexibility in the beginning. [46:59] And you'll see this, like a lot of these networks, people will complain about it, but they have [47:02] They effectively have multi-sig for some of the founders in the beginning who can essentially override those commitments. [47:10] The logic being just to your point, it's hard in the beginning to know. And obviously at some point you need to hand over control to the community, but maybe you delay that somewhat, which seems like a reasonable compromise. And by the way, not to be a broken record, but like in the smart policy approaches, you actually have frameworks for that. So, OK, so at this stage, it's still controlled by the team.

[47:29] And that means there's more financial guardrails around it. [47:32] you'd have a whole kind of staged framework for that. So creator royalties, I think, are its own little topic. And I think you could argue that's separate. Those are sort of two things that went on [47:42] blur and open see one is the fact that you have low switching costs because [47:45] The NFTs and the user identity are kept on a blockchain. I think generally low switching costs, even though like we're investors in OpenSea, it's annoying, but it's the promise of the space is that users can switch. And so I think that's a good thing. [47:58] I think the specific creator royalty thing is probably a separate issue and [48:02] Yeah, I mean, definitely annoying. I'm definitely pro creator royalties, and I think it's an important part of [48:07] what attracts people to the space. There's technical nuances with that. Like if you [48:12] If you force creator royalties on the blockchain, you also limit, for example, the ability for a user to move NFTs from one wallet that person owns to another. And there's some nuances. But I think of that as more of a technical problem that will get solved. People are making proposals and that specific problem. But I think generally, it's a good thing for consumers that there is competition like that, right? That there is the ability to switch and choose and you're not locked in. [48:42] very smart security researcher who was sort of arguing that blockchains are just going to do the same thing that's always happened, which is people will re-centralize around certain hubs. And empirically, we've seen the opposite, which does suggest a positive thing, which [48:56] this architecture does really kind of push choices out to the users.

[49:00] Okay, we have just a couple minutes left with you, Chris. So what are some good faith critiques that you've had since the book has come out? [49:08] I know there's a lot of misinformed or bad faith critiques, but what are some of the ones that have been more interesting to you? [49:14] Well, I think the best good faith critique is just sort of it hasn't happened yet. Yeah. It's a nice story, but until we see these products and all of this stuff play out, which is fair. I mean, it's not, it hasn't happened yet. What else? I mean, honestly, I think so far it's been sort of crypto people have all really liked it. And then as far as I can tell, the haters haven't read the book. [49:35] Well, like there was one, I just saw it. It was like... [49:37] RSS isn't actually dead. And I was like, Okay, like, go to Google trends, go walk down the street and ask somebody what social networks they use, and how many of them use RSS, like it's not even I didn't, I didn't honestly, I didn't even think of [49:51] of that as a possible objection. And by the way, I say in the book, like RSS, of course, still exists around podcasting. But it's just the point I was making was that in 2007, like if you walk down the street and ask somebody if they use social media, and most people wouldn't, but if they did, there was a greater than 50% chance [50:06] they use an RSS reader. Like that was the dominant. And there was a moment at which that could have been the way people did this. And that didn't happen. And if you just look at the stats, it dropped dramatically. It still exists sort of as this [50:18] thing behind the scenes for podcasting and other things and maybe in niche areas, but it's not 5 billion people like Facebook and WhatsApp and Instagram. Someone else said I didn't have [50:27] enough footnotes. I have, I don't know, 36 pages of footnotes and 230-page books. I don't know. So I feel like some of the critics, like, I think there are good faith critiques, and I'm looking forward to them. I feel like so far it's been the critics haven't

[50:41] for whatever, maybe it's, they just haven't thought it's important enough to actually read, I guess, or something, I don't know. What, have you seen good faith critiques? - I saw one around, [50:51] It was primarily around just the collective storytelling piece. Oh, that... [50:55] Yeah, it's a really interesting question. Like, okay, so you have a world where you can push a button and create a, create a video like the opening I demo last week. Right. And I assume that will be the world we live in. It's almost free to create content. Like what happens? [51:10] like in that world, does all value and kind of scarcity go away around media, or does it shift to other areas? Like my experience in technology, it always shifts to other areas. And what I mean by that is, [51:21] Maybe it's easy to create a [51:23] a video, a movie, but it's hard to get people to care about it. And, you know, and maybe getting people to care about it is about building communities who evangelize it and have a sense of ownership. And, you know, and that's kind of, to your point, like you were mentioning, this is a chapter at the end of the book about collaborative storytelling. Like to me, that idea becomes even more interesting in the AI world. [51:42] because you're going to need new ways to organize people and i don't know i mean presumably we're not just awash in tons of i guess the dystopian thing is we're all just plugged into some personalized video feed and [51:54] sitting there all day. But I think the Wally screen. Yeah, I mean, [51:59] But I tend to think like humans fundamentally like humans and you know, that there will still be an, like, it will mean something to you that other people like the story and that people [52:08] humans created some of the story. I, I'm, [52:11] feel very confident that's the case and that we'll need new ways to kind of organize around these.

[52:15] around media as an example. I don't know. So I think it's a very reasonable debate to have around [52:21] that chapter of the book where I talk about collaborative storytelling and maybe I'm wrong, but I would just love the world where we can have that discussion. Yeah. Like, like as opposed, like I'm not saying I'm right. I'm just saying this is like a really fascinating area to discuss and explore and not, [52:36] have just sort of name calling and like cryptos evil or something like let's like that's my maybe naive fantasy is that in three years we're all having discussions like that around like what's the right kind of network design in a world of AI and what's the incentive systems we want for creative people and like [52:55] all these kinds of questions. And obviously there would be good faith critique. Like I'm speculating about the future, and I obviously could be wrong. But like that, I just-- [53:03] Like, I just want to have that discussion and not the discussion that we're having today. Dina and I have another podcast called Two Online where we dig into like a internet story. And I have to tell you, I have so much belief in your idea of collective storytelling because the things that we find on the internet that people spend a lot of time doing and the things that they do together in small communities online is insane. And they spend so much time and they care and they do it with other people who care about the same things.

[53:33] - I think it's a good thing. [53:34] That would be incredible. I'm laughing because what I know you're thinking about is just for reference, Chris, last week we covered Duolingo fan fiction. People were writing fan fiction about the Duolingo bird. And then there's also Shrek fan fiction. That's Sims, like in Sims world. And so... [53:52] People were marrying the Shrek Sims fan fiction with the Duolingo bird fan fiction. Anyway, so that's what she's speaking to. So put it on chain. [54:02] I just want to end with one last question here. Many people who listen to this podcast are... [54:06] flag bearers for this industry? And what advice would you give them for choosing their heroes? What are some just best practices around projects, platforms, ideas that they love and advocate for? How do we not galvanize around another hero who is a bad actor? Yeah, good question. I mean, this is where, you know, in the book I talk about this computer versus casino idea that the sort of two cultures fighting over [54:31] the kind of future blockchains. [54:34] And so I do think, I mean, hopefully by naming that and calling it out and like understanding that there is there's sort of different ethos around this. That's maybe step one. Yeah, that whole thing. It was it was interesting to watch because we weren't involved. [54:47] with any of those like FTX and things. And honestly, the main reason was not that I knew it was fraud and things. It was a computer and casino thing. It was like, this is just a different culture and different, like we're not interested in this stuff and it's offshore and I don't know. But I think a lot of this is a movement building though. So there's sort of the negative framing of like, how do we avoid the casino? And then I would think of it more in the positive framing of like, how do we build such a big, dominant, overwhelming computer movement that the other thing just seems like a sideshow? Let me maybe add a note of positivism here, which is before I was

[55:17] will inspire people. [55:18] But it's also like, [55:19] There's always the new people entering... [55:23] their careers. [55:24] And they're always looking for something to do. And I think there's really just two things now. There's AI and blockchain. And you know, like my friend, our friend Dan Bonet is a professor at Stanford. He teaches a blockchain course and there were 200 students last semester, which is second most popular course after AI. AI is like 800 or something. So a lot more, but still like number two. And that's been pretty consistent. I think there's a set of people like to your point earlier about some of your listeners who instinctively get that like that AI is establishment and crypto is anti-establishment and [55:54] Now, it can be the wrong kind of anti-establishment, but if we can channel it into the right kind of anti-establishment, I do think that that appeals to a set of people. And with the right nudges, the work you're doing, the work I'm doing, other people, if we can get those people, you know, again, there's just every year there's 100,000 people entering the tech industry or something. And if we get some portion of them excited about this other vision, can we create a strong enough movement? And then it just takes care of itself, right? Like those are the people who build interesting things. [56:24] the people people look up to and the heroes of the industry that can happen pretty quickly if with the right again with the right things that happen and the right products and I think we're coming out of the downturn the negatives I don't know you would be closer to it than I am but too but I mean there was just a lot of bad stuff that happened a year and a half ago and I feel like some of it's worked itself out I love ending on an optimistic note Chris thank you so much this has been so great so fun really appreciate your time

[56:47] Really enjoyed it. Thank you. [56:49] *music*