Just a reminder that 0% of fediverse admins took on debt to support their communities.

Stefan Bohacek

https://stefanbohacek.online/@stefan/112399842395585906

#fediverse #SocialMedia #sustainability #bluesky #VentureCapital

Stefan Bohacek

I'm going to assume that folks who chose "selling user data" were joking, but do check on your server admins, just in case.

Stefan Bohacek

Ah, for context:

"Decentralized social app Bluesky announced on Thursday that it has raised a $15 million Series A round, following its $8 million seed raise last year."

$23 million in debt. Wow.

Bluesky raises $15M Series A, plans to launch subscriptions | TechCrunch

Decentralized social app Bluesky announced on Thursday that it has raised a $15 million Series A round, following its $8 million seed raise last year.

TechCrunch (techcrunch.com)

Laurens Hof

@stefan got me curious to check again, but seems like misskey.io did not take on debt either when they incorporated last year

not sure if they have in the meantime, tracking news on misskey is super hard

https://asia.nikkei.com/Business/Technology/Japan-s-Twitter-like-Misskey-to-form-company-in-bid-for-survival

Anil Dash

@stefan just a quibble, but venture funding is structurally a different financial vehicle than debt. they can sometimes function similarly, but it's incorrect at a technical level to equate them. (One key reason that it matters: it's generally illegal in most jurisdictions to have a debt that requires a return above ~1.3x, which would be abject failure for VC.)

Michael Stanclift

@stefan I’m not sure it’s 0% but some people are burning cash to keep the dream alive.

Aslak Raanes

@anildash @stefan Given that VC funding wants higher returns than what's possible with debt, doesn't that make it worse?

[email protected]

VC funding isn’t debt.

jon ⚝

@vmstan @stefan Confirmed.

Emelia 👸🏻

@yala @vmstan @stefan yeah, which is why I replied with how much of my savings I'd spent to be able to do the work I'm doing. Just gotta hope that one day it'll be valuable to people in an economic way.

NIGHTEͶ

@anildash @stefan interesting!

So would funding from VC be considered “worse”/more constraining than debts, since they expect a way higher return?

Stefan Bohacek

@anildash Fair enough. I'm definitely simplifying here to make a point (which I think still stands), but I appreciate the explanation!

Stefan Bohacek

@vmstan Yes, mainly just commenting on the results of the poll, which may very well be out of date at this point, to be fair.

But yes, sustainability is a big challenge, for sure.

We've already seen the cycle of taking VC money, enshittifying, and in many cases folding. I think we're ready to try something different.

Will it work? I hope so!

Stefan Bohacek

@Pieisawesome Yes, true, fair enough.

Still, looking from afar, as a non-entrepreneur, seeing startups raising funds only to enshittify and/or fold as they attempt to pay them back, with interests, I don't know if the difference is meaningful enough.

Anil Dash

@NIGHTEN @stefan it depends what you’re designing for, but yes in terms of the pressure on an org to deliver, it’s much higher with VC

Anil Dash

@aslakr @stefan depends what you’re aiming for, but in terms of economic pressure, yes.

[email protected]

You also have to look at who they raised from.

There are specific VC firms that focus on sustainable, long term growth over chasing massive profits for short term gains.

I haven’t checked who blue sky raised from, but not every VC is the same

Stefan Bohacek

@Pieisawesome Well, --

"Bluesky also raised $15 million in a funding round led by the crypto investor Blockchain Capital, but says it does not plan to use blockchains, crypotcurrency, or “hyperfinancialize the social experience” with tokens, crypto trading, or NFTs."

https://www.theverge.com/2024/10/24/24278666/bluesky-working-on-premium-subscription

We'll see!