What Happened To Optimism In America’s Tech Industry?
A spectre is haunting venture capital — the spectre of pessimism.
The Brookings Institution reported the results of a 2023 study showing “a marked decrease in the confidence Americans profess for technology and, specifically, tech companies — greater and more widespread than for any other type of institution.”
This disappointing decline is starkly in contrast to the faith Americans had in tech, specifically Silicon Valley and its clutch of startups, in the late aughts and early 2010s.
Back then, “Change the world” was a ubiquitous motto heralded by founders, operators, and VCs.
You don’t hear that as much anymore. Why?
Hype replaced faith.
Today, all we hear is how the next big thing is coming, whether self-driving cars, crypto, Web3, the Metaverse, NFTs, and now, artificial general intelligence (AGI).
The future is coming; it’s just around the corner. Any day now!
What happened to it? Why does tomorrow look so similar to today?
Peter Thiel captures this disappointment well with his well-known aphorism, “We wanted flying cars. Instead, we got 140 characters.”
Thiel is one of the few Silicon Valley VCs scrutinizing the status quo. His recent review of Douthat’s “The Decadent Society:
How We Became the Victims of Our Own Success” shows him still maintaining this pessimistic perspective. Thiel quips, “As for the world outside of MIT’s PR materials, it appears much the same as it was in 1969 — just with faster computers and uglier cars.”
On the other side of the spectrum, you have Marc Andreessen and his boundless optimism keeping hope in tech alive. His watershed essay, “It’s Time To Build” served as rallying cry for America’s tech industry to *choose* to build important things.
Yet, even in Andreessen’s stalwart faith in America’s information sector lies doubt.
I took sometime to re-read his blog post and I found this quote to be particularly telling:
Andreessen opines, “When the producers of HBO’s “Westworld” wanted to portray the American city of the future, they didn’t film in Seattle or Los Angeles or Austin — they went to Singapore. We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?”
Until recently, when people from around the globe think about America, they think about the future. America is second to none in its ability to market itself as the future in not just technological development but also its social, economic, and political evolution.
Fundamentally, our nation’s singular belief in the future and, more crucially, our sole ability to render it into reality is essential to the American character.
Wang Huning, one of seven members of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China (CPC), the central governing entity of the CPC, and the nation’s foremost intellectual, captured the particular essence of America as being the “spirit of futurism” in his book, America Against America, a reflection of his experiences in the U.S. as a visiting scholar in the late 1980s.
Huning remarks that this “spirit of futurism” is “a fundamental component of the general spirit of [American] society” and “a driving force [behind American success] that cannot be replaced by any other force” (translation via the Center for Strategic Translation).
His astute observations make Andreessen’s quote all the more alarming. The producers of Westworld chose Singapore over an American city as the principal filming location because the latter doesn’t look futuristic enough, reflecting the diminished vitality of our nation’s “spirit of futurism.”
Have we entered an era in which the West can only market itself as the future, while the East builds it?
I hope not. I still think America can offer the most compelling vision of the future and actually create it. But who will and under what conditions?
Are founders not ambitious enough? No — the ones I know dare greatly.
Are VCs too risk averse in selecting which startups to back? No — even though they are consensus driven, the companies they tend to back are impressive moonshots, such as OpenAIs quest to bring AGI into existence.
Is access to capital a restraint? No — VCs are still investing (albeit at a slower rate than during the pandemic) in plenty of startups.
Then what is the limiting factor at play?
Time.
Amid the current intense geopolitical situation against China, Russia, Iran, and Yemen, defense tech has captured the attention of both founders and VCs.
However, investing in capital-intensive sectors such as defense requires longer investment time horizons that deter, if not outright prohibit, most VCs from backing ambitious founders in this space.
For founders, the majority follow where the money is going, which is in any startup that claims it’s building some product or service with generative AI as its foundation. Can you blame them? Fundraising takes time, and time is money.
The unfortunate truth is that hegemony is not built upon computation but on supply chains. Logistics, not calculations, allow empires to endure.
Through the lens of Thiel’s sober pessimism, we can adequately scrutinize Andreesseen’s exuberant optimism.
The former lays out a more moderate path forward from our decadent moment:
“A renaissance will require motivational goals. To be motivational, a goal must be both ambitious and achievable.
“For technologists, that means pursuing goals that are difficult but possible: cures for cancer and Alzheimer’s; compact nuclear reactors and fusion power. For statesmen, that means deconstructing the corrupt institutions that have falsely claimed to pursue those goals on our behalf.
“It is a paradox of our time that the path to radical progress begins with moderation. Extreme optimism and fatalistic pessimism may seem to be stark opposites, but they both end in apathy.”
The moderate path Thiel mentions will be realized through America investing in defense technology at scale, with the government laying the foundation for the foundational technologies that the private sector can commercialize.
This is the way.
It’s almost ironic that Thiel’s and Andreessen’s essays were published within a month of each other, right at the beginning of the COVID-19 pandemic. Together, these perspectives reveal America's “paradox”: It dominates the world of “bits” at the expense of “atoms.”
The hype surrounding generative AI and the next “hot” technology trend won’t save us; it is only genuine faith in America to build physical, productive technologies that will revive the optimism that our nation’s tech industry needs for it to be at its best.
Soda
