The Future of the Creator Economy, Social Media, and Internet Culture with Rex Woodbury

Hey everybody, it's Eric Torenberg, co founder partner of Village Global, a network driven venture firm. And this is Venture Stories, a podcast covering topics relating to tech and business with world leading experts. Hey everybody. Welcome to another episode of Village Global's Venture Stories. I'm here today joined by a very special guest, Rex Woodbury at Index Ventures. Rex, welcome to the podcast.

Thanks Eric. It's great to be here.

So Rex, by way of introduction, why don't you give a brief background of how you came to Venture? I've been reading your substack for quite some time now and maybe you can give a sense of how your background informs your interests, particularly you're a creator and interested in the creator economy.

Yeah, definitely. I actually when I was little wanted to be sort of a filmmaker, producer or something in the media world. But some time along my journey I sort of got off track and entered the business world and I was doing later stage investing. I started my career at TPG doing Internet investing and impact investing on the growth and rise funds there. And then I realized the most impactful stuff in my mind was how tech was changing things and how people were interacting with the Internet in new ways and using the Internet to communicate and create. And at that same time that I was at tbg, I was on the side doing Instagram and earning income through social media and just becoming really fascinated with. Back then we called it more sort of the influencer phenomenon, but I think now it's much more sort of about creators and people much more creative than me on TikTok and YouTube, just this new form of work. And it's something that I think about a lot. It's sort of this unique intersection of the future of work and some interesting trends about how work is becoming more flexible and disaggregated, but also about pop culture and media and content and how entertainment and education as well is changing. So it's this intersection of two interests of mine and something that I spend a lot of time thinking about.

Talk about where you're most excited within the creator economy from an investor perspective and how you see that evolving.

I would say there are a few places within the creator economy that are interesting to me. I mean, first and foremost there are always the big horizontal platforms we have today. TikTok and YouTube and Instagram and emergent platforms like Clubhouse. I think those are very interesting. But at the same time I think some of the more kind of B2B products that are building out the infrastructure of this new economy are also really interesting. So I've Spent a lot of time thinking about the intersection of fintech and the creator economy. My first investment at Index is in a company called Creative Juice, which is is doing just that, sort of building the financial infrastructure for creators and also just interested in what happens when so much of sort of the American safety net and economy has been tied to institutions and to jobs, and that breaks down into sort of disaggregated, more creative and flexible work. What are the companies that need to be built to serve creators just like they were built to serve small businesses or large corporations over the last 50 years?

One of your ideas you've written about is that Gen Z culture is sort of at a different ethos where there's a rejection of perfection or status clout chasing, traditionally conceived and more about embracing authenticity and community. Why don't you talk a little bit about that?

Yeah, I mean, a lot of people who came of age probably in my generation as a millennial, even though I like to masquerade as a Gen Z, but as sort of a millennial, who's on that border of millennial Gen Z. I came of age in sort of mid 2010s Instagram, and I kind of call it the more performative or curated form of online interaction. And it's much more about status than about community. So people were posting filtered photos and Instagram really was born as a filtered version of reality. And then it merged with products like Facetune and influencers like the Kardashians and this kind of idea of portraying perfection online. And it's really shocking to me how quickly that's sort of gone out of vogue and how this embrace of online authenticity and community has. It's much more about sort of being vulnerable and being yourself online. And I think Gen Zs are the ones driving that culture. But we've seen it in the shift from the Instagram aesthetic and companies like the Museum of Ice Cream or sort of other companies of that era that are much more about posting the perfect selfie or photo to this more creative and new and emergent behavior online.

Felt cute, might delete later, rally and cry.

Yeah, I mean, I always think it's interesting how back in the day, a lot of the Instagram filters were designed to make you look good and people were very focused on looking perfect online. And now you see a lot of Gen Zs and younger people actually using filters that purposely make them look ugly. And a lot of the TikTok trends are built around filters that distort you in a way that many people would not say is beautiful, but it's funny and creative and authentic and it's raw, and it just resonates a lot more with people. And I think people have just gotten tired of sort of the performative nature of social media. And the ARC is bending toward bringing our full selves to our online presence offline as well. But it's a fascinating trend of just in a few years. I always sum it up as sort of saying the Kylie Jenner to Charli d' Amelio kind of shift that we've seen of aspiration of Kylie shifting to be more about relatability and Girl Next Door with Charlie.

I mean, I wonder, there's been this rise in terms of vulnerability has been more in vogue than Brene Brown.

Yeah, exactly.

I wonder if part of that is a response to sort of, you know, highlight culture, you know, social media being a highlight reel. And like, that feels when you're seeing how great everyone's life is, that sort of feels bad. And yet when you're seeing how bad everyone's life is, maybe that feels kind of good, which is to say, like, people admitting their problems. It's like, oh, okay, I'm not alone. Yeah.

I mean, I think it's, you know, it's interesting in seeing how the use of apps like Facetune has really decreased. You know, a big thing for TikTok or rather on Instagram now for Gen Z's is more like photo dumps and just sharing sort of candid photos from your camera roll. But, you know, a lot of people, I think, are just exhausted by, you know, performing online. And part of that is maybe the pandemic too. I mean, we spend more time online, we spend more time on Zoom. You know, I think the idea that you need to show off this perfect curated life or, you know, not have your kids run in the background of your zoom meeting just is no longer realistic and no longer appealing to people. And hopefully, I mean, my sort of altruistic hope there is that that leads to more kind of intimate and real connections between people.

Yeah. And that could be true or is true in many ways, but I think a more cynical interpretation, which also might be true, which is the thing I just said in terms of, like, it just makes people feel better if you share your negative takes, is that that's also performance as well. It's one thing to perform in the sort of, you know, Instagram, you know, model or sort of like, you know, style that you were. You were discussing. It's another thing to also perform in the sense of, like, I'm going to share all my low lights and, you know, make sure they're cataloged and categorized and sort of like operating.

Yeah, I mean, definitely a cynical view in that. I mean, I don't disagree with you at all. And I think there's always some nature of, you know, status and performance online and offline or just in sort of, especially kind of celebrity culture whenever you're interacting with a lot of people. And there are definitely aspects of sort of performance to apology videos or people trying to seem very authentic to a certain. To the nth degree online. And it may be shifted. The pendulum has shifted too far in the other direction. And there's certainly a fine line, but it is a dramatic shift that we've seen from Instagram in 2015, where it was to even the features that are used today as well as new social networks. Yeah.

And it's also interesting because, you know, the idea of authenticity typically, you know, combined with it is this idea of transparency or just like, you know, I'd be so authentic. So I'm going to live stream my whole life. You know, there was this New Yorker article a couple years back about this, like, you know, it's got somewhat dystopian twitch streamer who, like, you know, had to stream everything in order to just pay the bills.

Yeah. Or the phenomenon of sleeping and people, you know, stream themselves sleeping, which is. Yeah, it's sort of a whole sort of new level of, you know, sharing your life.

Yeah. And it's interesting because there was recently, you know, Jackson Dahl tweeted about this. This creator who was somewhat anonymous, or maybe totally anonymous, basically. Like, is there going to. Is it possible to have authenticity while also being either pseudonymous or anonymous or not being that transparent and for people still feeling that. That connection.

Yeah. I mean, it's an interesting question too, of what is the arc that people follow when. When someone's relatable early on, you know, does their fame that they attract make them unrelatable later? I mean, I think Charli d' Amelio is a great example where part of her appeal, I think, was, you know, she was someone that could be you. She was a teenager in Connecticut that, you know, was 16 years old and posting dance videos. And, you know, she kind of took off and then there was a lot of backlash to her sort of living someone, a rich person's life and not treating. I think it was her cook well in that video. But, you know, it's interesting, this arc of fame where, you know, who's the person who starts as authentic and relatable. Might not always be that way.

Yeah, it's interesting. Have you followed Lil Dicky at all?

I have not. I can't say. I only know the basics. Yeah.

The fundamentals. So Lil Dicky is this rapper and he became famous. He was, you know, he was this.

Yeah, Freaky Friday, right?

Yes, yes, yes. But even before that, he was sort of like, doing out of his dorm or whatnot. You know, he's sort of like all home videos. And he documented his journey of how he became famous from just, like, the Internet and people, you know, felt connected with him. And then he got super famous. And he has, you know, Justin Bieber, you know, Scooter Braun is his manager. And now he's doing all this stuff with famous people. And it feels like when you get famous, there's like, two paths. You can either, like, apologize all the time for being famous and that, like, you know, works to a certain extent, although it's never enough, you know, or you could just, like, absolutely just own it and just like, lean in 100% and just, like, give no fucks, as they say. And I think he's done the. I think that's probably more effective in terms of, like, some people will write you off, but you'll. You at least won't write yourself off. I don't know. It's more defensible. I know people respect it more in this weird way, and if you lean into it with humor, maybe. But, yeah, it's just an interesting thing. It's an interesting dynamic.

Yeah. And it is interesting, too, how I think fame is being compressed and the Internet enables so much talent and creativity in the world that, you know, people. I don't think we'll ever have a celebrity on the scale of, you know, an Oprah or Marilyn Monroe or some of the defining iconic figures of. Of the 20th century. I just don't think we'll see that again because the Internet really is niche, and there are so many different corners and pockets, and you can discover people really tailored to your interests. And we're not all watching the same three networks on television or seeing the same films in the box office. And, you know, mass media has really fragmented and broken down to Internet culture. And, you know, for better or worse, I don't think we'll all sort of rally behind the same people anymore.

Well, essentially, I agree with you there, but what I might add is it seems there's this great bifurcation, whereas the long tail is getting so much longer, the middle seems to be hallowed. Out the people on top seem to be bigger than ever. And maybe not as a percentage. You know, it's. Not everyone's listening to the same thing, but just because the sheer number of people on the Internet in overall quantity. Yeah, you know, Lil nas X or PewDiePie or I don't know, whoever, like Joe Rogan or whoever, like. I feel like we'll just continue to see from a numbers perspective, you know, the hits just get bigger and bigger and bigger while also being less like globally known in some weird way.

And I think you'll. Yeah, and it goes back to, you know, the great writing from, you know, Kevin Kelly or Legion on sort of thousand true fans or 100 true fans of. It shifts to being sort of as we move away from advertising based business models and a lot of the platforms embrace better tools to enable creators to tap into their communities and capture value and create value. I think that'll enable the real long tail to your point and more and more people will make a living this way.

Yeah. Let's talk about business model innovation and how we're seeing a shift away from ads and what future business models look like.

Yeah, I mean, I think it's fascinating. I've studied a little bit of how we ended up on advertising based models and I think there are a few parts of it. First and foremost, payments on the Internet were tough in the early iterations and advertising let Internet sites remain free. But also if you think of the political and social landscape when the Internet was really nascent back sort of around the 911 attacks, you know, privacy was not top of mind and that led to a lot of the sort of invasive ad targeting that now we're seeing this backlash to. And so I think, you know, advertising was a way for the Internet to get off its feet, but it's certainly not the way that either creators or communities or even the platforms capture most of the value that they create. And a lot of the platforms are built for advertisers and not necessarily for creators or for consumers. And so I think we're going to see a shift to new business models. I think more subscription, more freemium models as well as more sort of gaming like microtransactions and in game, in app currencies probably.

And what about say more about NFTs and social tokens?

Yeah, I mean, I think that's a piece of it. I think that goes hand in hand with virtual economies and microtransactions. The idea of actually being able to own digital items and you know, I love to think about and talk about the Metaverse or, you know, this idea of us, you know, spending much more time online and in economies that are, you know, for work and for socializing. And I do think that we'll have digital goods in there and that we'll see a shift, especially with NFTs from now. It's more collectibles today and I think it'll be more utility in the future. So we'll see NFTs be able to unlock certain access in a game or give you special powers or maybe be a ticket to something or give you access to a creator in a certain way. But I think we're in the really early innings of NFTs.

What do you think about BitCloud?

I think it's fascinating. I think really what BitCloud is doing in the concept of social tokens is I think taking something that has always existed. We've sort of always bestowed status on other people with at least on the Internet with likes and follows and other sort of markers and it puts that in sort of a dollar value. But I think it's fascinating in terms of could people invest in people that they believe in and it solves this problem of. I've used this example way too many times and I should change it, but I'm a really big Taylor Swift fan and I was a really big fan of hers back in 2006 or so before she kind of broke out. And why am I treated the same as the person who discovered Taylor last week? Right now we both are basically treated the same as a fan. But with NFTs and social tokens, this opens up a new opportunity for you to be able to put your money where your mouth is and support people that you believe in and then you rise alongside with. Alongside them and capture the value that they create and that you help create as a fan.

Right. And in. And why am I treated the same? I'll go further. Like I should have, you know, not just be able to get, you know, special access or, I don't know, whatever things that they want to dangle to their, to their special fans, but also like, you know, invest in them and get, you know, special. If I discover Taylor Swift when she's like 15 years old or whatever, I don't know, you know, just starting out and I, like, think she's going to be huge. I should be able to speculate and economic reward.

And you also helped create, you know, I mean, she, she really created her success. But you're an evangelist for her and I'm an evangelist for her and, you know, all the family and friends that you said, check out this artist, you know, hopefully that helps, you know, in the future appreciate, you know, your investment or your value as well. And I think we're in very early days here. There are all sorts of nuances to work out. And, you know, I think the creator needs to sort of own their own creativity and I think there need to be lots of sort of safeguards in place. But. But it's an interesting concept of the decentralization of the economy and this sort of concept of the Internet removing gatekeepers, which, you know, for a while was. It's certainly been true, but not to the extent where some legacy media gatekeepers like record labels have been removed and there's still a lot of, you know, intermediaries and brokers that are capturing value and middlemen where they don't need to be. And I think that's going to change. And social tokens, NFTs, those are all part of it.

Yeah. And then also there's this reputational aspect to it where I want to also just. I want the world to know that I discovered, you know, and not just for vanity purposes, but I might want to be an A and R person, you know.

That's true.

And not just as an artist, but every website I feel like should, you know, every blog, every substack, I feel like everything's about to get four squared or something in the sense, like just gamified in terms of who discovered it first or discovered early, believed in it, and gets reputational and economic benefits. I think there's a white label solution that enables it.

That's a great point, because if you think of someone who's trying to become a venture capitalist, they can say, well, look, I have great taste. Angel invested in these three companies that are really successful and someone wanting to be an ANR artist or a curator or even just capture some of the economic value that right now goes to those intermediaries could certainly be able to do that. So much of the Internet now is remix culture. TikToks are essentially components of other people's sounds and videos and ideas that you build on. And in the future, I think a lot of that, the original creators will be able to capture value as, you know, the photo that you take becomes a viral meme around the world or it becomes an important part of culture. Shouldn't you share in some of that, that value created? I think that'll be possible in the future.

Yeah. I tweeted at one point, I called it the hunter economy. You know, a product, obviously, but it's. It's. This is empowering curators in a reputational and economic way. And I think it's. Yeah, it's basically a whole class of startups that will incentivize and reward early adopters economically and socially, and will encourage people to discover and curate new products, new people, new ideas, memes, and then also stake and put their money where their mouth is so you can tell who's predicting the future and who doesn't want to put skin in the game.

Yeah, yeah, exactly, exactly. It's sort of the financialization of culture in a way.

You are a student of memes.

I am. I think meme culture is fascinating.

What do people not fully get about meme culture? Or why don't you enlighten us a bit about how you contextualize it and what people should know about it?

Well, I went down this rabbit hole recently because I've always been fascinated by memes in terms of what we think of as memes, which is like the image overlaid with text. I think it was Elon Musk who tweeted last summer, he who controls the memes controls the universe. Which I think is a riff on a quote from Dune. But I got fascinated with what even is a meme and where did it originate? And it actually has academic origins. I think it was an academic in the 70s or 80s defined a meme. It's really interesting. A meme is really just anything that's sort of a unit of culture transfer. And so a lot of things that we don't think of as memes are defined as memes in the broad definition. You know, I think like the emoticon, the little colon and then parentheses, that's a smiley. Was the first known meme online. And now, you know, a lot of TikTok videos are memes or viral videos. And it's just interesting in that culture transmits itself so quickly online and so rapidly. And memes are actually relatively complex in that they bring together sort of different contexts and ideas and cultures and mesh them together to communicate something. And I think, you know, it's fascinating how many people are sharing memes every day. I think I read a stat that something like 60% of younger people share a meme with a friend every day. And in the future, I think more people will be creators of memes as well.

And it'll be interesting to see, once it becomes more financialized, what that will do for memes.

Yeah, exactly. I mean, it's already becoming, you know, I've you know, the low code, no code tools that are we see in enterprise also are in consumer. You know, I would categorize TikTok as one in that, you know, it actually took quite a bit of knowledge and know how and expensive equipment to create a YouTube video, but it's a lot easier to create a TikTok video. And same thing with memes. You know, it used to be relatively difficult to create a meme. You'd have to go to a meme generator online or maybe go in Adobe and do some editing. But now, you know, new companies are emerging. We supported one at Index called Pinata Farms, which lets you sort of build memes with different building blocks of text and logos and videos and, you know, it's a fun app to use. But I think this sort of speaks to the trend of Internet culture becoming more participatory. And in the future, I think, you know, a lot of lot more people will share memes, hopefully. I think that's a good thing. I think they're fascinating and hilarious and fun, but I think more people will not just send them to each other, but also create them.

I invested in those guys too. I think they're awesome. Yeah, I think it's interesting. And that's the positive take on it, or you're just that it's fun and it's lighthearted and it's bonding and connecting, but also can be powerful too. I think the cynical take on it would be when you thought about the game stops of old, I don't know, Occupy Wall Street, I don't know, sort of mass movements were coordinated out of like a sincere belief in something. Maybe it was God, maybe it was the state, maybe it was some like, principle. Right. Some value. Whereas now it's mostly about the lulz. And that's like an embodiment of a society that can't really stand for anything. It's like a nihilistic act is one interpretation of it, where it's like, just stick it to the man. That's the GameStop thing is like Doge. I don't know.

Yeah, Dogecoin. I mean, I Definitely agree that GameStop is a fascinating example of memeification of capitalism. And Elon Musk and the deification of him speaks to this as well. And really I think that's more sort of a reaction to American capitalism in its current form and where it's been the last 50 years of income inequality. And I actually think a lot of the same drivers of the meme movement and GameStop and even NFT mania. A lot of these sort of Internet culture movements are the same drivers of support for Bernie Sanders or even Occupy Wall street or it's sort of this skepticism of American institutions. And I think this is also a driver of the creator economy broadly where people are more skeptical of traditional forms of work. Maybe they came of age during the financial crisis or you know, lived through that, but you know, they basically have a different view of capitalism and meme ify it to sort of, you know, Wall street and Gamestop was really all about taking down, you know, the big banks and Wall street in the name of, you know, almost like revenge for what are perceived as wrongs in the last decade or two. And so it's interesting this coming of age of Gen Z with this reaction to a lot of the things that they've lived through and how that's manifesting itself in Internet culture.

Yeah, you expect only to see more GameStops, more Dogecoins, more of these mass sort of movements that are sort of for the irony.

Yeah, I think it's all part of this long arc that we've been talking about about decentralization, removing gatekeepers. I think crypto, nft, social tokens, those will all play a part as well as sort of the non ad based business models. But just a shift away from centralized power is really, I think probably the next 20 years of the Internet. That's the story.

We were talking about the creator economy before. Talk about what misconceptions we might have about or what we don't fully appreciate or get wrong about. The creator economy.

Yeah, I would say I tweeted recently, kind of an old survey, I think it was from 2017. People asked kids what they most want to be when they grow up. And the most common answer was YouTuber. So I tweeted about that and there was a lot of hand wringing about it. And I think people were worried about what that said about society and sort of what kids are growing up to do. But I think there are a few misconceptions there. I mean, the first was that a lot of times people equate the creator economy with just Hollywood or celebrities and fame. And it's really much more than sort of a quest for money and fame. It's mostly in my mind about creative expression and self expression and being able to sort of convey who you are online and express yourself through art, which I think is a fundamentally human thing. And then the second piece is that a lot of people view, again in that same line, the creator economy is a vertical trend of Something that is replacing entertainment in Hollywood. But it's much broader than that. I mean, I think there are many, many teachers and educators who are making a living this way. Some of the most popular YouTubers are doctors and they're mechanics and other people and engineers who are teaching other people and making videos that they're proud of. And so I think it's a much broader trend than just entertainment. And people can also be doctors and be engineers and be teachers and also be creators. They're not mutual exclusive. Yeah.

And one big question in the creator economy was whether creators were not just going to monetize. And we talked a little bit about this, but via subscriptions, revenue, but also whether they were going to get equity or real ownership and asymmetric upside in the same way that startup founders do.

We're going to see this whole ecosystem evolve around creators. And I think creative Juice is part of this too. Of their first product is Juice Funds, which is enabling creators to invest in other creators so that Mr. Beast could invest in an up and coming YouTuber if he really believes in that person. And I think that's part of it. I think it's. That's almost similar to the concept of angel investing in Silicon Valley. And I think a lot of the infrastructure that we've seen built around startups, but also just small businesses or even large enterprises will be built for creators. And so much of the American social safety net is tied to work and careers, whether that's health care or retirement and basically how you have stable income. And I think all of those will need to be reinvented for this new disaggregated future of work.

I want to talk about the future of work and the future of education. Should we start with work?

Let's start with work. Let's do it.

So you have a few posts about this. I mean, one of them was the three stages. Maybe we start there and we can branch off wherever else is interesting.

Yeah. I think when people talk about, especially venture capitalists talk about the future of work, I think we usually, a lot of people focus on productivity tools and collaboration tools. I think that's certainly a piece of it, but I think of that as sort of the third piece. The two that lead up to it. I think of job readiness, which is more kind of how people prepare for jobs. It's workforce development training, it's lifelong learning, it's traditional education. And then the middle component is job discovery. So that's everything from labor marketplaces that we've seen or tools like LinkedIn for recruiting. And then that last piece is when you're on the job, how are you successful? And that's Notion and Figma and Airtable and these companies we think of. But that's sort of the flow in my head of how I think of future of work. It's, you know, how do you get ready for the job, how do you find the job and then how do you succeed on the job?

Yeah, you know, often, you know, when we think about the customers of higher education, at least higher education, its employers. And so how do you think the future of work, what does that mean for the future of education?

Yeah, I mean I think the two go hand in hand. And I think the answer is the future of education will hopefully be better set up for the future of work. And what I mean by that is a lot of skills taught in school are not relevant for jobs that are demanded by the job marketplace. And so this leads to this enormous skill gap. I think it's about $12 trillion or something enormous that there's a mismatch in skills of a lot of people have degrees that aren't demanded by the workforce. And there are a lot of jobs like nurses or engineers that aren't taught as much. And so I think the two will map better in the future. I think part of it will be through skills based programs. Maybe not colleges or traditional education, but this could be something like blockj or Lambda or some of the income share agreement fueled programs or it could be sort of corporations, better sort of developed workforces with a partner like Guild or companies like that. But you know, I think the future of education basically needs to keep up with the pace of change in the workforce and the different jobs that are being demanded by, by employers.

So for you it's outside of the traditional education system because Ed Tech has been plagued by a lot of businesses that tried to sell to universities or sell to schools. And it was just, it was just hard. Some people did, but it was hard to do.

Yeah, I mean I do think I definitely share the sort of normal investor skepticism of selling into schools and districts. It's not always impossible. We did a lot of investments at the Rise Fund, which is the social impact fund at TBG and sort of traditional sales cycles into schools and districts. And you know, it is usually difficult because there are many different decision makers and you know, budget is often constrained. And so I do think probably the two most interesting areas in education are what I would call direct to learner businesses, which is sort of selling direct to consumers. And then the other piece would be selling into enterprises. So you know, that's Guild selling to McDonald's or you know, Walmart or having them, them purchase training for employees. And you know, the first we're seeing great companies in both, you know, for the direct to learner space. There are some big businesses being built like the moocs or now like Outschool and then same on the employer side. There are some really interesting solutions there that actually help companies train their own employees.

And say more about what you mean when you say the disaggregation of work.

Yeah, I mean, I think that's the breakdown of, you know, our parents had careers for 30 years or 40 years at one place. And then so I think when I think of disaggregation of work, I, I think of two things. I think of my generation having more jobs and so, you know, changing work more. But even more so I think of people stitching together different forms of income to make a living. And so, you know, that could have been the gig economy and Uber and Airbnb and Insta Work Instacart or it could be labor marketplaces like Instawork and Paired and others like that. Or it could be creator platforms where you're making a Living on YouTube and Instagram and or Outschool as a teacher. So I think there are lots of flavors to it, but it's really the solopreneur phenomenon in my mind of how people are dictating their own futures. And I think it goes back to what we were talking about earlier about Gen Zs wanting to sort of reclaim some of the agency and being distrustful institutions. And you know, we're seeing this in how they dictate their own futures versus, you know, relying on a traditional career path.

Yeah, when we look at a post pandemic world, what's going to stay the same versus what's going to revert back or change forward?

Oh man, no one knows. It's fascinating. I mean, I think we really are living through one of the most fascinating times of behavior change being decades of behavior change being compressed into months or a year. My initial view when the pandemic hit was that fewer sort of underlying behaviors would change than people think. And I still believe that to some degree of. I do think people have short memories. I think we're going to be shaking hands and hugging people. I unfortunately don't think people when they're sick will wear a mask in the future. So I think some behavior changes will revert back surprisingly quickly. But I do think there is sort of this step change, shift in different things. Whether it's willingness to pay for education, whether it's willingness to take a telehealth appointment, whether it's the idea that you can be productive as a remote worker, might even like it more. I think all of those have created major behavior inflections and that will seem permanent changes in the future of work and education and health care and all of those different things.

Yeah, that makes sense. I want to talk about virtual communities, but also just like how communities are evolving. You had a great, great, great, great post that sort of specified some of the, some of the different emerging ones or some sort of principles about how online communities are evolving. Do you want to unpack that a bit?

Yeah, I mean, I think it's, it's really interesting. And again, I think this goes back to that idea of us shifting from sort of a status driven. I think of Eugene Way's like, status as a service piece. When I think of the 2010s on the Internet and Instagram and different ways of portraying ourselves online, and now it's much more community centric. I think we've seen that in the success of Discord and Reddit. I think, you know, Discord's one of our companies. I think there are like 7 million discord servers now and, you know, they're for everything you could ever imagine. And there are also millions of subreddits. So I think people can just better find their communities online. And part of that's also, you know, the globalness of the Internet, but also AI I think of, you know, TikTok here, where in the past a proxy for our social relationships online was the people that we knew in the real world. And that's no longer necessary. We don't really need to upload a social graph or click connections and friend people like we did on Facebook. TikTok tells us this is the person across the world that you're going to most enjoy this video from or lunch club. AI says this is the person that you need to know for your career wrecks. And so I think we're just seeing a broadening of communities in that the world is really the potential for people that we can meet. But then at the same time we're seeing this fascinating kind of move toward niche communities where people find each other online with really, really specific shared interests.

Yeah, it's really interesting. Going back to sort of our irony conversation, you had a post about how, you know, the eye, mouth, eye phenomenon, it translates to, you know, feeling helpless amidst the chaotic realities unfolding around no escape. That's, you know, that goes back to my cynical take about nihilism, but then also like another meme or sort of, you know, symbol is the sort of the Wendy's account, you know, like getting in a fight with some random person or, you know, like. Yeah, it's sort of like that feels like, you know, you reference another post. It feels out of like, infinite Jest or something. It also feels. Yeah, like, what does that signal? Just sort of like absurdism or like. I don't know.

I mean, I think it's that people want, like, corporations and brands to stand for something and have a personality. I mean, I just think people reject the sort of bland corporate ethos that we had of a prior generation, and they would rather you have an opinion, even if they disagree with it. And I think maybe part of that was fueled by the Trump administration. And sort of a lot of brands and corporations over the last four years had to make a decision about whether they were going to speak up on an issue. And I think a lot of people wanted to hear their employers say something. But I think some companies have just been so successful by having strong voices and stances. I think of Nike and the Colin Kaepernick ad. I think of other brands that have really been ahead of the curve and having a personality as a brand. And I think people. It's working well for Wendy's. I think people have been talking about them a lot more than if they were just posting kind of stale tweets or corporate replies. So we'll probably see a shift in that people view businesses as people instead of just as sort of emotionless corporations.

But I think also what they enjoy is seeing, like, a car crash in real time. You know, I mean, drama.

That's true, too. I mean, it's part of. It's definitely entertainment. I mean, you know, this gets back to sort of our talk on how quickly the cycles of celebrity are moving, too, and that or, you know, takedowns of different celebrities. I mean, I recently watched the Britney Spears documentary about how people are kind of just now waking up to how we sort of watched Britney's demise for our own entertainment. And I think that's played out again and again over many decades in celebrity culture, just sort of in general media and pop culture. Yeah, maybe that part of that is just accelerating on the Internet. But I think it's sort of, unfortunately, an underlying human behavior and phenomenon that probably will not go away.

I wonder how we'll view Greta Thunberg, you know, like a couple decades from now. Yeah, yeah, it's. Yeah, it's really. I mean there was one. Paul Scalas had this, you'd love his blog, by the way. Lindy Mann, he had this review of or analysis of Trump in that Trump managed to like get rid of scandals by just having other scandals like just flood the unit. Like, and it ultimately didn't work. But like, but there was something about it that did or was just so shocking in a pure sort of.

It was just so shameless that you just kind of got numb to it. Unfortunately, I feel like that hasn't worked for many other or fortunately I feel like it hasn't worked for many other people. But it is an amazing case study and how he was successful for a long time with that.

Yeah, it's a separate conversation. But I think if you have the socially acceptable views and you get caught with something, just keep going and just keep pushing and people will forget it. If you have the wrong views, then you'll get in trouble. That's a different conversation. One thing you've written about is how gaming is underrated or is not fully understood in its sort of pioneering certain elements of Internet culture. Why don't you unpack those a little bit? And I'm curious how many of them are going to spread to other sectors.

Yeah, I mean, I think gaming is probably. It's because of the massively multiplayer online games like Fortnite and Roblox and Minecraft and also the sort of user generated component that has really fueled gaming and made it much more about socializing than just about the game. And so I think the idea that so many of these games don't have a purpose beyond just interacting with people. And Matthew Ball has some great writing on this, on how in Grand Theft Auto they've got a casino where you just hang out and socialize. It has no purpose in the game, but it's just there to spend time with people. And I think during the pandemic we saw a lot of this behavior in gaming bleed over to real life. There's a great New York Times piece about people having business meetings in Animal Crossing or meeting up in Red Dead Redemption to just hang out with people and talk business. I think, you know, that's fascinating and that definitely has some metaverse flavors of how people will interact in the future, especially with VR and ar. But I also think just the business models of gaming, we can learn so much from those in terms of what the future of kind of creator and Internet monetization platforms are. Microtransactions, us spending A couple bucks to buy something. I think we're already seeing Clubhouse adopt some of this stuff. But I think as people move away from advertising, microtransactions will be the main way that Internet companies monetize.

I've heard this dynamic about or this analysis of social media is framework where basically says the things that work will be either to get me famous or to make me friends. There's a post that basically segmented all of them and I can't remember which one was which. It might have been the, the famous one that there's only like one main winner, whereas for messaging there's like lots of different winners.

That's interesting.

One main winner per format. So audio, it's Clubhouse for Twitter. Sorry for, you know, like short form text, it's Twitter, you know, for video, you know, async, YouTube, Live, TikTok. Whereas messaging, each one has, you know, like a bunch of different ones. You break down. I'm curious how you think about that breakdown and then how you just sort of break down understanding, you know, social or what you're looking to invest in.

Yeah, I mean, I think I haven't heard that framework. I think it's interesting and I'll have to dig into that. I mean, I think the way I think about it is usually it's such a crowded environment in social that usually to break through the noise, you do need at least something really clever and innovative, usually from a product standpoint. So. And then quickly, you know, it does get adopted and copycatted by. By everyone else. And I think we saw this with, you know, Snapchat stories and then Instagram used it and Now I think LinkedIn has stories. You know, it's really everywhere. And you know, next we saw, you know, TikTok's algorithmic feed was really innovative and you know, the sort of immersive feed. And now it's in a number of different social networks. You know, right now we're seeing this with live audio, you know, a lot of Clubhouse copycats coming up. So I think, you know, the question there is, is TikTok's feed a standalone product or is it a feature in another app? And I think we've seen with reels and sort of, they're not great success that it very much is its own app. I think that's the question with Audio now, is it going to be something in Twitter or Spotify or Facebook, or is it going to live in a standalone audio app? So that's one way I think about it, of you need some real innovation. But Then the other piece I would say is the framework you mentioned reminded me of the old kind of maxim that all consumer companies are built on one of the seven deadly sins, which I think is kind of a jaded view. But I do think there's probably some truth to it of at their core, humans have not changed much in many hundreds of years. And maybe Instagram is about lust or greed or tinders about lust. A lot of different Internet products can be traced to one of the sins of like pride and envy and different things like that. So I think that's another interesting lens to view people through. Not necessarily do they need to map to one of those sins, but more kind of the consumer psychology idea of it and that people are people. And if you study the history of the Internet and just consumer businesses for the last hundred years, sometimes there are some interesting learnings and patterns that you can draw.

Yeah, gearing towards close here. What have we not spoken about or what's in your request for startups or other things that you're looking to invest in or dig deeper in?

That's a good question. I mean I've spent a lot of time thinking about again, just sort of this infrastructure of online creativity and sort of how to better capture value for creators and communities. So I think that has two flavors. Maybe it's NFTs and I've spent a lot of time thinking through that space. But I think more broadly it's about rethinking from first principles the business models. So probably the thing I'm most interested in now and spend most time on is just thinking if we were starting from a blank slate, what are the most interesting business models that are most aligned between different incentives for different players in these ecosystems? And how do I help the companies I work with or how do we identify companies that are building in those interesting ways? But I think it's going to be an interesting decade for business model innovation and we're probably going to see much more diversified revenue streams. Definitely some learnings from China that we can have, but there's going to be a big shift away from the sort of monolithic ad driven Internet platforms.

What can we learn from China?

Man, that's a whole separate podcast episode. I mean I think in the past the main thing, and I read a lot of smart people's work on this, I think Connie Chan has some great work, Lillian Li has some great work and I think there are a lot of interesting learnings. Live commerce is one in live streaming. I think the most interesting company lately that I've found is bilibili, which is too long to get into now, but I recommend people read about it and I think in this idea of community they basically spin up really niche kind of interest driven communities. And I think there's a lot of learning. I think that'll be the next one where we see some people building bilibili for the West.

Yeah, that might be a good place to wrap.

Gotta leave it with people with the curiosity. And we'll have to do another episode on China or get someone else to join us for that.

I'd love to have you back. This was a great tour into some of your ideas. Your blog is really fantastic. It's digitalnative.substack.com it goes a lot deeper into some of the things that we talked about today and there's a lot more and I'd recommend listeners check it out. Rex, anything else you want to leave us with? Any plugs or where else people should find you online?

No, no, mostly the blog and Twitter rexwoodbury. I couldn't get Rex Woodbury, sadly, but that's where I usually am writing and My email is rex.woodburyindexventures.com and yeah, I hope to continue the conversation with people and with you, Eric. It's been, it's been fun. So thanks for having me. Awesome.

Thanks so much for coming on, Rex. It's been a great episode.

Awesome. Talk to you later.

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