Five-9s

And the Advent of the Next Generation Internet Industry

The last time that the incumbent technology industry made itself easy prey spawned a wholesale and disruptive revolution both overthrowing the incumbents and spawning the amazing and expansive Tech industry we all know and love today.

Now the incumbent Technology industry — or at least the incumbent trillion-dollar Internet industry portion of it — has made itself easy prey again. How so? In a word — Five-9s.

Five-9s

Five-9s is the bedrock of all technology products and services.

Five-9s is a statistical measure as well as an operational mindset. Namely, it is the technology and customer requirement that any technology product or service will be available essentially always and forever. A standard of availability that is so high that over a ten-year period, that technology product or service will be available always save for all of one hour.

This certain availability is important. Indeed, the need for certain availability is so pervasive that most of us can recall the one time some retail merchant’s Internet connection was down, and outages are so rare that they make national news (see: Google Maps Down As Global Outage Hits Mapping Service. The New York Post. March 18, 2022).

How To Get Overthrown In the Tech Industry 101

How to Get Overthrown in the Tech Industry is straightforward, namely, switching from providing a platform empowering customers to do as they please to controlling what customers can do.

Although the technology industry that you see today may seem to have existed essentially forever, that is actually not the case. In fact, today’s Tech industry is actually the amazing end result of the overthrow of the original Tech industry that had allowed itself to become easy prey.

The original Tech industry was the likes of IBM and Honeywell. At that time, the notion of startups displacing the likes of the dominant industry goliaths was laughable. However, as these goliaths grew, they (naively) took control over their customers. In industry parlance, they were pejoratively known as Closed Systems vendors. And therein lay the vulnerability.

Controlling what customers can do motivates customers to seek and find alternatives where they (i.e. the customers) are in control. To wit, the advent of Open Systems, in form of both technology and companies, blew away the “unassailable” incumbents. The Technology Industry that you know today is the Technology industry that offered and promised unqualified availability and control to customers.

Déjà vu All Over Again

Now fast forward to today. Once again the incumbent Internet Industry has switched from providing a certain platform of absolute availability for customers to do as they please, to taking away availability at the vendor’s whim.

Indeed, whereas the Closed-Systems era vendors of the bygone era, asserted control over their customers by limiting customer choice to what would work with their particular platform, at least their platform was always available.

Today’s Industry has foolishly — and I believe fatally — weaponized the crown jewel of any technology product or service against their own customers. Namely, certain availability. Whereas all technology customers require Five-9s, the current generation of Internet companies is instead offering Five-0s (as in Five… zeros).

This bizarre and hostile behaviour is rampant in core portions of the Internet industry. Vendors such as Amazon Web Services, AirBnB, Apple, Facebook, GoDaddy, GoFundMe, Google, PayPal, Salesforce.com, Square, Stripe, Twitter, YouTube and others have weaponized availability against their customers and even developers (see: Google cancels our Google Play publisher account and ends my family’s source of income). Existing Internet companies have gone so far into dictating to customers what they can think and write, that Microsoft even recently and quietly changed the word suggestions that its software presents to customers to only those deemed appropriate by Microsoft’s woke culture. Once again customers weren’t and aren’t offered a choice; instead, the only option available to customers is what current generation Internet companies deem that customers can have.

From Platforms to Policy. All technology companies are in the business of providing some type of (technology) platform for customers to do as they please, yet the current generation of Internet companies have bizarrely switched into the business of providing (social) policies that customers are forced to submit. Hint: This is not a durable business model.

Even obscure vendors such as JW Player have just summarily cut-off customers and done so just because their political views were different — a capricious standard leaving any customer at any time to find themselves naked at the whim of some faceless person in the Human Resources Department at JW Player.

Which begs the question: If you were building and operating a business, would you choose and integrate JW Player’s video platform in your business’ website knowing that JW Player is a company that can and will de-platform you at their whim? The answer, of course, is no — no business can operate with such uncertainty. Instead, the business will naturally choose the vendor who simply promises certain (i.e. Five-9) availability.

And therein lies the next generation of companies and offerings in the Internet Industry.

Certain Availability: The Next Generation Internet Companies

Where Closed Systems necessitated an entirely new Industry era built from the ground up on Open Systems, the Uncertain-Availability of today’s Internet Industry necessitates an entirely new Internet Industry era built from the ground up on Certain-Availability.

In particular, providing Certain-Availability is predicated on a new generation of culture, technology, features, and location built from the ground up on Certain-Availability.

1. Culture. A given Certain-Availability company’s mission is to provide great technology and customer experience for any legal purpose (and of course, without fail). Frankly, its a culture of respect — respect for others saying and thinking whatever they believe. Employees that believe in this mission are recruited and maintained and those that don’t aren’t recruited or let go.
   Just merely having a culture of providing great technology, will give new entrants an insurmountable advantage overthrowing the incumbents mired in cultures of forcing social/political agendas on others.
2. Technology. Next-generation Certain-Availability technology is built from the ground up assuming and resilient to a hostile environment — in particular, a hostile technology environment. This entails for example (i) building technology this is expressly not based on Amazon Web Services or other Uncertain-Availability vendors and (ii) greedily exploiting numerous decentralized systems technology such as Web 3 blockchains, Kubernetes, PWAs, and Docker containers.
3. Features. Features in both form and attitude that offer fine-grain and transparent ways of dealing with abuse or illegal use (designed to be conducive to Certain-Availability), in contrast to the coarse and opaque practices (eagerly abused to crush customers, not of their liking) of the current generation of Internet companies.
4. Location. In part to facilitate the above, but also to take advantage of pro-business and pro-freedom government and cultural environments, many if not most of the next-generation Internet companies will locate in States such as Florida, Texas, Utah and even Wyoming, and only have auxiliary operations in Silicon Valley and other anti-business/anti-freedom location, for specialized technology needs. Indeed, there are already even next-generation Internet companies setting up data centers and other core operations in other countries such as Switzerland and the Grand Cayman Islands and proudly marketing this inherent protection against the woke mobs in the United States and Internet industry complicity with the Federal Government, as part of their product offering.

Marketing of this next-generation value proposition has already begun. In the high-saturated market of (current-generation) Internet hosting services, a RightForge is rapidly growing by offering “the first global internet infrastructure company committed to American principles online”. Its marketing literature takes direct aim of the (Uncertain-Availability) current generation goliaths touting: “We provide hosting for those who believe in Freedom of Expression and need Big Tech Independence.” This is foretelling of what is to come.

Everyone Is Better Offer

As this next generation of Internet companies unfolds, it will increasingly pick up momentum as everyone — consumers, business users, Tech company employees, and Tech companies themselves — see that they are better off doing it.

Right now, everyone is miserable. Consumers are seeing their data being used against them and even manipulated into hateful ideas by companies such as Facebook, Google, and Twitter exploiting consumers to maximize revenue. Businesses can find their business suddenly impacted or destroyed, even for something that they can’t control such as the daughter of the CEO posting something on Twitter that isn’t compliant with the impulse judgement of some Technology company’s mob. Employees either have a negative attitude toward others to see and act as they do, or live intimidated by the intolerant culture forced on them by these negative employees. And finally, Tech companies find their businesses both restricted and impaired and increasingly stuck-in-the-middle in divisive battles between vocal political factions. Just miserable.

In contrast, next-generation Internet companies are happy. Everybody lives free.

Likelihood of Legal and/or Regulatory Disruption

The election of President Nixon decades ago, has been linked to AT&T and your Electric Power Company cutting off conversations and the electrical power of customers that didn’t support President Nixon.

Actually, this didn’t happen.

No one knows whether or not employees at AT&T and your Electric Power Company may have wanted Nixon elected President, but what we do know is that even if they did, they couldn’t do anything about it. AT&T and your Electrical Power company couldn’t do anything about it because of a profound Legal Doctrine, namely “Essential Facility”.

In the words of the Justice Department: “The essential facilities doctrine holds that dominant firms may incur antitrust liability if they do not provide access to their truly unique facilities on a non-discriminatory basis, even to their competitors, where sharing is feasible and the competitors cannot obtain or create the facility on their own.” Essential Facilities, Infrastructure and Open Access. 2006 Brett Frischmann & Spencer Waller.

This legal doctrine deals with the reality that once society becomes so dependent on a “facility” (i.e. trains, energy, communications) controlled by a few, those few cannot restrict its use of it. In fact, they not only cannot restrict the use, but they must affirmatively aid competitors using it.

Noting that the State of Florida has already started enacting State laws marching toward this legal doctrine of Essential Facility, and there is already legally-significant evidence of the competitive and consumer harm done by the present concentrated power of the Internet Industry I believe that it is only a matter of time before various flavours of the Essential Facilities Doctrines are imposed over the Internet Industry…at once boosting the fortunes of the next generation (pro-Freedom) Internet companies and hurting the current generation (anti-Freedom) Internet companies whose very business models and employees are addicted to this monopoly-like position.

For example, as an Essential Facility, Facebook, Twitter, and YouTube would have to affirmatively enable competitors to literally milk off their social networks, thereby and exactly to, prevent the abrupt destruction that Facebook, Twitter and YouTube presently inflict on anyone with different political beliefs.

Ditto for the AppStores used by billions of people, yet absolutely restricted in use to competitors and customers by a few (i.e. two!) companies — it’s only a matter of time until we see Apple and Google being forced to offer as much if not more access to third-party app stores. I pause to note two particularly salient facts about the current AppStore (and associated operating systems) matter, foretelling of its eventual breaking-up.

Fact one is that what Apple and Google are saying about their AppStores and Telephones is exactly what AT&T said about its telephone service and telephones. Namely, that their control of it was necessary to maintain quality and security. This brings up fact two…..

Namely, upon AT&T giving up control under the force of legal pressure, not only did the ominous claims of quality and security not materialize but an explosion of innovation occurred exposing just how much innovation and benefit were being stiffed and crushed by the concentration of control.

In short, every time you hear Apple and Google cite quality and service as the case for continuing their centralized control, it is actually some if not the best case of destroying their centralized control. Again, when this happens, the floodgates open for the awaiting next generation of Internet companies, and the incumbents including Apple and Google will find their business being bled away.

Meanwhile, there’s the infamous “Section 230” protection matter, which is now the most open secret of absurdity and abuse in the Internet industry. Section 230 is a legal protection afforded Internet companies at the formative stages of the Internet, protecting them from liability based on the fact that the Internet Companies weren’t editors of the content. Obviously, today’s Internet Companies are editors of the content, violating the intent, and more decisively, legal facts/conditions of Section 230.

The Revolution With Be Certain

The primordial goo of this next generation is already percolating. Numerous DeFi (distributed finance) companies have already been well-capitalized to offer businesses and consumers, essentially to prevent by culture and technology what for example, PayPal recently did to one of its customers (See PayPal sued for Freezing Customer Accounts Without Explanation by Bloomberg, January 13, 2022). A technology even for enabling decentralized social media companies has recently appeared. While likely just stepped in where the market will wind up, companies such as MeWe, Rumble, and Signal already offer ready — and Certain-Availability — alternatives to the notoriously Uncertain-Availability platforms Facebook, YouTube, and WhatsApp. Another company featuring Switzerland-based immunity from Wokeism from messaging and storage, Proton Mail, already has over 30 million users and more than 10,000 business customers.

As one who has been in the Tech industry long enough to see the wholesale emergence of the Open Systems Tech industry so pervasive that we take its fact for granted, and today’s Internet industry from a primordial goo of eclectic websites in 1993, I see the same stimulants and patterns of a new generation in our immediate future.

I cannot say with certainty that this next revolution will be televised, but what I can say about this next revolution is that its availability will be certain.

J. Neil Weintraut is a Venture Capitalist at Motus Ventures, a Venture Capital firm focused on deep technologies in autonomous, green energy, robotics, quantum computing and space. Motus’ investments include Elroy Air, EVConnect, Ghost Robotics, H2U Technologies, Infinitum, Memryx, Metawave, and Quanergy. Prior to Motus Ventures, Neil co-founded Internet-focused Venture Capital Firm, Palo Alto Venture Partners, realizing exits such as AdForce, AvantGo, CareerBuilder, DemandForce, Vicinity and When.com. Neil was a Managing Director at Technology Investment Bank Hambrecht & Quist where he was one of the first Wall Street Internet Research Analysts, taking public more than 15 Internet companies, and publishing research on more than 200 Technology companies. Neil has an MBA from The Wharton School of Business and a BSEE from Drexel University. Neil was the advisor to the International Olympic Committee on the application of the Internet to the Olympic Games.