The Business Model Trap
Traditional startup economics create a "sovereignty death spiral." Venture Capital (VC) demands 10x returns, which forces platforms to maximize growth at all costs. This inevitably leads to Enshittification: the degradation of user experience to extract value for investors.
Why Traditional Models Fail Sovereignty
- Advertising: Requires surveillance and real-name policies, destroying privacy and pseudonymity.
- Venture Capital: Requires rapid exit strategies (acquisition or IPO), often forcing the sale of user data or the platform itself.
- Debt Financing: Forces aggressive monetization to service interest payments (e.g., Twitter under Musk).
Alternative Models (The Foundry)
To build a "Foundry"—a business that respects sovereignty—Archeobytology identifies four viable models:
1. User-Pays (Subscriptions)
Pros: Aligns incentives (user is customer, not product). No need for surveillance.
Cons: Excludes those who can't pay. Hard to compete with free/ad-supported giants.
2. Open Core
Pros: Software is free/open source (sovereignty), managed hosting is paid (convenience).
Allows for "exit" via self-hosting.
Cons: Hard to defend against cloud giants who can host the free code cheaper.
3. Cooperative Ownership
Pros: Users/Workers own the platform. Governance is democratic. Cannot be sold to
VCs.
Cons: Hard to raise initial capital. Governance can be slow.
4. Non-Profit / Public Funding
Pros: Mission-driven (preservation over profit). Patient capital.
Cons: Dependent on grants/donors. Risk of "mission drift" to chase funding.
Field Notes
The Twitter/X Lesson: "Even 'ideological' ownership gets crushed by economic pressure. Debt + ad dependence = sovereignty impossible."
The Basecamp Counter-Example: By staying small, rejecting VC money, and charging a flat fee, Basecamp maintained sovereignty for 20+ years. Profitability at small scale is a superpower.