Jeremy Liew is the man these days, his 500k investment in Snapchat will likely go down as one of the best venture deal ever. Reflecting on this success, he observed how innovation, at least when it comes to consumer tech, is being democratised. Silicon Valley's monopoly on technology is weakening and another powerful force of innovation is emerging as a source of competitive advantage: insight into popular culture.
In his definition, this refers to people's interests and preferences, their emotions and habits. At a higher level, it points to a rebalancing in the relationship between theory and empirical observation, between intellectual elaborations and common sense. It reminded me of a comment Peter Thiel made in a recent interview: "I think often the smarter people are more prone to trendy, fashionable thinking because they can pick up on things, they can pick up on cues more easily, and so they’re even more trapped by it than people of average ability."
It is something I feel on myself very often. Faced with a situation I want to understand, I sense the weigh of established knowledge clouding my thoughts. In these moments, ignorance can be bliss. Simply ignoring what smarter people said about a certain topic allows us to get to a really personal understanding and we are often surprised about the simplicity of our conclusions, to the point we start doubting them again.
The right heuristic here is that simplicity is the normal condition of right conclusions. It is a topic I will write more about, soon.
I am reading a biography of the impressionist painter Renoir, written by his son. It is a beautiful painting of a world in transition: from the post-napoleonic restoration until the carnage of WWI, passing through 1848, the Commune, electrification, railways and industrial production. Possibly the biggest transformation ever experienced by man, and comparable to the one we are living today.
It is also a story of innovation and innovators. Of a group of painters that defy all conventions to follow their artistic instinct and impose an entire new approach to visual arts. They weren't received well. A reporter for Le Figaro wrote about the first exhibition of their work:
"The innocent pedestrian, attracted by the flags put up outside, goes in to have a look. But what a crule spectable meets his frightened eyes! Five or six lunatics -one of them a woman- make up a group of poor wretches who have succumbed to the madness of ambition [...] Some people are content to laugh at such things. But it makes me sad at heart."
and here is another one, from La Presse:
"...the practitioner falls into a senseless confusion, completely mad, grotesque and, fortunately, without precedent i the annals of art. For it is nothing less than the negation of the most elementary rules of drawing and painting [...] one is inclined to wonder if there has not been a deliberate attempt to mystify the public."
All other reviews follow the same pattern: shock, disgust, and laughter.
It is the inevitable faith of all real innovators to be laughed at. To be dismissed as jokers, lunatics, people that have lost touch with reality. It reminded me about the famous "what's this internet thing" video. . There was also another video, which I cannot find now, where Steve Jobs is introduced by the host dismissively as a "computer geek".
Today, founders and investors of technology startups are seldom laughed at. On the contrary, they are celebrated and revered as the saviours of our time. They have gone from villain to heroes, even before proving much about what they are doing. The tables are turned and nobody wants to be the fool on youtube who laughed about the internet.
But there is something missing here. Who are the true innovators, who is being laughed at today?
I keep asking myself this question, and I don't have a definite answer.
Beside their increasing popularity, bitcoin, ethereum and other cryptocurrencies (or the solutions they enable) might fit in to this picture. People skipping the conventional fund raising circuit and issuing their own tokens instead. A handful of visionaries that dare to imagine a future free from centralised sources of power, money and data.
There are also the "common" men and women working in larger corporations or in public services. The "incumbent" are laughed at all the time.
I never feel at ease when people laugh about something or someone too much.
When it comes to complicated problems - the ones that don’t bend themselves to unequivocal answers - the first solution coming to our mind is often a poor one.
Another sign that we are on the wrong path is when a lot of other people, of similar tastes and inclinations, agree with us. We can go as far as extrapolating a rule: any widely shared view on a complicated matter is likely to be wrong. There is a simple explanation for this: none of us has time to think deeply about all possible topics. We are wired to take shortcuts and settle on a position that appears coherent with pre-defined world views. Coherent, simple, and wrong.
A bit of trickery can do magic when we fall prey to this form of “common talk”. For example, we can take up the opposite position in a debate and let our (dialectical) opponent do the work for us. If we are lucky, we might learn something we don’t know and walk away with renewed conviction.
More often, we will only hear back the same argument we set off to challenge. The advantage is that we have now made it “their” position. We have externalised it. We have gained perspective. This allows us to spot logical fallacies, incongruences and false assumptions.
It’s a painfully refreshing experience. Armed with a better understanding of our biases we can now embark in our quest for clarity.
When I was young I had my parents build me a laboratory in our garage. Every week I would go to an electronic repair store in my street and beg for some broken radio, tv or small home appliance I could take home and dismantle. So many times I asked if I could work in that store. It was my dream, but it was too dangerous. I was 9, and I was a geek.
At school I was good in math, I would get bored and got myself kicked out of classes quite often. In high school I aced physics and thought about studying astronomy once I would get to college.
I ended up studying Political Science, majoring in History of India and writing my final dissertation on the relationship between a small tribe inhabiting the north-western part of the country and the traditional rulers.
Willian Gibson said once that all cultural change is essentially technology driven. We shape our tools and our tools shape us. Over the last 30 odd years, generously the time I have been alive, we have built the tools of our information age. First the computer, then the web. And boy did they shape us.
During this time, being in technology has been the right choice. “On the right side of history”, as it is often said. It has been one of those epochs where finding yourself in the right place, and at the right time, could really make a difference. Even at smaller scale, you can roughly split the people you know by whether they are part of the new world or the old one.
The ability to manipulate technology is a superpower. A secret key to a white canvas begging to be painted. It hasn’t been about permission, or title, but about skills, courage and, more than we actually realise, naivety.
Technology has now penetrated every aspect of our life. Like water finding its way through the cracks of a stone wall, a few drops at first, soon a full stream. What we considered immutable is now all up in the air.
Talking about a tech world and a real world today make much less sense. But so is the opposite. Vekatesh Rao said it right a couple of days ago: “It doesn’t matter if you are not interested in politics. Politics is interested in you.”
Our white canvas is now society. Technology is the paint but not the painting. How we will work, how we will create and redistribute value, how we will organise ourselves. These are all open questions that beg to be answered in a new way.
Reforming society will be the new hacking.
I think a lot about my choices now that I work in technology. Would it have been better to follow my scientific inclination? When did I stop being a geek?
The truth is I never did. I remember when I decided to pursue a different path. Curiosity drew me to people, countries, decisions and errors more that it drew me towards machines and equations.
I wanted to find out why things looked broken in so many parts of our world. How did we get where we are? How do we go where we want to be?
Breaking an old TV apart was my way to find out how stuff worked. The attitude matters more than that topic.
Many people today believe that democracy is at risk. Trump’s victory in the US presidential election, the UK “Brexit” vote (and its aftermath), the shadow of Marine Le Pen in France and the general rise of populist movements across Europe, are taken as signs that support for traditional liberal democratic values is declining. Other data points seem to suggest a similar trend.
An ultimate fight seems ready to be staged between so-called “New nationalists” and liberal “internationalist” elites:
“Let’s call it the New Nationalism: a bitter populist rejection of the status quo that global elites have imposed on the international system since the Cold War ended, and which lower-income voters have decided—understandably—is unfair.” Politico
I share these fears, but there is another scenario that receives much less attention and which is equally disturbing. What if the biggest threat for democracy didn’t come from the populists and nationlists but from the opposite side?
Last weak I wrote a short story to show how that might happen. It was a deliberate exercise in fiction, very aware that anything of that kind is highly improbable.
Improbable, not impossible.
The threatened minority
In its essence, my short foray into fiction shows how the global minority of internationalists could tip over to the temptation of using its power (economic and technological) to stop the rise of nationalists and their policies.
Dystopian fiction consists in taking certain visible signs of the present to their extreme consequences. Like solving a labyrinth backwards, it shows the path to a specific end. Except that here we are not trying to get there.
Polarisation and weakening of national ties
We have rarely been so politically polarised. When this happened in the past, it didn’t turn out well. Polarised societies can stick together when a strong underlying sense of unity survives . That sense of “oneness” is weakening today under the impact of technology and international mobility which makes the internationalist class less attached to national values than in the past. People in London, New York, Berlin, Barcelona and Copenhagen feel closer to each other than to their fellow countrymen in the periphery.
The more we look at the political debates, and at the discussions on social media, the more the opposite poles seem far apart. We might still speak the same language and cheer for the same team when national football is on TV, but we understand each other less and less and we show worrying signs of contempt toward each others.
Feeling of impotence
Within the context of a polarised nation state, internationalist are almost everywhere a minority. They feel now hostage of an angry mob that can use its electoral weigh to push reactionary policies. Manifestations in London after Brexit and in NY after Trump could just be the beginning.
Two more factors add to the feeling of impotence. Many internationalists are not citizens of the countries where they live and work, and therefore don’t enjoy any political representation (the real disenfranchised). In addition, there is a widespread feeling that facts and objectivity have lost importance. The vaccination debate is emblematic in this sense, socialmedia-reinforced beliefs are so strong that even the most obvious facts seem impossible to push through. Civilised argumentation feels increasingly futile.
Watch the clip below for a similar example.
While in the national political arena internationalists are increasingly marginalised and frustrated, their economic dominance has never been greater.
Nationalists have always found an easy target for their propaganda in the “global financial class”. In the past however, this group had relatively little influence in the economy. Fascism in particular was able to gather the bulk of the economic forces behind its banner, with the promise of industry-friendly protectionist and anti-union policies.
Today, national economies are much more dependent on global trade and finance. Cities, and the internationalists that inhabit them, have a disproportionate economic power, despite their political status of minority.
23. Like it or not, blue states & blue metros power the economy. ...
Even more important is the role played by technology, and technologists, the vast majority of which are within the internationalist ranks.
This is the defining element of this clash. A potentially marginalised minority (at political level) controls the ultimate levers of our society, across culture, media, retail and even military.
The recent fake news debate and the call on Facebook and Google to impose a sort of censorship on them shows how explosive this situation could become. Only recently, people in technology have been waking up to a situation where their job is not only neutral to some of the most problematic developments in society, but it’s likely causing them (or at least accelerating them). We have seen the first defections, on a personal level, and more might happen.
Exit vs voice
A way to look at how the situation might evolve is through the lenses of “Exit” and “Voice” . A few observers, among which Balaji Srinivasan, believe in “exit” as the likely choice for internationalists.
Over the next decade, internationalists will lose control of the state to nationalists. They will then turn to global technology instead.
Strengthening individual freedoms, facilitating international mobility and, in general, allowing people to “vote with their feet” is always a good thing. But the possibility of exit as a realistic scenario is questionable. Physical exit (actually moving) remains a difficult choice for many (assuming there is even a country that wants you). Technology exit (individual freedom through technology) is an interesting idea, but in the present state of affairs a bad government can still ruin your life regardless of the fact that you have the internet. Too much of your life is still offline. 
The issue with exit, in addition, is that it often leads to an even worse situation for those that stay behind. It is a legitimate choice, but a selfish one.
The alternative to exit is voice, and with the electoral way potentially barred for a long time (remember, this is a pessimistic scenario) violent voice is not to be excluded a priori. Especially when we consider that only 19 of millennials in the US believe it would be illegitimate for the military to take over if the government is incompetent.
It is interesting, at this point, to turn briefly to history and compare the present situation with similar ones in the past. Can we find examples of progressive minorities abandoning democracy to protect their status? And if not, why?
The ascent of neo-nationalism is often compared with the early years of facism in Italy and nazism in Germany. Also then it all started with an anti-establishment protest, targeting a minority of cosmopolitan and internationalist “elites”. That minority, though, simply didn’t have sufficient economic and cultural leverage. Economic power was firmly connected to the land (and the people) and it didn’t take much to align national interests with business interests.
More recently, and on the opposite side of the ideological spectrum, populist movements in Venezuela and, partly, Bolivia have also failed to provoke a violent reaction from the democratic opposition (although a coup was attempted in Venezuela in 2002). While in this case economic power was clearly opposed to the ruling majority, the possibility of “exit “(mostly to the US) provided a real alternative to the use of “voice”.
Digging further, the only case where a democratically elected anti-elite movement was met with a violent un-democratic response is probably Chile in 1973. The difference here is that Allende never had the support of the majority of the population. On the other side, it is also difficult to argue that the social base behind Pinochet was democratic in the first place.
This entire post (and the short story that inspired it) has been a rather theoretical exercise, exploring the possibility of a violent, undemocratic, reaction from the internationalist elite to the growing populist wave.
It is obvious that such a scenario is unlikely, as we have not even reached the point where a neo-nationalist victory can be ascertained. Even in its remote likelihood, it provides another good reason why we should do all we can to prevent slipping further down the black hole of a complete nationalist take over.
I’d like to conclude listing just a few tweets that kickstarted my fantasy and brought me to think of this. Nothing to worry about, it’s just a few isolated anecdotes…
I'll be organizing a secret meetup for those of us that still believe in diversity and international trade. Please don't tell the cops.
Post-war Italy is a good example where a country deeply split between communists and christian democrats managed to stick together. This was made possible by the presence of unifying elements: a fresh memory of the resistance to fascism which saw both groups fighting together (not without issues), a strong patriotic feeling, a full commitment within the party elites to the democratic constitution.
 My point is not to take position on the specific exchange in the clip. We could debate the misinformation of the 5 Trump voters but also the contempt that transpire from the anchor. Both reinforce my points above: these people have nothing in common and would gladly not have to live under the same roof/country. Yet they have to.
 Introduced by Alber Hirscham with his “Exit, Voice and Loyalty”. The basic concept is the following: when members of a group (e.g. a country) see their condition worsening, they have two options, “exit” (leaving, defecting) or “voice” (attempt to fix, oppose).
 In some cases the opposite is happening. People “exit” by leaving Facebook and/or Twitter.
 The typical examples is that of middle class parents withdrawing their children to public schools. This deprives that school of the constituency (middle class parents) which is often more vocal about the school’s problems and leave the remaining children in an even worse situation. Hirschman himself reached the point, obviously extreme, of regretting leaving Germany in the 1930’s.
I remember 2016. Lots of famous people died that year. There was David Bowie, and then that other one, and Fidel Castro. Generations are a funny thing. People are born everyday and yet it seemed baby boomers were all dying at once.
They would have never believed how things were about to change. Democracy seemed such a stable feature of the western world. I guess that’s just what happens when you get used to things.
What do you say? Why didn’t we do anything about it? You really don’t have a clue, do you?
I’ll have to go back to the nineties, before your were born. Progress seemed unstoppable. No more communism, no more nuclear risk, just trade, business and money. There were a few people who didn’t agree. Mostly old nostalgic leading a bunch of wannabe rebels with nothing better to do than trashing some windows in Seattle. Couldn’t they see that globalisation was for the poor?
Anyways, the combo dot-com 9/11 was the first big shake. The moment the rope we were all climbing with start cracking. We would only notice some years later.
The majority of us shrugged it off pretty fast. Times were good and loans were easy. Then 2008, another crash. This time the rope snapped, those behind were left back. No chance to catch up. No summit for them, not in this life.
What happened next is more complicated. I remember being in New York, how it all felt so great. I cursed myself for missing that train: “the best time to be alive”, someone said. It was a tale of two worlds. On one side unemployment, frustration, rage. On the other you couldn’t go to a fucking meetup without getting at lest three offers, two for jobs and one for an investment. “In case you start a company, you never know”. Euphoria and despair.
Then despair won. What do you expect when the majority of people feels neglected, derided, scared? What do you think they will vote? And yet again, we didn’t notice at first. Elections over we all turned back to our jobs, we had stuff to do, we were too busy to pay attention.
I guess London was the first spark. They had started deporting people, literally. Even if you were married to a local it didn’t matter. “No job, no stay” was their slogan, or some idiocy like that. The first big manifestation was huge. Londoners walking as one, protesting against a UK government they didn’t recognise. I swear to God somebody said there were even some Russians in the crowd, the fear of losing their townhouse stronger than allegiance to the political line back home.
It just didn’t matter. We were all upset, indignation was the big word, what a loser choice. Nothing mattered, not the headlines, not the strikes, not the protests from every single business unable to hire the talent they needed, or to retain the one they had. The economy kept spiralling down but they just didn’t care. They were accusing us of boycotting the national economy. Treason toward the fatherland. The economy security act won by a landslide at the referendum.
People in tech were the first to do something. Imagine going to work every day knowing that everything you do ends up against everything you believe in. Some started to quit already back in 2016. At first it was only a few, easily replaced. With fewer jobs around, finding an engineer that didn’t care wasn’t so difficult.
They called themselves “the resistance”. Weird things started happening. A few accounts disappeared. Puff, vanished, just like that. There were protests, people wanted to see some heads rolling. Nationalisation wasn’t a taboo word anymore. The big 5 went out publicly to confirm their pledge to neutrality. And yet the sabotages became more frequent.
The day the network went down will be remembered for long time. A new Bastille, some said. Except it was the opposite. Something did remind of France though, for a moment it seemed they would cut that boy’s head. The police came storming, two hundred were arrested, fifty went straight to death row. The toy was broken and there was nowhere to hide.
It is probably then that we started changing our mind. There was no hope in elections. They were just too many, just too angry. But we owned everything. We owned the banks, we owned the tech, the owned the culture. We owned the cities for Christ’s sake.
The army you say? Oh, come on.. They have always been where the power is. And what could they do anyway? Their drones, their intelligence, their satellites. It’s all software. We owned the whole goddam software and yet there we were, subjugated by our own government, a government we didn’t want, which didn’t understand us, which was trying to take it all away from us. Should we have let that happen?
If democracy was the price to pay, so be it.
It was a nasty business. Our great “liberation war”. I hate the name too. But a war nevertheless. You couldn’t believe the riots, the looting, the unimaginable violence. The curfew was established in December. Martial law on Boxing day. I don’t think the world had seen a bloodiest Christmas. Even during WWI they had stopped to play football. But we had no time for football. Revenge what was we had time for.
Why are looking at me like that. What do you want from me? What would you have done?
Newsworthy events are rarely just dots in the flowing of time. A life lasts for ninety years. A regime for almost sixty. It’s not even over yet. Can we distill it all in a sentence, a word, a thumb up or a thumb down?
I think about it. At first it seems wrong, a forced synthesis that doesn’t allow nuances. Life, history in fact, is never that simple.
And yet there is something liberating. Neutrality is a luxury only distant spectators can enjoy. In its simplicity, the medium takes us away from the comfort of our lives and throws us into the struggle. We are forced to take side.
A carousel of images run through my mind. It has been a long life. But the judgment is clear: thumb down.
Founders is a startup studio based in Copenhagen. We are proud of our origins and we really hope to participate in building a strong tech ecosystem in this town.
Copenhagen has captured a lot of media attention recently. It’s labelled as a true “up and coming” tech hub. There are plenty of conferences, plenty of talks, plenty of good hopes. And some good realities.
All this can have a positive spin. It can help an entire community suspend disbelief and take the risks required to actually build something real. It’s “fake it until you make it” applied to a city.
But there are issues we have to discuss, and some bad signs that if not stopped in time can ruin even the little good we have.
Here is my list of challenges, bright spots and two suggestions.
Drought of tech talent
Copenhagen has too little tech talent. Not enough people chose that type of education in the past and most of them got lured by attractiveness of “safe jobs” in large corporation or IT consulting firms. The rest are fragmented in a multitude of startups, either too small to matter or just not going anywhere. There is an obvious problem with abundance of grants and generosity of seed and angel investors which are keeping too many small teams alive. A sign of maturity would be to cut losses on many of these teams and let the best people join the best companies.
This is not something we are immune from at Founders and we are working on fixing it.
Startup lifestyle vs. building large companies
Working on a startup is still more of a lifestyle choice than the desire to build a long lasting company. Too many founders are motivated more by the goal of avoiding corporate life (or having a boss all together) than by true ambition.
I have nothing against bootstrapping and being solo-entrepreneurs (especially if you can turn 40k in MRR with a product in autopilot while learning new skills and travel the world). But an agglomerate of micro teams and lone wolves working from co-working spaces won’t turn Copenhagen into a tech ecosystem in the same way it is not turning Bali into one.
Too much of the asshole gene pool is wasted in corporates
Great companies are created by people with the right amount of “asshole” gene. Characteristic of these individuals is an insatiable drive for success and since success and money are too easily equated, big business and finance have been for a generation the natural destinations of the asshole gene pool. We might not like it, but the booming tech scene in the US owns a lot to the flow of assholes-in-the-making opting for Silicon Valley instead of Wall Street and for Computer Science instead of an MBA.
In Copenhagen today there is still enough fat in the corporate ladder to attract most of the assholes. Many will find enough purpose in a nice house in the suburbs and will satisfy their competing edge with their ironmans and triathlons. Others will realise, maybe too late, that they made the wrong bet. This is already happening and it’s only growing. Just check the amount of business school, consulting, banking profiles going around looking for a technical co-founder.
No real tech industry
Beside a few startups breaking out from the pack there are some large IT consulting companies (admittedly doing quite well) and some old school software companies, mostly spin-offs from government IT services. This is not a tech industry.
The issue goes beyond the lack of tech talent. It involves marketing, hr, growth, customer support. More developed ecosystems like Berlin, London, Stockholm even - for not talking about NY and SF - have score of people working in tech, in one role of the other. This alone creates an entire awareness of where the future is. It forces people to consider the skills that are in high demand and creates an entire generation of potential founders or executives for new startups.
The lack of a tech industry is also the lack of modern middle size companies that are open and willing to innovate. This is particularly important for new startups that need early adopters for their products. B2B startups in Copenhagen are faced by the dilemma of serving the local enterprises with the entire burden of super-long sales cycles, layers of approval and fear of change, or go straight into to the UK or US “modern SMB market”. This puts us at real disadvantage compared to places where you first ten customer (or at least beta users) are all within a block from your office.
Too many suits
Large companies in the city are jumping en masse on the startup wagon. They have the illusion that innovation is something you can appoint an agency to do or you can achieve by sponsoring events, running incubators and maybe making some investments.
It is no coincidence that innovation in tech has always come from startups. There is something cultural about it that has nothing to do with ping pong tables, but with the way risks are taken, the way “waste” is allowed to spread and how (little) the entire process is managed. I haven’t see any of it in the many corporate “digitalisation” programs in town. And no, mobilpay is not enough proof of the contrary.
What you see instead is this:
Everything I am trying to convey in one sentence. Take off your jacket, loosen 2 buttons and you have a startup. With a single strike you insult the people that are working hard on your core business and you perpetuate all the wrong cliques about startups.
Too many politicians
Why when you think of Silicon Valley you never, ever, can think of a politician associated with it?
I believe there is a clear role for politics (for policy actually) to create the conditions for an ecosystems to prosper. The main rule: get out of the way. The second rule: work a lot in the background to remove obstacles. Make it easier to recruit from abroad, make it cheaper to live, rent, start, go bust. Finance universities and research programs (if you want) but don’t set any specific goal. Let waste and spillovers take the turn they like. Invest in serendipity.
There are too many politicians willing to claim their spot on the stage. Too many grand plans of becoming “the capital of xyz”. Lots of words, few facts.
Some foreigners will stay
Go to any tech company larger than 10 people and you will clearly see the pattern. >50% of them come from abroad. Copenhagen is an amazing place to stay and despite serious issues with living costs and lack of rentals (and the weather, maybe) it’s a place where most people would be happy to settle. If we avoid committing suicide by making it even harder to bring, and keep, people from outside, we stand a chance to at least attract the talent we lack.
Universities reclaiming a space
At Founders we are guilty of not having been close enough with the local universities, in particular DTU. But even from a detached position it is easy to see that there is plenty of potential. The new wave in technology, particularly around the (often overhyped) fields of Machine Learning and AI, will require deeper skills than “simpler” web applications of the past. Technical universities in the city have the resources and structure to play an important role. I don’t believe that people attending Standford are necessarily much better, is what they get there, and the inspiration around them, that makes most of the difference.
Some good companies are obviously being built
I won’t make names to avoid forgetting somebody but we all know which companies I am thinking about. Companies reaching that 50+ size where things start getting more stable, where you can train people properly, where it’s easier to enter if you come straight from school are the lifeblood of a real tech ecosystem. At Founders we are trying to play our part and although none of the companies we co-started are at that size yet, by pooling resources and building an infrastructure around them we are gradually reaching that scale.
I’ll round off with 2 suggestions, knowing that there is a lot more to be done and a lot is being done as I write.
Recognise real successes, also beyond tech
Too often we make the mistake of considering tech the “elite” of the city entrepreneurial movement, even when the results are so-so. When I look at “real” businesses being built, however, retail is beating us big time. Tiger and Joe & The Juice are two examples successful businesses growing fast and rapidly expanding abroad. They might not have the “inevitability” or the glamour that tech has these days but they have something to teach all of us when it comes to winning. And that’s what matters. Let’s tell winner stories and let’s learn from them.
Make it easier to import talent
I cannot repeat myself enough. We need to import talent from abroad and we need to make it easier. Visa application, relocation, accommodation, schooling for children. All this can be done much better. Just think about the absurd CPR-address-bank account catch 22 situation every foreigner needs to go through (don’t know what I am talking about? just ask you foreign colleague).
We can also make it cheaper. Living costs, and by reflex salaries, are very high. Building a successful company requires an initial process of testing and failing. And that initial phase needs to be as cheap as possible. The fact that the only real tax break on employees is restricted to “highly paid employees” is a clear sign that we put attention in “maintenance” of existing companies and not on the creation of new ones.
You might say I am seeing the glass half-empty. Maybe. But the difference between a wannabe and a real tech ecosystem is also about stop pretending to be one.
If such a thing as “the perfect recipe to build a large successful company” existed, it would probably read like this:
Start with great vision leading to large market
Identify opening or angle to attack it
Build initial version targeting your early adopters
Use traction to conquer your beach-head
(A man with a plan)
The truth is that very few cases like this actually exist (Elon’s secret master plan being one of them). The majority of mortals find themselves often in two different, but equally challenging, situations. Similar to a form of light induced blindness.
When vision blinds traction
The first one is “the entry point” challenge. In some cases the vision is clear, the opportunity is there to grab (often to the point of being “obvious”) but you just cannot find the right way to start.
The importance of finding the right entry point can hardly be overstated. From Geoffrey Moore’s “Enthusiasts and Visionaries” to Steve Blank’s “Earlyvangelist” to Peter Thiel’s “small niche” (to be dominated), everybody out there knows how critical it is to start with the right users.
But looking at it only from the point of view of a segment misses the point. It is rather the combination of: addressing the right users, with the right value proposition, delivered through the right set (preferably as small as possible) of features and the right channel. It’s what David Galbraith calls “ecosystem fit: the starting point for the path to capture the opportunity”.
What it boils down to is the ability to gain traction, beyond any doubt. Lots of things can be fixed when there is traction (from hiring to fundraising to differences of opinions in the team), but when you are struggling to make things work even the best relationships will start showing cracks.
There is this risk that you feel (traction) is always around the corner, we just need to launch this product or this feature or get this level or critical mass.. and it’s always at the end of the horizon..
The presence of a large market will make it so that you can get a few customers by working really hard. And the clarity of the opportunity will give you the energy to endure. But in the end, these signals will mislead you by not pushing you hard enough to change more drastically and find the “real” entry point.
When traction blinds vision
There is then a second challenge, at the opposite extreme. Startups, or rather products, that have found traction or are just close to it but where it is hard to imagine what the next step would be.
Let’s say you have created a nice to-do app, you could certainly turn a profit around that (and even a good exit) but it takes serious strategy work to go from a product with traction to a business with huge revenue potential. Fred Wilson talked about this recently:
Most of the companies I work with didn’t really start out with a strategy. They started out with an idea that turned into a great product that found a fit with a market. And they jumped on that and used it to build a company. Most of them wake up at some point and realize that a single product in a single market is not a strategy and they need to come up with a plan to get a lot bigger and build a sustainable and defensible business.
When looking at these two challenges, many people would be inclined to pick the second one. It is definitely easier to figure out the next step when things are going well — the proverbial “luxury problem” — but there is also a counter argument. Having found your local maximum can turn into a trap, and lead the team into a blind alley with no clear path to the next stage. Lack of vision and clear strategy will result in endless discussions around what to do next, possible feature creep and ultimately throwing away the original traction.
Following the perfect recipe sounds great, but it’s rarely how life looks like. If you are facing one of these two challenges the best you can do is to acknowledge them and avoid letting your vision, or your traction, blind you.
2016 will go down as the year where everybody woke up to the power of internet crowds. The year where the anti-hierarchical nature of the web manifested all its influence on the political discourse. “Gradually, then suddenly”.
This story has been covered a lot and well. Another aspect has received less attention. Together with the rise of the crowds we witness the demise of the silent majority.
Silent majority and the illusion of consensus
Since Nixon made the expression popular in 1969, the idea of a silent majority has been often used in antithesis to nosier positions and groups. From pacifist movements to labour unrest to football hooligans. For every group resorting to noise to manifest its dissent, there is a moderate majority which needs to be protected.
But what does this majority stand for? Silence is not neutral as it might be assumed. Silence is communication just like “no ideology” is an ideology of its own. The concept of a silent majority presumes the existence of a tacit consensus, one that doesn’t require to be expressed noisily but somehow exists objectively.
Many in the past 20 years have promoted the existence of an objective consensus. The end of the cold war was meant to unleash a post-ideological (or post-political) era. An era of technocratic governments following fundamental laws and the rule of the obvious. Political debates moved from the material to the personal, economics (the most “scientific” of social sciences) took over the scene.
Yet this assumption of consensus, this illusion really, contains the seeds of its own destruction. Blinded by the pretence of objectivity, the bearer of consensus becomes subject to the worst form of ideology. Not only does he claim not to have one, he also scorns anyones who does. Over time, this superiority becomes laziness. The ranks of the “objective truth” start shrinking, those that still benefit from it turn into defence mode while the rest fall easily into the arms of the emerging crowds. It shouldn’t surprise that is it now Trump’s turn to waive the flag of the silent majority.
There is probably no better, and tragic, example of this trajectory than the EU. The European project started as an idealistic attempt, smart enough to understand the need for a pragmatic anchor. Just like a startup that requires both an ambitious vision and a tangible beachhead to achieve traction, the EU found its own in economic integration, initially within the coal and steal niche. Over time, the beachhead expanded. The economic rationale became the main motor of integration, “obvious” enough that it didn’t even need to be justified. The how and the what took over from the why. The consensus was clear, until it wasn’t anymore.
Moderates and radicals
The illusion of consensus goes hand in hand with the mirage of moderation. The belief that there is always a neutral space in between opposed factions. It’s a comforting feeling: “I want order but I am not a racist”, “I like equality but I am not a socialist”. It’s the temptation of simple solutions, defined negatively as a watered down version of extreme positions.
Unfortunately, moderation leads often to the same results as the illusion of consensus. Because moderates don’t really stand for anything they end up retrenching into an assumed sense of superiority, justified by some sort of objectivity in their position. It’s the “intellectual yet idiot” targeted recently by Nassim Taleb.
A good example can be found in this discussion of “pragmatic vs radical centrism”. Pragmatic choices are directly linked to the crony capitalisms resulting from the lack of true disagreement between alternative visions of the common. When a pragmatic centre-right and a pragmatic centre-left join forces in a grand coalition, “the range of policy options is narrowed down to a pragmatic compromise that maximises the rent that can be extracted by special interests.“
Radicalism is the opposite of moderation. It’s a positively defined position. Radicals stand for something.
Adopting a radical position doesn’t mean playing at the extremes (you can easily be, as seen above, a radical centrist), and it doesn’t mean accepting rules of engagement based on harassment and provocation. It means rejecting the illusion of consensus and the false comfort of moderation. It means taking up the challenge of active political participation, well aware that in 2016 it doesn’t require joining a political party or even voting for one.
Compromises and coexistence
Does this means giving up to tribalism? To a state of permanent conflict, a social media powered cacophony of noisy crowds?
That’s certainly not a desired state, but it is more a question of how we design the arena of our disagreements, rather than suppressing them. In the past, the parliament was the primary place of debate, negotiation, compromise and coexistence. That place is today both limited and outdated. Our new public spaces are larger and more inclusive. But they are also driven by dynamics that foster closure at the expense of openness (the filter bubbles), short outburst of anger over longer, more considerate, reflections. Beyond that, we need a culture of dialogue which simply acknowledges our disagreements while realising that coexistence is really our only option.
2016 has proven that there is really no escape from the bottom-up explosion of the crowds. The “insurgents”, as Naval calls them in the tweet above, cannot be stopped with money and media control. Those that disagree with them need to embrace the new reality. Forget silence, forget neutrality. Welcome to politics.