Can I step on the SC? I'm ready to attack. Andrew King, yeah, he's the one to bash, asking questions no filter, just keeps on grinning. He's the man who's got the whole crowd spinning. Money, fame, success, it's all in his sight till Dick Deep exposes you with all his mind, no sugar coating.
Hello everybody, we are on the road today in Munich, Germany, at the DLD Conference, a regular conference that I come to every year. It's a special DLD this year, January 2025, celebrating its 20th anniversary, 20 events, and I think most of those 20 I've been to, and so is my guest, Albert Wenger, the distinguished venture capitalist, entrepreneur, now at Union Square Ventures. Albert, I'm beginning all our DLD anniversary 20th anniversary conversations by getting our guests to remember where they were in January 2005. Can you think that far back?
January 2005 was actually a really interesting year for me. It was the year that Delicious was acquired by Yahoo, so I was in New York, and then after that is when I started hanging out at the USV offices.
This was a holiday. If this was a Hollywood movie, maybe it would have been the end rather than the beginning. Was that the most exciting moment of the last 20 years, when you sold your company?
Well, the company had been started by Joshua Schachter, but no, there have been many, many exciting moments since. I had fabulously exciting moments even last year, not just business-wise, but I sailed across the Atlantic, which was very exciting.
What was the world like in 2005? Can you remember? Was it a kind of gentler, better world? No, just kidding. It was an exciting moment in technology because we had what was known at the time as Web 2.0. All of a sudden, companies that enabled user-generated content, that enabled users to interact with each other, to share, were really rising fast, and that felt to many people at the time like an important new use case of this permissionless media, the web. It was a period of Web 2.0 exuberance, perhaps like today with AI. Were you exuberant, Albert? Were you a believer in Web 2.0, in this democratizing potential of technology, particularly for online broadcasting and publishing?
Delicious, of course, was one of the early pioneers of Web 2.0. It was indeed. I was exuberant about it, and I still, despite all the problems we've had, have a belief in its power and potential. I think all of us at the time believed that many people being able to express their views would be good. I think we already knew early on what some of the problems of that might be. Eric Brynjolfsson and Marshall Van Alstyne famously wrote a paper about the Cyber Balkans, written in the late 90s, so people were thinking about this problem of fragmentation of discourse, of people retreating into their own tribes. So it was known that this was going to be a problem. I think what none of us did was try and create systems that would counteract that, and we didn't really have a good view even of what those systems might look like. I believe we now actually have examples of what some of these things could look like; they're just very small and not scaled. The primary example of this in my mind is Community Notes on X.
I want to get to Community Notes on X in a second. Eric Brynjolfsson, who's been on this show several times, I think was your advisor?
He was my PhD thesis advisor.
I believe Eric is a little bit younger, but maybe not by much, than I am. Eric, of course, now is a very distinguished academic at Stanford. You've gone on from MIT to be involved in a successful startup and then go on to Union Square Ventures. Are you happy with your narrative, Albert? You could have been an academic, I'm guessing, if you'd chosen.
I'm not sure I could have been an academic, actually, because to be an academic requires a very deep focus for a prolonged period of time on a single thing. Interestingly enough, I think I've learned more recently how to do that better, but I really enjoyed the opportunity that venture has afforded me to learn about a lot of different areas. Something that I needed was to be drawn out and work with people; it's not my natural comfort zone. So having something where on the one hand I have the excitement of learning about new things, and on the other hand it's connected to people, has been absolutely fantastic for me. I really couldn't be more thrilled with where I wound up.
In 2005, did you have aspirations to be a venture capitalist?
Oh, absolutely. My aspirations to be a VC actually go back to the late 90s. I had started a company in Boston in the internet healthcare space, started in late 96, early 97, together with two MIT professors. That was not a success, that company, ultimately, but I really loved the idea of startups bringing innovation into the world, and I thought I might be a better investor than I would be an operator. It took me essentially a decade from that experience to become a partner at Union Square Ventures, but that was a journey that had started, and I was excited about it from that very first moment of the very first startup experience.
You've always been very interested in politics. Were you part of the exuberance in 2005 about technology democratizing the world? Of course, that reached its climax perhaps in the Arab Spring and seems to have been going downhill ever since.
Yeah, and as I said earlier, I still share this exuberance, actually. I believe that as with many very powerful technologies, when they come into the world, we struggle for a long time to get them to work for us, as opposed to fitting into the old paradigm. I think this is the moment in time we're finding ourselves, and also with AI, we are really, really head-deep in the Industrial Age. There are 200-ish years of Industrial Age thinking that has accumulated; it's everywhere, in culture, in the pension system, in how we regulate media. It has all accumulated over a fairly long period of time, and when this new technology comes along, we kind of shape it and force it through those old lenses. I am, and continue to be, exuberant. Let me point at some examples that I think support this exuberance. If you look at what's happening in AI research, for example, it's all being published directly by the researchers without a very long review process, and that has massively accelerated the rate of progress. It makes the papers available almost in near time, in real time, and other people can be like, 'Oh, I can see how I can implement this in my system,' or 'I can see how I can improve this further.' So we see this ability of people to share directly with the world. We see the positive sides of it, yes, but we have come to also very much appreciate the negative sides. I think the right thing to do now is to say, 'Okay, what are the digitally native solutions to the problems, not what are the old-fashioned ways?' Because when I look at speech, for example, the left and the right both want to regulate speech on the internet; they just want people to not be able to say what they don't like. It's a mirror image of each other. So we need to have a digitally native solution that is not going back to saying, 'Okay, we need to put the government in power of censorship,' which by the way happens to be the origin of copyright.
You used a couple of terms: 'digitally native' and 'Industrial Age thinking.' What do those mean?
Industrial Age thinking to me means thinking where the primary constraint of the world is capital, physical capital, where the primary constraint is how many buildings can we build, how many machines can we make. When that was the primary constraint, that to me is the Industrial Age. And now the primary constraint is attention. We have all the machinery, and it's just like, what are we paying attention to? Are we paying attention to the big problems: climate crisis, infectious disease, the big opportunities which come from automation, from space travel, from new materials? So many new opportunities. Are we paying enough attention to this, or are we still caught in trying to sell the 12th pair of shoes to people who already have 11 perfectly good pairs of shoes? We have a certain mindset that has worked very well for us, by the way. I'm a big believer that free markets and innovation in free markets has gotten us to an amazing point, but whenever you run a system for some length like this, you wind up in the end with kind of marginal benefits. And now you have these new capabilities, and you need to invent the new thing. And 'digitally native' to me just means you don't take regulation that you invented 100 years ago in the Industrial Age and apply this regulation to a fundamentally different set of capabilities.
You've thrown a lot of things in there, Albert. You talk about not needing that 12th pair of shoes, which suggests that you're not a great fan of maybe what we might call decadent capitalism. Are you suggesting that digital natives aren't into shoes, or at least fancy shoes?
I think we're seeing a lot of people who are like, 'Actually, that is not where my sense of meaning and purpose in life comes from. I can live with fewer things. I'm more interested in experiences. I'm more interested in building and creating, whether that's as an artist or as somebody who helps conserve nature.' We're seeing a massive interest among young people again in farming, for example, and nature restoration. So I think people are discovering that it turns out you can't actually consume your way to meaning in life.
Albert, have you been surprised by the shift in the zeitgeist from 2005 to 2025? In the last 20 years, back in 2005 there was a consensual exuberance about the potential of Web 2.0. Now, in our AI age, it seems as if the pendulum has swung the other way. Is that fair?
I don't think the pendulum has swung the other way. I think we've had 20 years of seeing that, unsurprisingly, digital technology has huge benefits and also has huge problems. And I think now people are looking at AI, and you find only smaller groups that are like, 'It's all good,' and you see more groups that are like, 'Oh, I can see that it could be good and it could be negative,' and then you, of course, have a big group that says it's all bad. I think one of the really problematic features of current dialogue on almost any topic is that the groups at the extremes occupy most of the dialogue space. So the 'AI is all good' group gets a lot of space, and the 'AI is all terrible, it's going to kill us all, it's all biased, we shouldn't be doing it, we need to slow it down' group gets a lot. The group that's in the middle, that's sort of saying, 'Hey, this technology has extraordinary capabilities, it also has very real risks, including not dismissing existential risk, and so how do we approach this in a way that recognizes both?' That group tends to be less vocal on social media, less vocal in policy circles. And I think the net result of that is that we are being torn between these two very loud voices on the extremes, and that is true on so many different issues.
But a venture capitalist, you're lucky enough to see everything early, first, before other people. I want to get to AI in a second, but it seems in a post-Web 2.0 world, Web 3 has fizzled. Is that fair? Were you excited by Web 3?
I don't even quite know what that term means. I was and I continue to be excited by it. So by Web 3, to me, it means decentralized ways of reaching consensus. Consensus means you agree on some state of the world, usually a state of a database. You agree, for example, who owns a Bitcoin, or who owns an NFT, or who made a social media post, where did it originate. Those are all examples of consensus. And in Web 2, the way we achieved consensus was we put big centralized players in charge. Amazon maintains a huge catalog of payment credentials and SKUs and who's purchased what; that's very centralized. Facebook maintains a big database of profiles and relationship graphs and status updates. So we have these big centralized players that really took care of maintaining the database. And now we have decentralized alternatives that can do that, that give you all the benefit of network effects, meaning all the benefits of people sharing the state, but without giving power to a centralized player. Now, I think this is fundamentally a very positive technology. We have seen a lot of negative use cases, but I think we're beginning to see a lot of very positive use cases. If I think of the USV portfolio, for example, we have a company called Slang that lets you send money anywhere in the world instantly, I think in something like 70 countries, for virtually no fees, and that is all powered by this decentralized consensus behind the scenes as to where, in which account, the money sits.
