Tag: Capitalism

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Finance Startups

238 and DAO Ethics

Are smart contracts freeing us from the tyranny of the legal class just to toss us into the maws of the developer class? Sure we think of lawyers as being inherently worse because they are bourgeois and protected by credentialism and regulatory capture.

But as crypto gets more complex and smart contracts involve more intricate provisioning ,will it become just as exclusionary as the ecosystem of white shoe magic circle legalese? It’s getting to be mighty hard to afford Solidity developers!

Sure we tend to think of developers as friendly self trained indie types. Anyone can learn to code! Let us not lean on heavily on the benefits of decentralization as a panacea for human nature. Power aggregates and money likes influence.

When describing the benefits of how DAOs will outflank traditional corporate governance structures we need to look out for how we avoid the self interest of a protected class of Mandarins forming. We need to think ahead on how to keep smart contracts legible. I don’t have any of the answers here. Governance is just barely coalescing in crypto but it’s never to soon to think ahead.

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Internet Culture Startups

237 and Crypto-Optimism

As much as Silicon Valley and startup culture claim a kind of techno-optimism, in the wake of the social media partisanship, science skepticism and climate concerns, it feels hard to really dream big. People say catch phrases like “it’s time to build” but we all understand there are limits to the problems we solve in capitalism’s current markets. And no one believes the government can solve anything.

Any possibility or big dream can be clouded by its politics or cultural baggage if you let it. We yell about cancel culture but it’s really a lack of imagination. A kind of giving in to the boundaries of what is acceptable has captured the moment.

But I’m noticing a genuine mood of possibilities in crypto. A levity that believes in wide open horizons. Instead of the long horizon, crypto sees a bright one.

Maybe it’s because crypto’s proponents genuinely believe it will be possible to toss out legacy systems. Crypto is still so new the disillusionment of compromise to human nature, design dependencies or aggregate power seem far away. The problems that plague ant endeavor haven’t become inevitable. No wonder the mood is ebullient. We are genuinely happy in crypto.

You can imagine a world in which the DAO destroys the corporation. You can imagine a world in which artists are paid directly by patrons in effectively priced markets which respect their ownership. You can imagine expensive and exclusive financial products being automated away so even a small independent entity can access the best without bleeding out through a dozen service fees. Everything could still be a utopia.

And while I know it won’t it feels really great to be optimistic about something.

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Internet Culture

Day 226 and Brain Prostitutes

When you sell your intellect for a living you cannot afford to have a stupid day. When I was younger I sold my time but as I got older I got paid for my ideas. Or as one of my favorite anonymous Twitter accounts Becoming Critter said I’m “a brain prostitute.”

There isn’t a union for idea whores so when your mind has a sick day you are fucked. Not idea fucked, no, because then you’d get paid. If you can’t produce a good idea you’ve got nothing to sell. I personally found this entire concept of knowledge worker as as brain prostitution to be pretty amusing. It kind of takes the wind out of your sails if you’ve decided being a “knowledge worker” makes you better than other types of labor.

We’ve decided that selling your mind is higher status than selling your time but I think it’s all just a a clever way for the capital class to move labor into categories that produce better returns. If someone has found it beneficial to employ you, either for your time or your ideas, it’s because it’s worth more than you are getting paid.

I like that the intelligentsia is lying to themselves about being bourgeois. Doing practical things like running a grocery was beneath them. So they had to invent some exciting distinction that convinced everyone that selling ideas made you a better class of person than selling lettuce. I’m not really sure how Marx would see all of this but it seems like if you aren’t capital then you are still labor.

But I guess now that we’ve got rid of hereditary aristocracy the need for more elaborate distinctions for how we determine our betters is clear. The market demanded a rebrand. Personally I like idea whore better but I can see why we went with knowledge worker.

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Finance

Day 225 & Explaining DAOs to Moms

My mother is a sharp woman. She’s interested in economics but if you asked her to explain securities law she’d probably shrug. Not her expertise. She did survive our family bankruptcy during the tech IPO implosion she’s got a slight intuition of securities law in the context of consumer protection but that’s about it.

So I was impressed that she was able to sum up the recent infrastructure bill’s attempt to make crypto foot the bill very neatly.

“So they are trying to convince us that people who program computers to run math problems are actually bankers?”

That’s…actually not too far off. She seemed to grok that this was a misunderstanding of the basic technology, who builds it and it’s purpose. She was glad the amendment didn’t pass. Clearly people who build computer applications are not the same as the guy at Charles Schwab who looks after her retirement account.

We were discussing it, as I was trying to explaining PR DAO and why I wanted to help organize an activist group of folks whose purpose was execute public relations campaigns to tell stories about crypto. I explained to her that rather than having a bunch of executives who make decisions we would write a set of rules that automatically determine how we make decisions. Those rules would let all members of the organization vote on how we wanted to deploy our assets and pursue our agenda. She liked the tag line “rules not rulers” a lot. She’s pretty into freedom. A smart contract was pretty intuitive to my mom.

Where she got confused was the governance tokens. Not how they worked. Again it was intuitive to her that depending on what you contributed and how invested you were in the organization that you would a different say in what got done. Maybe each token represents one vote. Maybe some people have more votes because they are more invested. Presumably we figure that out in our smart contract. What she didn’t get was why the government thinks a voting mechanism is a security.

“So the government treats the way your group organizes decision making as if those little voting symbols were stock in IBM? That’s fucking stupid”

Now granted my mother probably can’t explain what a security is (she’s got the basic idea that they are like a type of money and Boomers like to own stocks). She gets why they are regulated the way they are in a general sense. She’s lost money on badly governed companies. So sure it’s fine that the government has some rules for that sort of thing.

But even to a lay person like my mom it seems pretty clear that something meant to represent ownership in a money making enterprise and something meant to help organize voting and decision making are separate ideas. She seemed to think maybe they ought to distinguish between the two ideas. Because you know the last time we came up with clever ideas like the corporation the whole world changed. Evolving them again to be autonomous could make for the same level of change. If my mom got that in a half an hour phone call seems like maybe the professionals at the SEC could work it out too.

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Finance Startups

Day 216 and Annihilation

My parents were hippies. Thanks in particular to my mother’s great interest in the spiritual world, I spent time in ashrams, communes and retreats as a kid. One was a great big sprawling former summer camp in the Catskills. I adored spending time there.

There is something amusing about being in a Christian family who has decided to study Kashmir Shivaism in an old Borscht Belt resort. But it was thanks to these adventures in expanding our minds and spiritual horizons that I learned about Shiva the Destroyer. And Shiva has had a profound impact on how I think about startups.

I won’t get into the full theology of Shiva but he creates, protects and transforms the universe. His power is set against the goddess Shakti (sorry Parvati can’t get into your whole deal) for a kind of death and creation in one balanced whole. To this day, I chant Shiva’s mantra “Om Namah Shivaya” when I mediate. It more broadly has a meaning of the “universal consciousness is one” which I tend to interpret as ego death. Shiva is the destroyer of my ego for which I am grateful.

The idea that creation and destruction were interlinked, and indeed matched, spoke to me as a child. Some kind of pre-rational understanding of the first law of thermodynamics. Energy is neither created nor destroyed. Maybe Shiva and Shakti are just godhead metaphors for the eternal spiral of creation and destruction that we’ve come to dimly understand thanks to the study of physics. I’m neither a theologian nor a physicist.

But I am a business person. Shiva lead me to appreciate the economist Joseph Schumpeter. You see, metaphysics aside, I took the lesson that destruction wasn’t inherently bad quite to my heart. That sometimes, for new things to be formed in the world, old manifestations needed to be destroyed or transformed. Schumpeter’s gale or, more commonly, creative destruction, held my imagination.

I thought to myself “dismal science my ass!” Economics has dedicated an entire discipline to the study of apocalypses and the utopia’s that are created in their wake and we call it good business management. Wealth by way of eschatology. Obviously I was hooked.

According to Schumpeter, the “gale of creative destruction” describes the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”

Startups are known for their creative destruction. Small changes and innovations slowly, and then all at once, implode and destroy old ways of doing business. if we are lucky more wealth is created in the process. Sometimes enough to change entire cultures and people for the better. And sometimes not. But if there was ever going to be a god of startups I think it would be Shiva.

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Biohacking Emotional Work

Day 215 and Leisure

I’ve got a bad relationship with work. Since I was a teenager I’ve been compulsive about the idea of hard work. I don’t know how I got to have a problem with the Protestant Work Ethic but it seems likely I developed it long before I read Max Weber and found it’s comforting rationalizations about work’s inherent morality.

I’m fascinated by things like commodity aesthetics, the history of consumption, and theories of leisure & status. Partially because I got a kick out of supposing I was a better person than those wretched lazy types. I wasn’t so sophisticated to sneer “rentier” class as kid but I was well on my way to veneration of hard work and productive capital. An economics degree finished the job.

This was compounded by growing up in a family that worshipped the culture of Silicon Valley. The innovation of computers and the people that worked all hours to bring their creativity to the world were the most important people on the planet. They hadn’t quite crossed the cultural rubicon of power that the tech industry has now, but the power of making the future was hard work and heady stuff even before it captured the mainstream. I wanted to change the world like the people my father admired

There was a time when computing and automation raised questions of a new era of leisure. If we could move all of the work we’d previously done manually to automated systems perhaps humans could ascend to The Culture of Ian M Bank’s novels. In a distant future of abundance, sentient AIs run industry and production, so humanity can do, well, whatever it likes.

But we haven’t achieved a post scarcity world. If anything accumulating resources and showing you’ve done it by the rules of the meritocracy makes hard work even more crucial. You’ve got to play and win two games. You’ve got to make the money and show you’ve demonstrated the proper status while doing it. It seems like leisure is losing the battle quite soundly.

I’ve been pushing all year to get back to hard work. I’ve worked hard at my health. I’ve committed myself to biohacking. But really what if the obsession with working myself to the bone is killing me? I’ve been completely relaxed as I prepared for a medical procedure this week. I’ve never felt better. Which forced me to ask myself if maybe I better come to live leisure like the way I have loved work. It might be a much better life for me. The future sentient AIs might approve as well.

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Aesthetics

Day 214 and Their Rules

“If he wants to play their game, then he has to learn their rules.” – Downton Abby

I’ve been on a bit of a kick with taking notes for my grand unified theory of shitposting. Naturally I’ve been obsessed with the British aristocracy melting down during modernity in Downtown Abby. A great deal of class implosions make for excellent drama. Class and it’s privileges are crucial to understanding who can get away with what. And I’m becoming rather sure that shitposting is a way of changing the rules, through satire, of who gets to accumulate social capital.

I own a reasonably good library on the intersection of class, wealth, and capitalism. I suspect that sort of preoccupation isn’t that odd of a leaning when you come from family that jumped from working class to bourgeois and had set its sights even higher for their children. And it’s reasonably amusing that I file the topics together in my head and on my bookshelf.

Class, Greed, Liquidated, Capitalism and of course Zizek.

Money has never been the determining factor for class, but the American preoccupation with capital has led us to develop elaborate social mores to try to distance that we have overlapped wealth and status into the term “upper class” in this county. We don’t have peerage so things like taste and creativity has come to dominate. We absolutely hate the nouveau rich and disdain people with bad taste.

I spent a number of years working in “style” which is the overarching set of professions that dominate who has class. I worked for luxury houses, founded a cosmetics brand and even did marketing for a very high end gym. All of the kinds of things you can buy to demonstrate you have good taste and thus are worthy of being considered upper class.

Honestly it seems easier to have to learn the manners of the aristocracy than to have to bother with keeping up on style. At least those assholes had a consistent dress code. But an elaborate set of social distinctions overlaying signifiers on who has taste and credentials is fundamentally more accessible. Hipster are social progress.

Showing you’ve got the capacity to read social signals has lead to a lot of weird shit. Our current preoccupation with critical theory for one. But it’s opened up class status to people who are capable of demonstrating their understanding of what it takes to occupy their place on the ladder. And yes I think shitposting is the new Harvard degree or house in Newport. I guess it’s no weirder than marrying someone with an estate on a cold island off the coast of Europe.

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Finance Startups

Day 202 and Show Me Anything

I’m lucky to see work from founders at the very earliest stages. If you have a problem you are solving for chaotic world I’m generally interested in seeing it even if it’s just in the idea phase. But you have to show me you’ve got a plan to build a product. Any product is fine. Just show me something! Show me how you have the capacity to build even if you suck at it.

Bobby Goodlatte captured some of the sentiment I feel on the subject well with this exasperated Tweet.

What’s a “builder”? Show me something. Anything. Just show me one pixel you’ve created. That’s what a builder is. That’s why PM’s don’t qualify.

Sometimes it can feel hard to build something, anything, when you are very experienced. This is a problem I’ve seen across all kinds of impressive people. Academics, government folks and higher end finance folks, former c-suite executives. They know what good looks like so anything they can physically make with their own two hands will all look like crap.

I’d even go so far as to suggest there is an inverse relationship between how much you obfuscate your lack of existing product and your credentials. There are other corollaries on that basic theme. How comprehensible your product is right now is inversely related to how extensive your service layer is at the moment.

I see a lot of brilliant, extremely credentialed people solving big problems, but because making money is important they will pitch what amount to service companies without an existing product. But they will use extensive jargon and hand waving visionary opportunities to hide the fact that there isn’t any product layer yet. Which is weird because like eventually I’ll find out right? You wouldn’t want to trick your investors on the state of play.

I’d encourage you to stop trying to hide that fact. Don’t be embarrassed that you can’t make things to your standards. None of us can. New things always look like shit. Just own up to that reality and you will find more help from folks who will want to help make it better. Stop showing me CAGR and TAM and possibilities as a way of hiding that you haven’t built a product yet. It’s ok. You don’t need to have built something great yet.

Admit it. Show me some wireframes and a roadmap. I’ll take that way more seriously. In fact, I’ll probably overweight you showing me exactly what you do have and how you plan to use funds to improve it. That’s how much startup people value just building the damn thing.

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Aesthetics Emotional Work

Day 197 and Status Anxiety

I’m becoming quite bored of feeling like shit as I go on maybe day 8 or 9 of a poor reaction to an anti-viral. It’s not fun when the cure is worse than the disease. I noticed something fascinating as more and more “days off” piled up. I’ve still got a lot of emotional shit when it comes to being sick.

My anxiety over being seen as weak, lazy or lacking in willpower started to compound the more days I’ve needed to recover. What will people think of me that just as I’m making a comeback to full time work that I let myself get waylaid by a virus? Every project and meeting that needed canceling felt like I should accompany it with an apology tour. I felt like I owed everyone my time and energy. I felt ashamed.

The social striving and status chasing that have gripped the aspirational class seems to have its claws firmly in my psyche. At least when it comes to work, I’m convinced I must always be working to be “better.” Where the fuck did this self limiting belief come from?

Who cares if I needed a week off to cope with health care needs when I’ve been on medical leave for nearly two years? What is another week. Why am I so anxious to show that I’m capable of going back to work? Who the fuck cares! It’s not as if I’m dependent on a salary to survive. I’m not chasing a resume or CV polish on LinkedIn. I can just not work.

Technically I’ve already made it out of the status social climbing games. I’ve got money. I’ve got traditional credentials. I have a well compensated skill set that is easily hired out for income without sacrificing much of my time. I should not be experiencing any class anxiety at all. I should happily go into the leisure class and not concern myself that my workaholism isn’t possible for health reasons. And yet I’m absolutely panicked that I’ll be see as lazy and unreliable every time I have a minor setback.

It’s abundantly clear that aspirational class signals, especially around meritocracy and knowledge work, are as bogus as Edwardian England’s aristocracy. Class division can be upended if you just stop giving a fuck. But I’m experiencing exactly this anxiety noted in The Hedgehog Review.

The aspirationals’ endless pursuit of better can produce psychic restlessness and doubts beneath the façade of confidence and accomplishment.

I’ve always thought of my habits as being high status. I read science fiction, make a hobby of macroeconomics, and pursue healthy biohacking experiments. Of course, that I think of these things as having status is precisely what makes me signaling it low status. The perception of me caring so fucking much is proof that I don’t think my status in life is secure. I’m no better than the middle class strivers in Downtown Abbey who miss manner cues. How embarrassing!

But if I can admit that I’m anxious about my place in the world maybe it’s a sign I’m not so beholden to class systems after all. I’ve just now admitted that I’m afraid of how I will be perceived if my climb back to health isn’t perfectly stage managed. I hope that is the first step in letting it go. Fixating on fear and anxiety isn’t great for physical health. So I’m putting it out there that I’m afraid of how I’ll be seen by others. And I’m letting it go.

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Finance Startups

Day 181 and Thesis Trends

As I was putting down scratch notes for Chaotic.Capital’s thesis yesterday on the types of businesses we like I thought I’d do a bit more stream of consciousness writing to discuss some of the mega-trends that I see driving returns over the next decade.

Embedded Functionality

We think more and more businesses will be born of the embedded functionality inside protocol layers or data sets. Many protocols have functionality embedded across different layers of utility and functionality. For instance, the new consumer bank is an API at heart. The protocol layer is the API and the embedded functionality is the financial services layers enabled through the protocol or application layer. Need another example. Retail sales data and demand trends give rise to fashion retailers. Think of StitchFix, the clothing brand is the embedded functionality of its aggregate trend, recommendation and demand data set.


Unbundling Trust

Trust based networks rule businesses like insurance, retail banking, law and financing. But what if trust was unbundled from institutional nexuses of power. What if we built trust from value creation instead of value extraction. DeFi wants to build permission-less trust based on a protocol. Its entirely possible we bundle trust back into the wisdom of crowds and markets. Wall Street Bets is an aggregate source of unbundled trust. Figuring out what layers can be stripped away for more efficiency and what layers we need for safety and peace of mind are unsolved problems.


Data Ingestion Is Value Creation. The more capacity we have for data collection the more demand we will have for data ingestion and processing. While we can say sure businesses rely on the protocol and data and that unbundles trust, that’s not the full picture. We will need people who make sense of the chaos for the muggles. Ordered systems give the impression of serendipity for their users (an introduction on a social network, a recommendation for a loan, an outfit customized for you) but the work required to intake and order the data to create value for users is a big hairy problem. And there is a lot money to be made in those. Centralization may come at this layer especially in user experience.

Flexible Asset Weighting.

We are also interested in businesses that know where they stand with capital needs for their business. If you are executional business you need a thin layer of assets to succeed. To quote Roy Bahat “hot swap” startups are executional businesses. A slim horizontal physical layer to take advantage of low financing costs means return on equity is greater for these asset light businesses. If it’s deep innovation then you can be asset heavy. We like those just fine too. But knowing where you stand and anchoring your business case on your asset weighting can give you an edge. That lets you be capabilities based and find opportunities, particularly as debt as is in a commoditization cycle.


All of this is to say we are thinking across a number of system level problems to unearth startups that will give flexibility to individuals, organizations, industries and hopefully the entire economy. Incumbents won’t see who is coming to beat them because they won’t recognize the new predators. They prioritize value systems that at won’t remain true as systemic chaos erodes inefficient businesses and institutions.