An internet company imagines itself as a book

Print-first strategy.
Print-first strategy.
Image: Quartz/Mia Mabanta
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“Betaworks is…”

“Betaworks is a holding company slash studio that’s building internet stuff in a different way, based in the Meatpacking District of New York.”

“Betaworks, I would say we’re a media company, but we operate functionally the way a studio operates, with these loosely coupled pods using shared resources.”

“Betaworks is an operating platform that brings together creators and builders across several domains and offers them access to a set of capabilities, data, and tools that lets them do what they do best.”

Every time John Borthwick describes the company he founded six years ago, it comes out a little different. Betaworks is… complex. It invests in some internet startups like a venture capital firm (Twitter, Tumblr, Airbnb), operates other wholly owned products like a studio (Digg, Dots, Giphy), and spins out more mature endeavors as standalone companies (Chartbeat, Bitly, SocialFlow). Only 10 people work for Betaworks itself. Everyone else, from investors to engineers, could be described as within its—thus far, very lucrative—financial orbit.

That complexity may explain why the company has just released a 137-page volume about itself that reads like a futurist’s chapbook. Formally, the book is Betaworks’s annual letter to shareholders. In previous years, Borthwick has penned the letters himself, opining on broad internet trends that form the basis of his investment strategy. They have achieved a certain cult status, if not quite on the level of Warren Buffett’s annual missives.

“This year, we wanted to create something that had more permanence and felt more like an object,” Borthwick said the other day after the first 500 copies arrived from a printing press in Winnipeg, Canada. The book is a collection of essays, interviews, and photographs. Some pieces are about Betaworks and its investments, while others remark on brewing tea and urban cycling—though those, too, “represent the full scope of what Betaworks is,” he insists.

There are no plans to release a digital version of the book, though you can get a sense of it on Tapestry (a Betaworks studio company) and read one of the essays on Medium (in which Betaworks is invested).

Some art in the book can be found on the walls at Betaworks.
Some art in the book can be found on the walls at Betaworks.
Image: James Cooper

Printing a paperback may seem like an odd choice for a company that invests in the internet, but Betaworks can’t resist a good metaphor. In the book, the firm is variously described as a network, platform, laboratory, and set of concentric circles. The most compelling metaphor is a holarchy, which Borthwick explains this way:

The word holon was first coined by Arthur Koestler to refer to something that is simultaneously a whole and a part. Koestler compounds holos (whole in Greek) and on (as in neutron). Stacking, modularization and bootstrapping are things that makers and engineers understand well—why not apply this to a company structure? The question that Koestler was trying to answer was: can complex systems evolve from simple systems more rapidly if there are stable intermediate forms?

The loft space that Betaworks inhabits in New York reflects that view of the company. Seating plans are constantly in flux, yet a step back seems to reveal order among the investments: a news aggregator working alongside a reading app and so forth. These startups stand on their own, but collectively, they also form a contemporary media conglomerate.

Borthwick is fond of the model practiced to great effect at film studios like Pixar: “small, very focused teams with a set of shared resources.” He has internalized the idea to such an extent that, in an interview, he referred at one point to Betaworks products as “productions,” the way Pixar or Miramax would.

The studio model, he argues, is well suited to the technology industry. Facebook’s acquisitions of Instagram and WhatsApp have arguably produced a holding company—or very large studio—of apps with a common thesis about the internet. “Think about General Electric,” Borthwick said, riffing on the concept. “The thesis was industrialization is going to change the world, and we’re going to be the leading holding company in the industrial world.”


The Betaworks thesis was articulated by Borthwick in his 2012 shareholder letter (pdf): “As people and devices live increasingly connected lives, opportunities exist to develop and build companies around the networks they create.” This time around, he eschews any predictions or broad themes, which will surely disappoint those who have read his letters in the past. But his thesis having been well established by now, Borthwick instead strikes a contemplative tone:

Each year when I start to write the Betaworks shareholder letter—this year, a book—I think about the previous year and what is coming next. I take a short look back and a long look forward, asking myself what are the technologies and the shifts that really matter and where should we be spending our time over the coming year. Last year I focused on the migration of data off the PC. What does the mobile shift mean? What services and products will arise from data-driven media and contextual computing? What are the hubs of data that will form around wearables and what software will be created? I also wrote a lot about storytelling and design. How the medium has developed to a point where we can tell stories in a manner that is specific to the Internet, i.e., not just play videos online but tell stories that are natively made for the medium. Now I’m thinking about those shifts and about 2014 and beyond and this year feels different—different because I think many of the shifts are now evident, and they have been written about and wrung dry on many a blog. 2014 is a year for execution. It’s time to go build all the things we have been thinking and dreaming about.

That execution in 2014 will include Alphaworks, for crowdfunding equity investments from small investors, which Betaworks launched this month with other venture capital firms. New financial regulations expected later this year will make it easier for American startups to raise money through such platforms.

Nick Chirls, the head of Alphaworks, explains in the book:

If private companies can market and sell securities to the public, then what exactly is the difference between a private and public company? The answer is that the line has been blurred, and with this change, we see a number of interesting opportunities to build and to invest in this new space…. We see equity crowdfunding as fundamentally additive to what we do, particularly around the concept of organized investment pools (syndication) and the ability for us to earn new sources of revenue. For our seed investment companies and founders, the excitement is even more apparent. This is not just a new potential source of capital for them, this is a foundational shift in how they raise funds. It is closer to something along the lines of collective ownership than venture or bank financing.

Other pieces in Betaworks 2014: A quick look back. A longer look forward.—its official title—explore the company’s process and structure, its approach to storytelling, and the relationship between humans and algorithms. You won’t find much in the way of financial data. In fact, you won’t find anything at all if you’re not among those receiving a copy. It’s a curious approach, to be sure.

But if an internet company were a book, it would be this.