Startup Societies, Part One: Balaji Srinivasan and The Network State

By Keith Preston May 13, 2023

Balaji Srinivasan’s book The Network State was published, ironically, on July 4, 2022, and is available for free online at

Srinivasan is an entrepreneur and investor, co-founder of Counsyl, the former Chief Technology Officer (CTO) of Coinbase, and former general partner at the venture capital firm Andreessen Horowitz. The Network State builds on the concept of “startup societies” that has been promoted by figures like Joseph McKinney and Patri Friedman. The Startup Societies Foundation describes this concept as “any new community (physical or otherwise) that operates under a new, atypical governance model that attempts to address the challenges of modern society.”  Startup societies, also known as charter cities, special economic zones, or seasteading, are experimental communities or regions that aim to create innovative and often independent systems of governance, legal frameworks, and economic models. These societies typically emerge with the goal of fostering economic growth, technological innovation, and social progress by implementing alternative governance structures and regulatory frameworks.

Startup societies often seek to leverage the benefits of reduced regulations, flexible legal systems, and economic incentives to attract entrepreneurs, businesses, and investors. They aim to provide an environment that encourages experimentation, attracts talent, and promotes economic development. These societies can take various forms. Special Economic Zones (SEZs) are geographically delineated areas within a country that have special regulatory frameworks and economic policies designed to attract investment, stimulate trade, and encourage economic growth. They often offer tax incentives, streamlined bureaucracy, and relaxed labor laws to attract businesses and investors. Charter cities are new, purpose-built cities or regions that operate under a distinct legal and regulatory framework separate from the surrounding jurisdiction. They typically involve collaboration between a host country and external entities to establish a new city with its own governance structure, laws, and economic policies.

Seasteading involves creating autonomous floating communities or structures in international waters, beyond the jurisdiction of any specific country. These seasteads aim to experiment with alternative forms of governance and social organization while promoting economic and political innovation. Innovation hubs, also known as tech hubs or startup ecosystems, are geographic areas that foster innovation, entrepreneurship, and collaboration. These hubs provide physical spaces, resources, and support networks for startups, often with a focus on technology, research, and development. Well-known examples include Silicon Valley in California, USA, and Tech City (now known as Silicon Roundabout) in London, UK. Eco-villages are intentional communities that strive to live sustainably and in harmony with the environment. These communities often emphasize ecological principles, such as renewable energy, organic farming, and ecological building practices. Eco-villages aim to create self-sufficient, socially cohesive, and environmentally friendly living arrangements.

Micronations are self-declared independent entities that claim to be sovereign states, often on a small scale. These entities may be formed for various reasons, including cultural, ideological, or experimental purposes. Micronations usually lack international recognition but can serve as experimental spaces for testing alternative forms of governance and social organization. Co-living spaces are communal living arrangements where individuals or groups share living spaces, resources, and facilities. These spaces typically provide a combination of private living quarters and shared communal areas. Co-living spaces aim to foster a sense of community, collaboration, and shared experiences among residents. With the rise of blockchain technology and cryptocurrencies, some communities are forming around specific digital currencies or decentralized platforms. These communities often share common goals, such as advancing blockchain technology, promoting cryptocurrency adoption, or experimenting with decentralized governance models.

The underlying principle behind startup societies is to provide a platform for innovation, entrepreneurship, and social experimentation by implementing new rules and regulations that encourage economic development and individual freedom. These societies often attract individuals and businesses looking for opportunities to operate within a more flexible and conducive regulatory environment. It’s important to note that startup societies often face challenges, including legal complexities, social integration, and ensuring accountability and transparency. Additionally, the success and long-term sustainability of these societies depend on various factors, including local context, support from host countries, and the ability to attract talent and investment. It’s also worth noting that while startup societies and alternative communities can be innovative and offer unique opportunities, they also face challenges and considerations such as legal frameworks, social integration, and long-term sustainability.

Startup societies offer several potential advantages as new social models. Startup societies provide an environment for innovation and experimentation in governance, economic systems, and social structures. By adopting new rules and regulations, these societies can test and iterate on different approaches to address societal challenges, fostering creativity and adaptive problem-solving. Startup societies often implement business-friendly policies, such as tax incentives, streamlined regulations, and infrastructure development, to attract entrepreneurs, businesses, and investors. This can lead to economic growth, job creation, and increased investment in the region, potentially benefiting the local economy and community. Startup societies that offer a conducive environment for entrepreneurship and innovation can attract talented individuals and resources from around the world. This influx of talent can create dynamic and diverse communities, fostering knowledge sharing, collaboration, and the exchange of ideas. By operating outside traditional regulatory frameworks, startup societies have the potential to be more flexible and nimble in responding to changing needs and circumstances. They can experiment with alternative governance models, regulations, and policies, allowing for quicker adaptations to emerging challenges or opportunities.

Startup societies can be created with a specific purpose or focus in mind, allowing them to address unique challenges or opportunities. For example, they can be designed to promote sustainable practices, address social inequality, or focus on technological advancements in specific industries. This targeted approach can provide solutions to specific problems that might not be effectively addressed in existing systems. Startup societies often encourage citizen participation and engagement in decision-making processes, allowing individuals to have a more direct role in shaping their community’s governance and policies. This can foster a sense of ownership and empowerment among residents, leading to increased civic participation and community involvement. Startup societies can serve as learning laboratories, providing insights into what works and what doesn’t in terms of governance, economic models, and social structures. Lessons learned from these experiments can be shared and applied in broader contexts, potentially contributing to advancements in governance and societal development.

The relationship between startup societies and anarchism, as a political philosophy, can be complex and multifaceted. While there may be some overlapping principles or objectives, it’s important to note that startup societies and anarchism represent distinct concepts and approaches. Anarchism is a political philosophy that advocates for the absence of hierarchical authority and the rejection of centralized power structures, such as the state or government. Anarchists generally emphasize individual liberty, voluntary cooperation, and direct action as means to achieve a more egalitarian and autonomous society. On the other hand, startup societies typically focus on creating experimental communities or regions that aim to innovate within existing governance systems or establish new governance frameworks. They often involve collaboration with existing governments or the creation of special economic zones, charter cities, or other forms of controlled environments. While they may seek to explore alternative governance structures and regulations, startup societies generally operate within a framework of rules and legal frameworks.

That being said, some aspects of startup societies, such as their emphasis on voluntary association, decentralized decision-making, and experimentation with alternative models, may resonate with certain strands of anarchism. The desire to create self-governing communities, explore non-hierarchical structures, and promote individual autonomy can align with certain anarchistic principles. However, it’s important to recognize that the relationship between startup societies and anarchism is not universally embraced by all anarchists. Some anarchists argue that startup societies, especially those established within the framework of existing states or systems, can perpetuate power imbalances, reinforce hierarchical structures, or be co-opted by existing power structures. Ultimately, the relationship between startup societies and anarchism can vary depending on the specific principles and perspectives involved. While there may be shared elements in terms of challenging traditional governance models and promoting individual autonomy, the approaches and goals of startup societies and anarchism can diverge in significant ways.

However, startup societies provide an alternative model of change beyond both traditional revolutions and electoral politics. From an anarchist perspective, traditional forms of revolution can be problematic for several reasons. Traditional revolutions often aim to overthrow existing power structures but may unintentionally replicate them in the process. This can result in the establishment of new hierarchical systems or the concentration of power in the hands of a few leaders or a vanguard party, which goes against anarchist principles of decentralization and rejection of authority. Many traditional revolutions involve violence, armed struggle, and coercion to achieve their goals. Anarchism, as a philosophy, opposes the use of violence and coercion as it perpetuates oppressive dynamics and can lead to the subjugation of individuals or groups by a new ruling class. Anarchists prioritize non-hierarchical, consensual relationships and reject the idea that the ends justify violent means.

Traditional revolutions often focus on capturing state power, which can lead to the centralization of decision-making and the concentration of authority. Anarchism opposes centralized authority and promotes direct, participatory democracy, where decisions are made collectively by those affected by them. This contrasts with the top-down approach associated with traditional revolutionary movements. Traditional revolutions may seek to impose their vision of change on communities or societies, disregarding the self-determination and autonomy of individuals and local communities. Anarchism emphasizes voluntary association, self-governance, and the importance of grassroots initiatives in shaping societal structures. Traditional revolutions often focus on the immediate overthrow of the existing system without sufficient consideration for long-term strategies for sustainable and equitable alternatives. Anarchism advocates for long-term, prefigurative practices that embody the principles and values of the desired society in the present, rather than simply seeking a future revolution. Traditional revolutions can sometimes marginalize or suppress minority perspectives, dissenting voices, or alternative forms of organizing. Anarchism seeks to foster inclusive, participatory decision-making processes that prioritize the voices and agency of all individuals and communities.
From an anarchist perspective, electoral politics can be seen as problematic for several reasons:

Electoral politics often perpetuate hierarchical power structures by concentrating decision-making and decision-making authority in the hands of a few elected representatives. Anarchists argue that this system undermines the principle of decentralized, grassroots decision-making and creates an inherent power imbalance between the ruling class and the governed. Electoral systems typically limit participation and representation to those who are eligible to vote or seek elected office. This exclusionary nature disregards the voices and perspectives of marginalized communities, non-citizens, and those who choose not to engage in the electoral process. Anarchists advocate for more inclusive and participatory forms of decision-making that give agency to all individuals and communities. Anarchists critique electoral politics for often providing an illusion of choice within a narrow range of options. They argue that the political establishment, influenced by powerful interests, limits the scope of policy debates, leaving little room for radical or transformative change. Anarchism challenges this limited vision of politics and strives for more meaningful alternatives.

The professionalization of politics within electoral systems can lead to the emergence of a political class detached from the experiences and concerns of ordinary people. This can result in a disconnection between elected representatives and the communities they are supposed to serve. Anarchists promote horizontal forms of decision-making that prioritize the involvement of all individuals, rather than relying on a professional political elite. Electoral politics often focus on incremental reforms within the existing system rather than challenging the root causes of societal issues. Anarchists argue that this approach can perpetuate and legitimize oppressive structures rather than fundamentally transforming them. They advocate for more radical and transformative strategies to address systemic injustices. Engaging in electoral politics can sometimes lead to the co-optation of anarchist ideals and movements by the state apparatus. Anarchists are cautious of becoming entangled in electoral processes that may compromise their core principles, dilute their goals, or result in the assimilation of anarchist movements into existing power structures.

It’s important to note that while these critiques do not necessarily involve either/or dichotomies. Participation in traditional revolutions, reformist electoral politics, and startup societies may all have their place depending on the circumstances and contexts involved. Combining startup societies, network states, anarchist militias, and libertarian political parties as a multi-layered and multi-dimensional anarchist approach would involve different strategies operating on various levels. While there are no fixed blueprints for such a combination, there are some possible elements to consider. Startup societies and network States could serve as the foundation of the approach, focusing on creating decentralized, voluntary communities that embody anarchist principles. Startup societies and network states would provide spaces for experimentation with alternative forms of governance and social organization, emphasizing individual autonomy, direct participation, and decentralized decision-making.

Anarchist militias could be part of a self-defense or community defense strategy within the startup societies or network states. These militias would aim to protect communities from external threats, while operating on principles of voluntary association, non-hierarchical organization, and mutual aid. They would prioritize the security and autonomy of the communities they serve without replicating oppressive power structures. Libertarian political parties, advocating for limited government intervention and individual liberties, can participate in electoral politics as a means to promote policy changes that align with anarchist ideals. They can use the electoral platform to raise awareness, challenge state authority, and advocate for the dismantling of oppressive structures. However, it’s important to remain critical of the limitations and potential co-optation of electoral politics, as highlighted in the anarchist critiques mentioned earlier. Building interconnected networks among these different elements is essential for effective coordination and mutual support. This can involve shared resources, knowledge exchange, and collaboration to strengthen the overall anarchist movement. Interconnected networks would promote solidarity, decentralized decision-making, and collective action across different dimensions of the approach.

Regardless of the specific strategies employed, prefigurative practices would be central to this multi-layered approach. Prefigurative practices involve embodying the values and principles of the desired society in the present, within the communities and organizations that make up the approach. This ensures that the means align with the ends, cultivating the desired social relationships and structures within the movement itself. It’s crucial to acknowledge that combining these elements in practice would require careful consideration of the specific contexts, challenges, and ethical considerations involved. Balancing the different dimensions while maintaining a commitment to anarchist principles, such as decentralization, voluntary association, and non-hierarchical organization, would be an ongoing process of negotiation and adaptation.

Advocates of startup societies and network states as forms of anarchist strategy argue for several advantages over violent revolution and electoral parties. Startup societies and network states propose peaceful, non-violent approaches to creating alternative systems of governance. They focus on building voluntary associations and opting out of existing structures rather than engaging in armed conflict or revolutionary violence. This approach aims to minimize harm, promote social stability, and avoid the destructive consequences often associated with violent revolutions. Startup societies and network states offer a pragmatic and incremental path toward change. Rather than seeking immediate and drastic transformations, they focus on creating smaller-scale, self-governing communities or experimental zones. This allows for testing and refining new ideas and models gradually, without disrupting existing social orders entirely.

Startup societies and network states emphasize individual autonomy and voluntary association. They provide opportunities for individuals to choose the communities they align with based on shared values, interests, or goals. This voluntary participation ensures that individuals have a direct stake in the governance structures and can shape their own social environments. Startup societies and network states can be more flexible and adaptable compared to electoral parties, which often face challenges in implementing substantial changes within existing systems. By leveraging technological advancements and decentralized governance mechanisms, these models can respond more quickly to changing circumstances and adapt to the evolving needs and preferences of participants. Startup societies and network states encourage innovation, experimentation, and bottom-up solutions. They provide environments for testing alternative governance models, economic systems, and social structures. This focus on innovation allows for the exploration of new approaches to address societal challenges, foster creativity, and adapt to emerging circumstances. Startup societies and network states prioritize localized decision-making and community involvement. By focusing on smaller-scale communities or special zones, they enable individuals to have a more direct role in shaping their governance and policies, fostering a sense of ownership and empowerment among residents. The Startup Societies Foundation observes that such projects can achieve a multiplicity of forms.

Examples include the physical communities which “allow people to live and interact in ways not as prevalent or available in a wider community. These types of communities are usually (but not always) focused on a particular social issue or communal way of life. Examples of physical communities include new cities, ecovillages, and intentional communities, such as the Polestar Village in Colorado.” However, another example would be legal communities functioning as “jurisdictions that provide unique policies, laws, regulations, and rules that differ from that of its host community. The most common example of a legal community are Special Economic Zones (SEZs), which are sub-jurisdictions located within a host country, but have adopted policies designed to attract economic investment. Successful SEZs, such as Shenzhen, just outside of Hong Kong, were crucial to China’s economic success and continue to be important engines of the economy.” Yet another example would be digital communities operating as “virtual platforms, protocols, and communities that allow people to interact, share information, and exchange value outside of a centralized governance authority. Common examples include blockchains, Decentralized Autonomous Organizations (DAOs), and open-source development communities.

Balaji Srinivasan’s concept of the “network state” is a vision for a decentralized, technology-enabled form of governance. Srinivasan is a technology entrepreneur and former CTO of Coinbase, and he has proposed this concept as a potential alternative to traditional nation-states. The network state envisions a model where individuals voluntarily associate and form communities based on shared values, interests, or goals. These communities would be organized and governed through decentralized digital platforms, leveraging technologies such as blockchain and cryptocurrencies. According to Srinivasan, the network state would be a bottom-up system that allows individuals to opt into or exit communities freely, providing a greater degree of personal choice and sovereignty. It aims to create more responsive, efficient, and adaptable forms of governance that can better serve the diverse needs and preferences of individuals.

The network state emphasizes decentralized decision-making and governance structures. It envisions communities using digital platforms and consensus mechanisms to collectively determine rules, policies, and resource allocation. Participation in the network state would be voluntary, allowing individuals to choose the communities they align with based on shared values, interests, or goals. This voluntary association aims to create a more cohesive and engaged community. Digital technologies, particularly blockchain and cryptocurrencies, play a fundamental role in the network state concept. These technologies enable secure, transparent, and decentralized systems for governance, identity verification, and value exchange. The network state proposes the idea of “governance as a service,” where individuals and communities can access and customize governance tools and services according to their specific needs. This includes dispute resolution mechanisms, reputation systems, and other governance-related services. The concept of the network state is still at an exploratory stage, and there are ongoing debates and discussions around its feasibility, implications, and potential challenges. While it presents an alternative vision of governance that leverages technology and individual choice, its practical implementation and broader societal acceptance remain subjects of further exploration and refinement.

Developing these concepts further, Srinivasan regards startup societies as potential foundations for the eventual creation of “network states,” which he defines as “a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.”  Srinivasan explains, “A network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of civility, an integrated cryptocurrency, a consensual government limited by a social smart contract, an archipelago of crowdfunded physical territories, a virtual capital, and an on-chain census that proves a large enough population, income, and real-estate footprint to attain a measure of diplomatic recognition.” Srinivasan described seven steps that would be necessary to make network states into a reality.

  1. Found a startup society. This is simply an online community with aspirations of something greater. Anyone can found one, just like anyone can found a company or cryptocurrency.2 And the founder’s legitimacy comes from whether people opt to follow them.

  2. Organize it into a group capable of collective action. Given a sufficiently dedicated online community, the next step is to organize it into a network union. Unlike a social network, a network union has a purpose: it coordinates its members for their mutual benefit. And unlike a traditional union, a network union is not set up solely in opposition to a particular corporation, so it can take a variety of different collective actions.3 Unionization is a key step because it turns an otherwise ineffective online community into a group of people working together for a common cause.

  3. Build trust offline and a cryptoeconomy online. Begin holding in-person meetups in the physical world, of increasing scale and duration, while simultaneously building an internal economy using cryptocurrency.

  4. Crowdfund physical nodes. Once sufficient trust has been built and funds have been accumulated, start crowdfunding apartments, houses, and even towns to bring digital citizens into the physical world within real co-living communities.

  5. Digitally connect physical communities. Link these physical nodes together into a network archipelago, a set of digitally connected physical territories distributed around the world. Nodes of the network archipelago range from one-person apartments to in-person communities of arbitrary size. Physical access is granted by holding a web3 cryptopassport, and mixed reality is used to seamlessly link the online and offline worlds.

  6. Conduct an on-chain census. As the society scales, run a cryptographically auditable census to demonstrate the growing size of your population, income, and real-estate footprint. This is how a startup society proves traction in the face of skepticism.

  7. Gain diplomatic recognition. A startup society with sufficient scale should eventually be able to negotiate for diplomatic recognition from at least one pre-existing government, and from there gradually increased sovereignty, slowly becoming a true network state.

Srinivasan summarizes his perspective by pointing out, “The key idea is to populate the land from the cloud, and do so all over the earth. Unlike an ideologically disaligned and geographically centralized legacy state, which packs millions of disputants in one place, a network state is ideologically aligned but geographically decentralized. The people are spread around the world in clusters of varying size, but their hearts are in one place.”

What Srinivasan describes is essentially a modern version of the concept of “panarchism” or “panarchy” first developed in the 19th century by figures such as Paul Emile de Puydt, later embraced by classical anarchists such as Max Nettlau, and which contemporary figures such as the individualist-anarchist John Zube have continued to promote. Panarchism involves the idea of non-territorial, non-geographically contiguous governmental systems, a kind of polycentrism similar to what was sometimes found in various pre-modern societies. The image below is taken from Srinivasan’s book and indicates what the map of a modern, panarchic “network state” might look like.

Srinivasan argues that the startup societies that become federated into panarchic network states would be values communities, whatever the specific framework of values involvd. He provides the hypothetical examples of “Renewal Culture: the Cancel-Proof Society” (an alternative to “cancel culture”), “Keto Kosher: the Sugar-free Society” (including subgroupings like “Carnivory Communities” or “Paleo People”), “Digital Sabbath: the Partially Offline Society” (where the Internet is shutdown for one day a week), and “Your Body, Your Choice: the post-FDA Society” (committed to food and/or drug freedom).

Indeed, real or proposed startup societies like special economic zones, intentional communities, eco-villages, micronations, plans for seasteads as “floating countries,” private cities, utopian colonies, and other comparable entities provide a foundation for future “network states.” Likewise, the kinds of “values” communities Srinivasan describes already exist to some degree in places like pro-migrant “sanctuary cities,” pro-life/pro-choice “sanctuaries” on both sides of the abortion issue, pro-gun “Second Amendment sanctuaries,” the legal recognition of “polyamory” (plural marriage) in a couple of Massachusetts cities, the decriminalization of marijuana and other drugs in various states and localities, and the implementation of socialized medicine in Libby, Montana.

Such an approach to political theory and practice greatly resembles Voltarine de Cleyre’s anarchism without adjectives, Paul Emile de Puydt’s panarchism, and Max Nettlau‘s and Peter Marshall’s historical narrative of freedom vs. power that traces the roots of anarchist thought to Axial Age thinkers in various Greek, Hebrew, Chinese, Persian, and Indian traditions, along with the parallel legacy of many indigenous, traditional, and pre-modern societies, Christian and Islamic traditions from the medieval world, and many other philosophical, religious, ethical, and cultural traditions. The ideas of contemporary thinkers such as Balaji Srinivasan and Kevin Carson seem to be the most advanced contemporary expressions of these ideas. Just as Carson has speculated about the “next mode of production” in the economic realm, Srinivasan provided a comparable degree of speculation in the political realm, though their application might necessarily have to be tempered by the realist insights of the figures such as those surveyed by Neema Parvini.

See Part Two here.


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