Internet Organizations

peter zakin
6 min readJan 4, 2019


I’ve spent the last six months exploring and wrestling with a wide range of ideas. As we head into a new year, I’ve decided to open-source some of my thinking, particularly around a certain family of ideas related to how the internet can help people solve problems collectively.


It’s commonplace to hear startups pitch themselves as “democratizing access to Y” where Y is some special thing that only the elite have access to. As a shorthand, I like to refer to these companies as “Promethean”. Promethean companies make the world’s resources more evenly distributed.

In this vein, I asked a friend of mine who works at a hedge fund: what advantages do the super-rich have when it comes to investing?

My friend responded that:

  1. The richest people have access to the best performing funds across different asset classes, e.g. private equity, VC, real estate, hedge funds etc…
  2. The richest people can afford to be patient and invest in those funds which inherently lock up their capital for many years. Illiquidity is not a problem when you have lots of money.

To level the playing field, I began to think, you’d need to figure out a way to give ordinary people access to these funds. (I admit it’s an open question of whether this is actually good for “ordinary people”). The method of doing so could be a crowdfunded Fund of Funds: by pooling capital together and operating as a kind of endowment, people might be able to get exposure to non-correlated, top-performing funds.

At first this idea was tempting even as it was daunting. Yes, you’d have to figure out how to convince top funds to accept investment from this new Endowment of Ordinary People, but once you’d convinced a finite number of high-powered people, the rest was a matter of organizing people on the internet around a common goal: earning an optimal return on their money. The demand is not the weak part of this idea.

But the idea is ultimately uninspiring:

  1. People need to be willing to keep their investment in an illiquid form for years, which is not plausible for most.
  2. Securities laws (currently) prevent non-accredited investors from investing in a fund of this kind so ultimately your customers are exclusively limited to accredited investors. I’m not overwhelmingly inspired by the idea of making rich people richer.

I think someone can build this business. But it’s hard to say whether you’ll be able to raise enough assets under management at customer acquisition costs that makes sense.

Pooled resources

My biggest takeaway from this idea was a surging interest in building something that enabled people to pool resources to do big things. In an abstract sense, I’m pointing to some notion of internet enabled organizations.

I define an organization as a group where members come together to accomplish a goal.

Offline, organizations take myriad forms like corporations, governments, unions, Costco, insurance companies etc… All seek to solve a set of problems and the solution is only possible because people coalesced around an objective.

The internet is unique as an enabler of organizations because it removes historical barriers to people coming together. There are no spatial barriers: you can partner with people far away from you. There are no requirements on synchronicity: you can communicate with people even when you don’t have their attention at that moment.

And most crucially, the internet is a platform for software applications, which can model the problems we want to solve.

The internet has made possible all sorts of online organizations: Wikipedia, Open Source Software etc…

What internet-native organizations will emerge in the future? A simple shape of some of these organizations might just be groups of people who want to collectively bargain for lower prices.

In the enterprise software space, group purchasing organizations are an inspiring example. What would internet-native GPOs look like? What would a platform look like that allows for the formation of GPOs?

Or perhaps people should be pooling together to share content subscriptions like Netflix, Hulu and the New York Times with their friends, an inversion of the traditional bundling that occurs when an aggregator partners on the supply side.

Aggregated Labor

One area I found to be particularly interesting as a space for pooling resources is labor. In the offline world, aggregated labor most famously takes the form of labor unions.

In a labor union, workers organize to counterbalance the power of a corporation. Individually, workers have no leverage but together, they’re a formidable negotiating partner to corporations. Unions also happen to provide ancillary services to their members, like pension plans. (Side-note: Organizations can be incredible distribution channels).

Another form of aggregated labor is a talent agency. The purported value proposition of a talent agency is that clients are better poised to get roles because the agency can sell them better than they can sell themselves. And when agencies are good, they find their flywheel: they attract more talent, which increases their negotiating leverage, which in turn attracts more talent…

In both talent agencies and labor unions, workers are best served by pooling together. But among other distinctions, I would argue that a talent agency has far stronger network effects than a labor union since the intra-network connections are stronger. In its best form, talent agencies can cultivate valuable creative connections between its members. In industries where the contributions of individuals and small groups can be particularly outsized, the structure of a talent agency can increase creative throughput.

A number of people who read “Who is Michael Ovitz” were quick to wonder what a CAA for tech might look like. There are many variations of such an idea. Would it focus on entrepreneurs? High-powered executives? High-potential tech workers? Or instead of a talent agency, would an aggregation of tech workers band together to ensure certain rights and privileges for their industry? I happen to think all of these permutations are interesting, although each suffers from a lack of obvious cash flow.

Beyond these musings: it’s worth mentioning that perhaps the truest manifestation of a talent agency in Silicon Valley is not a talent agency per se, but a venture firm that has expertly cultivated a network of entrepreneurs. In my contemplation, I realized that the closest thing to CAA in Silicon Valley was Y Combinator.

Whether you call it a network effect or a “mafia” dynamic, YC provides a clear leg up for founders who participate in the program. Founders learn from other YC founders. Companies in YC partner with other YC companies. YC founders (eventually) hire other YC founders. YC is its own talent network, its own sales/marketing channel, partnership network, and with the crowning of the last generation of successful entrepreneurs, also its own capital network.

If you believe in the power of networked labor, perhaps you build a talent agency or figure out how to bring network effects to your seed stage venture firm or startup studio or guild (I still find the idea of an entrepreneur guild exciting, even if I haven’t figured out mechanics that work). But another angle is to look at the software layer. How might software extract greater value out of professional connections?

Software for Professional Tribes

YC’s BookFace is a key part of how YC founders capture value from the YC network. BookFace is a communication platform that lets YC founders ask questions, make requests, share valuable information. In an abstract sense, it’s simply a marketplace for different kinds of requests. You have people who need information, connections, hires etc… and a relatively engaged audience of people primed to help them. That there are contextual incentives to help each other makes it even more interesting.

I continue to think that the future of LinkedIn resembles something like BookFace. There are numerous reasons to point to for why this is, but principally, it’s because there’s power in confined groups.

Confined groups have clearer, more natural boundaries around what content you’ll feel comfortable sharing. Closed groups, and especially small ones, are more permitting of high-intensity information. As a CEO, you can more readily share your concerns about core business problems you’re experiencing in a group chat than on Twitter or LinkedIn.

In that vein, I’m inspired by the possibility of products that help you extract greater value from your close connections. I remain bullish on the idea of software aimed at helping you and your professional tribe succeed together.

Internet Kibbutzniks!

I had begun my exploration by taking on the Promethean mantle: how might I democratize access to some privileged thing. My answer from the start was to lean on tactics where people unlock value by working together.

Of course, this collectivism as a means of leveling the playing field does have vague hints of socialistic thinking to it. It’s hard to avoid that when you’re using collectivism — internet-enabled or not — for populistic ends.

I’ll admit I was amused, while writing this, by some of the language I had to lean on to describe ways of people cooperating. Collectives, unions, guilds etc… I nearly could have invoked kibbutzim. In fact, a tweet of mine earlier this year did just that.

For those of us interested in the future of how people will work together to solve common problems, history is an inspiring guide. I suspect that certain collectivistic templates might very well re-emerge as the internet continues to unfold.