In venture capital we come across startups all the time that are building something that has been tried in the past and failed. It would be very easy to dismiss these opportunities based on a naive “pattern matching” approach to investing. Instead at USV we always ask ourselves “what is different now?” to understand whether the lessons from the past do in fact apply or something profound has changed.
This is important because things that failed in the past tend to eventually succeed due to changes in technology, the market or society / behavior. It is useful to keep some big examples in mind to remind oneself of this. Here are a few: Apple had an epic failure with the Newton but eventually a huge success with the iPhone (changes: further turns of Moore’s law, cellular network buildout). Car companies had many failed stabs at electric cars until Tesla came along (changes: more expensive gasoline, cheaper batteries, critical mass of affluent environmentally conscious buyers). There were attempts at digital currencies (remember Flooz anyone?) which failed where bitcoin is appearing to succeed (changes: technical breakthrough, growing distrust of governments).
Or how about this one? Social networks in the past failed or didn’t make much money (friendster, MySpace) until Facebook came along (and recently inspired a whole series of tweets by Marc about failed FB predictions). Nassim Taleb in Antifragile and elsewhere has referred to the “it hasn’t happened so it won’t happen” argument as the Turkey fallacy (the Turkey is happy about the farmer feeding it every day until Thanksgiving).
All of this is to say that I strongly disagree with Marc’s assessment that people who worry about technology’s impact on the labor market today are either Luddites or socialists simply because this argument has been wrong in the past. There are plenty of things that have changed fundamentally since 1964. Most importantly, the cost of computing has plummeted and the power of computing has skyrocketed (see my comparison btw NASA’s compute power in 1960s and Raspberry Pi).
During the first industrial revolution people worried about machines replacing human workers because machines provided mechanical power. Well, it turned out that humans were still needed because we supplied brain power. This time round though, at the dawning of the “Second Machine Age” we are worrying because machines are providing brain power. That’s a new and different set of circumstances and so we should rightly re-examine this question and not just take a no answer for granted.
Marc has written that he is “way long human creativity” to say that even if computers replace humans for some thinking tasks we will be the ones who are creative (and come up with interesting things for ourselves to do). Even if you believe that – and I happen to share this belief – that still doesn’t mean that we shouldn’t worry about the transition period.
In fact if we want to look at history for a lesson we would do well to keep in mind that industrialization was incredibly ugly and had us go through lots of revolutions and two world wars. Agricultural jobs were lost at a far faster pace (due to mechanization) than industrial jobs appeared. And the early industrial jobs were awful involving horrid working hours and conditions.
In summary: something has changed (computing) and it is entirely appropriate to worry about existing jobs disappearing. At a minimum the worry is that they will disappear far faster than we can figure out how to be creative and at a maximum that we won’t in fact figure out what to substitute for them (I am personally less worried about the latter but not dismissive).
