Mozilla Is Rethinking Venture Capital

(To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)

Right now seems like a moment of unique opportunity for many internet entrepreneurs. Hundreds of thousands—maybe millions—of Twitter users are searching for a platform to make their new online home, amid Elon Musk’s scorched-earth upheaval of the platform. But, for many of Twitter’s traditional users, nothing seems to fit the bill. Mastodon is too complicated. Facebook is for boomers. LinkedIn is too professional.

One of the many reasons a viable alternative isn’t ready to swoop in is that the traditional venture capital (VC) firms that have funded Silicon Valley’s biggest hits often prioritize the prospect of return on investment over sound ethical decision-making. If a Twitter-alternative were to facilitate healthy conversation, eschew targeted advertising, and make it more difficult for polarizing content to go viral, the company behind it would simply be less profitable. As a result, founders looking to raise investments for similar projects often fall at the first hurdle.

That, at least, is the opinion of Mozilla, a hybrid organization that includes a non-profit foundation and the corporation behind privacy-focused web browser Firefox. On Nov. 2, Mozilla set out to change that state of affairs by launching its own venture capital arm, Mozilla Ventures, which will inject much-needed investments into companies that “can ultimately push the internet in a better direction,” according to a statement accompanying the launch.

With an initial funding round of $35 million, Mozilla Ventures isn’t as flush as the VC giants of Silicon Valley. But Mark Surman, the Mozilla Foundation’s president and executive director, is optimistic that the money will have a big impact on projects attempting to make the internet safer. “Venture capital as it’s currently formed, that pursuit of profit at all costs, leads eventually to things like the Twitter debacle and the monopolies that we have today,” Surman told TIME in an interview on Oct. 27, the day Elon Musk completed his acquisition of Twitter. “So it’s not only that there’s a consensus that we need a different kind of tech industry, I think it’s also clear we need a different kind of investing to get different outcomes.”

Mozilla Ventures has already announced its first three investments, with more to be announced next year. One of the beneficiaries is Block Party, an app that helps users protect themselves from harassment on social media. Its founder, Tracy Chou, was named a TIME woman of the year in 2022. “We’re gonna use [the money] to hire and execute faster on the things we want to do,” Chou told TIME.

This interview has been condensed and edited for clarity.

Why are you launching Mozilla Ventures?

We see a lot of startups who want to tackle things like privacy, trustworthy AI, and alternatives to Twitter. The founders are there. We’ve met a lot of them in the last couple of years. But they really struggle to find capital that lines up with their values and that will support them in being ethical tech companies.

It feels like there’s a consensus that we need to push the tech industry in a different direction. The question now is, how is that going to happen? And it’s clear that some of that could happen through regulation. But it also has to happen through people building different products that still delight people and that people want to use, but also products that respect people and protect people.

There’s very few people who aren’t going to say, ‘I want the internet to work differently’ right now. But venture capital as it’s currently formed, that pursuit of profit at all costs, leads eventually to things like the Twitter debacle and the monopolies that we have today. So it’s not only that there’s a consensus that we need a different kind of tech industry, I think it’s also clear we need a different kind of investing to get different outcomes.

So how is Mozilla Ventures different?

At the simplest level, it is going to be investing through the lens of the Mozilla manifesto. So there’s 14 principles, like privacy, human dignity, transparency, and so on. And we look at a company through that lens first. Is there something in their vision and their product that advances one of those principles? And is what they’re doing not harming any of them? We’re putting the same mission filter we put on ourselves, on these companies. And then we look at, is there a good founder? Is there a good team? Do they understand the market? Is there a likelihood that they’ve got a niche and a business? That’s really the only thing that’s different: applying the values we apply to our products to companies we might invest in. And then, doing the normal kind of review of whether it’s a good investment.

What companies have you already invested in?

So there’s three companies we’ve already invested in. One is called Secure AI Labs, which is about doing biomedical research with patient data in a way that is hyper privacy friendly. It’s also aligned with the interests of patients because it works with nonprofit patient advocacy groups. There’s a big opportunity in AI and big data for pharmaceutical biomedical research for health breakthroughs, but a huge problem with this is [that it’s] some of the most sensitive information about us. So it’s about crossing a chasm between something that’s a real big promise of AI, and something that’s a huge privacy problem with AI, by building a trusted layer in the middle.

The second is a company called Block Party, founded by Tracy Chou, who’s well known as a spokesperson on online safety. She has had to confront online harassment herself. Block party is basically a tool to help people mitigate online harassment, at this point on Twitter, but looking at moving to other platforms as well. It’s kind of like a personal safety tool for living in the internet world.

And then the third is a password management company called heylogin. And, you know, their innovation is really to make password management hyper simple. Everybody thinks we need better individual security and that means better passwords, two factor authentication—all that stuff. But password managers are really a pain in the butt. And so they leverage the encryption technology that already exists on smartphones, and then the biometric, facial or thumbprint recognition as a way to lower the friction on a password manager. Unlike Apple or Google keychains, it works across platforms.

I want to zoom out here. Elon Musk has bought Twitter. Facebook’s valuation has gone through the floor. Do you think that this moment right now is a unique moment of opportunity for new ventures?

Yeah, I definitely think this is a unique moment of opportunity. One, because what’s going down shows the absolute pressing need for alternatives, and those alternatives are not going to emerge unless there’s founders and companies who build them. And the founders are not going to build them unless there’s money aligned with their vision. We’ve been in an era of insane growth and profits in the tech industry. In the current moment, I question whether that’s going to slow down for a moment or for a long time. But even if it slows down, tech is part of our lives and is going to be profitable. So a venture fund that isn’t necessarily looking for the huge crypto multiples, but is just looking for good business and good investment and good returns, that, I think, is the era that we may be entering. There’s still good investments, but not wacko. And not profit at all costs.

The profit-at-all-costs mentality of looking for huge multiples on venture money has driven the growth of the surveillance economy, the hoarding of data, untrustworthy AI, all those things. So I think we need to still be about commerce and creating wealth, but we don’t need to be wacko, as I say.

Where does this take Mozilla as an organization? What’s Mozilla’s vision for the future? And how does this fit into it?

Mozilla’s vision for the future is that we can have an internet that is joyful and delightful, but also respectful and private. And we’re working on new products beyond Firefox, to help make that possible. But we also know that even if Mozilla is wildly successful at creating responsible tech products—even if we had 10 of them, we need 100. We need 1,000. We actually need more than us to be successful at this. So the play here is hopefully we can help some of those founders and teams be the next Firefox in the current era, but also encourage other investors to look at the opportunity and the need.

Mozilla Is Rethinking Venture Capital

Related Posts