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Building something meaningful, innovative, and disruptive from scratch - whether it's a company, a network, or a currency - is a hard endeavor that demands strong and visionary leadership.
And a new country, of course, wouldn’t be different.
By no means implies that society will be governed forever by a single person without any checks and balances, as some critics have been pointing out.
Just as a company decentralizes among multiple stakeholders as it grows, a new society will also start small and centralized as a political startup, until eventually reaching the stage of a Network State and becoming more decentralized.
A recognized founder. A state, like a company, needs a leader. Especially early on. But truly strong leadership comes from consent and buy-in, not propaganda or force. Hence, it’s important to have a recognized founder, one that people actually listen to and choose to follow by joining the community.
Can that founder break up the Triforce, splitting their authority into some kind of multisig? Sure, just like the founder of a startup company can choose to give up board seats. But it’s easy to give away power and hard to consolidate it, and you need that power sometimes to make hard but important non-consensus decisions.154 That’s why dual-class stock to maintain control is used by both the US establishment and their opponents.
However, because the idea of starting a new country as a digital startup only emerged literally last year, most political and social innovators have been devoting their time just to studying large-scale governance - voting, public-good funding, taxes, diversity, immigration, etc. -, completely neglecting boot-up strategies.
These are very important issues and must be discussed. But, and this will probably sound obvious for most startup tech founders, in the early stages of an organization, there is something much more critical to spend energy on:
how to start and survive in the first place?
By framing political innovation through the lens of Hegel’s dialectic, as Balaji usually does, we essentially have the following groups:
1) Those who understand the flaws of current Institutions in-depth and strongly stand against the Establishment (Thesis), and
2) Those who think deeply about how the ideal world should be - digital, decentralized, open, fair, with privacy, diverse, opted-in, and so on (Antithesis).
The problem is that the Antithesis, which encompasses all crypto and web3 technologies and governance methodologies, is not enough to solve the problem.
So, we need Synthesis:
3) Those who are thinking about how to realistically transition from 1) to 2), and attempting to devise the most effective strategy to reach the optimal society in the shortest time possible.
But this is an incredibly difficult endeavor.
Not only because it requires a lot of resources and hard work but also because you need to think pragmatically and make compromises in some axes in order to reach the goal. However, this means that both sides will eventually become upset.
Incumbents, because you represent a threat.
Insurgents, because your compromises are heresy.
It takes great drive and creativity to walk through a complex and frightening idea maze that has never been explored before in order to take these new premises to the mainstream.
And this is a job for a Founder.
A leader able to establish a long-term vision, attract new talent and resources, effectively identify and communicate with the target citizen, establish the initial distribution channel, understand the underlying problem deeply, clarify the value proposition, set and monitor metrics, and understand the technology stack well to build solutions.
Someone who can draw and execute an effective go-to-society strategy, the same way a tech founder would do with a go-to-market strategy for his product.
Coinbase can be seen as a very good example.
There was a thesis: the financial system is broken.
There was an antithesis: we must decentralize (Bitcoin).
And then a synthesis was needed: we must compromise in some axis (decentralization and work together with fiat) in order to create a bridge between the old and established world and the crypto world to gain traction and scale, and ultimately reach the mainstream.
This new system initially was very controversial but over time it was proven to be the most effective strategy for onboarding millions of people to a superior non-establishment financial system in less than 10 years.
If Coinbase had just forged a purely decentralized approach, rejecting all centralized solutions, we would not be as advanced as we are today. Clearly, a bridge between the two worlds is far more effective for mainstream adoption.
Innovation can sometimes emerge too early when the market or society is not yet ready for adoption. On the other hand, it can also emerge too late, missing the window of opportunity or becoming obsolete.
Timing is key for truly disruptive innovation to succeed.
For instance, Open source.
Although it can be deemed as a huge success for backend systems and even mobile with Android, in the end-user software realm it never stood a chance against proprietary and already established applications such as Office and Photoshop.
The same with the RSS open protocol.
While the concept of an Open Content Feed was great, it was massively outcompeted by Facebook, Twitter, and other private social media.
And that’s because in these cases there was no effective go-to-market strategy to reach the scale of mainstream usage. The technology was there but it lacked the necessary vision, leadership, and compromises
In the realm of political and institutional innovation, the logic is similar. It is not enough to understand the root issues of the current system. It’s not enough to think of new governance models and collective coordination technologies. We also need the best strategies to turn this vision into reality because technology does not automatically improve.
https://www.youtube.com/watch?v=BZU03pYR85E
In my view, that is the core value of the Network State book.
Balaji’s book is not about drawing rules by which a new society should run. The main idea behind it is to offer a strategy to actually reach that goal.
It’s the synthesis. The go-to-society strategy.
In Balaji’s view, the best way to build a bridge between the old and the new political world is to borrow the concept of a tech startup, adapt it, and apply it to the political ecosystem.
Have a founder (political leader), a problem to solve (one commandment, moral innovation), a go-to-market strategy (startup society, go-to-society strategy), a digital business model (network union, collective action, crowdfunding), be global (network archipelago), and go public, IPO (network State and diplomatic recognition).
The combination of a driven founder solving a hard problem with the right strategy has been proven to be powerful in the economic world. It can take an idea from zero to multi-billion dollar valuations and attract billions of users. And probably that’s the best shot we have to escape from the obsolete and decaying political system fast enough to reach escape velocity and not be neutralized by the establishment.
Maybe this approach could represent some level of systemic risk or negative externality such as an evil founder. However, the entire social and technical stack of a Network State is designed to keep leaders accountable and minimize the power asymmetry. The infrastructure will be digital, open, transparent, and onchain. And the moral premises are based on the right of exit and voluntary opt-in.
That alone represents at least a 10x improvement over any current State.
Furthermore, you cannot discuss the risks and negative externalities of innovation without comparing them to the externalities of the status quo.
What about all innovation, from crypto and longevity to energy and education, held back by dumb regulations? Or all the capital wasted in wars and useless projects? Not to mention all the people kept in poverty and excluded from better places to live.
A startup society is a bet that is worth taking. The upside can be huge, while the downside is limited, which is very different from experiments made by large Nation-States like Russia, China, North Korea, and Venezuela.
Probably the current Network State playbook is not how the world will create new countries 30 years from now. Perhaps they will start as a completely decentralized DAO. Maybe there will be no founder at all. Let’s see.
But for now, while we need to fight against all the counterattacks and friction from the Establishment, the best social technology we have at our disposal is founder-led startups.
So, let’s do it.
