A family buys a house they can’t afford.

They can’t make their monthly mortgage

payments, so they borrow money from the
Mob. Now they’re in debt to the bank and
the Mob, live in fear of losing their home,
and must do whatever their creditors tell
them to do.
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A Book Apart:
Brief books for people who make websites.
An Event Apart:
3 days of design, code, and content for web & UX designers & devs.
Welcome to the internet, 2019.
Buying something you can’t afford, and borrowing from
organizations that don’t have your (or your customers’)
best interest at heart, is the business plan of most
internet startups. It’s why our digital services and social
networks in 2019 are a garbage fire of lies, distortions,
hate speech, tribalism, privacy violations, snake oil,
dangerous idiocy, deflected responsibility, and whole
new categories of unpunished ethical breaches and
crimes.
From optimistically conceived origins and message
statements about making the world a better place, too
many websites and startups have become the leading
edge of bias and trauma, especially for marginalized and
at-risk groups.
Why (almost) everything sucks
Twitter, for instance, needs a lot of views for advertising
to pay at the massive scale its investors demand. A lot of
views means you can’t be too picky about what people
share. If it’s misogynists or racists inspiring others who
share their heinous beliefs to bring back the 1930s, hey,
it’s measurable. If a powerful elected official’s out-of-
control tweeting reduces churn and increases views, not
only can you pay your investors, you can even take home
a bonus. Maybe it can pay for that next meditation
retreat.
You can cloak this basic economic trade-off in fifty layers
of bullshit—say you believe in freedom of speech, or that
the antidote to bad speech is more speech—but the fact
is, hate speech is profitable. It’s killing our society and
our planet, but it’s profitable. And the remaining makers
of Twitter—the ones whose consciences didn’t send them
packing years ago—no longer have a choice. The guy
from the Mob is on his way over, and the vig is due.
Not to single out Twitter, but this is clearly the root
cause of its seeming indifference to the destruction hate
speech is doing to society…and will ultimately do to the
platform. (But by then Jack will be able to afford to
meditate full-time.)
Other companies do other evil things to pay their vig.
When you owe the Mob, you have no choice. Like sell
our data. Or lie about medical research.
There are internet companies (like Basecamp, or like
Automattic, makers of WordPress, where I work) that
charge money for their products and services, and use
that money to grow their business. I wish more internet
companies could follow that model, but it’s hard to
retrofit a legitimate business model to a product that
started its life as free.
And there are even some high-end news publications,
such as The New York Times, The Washington Post, and
The Guardian, that survive on a combination of
advertising and flexible paywalls. But these options are
not available to most digital publications and
businesses.
Return with me to those Halcyon
days…
Websites and internet startups used to be you and your
friends making cool stuff for your other friends, and
maybe building new friendships and even small
communities in the process. (Even in 2019, that’s still
how some websites and startups begin—as labors of
love, fashioned by idealists in their spare time.)
Because they are labors of love; because we’ve spent 25
years training people to believe that websites, and news,
and apps, and services should be free; because, when we
begin a project, we can scarcely believe anyone will ever
notice or care about it—for these reasons and more, the
things we make digitally, especially on the web, are
offered free of charge. We labor on, excited by positive
feedback, and delighted to discover that, if we keep at it,
our little community will grow.
Most such labors of love disappear after a year or two, as
the creators drift out of touch with each other, get “real”
jobs, fall in love, start families, or simply lose interest
due to lack of attention from the public or the
frustrations of spending weekends and holidays grinding
away at an underappreciated site or app while their non-
internet friends spend those same hours either having
fun or earning money.
Along came money
But some of these startup projects catch on. And when
they do, a certain class of investor smells ROI. And the
naive cofounders, who never expected their product or
service to really get anywhere, can suddenly envision
themselves rich and Zuckerberg-famous. Or maybe they
like the idea of quitting their day job, believing in
themselves, and really going for it. After all, that is an
empowering and righteous vision.
Maybe they believe that by taking the initial investment,
they can do more good—that their product, if developed
further, can actually help people. This is often the
motivation behind agreeing to an initial investment deal,
especially in categories like healthcare.
Or maybe the founders are problem solvers. Existing
products or services in a given category have a big
weakness. The problem solvers are sure that their idea is
better. With enough capital, and a slightly bigger team,
they can show the world how to do it right. Most
inventions that have moved humankind forward
followed exactly this path. It should lead to a better
world (and it sometimes does). It shouldn’t produce
privacy breaches and fake medicine and election-
influencing bots and all the other plagues of our
emerging digital civilization. So why does it?
Content wants to be paid
Primarily it is because these businesses have no business
model. They were made and given away free. Now
investors come along who can pay the founders, buy
them an office, give them the money to staff up, and
even help with PR and advertising to help them grow
faster.
Now there are salaries and insurance and taxes and
office space and travel and lecture tours and sales booths
at SXSW, but there is still no charge for the product.
And the investor seeks a big return.
And when the initial investment is no longer enough to
get the free-product company to scale to the big leagues,
that’s when the really big investors come in with the
really big bucks. And the company is suddenly famous
overnight, and “everybody” is using the product, and it’s
still free, and the investors are still expecting a giant
payday.
Like I said—a house you can’t afford, so you go into debt
to the bank and the Mob.
The money trap
Here it would be easy to blame capitalism, or at least
untrammeled, under-regulated capitalism, which has
often been a source of human suffering—not that
capitalism, properly regulated, can’t also be a force for
innovation which ameliorates suffering. That’s the
dilemma for our society, and where you come down on
free markets versus governmental regulation of
businesses should be an intellectual decision, but these
days it is a label, and we hate our neighbors for coming
down a few degrees to the left or right of us. But I
digress and oversimplify, and this isn’t a complaint
about late stage capitalism per se, although it may smell
like one.
No, the reason small companies created by idealists too
frequently turn into consumer-defrauding forces for evil
has to do with the amount of profit each new phase of
investor expects to receive, and how quickly they expect
to receive it, and the fact that the products and services
are still free. And you know what they say about free
products.
Nothing fails like success
A friend who’s a serial entrepreneur has started maybe a
dozen internet businesses over the span of his career.
They’ve all met a need in the marketplace. As a
consequence, they’ve all found customers, and they’ve
all made a profit. Yet his investors are rarely happy.
“Most of my startups have the decency to fail in the first
year,” one investor told him. My friend’s business was
taking in several million dollars a year and was slowly
growing in staff and customers. It was profitable. Just
not obscenely so.
And internet investors don’t want a modest return on
their investment. They want an obscene profit right
away, or a brutal loss, which they can write off their
taxes. Making them a hundred million for the ten
million they lent you is good. Losing their ten million is
also good—they pay a lower tax bill that way, or they use
the loss to fold a company, or they make a profit on the
furniture while writing off the business as a loss…
whatever rich people can legally do under our tax
system, which is quite a lot.
What these folks don’t want is to lend you ten million
dollars and get twelve million back.
You and I might go, “Wow! I just made two million
dollars just for being privileged enough to have money
to lend somebody else.” And that’s why you and I will
never have ten million dollars to lend anybody. Because
we would be grateful for it. And we would see a free two
million dollars as a life-changing gift from God. But
investors don’t think this way.
We didn’t start the fire, but we roasted
our weenies in it
As much as we pretend to be a religious nation, our
society worships these investors and their profits,
worships companies that turn these profits, worships
above all the myth of overnight success, which we use to
motivate the hundreds of thousands of workers who will
work nights and weekends for the owners in hopes of
cashing in when the stock goes big.
Most times, even if the stock does go big, the owner has
found a way to devalue it by the time it does. Owners
have brilliant advisers they pay to figure out how to do
those things. You and I don’t.
A Christmas memory
I remember visiting San Francisco years ago and scoring
an invitation to Twitter’s Christmas party through a
friend who worked there at the time. Twitter was, at the
time, an app that worked via SMS and also via a website.
Period.
Some third-party companies, starting with my friends at
Iconfactory, had built iPhone apps for people who
wanted to navigate Twitter via their newfangled iPhones
instead of the web. Twitter itself hadn’t publicly
addressed mobile and might not even have been
thinking about it.
Although Twitter was transitioning from a fun cult thing
—used by bloggers who attended SXSW Interactive in
2007—to an emerging cultural phenomenon, it was still
quite basic in its interface and limited in its abilities.
Which was not a bad thing. There is art in constraint,
value in doing one thing well. As an outsider, if I’d
thought about it, I would have guessed that Twitter’s
entire team consisted of no more than 10 or 12 wild-
eyed, sleep-deprived true believers.
Imagine my surprise, then, when I showed up at the
Christmas party and discovered I’d be sharing dinner
with hundreds of designers, developers, salespeople, and
executives instead of the handful I’d naively anticipated
meeting. (By now, of course, Twitter employs many
thousands. It’s still not clear to an outsider why so many
workers are needed.)
But one thing is clear: somebody has to pay for it all.
Freemium isn’t free
Employees, let alone thousands of them, on inflated
Silicon Valley engineer salaries, aren’t free. Health
insurance and parking and meals and HR and travel and
expense accounts and meetups and software and
hardware and office space and amenities aren’t free.
Paying for all that while striving to repay investors
tenfold means making a buck any way you can.
Since the product was born free and a paywall isn’t
feasible, Twitter must rely on that old standby:
advertising. Advertising may not generate enough
revenue to keep your hometown newspaper (or most
podcasts and content sites) in business, but at Twitter’s
scale, it pays.
It pays because Twitter has so many active users. And
what keeps those users coming back? Too often, it’s the
dopamine of relentless tribalism—folks whose political
beliefs match and reinforce mine in a constant
unwinnable war of words with folks whose beliefs differ.
Of course, half the antagonists in a given brawl may be
bots, paid for in secret by an organization that wants to
make it appear that most citizens are against Net
Neutrality, or that most Americans oppose even the
most basic gun laws, or that our elected officials work
for lizard people. The whole system is broken and
dangerous, but it’s also addictive, and we can’t look
away. From our naive belief that content wants to be
free, and our inability to create businesses that pay for
themselves, we are turning our era’s greatest inventions
into engines of doom and despair.
Your turn
So here we are. Now what do we do about it?
It’s too late for current internet businesses (victims of
their own success) that are mortgaged to the hilt in
investor gelt. But could the next generation of internet
startups learn from older, stable companies like
Basecamp, and design products that pay for themselves
via customer income—products that profit slowly and
sustainably, allowing them to scale up in a similarly
slow, sustainable fashion?
The self-payment model may not work for apps and sites
that are designed as modest amusements or
communities, but maybe those kinds of startups don’t
need to make a buck—maybe they can simply be labors
of love, like the websites we loved in the 1990s and early
2000s.
Along those same lines, can the IndieWeb, and products
of IndieWeb thinking like Micro.blog, save us? Might
they at least provide an alternative to the toxic aspects of
our current social web, and restore the ownership of our
data and content? And before you answer, RTFM.
On an individual and small collective basis, the
IndieWeb already works. But does an IndieWeb
approach scale to the general public? If it doesn’t scale
yet, can we, who envision and design and build, create a
new generation of tools that will help give birth to a
flourishing, independent web? One that is as accessible
to ordinary internet users as Twitter and Facebook and
Instagram? Tantek Çelik thinks so, and he’s been right
about the web for nearly 30 years. (For more about what
Tantek thinks, listen to our conversation in Episode №
186 of The Big Web Show.)
Are these approaches mere whistling against a
hurricane? Are most web and internet users content
with how things are? What do you think? Share your
thoughts on your personal website (dust yours off!) or
(irony ahoy!) on your indie or mainstream social
networks of choice using hashtag #LetsFixThis. I can’t
wait to see what you have to say.