This is an interesting commentary on Andreesen’s piece, but it doesn’t really change or contradict anything.
At the end of the day, the US is a litigious society covered in Byzantine regulation that most people aren’t even aware of. This covers the most basic things: would you like to build a townhouse for your family with just one parking space? Illegal in the vast majority of the United States, where 2+ parking spaces per home are required by law. Want to build an apartment building in San Francisco to capitalize on the incredible demand for housing? You’ll spend at least 6 years getting a building permit, and what you’re actually allowed to build will be mostly the result of ugly haggling with special interest groups along the way. These are just a few examples I happen to be familiar with.
We’ve chosen for things to be like this by the way we allow our government at every level to be captured by lobbyists, special interests, and partisanship. Realistically, to change things, we need reform that fixes the way the government itself operates, and while there are many ideas that sound good, everything has unexpected side effects. That is a very, very hard problem, to solve.
The music was new, black polished chrome / And came over the summer like liquid night
The DJ's took pills to stay awake / And play for seven days
Andreesen's 'Software Eats The World,' Mosaic & associated perspectives emerged from the fresh green fields of internet-enabled personal computing in the 90s and 2000s. Everything was young and novel. The software itself. The business models. The cultural impact. The companies and personas. Everything was a disruption.
There was a time when the record industry was fresh & jukeboxes were a disruptive new "channel." With it came new business models, genres of music. Music became imbued with new cultural & artistic significance.
There was a time when gentleman scientists were inventing the institution of science at home. A time before "publish-or-perish," tenure-tracks and grant applications.
Everything was young once. Mechanised farming. Production line manufacturing. The Americas. Nothing stays young, however.
Pondering why & how institutions go from new to old is something we've been doing forever. Ibn Khaldun, father of social science, had his barbarians-vs-civilisations theories in the 1300s.
These theories tend to get ideological. Marxism was a (Khaldun-ish) theory that "late-stage capitalism" was upon us(them). Ayn Rand thought everything had gotten infested with parasitic "looters." Both fantasised about revolutionary moments, where the old world dies and is reborn new & fresh. Today, we like terms like regulatory capture/burden, incumbent effects, path dependencies, low hanging fruit depletion or somesuch. All characterisations of "corruption" infesting mature institutions.
There are lots of examples. NASA's achievements in early decades vs the 90s. How a 3 person startup with 1 month of code can add featureX to their product orders of magnitude more easily than an established company with a mature code base. Twitter once served their product to the whole world with 50 people. It was a similar twitter, but doing it with just 1,000 people today would be a massive challenge.
> It was a similar twitter, but doing it with just 1,000 people today would be a massive challenge.
Is that true though? We know that instagram had less than 100 people running it before Facebook bought it for $19B.
There's a tendency for successful companies to add headcounts and grow - and it's very hard to convince yourself not to - maybe just maybe they would be able to serve the whole world with about 50 people, on a smaller revenue but huge revenue/headcount.
Instagram and WhatsApp are anomalies. To try and find general tendencies, we should try and cite the typical story, not a three sigma exception case.
Secondly, headcount is a darling of many HR systems. You might cite exceptions with Google or Stripe but your typical corporate environment will not put much effort into fairly evaluating career advancement (e.g., measuring impacts, outcomes, risk) for anyone.
If you are sales or profit focused, lucky you. But outside of that, most HR systems will use simple metrics like "how many people report to you" or "how much budget do you control" to evaluate your promotions and pay. Some will even have literal formulas (e.g., you need 6 reports to go to Director; you need 6 Director reports to go to Executive Director; etc.)
It is done because it is easy and convenient for HR. Unfortunately, obviously, people then try to game the system and over-hire.
You might have to produce an "impacts report" at EOY but that is often HR-theater. Get down to "why" and you will find it came down to how many direct reports you had. Or how much budget you burned.
If your incentive system rewards hiring over results, expect headcount to grow I urge those in governance positions to ensure their organizations have a real impacts assessment system to evaluate employee progress. There is no better way to kill motivation among workers than tell them that impact has no effect.
> Instagram and WhatsApp are anomalies. To try and find general tendencies, we should try and cite the typical story, not a three sigma exception case.
>> But the question is, can they do it without the bloat? My understanding is yes - and I can probably even tell you how.
I dont mean to be snarky, but isn't the "how" sort of obvious (though hard to achieve)? You'd have to align reward with value generated per unit of risk and nothing else. The more value you generate (on a risk adjusted basis), the greater your reward and promotion. When companies grow larger, it becomes difficult for them to measure value generated, or too tedious, or politics overpowers governance.
In practically every big company. It isn't as much power or voice as much as litmus tests that serve to veto good stewardship.
This doesnt mean big company Directors and Executive Directors are not deserving of their promotions, it just means that they usually have an added hoop to jump thru -- increasing headcount.
I've been in senior ranks of big companies, and spoke to plenty of counterparts at other companies, and it is almost always the story.
Dealing with people you discover that all the weird rules are there because somebody or a situation made them necessary.
For every well meaning well behaving individual there is another that will park his car in your freaking back yard if you don't fence your property.
Would you raise a building while taking into account the surrounding people and context? Well, perhaps. But many others will absolutely destroy the location in all concerns and just maximise square footage.
This problem has no solution! Whatever set of rules you agree upon, somebody will find a creative way to mess with them and a new rule or clarification will need to be added. Then people will complain why so many rules.
> somebody will find a creative way to mess with them and a new rule or clarification will need to be added.
Rules can be rewritten in a cohesive way or rules can be written as just an endless series of if statements which may contradict with other if statements.
It would be useful for laws to have an automated test suite so that known good uses cases wouldn't be broken down the road.
No way. Software works for predictable inputs producing well-defined desired outputs. Reality is nothing like this.
Actually good rule systems are ambiguous or weak enough that when someone tries to abuse edge cases, people can turn round and say "no" and the rules don't get in the way.
Perhaps the parent is too critical of the rule makers, but you are far too forgiving.
Laws in the US happen like this: someone has trouble parking one day and decides that the solution is to make more parking a legal requirement, giving little or no thought to the second or third order effects of those laws.
I'm not a big fan of philosopher Michael Huemer, but he makes an interesting metaphor regarding laws. He compares society with the human body and laws with medicine. For a long time medicine wasn't based on empirical evidence, but on logic and "common sense." Most medical advice from before the scientific method was more harmful than helpful. The human body is such a complex and delicate system that almost all interventions are more harmful than helpful. Even in the presence of a medical issue, unless there is evidence that a given medical intervention is more helpful than harmful, no medical intervention is probably better than an unproven one.
Just because a societal ill exists, doesn't mean that the first legal remedy that pops into someone's head is a good idea. Even if that idea solves the problem (a big if), will its second and third order effects cause more damage than the original problem?
American political discourse is dominated by a desire to "take action." But unless lawmakers are willing to start consulting economists and domain experts, no action at all is probably better.
You seem to think that endless sets rules is a necessary evil, but my intuition is the opposite: for every US law that makes for a better society, there are ten which are holding us back.
It's more like, a bunch of apartment buildings were built before cars were big. Now cars are everywhere, and there is insufficient parking for existing residents, let alone new residents. Therefore, new or substantially renovated residential construction is required to have X parking spots per bedroom.
If you actually go to city council meetings they will explain why all of these rules and regulations exist. Just because random Joe on the internet can't see the problem doesn't mean it doesn't exist.
I’m not arguing that laws are made without basis. A lack of parking is a problem, and a legal remedy isn’t on its face absurd.
I’m arguing that lawmakers don’t give enough consideration to the second and third order effects of laws. Minimum parking requirements solve one problem, but they create many others. I have attended many city council meetings and my impression of city councilors by and large is that they don’t rely enough on the work of economists, urban planners, and other domain experts.
someone has trouble parking one day and decides that the solution is to make more parking a legal requirement, giving little or no thought to the second or third order effects of those laws.
Or, "someone owns a small house and one or two cars and finds they can't park because the neighbors have six roommates with one car each", or "developer builds 50 units without parking expecting the neighborhood to absorb the cars".
Sure, the first order effect of minimum parking requirements is that there is more parking, which is nice in a situation like the one you describe. I don’t dispute that.
What are the second and third order effects and how do those effects compare with doing nothing? Will these laws be revisited as modes of transportation and the urban environment changes? (Spoiler alert, no). Without these laws would everyone just be permanently unable to park? Or would tenants, knowing how hard it is to park in public spots, pay a premium for private parking? Wouldn't those premiums incentivize developers to add private parking? But unlike the legal remedy, when those incentives go away, we don’t have to keep building parking spots.
"developer builds 50 units without parking expecting the neighborhood to absorb the cars"
That's exactly what's happening in downtown San Jose right now. One specific example::the city is approving a big new hotel on a tiny lot next to the De Anza Hotel with absolutely no parking provided, externalizing that mess onto the already parking-deprived neighborhood. SAP Center event nights will get really interesting.
Well, yes, but until we fix something at a societal level which takes decades some poor people on a given street struggle because all the new buildings increase people and car density but not parking space. Which means, it makes sense to apply the rule first, and then fix society and then we can turn that excess parking space in gardens if need be.
I agree that doing something just so something is done about it is not a solution and it generally produces a worse outcome.
Ultimately I started questioning a lot of these rules and discovered in time what I said in the original post: a lot of people need to be forced with (new) rules because they will not think of anybody else or even actively try to workaround the rules.
And I'm not forgiving of rule makers: I think they are really bad at what they do, both in how they reach consensus and how they codify it in law, but I understand the general need they fill, so to say.
On the other side of this all I see is that there are very powerful entities that do not want to be constrained. Blood was shed for the rule of law. I don't want to return to feudalism
"Chesterton's fence is the principle that reforms should not be made until the reasoning behind the existing state of affairs is understood."
What you've written is an all-too typical complaint of people who don't bother to understand the history of our existing legal, political and social structures. It's easy to hand wave and vent about "regulatory capture" (I do it all the time).
But go and dig down and find out why that 2+ parking space rule exists. You will find a massively more complex, and much more pro-public, pro-people, pro-progress agenda in play than anything you just wrote suggests.
I remember an example of this sort of thing that I came across in eastern WA about 20+ years ago. A small town there was facing protests because it was about to put down ("execute") several wild horses that were hanging about the town. The law was very clear about what had to be done, but the public, both in town and elsewhere in the state were aghast. The horses were healthy, beautiful and there seemed to be no good justification for killing the as the law required. People complained about the law being an ass (no pun intended) and said that this was the perfect example of government inflexibility and law making by people with selfish interests.
But all it took was a little history detour to go back and find out why the law(s) in question had come into being. It had indeed been the case that in the not too distant past (by global standards, not necessarily those of the western US), wild horses had indeed been a problem in town, and that the towns people had tried several approaches to dealing with and/or fixing the problems. None of them had been very successful, and some 80 years earlier, the town had reluctantly adopted a law where an unowned horse, if not claimed by anyone within a reasonable period of notice, must be put down.
This wasn't government inflexibility, or stupid law, or selfish interests: it was a community improvising to deal with a tricky situation, and doing so imperfectly. Improving this particular law, and others like it (such as your 2+ parking space case) isn't going to happen by assuming that the existing legal framework exists because of malintent. It's going to happen by carefully understanding the context and motivations and knowledge that led to the current laws, and only then setting out change them, hopefully for the better.
> * But go and dig down and find out why that 2+ parking space rule exists. You will find...*
It's easy to find what arguments people gave for instituting a rule.
That is often different from the real reason it was enacted or is kept around.
There is always a nice sounding argument for even the most blatantly unfair rule. Normally, due to Motivated Reasoning, the people benefitting from them even honestly believes the arguments!
Chesterton's Fence doesn't require that you perform a merely superficial analysis of why things are as they are, and indeed it would be doing the idea a disservice to do so.
As I noted in another reply below, I think it's fine to make the argument that the 2+ parking place rule comes from zoning policies that are ultimately racist, and that if you can show that this is really the sole origin of the rule, you've cleared "the fence" and can start to meangingully propose alternatives.
But such a historically-aware analysis is a far cry from "too much government regulation ... regulatory capture ... wah!"
There is clearly too much government and there is regulatory capture - are you saying these aren't true? Just because some regulation is deemed good doens't mean the majority is.
There is a bias that the present and recent history is how things are and should be and that any changes require superior proof than the initial experiment in passing the legislation.
I understand that you might think there is too much government, but it's far from clear that this is so.
I think the USA could benefit from "more government", but even saying that is woefully ambiguous. What does "less government" or "more government" even mean? Less laws? More government workers? Too much spending?
Regulatory capture is indeed a problem, but it's not unique to the USA and there's no point pretending that it's unsolvable.
> This wasn't government inflexibility, or stupid law, or selfish interests: it was a community improvising to deal with a tricky situation, and doing so imperfectly.
Improvising law and doing so imperfectly seems like a textbook recipe for "stupid law". That particular stupid law was worth complaining about "the law being an ass" (because it obviously was) and "the perfect example of government inflexibility" (local gov goes forward with putting down blameless horses based on an obscure law enacted 80 years ago in response to a situation that is nowhere near prevalent nor relevant today)
Maybe I'm missing something obvious but in light of this I'm curious how that specific example helps your argument?
So your proposal is that the government can just choose in the moment which laws to enforce and not enforce, based on current conditions and the leanings/predilictions of its current members?
The right thing to do do in the horse case would have been to repeal the law, since for sure, it no longer really applied. By contrast, the call from the public was "this is just another example of excessive government regulation", which is an entirely different claim.
But do you really want to argue for "oh, no problem, the police/courts can just ignore that statute because its clear to everyone that the original conditions that led to it no longer apply?" Really?
The 2 parking space rule is because we allow people to park on the street overnight. It's very simple to just not allow that or if it's allowed, then charge a market rate for the space. If people want parking then the house can have it, or there can be a garage. The problem is that they're getting a public good for free - free on street overnight parking.
Assuming this to be true (though see my reply about zoning below - I think this is an incomplete answer), then that's great, you have now cleared Chesterton's Fence, and are in a position to propose a replacement.
But notice how utterly different your argument is to the OP, who talked about excessive government regulation, regulatory capture and so on.
(and yes, one can make a case that codification of racism in law statutes is a kind of regulatory capture, but it's really not what most people mean when they use that term)
As large apartment buildings pre-date zoning regulations, parking space requirements, and in older East Coast cities even cars, that assertion is clearly false...
> It's going to happen by carefully understanding the context and motivations and knowledge that led to the current laws, and only then setting out change them, hopefully for the better.
If you go case by case through all the nonsensical things in the american legal system, you'll find most of the time that the reason they were put in place originally was racism. Zoning is a prime example.
Zoning for single family housing is definitely (at least in substantial part) rooted in racism (although I think you can make a case for it to be more expansively classism ... but sure, whatever).
However, racism doesn't require 2+ parking spaces, just single family dwellings that cost more than poor people can afford.
Marx based a lot of his theories on classical economics. Ibn Khaldun was arguably the founder of modern economic theory. One of his observations of late stage societies is that they are riddled with large government expenditure and high taxation stifling the economic activity of society.
> At the end of the day, the US is a litigious society covered in Byzantine regulation that most people aren’t even aware of.
I dunno, maybe? In some ways yes, in many ways no.
> this covers the most basic things: would you like to build a townhouse...apartment building in San Francisco...
That seems awfully specific.
I think it's clear to any outside observer that Bay Area residential real estate policy is literally insane. That doesn't really have all that much to do with this essay or the Andreesen one that precedes it though.
> We’ve chosen for things to be like this by the way we allow our government at every level to be captured by lobbyists, special interests, and partisanship.
No.
This is an outcome of having democracy operable at a local level; the entire outcome of localism is "your local special interests control the system". What that means, in practice, is the people who have time to burn control the system. That is either (1) retired people (2) semi-employed activists or (3) paid lawyers/lobbyists. 3 is often paid by the local big fish.
Add/subtract as your locality changes, but the principle is the same. Kill the hyperdecentralization, and you kill the balkanization.
If you want real change in the US, you have to gut the localism principle comprehensively.
edit: get involved in local politics, even on the margins, and you start seeing that change is very possible, and there are a lot of people passionately invested in not changing. This has nothing - ZERO - to do with US political alignment, BTW.
Hm, I was actually thinking that local authorities should be strengthened. But the perspective I'm coming from is being European and seeing all major EU countries have unpopular governments that are seen as ineffective, and contrasting with Switzerland, which has very powerful local government (a president/prime minister/chancellor doesn't even exist, federal government is only in charge of defense and energy), and is extremely successful by every measure you could think of.
I've done some thinking about the problem of regulation bloat (setting aside regulatory capture for now).
Good regulation, like good code, would express ideals and objectives in the simplest way possible that can still implement the solution. But if we follow this analogy, our country's body of law and regulation is like a centuries-old codebase that has never been revised or refactored for the sake of consolidation and simplification. It only gets added to, and obviously can't be rebuilt from scratch. This means we have a monotonically-growing level of complexity for entities that want to adhere to the law, which is a recipe for grinding to a halt.
I feel like the common argument by conservatives against regulation because it stifles innovation has some truth, but it doesn't have to.
What would it look like, I wonder, to implement reforms that are purely concerned with simplifying the existing rules and stripping out cruft? Has anybody ever considered the problem from this angle?
Years ago I worked on a project to do exactly that for local development ordinances. Try to boil down the intent to the simplest version of rules that would encompass that intent, while stripping out all the rest. It got some local interest, but there were too many local interests that each wanted everything simplified except for the couple rules they specifically benefitted from in some way. So it didn’t go anywhere.
would you like to build a townhouse for your family with just one parking space? Illegal in the vast majority of the United States, where 2+ parking spaces per home are required by law.
That's a very specific and authoritative claim that is utterly false.
First of all, most of the U.S. doesn't even have zoning limitations regarding parking specific to townhomes. Nowhere outside cities (private developments can have CC&Rs to this effect, but that's not "zoning"), to my knowledge.
Where I live in SV, our entire development is townhomes with single parking spaces (plus a small pool of guest spots on the outer fringes of the complex).
Next to us is a large apartment complex with one space per unit. Next to that is a duplex development with one-car garages and just street parking otherwise. Can't even park in the driveways.
My last condo in Mountain View had exactly one parking space per unit (even the three bedroom units) plus a small pool of guest spaces outside the "secure" garage level. (Feel free to look it up: 1033 Crestview Drive, 90 condos in the complex, all with just 1 space).
YIMBYs love to claim "but zoning" yet almost never quote any specific codes from any specific cities, let alone anything at a county or statewide level.
So, by all means, please educate us all and give your references identifying this "vast majority".
I also wanted to write my own response to that article from Anderson.
I worked within OEM electronics industry since my first job 13 years. During those years I was fortunate to have experience living many different countries, with very different "systems."
I spent my childhood in early nineties Russia, where my parents had a business. My late teens were spent in Singapore, as an exchange student, and an interpreter in a trade company. Later I spent 6 years studying, working, and living in Vancouver, Canada, and Seattle, US. My career however only took off when I was forced to leave Canada by a paperwork mishap on behalf of my employer, and go to China for no better option.
SanderJD below has a very good point I wanted to talk about:
> I'm amused by these morality screeds from rich tech thought leaders. "Why don't the talented sacrifice easy money in software by getting into [insert super regulated, low-margin business]?" says profit-maximizing tech capitalists who ignored said businesses for a decade.
My own reason deciding not to return to the West was that I feel I simply can't do my job there, and an honest business as a way of making money doesn't work here.
I wrote many times here before how helpless I felt when I simply tried to "make money the normal way," and the normal way doesn't work. I feel the whole business culture in the West goes against the notion that a "normal, honest work" is the way to do things.
I saw many of those SV "mentors," "VC" guys, buffoon fund managers, and trendy hipstrepreneurs. All and every one of them is obsessed with NOT doing things the proper way. They all hellbent on the notion that the business IS to be done by some "special sauce," "a cheat," or "a secret trick" that is nearly equates to money out of thin air for them.
These people are wrong. They are so wrong. This is why you can not run manufacturing in America.
Maybe these guys can "make money out of thin air" by tricking banks, pension funds, clients, or the legal system, but there is no "trick" they think of to making physical things.
How do you feel about the future of Russia (where do you live these days)?
I'm an American living in Russia. While there are many problems (politics and others), it actually "feels" freer than the West in a sense and the cities offer a higher quality of life than the USA. They are actually walkable with many affordable transit options). In my city, there is new construction of condo towers everywhere.
Taxes are lower, costs are lower and people can afford their own apartments, there's a ton of untapped human potential (highly educated intelligent people). My Russian is elementary, but from the business owners I talk to, while they complain about regulations and taxes, it seems they have fewer than the USA. Or do you think it's a lost cause?
I haven't been living in Russia since 2007. I only went back twice since then
I was robbed three times in my life, two times in 2007 just months before my departure, and the third time in 2016, just a week after my first visit there after 9 years abroad.
You can understand, I can't bare carrying that passport now.
I wonder how many Silicon Valley luminaries assume that government is one of those industries that's going to be disrupted and replaced by software, but don't say it out loud because suggesting you're going to replace the government isn't really the wisest move.
> Illegal in the vast majority of the United States, where 2+ parking spaces per home are required by law
What does that mean? Do people need to build homes with at least 2 parking spaces per home, inside the area of their property? Does it generalize to apartments?
I'm sure the parking space thing exists because of all the people who thought they only needed 1 space, but it turned out they needed at least 2. And then they parked in other spaces or in the way of everyone else because they were short-sighted.
> thought they only needed 1 space, but it turned out they needed at least 2.
It has a lot more to do with historical post WW2 urban planning models which were designed to make room for increasing household car ownership, which did happen over the decades as public transportation systems were either dismantled or never built in the first place.
Consumers of the time readily bought into that model. We are only reevaluating it today in light of its failure modes.
Counter-point: The "everyone needs ridiculous amount of driveway space" rule existed in a suburb I lived in. We had exceptionally wide streets, but parking any car in the street for any amount of time was strictly forbidden. All of my neighbors complained about how "ghetto" our street looked when my parents visited and parked in the street. People really actually hated the idea of anyone parking in the street, even for a weekend, and so we needed driveways that were large enough to handle the 3 days of the year when we had a couple extra cars around.
That rule was dumb and unnecessary, but was also not a "pointless regulation", it was not "regulatory capture" by the Big Driveway Cartel, and it definitely wasn't a response to a legitimate need for more parking (again, super wide streets that sat empty). It was just a reflection of the deeply held convictions of an extraordinarily parochial population.
Counter-counter-point: Sometimes it is about the level at which the policy is applied. It may be easier to apply it at a county level or state level, etc. It might not make sense for every single street in the county, but since many policies are enforced at a certain level (county, city, state, country) you need to match the policy to the level at which it would be enforced. Otherwise you'd have a gerrymandered law that applies on some streets and not others, which would create yet other problems.
The problem is that if you do not build for that potential need, you then need someone with the ability to say "no." It might be a condo manager, a city parking enforcement worker, etc.
Problem is, that person doesn't exist in most places where required.
This is just the nature of the world. There are enough defensible reasons to screw your own team so people will do that anyway. The real reason is that once you've hit some degree of prosperity, loss aversion overtakes gain seeking. Today's America is therefore focused on maintenance of its wealth.
You can try anything you like, but it won't work. America cannot build in the real world because it constrains itself out of fear of losing what it has, because it has so much.
All these articles and open letters and appeals are just the same as internal company memos at massive corporations exhorting innovation. But IBM can't innovate, no matter how many innovation labs it funds. It just can't. The fire is dead and that's a property of what it's hit: the upper limit of prosperity. The next innovation won't come from IBM and it will rocket past IBM and then hit its own upper limit.
Perhaps the only recent big companies that have innovated are Apple and Amazon. Maybe there's something to be learned from their relative approaches. But America as it stands won't build, because it can't build. The excuses will be numerous: "law written in blood", "do we want to end up like X who built but built wrong", "America is big", "America is sparse". But the problem is none of that. The problem is that America won, that America is prosperous and glorious, and so it can no longer countenance any risk of loss.
"It's tough to get out of bed to do roadwork at 5am when you've been sleeping in silk pajamas” - Marvin Hagler
I think there's definitely something to be said for Elon Musk sinking his entire Paypal fortune into Tesla. Hitting the reset button and starting again from ground zero is one hell of an incentive to succeed.
I want to like a lot of this. The UK is full of "crap towns" with poor housing, poor design and environs that are generally anti-human (as well as anti- a lot of other things). I don't particularly agree the problem is "regulatory capture" unless that's simply a shorthand way of saying, "we, as society, have agreed that inertia is our preferred approach". In some cases it may well be regulatory capture; in most I don't believe it is (obvious case in point for housing is green belt: we know it's a nonsense, but it's an absolute political impediment, not a regulatory one. The people do not want to build there).
There shouldn't be problems with people having access to healthcare, or living in housing which is not just healthy but is also pleasant. People should have access to nature as well as all their other conveniences, working should not require long commutes and we shouldn't be generating the absolute tsunamis of waste we currently do just to survive.
There are constructivist answers to all these problems. Andreesen appears to be suggesting it's just a matter of willpower. I don't believe the solution is that simple.
> has tech [...] been the primary source of American innovation because it represented the future? Or has it been the future because it was the only space where innovation was possible, because of things like inertia and regulatory capture in the real world?
Here's a third option: Due to Baumol's cost disease, if the wages for Java programmers rise, the wages for CNC milling machine programmers are going to go in the same direction - and if manufacturers can't pay, there will be a "skills shortage"
Why would a graduate who can program and design electronics do the latter, if the former pays 3x as much straight out of college?
Are you familiar enough with Baumol’s to comment on why we don’t see this effect in, for example, medicine vs basic biochemistry? Presumably there is a lot of overlap in these cohorts, but most research jobs pay significantly less than research jobs.
Both industries seem to be “more productive” these days as well, with massive gains in biological research techniques over the last 20 years.
I guess it is easy to see something and give it a name, but the wikipedia description didn’t leave me with a very solid understanding.
> but most research jobs pay significantly less than research jobs.
I think your comment has a typo, but my answer to the question I believe you are asking would be that there are far more people seeking to have medical jobs than there are positions available in licensed medical schools.
There is no shortage of qualified people seeking to do medicine. They just can't do it as there are hard licensing restrictions on who can do it and those restrictions require formal degrees.
Of the people I know in the more poorly paid biochemistry research field, most have tried or are trying to jump over to medicine/medical research. They just can't get admitted to med school or can't get approved in some other way. There is no rise in the price of labour because there are just so many potential and willing workers that medicine is not altering the supply of labour for biochemistry research in a meaningful way.
In the case of the developers, there are no restrictions on who can be one. There are no formal requirements at all. You could be a high school dropout and if you can code well, there is work for you. If you have the skills, you can go be a developer. It is more as though nobody wanted to be in medicine as biochem paid more. In that scenario, there would be very few doctors.
Your correction was correct, thanks for still seeking to answer the question.
I think I generally agree with your premise -- there are large gates in place and the licensing is much harder to achieve than a college degree. Though I think this setup breaks down partially (But not completely) when we view that PhD biochemists are still paid far less than doctors even with roughly equivalent time horizons and some level of institutional gating (4-6 years for PhD, maybe a PostDoc).
Either way, this is a fun new frame to play around with. Thanks for your time!
Doctors are limited by the American Medical Association which sets the limit on residency slots. Basic biochemistry is done by low-paid grad students, a large percentage (possibly a majority at some schools) of whom are from lower cost of living countries, particularly China and India.
>The issue is residents are unproductive and thus need government subsidy for hospitals to train.
This is so hilariously wrong. Hospitals make TONS of money from the work of residents who get paid like 50k doing 200k of work. A residency hospital, Hanneman, closed and the spots there were auctioned off for $55M to other hospitals.
The limit is where it is because the AMA put it there because they were afraid of the "physician glut" ruining salaries. They're probably responsible for around as many American deaths as many of the world's worst dictators.
Pretty clever retcon in their text to make themselves out to be heroes, if your source is the AMA.
Vote whichever way you want, I'm absolutely right:
Can confirm. I graduated from computer engineering, which had a heavy electrical component. Knew a lot of electrical engineers as well. If my graduating class stayed in tech at all, it was in software.
>"First, tech should embrace and accelerate distributed work. It makes tech more accessible to more people. It seeds more parts of the country with potential entrepreneurs. It dramatically decreases the cost of living for employees. It creates the conditions for more stable companies that can take on less risky yet still necessary opportunities that may throw off a nice dividend instead of an IPO. And, critically, it gives tech companies a weapon to wield against overbearing regulation, because companies can always pick-up-and-leave."
The next big "tech" revolution is working from home -- and distributed working. It has been around, like the way smartphones were around before the iPhone -- in concept, but never realized in practicality. It is an imperative that tech should accelerate and develop a cohesive set of products that will enable iPhone like working from home.
This is so true. Half the VCs you talk to want you to re-locate to the Bay Area.
What does that mean to someone mid-career (you know, the type with enough experience to really do something big and build) - it means:
- They often have kids.
- They may have student loans from advanced degrees
- They have to worry about healthcare for their whole family
- They may be willing to live on ramen-noodle salaries, but dont want to subject their kids to it.
Unless seed funds and VCs start allowing more reasonable founders salaries, or allow non-bay-area founding locations with reasonable cost of living, the numbers often just dont work out
At this point in the discussion, I will often have a load of people jumping on me to "get roomates" or "eat pasta" or the "all schools are good" argument. Let me pre-answer those:
1. OK, so you have a family with children. Do you really want roommates?
2. Yes theoretically I can eat pasta everyday and save money. But is that really the life I want to give to my family (FYI, I can easily work on wall street and make a half-million salary, so really...)
3. No, not all schools are good. My high school for example had metal detectors on entrance. A staff member died from a heart attach after a confrontation from a student. No, not all schools are good. Perhaps you want to subject your kids to that, I dont.
So what do you end up with? Rich kids funding other rich kids building juice squeezers, after which they will just join the VC firm and perpetuate the cycle.
And as for the eggheads, present them with a shitty enough "deal" and it makes total sense to either go to a big firm or go work on Wall St. "Thought Leadership" is cheap.
a key point (IMO) innovation happened online becuase being a new space enabled by novel technology, it wasn't regulated yet. But now it's mainstream, so inovation will decrease.
also, this quote from an intervier questioning Marc Andreessen
> a “primary technology” would need to involve, you know, some fundamental new insight in code, some proprietary set of algorithms.
tells me that so many people just don't get it. software due to being immaterial just doesn't play by the same rules as other mechanical machines.
I know I cannot explain it properly; but why is open source such a superior way to develop infrastructure software?
finally
> Human progress in this view is solely online.
IMO, we don't need a new cleverer algorithm. I believe that Amazon's success is not some really sophisitcated piece of code, but the way in which they integrated computer technology into the very core of the organization.
Infrastructure software, by its nature, is designed to power hundreds or thousands or millions of different needs. That suits an open source model.
We tend to inflate problems that touch us directly and deflate problems that we don't see very often. Consider if I am the government official responsible for making sure roads are paved. The roads that I use every day (to commute, to go to the grocery, etc.) are likely to be pristine. I will make sure of it. The roads I rarely see will be dealt with on their regular schedule, and maybe not at all if time runs out.
However, if paving decisions were made by a large group of citizens, each of whom had the ability to just go out and pave the road themselves if they felt like it, the city would be much more paved.
The same allegory works for closed versus open source. Consider if LinkedIn had left Kafka as closed source. If we looked at the code base, we would likely still find a pretty good message bus, but it would be optimized for the nuances of LinkedIn's system architecture and proclivities in passing messages. Once it became open source, developers from Facebook and Google and Startup #1 and Manufacturing Firm #2 and so on all jumped in to solve problems. They achieved consensus on how those problems should be solved and pushed forward.
Two points on this allegory that are relevant to Andreessen's argument: everyone in the infrastructure committee had skin in the game (they wanted problems solved) and they had the capacity to go deal with the problems themselves. Andreessen argues we have a lot of the first already but we don't have nearly as much of the second as we need.
Although I mostly agree with you about amzn, they do in fact have some really sophisticated pieces of code. The core aspects of why the company succeeded are not related directly to that code, but without it, it seems quite unlikely to me that they would have succeeded in the way that they have.
yes, but at least until everything went back into the (mainframe) cloud, the opreational cost of running the software was coverd by the user.
My pc's hardware is mine, and the electricity bill is also mine.
So 'licensing' software is very much a form of rent.
Quite frankly this is an open problem. e.g. the debate about AWS suddenly providing, redis, elastcisearch, etc as a service and making the original developers redundant.
I can identify with this essay. And, I've always wondered why people don't want to build, why people are so hell bent on preventing others from building. I mean, what on earth is the problem with letting others build? build more housing, build more transportation? Even when a start up wants to do something as simple as put more buses on the road, it quickly gets shut down by regulation (at least in the bay area)
I tend to think the technology industry could benefit from a heavy dose of humility. This isn't just a problem for people at the top - it is pervasive at all levels and professions within the technology industry.
That would go a long ways towards the ends being discussed.
I'm surprised this is being downvoted. Again and again we've seen really smart people who made a great photo app try to bring their approach to something that's genuinely hard for reasons that go beyond how to write code or build a SaaS business, and leave a trail of wreckage in their wake.
Healthcare, education, civic life, etc. are all extremely valuable problems, but only if you actually get it right. Humility doesn't mean don't tackle them, it means recognizing that your expertise in one thing doesn't translate to another automatically.
There are counterexamples, and they'll all tell you that the code was the easy part.
Third — and related to both of the above — figure out an investing model that is suited to outcomes that have a higher liklihood of success along with a lower upside.
The tricky part is that the type of build projects Andreesen argues for are more costly, have a higher risk and a lower upside compared to most software startups.
We need substantially more capital allocated to the VC segment before the focus will shift to these projects.
I'm amused by these morality screeds from rich tech thought leaders.
"Why don't the talented sacrifice easy money in software by getting into [insert super regulated, low-margin business]?" says profit-maximizing tech capitalists who ignored said businesses for a decade.
I will make the best decisions for me, and you will make the best decisions for you. If you want to charity-fund a business that helps society more than your profit margin, then pay me the same amount of money and eat the loss on your end. I'll keep working at what pays me the most, as will 99% of everyone.
For that reason, I prefer Chamath Palihapitiya's 2019 annual letter [1] over pmarca's essay. It's not merely descriptive of societal problems at large, but calls out actor and makes prescriptions. Two lines from the letter
> Governments can do a lot to make it more expensive for Big Tech to hoard human capital and allow this talent to flow more naturally to small businesses and startups so that they can more effectively compete and create vibrant ecosystems.
> The intellectual lobotomization of smart, young STEM talent has been an explicit strategy by Big Tech fueled by unseemly profitability and hi flying stock prices.
I think the reason why pmarca's essay is so tame in comparison, is that pmarca believes you can have the best of both worlds: high venture returns and non-tech societal progress that doesn't necessitate government.
This is excellent and I enjoyed it deeply. Thank you for linking it. I didn’t agree with everything but I especially liked his focus on friends, family, health, and being true with oneself over the opinion of others. This VC seems very respectable.
The large healthcare providers are already run like private businesses, because they are private businesses.
> education
Please no.
This is a favorite pet issue of the rich and powerful. Their ranks are littered with failed school reform activists. Sometimes those folks even have the self-awareness to realize they failed, e.g., the Gates Foundation. More often, they keep on proposing the same old ideas that are continuously tried and fail, while sending their own kinds to expensive private schools or public schools in the priciest zip codes in the country. Schools that are, aside from their wealth, operated in a quite traditional fashion.
If you look at education outcomes by country, there's really only two things that stand out as invariants that separate education systems that work from those that don't:
1. degree of heterogeneity in schooling (school choice without some strong equalizing effect on quality just rearranges the deck chairs on the titanic), and
2. level of respect for educators (pay != respect).
The "rich people can fix this" attitude is truly both a symptom and a cause of the biggest issue with America's education system: teaching is a low-status job (even places where it's well-paid).
When it comes to education, Americans respect literally anyone's opinion more than the opinion of educational professionals. Hell, even random people who were literally born into wealth get more voice than the professionals who spend their lives in the classroom. If that doesn't change, nothing else will.
Counterpoint to the respect for educators argument. I live in a country where teachers are highly respected (Thailand), but has among the world's worst education outcomes (as measured by standardized tests like PISA) and steadily declining. The Thai Ministry of Education continues to wring its hands year after year about it, makes various pronouncements, proposes education reforms once in a while, but student performance continues to decline. My conclusion is that respect for educators is important, but there are other much higher impact confounders that nobody seems able to clearly identify.
They already have in several of the things you listed.
Online Education? Coursera, Lynda, Pluralsight, Kahn Academy, Youtube for crying out loud.
Healthcare? - Healthtech is becoming a big thing, I had the opportunity to interview at a company that is currently working on a private health cloud where they aggregate all of the info about you, your smart watch, your phone, etc. (Note: That you choose and opt into) to make it available to determine the best outcomes for you personally and help the Dr. working with you practice individualized medicine.
You list other things, but hospitals are being changed by technology at an amazing pace, the fact that now during a pandemic I don't have to leave my home to see my PCP, you think that was the burdened bloated Hospital beracuracy that came up with that?
You then list roads and bridges, but the point is that yes, VCs and entrepenuers could figure out how to solve those too given time and a enough freedom, even we can't see it right now, it may be because our vision is just too limited to see what could be, that's what makes entrepreneurs, real entrepreneurs, different they are visionary.
How did Amazon replace you reading a book in your house? It didn't alter the underlying fundamentals but it changed the way we think about it, and again you miss my point, most of us can't figure out things like that, we can't see how we would do that. Some people can, make it so they have the freedom to build and create and they can do things you've never dreamed of.
Also a healthcare app won't replace those things but robots, computer vision, and ML could. Or they could make it so that a Dr. instead of doing 8 surgeries a day could do 80, or a Radiation machine that is totally self managed. You pop in it runs the test then it can interpret results with a 99.99% accuracy. There are lots of ways tech can augment and improve healthcare.
A VC could build a company to fulfill a government contract? I doubt it would be able to compete with established firms though because the startup wouldn't have a history and the established firm would.
Thanks for posting this excellent article. This really resonated both as a Brooklyner and as a full-time founder of a health-tech startup (for 3yrs.)
Lesson Learned: whatever doctors or hospitals say in their "Thought Leadership" pieces...if you end up making medicine more efficient and threaten their fee-per-use system, you will get tons of of pushback from the first-do-no-harm crowd. Talk is cheap, you should focus on what the AMA and individual medical Boards do, not what they say.
Ben's analysis is fine. It's not really relevant to the big picture imo.
Andreesen needed to do more than just call for action in his blog post. He should have committed his own funds towards the goals he is calling for. Gates is doing a lot via his foundation. Dorsey is committing a significant portion of his net worth towards goals Dorsey wants. Without something more than a blog post, it's just a blog post.
This virus won't be defeated by 'software' in the Silicon Valley sense. It will be defeated by vaccines. So help the labs create and distribute a vaccine. Or if that's too short-term, look at any of the problems that this pandemic has laid bare- there's lots to fix that is not VC-funded startups.
> Andreesen needed to do more than just call for action in his blog post. He should have committed his own funds towards the goals he is calling for.
That was the part I found frustrating about his original post. He talks of the need to build and the need to push people to build, but when he is one of the 1000 most capable people of building in North America (between his past experience building, his vast network, and his billionaire level of wealth), he prefers to sit back, sit on plenty of corporate boards, and wait for solutions to walk in the door.
Plus things like the hypercar and passive solar architecture, etc. All of this was worked out decades ago. But then... in the 80's everyone got high on cocaine; in the 90's it was raves; in the 00's it was the internet (and war); and in the 10's our phones.
I am glossing over hella stuff, of course, but my point is that we have all the answers already (just as Bucky calculated half a century ago.)
>Third — and related to both of the above — figure out an investing model that is suited to outcomes that have a higher liklihood of success along with a lower upside. This is truly the most important piece — and where Andreessen, given his position, can make the most impact. Andreessen Horowitz has thought more about how to change venture capital than anyone else, but the fundamental constraint has remained the assumption of high costs, high risk, and grand slam outcomes. We should keep that model, but surely there is room for another?
I'm puzzled that the above paragraph was written by Ben Thompson with his background including an MBA and the writing of insightful articles about startups.
The reason VCs don't invest in other non-VC things like "boring" and "low-return" city infrastructure projects, or small/medium businesses to help communities -- is because that's not what the people who put money into their fund expected them to do.
Some folks seem to forget that VCs are ultimately managing other people's money. Pension funds, university endowments, charities, some wealthy families, etc. The investment officer working as custodian of a teachers' pension fund didn't give money to a VC like a16z to build a new sewer system. The pension fund is looking for 15-20% returns and looked to a16z's expertise on evaluating startup founders. That's what they specialize in. Previous comment about the complexity of different investments leads to specialization: https://news.ycombinator.com/item?id=21365966
I think Ben's idea is that Marc A (and a16z) is influential and so they can put out a prospectus for a new type of fund with a different investment thesis that avoids YC software startups and focuses on low-risk low-return low-margin "hard" projects. Well here's the problem, the pension fund officers will not think it's a good use of their money and will invest their money elsewhere. Therefore, the VC fund using Ben's ideas does not raise any money.
The customers (Limited Partners) with the millions to invest is the constraint that any person raising a new fund with "feel good" ideas faces. E.g. let's say you want to create an investment fund that "feeds poor 5-year old children nutritious meals and reads books to them because children are the investment into our future." Ok, it sounds noble but when the investment officer of the Firemen Retirement Fund asks how it makes money, you need to have a credible answer. Otherwise, your fund gets no money and the feel-good investment thesis goes nowhere.
My previous comment on why alternative investment ideas don't need essays about it. They just need financial mavericks to pursue it and everybody will copy them. (https://news.ycombinator.com/item?id=21588264)
However, Andreessen Horowitz is probably not the financial maverick that can prove the alternative investment idea will work. Their firm and their staff are built to understand software startups. Somebody else has to lead with Ben's ideas.
You're right about a lot of this, but I think what you're missing is that Marc Andreessen did this financial maverick thing once, which is why he is influential. So it is probably right that Andreessen Horowitz the fund is not the right vehicle for such a thing, but having written his open letter, and with a deep well of influence and (presumably) some unique talent for setting up investment vehicles, Marc Andreessen the person is well positioned to put his money where his mouth is and work toward making this new kind of investment vehicle work.
Yes, this would involve finding new kinds of LPs or selling the same LPs on a new vision with different trade-offs, but that finding-LPs-and-selling-them work is exactly what it took to launch Andreessen Horowitz, so it is not crazy to suggest that perhaps Marc Andreessen is well positioned to get to work on this.
The response to your other comment you linked (edit, this one: https://news.ycombinator.com/item?id=21588626) is also interesting and meshes with my intuition that there might be more of a market for this than your giving credence to. I would also add that a benefit of this possible market may be that it could be a lot bigger than the pool VCs are currently constricted to. I think one interpretation of what we've seen with unicorns (and SoftBank, which is increasingly looking like a debacle) is that there is more money that wants in than there are businesses with the right model for the kind of VC money they are getting. It is plausible that a more sustainable model might be found in a much broader market of less risky companies.
We're great at building private wealth. We suck at building public wealth. We built a database worth a trillion dollars. We've built oligopolies in vital industries.
The newspaper reports on "the economy" by a private wealth measure -- the stock index. Another measure -- jobs -- is reported in numbers and not dollars, because the numbers are a leading indicator of public support for private wealth.
We haven't begun to fight for our survival until we agree to tap into private wealth.
At the end of the day, the US is a litigious society covered in Byzantine regulation that most people aren’t even aware of. This covers the most basic things: would you like to build a townhouse for your family with just one parking space? Illegal in the vast majority of the United States, where 2+ parking spaces per home are required by law. Want to build an apartment building in San Francisco to capitalize on the incredible demand for housing? You’ll spend at least 6 years getting a building permit, and what you’re actually allowed to build will be mostly the result of ugly haggling with special interest groups along the way. These are just a few examples I happen to be familiar with.
We’ve chosen for things to be like this by the way we allow our government at every level to be captured by lobbyists, special interests, and partisanship. Realistically, to change things, we need reform that fixes the way the government itself operates, and while there are many ideas that sound good, everything has unexpected side effects. That is a very, very hard problem, to solve.