Daily Balajisms – From tech startups to tech communities

Funding dries up during tech winters. But a moral innovation is the resource that never runs out.

Balaji Srinivasan says that his long-term vision of building network states can be simplified into a proximate goal of fostering pro-tech policy across multiple jurisdictions in parallel. A network state can be translated as tech policy.

Previously you would launch a tech startup and join places like Y-Combinator, but Balaji thinks today you should start with a tech community, not a tech company.

A tech community is much less fragile than a tech startup. People have various employers and sources of funding and income. It is more like a church or an extended family/clan – where people can take care of each other when times get rough.

Balaji has a gradual and bottom-up approach to building network states. You launch a startup society around one moral innovation, the one commandment. Anyone with a laptop can do it. The second step of creating a network union, a highly-aligned community capable of collective action, is much harder.

Not every network union needs to acquire real estate and become a network archipelago. And not every network archipelago becomes a network state – by gaining diplomatic recognition from pre-existing sovereign.

A tightly-knit local tech community, advocating for a pro-tech policy, let’s say in Slovakia, is a proximate and tangible goal towards building network states.

We have a crypto winter and an AI summer now. But seasons come and go, as does the funding. Community and its moral innovation (like sugar bad, or Zoroastrianism good) is the candle that keeps burning during the stormy periods and lean winters. Moral innovation is a resource that never runs out, says Balaji.

This is the reason why tech communities are the backbone of tech startups. You need to build a foundation first. Tech startups happened in Silicon Valley, because there was a brewing tech-forward community for decades. And after Covid, many of its members chose exit – and left for Miami or Austin.

 If you can’t crowdfund a coffee, you can’t crowdfund a city, says Balaji. If you can’t crowdfund a breakfast, you can’t crowdfund a building, he adds.

Balaji has a concept of founding versus inheriting. Founders acquire their backlinks gradually, one customer at a time. Heirs get their backlinks all at once – when they inherit a company or an institution.

Mark Zuckerberg, a son of a dentist, has built Facebook from his dorm room into a 3.5 billion users. Salzburger inherited NYT from his father’s father – six generations down.      

You want people to laugh at you and think you are crazy for proposing wildly new ideas like building the network state. Because this is one form of social defence. If you are dismissed and not taken seriously, you are less likely to get attacked.

The old establishment is the opposite of an ideal venture capitalist, says Balaji. They are bad at spotting weak signals that have potential to go vertical and can perceive phenomena that have a size of a political constituency, like 10-50%, but not 0.01%.

Crypto winters are for builders. And your tiny and tightly-knit tech community can do great things together even when times get rough.

A nation is people who have made great things together and wish to make them again.