Werd I/O

Axios reports that Facebook - sorry, Meta - is putting the metaverse on the back burner:

This week the firm announced a massive second round of layoffs. It recently killed off its Portal platform. And CEO Mark Zuckerberg, while not disavowing his metaverse dream, sounds more eager to talk about AI.

[…] “Our single largest investment is in advancing AI and building it into every one of our products,” Zuckerberg wrote. “Our leading work building the metaverse and shaping the next generation of computing platforms also remains central to defining the future of social connection.”

My working model for Facebook’s growth is that it is closely tied to the growth of the internet: as more and more people came online, Facebook was there to help them connect with each other. When the internet was new, there wasn’t much in the way of nuanced mainstream criticism of it as a platform. People were excited to connect and share and a minority thought it was the devil. There wasn’t much in-between.

These days, though, most people are already online. The internet isn’t new or exciting: it’s a utility that just about everybody has. Correspondingly, the ways society interacts with and on the internet have become more nuanced and thoughtful, just as the ways in which people have interacted with any media have always evolved.

Meta isn’t that thoughtful or nuanced a company, and this change in how the internet works in the context of most people’s lives has laid this lack of vision bare. The concept of the metaverse was driven by the hype over web3. Now that crypto has become less popular, many of the same people are excited about AI. In turn, AI will face a downturn, and they’ll be on to the next thing. This is expected and normal for the kinds of cash-driven charlatans who have swarmed Silicon Valley since venture capital rose to prominence, but it’s more surprising for the leadership of a multi-billion-dollar company. I’d expect it to have more vision, and it just doesn’t.

To be a little charitable to it, perhaps Meta is subject to the same kinds of winds that led to its layoffs. We know that layoffs aren’t helpful or profitable, but we also know that shareholders want to see them if other companies are doing them. So it’s perfectly reasonable to assume that shareholders may also see other companies pivot to web3 or AI and want Meta to do it too. A strong enough vision - something that carries shareholders and employees alike along - could counteract these expectations, but in the absence of that, the company is flotsam and jetsam to the hype cycle.

Meta didn’t invent social networking, and it didn’t invent the best social networking platform. It was in the right place at the right time, and was smart enough to buy Instagram when mobile internet was in its relative infancy. I’m sure it can be profitable off the base of those platforms for a long time to come. But at the same time, it’s not clear to me that lightning can strike twice for it without major leadership changes. Not when its strategy seems to be “throw shit at the wall”, and certainly not when the shit it’s throwing is the same shit everyone else is throwing.

I’ve been publicly critical of the company for 19 years now, but I want to make clear that there are lots of very talented people who work for it. Running a platform at this sort of scale requires a unique set of technology chops; it also requires all kinds of social and legislative infrastructure that other tech companies can barely even imagine. It’s not like it’s easy. And that’s how it found itself facilitating a genocide. Every single one of those people deserves stronger leadership. The internet does too: whether we like it or not, Meta has a leading role in how the internet develops, and it has not risen to that challenge. Over time, that will become clearer and clearer. It will be interesting to see what happens to it in the long term.

Photo by Glen Carrie on Unsplash

Revisiting my grandfather’s obituary:

‌But this is not Sidney’s first obituary. In May 1945 when he returned home from a four-month internment as a POW in Hitler’s Germany, the twenty-year old Sidney was surprised to find that his hometown Pennsylvania newspaper had published an account of his death at the hand of German troops during the Battle of the Bulge in December of the previous year. Considering that some 75,000 American soldiers did perish during that battle, that Sidney was in fact on the front lines, and that the German soldiers were reportedly under orders to take no prisoners, this was not an irrational conclusion; however, it turned out to be an erroneous one. Sidney was one of the lucky few who were captured, shipped to Germany and survived starvation, disease and Allied bombing of the prison camps until being liberated by General Patton’s army.

‌[…] Sidney’s father David Monas had first emigrated to the United States from Ukraine in 1913, primarily to avoid conscription in the Tsar’s army. David found work in a clothing factory, where he caught the attention of early union organizers due to his ability to communicate in Yiddish, Russian, and English. Following the 1917 revolution in Russia, David and his brother Harry traveled the long way via Japan and Siberia back to Ukraine, arriving in the midst of the Russian Civil War. David was promptly elected to the local soviet; but when the notoriously anti-Semitic White Army began to close in on their region, David, Harry and David’s new wife Eva emigrated/escaped once again to the United States. After an unsuccessful attempt to run a paint business in Brooklyn, David had a long and successful career as a union organizer and ultimately General Manager of the Pennsylvania Joint Board of the Amalgamated Shirt Workers.

I’ve been very lucky to live in a time of relative peace: going to war is not something I’ve ever had to worry about. I hope our child experiences the same. I hope every child, one day, can experience the same.

At this point I’m not sure how helpful it is to be publicly outraged over Fox News. There’s the catharsis of it, sure, but I’m increasingly of the mind that we shouldn’t give it oxygen.

Lately it’s been their redefinition of the word “woke” and, this week, the ludicrous idea that Silicon Valley Bank imploded because of DEI initiatives. It’s also been the revelation, through leaks related to their voting machines lawsuit, that they don’t mean what they say and privately hate Donald Trump. These people are unprincipled charlatans who prey on their audience, but we know that; we’ve always known that.

And maybe it’s worth saying, again and again, because we don’t want anyone to forget that basic truth. I don’t want to argue for letting them get away with it. But they also are getting away with it, and in some ways I think the better solution is to do our own thing and show and tell that it’s better.

We’re all imperfect. Over the last year, I’ve been more imperfect than most. But all of us, however imperfect, can stand up and craft our own message - not just in response to Fox News or bigotry, but in a future-facing way that paints the future we actually want to live in. I think that’s powerful, and crucially, will change more minds.

A People’s History of Twitter, put on by Better Platform, runs tomorrow: a short, free, online event about who depended on Twitter, how it worked for good and bad, and what those communities should do now. It’s moderated by Wagatwe Wanjuki and Jacky Alciné, two people you should be following if you’re not already; some really great speakers are involved. I’ve been speaking with the organizers for a long time and hugely respect their intentions.

RSVP over on their website.

I’m pretty excited about Automattic’s acquisition of Matthias Pfefferle’s ActivityPub plugin. I believe it will remain open source, but by acquiring the copyright to the code and hiring its developer to work on open web projects, Automattic is sending a signal about what it considers to be important.

The federated social web - here I’m talking about the idea, not specific protocols - has the potential to replace the building blocks of version one blogging. It covers subscriptions, comments / replies, notifications, and other interactivity in a way that pure website comments and trackbacks could not. ActivityStreams is potentially also an iteration on RSS, albeit not one that makes RSS obsolete. Making these technologies easily available to over a third of the web is a big deal.

These are ideas that federated social web communities, the indieweb, and others have been working on for a very long time. There are a plurality of solutions right now - and more importantly, a plurality of communities who are excited about the prospects. While startupland is going through some turbulence at the hands of mass layoffs and bank implosions, I’d go so far as to say that we might be heading into a new golden age for the web.

Check out the ActivityPub WordPress plugin - and while you’re at it, check out other plugins Matthias has worked on, including IndieWeb, Webmention, and WebSub.

A lot of ink has been spilled over the demise of Silicon Valley Bank. I’ve never banked with them, and the current crisis doesn’t affect me directly today, but at least three of my prior employers were customers. While it was a regional bank, its collapse is the second-largest bank failure in US history.

Because SVB was an FDIC-insured bank, depositors’ first $250K are safe. But startups tend to have far more than that on hand. VC firms, depending on the firm, are likely to too (although a lot of their funds are wrapped up in commitments for future capital calls). For some, payroll alone may rapidly exceed $250K, threatening their ability to do business. Many companies may move their money from other regional players into national banks, creating more instability.

The FDIC levies premiums on its members and uses the proceeds to cover the depositors at failed banks, in a similar vein to most insurance companies. There’s no taxpayer involvement and no funding from the federal budget. But, of course, some people - VC investors, for example, whose fund returns are about to see major dings - would like the government to make depositors 100% whole. That could mean diving deeper into the FDIC insurance fund, jeopardizing depositors at other banks that might collapse; it could mean finding an emergency buyer, which normally-libertarian VCs like David Sacks have called for; or it could mean a bailout, which would necessitate taxpayer participation.

Benchmark Capital General Partner Eric Vishria:

“If SVB depositors aren’t made whole, then corporate boards will have to insist their companies use two or more of the BIG four banks exclusively. Which will crush smaller banks. AND make the too big to fail problem way worse.”

The thing is, this problem was exacerbated by Trump-era deregulation that was pushed by VCs and, notably, Silicon Valley Bank itself.

Representative Katie Porter:

“The collapse of Silicon Valley Bank was totally avoidable. In 2018, Wall Street pushed a deregulation bill that allowed banks like SVB to take reckless risks. It passed, even as I and many others warned of the risks. I am writing legislation to reverse that law, S. 2155.”

That’s probably one part of the solution: re-establish regulations that protect depositors at smaller banks. Silicon Valley as a whole needs to learn to lose its anti-regulation bias; while it’s certainly true that government is bad at understanding technology, that doesn’t mean it’s bad at understanding societal risk. Banks in Silicon Valley shouldn’t get to skirt safety protections because the industry has a culture of taking risks in the name of innovation. As we’re seeing, that risk can have real adverse effects outside of the industry.

Hedge fund manager Bill Ackman:

“SVB's senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs.”

High risk can lead to high reward, but it shouldn’t necessarily lead to that, particularly when you’ve lobbied hard for a reduction in the rules that were in place to protect ordinary people. On those grounds, I don’t think a bailout of SVB makes sense.

On the other hand, the people who really need and deserve financial support are the vulnerable groups who are put in jeopardy by payroll failures: not the entrepreneurs or senior engineers making high six figure salaries, but the people who make the lunches, clean the offices, and work in administrative positions. They’ve been put in a terrible position by risky strategies carried out in the name of greed. Over time, Silicon Valley will be just fine, but the impact to a low income family of not getting paid for a cycle or three can be profound. Job losses may also affect immigrant workers, who may not be able to secure other employment, putting their visas in jeopardy.

There’s potentially more to come. CNN:

US banks were sitting on $620 billion in unrealized losses (assets that have decreased in price but haven’t been sold yet) at the end of 2022, according to the FDIC.

In all this, it’s worth remembering: innovation is not constrained to Silicon Valley, technology business models are not constrained to venture capital, and innovation doesn’t depend on a lack of constraints. I think SVB’s collapse is one more factor in an ongoing changing of the laws of physics in Silicon Valley; one that will not necessarily be for the worse.