The Network State in One Deck

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We’ve engaged the concept of the network state at 30,000 feet. What if we get down to brass tacks, to the kind of specifics needed for a pitch deck?

As founders and venture capitalists know, the pitch deck is to tech what the screenplay is to Hollywood. It’s a ritualized format that’s been honed over the years to quickly communicate a business plan to a prospective investor. There are many deck templates, but we’ll use a combination of the Sequoia and 10/20/30 formats.

The entire point of this sample deck is to turn something impossibly ambitious (“start a new country”) into something possibly fundable (“organize a series of paid meetups of increasing scale and duration”). Just like SpaceX made space fundable, Bitcoin made cryptocurrencies fundable, and OpenAI made artificial general intelligence fundable…we seek to make new countries fundable.

Recall that startup societies are to network states what startup companies are to public companies. They’re the embryonic versions. So rather than call it a “network state” deck, we call it a “startup society” deck instead.

A Sample Startup Society Deck

The sample deck (Google Slides, PDF) describes a hypothetical startup society that’s focused on lengthening lifespan.¹¹ It has three phases with increasing levels of ambition:

A purely digital startup society organizing longevity-focused gatherings (“Methuselah Meetups”)
A partially physical network archipelago implementing keto diet restriction (“Keto Kosher”)
An diplomatically recognized network state with better-than-FDA levels of biotech regulation (“Future Drug Agency”).

So: from assembling online, to holding popups in the physical world, to owning permanent locations and shaping new laws.

Differences Between Startup Companies and Startup Societies

The deck implicitly includes some key differences between startup societies and traditional startup companies. Among them:

The founder of a startup society is more President than CEO
The first users are more like early adherents than early adopters
The business model is the new SaaS, society-as-a-service
And the investors can now turn venture capital into political capital

Each point is used in the sample deck but deserves further elaboration.

The Founder of a Startup Society is the President

The right title for the founder of a hypothetical startup society is President, because it’s both a commercial and electoral title. That is, you’ll frequently see chief executives described as “President and CEO”. But a President is also understood to be the leader of a democratic society.

So, how do you attain the title of President of a startup society? The same way you attain the title of CEO of a startup company. You create a new company¹² and assign yourself that title. You use it when introducing yourself. You LARP it into reality. Just as the CEO of a single-person startup LARPs it into reality by building a business strong enough to hire people that report to them as chief executive, the President of a single-person startup society LARPs it into reality by building enough of a following online to get netizens to digitally vote for them (and then physically follow them) as community leader.

For the President, this is really no different than running for mayor or governor — you’re just doing it online. And for the netizen, it’s really no different than accepting digital moderation of an online forum — you’re just doing it offline.

The First Members of a Startup Society are Early Adherents

If early adopters are the first customers of startup companies, early adherents are the first members of startup societies. Basically: the ideal first netizens are those who believe in the moral innovation (the One Commandment), and who want to implement the subsequent social innovations.

What’s a moral innovation? It’s a change in the bedrock values that underpin a society, as quantified by longitudinal polling data on values. And what’s a social innovation? It’s a visible change in societal behavior, the built environment, or both. For example:

Once 90%+ morally shifted to thinking “smoking is bad”, you saw a sharp dropoff in smoking (social change) and no smoking signs became common (built environment).
Once enough people shifted to thinking “walkability is good”, you saw highways removed from San Francisco’s waterfront.
And once they went from mandating socialism to endorsing capitalism, you got the economic rise of India.

So: moral innovation comes first — people agree on what is good and bad — and then social innovation follows from that. Early adherents are drawn to your new society because they agree with your moral stance, because they agree with your critique of society and your recipe to fix it.

But…why is morality the place to start when creating a new society?¹³ Why not just start with technology, with a flying car or stem cell society? We discuss this at length in the One Commandment, but let’s give the brief version here.

Morality Underpins Legality Underpins Technology

Tech founders usually think morality is obvious. That it’s good to make things faster and cheaper. That it’s good to live longer and healthier lives. The sort of moral intuitions you’d have if not corrupted by a bioethics class.

They’re taken aback when they deal with political activists who aren’t wired that way. Think about the Luddites that paint nuclear energy as morally bad, that attack ride-sharing as bad, that even characterize curing deafness as bad. The fundamental weapon of these People of the State¹⁴ is to get enough people to believe something is morally bad, and then to use that moral premise to pass laws to stop technological advancement. They are into power and status, not abundance and progress.

You will lose to these people if you don’t understand the game they’re playing. Because if you lose at the level of morality, you lose at the level of legality, and then you lose at the level of technology. Your privacy-protecting Tornado Cash will get labeled a society-harming Torment Nexus, and next your torments will begin. That’s why a deck for a startup society begins with a statement of moral principles. In this sample deck, it starts with the specific claim that life extension is good.

The Business Model of a Startup Society is Society-as-a-Service

We’ve talked about the president of a startup society and the purpose in terms of morality. But how does the business model work economically? Answer: the business model is the new¹⁵ SaaS (society-as-a-service) and the netizens are shareholder-subscribers that both buy a digital currency and pay to maintain a digital passport.

Financially, Netizens are Shareholder-Subscribers

What’s a shareholder-subscriber? It’s a netizen who is committed both financially and operationally, who both buys a digital currency and holds a digital passport. That’s qualitatively different from the typical user of a startup company.

As context, in a traditional tech startup the customer of your stock is not the same as the customer of your product. The customer of your stock is willing to sit down for a pitch deck and is interested in how profitable you are. But the customer of your product has a short attention span, may click a button or two at best to try something out, and is interested mainly in how useful you are. These are very different audiences and value propositions! So the back-of-the-house pitch to investors is as different from the front-of-the-house website for users as a screenplay is from a released movie. This changes in the context of a cryptocurrency — or a startup society.

In a startup society, you might have some casual users or passive investors, but the ideal netizen both holds the society’s digital currency and maintains its digital passport. Concretely, they might (a) invest in a share of the overall community (the digital currency) and (b) pay a monthly fee to access their society-as-a-service (the digital passport). Thus, they’re both investor and user.

Economically, the new SaaS is Society-as-a-Service

The point of startup societies is not really about starting a business. But they could be amazing businesses.

Their business model is the new SaaS: society-as-a-service. Members pay a monthly subscription to maintain a digital passport for every startup society they belong to, potentially implemented as NFT ownership. Conversely, if their subscription to the society lapses, so does their digital passport and their ability to access community services.

Operationally, it’s much like paying a monthly subscription to maintain a Dropbox account. That’s already a known paradigm and every tech founder knows how to make that work for anyone worldwide with an internet connection. The new wrinkle is that this user login can be taken more seriously, as a digital passport that gates access to both online and offline services, like Singpass online and cryptographic door locks offline.

And why do people pay for this digital passport? Where does the fundamental value for a startup society come from? Not technology, but community.

For the founder of a startup society, it’s much cheaper to found a community than a company. All you need is to build a following online. Then your shareholder-subscribers can provide both capitalization as well as recurring revenue to hold meetups and scale from there. Fundamentally, moral innovation is “inexpensive” relative to technical innovation, so you don’t need to raise large rounds. If you’re good at posting online, you’re part of the way there.

For a prospective netizen of a startup society, the shareholder-subscriber…the value proposition is also tremendous for a genuinely novel community. The reason is a netizen wants to find people of like mind, and they can’t get a community like this anywhere else. So their utility and thus their stickiness will be high.

The Startup Society Turns Venture Capital Into Political Capital

The society-as-a-service business model has another major advantage: it allows us to finally turn venture capital into political capital. You can now align investors behind political reform in a way that was not previously feasible.

As background, it’s proven very difficult for tech to turn around San Francisco. There’s a reason for that! The conventional startup model assumes three things:

Empowered management
A clean slate
The prospect of venture returns

All three are present in a startup company: you have a clear CEO, a newly incorporated vehicle, and the possibility of 1000X upside. And all three are absent when running for office in an old city like San Francisco: you have many politicians, tons of legacy legal code, and no ability to directly recoup the financial costs incurred by running for office – let alone profit from improving the city by 10X.

That’s why we haven’t seen top founders and investors go into politics. That’s why the tech model that’s produced such amazing things is seemingly incapable of dealing with the problems of San Francisco, let alone those of California, the US, or the Western world more generally.

But startup societies fix all three of these things. As the sample deck shows, they look a lot like a startup company from a VC point of view. You have empowered management (a president), a clean slate (a new digital community), and the prospect of venture returns. You just need to convert your sprawling online community into a partially offline society of shareholder-subscribers.

For Founders, Funders, and Finders

To summarize: this deck explains in very concrete terms how the founders, finders, and funders of startup societies work together.

The founders run for President of a new startup society, by simply starting and running that society. They might start it as a traditional corporation, a Discord, or a fully onchain DAO – but that’s an implementation detail. They’re really setting up a community more than a company.
The “finders” are the netizens looking to find communities of like mind. They join a startup society to live with others who share their moral values and want to build their vision of the good, whether that be technological or social.
The funders are the investors, both retail and professional. The retail investors are the netizens, “shareholder-subscribers” that both capitalize the startup society and participate in it. And the professional investors finally get a mechanism for turning venture capital into political capital.

Note that you can bootstrap a startup society as well! The point of the deck isn’t to necessitate an investor pitch, it is to explain how you’d build a startup society using concepts we already understand from startup companies.

From Startup Society to Network State

The deck reviews one concrete example of how you can start with an online community with a moral innovation (“life extension is good”), materialize that community into the physical world, and eventually lobby for political reform to legalize new biotechnologies. And that is quite ambitious. But is it really the seed of a new state?

Hard to say. Predicting which startup societies will become full network states is like predicting which startups will become public companies. Few people predicted that posting 140 characters would be so insanely politically important.

It might turn out that obviously ambitious startup societies become network states, like the ones that start out with a goal of building a nuclear fusion-powered society. But it might also turn out that their ambition means it’s harder to ship a minimum viable product that doesn’t require changes to law.

The best path may be to start with an online community, turn it into something capable of crowdfunding territory, and only then petition for changes to law. That’s the path the deck takes. But the point of startup societies and network states is to enable many experiments. The sector will surprise us.

Next Section:

The Network State in One Preface