History can be described as a power struggle between hierarchies and networks. Most history we learn about is hierarchical: it’s about kings, presidents, generals, and CEOs. It’s about states, armies, and corporations. It’s about orders from higher up.
Yet networks have always been with us. Throughout history, hierarchies housed in high towers have claimed to rule, but often real power resided in the networks in the town square below. For it is through networks that innovation and revolutionary ideas can contagiously spread.
The 21st century has often been hailed as the Age of Networks. While today we view the Internet as being centralized in a few gatekeepers like Google and Facebook, we forget that most early innovation was driven by grassroots organic communities rather than top-down central planning. Hackers and early adopters who spent their free time and weekends tinkering and living in online communities were the ones who ultimately brought the Internet to the masses.
To illustrate, here are five lessons from the early Internet that show why online communities are essential to the development of a new computing platform.
1. World Wide Web vs. Information Superhighway
In the early 1990s, there were two competing ideas for what the future Internet would look like. One was the Information Superhighway, the other was the World Wide Web.
The Information Superhighway was the futuristic dream technology of the media and telecom industries. The computer, television, and telephone would all be combined into one monolithic product such that consumers could shop online, video chat, watch movies, etc. all in front of their own TVs. Sounds like the Internet we know of today except with a “smart” TV.
There was so much hype around the Information Superhighway. Large cable, media, and tech companies such as Time Warner and Microsoft invested hundreds of millions of dollars into “smart” TV products. They assumed the living room was the logical place for the Internet revolution since that was where the existing infrastructure and entertainment were. Jerry Levin, then CEO of Time Warner, even proclaimed at one point that “I challenge anybody to say that video-on-demand isn’t what the consumer wants.”
Instead, he should have just asked the consumer. One by one, these “smart” TV products failed spectacularly. One reason was due to the generational bias of industry executives. They had all grown up during the television era and assumed that the World Wide Web was too technical and esoteric for mainstream consumers compared to the TV. While the executives were correct in their assessment at the time, what they missed was that the World Wide Web had a passionate community of early believers that the Information Superhighway didn’t have.
The early World Wide Web community of geeky hackers wanted the ability to not only consume more content but also create and share content. Upstart community members built tools and interfaces that made the user experience better for the average person. Netscape, for instance, was the first popular GUI browser that replaced the hideous user experience of reading text on a command line.
Improved UX greatly reduced the barrier to entry to the early World Wide Web community. Consequently, what started as a grassroots community of early adopters ended up growing exponentially to become the Internet we know of today. Instead of deciding on a top-down managed product, the old industry executives should have paid attention to the bottom-up organic World Wide Web community and help nurture its growth into a huge market.
One of the core features of AOL was online chat. There were public chat rooms organized by topic as well as private chat rooms where anything was fair game. It’s an open secret in business that sex sells — like the way porn movies drove adoption of VCRs and the way VR found an early use case in porn. Thus, it’s no surprise that the popularity of AOL was driven by lots of sex chat where anonymous users could talk dirty and role-play sexual fantasies.
The more users chatted, the more money AOL made. An October 1996 article in Rolling Stone estimated that half of all AOL chat was sexually oriented, which generated $7 million a month in revenue. By the end of 1996, AOL servers were so overwhelmed with traffic that service often went down for several hours.
By contrast, AOL’s competitors CompuServe and Prodigy were too serious and conservative for any hints of indecency. As a result, they missed out on the huge growth opportunity driven by sex chat communities, and by the time they realized their mistake AOL already had the online chat market cornered.
One unique feature of eBay in its early days was that it was just a marketplace. It didn’t store any inventory of goods unlike Amazon. Likewise, the only tangible asset eBay had was the goodwill of buyers and sellers and the reputation of its online community.
eBay’s creator Pierre Omidyar strongly believed in the libertarian ethos of not imposing governance on or policing a nascent Internet community. He relied on buyers and sellers to be honest, and when disputes arose he simply copied both parties onto the same email thread and told them to resolve the issue themselves.
With the need to self-regulate an online community, Omidyar created the Feedback Forum where buyers and sellers could rate each other and leave written feedback. Today ratings are ubiquitous in marketplaces like Uber or Airbnb, but at the time online reputation was a novel groundbreaking idea. eBay provided the training wheels for people to trust strangers online. Very quickly, a select group of users stepped up to the responsibility of being “experts” and trusted sources of advice. The strong emphasis on community was evident when Mary Lou Song, eBay’s community manager, always referred to users as “the community” as opposed to “customers.”
A lot of eBay’s early user growth came from antiques and collectibles because the Internet was good at tapping into niche communities that were historically underserved yet have passionate users. eBay was the forum where disparate communities of shared interests, no matter how obscure, could congregate and perform the fundamental hobbyist acts of trading and collecting.
At the beginning of 1997, antiques and collectibles accounted for 80% of all eBay listings. Beanie Babies, a popular collectible that lacked a secondary market for rare and discontinued stuffed animals, quickly grew to 6.6% of eBay’s sales volume, with some auctions netting thousands of dollars. What started out as hobbyists who sold spare items for supplemental income eventually grew into professional businesses that sell millions of dollars of goods on online marketplaces.
The success of eBay gives us two major lessons. First, an insane focus on community — on empowering anonymous users and allowing them to function based on reputation — can actually work in practice. Second, niche communities can serve as good beachhead markets before expanding into other verticals.
Jimmy Wales had a vision that the web could create the largest encyclopedia conceivable where “every single person is given free access to the sum of all human knowledge.” To do so, he started the Nupedia project where everyday people, preferably “true experts in their fields and (with few exceptions) possess PhDs,” could contribute articles that would then be peer-reviewed by other experts.
The problem was that rigid quality control was highly inefficient. Fewer than two dozen articles were published in just the year 2000 alone. Frustrated with the lack of volume, Wales decided to crowdsource articles in a separate website called Wikipedia before submitting those crowdsourced articles to experts. The first crowdsourced article created was on the English letter “U”, which investigated the origins and usage of such letter.
As it turned out, those crowdsourced articles were extremely comprehensive, well-written, and — to the surprise of the expert editors — accurate. The few thousand users who contributed to Wikipedia in its early days had collectively submitted near-authoritative quality articles on a variety of different topics. The rigorous system of peer reviews was quickly abandoned.
What confounded everybody about Wikipedia was that crowdsourcing knowledge actually works in practice. If total idiots put fake news in an article, then others could delete those changes and edit them into something more accurate. The marketplace of ideas would eventually sort itself out and reach an equilibrium point on a set of facts that the community agreed upon.
One of the killer apps of the Internet was the ability for users to freely generate content for others. Blogging enabled everyday people to publish in front of an audience without going through a gatekeeper like the New York Times. The Internet was the endless human storybook for people to share their own perspectives and experiences.
Politics was especially impacted by blogging. From the right side of the political spectrum, a group of conservative blogs such as Instapundit, Little Green Footballs, Power Line, and others advocated for an aggressive war on terrorism after 9/11. Conversely, opposition to the Iraq War fueled left-wing blogs such as MyDD, DailyKos, Eschaton, Hullabaloo, and others.
Blogging forever changed political campaigning and discourse. Mass movements can arise online and quickly take over the mainstream discourse — examples include the Tea Party and Occupy Wall Street movements as well as the influence of Breitbart on the Drumpf campaign. Moreover, blogging can serve as a platform for an obscure individual to launch his or her own political media career. Matt Drudge (Drudge Report), Andrew Breitbart (Breitbart News), and Nick Denton (Gawker) all started as bloggers who quickly garnered an online community around them.
Blogs enabled online communities to form around certain political interests and affiliations, when previously everyone got the news from a few major outlets like the New York Times or CNN. Although today it’s debatable whether breaking down the arbiters of media has created political polarization and echo chambers, the power of online political communities cannot be understated. A spark generated from an obscure blog can fuel the fire for a mass political movement.
Most people view the success of the Internet as primarily driven by top-down decisions, but in reality it was the organic communities that formed around different projects that enabled the Internet as a whole to prosper and get mass adoption.
The Information Superhighway showed us the folly of top-down decisions that didn’t address what users really wanted compared to the World Wide Web. AOL showed us not to be embarrassed about sex communities as a driver of growth. eBay showed us that reputation is enough to govern anonymous users online and that niche communities are great first markets. Wikipedia showed us that crowdsourcing knowledge results in the truth winning out in the marketplace of ideas. And blogging showed us that online communities are powerful platforms for launching one’s public figure career.
As Mark Twain once famously said, “History doesn’t repeat itself but it often rhymes.” One new area we can apply the lessons of the early Internet to is blockchains and cryptocurrencies. Decentralized crypto networks represent a new computing paradigm just like websites did for Web 1.0 and mobile did for Web 2.0. With each computing paradigm, getting buy-in from an early passionate community of users is crucial for the ability of such platform to thrive long-term. You want others to be actively building on top of your platform.
In my view, the crypto projects that have a community-first as opposed to product-first approach are the projects that have the highest chance of being successful. Many projects today are underestimating the importance of building a community. Distributed ledger technologies (DLTs), for instance, are mostly driven by top-down corporate decisions but so far have failed to get meaningful adoption, a striking parallel to the Information Superhighway of the early 90s. This stands in contrast to open crypto networks, which have a higher chance of winning over DLTs like what ultimately happened with the World Wide Web.
Thus, as we move forward in innovation, it’s important to look back into the history of the early Internet and remember that many early projects that were insanely focused on community were the ones that were ultimately successful.
This article was inspired by Brian McCullough’s book How the Internet Happened. Fantastic book that explains the whole story of how the Internet evolved from Netscape to the iPhone.