Mozilla’s Mark Surman rethinks venture capital

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Right now seems like a unique time of opportunity for many internet entrepreneurs. Hundreds of thousands, perhaps millions, of Twitter users are looking for a platform to make their new home online, amid Elon Musk’s scorched earth upheaval of the platform. But, for many traditional Twitter users, nothing seems to fit the bill. Mastodon is too complicated. Facebook is for baby boomers. LinkedIn is too professional.

One of the many reasons a viable alternative isn’t ready to launch is that the traditional venture capital firms that have funded Silicon Valley’s biggest hits often favor the prospect of a return on investment over sound ethical decision-making. If an alternative to Twitter were to facilitate healthy conversation, avoid targeted advertising, and make it harder for polarizing content to go viral, the company behind it would simply be less profitable. As a result, founders looking to increase investment for similar projects often fall at the first hurdle.

At least that’s the opinion of Mozilla, a hybrid organization that includes a nonprofit foundation and the company behind the privacy-focused Firefox web browser. On Nov. 2, Mozilla set out to change that state of affairs by launching its own venture capital arm, Mozilla Ventures, which will inject much-needed investment into companies that “can ultimately nudge the internet in a better direction,” according to an accompanying statement. the start.

With a first round of funding of $35 million, Mozilla Ventures isn’t as plentiful as the venture capital giants of Silicon Valley. But Mark Surman, president and executive director of the Mozilla Foundation, is optimistic the money will have a big impact on projects to make the internet safer. “Venture capital as it is now formed, this pursuit of profit at all costs, ultimately leads to things like the Twitter debacle and the monopolies we have today,” Surman told TIME in an interview. October 27, the day Elon Musk completed his Twitter takeover. “So it’s not just that there’s a consensus that we need a different kind of tech industry, I think it’s also clear that we need a different kind investment to achieve different results.”

Mozilla Ventures has already announced its first three investments, with more to be announced next year. One of the beneficiaries is Block Party, an app that helps users protect themselves from harassment on social media. Its founder, Tracy Chou, was named TIME Woman of the Year in 2022. “We’re going to use [the money] to hire and execute the things we want to do faster,” Chou told TIME.

This interview has been condensed and edited for clarity.

Why are you launching Mozilla Ventures?

We see a lot of startups wanting to tackle things like privacy, reliable AI, and alternatives to Twitter. The founders are there. We have met many of them in recent years. But they are really struggling to find capital that aligns with their values ​​and that will help them be ethical tech companies.

There seems to be a consensus that we need to push the tech industry in a different direction. The question now is, how is this going to happen? And clearly some of that could happen through regulation. But it also has to be about people building different products that people still love and want to use, but also products that respect people and protect them.

There are very few people who aren’t going to say, “I want the internet to work differently” right now. But venture capital as it is currently formed, this pursuit of profit at all costs, ultimately leads to things like the Twitter debacle and the monopolies we have today. So not only is there a consensus that we need a different kind of technology industry, but I think it’s also clear that we need a different kind of investment to get different results.

So how is Mozilla Ventures different?

At the simplest level, it’s going to invest through the lens of Mozilla’s manifesto. So there are 14 principles, like privacy, human dignity, transparency, etc. And we first look at a business through that lens. Is there something in their vision and product that advances any of these principles? And is what they are doing harming any of them? We put the same mission filter that we put on ourselves, on these companies. And then we look, is there a good founder? Is there a good team? Do they understand the market? Is there a likelihood that they have a niche and a business? That’s really the only thing that’s different: applying the values ​​we hold to our products to the companies we might invest in. And then do the normal kind of review to find out if it’s a good investment.

In which companies have you already invested?

So there are three companies in which we have already invested. One is called Secure AI Labs, which is about doing biomedical research with patient data in a way that respects privacy. It is also aligned with patient interests as it works with non-profit patient advocacy groups. There is a great opportunity in AI and big data for pharmaceutical biomedical research for health breakthroughs, but a huge problem with this is [that it’s] some of the most sensitive information about us. So it’s about bridging a chasm between something that’s a really big promise of AI, and something that’s a huge privacy issue with AI, building a layer of trust in the middle.

The second is a company called Block Party, founded by Tracy Chou, who is well known as a spokesperson for online safety. She herself had to deal with online harassment. Block Party is primarily a tool to help people mitigate online harassment, at this stage on Twitter, but is also considering moving to other platforms. It’s kind of like a personal security tool for living in the internet world.

And then the third is a password management company called heylogin. And, you know, their innovation is really to make password management super easy. Everyone thinks we need better individual security, which means better passwords, two-factor authentication, all that stuff. But password managers are really annoying. So they’re leveraging encryption technology that already exists on smartphones, and then biometric, facial, or fingerprint recognition as a way to reduce friction on a password manager. Unlike Apple or Google keychains, it works on all platforms.

I want to zoom out here. Elon Musk bought Twitter. Facebook’s valuation has skyrocketed. Do you think this time right now is a unique time of opportunity for new ventures?

Yeah, I really think it’s a unique moment of opportunity. First, because what’s happening shows the absolute pressing need for alternatives, and those alternatives aren’t going to emerge unless there are founders and companies building them. And the founders aren’t going to build them unless there’s money aligned with their vision. We have been in an era of growth and insane profits in the technology industry. Right now I wonder if it will slow down for a while or for a long time. But even if it slows down, technology is part of our lives and will pay off. So a VC fund that’s not necessarily looking for huge crypto multiples, but just looking for good deals, good investments, and good returns, that’s, I think, the era that we’re maybe entering- be. There are still good investments, but not wacky ones. And do not profit at all costs.

The profit-at-all-cost mentality of chasing huge multiples on venture capital money has driven the growth of the surveillance economy, data hoarding, untrustworthy AI, all of those things. So I think we need to keep talking about trade and wealth creation, but we don’t need to be wacky, as I say.

Where does this take Mozilla as an organization? What is Mozilla’s vision for the future? And how does that fit in?

Mozilla’s vision for the future is that we can have an Internet that is joyful and enjoyable, but also respectful and private. And we’re working on new products beyond Firefox to help make that possible. But we also know that even if Mozilla succeeds in creating responsible technology products, even if we had 10, we need 100. We need 1,000. We actually need more than us to get there. So the play here is hopefully that we can help some of these founders and teams to be the next Firefox of the current era, but also encourage other investors to look at the opportunity and the need.

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Write to Billy Perrigo at [email protected]

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