Peer Progress and Regulation 2.0

As some of you know, we have had an activist in residence at USV for the past year. His name is Nick Grossman and he has helped us to understand the public policy implications of the rise of networks that we are so actively investing in. The idea of a VC firm having an activist in residence has also produced outrage among those who dismiss the power of peer networks in our society.

One of the topics we have been thinking about and working on with Nick is the idea of regulation 2.0, a lighter weight regulatory paradigm than what we currently have. On thursday, Nick went down to Princeton and gave a talk about Regulation 2.0. His blog post with a video of his talk is here.

I think the slides will give you a good sense of what we are thinking about under the Regulation 2.0 framework.

I am excited about the possibilites of a more transparent world with less permission seeking and more innovation.


Comments (Archived):

  1. vruz

    Morozov can be safely ignored about anything that has to do with innovation.At times he seems more interested in providing rationales for the obtuse elitist world of old, instead of understanding the changes that are needed to bring about a better world, unrigged markets and an actual meritocracy.Congratulations on Nick’s appointment, it’s a sign that USV have a sight set in the future, listening hard and putting (some of 🙂 their money where their mouth is.

    1. Super Duper Truth Pooper

      Tech elitists are NOT about meritocracy.

    2. Super Duper Truth Pooper

      Is the issue discussed in this article an example of this Meritocratic culture of which you speak?http://jules.dailygrommet.c

  2. angoodkind

    Fred, what is the difference between Nick’s role, and that of a lobbyist? I do not mean this facetiously: I immensely respect what you guys are doing, but it seems like he’s just the legislative arm of your firm. Would love to better understand the difference. Thanks!

    1. vruz

      A lobbyist is a salesman, someone who greases the skids for some duds to sail.From the outside at least, Nick’s role seems to be that of someone who actually cares about the changes he’s working to bring about, helping to evangelise and develop campaigns of direct action.Let’s see how that pans out, if anything, a brave move of USV.

      1. angoodkind

        That’s an interesting distinction. But, at the end of the end, you’re saying they are means to the same end, right? They both help their business models prosper?

        1. vruz

          One is solely focused on his own business by any means possible. The other strives on a level playing field for the ecosystem, in addition to his own business.

    2. Richard

      The lobbyists are the incumbants. You know that embargo on Cuba that has been going on for years? What if I told you that many major pharmaceuticals are developed in cuba each decade? Either a lobbyist or a Peer Network, reframes the issue to one manageable to.the elected representative.

      1. William Mougayar

        “The lobbyists are the incumbants.” Exactly. The online peer networks will overwhelm them.

        1. JamesHRH

          You have to have an audience. Politicians are very sensitive to bullying and the good ones are very strong at judging actual versus projected power.

          1. William Mougayar

            I don’t think we’re talking about bullying. Reality is that a large part of the politicians become aligned with the new ideas from the outside, like when anti-SOPA/PIPA started getting supporters in the Congress from politicians that were listening to outside activists.

    3. Aaron Klein

      There is zero effective difference. You just have a negative association with the word.If you wrote a letter to Congress about SOPA, I regret to inform you that you are a lobbyist. 😉

      1. vruz

        If you speak convincingly to some congressmen’s ears (oops, what’s this in your pocket?) you are a lobbyist.If you write a letter to congress you are a citizen.

        1. Aaron Klein

          Good heavens, Disqus will not post my replies.That’s just not true. Lobbying is trying to convince someone to do something. If you wrote a letter, you may not be a paid lobbyist, but you certainly were lobbying!

          1. ShanaC

            do you have copies of the email(s) and any details about your server of choice? I want to send them along so that a ticket is developed

          2. Aaron Klein

            This email response didn’t post either. I do have the sent message. I use Gmail / Google Apps.

          3. Aaron Klein

            Gmail. I do have the sent messages, I’m sure.

          4. vruz

            Do you know where the etymology of “lobbying” comes from?

    4. William Mougayar

      In my opinion, Nick is greasing the wheels of online activism and online advocacies. It’s like online-lobbying, but potentially more powerful.

    5. Nathan Gantz

      Adam raises a worthwhile consideration. Politicians are typically profane in Western culture. However those who can transcend this profanity become sacred symbols which defy categorization within any individual “firm”. Check this out:

    6. Nick Grossman

      Hi Everyone — I actually just tuned in after a day of running around in 3 feet of snow up here in Boston. Haven’t been on email all day, and just randomly checked fred’s blog…Anyway – I’d say that the role is similar in that my focus is on advancing policies that support an interest. I’d say my role is both about a corporate / industrial interest (peer networks on the internet, including but not limited to the companies USV funds) and also a public interest (access to information & data, harnessing networks to increase the effectiveness of public goals, advancing innovation more broadly, etc).I think @wmoug:disqus has a point in that my role is less about direct lobbying of public officials and more about empowering and activating others. Beyond the policy & regulatory specifics we’ve been focusing on, we are also really inspired by the potential to give voice and power to more people than was possible before, and to ideally combat the traditional dynamics of money in politics (big goal, obv).

      1. William Mougayar

        Cool role.I think you’re an orchestrator, an instigator & prognosticator on what’s standing in the way of Internet-based innovation from a regulation or policy point of view.

      2. William Mougayar

        Nick, any thoughts on what this organization is doing? http://i2coalition.comThey are planning an Internet Advocacy day on the Hill in February.

        1. Nick Grossman

          Yeah I know them – they are looking to represent the interests of the infrastructure providers (ISPs, domain sellers, data centers, etc). I have been in touch with them a bit about startup advocacy day, which Engine Advocacy ( is also involved with.

          1. William Mougayar

            Interesting. So Engine Advocacy looks like a watchdog / early warning blog for the key policies affecting technology and startups.

          2. Nick Grossman

            Yep. They are also a membership organization and they our together a lot of events.–http://nickgrossman.ison the fly

      3. William Mougayar

        Cool role.I think you’re an orchestrator, an instigator & prognosticator on what’s standing in the way of Internet-based innovation from a regulation or policy point of view.

      4. Prokofy

        In other words, just be a more subtle lobbyist to stay clear of regulations for lobbyists!

    7. fredwilson

      He doesn’t lobby. If there is lobbying to be done, the partners do it. His role is to help us develop themes and positions that we can advocate for and help spread beyond our firm. Nick will not be doing this for long. He has his own plans and goals and thankfully he has been willing to spend some time with us along his own career journey.

      1. Prokofy

        In other words, he just helps build your mailing list for you to lobby government as lobbyists yourself, without checks and balances. Like I said, today, an “activist in residence,” tomorrow “an entrepreneur in office”. Wait for it…

  3. Luke Chamberlin

    Trust.That’s the slide that got me. There’s a huge generational gap in trust.(I’m going to generalize here a bit so please forgive me. I know not everyone fits into these boxes.)When you listen to regulators or incumbents talk about new peer to peer services like Lyft or Airbnb or even Craigslist there is this hint of derision in their voices, because they don’t trust people.”You’d let a total stranger into your house?””You’d share your car with a total stranger you met on the internet?””You’d give money to fund a project that might not even get made? That’s crazy!”They don’t trust these services because they don’t trust people. They don’t believe that most people are good and honest. They come from an old hierarchical system full of winners and losers. You’re either on the top or the bottom in these models and since they see themselves on the top that means everyone else must be on the bottom. There’s no working *with* only working *for* in their vocabularies.The younger generation that grew up online knows how to trust people. Not naive trust; they know there are creeps and weirdos out there but they also know how to make these decisions for themselves.But they see the wonderful contributions that people make every day as we all build the internet together. Everyone here is a maker and a contributor and a collaborator. These peer to peer services make perfect sense because of a common belief in the underlying trust that powers them.The battle for trust will be central to Regulation 2.0. Because the mortal enemy of trust is fear, and the incumbents are really good at using fear to their advantage.

    1. Arlo Gilbert

      There are no shortage of horror stories from these networked companies. Creeps who wreck your house. Your argument doesn’t play out when you take it to extremes… Airbnb… ok that’s my house I’m letting somebody use. It’s just a thing…. Dogvacay? Ok that’s my dog, if my dog dies I’d be sad but I’d move on…So take it to the extreme… How about Toddlervacay? Let total strangers take care of your child. No regulation, no requirements about things like safety gates, food allergy awareness, knowing the Heimlich?Still feeling the trust?

      1. Luke Chamberlin

        Yes, I still feel the trust. This is the gap I’m talking about.

    2. LE

      “They don’t believe that most people are good and honest.”Doesn’t matter if “most people” are good and honest.You are talking about a very small chance of a potentially bad thing happening.People operate by experience and observation. Once they are burned or they have viewed someone else being burned they act accordingly.Younger people generally have less life experience so it makes perfect sense that they would view the risks differently. (This is not to say that regulators are right or that they don’t suck or any of that in some cases.) But it means that you have to present clear and convincing evidence of the down side risks in a way that they can understand in order to get over their predisposition to protect incumbent systems that work. Remember when Obama thought he could solve the middle east problems by just getting everybody in the room and talking it out? How ridiculous was that! Like these guys are a bunch of corner hommies from his old nabbie! I will bring them all together and pass around the hookah.”they know there are creeps and weirdos out there but they also know how to make these decisions for themselves.”I don’t know about that. Actually I don’t agree. I went with my daughter to help her buy a car. She is smart and gets top grades and a good private college. But she didn’t even know you could haggle and that the price of a new car is negotiable (she knew a used car was negotiable for some reason I guess because that is what a friend bought). I was amazed at how such a “smart” person could not know that (she doesn’t live with me is one explanation of course if she did she would know that). The other day I read where Mark Suster had to call a friend in the car business to see how car dealers work with respect to pricing. And Mark is an experienced businessman. But he knows what he knows and needs help in what he doesn’t know. And Mark isn’t young either.I was sitting with the financing guy who was trying to upsell me everything from pre-paying service to prepaying dent repair coverage, etc. My partner Steven Dietz is an expert on cars (and auto startups having funded DealerTrack, TrueCar, Digital Airstrike, Uparts and others) and I called him and he said, “Decline everything. That’s where the dealer makes all their margin – upselling you at close.”Note how Mark an “older” person knows what he doesn’t know. So even though there was minor outcome to making the wrong decision he decided to ask for advice.The other thing about young people, the point I’ve made before, is they don’t look at material possessions as possessively because so much has been handed to them and their parents want to be their friends. If you’ve worked your paper route or mowed lawns to buy your bike, you are less likely to lend that bike to a friend (who could damage it) if you’ve got the type of father that says “bike broken – to bad you shouldn’t have lent it out”! But if you’ve got the type of father that says “oh no problem I’ll buy you a new bike” you are more likely to be less possessive and share what you have.”The younger generation that grew up online knows how to trust people.”Tell me more about this in all seriousness how does the younger generation online know about how to trust people? How do you know what you don’t know if you are 18 or 22 and haven’t been around long enough to see how the world operates?

      1. Luke Chamberlin

        I think that when you grow up online you develop a sort of “internet smarts” similar to the street smarts you gain by growing up in a tough neighborhood.”How do you know what you don’t know if you are 18 or 22 and haven’t been around long enough to see how the world operates?”I’m talking about a specific kind of trust in regards to the way that online communities operate. The modern consumer internet has only been around for 20 or so years, so a 20 year old has as much experience as anyone.

    3. Aaron Klein

      And the core question is: why should people be barred from exercising trust if they feel it?The Regulation 1.0 approach is “we understand you may want to trust, but we think you’re too dumb to make that decision for yourself, so we’re here to ‘protect’ you.”The reality is: the motivation is incumbent protection.

      1. Luke Chamberlin

        I am generally for letting people do what they want with some pragmatic boundaries set here and there.I was talking with a friend who is a true libertarian and he was promoting doing away with the health department and health code entirely (here in NYC).That’s a little bit further than I would take things, but then he says: “you eat at your aunt’s house all the time without thinking about it and she has cats running around the kitchen and doesn’t follow half of the health code rules.”I still think I like the idea of restaurant inspections but his comment has stuck with me.

        1. Aaron Klein

          Yep. The difference is…it’s my aunt.What we don’t know is what would spring up if the government wasn’t forcing every restaurant to follow their framework. You can imagine the startup that would certify restaurant cleanliness and quality.And that’s the point of this new framework. If we can try and imagine starting from a point of “trust but verify” rather than “centralized command and control” the possibilities are endless.

          1. Arlo Gilbert

            The familial connection is part of it, however the realreason you dont worry about her is because she is not commercially motivated.The corner bistro is a for profit enterprise. The owners motivation is to make as much money off the hamburger as possible. When profit is the primary motive history teaches us time and time again that people will cheat. Will all people cheat? No. But some will and that is why we have organizations like the SEC.This entire argument is built on the foundation that the current twenty something’s are somehow more ethical than their elders. I call bologne.

          2. Aaron Klein

            Bullshit.The for profit business has a GREATER motivation for keeping customers happy.If you don’t like capitalism, there are probably better blogs to spend your time on.(I’m quite annoyed to say that Disqus is once again not posting email replies.)

          3. Arlo Gilbert

            You misunderstood my point. I love capitalism and have started several companies. My point was that regulation is necessary in many places. Industries repeatedly prove that they can not self regulate. The corner bistro does not have your best interests at heart. Read “Kitchen Confidential”. The bistro can do lots of things that you don’t catch on to. Some are just unethical, some are borderline criminal. You don’t mind horse meat do you? You can’t tell the difference between beef and horse in a burger or meatball. You can’t taste the antibiotics in poultry or the chemicals in your koolaid that are now illegal due to regulation.By your argument car salesmen must be honest because they want you to buy from them again someday or bankers must be honest because they want your deposits.Perhaps you are smart but people as a whole while mostly nice and mostly honest are by definition of average intelligence with many people by definition are of lower than average intelligence. Regulations keep smart people from screwing over dumb or ignorant people.No need to be accusatory.

          4. Aaron Klein

            I don’t mean to accuse. But the people running the DMV aren’t going to figure out that kind of stuff either.Better to rely on the profit motive and patronize businesses who provide transparency in one form or another.The profit motive – fear of losing one’s customers – is the friend of the consumer, not the enemy.

          5. Luke Chamberlin

            My original point was not about ethics. It’s about growing up in an environment and being shaped by it.

          6. Aaron Klein

            Bullshit.The for profit business has a GREATER motivation for keeping customers happy.If you don’t like capitalism, there are probably better blogs to spend your time on.

          7. thinkdisruptive

            Aaron, I agree with trust but verify as an approach in most things, but I believe strongly that privacy and security need absolute lines drawn by regulators. There are matters of public safety, some that we don’t even know about yet, where the damage can’t be recovered after the fact. I see too many internet companies completely disregarding both of these, or actively dismissing them as unimportant, so I don’t trust self-regulation, any more than I trust doctors and biologists to self-regulate genetic engineering. It’s great that the network gives us the ability to have transparency and a high degree of community-based and/or self regulation, but there are areas where that isn’t good enough. Banking and finance, for example.That said, I think we’d be better off throwing out the entire legal code (except the constitution), agreeing on a set of principles such as no lying, stealing, cheating or killing, and then starting over to build a new compact regulatory framework based on modern realities. The harm done by our existing legal system far exceeds the benefits it provides, so I’d be prepared to live with a little anarchy for a while.

      2. JamesHRH

        The American populace has a poor track record of judging trustworthiness.Especially once they pass age 65.

      3. thinkdisruptive

        I’m just waiting for personal liability lawyers to get their hands on the modern web — you know it’s going to happen. After the first lawsuit where some old lady gets $4M for the internet equivalent of spilling her own hot coffee in her lap (… ), and forever after, nobody else will ever again be able to buy a hot coffee. No more idealism after that.

    4. fredwilson

      Well said Luke

  4. JamesHRH

    While Nick’s title is a bit off-putting, his role makes perfect sense. All of his suppositions are correct, especially that networks are a new organizational form.The question will be, “will hierarchical bureaucracy be able to prove that accountability is more valuable than innovation or transparency?”The internet has a poor record, to date. of holding people accountable.And, many of the cultures that were very good at network style accountability (e.g., almost all ‘native cultures’) had one thing in common: they didn’t scale.That’s the one thing about hierarchy: it scales & has internal accountability.

    1. vruz

      You are wrong: Linux.

      1. JamesHRH

        My name is not Linux and I am not wrong ;-)You cannot use SW examples to prove that IRL hierarchies are going to turn into IRL networks.

        1. vruz

          Oh, sorry, I mistook you for somebody else ;-)This is what I’m talking about.…You are relying on yesterday’s world to stay the same tomorrow. It won’t.

          1. JamesHRH

            The core assumption of the paper is ‘hierarchy makes sense when only broadcast communication is available.’That is wrong.Hierarchy works when risk aversion rules. That’s most people’s perspective – unless you are talking about teenagers!Not buying.These teens had parents that were going to change evrything. The parents changed the hierarchies’ norms, but not their nature or existence.That is the future & the past everlasting.

          2. vruz

            That’s just not the world I see, we come from diametrically opposite worldviews, I still think you are wrong and unaware of many things, too many to describe here.I guess we can respectfully agree to disagree.

          3. JamesHRH

            Facts, opinion & philosophy / world view.The hierarchy of things to argue about ;-)At least we disagree at the highest level – arguing facts with people destroys the spirit.We will see whose world view is right in…. 20 years?

          4. vruz

            Earlier than that, in my view :-)Say, February 12, 2023, right here?hehehe

    2. Luke Chamberlin

      “The internet has a poor record, to date. of holding people accountable.”I don’t think I agree with this statement. Could you give some examples?

      1. Aaron Klein

        I’m with you on that, though interested to hear James’ reply. From my perspective, the Internet has a huge record of accomplishment when it comes to accountability.

      2. JamesHRH

        Name an instance where an online network levied a suitable, scalable punishment for harmful, immoral or illegal activity.The penalties are imposed by the hierarchical bureaucracies.

        1. Luke Chamberlin

          Are you saying it’s the responsibility of Facebook to punish people for illegal activities?They cooperate with law enforcement and ban the user. I wouldn’t call that a poor record of holding people accountable.What other sort of actions are you looking for?

          1. JamesHRH

            I’m saying that networks & hierarchies will be like symbiotic animal relationships.There is no replacement going on.Take criminal justice. THere are lots of alternative, network absed approaches (healing circles pop into my mind, but that’s not exhaustive nor the best example).They work – in small groups where there are strong ties. That’s not online networks.

        2. Aaron Klein

          The Internet helped defeat one of the architects of SOPA out here in California. 😉

    3. raycote

      “That’s the one thing about hierarchy: it scales & has internal accountability.”- Are you saying hierarchy scales only because it has internal accountability ?”will hierarchical bureaucracy be able to prove that accountability is more valuable than innovation or transparency?”- Are you saying accountability is mutually exclusive of both innovation or transparency?”cultures that were very good at network style accountability (e.g., almost all ‘native cultures’) had one thing in common: they didn’t scale.- These are early times. There are surely vast untapped symphonies of nested social-synchronization yet to be minded from a medium that networks everyone and everything, including their node localized live or pre-authored algorithmic responses, into an infinitely syncopated function-drive social-fabric which can even include layers of automated self-adjusting networked-feedback metrics. Almost every trick available to human biology can potentially now be mimicked atop this new medium/platform.

      1. JamesHRH, but I am saying that innovation is driven by singular, infrequent & highly personalized accountability (read Dealers of Lightning as an example) which does not scale. Transparency is accountability’s right hand.your third point argues my case. Network based societies didn’t scale. European command & control hierarchies did. The internet will not change that outcome.

  5. Alex Bangash

    Wow..what a great talk, Fred. Thank you so much for sharing. It was a common refrain by VC’s that they would not touch anything involving regulatory risk. Airbnb, lyft, Hailo, Uber, all challenge regulations. It’s remarkable how innovation in collaborative consumption is an agent of change for regulations, not a response to it.

  6. Richard

    Had this very discussion with a dc lobbyist this weekend at the 4 seasons jacuzzi ( recovering  from an injury ). I call it creating  regulatory peer networks. How does this differ from lobbying? Lobbying is a dinosaur industry of  middlemen,   an oligopoly.  Regulatory peer networks are Networks that use size, speed and links to tear down the iron wall of k st. 

    1. LE

      “Lobbying is a dinosaur industry of middlemen, an oligopoly.”Lobbying is merely selling, selling your point of view. So in that sense it’s a middleman for a point of view. And, like anything else that someone wants to achieve it either takes money or effort combined with creativity.People have this distaste for lobbying that is somewhat understandable given their “I’m entitled” attitude. They make it a boogeyman, a negative because they think it’s “unfair” [1] and something that only “people or companies with money get to do.” (quotes meant to be read as if a whiny voice was being quoted). Same as with “middleman” for that matter. Middlemen are filters and do have a place in society (as I’ve mentioned countless other times before).My question is this: How many people have tried lobbying, tried going to DC and taking the time and effort in clearly presenting their point of view and trying to get results? (I did and got several meetings quite easily.)The fact is nobody is going to give you something unless you ask for it or more importantly sell them on what you want. And lobbying is a way to do that.Lobbying is communicating and selling. And unlike representing yourself in court you don’t need to be blessed with a law degree and have years of knowledge of procedure.In the end people needing to make decisions will still rely on the most compelling information in order to decide what to do.

      1. Richard

        we have a political industrial complex

      2. raycote

        Who said :”Have as few middlemen as possible but no less ?”The network-economy hopefully means we can arrange to operate with less middlemen not because they are villains but because they will becoming redundant.

    2. raycote

      Maybe it would be useful to visualize a regulatory-peer-network as a metaphoric analogue to a collective/social autonomic-nervous-system ?What longterm homeostatic autonomic-nervous-system social-functions must be maintained?What networked granularity support for autonomously-creative-recombinance(access to public utility based Big-Data) should be guaranteed to all central-nervous-system(commerial–nervous-system) nodes/platforms/players to optimize our collective organizational agility within the context of an ever more organically-interdependent network environment?If optimally networked social-synchronization emerges around the best integration of form and function as dovetailed into any given environmental slipstream then maybe regulatory structures, network structures and environmental/social-substrate structural-constraints must ultimately be aligned as one and the same ?___________________________________SAY WHAT ?”as dovetailed into any given environmental slipstream”Used in the sense that Andy Clark describes in his book “SUPERSIZING THE BRAIN” which I think doubly applies to distributively synchronized network-effect social functions?Pfeifer and Bongard (2007) invoke thePrinciple of Ecological Balance.This principle statesfirst…that given a certain task environment there has to be a match between the complexities of the agent’s sensory, motor, and neural systems . . . second. . . . that there is a certain balance or task-distribution between morphology, materials, control, and environment. (123)The “matching” of sensors, morphology, motor system, materials, controller, and ecological niche yields a spread of responsibility for efficient adaptive response in which “not all the processing is performed by the brain, but certain aspects of it are taken over by the morphology, materials, and environment [yielding] a ‘balance’ or task-distribution between the different aspects of an embodied agent” (see Pfeifer et al. 2006). In such cases, the details of embodiment may take over some of the work that would otherwise need to be done by the brain or the neural network controller, an effect that Pfeifer and Bongard (2007, 100) aptly describe as “morphological computation.”The exploitation of passive-dynamic effects exemplifies one of several key characteristics of the embodied, embedded approach. . . . This first characteristic has been called nontrivial causal spread.Nontrivial causal spread occurs whenever something we might have expected to be achieved by a certain well-demarcated system turns out to involve the exploitation of more far-flung factors and forces.

    3. fredwilson

      Great minds think alike!I hope your recovery is progressing well

  7. jason wright

    regulation blocking innovation – an example?

    1. Richard

      Peer to Peer food service.

    2. Aaron Klein

      Watch the presentation. There are a ton of examples beyond the ones he covered.

    3. fredwilson

      So many. Hard to know where to start

      1. William Mougayar

        Nick had a few examples in this preso.

  8. RudyC

    All I’m going to say is Craigslist. No one much cared about the prostitution ads on Craigslist but the police. It took one drastic killer to garner the attention of every politician and the general public.The last time I was in the City late at night, I saw 3 blocks of street walkers on Van Ness. I couldn’t remember the last time I had seen prostitutes on the street soliciting business, but there it was.It literally took me a drive across the bridge to realize why that was. Craigslist was forced to take the ads off their website. Was it better for society to have the activity buried on the internet, surely, esp. to the neighborhood, but that didn’t stop regulation.My point is at some point something bad is going to happen on all networks. A killer/serial rapist on Air, a con artist on some type of fundraising activity. Like my mother always said, all it takes is a few to punish the many…I think internet companies should feel it’s there responsibility to act on this BEFORE something happens that they can SAY, I’m sorry this happened but we did do the following, xyz. Regulation is a good starting point.

    1. Aaron Klein

      Prostitution is the world’s oldest profession. It’s particularly horrible because of its links to sex slavery and child trafficking.But it would exist with or without Craigslist. If these attorneys general had the slightest hint of intelligence, they would have thanked CL for centralizing it and focused their law enforcement efforts there.

      1. ShanaC

        would numbers for the crappy stuff go down if it were legalized and regulated?

        1. Aaron Klein

          The data in Nevada, where that is true, would tell us “no.”

        2. Cam MacRae

          It’s a legal and highly regulated business here (either decriminalised or legal in all states) and all those things are still very much a problem.

  9. John Pasmore

    not quite that simple, an early example:”The introduction of cookies was not widely known to the public at the time. In particular, cookies were accepted by default, and users were not notified of the presence of cookies. The general public learned about them after the Financial Times published an article about them on February 12, 1996″ has been playing catch up to cookie-based technology ever since. and you could argue there is an underlying effort to suppress regulation in this regard.Napster was innovative and consumers loved it in a relationship that wasn’t about trust — so framing consumer trust as underlying principle that could self-police as opposed to true regulation does not reflect every instance of innovation being deployed on the Web.Consumer trust exists to some degree because there is trust in the underlying regulation. Education and information should be free flowing as is possible and the Web often democratizes…just not always.

    1. Nick Grossman

      right those are good points.Another one that’s come up, which I think is apt, is that internal trust systems in peer networks produce trust *within* the network — but don’t necessarily account for externalities (i’m thinking negative ones such as noise, public safety more broadly, etc)

  10. Aaron Klein

    Wonderful presentation. My biggest critique is that the last slide needs to first appear at the beginning. “I’m going to show you how a framework of transparency and accountability will unleash a wave of innovation that is simply impossible under a framework of bureaucratic permission.”Tell ’em what you’re going to tell ’em, then tell ’em, then tell ’em what you told ’em. 🙂

    1. Nick Grossman

      Thanks — it’s funny I do usually do that, but haven’t for the last several decks. I do like that technique.

      1. Aaron Klein

        That certainly doesn’t take away from what is an excellent presentation. I hope governments will start listening to you. Our future may depend on it.

  11. takingpitches

    Not just for pure government regulatory schemes, but networks are perfect to take some power away from guilds/licensing organizations that have had cartel-like powers to control supply delegated to them by the government.Think ABA, AMA, ADA and on and on…Networks can solve the quality issue better, and also allow supply expand to empower both consumers and producers of these services…As I have said again and again, networks are a better talent elevation/talent discovery/talent accountability tool where designed right.

  12. jbcolme

    I had not thought of networks in this way… thanks for sharing.

  13. William Mougayar

    This is a MONUMENTAL topic in importance and in scope. I was about to write a post on this actually, which I’ll link to here shortly.I’ve already said before several times that the power of the online is when it starts to affect the offline in big ways, not just at the individual level, but at the collective level, locally, at the state level, nationally or even globally.Governments are no longer in control here. And they should not be anymore. There are some folks talking about global empowerment at the government level, but it’s all wrong. The real empowerment is happening at the peer level, not at the inter- or intra-governmental level.Governments should be just spectators, facilitators, NOT instigators, NOT managers, NOT funders (but discounters OK), NOT creators, NOT inventors, NOT regulators.For the Government, the Internet & innovation should be a spectator sport. Maybe they built the stadium, and they pocketed our ticket price. Now, let them just watch and do mild refereeing only if the players commit crimes or unethical moves. The Internet is for the people, not for anyone to regulate.This brings me to the topic of Crowdsourcing Advocacies. It’s the next big thing in my opinion. Look at http:/ as a starting point. People are having online conversations and are increasingly taking more actions together to make change happen.For the online to deliver on its promise to make change happen, you need to thread each one of these issues with armies of advocates that are collectively taking actions to transform current regulations, tear down old beliefs, push back on policies that don’t make any sense, and fend off the traditional lobby movements.Peer-to-peer networks must form to increase the power of change, to allow for:- More engaged people to know each other- More involved communities to swell-up in pro-active or reactive purposes- More action oriented outcomes that take it to the real worldI think this is the just the beginning. The earth is about to shake on this.

    1. John Pasmore

      Unbridled web freedom: “Governments should be just spectators….” — that would be amazing but given the different state players from the EU to China I wouldn’t expect to see that realized any time soon, but if we could get there do you see the web as self-governing?

      1. raycote

        Hoping your wrong !Social disruption happens form the bottom up as driven by new democratizing technologies.Is the network-effect just another faults hope or this time around do we actually reach oligarchic escape velocity ?

    2. raycote

      So very well said !Governments should be just facilitators of Crowdsourced Social Policy.So your an anarchist ;-)I especially hope your right about “Crowdsourcing Advocacies” being the next big social tour-de-force.A neural-network of interconnected and dovetailed “Crowdsourced Advocacy” groups that organically integrate to drive adaptive, direct-democracy social-policy structures may seem far fetched now but in the long run seems like an inevitable outcome of ever increasing social network synchronization.Or maybe we slip on this technology banana and just get BIG BROTHER 3.0

      1. bernardlunn

        slipping on the tech banana to get Big Bro 3.0 is the best line (of a horror movie)

      2. Prokofy

        That thing you’re describing with Newspeak — it has a name. It’s called “Communism”. You’re welcome.

        1. raycote

          Then again you tend to define any community synchronization efforts as communism ?It is just not that black and white. Complex things like cells, people and societies simply require cooperative communal synchronization to exist.Better hope all that communist cellular-community synchronization going on inside the Prokofy biological persona does not experience a communist purge !

    3. andyidsinga

      if not regulators – who enforces a contract?

      1. William Mougayar

        I should have said “right regulators” – there is a fine line between regulation & policy. A good policy with light regulation could be a great enabler. The opposite stifles innovation as Nick explains well. (See my post where I can expand a bit

      2. William Mougayar

        I should have said “right regulators” – there is a fine line between regulation & policy. A good policy with light regulation could be a great enabler. The opposite stifles innovation as Nick explains well. (See my post where I can expand a bit

        1. andyidsinga

          got it. agree that light regulation best actually enforced . will read link thx

    4. Aaron Klein

      +1 William. Well said.

    5. awaldstein

      i like the passion here William.I believe fervently in the power of communities and that their source of power is the empowerment of the individual’s themselves.Networks self organize and self group and enable change. Certainly. People have only so much verve for things they believe in and the idea that there are infrastructures that will channel advocacy, is questionable in my opinion. Once channeled from the top down, it’s not an organizing principle it’s a rule.Tools to make this easier I’m all for and I’ll check out But just because there are massive interconnected networks (which there are) and tools to aggregate interests for change (which I presume causes is) that doesn’t imply that there are multitudes of these causes that are broad based enough to focus armies for change.Some yes. The power has proof points but that focus not that breadth is where I see the power of it all.

    6. JamesHRH

      Geez, it would be nice if your new gig & your personal beliefs regarding the impact of the internet were aligned.

      1. William Mougayar

        I am not following you…are you being sarcastic?

        1. JamesHRH

          yes. It is pretty obvious that you are not going to have much trouble finding talking points!

  14. kidmercury

    The necessary regulatory reform to allow crowdsourcng to fulfill its destiny as an enabling technology that ushers in many disruptions is part of a much larger change in politics, culture, and global economy. Silicon valley as a whole has neither the understanding nor the desire to see this bigger picture. Till it does its efforts will only result in failure and profound embarrassment.There are many issues that can be cited as a part of this, 9/11 and national debt being my favorite ones to repeat incessantly. Though that silicon valley unites around empowering government to disarm the people via their anti 2nd amendment stance only illustrates the disconnect here. The change needed is more akin to a revolution than support for the establishment which is what anti 2nd amendment stances are.To put it simply, political will is needed and there is nowhere near the necessary quantity and quality. Were getting there, but its probably going to come bottom up style. More like anonymous, less like the valley and vcs and hot startups. Bubbles make you lazy and make political will too unappealing. Financial hardship has the potential to put some fight in you, which is its true gift in our current times.

    1. PhilipSugar

      C’mon kid where are you on your favorite issue? Isn’t it fun watching the very same people that want to regulate one of our Bill of Rights want regulation 2.0 for everything else?

      1. kidmercury

        i was out of town this past weekend so unfortunately didn’t get a chance to post for Second Amendment Saturday. but this past week was pretty interesting on the 2nd amendment front to say the least! california is looking to introduce a bill to confiscate guns in its state, in addition to a bunch of other rules it wants civilians to go through to get firearms:…but i’m really starting to enjoy this. this issue is really starting to awaken the spirit of liberty in the american people. finally! it’s just like thomas jefferson said, the beauty of the 2nd amendment is that it only reveals its importance when someone tries to take it.

  15. ShanaC

    My first thought was actually Marx after seeing this (in terms of his notion of labor as a means of production). In a networked world, it much harder to attribute labor (and therefore money/means of production) to one person. Labor itself becomes highly interdependent.What does that mean in terms of paying for labor, I don’t know. But I need to think about it moreMy second though was that Nick’s position sort of reminds me of Michael Pollan’s Omnivore’s Dilemma where he looks on mass organic farms and how they got there. Not that capitalism is bad, but it does change the value set of some ideas by attributing monetary worth to them, and I kind of wonder if political advocacy vis a vis a venture capital firm falls into that category (as opposed to grassroots work)

  16. John Pasmore

    Totally get and support that regulation should not stand in way of innovation, that’s a no brainer. But is not quite that simple, an early example:”The introduction of cookies was not widely known to the public at the time. In particular, cookies were accepted by default, and users were not notified of the presence of cookies. The general public learned about them after the Financial Times published an article about them on February 12, 1996″ could say that regulation has been playing catch up to cookie-based technology ever since, and could argue there is an underlying effort to suppress regulation in this regard to the benefit of some not all. The W3C, a “standards” body of/by the Web can not really keep up with the innovation of the Web, much less the government.There are still areas that require regulatory intervention to enhance innovation such as patent laws.

  17. William Mougayar

    I’ve expanded my thoughts that directly support this post, here:The Earth will shake with Online Advocacies…

  18. jason wright

    Disqus has diapppeared another post, so i’ll simply paraphrase what i wrote.scaled networks, circuit breakers, Raytheon’s RIOT, the fall of FB.

  19. Tom Labus

    That companies would begin to advocate for a position seems inevitable to me since the traditional routes are not very effective. If people are yelling about it, that’s a good sign.

  20. Matt Zagaja

    I just reviewed the slide deck, and listened to parts of the YouTube presentation and some thoughts:1. These systems seem to pre-suppose people are knowledgable about the subject matter they are dealing with. In many areas (especially science and public health) this is not the case. Also consider especially the financial services industry. (See… for Malcolm Gladwell’s story about Enron and transparency.) Kickstarter has already had to revise its policies in response to issues about misunderstandings between its investors and the entrepreneurs on there.2. Sometimes the systems in these peer networks break down or fail. For instance consider places on Yelp or products on Amazon that get reviews that are not genuine. People unfamiliar with the Internet or its culture fall prey to scammers and hoodlums. The reason spam comes into your Inbox is because for a small percentage of people, it works. That’s enough to make the expense of sending spam worth it. It also causes real people real financial problems.3. I’m not really sure what this regulation 2.0 looks like mechanically. Throwing out the old laws, but which ones and why? I think and wonder whether many realize that laws are not arbitrary but many are rooted in history and culture. When you want to get rid of a regulation there tend to be more than just a couple bureaucrats behind it, some kind of group of people wanted it there. The world is changing, and our world is certainly different from say people that read the physical newspaper and not the Internet, or the people in neighborhoods in Kansas City that turned down Google Fiber (see….

  21. Catkfr

    This field is new to me, but I find it very interesting and full of potential!I discovered today in my twitter feed a French project whose aim is to enable citizen networking with parliament to establish new laws. This site which will be launching on Feb 13 2013:https://www.parlement-et-ci…It’ll be interesting to see how this topic emerges in various countries.

  22. Prokofy

    Of course you can do whatever you want. But that doesn’t mean it’s a good thing. I don’t agree with the claim of the nature of the apocalypse we’re facing (one of insufficient regulation of capitalism), or the solution that Morozov offers (more Soviet style elitism founded in socialism), but I do find it a bad sign as well. The way it used to work is that corporations would have philanthropy departments and they would give grants to the 501-c-3 organizations favoured by the corporation. Or the individual corporate officers would give to the causes they supported. What you mean is that you’re now skipping all the steps that help prevent conflict of interest and that used to create a third sector that was at least nominally separate from business and government. Now you’re merely mashing them up so that they become indistinguishable. It’s all a continuum, a belt of power, where you try to influence law (remove laws that would cause you greater business expense or harm your so-called “innovation”) without having to register as a lobbyist, and where the end game may be that you just put your guy into a government job — like Google does, revolving in and out of government.Today, “the activist in residence”; tomorrow, the “entrepreneur in government” fixing the permits your way. Just you watch.What you mean is that you’ve hired a corporate lobbyist but you haven’t called him that or registered him that, but have trumped up some Newspeak about how he is an entrepreneur or an activist in residence.It’s not about “dismissing” the power of peer-to-peer networks; it’s about realizing that they are taking over everywhere without much accountability or any checks and balances. And when somebody criticizes them, they are lambasted as somehow not cool or not sufficiently “innovative”.I’ve always said you were a Bolshevik, Fred, and you are: you want to take over the executive branch or executive power through “revolutionary justice” and just run things with you and your friends. This is not good for society just because you might in fact be a good man.

  23. Prokofy

    The slide show never answers the question of how you get “trust” in your peer-to-peer networks which are basically founded on ethics-free phreaking/hacking mentality or collectivization of other people’s property. And the answer is: with the self-criticism system and “workers’ self-management” and police informers’ networks. You guys shouldn’t all just repeat the same history we already had in the totalitarian movements of the last century, only online.