Timestamp 13:50: “If you’re a startup, and you want to get to a monopoly, start with a really small market and you take over that whole market and then you find ways to expand that market in concentric circles”
Last I checked Zuckerberg is doing precisely what Thiel taught him to and has done it with preternatural skill.
This is the standard for how you’re expected to act as a technology “leader” - which the majority of VC backed unicorn goal founders (like every FAANG founder) have been executing since day zero.
In the piece the notion that what we need to solve our problems is more people like Joy, Torvalds and de Raadt and less people like Zuckerberg, Gates, and Bezos is gently alluded to, and I think it's a powerful point.
I'd nearly go on and suggest things like Tools for Conviviality, or some Cory Doctorow stuff. But in any case it's a lovely interview, maybe it's a good enough start.
Defensibility is pretty much one of the first topics raised by every investor, and thus ingrained into every founder: What is our moat? (e.g. how do we ensure no one else gets into our space until we're ready to choke out their air supply).
The word that is not used often to describe their worldview is the most accurate: medieval.
It isn’t just jargon. They are building castles against perceived enemies and everyone is an enemy. They are striving to be the Normans taking England, embedding themselves in every realm, region, barony, and parish, rewriting the rules in the name of progress either by woo or by force, and eliminating the natives. Up go the walls, round go the moats, and out point the guns.
The last startup I worked at was primarily concerned with loyalty above most else. Loyalty to what?
Sure, but in non-digital markets we had a term for most common growth hacking tactics for attaining that niche monopoly.
Dumping. Operating on loss for years, just burning money to capture a market and then jack up prices and make competition unfeasible.
Which is illegal in most cases when it comes to physical goods. of course it depends on the region you're in - it is extremely illegal with sky high fines in my country for example.
Having the attitude to reach that goal is fine, but the goal itself(monopoly over segment of a market) should be impossible to reach. Whenever it happens markets get distorted to the detriment of all customers.
The whole point of capitalism is to put stress onto system for self-improvement - you need to produce better good, make it more efficient and cheaper, and find perfect balance between price and performance - to run economy as efficiently as possible while basically 'crowdsourcing' resource allocation computation over every market participant.
As soon as that stress is gone, you're back to Guilds system where nothing is dictated by market forces, just at whim of current entity in power.
I remember many (many) years ago I used to frequent a small independent video rental shop. Then, one day a Blockbuster opened next door (and when I say next door, I do mean literally next door) offering a larger range of videos to rent and much cheaper prices. Within about three months the independent had gone out of business and shut down, at which point the Blockbuster jacked their prices up to what the independent had been charging.
It was incredibly blatant and I felt sorry for the poor guy that had been running the independent business.
The analogy with dumping is interesting. In the software world, near-zero marginal costs make it much harder to determine, but I guess the same concept does exist.
That is also one of his core arguments on his book "Zero to One".
To be fair, he is not the only one to think like that. Every "captain of industry" needs to be paranoid against competition. It is a basic survival instinct. Just look how much Steve Jobs freaked out about Android and Windows. Or how Alfred Sloan bought or merged every possible competitor. Or the history of Nabisco, the steel industry, Microsoft, AT&T, etc
And that's not a bad instinct which (in a perfect world) drives innovation and lowers prices for customers.
But that only works if the competition can not be simply bought out which requires effective anti trust laws before they get so big that "nobody" can compete.
I firmly believe that it's better to prevent a company from growing too big than breaking it up after the fact.
Almost everybody profits from smooth and constant enforcement.
> Last I checked Zuckerberg is doing precisely what Thiel taught him to and has done it with preternatural skill.
...and the teachings from Bill Gates and Steve Jobs' mentorship.
> This is the standard for how you’re expected to act as a technology “leader” - which the majority of VC backed unicorn goal founders (like every FAANG founder) have been executing since day zero.
Except knowing how to deal with the time when anti-trust regulators are knocking on your door.
The stark difference between why Microsoft isn't being broken up vs Meta Platforms.
You're correct, this has been the prevailing culture in tech. This is the playbook.
But this isn't a good excuse. Players gonna play - we want them to play to win as hard as they can. But when we have safety guardrails and boundaries like antitrust, they're not supposed to just break through them.
Was he 'taught' by Thiel is that a thing that happened?
It goes deeper than that. All publicly traded corporations are morally obligated by the Friedman Doctrine [0] to do stuff like this. If something returns value for shareholders (and monopolies do) then a CEO must do it. This is how the whole system is supposed to work. Of course, there's no reason that capitalism must to work this way, but this is the toxic form of capitalism that we've unwittingly chosen. Thiel just gave a playbook for implementing this in the tech space.
That is not a moral obligation, it is in fact the opposite. It is a lie that people tell themselves and the world to allow themselves to make immoral decisions for their own benefit.
I’m not saying running a company is easy and I know that many gray areas exist in the decision making. I do think companies can exist, profit, and be a net good for the world. However, we need to remove the notion that the duty to shareholder profits is a moral duty. It’s a cowards way out of having to make actual difficult choices. It’s one of those things that sounds great exactly because it allows you do horrible things with no responsibility. It creates a system where you offload the effort and weight of your decisions. As long as you’re are acting in the interest of shareholders, you are in the clear. That’s a dangerous concept and the opposite of morality.
Nobody is obligated to do this, its just that they say they are so they can extract the most amount of money from any situation and blame some vague principal. Plenty of companies leave money on the table because its terrible for everyone.
> Of course, there's no reason that capitalism must to work this way
There kinda is. Capital is allocated to where it makes most profits, and most profits go to companies maximizing shareholder value. In aggregate this makes the profit maximizing companies more likely to survive.
Sure this can be perhaps mitigated by e.g. legislating other duties to companies, but I'd say it's very hard even in theory, let alone in practice, to have capitalism without lopsided profit maximization.
Not sure why OP is getting downvoted. Going the premise of the cited doctrine, it follows precisely that even doing illegal things are acceptable as long as there is net gain until the expected future.
OP doesn’t even claim this is the one true doctrine or anything of the sort.
This article would have been much better if it was at least a bit more direct. At the most crucial juncture, instead of including Zuck's own words, the author wrote the author's interpretation of his words and then an analogy.
> At this point, Zuck's CFO – one of the adults in the room, attempting to keep the boy king from tripping over his own dick – wrote to Zuck warning him that it was illegal to buy Insta in order to "neutralize a potential competitor."
> Zuck replied that he was, indeed, solely contemplating buying Insta in order to neutralize a potential competitor. It's like this guy kept picking up his dictaphone, hitting "record," and barking, "Hey Bob, I am in receipt of your memo of the 25th, regarding the potential killing of Fred. You raise some interesting points, but I wanted to reiterate that this killing is to be a murder, and it must be as premeditated as possible. Yours very truly, Zuck."
I mean this has been Cory's writing style for years. It should be no surprise.
I think he included, or linked to, enough direct quotes and references to allow him to editorialize as well, and get across his disdain (that many other share no doubt).
This is the man who coined the term "enshittification" after all.
The article talks about writing things down as if it's a negative, but surely we should applaud it? I don't want the lesson to be "don't write things down", I want it to be "don't break the law".
> I don't want the lesson to be "don't write things down", I want it to be "don't break the law".
That would be great if the law was functional. US antitrust law is a low-level IQ test, whose only function is to catch the occasional stray careless CEO admitting to the crime, ignoring corporate training 101. The article puts it well:
> It's damned hard to prove an antitrust case: so often, the prosecution has to prove that the company intended to crush competition, […] It's a lot easier to prove what a corporation did than it is to prove why they did it.
In other words, think happy thoughts when crushing the competition. Like when Bezos was feeling charitable selling baby products at a massive loss until diapers.com was starved to death[1], and then jacking up the prices.
Negative only for Zuckerberg. The implication is that he was so arrogant and incompetent that he made a mistake (writing) that monopolists in other fields knew to avoid. Incriminating talk “should” happen only in person or on the phone if you don’t want to get busted.
> Did Zuck buy Insta to neutralize a competitor? Sure seems like it! For one thing, Zuck cancelled all work on Facebook Camera "since we're acquiring Instagram."
I don't get this bit. That seems to be supporting exactly the opposite of the author's thesis. If the acquisition had existed only for "neutralizing a competitor", they would have continued work on their existing products in this space, no? Canceling their existing product and keeping the acquisition is more in line with them realizing Instagram was a service they couldn't hope to catch up with. It'd also be consistent with them wanting to carve out a larger niche for Instagram, by reducing the overlap between the two on Facebook's side.
That movie was made almost entirely based off of the story as told by people who were at the time suing Mark Zuckerberg. It is the farthest you can get from fair.
> head of a powerful corporation that almost controls our minds.
I find this line of thinking disingenuous. No one is forcing anyone to participate in social media. At the same time, no one is responsible for others participating in social media. So what makes the CEO of Facebook so evil?
My theory is that he's dislikeable as a person, regardless of what his company is making money from.
"...At this point, Zuck's CFO – one of the adults in the room, attempting to keep the boy king from tripping over his own dick – wrote to Zuck warning him that it was illegal to buy Insta in order to "neutralize a potential competitor."
Zuck replied that he was, indeed, solely contemplating buying Insta in order to neutralize a potential competitor. It's like this guy kept picking up his dictaphone, hitting "record," and barking, "Hey Bob, I am in receipt of your memo of the 25th, regarding the potential killing of Fred. You raise some interesting points, but I wanted to reiterate that this killing is to be a murder, and it must be as premeditated as possible. Yours very truly, Zuck...."
"In Zuckerberg's defense, he's not the only tech CEO who confesses his guilt in writing (recall that FTX planned its crimes in a groupchat called WIREFRAUD)."
Any similarity with other "tech CEOs" seems inculpatory more than exculpatory.
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Timestamp 13:50: “If you’re a startup, and you want to get to a monopoly, start with a really small market and you take over that whole market and then you find ways to expand that market in concentric circles”
Last I checked Zuckerberg is doing precisely what Thiel taught him to and has done it with preternatural skill.
This is the standard for how you’re expected to act as a technology “leader” - which the majority of VC backed unicorn goal founders (like every FAANG founder) have been executing since day zero.
I look to individuals like Bill Joy, Linus Thorvalds and Theo de Raadt. People who roll up their sleeves and build amazing things.
Parasites like Zuckerberg and Thiel can go to hell for all I care.
https://futureofcoding.org/notes/alan-kay-lunch.html
In the piece the notion that what we need to solve our problems is more people like Joy, Torvalds and de Raadt and less people like Zuckerberg, Gates, and Bezos is gently alluded to, and I think it's a powerful point.
I'd nearly go on and suggest things like Tools for Conviviality, or some Cory Doctorow stuff. But in any case it's a lovely interview, maybe it's a good enough start.
It isn’t just jargon. They are building castles against perceived enemies and everyone is an enemy. They are striving to be the Normans taking England, embedding themselves in every realm, region, barony, and parish, rewriting the rules in the name of progress either by woo or by force, and eliminating the natives. Up go the walls, round go the moats, and out point the guns.
The last startup I worked at was primarily concerned with loyalty above most else. Loyalty to what?
Dumping. Operating on loss for years, just burning money to capture a market and then jack up prices and make competition unfeasible.
Which is illegal in most cases when it comes to physical goods. of course it depends on the region you're in - it is extremely illegal with sky high fines in my country for example.
Having the attitude to reach that goal is fine, but the goal itself(monopoly over segment of a market) should be impossible to reach. Whenever it happens markets get distorted to the detriment of all customers.
The whole point of capitalism is to put stress onto system for self-improvement - you need to produce better good, make it more efficient and cheaper, and find perfect balance between price and performance - to run economy as efficiently as possible while basically 'crowdsourcing' resource allocation computation over every market participant.
As soon as that stress is gone, you're back to Guilds system where nothing is dictated by market forces, just at whim of current entity in power.
It was incredibly blatant and I felt sorry for the poor guy that had been running the independent business.
To be fair, he is not the only one to think like that. Every "captain of industry" needs to be paranoid against competition. It is a basic survival instinct. Just look how much Steve Jobs freaked out about Android and Windows. Or how Alfred Sloan bought or merged every possible competitor. Or the history of Nabisco, the steel industry, Microsoft, AT&T, etc
But that only works if the competition can not be simply bought out which requires effective anti trust laws before they get so big that "nobody" can compete.
I firmly believe that it's better to prevent a company from growing too big than breaking it up after the fact.
Almost everybody profits from smooth and constant enforcement.
...and the teachings from Bill Gates and Steve Jobs' mentorship.
> This is the standard for how you’re expected to act as a technology “leader” - which the majority of VC backed unicorn goal founders (like every FAANG founder) have been executing since day zero.
Except knowing how to deal with the time when anti-trust regulators are knocking on your door.
The stark difference between why Microsoft isn't being broken up vs Meta Platforms.
So let’s RICO them then I guess.
But once you have a monopoly, you're not allowed to do certain things like buying competitors for the purpose of crushing them.
But this isn't a good excuse. Players gonna play - we want them to play to win as hard as they can. But when we have safety guardrails and boundaries like antitrust, they're not supposed to just break through them.
Was he 'taught' by Thiel is that a thing that happened?
All of this so he and his other billionaire friends can turn society into “network states” (privatized entities/corporate towns).
[0] https://en.wikipedia.org/wiki/Friedman_doctrine
I’m not saying running a company is easy and I know that many gray areas exist in the decision making. I do think companies can exist, profit, and be a net good for the world. However, we need to remove the notion that the duty to shareholder profits is a moral duty. It’s a cowards way out of having to make actual difficult choices. It’s one of those things that sounds great exactly because it allows you do horrible things with no responsibility. It creates a system where you offload the effort and weight of your decisions. As long as you’re are acting in the interest of shareholders, you are in the clear. That’s a dangerous concept and the opposite of morality.
That's a strange way to put it. As though it is the Right and Good way to run a company — and also as though the Board's/CEO's hands are somehow tied.
Deleted Comment
Disagree. Shareholders are not the all and everything of a company. Neither they, neither the company exist in a void.
> Of course, there's no reason that capitalism must to work this way, but
How is that not a contradiction with the above?
There kinda is. Capital is allocated to where it makes most profits, and most profits go to companies maximizing shareholder value. In aggregate this makes the profit maximizing companies more likely to survive.
Sure this can be perhaps mitigated by e.g. legislating other duties to companies, but I'd say it's very hard even in theory, let alone in practice, to have capitalism without lopsided profit maximization.
OP doesn’t even claim this is the one true doctrine or anything of the sort.
But in fact, in USA there's even a SCOTUS ruling that says it is a bogus idea
> At this point, Zuck's CFO – one of the adults in the room, attempting to keep the boy king from tripping over his own dick – wrote to Zuck warning him that it was illegal to buy Insta in order to "neutralize a potential competitor."
> Zuck replied that he was, indeed, solely contemplating buying Insta in order to neutralize a potential competitor. It's like this guy kept picking up his dictaphone, hitting "record," and barking, "Hey Bob, I am in receipt of your memo of the 25th, regarding the potential killing of Fred. You raise some interesting points, but I wanted to reiterate that this killing is to be a murder, and it must be as premeditated as possible. Yours very truly, Zuck."
I think he included, or linked to, enough direct quotes and references to allow him to editorialize as well, and get across his disdain (that many other share no doubt).
This is the man who coined the term "enshittification" after all.
That would be great if the law was functional. US antitrust law is a low-level IQ test, whose only function is to catch the occasional stray careless CEO admitting to the crime, ignoring corporate training 101. The article puts it well:
> It's damned hard to prove an antitrust case: so often, the prosecution has to prove that the company intended to crush competition, […] It's a lot easier to prove what a corporation did than it is to prove why they did it.
In other words, think happy thoughts when crushing the competition. Like when Bezos was feeling charitable selling baby products at a massive loss until diapers.com was starved to death[1], and then jacking up the prices.
[1]: https://en.m.wikipedia.org/wiki/Diapers.com
I don't get this bit. That seems to be supporting exactly the opposite of the author's thesis. If the acquisition had existed only for "neutralizing a competitor", they would have continued work on their existing products in this space, no? Canceling their existing product and keeping the acquisition is more in line with them realizing Instagram was a service they couldn't hope to catch up with. It'd also be consistent with them wanting to carve out a larger niche for Instagram, by reducing the overlap between the two on Facebook's side.
It's really terrible to have somebody like him as the head of a powerful corporation that almost controls our minds.
I find this line of thinking disingenuous. No one is forcing anyone to participate in social media. At the same time, no one is responsible for others participating in social media. So what makes the CEO of Facebook so evil?
My theory is that he's dislikeable as a person, regardless of what his company is making money from.
Zuck replied that he was, indeed, solely contemplating buying Insta in order to neutralize a potential competitor. It's like this guy kept picking up his dictaphone, hitting "record," and barking, "Hey Bob, I am in receipt of your memo of the 25th, regarding the potential killing of Fred. You raise some interesting points, but I wanted to reiterate that this killing is to be a murder, and it must be as premeditated as possible. Yours very truly, Zuck...."
Any similarity with other "tech CEOs" seems inculpatory more than exculpatory.