Micronations are what most people think of when they hear about the term “startup society” – these often eccentric societies are the proclamation of a new sovereign state on a territory that may or may not be part of a sovereign state’s surface.
From kingdoms, to republics and confederacies, micronations pepper the landscape of many a nation in a sign of upheaval against the governance systems that we hold in disregard. However, many of these projects are little more than persons setting up websites and little else, expecting that to be enough for the creation of a government. One of the most famous examples of a startup society is known as Sealand, which we’d like to dive into here!
Standing on two concrete legs and standing 60 feet over the North Sea’s surface, Roughs Tower was built as an anti-aircraft installation during World War 2 by the UK government, expecting an invasion from continental Europe. It is a veteran of this very war, Patrick Roy Bates, who decided to visit this installation in the 1960s, and attempt to create his very own micronation on it.
Roy was a pirate radio broadcaster during the 1960s in the UK, when strict prohibitions on the genre of music that may be played were in effect, leading to ships armed with ham radios to set out to the edge of the UK’s territorial waters. The UK police had no jurisdiction there, but neither did other nations: the perfect place for black-market broadcasting.
He had an understanding of the law of the sea and he used it to its fullest – he set up shop in the (now abandoned) sea fort and proclaimed himself ruler of the Principality of Sealand. He even began minting coins, offering passports and postage stamps with the royal family’s likeness!
Important events in the micronation’s history include a failed invasion by German and Dutch mercenaries in 1978 (apparently, the creators of the fort from WW2 knew exactly what was coming) that was lead by lawyer Alexander Achenbach. Also worth mentioning is the fact that in 1991, Sealand stopped issuing passports, as these were used by Russian, Iranian, and Hong Kong criminals for the purposes of money laundering and identity theft.
The 90s were a time when Prince Roy’s health significantly worsened, and the title of Prince was given over to Roy’s son Michael, who is credited with defending his Principality from the failed attack by the Germans in 1978. However, without passports, the fledgling micronation had to seek a new source of revenue…
HavenCo started on the island of Anguilla, at the 1998 Financial Cryptography conference, when Sean Hastings met Ryan Lackey. Hastings was a programmer who had moved to Anguilla to work on online gambling projects. Lackey was an independent-minded MIT dropout.
They were worried about preserving personal freedom and concerned about expansive government power; they believed that the free flow of information on the Internet could solve both of those problems by enabling individuals to speak without fear of governmental oppression. To put their libertarian beliefs and technical skills into action, they were both looking to create a data haven.
The interplay between Sealand and HavenCo occurred when the startup data firm placed servers on Sealand’s surface, and Sealand officially became a Data haven – a jurisdiction where people can host their data which may be harmful, illegal, or unseemly in their host jurisdiction. Due to Sealand’s not being in territorial waters of any country, most data regulations were not applicable.
This resulted in a tidy income for HavenCo and Sealand, until several setbacks (including a fire aboard Sealand and the desertion of a co-founder of HavenCo) caused the end of teh HavenCo/Sealand partnership. Sealand now operates mostly online, with Roughs Tower usually sitting empty or housing fewer than 3 persons at a time.
Sealand had the problem of never having created a valid long-term economy (due to the hostile climate and lack of amenities on the tower). Also relevant is the fact that no known governance innovations came out of Sealand’s 50 years of existence, and that can’t possibly be the winning recipe for a startup society.
Although the international law aspect of Sealand may be the one that brought the most value to it, it’s hardly enough to attract patronage from citizens or investment from businesses. The fact that Sealand stood outside the UK’s territorial waters was a trifling matter, given the fact that it was square inside the UK’s exclusive economic zone, so that activities such as fishing were fully regulated.
When attempting to establish a new jurisdiction, it is instrumental to know that nobody is in charge of a part of your startup society that will later be instrumental to your economy and value delivery, which is something that Sealand neglected to address. Sealand’s sign of defiance toward the UK government was commendable, but ultimately fruitless as it remained well within the purview of UK regulators.
The irony of creating the Roughs Tower to face the Germans in World War 2 and then having German mercenaries attempt an attack some 35 years after the war’s end is hard to miss, but it is the fact that Sealand was built to withstand an amphibious and aerial attack (as well as the resourcefulness of the occupant Prince Michael) that lead to the successful driving away of the attack.
Startup societies must understand that their business is no picnic and that although there are systemic advantages that will guarantee violence does not continue for long – they still must defend themselves. Various methods have been described in our articles previously, but an innovative attacker will find a weakness in a target if there is one.
The problem that Sealand had during its stint as a data haven is that it tried to re-brand after re-branding: the distancing from the passport business in the 90s that Sealand undertook cemented its reputation amongst aficionados. However, the flip-flop that occurred in the 2000s (going back to haven status, this time for data) couldn’t have been a good sign for consumers.
With time, that part of the business collapsed and Sealand now primarily sells dukedoms and similar memorabilia on their website – a perfectly valid business, but hardly a startup society.
Sealand was built on Roughs Tower, a WW2-era sea fort in the English Channel.
It was attacked by mercenaries in 1978 – something that can happen to many startup societies.
It stopped issuing passports in the 1990s, which eliminated one of the key advantages it had.
A brief attempt at being a data haven was made, but was extinguished after less than 10 years.
Sealand certainly is a startup society, though it isn’t a terribly good one: learn from its mistakes before venturing to create your own startup society!