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My Adventures in Web1 and Web2: The Rise of Surveillance Capitalism

I WAS EARLY, but I wasn’t the first. Social media was born in the late 1990s. A handful of Web entrepreneurs were tinkering, independent of each other. It was a classic hundredth-monkey effect.

In 1997, my family gathered from many points for a vacation in Stanley, Idaho—population, 110. It’s a beautiful place. The landscape near the Sawtooth Mountains is idyllic both for being together and for solitary enlightenment. Perfect for expansive thinking.

Hiking around pristine Redfish Lake, the conversation was completely unintended. My 10-year-old nephew, Justin, and I fell far behind our family members. We were chattering about using the still-newfangled Web to keep us all together. Over 25 years ago, email was already antiquated and notable for its visceral void. Web-based communication tech was in its infancy. It started like this: “Uncle Markie, wouldn’t it be great if we could …”

Ten minutes into our conversation, I was overtaken by a tingling sensation, an awareness. The words jumped off my tongue. “Justin, I am going to start a company to do this, and I’m going to give you 10% of whatever I own.”

Game on.

At dinner that night with our extended family, we imagineered, taking notes on a couple of napkins about what we wanted to share online: photo albums, chats, discussions, address books, recipes, a family newspaper, a calendar, wish lists, birthday reminders, and more.

This was Web1, as it is now known. There was plenty of capital available. The internet horse was out of the barn and everyone wanted to hitch a ride—designers, engineers, marketers, executives, you name it. Web1 had its own singularity—everyone was focused on serving the end users. No one was yet enamored with their data, or algorithmic manipulation of the ads they were served, or with their newsfeeds and purchases. Eyeballs were the valued commodity; revenue models and monetization would follow later. Web1 was labeled the “New Economy.”

It was classic entrepreneurialism. In those days, there was no LinkedIn or Indeed—I placed ads in the Albuquerque Journal’s help wanted section and interviewed candidates at my kitchen table. My 1,445-square-foot home became company headquarters. Today, software engineers are everywhere in the world. At that time, there were hardly any engineers or graphic designers experienced with Web applications. Salt that with the way people accessed the Web, via dial-up. Efficiency in programming was paramount, as most sites loaded slower than pouring molasses, and many not at all. The first graphic designer I hired was well established and highly regarded. His designs were beautiful. But his Web pages wouldn’t load.

In a stroke of luck, the State of New Mexico gave my just-birthed company a $300,000 grant to remain in the state. At the hearing to consider my grant request, they first denied it—then the chair, Mr. Garcia, pulled the committee into a back room. Moments later, they reemerged.

“Mr. Weinstein,” Mr. Garcia began, “several years ago, we rejected Bill Gates’s application and he left the state …”

Gates’s dad, I later learned, beckoned him to come home to Seattle for parental funding.

Mr. Garcia continued, “After reconsideration, we are approving your request for a $300,000 In-Plant Training Grant.”

Wow! Thank you, Mr. Gates. The state also provided and subsidized sweet offices in Albuquerque’s newly built Science and Technology Park and added a custom-built server room. We were off to the races.

We grew to about 70 team members in all. Along the way, we partnered with Sun Microsystems and Oracle to build the largest commercial installation of servers in New Mexico. Every weekend we ran a full-page print ad in USA Today, promoting this newfangled social Web experience. There were billboards touting our sites. In 1998, traditional marketing techniques were the best way to reach and attract users. Our flagships, Superfamily.com and SuperFriends.com, made PC Magazine’s “Top 100 Sites” list three years in a row.1 It was one of the most prestigious accolades for websites at the time. We were participating in a new paradigm, “Community Portals” (later to be called “Social Networks”).

Web1’s colossal fall from favor with investors in 2001 hailed its curtain call. Virtually overnight, what had been an easily accessible pot of investor capital, limited only by how much dilution was palatable, dried up. Understandably, Web1’s “New Economy,” based on a site’s number of users and their anticipated future monetization rather than the tried-and-true measurement of actual revenue, profit, and loss, fell from grace. Investors panicked before seeing their companies achieve financial success. The stampede was brutal. The sudden dearth of funding caused massive failures, though everyone had bought into the paradigm. A historical event, the dot-com bubble, burst, and I was caught in the middle.

Egg on my face, guilty as charged—as I had bought into the eyeballs-first mantra and believed it was the only way to encourage hesitant newbies to step into the Web. Paradoxically, the phoenix rising—Web2 —professed the same mantra, but with a new twist: Surveillance Capitalism. Personal data analytics and targeted marketing would resolve the revenue conundrum, manipulate those eyeballs, and make profits pop like never before.

Looking back, it’s both curious and foretelling. There was a purity of purpose in Web1, the dedicated focus on serving the customer, in this case the “user,” the leveraging of rapidly iterating communication technologies. What I and a handful of other entrepreneurs were creating in Web1 is now known as “personal social networking.” Today, over 5 billion people participate in this paradigm.2 In Web2, it would become one of the most successful business models in history.

Web2: The Rise of Surveillance Capitalism

“Privacy No Longer a Social Norm, Says Facebook Founder.”3 The headline in The Guardian blared on January 10, 2010.

My mouth opened, jaw-dropped, as I witnessed Mark Zuckerberg make this bold declaration at the Crunchie Awards in San Francisco, a ceremony then widely covered in the press. Social media was invented to serve people, not spy on them. His thought process and arrogance bewildered me. His wallet was more important than the fundamental human right to privacy?

Today and for most of the 21st century, we’ve been participating in the greatest socioeconomic experiment in human history. It’s called Surveillance Capitalism. This is the elephant in every room of our lives. Surveillance Capitalism is the modern-day business model in which everything we do—morning, day, and night—is tracked, analyzed, and monetized.

Our personal information is packaged into datasets shared and sold in a hidden ecosystem of massive data companies. These data brokers generate hundreds of billions of dollars per year by collecting our data from Web and social media companies, credit card networks, retailers, and other entities. They then provide access or sell it to whomever desires it.4 Our data is then used to target and manipulate us—by advertisers, marketers, social media companies, politicians, governments, and every other person or entity that aims their dart directly at us. Our independent thoughts, critical thinking, and privacy are becoming relics of the past.

In the past two decades, the rise of Big Tech has placed human beings under nearly constant surveillance. Our phones, computers, Alexa, the Web, and everything we do online, everywhere we go, is all being tracked. Our relationships, our purchases, our finances, our health issues, our politics, our religious beliefs, our diets—you name it. It’s estimated that, by the time we reach the age of 13, about 72 million data points on each of us have been collected.5 This number is stunning and hard to grasp, but true. This data is monetized by commercial interests, stolen by hackers, and shared with governments.

How the heck did we get here? Courtesy of the premise and promise of Web2. In the ashes of Web1, companies like Google and Facebook arose and discovered they could reap more profits by spying on us under the guise of serving us. This solved the conundrum of Web1, and suddenly revenue flowed handsomely from their new targeting business models. Other companies quickly followed suit, spreading the Surveillance Capitalism business model across the world.

Today, these entities know more about us than our own mothers do. They know everywhere we go, every friend and family member, every search, every website, every health issue, every financial transaction, every fantasy and fear that we research. All these private moments are broadcast directly into the global data ecosystem. As Yael Eisenstat, former CIA analyst, diplomat, and Facebook employee, said in 2019, “Facebook knows you better than the CIA ever will. Facebook knows more about you than you know about yourself.”6

So, somebody out there is collecting all your private information. Is that such a bad thing? Yes, it is. If you want to see where Surveillance Capitalism is headed, let’s take a look at what is going on right now in China.

China’s “social credit...