Why I Changed My Opinion on Jack Dorsey and Twitter, Inc. (NYSE: TWTR)
I have to admit that I’ve never been a big fan of Jack Dorsey.
The enigmatic CEO of social media giant Twitter (NYSE: TWTR) and payment processor Square (NYSE: SQ) has always come off to me as a kind of beatnik hipster who fell into success more so than having earned it.
This was never a particularly informed opinion of mine, I’ll admit. It was predicated largely on my own superficial understanding of Dorsey, based on what I (still) believe to be some truly peculiar and even self-harming behaviors.
It’s easy enough to blow off a man like Dorsey because of his unusual daily habits. At least it had been for me. He reportedly takes an ice bath every morning and drinks nothing but salt juice for breakfast. He fasts until the evening on weekdays. On the weekends, he doesn’t eat anything at all.
When Dorsey works from home, he uses a standing desk with an infrared light shining on his face. When he doesn’t work from home, he walks five miles to the office. He meditates for two hours a day and then alternates between more ice baths and hot saunas before he goes to sleep.
Needless to say, Jack Dorsey doesn’t follow your typical daily routine. He seems like a pretty strange dude with some seriously questionable health habits, so my initial reaction has been to blow him off as an all-around incompetent person.
Then again, Steve Jobs effectively killed himself by ignoring his doctors’ advice and by pursuing an extreme vegetarian diet while he was suffering from pancreatic cancer. Elon Musk legitimately thinks we’re living in a computer simulation, and his celebrated 19th century scientist Nikola Tesla was in love with a pigeon (seriously).
The point is, genius doesn’t always extend to every last facet of human intelligence. For billionaire tech savants, being halfway insane might just be par for the course.
As for why I bring this all up, a recent announcement from Dorsey has managed to change the way I think of him. At least, it’s made me look beyond the superficialities of his behavior and instead focus on his competence as a future-minded CEO.
Facing the Truth: The Internet Is Broke
Last month, Dorsey announced the launch of a small research team of up to five members called Bluesky. The purpose of this team, according to Dorsey, is to create a set of open and decentralized technical standards (protocols) for social media platforms like Twitter.
In tandem with this announcement, Dorsey shared an essay by Columbia University’s Mike Masnick under the title “Protocols, Not Platforms: A Technological Approach to Free Speech.”
Published back in August, Masnick’s essay is one I have personally called “a must read.”
The reason for my enthusiasm around this essay, and Dorsey’s coinciding reference to it, is that it conceptualizes a new paradigm of connectivity in a way that no one else has done before. It’s something others (particularly in the blockchain community) and I have been talking about for years but not to this level of detail, organization, or feasibility.
The near 5,000-word essay is worth a read on its own, but for the sake of brevity and your personal time, I will do my best to summarize it here and explain why it matters so much to social media companies and the broader internet. Believe me when I say this is something everyone will be talking about years down the road.
As you may already be aware, social media bellwethers like Facebook (NASDAQ: FB), YouTube, Twitter, and so forth are facing an assault from both directions surrounding the limitations of free speech. As centralized platforms, these companies have been forced into a position where they must determine what is and isn't allowed to be said, as well as who is and isn’t allowed, on their websites.
This two-sided assault has left social media firms sandwiched in a lose-lose situation. They can either piss off the social justice warriors and neo-puritans by not censoring enough, or they can draw the ire of free-speech advocates/abolitionists by censoring too much.
This role of social media companies, as internet police and arbiters of truth, has created a public relations and regulatory nightmare for them, with continuous calls to testify in front of legislative bodies like the U.S. Congress. Twitter has already banned political ads entirely in response to this pressure (giving up a chunk of its revenue stream), while Facebook has instituting a blanket policy to not fact check political ads at all (exacerbating its legal and regulatory risks).
On top of this ongoing censorship debate is the growing concern over data ownership and privacy. As centralized platforms, social media companies own all of your data and are monetizing it as they see fit. This business model has resulted in reasonable and widespread distrust of these internet giants and a subsequent push to decentralize their power.
To many, this may seem like an impossible task, if only for the reason that existing platforms have already become so deeply entrenched in our society. If you quit Facebook, Twitter, or Instagram, you lose all your social media contacts, not to mention much of your identity online. It’s a modern form of excommunication that very few people are willing to face.
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The Coming Death and Rebirth of the Web
What seems like a moat that’s impossible to cross, though, may actually be starting to fill in. Thanks in part to the emergence of blockchain technology, a growing number of developers believe we’ll be able to effectively reset the internet by prioritizing standard protocols over proprietary platforms.
The best example of this proposed model already exists to some degree in email, which is built on open protocols such as SMTP, POP, and IMAP. I can send an email to your Yahoo address from my Gmail address, for instance, because Yahoo and Gmail are simply interfaces built on top of a shared, open protocol. This model also allows you to unify all your emails together at once with a third-party interface such as BlueMail.
The key point here is that email users have options. If they want to export their contact list, they can. If they want to migrate their email address to a different interface, they can. This relative ease of user departure has helped keep email companies on their best behavior because it drives competition. Unlike Facebook, where users are completely trapped and at the mercy of a single corporation, email is a place where users have the power.
Masnick’s proposed idea of protocols over platforms, though, would extend well beyond email. It would reach virtually every corner of the internet, including social media. Ultimately, the idea is to push control away from private platforms like Facebook at the center and toward users at the end of the network.
As for why a man like Dorsey would embrace this change rather than fight it, well, there are a number of possible reasons:
- Dorsey views the shift to open standards/protocols as an inevitability and wants to protect Twitter long term by being a step ahead of the curse.
- Dorsey wants to shed the increasing costs and liabilities of content moderation.
- Dorsey views this as a moral imperative.
- Dorsey is taking the opportunity to snub his counterpart Mark Zuckerberg and ultimately get a leg up on Facebook.
- Dorsey recognizes that tokenization/blockchain could make this a feasible business model.
On the fifth and final point, we won’t get too deep into the technicals, but the basic premise is to use tokens or cryptocurrencies as a kind of equity in the standard protocols being used. Historically, there has been limited monetary incentive for people to maintain open protocols, but the hope is that this model would make it a profitable endeavor.
Of course, there is no guarantee Dorsey will be the one to upend the internet as we know it with Bluesky, but Twitter is certainly in a unique position to make it happen. Not only does the company have the initiative, but it has the user base, too.
Whatever the outcome for Twitter, this development is bad news for Facebook and its investors over the long term. Decentralization isn’t going to happen overnight, but the industry is starting to move in that direction, and there won’t be much that can be done to stop it.
Until next time, Jason Stutman Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and Topline Trader. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted. Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary. Outside the office Jason is a lover of science fiction and the outdoors. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.
Until next time,
Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and Topline Trader. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.
Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.
Outside the office Jason is a lover of science fiction and the outdoors. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.
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