Web3 says, 'I don't want your life' to web2
Web3's meteoric rise is a rebellion against its imperfect parent, web2
Dizzy from the current crypto bear run—or bull run, depending on when you’re reading this—it’s easy to forget how we got to web3. After 30-ish years of the Internet’s evolution, why do we even need the third web and its “magical internet money?” What ignited the movement that mobilized millions of people and trillions of dollars toward a different future for the Internet? Our dysfunctional institutions (e.g. governments, banks, Hollywood and the like) may take the brunt of the blame for inciting the techno-peasantry, but what about web3’s internet forebear? Web3’s outlook on life has largely been shaped by its imperfect parent, web2 (the Internet of the past 20 years); analyzing that relationship, including the dubious history of web2, can tell us a lot about what web3 is and will/can be.
Remember web2’s founding promise? In the early 2000s, web2 heralded a better world, promising that we’d be more connected thanks to social media like Facebook and Twitter; that we’d never have a question unanswered nor a need unmet via omnipotent clearinghouses like Google and Amazon; that endless entertainment from the Spotifys and Netflixes of the world would satiate our cultural appetites; and on, and on. But the wonders of web2 could only distract from its woes for so long.
Web2 broke its promise. As our digital saviors outgrew the benign altruism of their adolescence, the cold realities of a maturing business set in: there are investors to make whole and new growth to be funded. (#Adulting: even unicorns struggle with it!) As the bills came due, Big Tech’s starry-eyed ideals came into direct conflict with the brute force of profit. Guess which won? And there we were, still hoping those world-beating web2 firms would come through, but starting to suspect that maybe—just maybe—there may have been a better path for us and our beloved Internet. Our free delivery and low-cost rides (often to places we easily could have walked) began to disappear; intrusive ads and sold personal data became commonplace. More importantly, with loneliness, political strife, economic inequality, and empathetic bankruptcy are all-time highs, it’s no surprise beleaguered web2 citizens have sought out a better future - a less extractive and corrosive version of digital life.
So now a new silver-tongued suitor, web3 (aka “Mr. Steal Yo’ FAANG”) whispers a familiar promise: the Internet—along with its endless riches and community(?)—can be ours again. Can it? Who knows! sounds cool at least. Whether web3’s vision will come to fruition is a topic of much debate, and a discussion I’ll save for another day. For now, it’s less important to buy into the dogmatic vision of crypto’s self-serving hypemen, and more important to realize that web3 is still a fluid concept - an unrealized future that we are shaping daily. And, to shape it properly, it’s important to learn from our sometimes-toxic relationship with web2.
TL;DR: we kinda got rugged (hoodwinked) by web2. The realities of business forced compromises on web2’s boldest pledges to users, and in the process, eroded the latter’s trust in the former. We became disillusioned with the online status quo and more open-minded towards new ways to experience the Internet. Thus, web3 was borne - a vision for a decentralized, community-driven, unmediated version of the Internet that was at least partially sired by a semi-failed web2. Web3 has clearly told web2 “I don’t want your life”, but what choices will it make differently? Web3 is a possibility of a better future, not a guarantee. To achieve that dream, we’ll need to learn from web2’s mistakes and be intentional in not repeating them.
Facebook: Connect the world, then divide them... for money
Of all the web2 villains, Facebook is one of the more popular punching bags given its litany of well-publicized sins: rage profiteering, election manipulation, non-election manipulation, depressing teens, dividing families, giving birth to what would one day become the influencer race… et cetera. But it didn’t start like that. Facebook’s infancy brimmed with optimism—we aligned ideologically, us and Zuck, on a vision for a more connected, socially lubricated world. Remember when you could just, like... poke people? We had it all...
We were promised a neo-digital social utopia of sorts, where literally anyone could connect with anyone and friends weren’t scarce. But, ultimately, the auto-tuned promises of social bliss were drowned out by investor demands. Division proved more lucrative than connection, misaligning the incentives of Facebook and users. We still wanted connection and friendship, but Facebook needed money. Our relationship status with Facebook became “it’s complicated.” Facebook had broken its primary promise to us: instead of hyper-connection and online community, we were farmed for the engagement that advertisers craved. Facebook quickly realized that fear and fury made the ads click harder, and optimized accordingly; enemies are more profitable than friends… which kinda sucks.
This didn’t happen overnight, though. There were a decade-plus of red flags that we overlooked (classic us). They flew highest around matters of ownership: ownership of mission, features, data, and rewards of the ‘social network.’ And they flew early, particularly when it came to features. Remember when Facebook introduced the newsfeed in 2006 and everyone flipped out? (Gen Z readers: I promise this happened.) In response to the newsfeed controversy, Facebook said:
The Facebook users feel like they have ownership in the company… When they realize that they're not the ones in control, it's a real slap in the face.
It should have been clear notice to users that they didn’t control the platform’s features. (It wasn’t.) But, what about the data? That’s ours, right? Wrong. During the Cambridge Analytica scandal in 2018, we realized that we weren’t in control of that, either. Facebook’s early assurances of privacy….
There are pretty intensive privacy options… You can limit who can see your information, if you only want current students to see your information, or people in your year, in your house, in your classes. You can limit a search so that only a friend or a friend of a friend can look you up. People have very good control over who can see their information.
…came to feel pretty darn flat.
Whatever though. What does control over features matter? So what if they made a little money off of our data? Dog’s gotta eat, right? But, if control and data privacy don’t bother you, maybe the money should. Facebook made $33.4B in revenue in 2021. The people that generated the content and clicked the ads that drove the vast majority of that revenue—rank-and-file Facebook users—made none. And, generally, I think people would be okay with that if things didn’t suck so bad. I.e., if Facebook actually fulfilled its core social promise, then nobody would call it out about how it monetized outrage and handled our data. But, at some point Facebook decided to forgo its mission in order to make more money. That was the “real slap in the face.”
I could hate on Facebook all day, but that’s not the point. The point is that Facebook broke promises to the people around ownership, privacy, and trust, and made a lot of money doing it. What did we get for our hard work? Our diligent “poking” and “friending” of one another since the 2000s? Not so much as a taste of that sweet half-a-trillion dollar market cap. Certainly not the social utopia Facebook sold us on.
Would the Facebook experiment have a better outcome if the incentives of company and users were more aligned? Maybe! Who really knows. The cynics will always ask, Would we have been better without web2? But, a more productive framework for us is, Can we learn and be better with web3? Would a web3 version of a social network fix our problems, and would it resist the same pitfalls? It’s worth a shot.
Uber: Hailing web3
Uber hit the scene half a decade after Facebook with a straightforward web2 promise all its own. The platform would offer safe, low-cost rides on-demand, in nice cars operated by friendly drivers who a) had GPS and b) were subject to user reviews. They were going to shuttle us from taxi oppression to local-transport bliss. But after over a decade in Uber’s backseat, both literally and figuratively, we have to ask the age-old roadtrip question: are we there yet?
No, we are not.
For one thing, Uber’s conquest of local transit was famously expensive. Pre-IPO, Uber was burning through cash at the super-casual rate of near $2 billion a year. That money wasn’t free either, and investors eventually needed returns (and maybe even—gasp—profits). Those returns could only come from more users, more drivers to drive them, and more money back to Uber on each ride. Cheaper and more convenient ride, the things Uber users were promised, and actually wanted from the platform, wouldn’t get the company where it needed to go.
The misalignment was set in motion. First, users saw tips introduced: a renege on Uber’s simple, flat-rate pricing model, and an infringement on its commitment to low-cost rides, all made worse by the fact that it was a workaround for the company to avoid paying drivers more. Next came longer wait times and surge-pricing with higher fares, posited as a fair solution to supply and demand issues. But, fair to whom? They didn’t compensate the drivers as much as advertised, and they angered riders to boot (including, famously, Jerry Seinfeld’s wife Jessica back in 2013.) Finally, we got plain-old increased fares. And, as if all that wasn’t enough, the costs were compounded by violations of drivers’ rights, rider safety issues, and corporate culture flaws—ethical and/or moral surge-pricing, if you will.
But, this isn’t about Uber’s fading glory and broken promises (that’s what HBO’s Super-Pumped, based on New York Times journalist Mike Isaac’s same-named book on the company, is for), it’s about how and why it went wrong, and what it can tell us about web2’s role in web3. It happened because Uber’s primary assets, and early allies (riders and drivers), never really had any official control. Their original shared goal was destined to diverge as profit became priority. It means that users felt kinda betrayed; and, while some are back to hailing cabs and ordering pick-up, others are dreaming up new business models that return ownership to the users and force incentive alignment long-term.
While there isn’t a web3 rideshare platform yet, Uber certainly played its part in sowing dissent and inspiring the discord (no pun intended) that drives the current web3 drumbeat. It forced the masses of riders and drivers to question their loyalty to Big Tech. For some, web3’s message of user-owned, incentive-aligned, and people-governed apps started to make a little more sense. And, if there was a web3 Uber that belonged (profits and governance) to the people that rode and drove the most, maybe we wouldn’t have been… well, driven in this direction.
Google: Don’t be evil. Unless...
Google was the poster child for Big Tech’s early altruism. “Don’t be evil!” shouted all the Googlers down in Googleville, while promising users that they would always have the perfect answers to all their little questions. Or, in their words, that they’d “organize the world’s information and make it universally accessible and useful.”
*chills*
Google’s impact on the world is undeniable. They’re a pillar of the modern Internet, having indeed made things “universally accessible and useful” for billions of people. And, for a long time, they were the best of Big Tech. They inserted benign ads into our daily routines for money, which kept the innovation flowing, and/or paid for YouTube. And, I don’t think that really bothered us, for a time.
But to grow is to change, and it’s hard to be Big Tech (poor, misunderstood Big Tech.) At some point on the way to $1 trillion market cap, even good Google was forced to compromise and do some evil (or at least some “not-good”). We’re talking about privacy issues, monopolistic practices, dubious dealings with censorship in China, and controversy around its D&I efforts.
Ultimately, a symbolic representation of this transition happened in 2015 when Google quietly removed the famous “don’t be evil” from their code of conduct. The mantra’s watered-down replacement became “do the right thing.” But, do the right thing for whom? Google’s mutated motto became an emblem for the chasm growing between user expectations and business imperatives. “Do the right thing” didn’t (and maybe couldn’t) have a shared definition amongst Google’s users, shareholders, advertisers, etc. The critics have been noticing… and noisy.
Google’s failures, even if relatively minor, nevertheless prompted questions about ownership, privacy and incentives. Ironically, questions are bad for things like Google. More importantly, the company’s metamorphosis made us question why we trust institutions on their word and whether there might be a better way to ensure that the implied contracts between users and companies are honored. As renowned web3 thinker/advocate/investor Chris Dixon likes to remind us:
This is the grand promise of web3: that code can eliminate the need for compromise and keep incentives aligned as companies and markets evolve. Google may not have been able to maintain its mission culturally or economically, but what if it could have been guaranteed programmatically? A web3 Google couldn’t be evil (stated or otherwise) without buy-in from their users. Is that better?
The path forward
If you Google, “what is web3?”, you’ll find plenty of articles that spell out the technical and ideological roadmap. There’s are a few other ways to look at it that better incorporate the history:
Web3 is an emerging period in the Internet’s history. We are at the very beginning of that period, and how things unfold isn’t predetermined. A lot of what web2 was will persist.
Web3 is still being shaped. Many people are actively participating in building the future - anyone can jump in and make an impact, not just crypto maxis. Web2 people and companies will help in that shaping.
Web3 isn’t just all of the new innovations like crypto, blockchain, DAOs, NFTs, etc. It will, inherently, also carry forward a lot of the good constructs that web2 built (yes, web2 created a lot of good stuff).
Web3 isn’t just online. Web2 showed us that technology has a profound impact on our real word, not just our digital one. As the web evolves, it will further impact our offline lives.
Web3 is an opportunity. We can choose to patch many of the shortcomings of web2. We can advance concepts around trust, privacy, ownership, government, money and incentives.
Ultimately, we don’t know what web3 will grow up to be. We’ll probably see a lot of web2’s traits apparent in its child; all of its strengths, none of its weaknesses (big Blade energy). And sure, the same capitalistic genes are in there, as Jack likes to remind us:
But new technologies and sources of capital don’t guarantee better outcomes; different often doesn’t mean better. Better is a choice, and while people haven’t always been good at choices, I’m optimistic. Blockchain and crypto can’t force us to make those choices and won’t manifest a better web/world by default; they are powerful, impactful tools, but nothing more than that. Whether we learn from our mistakes, and patch them, is up to us.
For everyone wondering: in this metaphor, West Canaan High School is the TCP protocol. I think.