This is so fascinating! Your “competent villain” example definitely resonates with me- I also had to learn the hard way to be assertive when it comes to tiny things like domain ownership which could have huge power dynamic impacts down the line.
Yeah. To your founder point, it’s very very possible as they are VC backed and even the VCs’ interests aren’t very well aligned with the community.
In terms of coup, given VC backed nature + other factors it’s nearly impossible to take over. But a ideological split/fork might certainly be possible!
Now I’m curious as to history of successful coups. Would the leader usually have to be a prominent member of the old faction as well? Or is it possible for someone with minor power/influence in the old regime to lead a successful coup as well?
I definitely need to study my history, thanks for the food for thought.
In my experience, I only remember one example of a successful “coup”. It was a private company that started small, and then became wildly successful. Two key employees were savvy enough to realize that this is not necessary a good news for them. The founders, those will definitely become rich. But a rich company will hire more employees, which means that a relative importance of each one of them will decrease. And the position of the founders towards those two will probably become something like: “okay guys, you spent a decade working hard to make all of this happen, but… you got your salaries, so we don’t owe you anything; what have you done for us recently?”.
So those two guys joined forces and together blackmailed the founders: “either you make both of us co-owners, right now, or we both quit”. And the company couldn’t afford to lose them, because one of them wrote like 90% of the code used by the company, and the other had all the domain expertise the company needed. (Now imagine how different the power balance could be one year later, if the company had maybe three new employees understanding the code, and three more employees to learn the domain knowledge.) So the original founders grudgingly accepted the deal. I think there were some symbolic concessions like “but we have spent our money to build this company, so you will have to pay that part back from your future profits”, but that was completely unimportant, because until now the company was small, and soon it became huge and rich, so the money was probably paid back in a few months, and the two guys are millionaires now.
(More generally, I get the impression that early employees in companies often get a bad deal, because first they are told “the company is still small, it may not even survive, so you need to work harder and we can’t afford to pay you better… but think about the bright future if the company succeeds”, and then it turns out that the future is bright for the owners, and the burned out employees probably get replaced by new hires who are full of energy and bring new technologies. Oh, and if they own any “equity”, it almost always turns out that for some technical reasons it doesn’t mean what they thought it meant, and instead of 5% of the company they actually own 0.005%, plus they have to pay a lot of tax for that privilege.)
I think a much more frequent situation is that people predict that they would end up in a similar situation, and avoid it by starting their own project rather than joining an existing one. Now in certain contexts, this is business as usual—everyone who starts their own company rather than joining an existing one is doing exactly this. (You don’t need to organize a coup, if you are the legitimate owner.)
Problem is, we have different social norms for “business” and for “community”. In business, being openly selfish is legitimate. If someone asks you “why do you want to start your own company rather than work for someone else?”, if you say “because I want to get rich”, this is a perfectly acceptable answer. (The person may doubt your ability, but not your motivation.) In community context however, you are supposed to optimize for some greater good, rather than your own profit. That of course doesn’t prevent the smart people from taking the profit! But they must argue that what they are doing is for the greater good. And if you want to start a competing project, you must also become a hypocrite and argue the same, otherwise all the people who are there for the community feeling will boycott you.
This is why “build a 10% better mousetrap” is a legitimate goal, but “build a 10% better web portal for artists” is not. The 10% improvement means nothing if the community accuses you of being a greedy selfish bastard who only cares about money and not about art, and they blacklist you and everyone who cooperates with you. And yes, if you understand how the game is played, the initiators of the backlash are those who profit from the existing system. But you can’t say this out loud; it would only prove that you care about the money. So both sides will keep arguing complete bullshit, trying to get the confused people on their side. The important thing is to get confused high-status people on your side, because then the rest will follow. The old group will argue that “we need to protect our current values” and “splitting our small community will ultimately hurt everyone”. The new group will argue that “we need more diversity” and “providing more options will attract more people to our common cause”. (Then the old group will whine: “so why don’t you add those new options to our current community website instead?” And the new group will respond: “you had plenty of opportunity to do that already, which means that you are either incompetent or unwilling, and we need a new space for the new ideas”.)
You talk about a “crypto community”, which I suspect is another example of the same thing. The people who have the power are there for the money. Everyone else is there for the feeling of community. The community is an important part of how the people with power make the money. But they very likely optimize for money, the community is only instrumental. In the occasional situation where “what is good for the people who make money” is significantly different from “what is good for the community”, the arguments of the people with power may sound a bit… confused… but everyone else interprets it charitably as a “honest mistake” or “well, I don’t have all the information they have, so maybe it’s my fault that I do not understand their perspective”. This is because the people who know better are either part of the inner circle, or have already left the community (or have never joined it in the first place); or maybe are there for their own selfish purposes, which are unrelated to the goals of the founders or the community (someone analogical to publishers in the artistic community).
(By the way, these days when I hear a company owner say something like “we are all like a big family here”, I treat it as a red flag. That basically means that the owner wants me to apply community norms in a business situation. Thank you, but I keep my communities outside of my workplace, where I won’t lose them if one day my boss decides to press the button.)
This is so fascinating! Your “competent villain” example definitely resonates with me- I also had to learn the hard way to be assertive when it comes to tiny things like domain ownership which could have huge power dynamic impacts down the line.
Yeah. To your founder point, it’s very very possible as they are VC backed and even the VCs’ interests aren’t very well aligned with the community.
In terms of coup, given VC backed nature + other factors it’s nearly impossible to take over. But a ideological split/fork might certainly be possible!
Now I’m curious as to history of successful coups. Would the leader usually have to be a prominent member of the old faction as well? Or is it possible for someone with minor power/influence in the old regime to lead a successful coup as well?
I definitely need to study my history, thanks for the food for thought.
In my experience, I only remember one example of a successful “coup”. It was a private company that started small, and then became wildly successful. Two key employees were savvy enough to realize that this is not necessary a good news for them. The founders, those will definitely become rich. But a rich company will hire more employees, which means that a relative importance of each one of them will decrease. And the position of the founders towards those two will probably become something like: “okay guys, you spent a decade working hard to make all of this happen, but… you got your salaries, so we don’t owe you anything; what have you done for us recently?”.
So those two guys joined forces and together blackmailed the founders: “either you make both of us co-owners, right now, or we both quit”. And the company couldn’t afford to lose them, because one of them wrote like 90% of the code used by the company, and the other had all the domain expertise the company needed. (Now imagine how different the power balance could be one year later, if the company had maybe three new employees understanding the code, and three more employees to learn the domain knowledge.) So the original founders grudgingly accepted the deal. I think there were some symbolic concessions like “but we have spent our money to build this company, so you will have to pay that part back from your future profits”, but that was completely unimportant, because until now the company was small, and soon it became huge and rich, so the money was probably paid back in a few months, and the two guys are millionaires now.
(More generally, I get the impression that early employees in companies often get a bad deal, because first they are told “the company is still small, it may not even survive, so you need to work harder and we can’t afford to pay you better… but think about the bright future if the company succeeds”, and then it turns out that the future is bright for the owners, and the burned out employees probably get replaced by new hires who are full of energy and bring new technologies. Oh, and if they own any “equity”, it almost always turns out that for some technical reasons it doesn’t mean what they thought it meant, and instead of 5% of the company they actually own 0.005%, plus they have to pay a lot of tax for that privilege.)
I think a much more frequent situation is that people predict that they would end up in a similar situation, and avoid it by starting their own project rather than joining an existing one. Now in certain contexts, this is business as usual—everyone who starts their own company rather than joining an existing one is doing exactly this. (You don’t need to organize a coup, if you are the legitimate owner.)
Problem is, we have different social norms for “business” and for “community”. In business, being openly selfish is legitimate. If someone asks you “why do you want to start your own company rather than work for someone else?”, if you say “because I want to get rich”, this is a perfectly acceptable answer. (The person may doubt your ability, but not your motivation.) In community context however, you are supposed to optimize for some greater good, rather than your own profit. That of course doesn’t prevent the smart people from taking the profit! But they must argue that what they are doing is for the greater good. And if you want to start a competing project, you must also become a hypocrite and argue the same, otherwise all the people who are there for the community feeling will boycott you.
This is why “build a 10% better mousetrap” is a legitimate goal, but “build a 10% better web portal for artists” is not. The 10% improvement means nothing if the community accuses you of being a greedy selfish bastard who only cares about money and not about art, and they blacklist you and everyone who cooperates with you. And yes, if you understand how the game is played, the initiators of the backlash are those who profit from the existing system. But you can’t say this out loud; it would only prove that you care about the money. So both sides will keep arguing complete bullshit, trying to get the confused people on their side. The important thing is to get confused high-status people on your side, because then the rest will follow. The old group will argue that “we need to protect our current values” and “splitting our small community will ultimately hurt everyone”. The new group will argue that “we need more diversity” and “providing more options will attract more people to our common cause”. (Then the old group will whine: “so why don’t you add those new options to our current community website instead?” And the new group will respond: “you had plenty of opportunity to do that already, which means that you are either incompetent or unwilling, and we need a new space for the new ideas”.)
You talk about a “crypto community”, which I suspect is another example of the same thing. The people who have the power are there for the money. Everyone else is there for the feeling of community. The community is an important part of how the people with power make the money. But they very likely optimize for money, the community is only instrumental. In the occasional situation where “what is good for the people who make money” is significantly different from “what is good for the community”, the arguments of the people with power may sound a bit… confused… but everyone else interprets it charitably as a “honest mistake” or “well, I don’t have all the information they have, so maybe it’s my fault that I do not understand their perspective”. This is because the people who know better are either part of the inner circle, or have already left the community (or have never joined it in the first place); or maybe are there for their own selfish purposes, which are unrelated to the goals of the founders or the community (someone analogical to publishers in the artistic community).
(By the way, these days when I hear a company owner say something like “we are all like a big family here”, I treat it as a red flag. That basically means that the owner wants me to apply community norms in a business situation. Thank you, but I keep my communities outside of my workplace, where I won’t lose them if one day my boss decides to press the button.)