Technology Venture Capital

Recent Read: “Not even wrong – ways to dismiss technology”

In case you missed it, Andreessen Horowitz’s Bendict Evans has an interesting take on what differentiates tech with game-changing potential from mere novelties. His post is worth a careful read.

Some excerpts:


It is unquestionably true that many of the most important technology advances looked like toys at first – the web, mobile phones, PCs, aircraft, cars and even hot and cold running water at one stage looked like faddish toys for the rich or the young. Even video games, which literally are toys, are also largely responsible for the GPUs that now power the take-off of machine learning. But it’s also unquestionably true that there were always lots of things that looked like toys and never did become anything more. So how do we tell? Is it that ‘toys’ occasionally turn into something else through some unpredictable chance? Do we throw up our hands and shrug? William Goldman famously said of Hollywood “Nobody knows anything”, but that feels like an abdication of reason and judgement. We should try to do better.

Mobile phones in the 1940s may have been toys, but there was at least some sense that at some point in several decades’ time it might be possible to make something useful with the same basic principles – radio, plus a microphone and speaker, plus a phone number. That isn’t always true. In 1960, rocket packs looked just as limited and impractical as the Wright Flyer in 1903. Indeed, just like the Flyer, they could carry one person a few hundred meters and nothing more. The crucial difference was that the Wright Flyer was a breakthough of principle that could then be expanded upon and the rocket pack was not: it could not be expanded. It flew for only 21 seconds because that was how much fuel you could carry, and there was no roadmap of iteration and improvement to change that (well, not much: the subsequent 60 years have improved this to 30 seconds). To get more range you need more fuel, but then you weigh more and so need more fuel again, and there is no amount of iteration that can solve that – you need some new and discontinuous technology. Rocket packs look more like hot air balloons in 1783 than they do the Wright Flyer – they’re not the first step on a journey.

In the enterprise, new technology tends to solve existing problems in new ways (or of course solve the new problems created by the new tech). In consumer products, it’s more common to seem to be proposing a change in human behaviour, and so in human desires. You may in some underlying way ‘really’ be replacing an existing behavior in a different way, as Word replaced typewriters and email replaced Word, but that line of reasoning can easily lead you to unfalsifiable assertions when you move up Maslow’s Hierarchy.  ‘Millennials care less about driving because smartphones give them their freedom now’ certainly sounds good, but I have no idea how you could tell if it’s true, far less predict it. This is not a falsifiable analysis. All that you can hold in your hands is that you’re proposing a new human desire, and that’s a subjective view, not the objective analysis one could do of the roadmap for flight in 1903 – worse, it requires a change in your subjective view. You don’t think that you want to listen to music walking down the street, and you don’t think that you want to be able to call anyone from anywhere you might be. The argument for progress here is effectively false consciousness – ‘you think you don’t want this, but you are wrong, and one day you will realise the truth of your own feelings’. But you can’t ever know this – again, you can’t falsify it.

To give one more example, in 2000, it seemed as though the only question any telecoms investor ever asked was ‘what’s the killer app for 3G?’. It turned out that the killer app for having the internet in your pocket was having the internet in your pocket: a general technology breakthrough matters not because of a particular application that it enables but because of all and any of them. I had little idea of the specific ways you’d use your phone to access all the world’s information and share stuff with your friends, but it was a safe bet you’d want to do it somehow.

So, the use cases are subjective, but the capability is objective, and it’s the capability that matters. Really, the new technologies that matter give us superpowers. Is that what we’ve made this time? Electricity is a superpower, and so are cars, and flight, and mobile. I can rub my watch and tell the djinn that lives inside to summon a car, and there’ll be one waiting at the door. We can hear, or see, or travel, in ways we could not do before. Where we go and what we listen to are secondary questions. You can’t necessarily predict the applications, but you can predict that people will like having a new superpower. What you do with your superpower is up to you.

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