Silicon Valley is Dead. (Succinct Version)
A more direct phrasing of my previous article on the death of the Silicon Valley-style innovation ecosystem.
My previous essay was a bit crude, to say the least. I had left it as unpolished as it was for experimental reasons. That said, the response I got on the content of that piece was phenomenal. Many who read it immediately understood the implications of my point despite the mental effort required to put all the pieces together. In this piece, I rephrase the content of my previous article and provide a more understandable version of it.
Silicon Valley as an innovation system and cultural export is dead, and it has been dead for a long while.
The glorious age of presentations, of flair, of bluster, is over.
The reason for its death is quite simple. None of its supposed innovation has resulted in the promised “disruption” of society promised to us by many tech entrepreneurs. This isn’t to diminish the effort required to scale their products.
Building anything is difficult.
But when we look at the startup scene that was meant to radically alter the world— and be profitable— we see that none of those goals were actually achieved.
Many may point to the technical innovations of Netflix, and so forth, but these haven’t disrupted society in any way as to show some productive value. Some may look to Google and Microsoft and term these as Silicon Valley-type cultural enterprises. I don’t see them as so for various reasons, and I’ll explain so later on.
The world promised to us by this ecosystem was one supposed to be filled with the improvement of living standards and society at large.
But when one looks closely, they realize that none of the supposed innovation has shown up in growth and wellbeing indicators.
There are many reasons for this and I’ll elaborate on them as precisely as I can:
Silicon Valley-style innovation isn’t tackling herculean projects:
This in itself can be attributed to several reasons. The most evident is the funding mechanism for most startups. Most early investors seek low-risk ventures that are going to scale. It doesn’t necessarily matter what those ventures are doing, or how they do so. Investors care far more about their ability to exit.
As such, innovators and entrepreneurs may seek to limit the extent of their projects to less herculean feats. The emphasis on software and computing ventures has to be the most obvious case.
It’s very easy to monopolize software when compared to say, investing in Biotech. The latter requires accepting Knightian risk: the sort of risk that is essentially unquantifiable. You can’t predict what is going to happen to a venture that pursues truly radical innovation. If you’re planning on tackling aging, for example, you depend heavily on scientific knowledge, which is:
Growing at an ever hastening pace.
Increasingly difficult to make practical. A lot of scientific research tackles topics with no applicable dimension to them. It would require a huge amount of resources to make them applicable.
This ecosystem was not built to tackle herculean projects in the first place:
The standard image of the founding of a tech company omits a lot of the information. A lot of that information has to do with the role of the state in defining the current technological behemoths of today.
When one thinks of Google, you think of the search engine created by two Stanford Ph.D. dropouts. You don’t think of the search algorithm itself, which was primarily a result of state funding. Google had and still has strong ties to the CIA since its inception. ColdFusion dives deep into this connection.
You can look at Amazon, which has become synonymous with online shopping, and far less as a CSP(A Cloud Service Provider) whose lists of clients include The Pentagon.
Despite the brilliance of Elon Musk, you can see the role of the state in choosing truly innovative companies in SpaceX and Tesla. And yet, the Silicon Valley ecosystem has convinced many naive enough to believe, that they can change the world without interacting with forces that are both controversial and political in nature.
Many of society’s greatest problems require access to knowledge and resources far beyond the scope of any SaaS startup, and yet the SV style innovation ecosystem has led many truly smart people into believing that they can make a strong dent in the affairs of the world without said resources and connections; that this “apoliticality” is a thing that will result in world-changing innovation.
This is a lie. And during the crisis that is this pandemic, many looked not just to tech giants, many of whom were actually tackling this disease. They looked to innovative startups to produce necessities. America got next to none of that.
But not everyone is so naive.
When Thiel noted the over-investment in bits and the lack thereof in atoms in Zero To One, he struck a strong note. But there’s more to the Thielen observation which isn’t necessarily that breathtaking an insight.
Thiel early-on advocated that companies turn themselves into monopolies. But he also noted that big monopolies are actively supported by the government. Google, Amazon, and SpaceX are all value providing companies.
They require more antitrust to ensure that they stay so, but they nevertheless value providing companies.
When one thinks of their founding, one still thinks of the myth of a naive apolitical individual who builds everything from scratch. Sprinkle some angel investors here and there, and you have a New York Times bestselling startup story.
This is quite evidently a myth.
It’s becoming far more obvious that startups need to inflate the capabilities of their innovations to the public. This is evident in Elizabeth Holmes and Theranos, and more recently Nikola.
I must emphasize, however, that when I mean Silicon Valley in this case, I’m not talking about the geographical location, but the cultural export that it has come to define. I’m talking about the startup story, the investors, the ever-increasing inflation of the technological prowess of a product to drive more investment, and most importantly the indefinite optimism; the latter being a term Thiel described as the belief in a technologically enhanced future without a plan to make it so.
Atomic Valley is what I’ve come to define as a set of companies and entities going against this predefined set of characteristics. These are startup ventures, entities, and personalities that are providing technology that matches— and quite honestly have to match— their marketed capabilities because they have a direct influence on society at large.
In this category, I’m putting Palantir, Anduril, SpaceX (despite its progress), Primer, Clearview, and even Neuralink. Actually, I’d be more inclined to look up In-Q-Tel’s entire portfolio to gain a view of the type of companies I’m talking about.
Their founders have a certain devious ideological bent. Thiel and Hoan Ton-That have been shown to have strong associations with the Dark Enlightenment philosophy. And their increasing power and influence in societal functioning put them in positions where they are capable of actually getting their ideological wishes.
This is dangerous.
But the prowess of their tech is barred none. And due to their attachment to mission-driven agencies ranging from the police down to the CIA and DoD, they are ensured stable funding so far as their technologies work.
This pattern is far more consistent with how groundbreaking innovation has always taken place.
I hope to elaborate more on Atomic Valley in an upcoming piece. But I hope this succinct version was far more to your liking.
To the entrepreneur reading this hoping to truly change the world, it has several implications. But the most evident is that you have to look for mission-oriented state organizations to tackle the truly radical projects you want to pursue.
It is not enough to think you can go down the old innovation pipeline. One has to think more broadly about the social impacts of said technology and embrace whatever socio-political risk this may come with.
To society at large, it means having to realize that:
People with reactionary ideological leanings are taking a lead in innovation.
This should not be taking place.
The resources in my two previous articles —listed below— are all that’s needed to know more about the technicalities of this piece, the latter being a bit cruder. :
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