"Using the medical analogy, the current environment in the internet space essentially tells people that they will make more money as a pre-med dropout opening clinics than as a serious researcher looking for a cure for cancer."
You say that like you aren't aware it's a true statement? You have terrible odds of becoming rich being a cancer researcher.
It's a hard problem to solve, though. The obvious answer of "route more money to cancer researchers" produces the obvious social attack of "more marginal people being or simply pretending to be cancer researchers", for instance. It's easy to get "more money" -> "more researchers", it's much harder to get "more money" -> "more research". (I'm not saying it's impossible, just that it's a lot harder than it looks.)
Innovation is doing fine. All these whiny bloggers and investors simply can't see the forest for the trees. The reason there are so many trivial startups is because the web is now a mature market and the barriers to entry have fallen to the point that anybody can jump in. Time will show that most of these ideas are worthless and not very many people are getting rich off fart apps, but for now it's a gold rush plain and simple.
Fundamental innovation in tech is in hardware and software standards, neither of these things is suffering. The evolution of web standards is moving faster than it ever has. Hardware is making steady progress. Cloud computing is making big strides. Things are moving just as fast as ever, it's just obscured by the mass market noise that is obscuring the big picture.
Now obviously a lot of this stuff is incremental, but guess what: computers and networks aren't new anymore. The level of innovation from 1980-2000 was special because it introduced the power of general computing to the majority of the population. It's not a matter of simply working on harder problems to replicate that. It's one of a few evolutionary sea changes like mass production/automation, railroads, wired communications, or space flight. Nothing short of the singularity is going to appear that amazing, especially with the compounding effect of nostalgia.
Sort of like saying that the era from 1980 - 2000 was about making computers and computation visible, and now we're trying to make it invisible so that we no longer have to explicitly think about computation, it just is.
If you want to find ground-breakingly new tech & ideas, don't look at your average 2012 startup. Look at PhD dissertations or the output of Microsoft/Google/IBM research. Those people are paid for new ideas that don't make money. :-)
Real ground-breaking tech comes from deep work & deep knowledge. It also comes from trying out ideas and watching the "99 lightbulbs that don't work". It turns out failing costs money, and groundbreaking work is hard to fund. In general, that is sort of the idea behind research labs not producing monetizing products: all they do is work up ideas. Maybe the ideas are usable, but statistically, most of those ideas aren't going to make money. Think very hard about that. As an investor or a founder, you have to be prepared to lose your money on some faffy idea that might be so far beyond the current worldstate that no one would buy it. The interested reader is advised to examine Common Lisp company history in the '80s for a classic case study. Or, alternatively, the Connection Machine.
Real innovation/groundbreaking ideas are exotic (a priori, this is what makes them the real deal). So there must be some sort of ability on the part of the company to transform the society into being ready for this idea.
Put another way, research is even more black swan than startups.
Innovation happens in fits and spurts -- it's highly nonlinear.
More importantly, there is a positive feedback cycle between what the author would consider "true innovation" and "trivial apps" -- before we can make a very large leap in terms of true innovation, we need some societal comfort with the paradigm. Those apps (like Twitter, the one Peter Thiel derided) serve a very important role: they move the bar culturally. These apps help acclimate people to the idea of technology (for example, owning and keeping a smartphone close to you) and make sure that society is ready for whatever next innovation happens. Without the societal leg of the cycle the "true innovation" will be stymied.
Honestly? I think that's what investors(and the trivial startups who court them) tell themselves as they tuck themselves in at night.
Innovation, like a new tree, has many branches which can be developed and on which to exploit and make money. Exploiting innovation is lucrative; research is costly. But now we've over-grazed. We got so greedy that we threw everything into harvesting the leaves, forgoing the costly part of sowing new seeds, and now we're navel-gazing and wondering what happened. It's not hard to understand.
In WWII there was a ton of investment into important research and the results were overwhelming. Currently there is a ton of investment into photo-sharing social networks for dogs, and the results are, surprise!, quite underwhelming.
Whether an innovation is lucrative or not depends highly on cultural factors. Ultimately to exploit an innovation there needs to be something to exploit, and unfortunately that is almost always other people.
Many companies have produced tablets for decades before Apple came in with the iPad. If the iPad were launched in the early 90s, for example, it would not have taken off in the same way it did now.
Excellent article. I've seen a lot of my friends get disheartened by the idea of spending the time and effort to do a PhD and instead hoping to make it big by trying a variation of the "chain of clinics". While this is strictly their personal choice to make, I think their intelligence would have served better learning the field more thoroughly; after which they would have probably been an invaluable asset...
A lot of them feel that getting a PhD would make them overqualified to work in the industry.
Let's ask a simple question: how many people really want to change the world? Not just disrupt, but eliminate an entire class of fundamental human problems? And how many people would settle for simply being rich? The allure of success can be highly seductive.
The market has spoken, and it's rewarding people with little to no vision. It makes it OK to water down grand visions.
Fix the culture to stop focusing so much on being the top dog. This is a very difficult task.
It hasn't stalled, its just hard to quantify, it can't be strictly measured in press and consumer intelligibility.
Likewise, most businesses are not strictly innovative in a scientific/technological sense, merely in having a clever synthesis of preexisting tech that does something people will pay for.
There are a lot of innovative tech / engineering shops being created and or growing each year, but they're a bare fraction of the total number of businesses being created. (And all businesses have a web site these days, so clearly that's not tech ,,:-p )
The kicker is we're kinda already in an amazing future. We actually understand pretty well how much / little we truly know in most endeavors. Sadly, human psychology does get bored and demand ever more exotic novelty.
Being innovative in sci-tech and having a self sustaining business With RECURRENT are not often happily wedded, and every successful fusion should be cause for celebration.
Likewise its actually really hard to evaluate what IS innovative if you're not a domain expert. Etc etc etc
Usual caveat, I'm trying to fix numerical computing at wellposed, so I'm a bit overthinking about innovation always.
I disagree with the premise of the article. Yes, there are a lot of people dropping out of college saying "Oh Zuckerberg did it, I should do it too!" without a sane business model. Yes, there are a zillon daily deals startups which will probably all go bankrupt in 6 months. Yes, there are a ton of social media startups that allow you to take a photo and share it for 10 seconds with all your friends. And there are definitely more of these startups than usual, due to the funding environment.
However, there are also many "serious" startups. Tesla, transforming the primary mode of transport for most Americans. SpaceX, reinvigorating space exploration. Palantir, integrating the world's data to save lives. There have, and always will be, these startups doing serious world-changing innovation.
I picture Silicon Valley as a funding pyramid. The best companies are at the top, and always get funding. Then, at the bottom of the pyramid are the daily deals startups. In a less hot funding environment, these companies wouldn't get funded. But in the current climate, a ton of companies at the bottom of the pyramid are getting funding. Since there are way more of these bogus startups than serious ones in the current climate, we just hear more stories about them.
>However, there are also many "serious" startups. Tesla, transforming the primary mode of transport for most Americans. SpaceX, reinvigorating space exploration. Palantir, integrating the world's data to save lives. There have, and always will be, these startups doing serious world-changing innovation.
Are any of those actually startups anymore? SpaceX has over 2000 employees. Palanir has over 400. Tesla had it's IPO in 2010.
They're just companies, they've all delivered products to market, and are(with the possible exception of Tesla, depending on their 2012 filings) making a profit.
On the scale of innovation, it's important to note that a computer program will never be a flying car, or antigravity, or a cure for cancer. It won't be anything physical, by definition. For the most part the total output of any application can be specified as a sequence of pixel bitmaps, and the utility of that sequence is subjectively measured by the person interacting with it. Applications can't do any more than acquire data and generate bitmaps. I only say this to emphasize that it's important to set your expectations before getting "disappointed" in the state of software innovation.
The other thing about innovation in software is the need to distinguish between application development as distinct from computer science. Writing an application is very different from writing an algorithm! Much of the "boring innovation" happening right now is about application development, not computer science. Once we accept this we can start making clearer calls about what kind of innovation we think is stagnating.
I don't think is caused so much by fewer people doing truly interesting work as it is by a greater number of people doing fairly trivial projects.
In other words, it's not that resources that could have gone to "serious" projects are being allocated instead to easy projects. The author even says as much, different people are doing those jobs.
The innovation in the past 5 years in tech dwarfs the past. Monsterix has a great list of the innovations that have been developed recently and complaining about the lack of innovation is sloth - a lack of willingness to get out and speak with the companies that are building non-linear tech.
Not sure what Monsterix is, but I have a feeling that innovation is "new way to bounce stuff on the screens" "new API for X", "new protocol for Z", etc. Those aren't innovations, IMO.
That there's a lack of real innovation might just be an illusion that is created by too much focus on stories about how much money this or that startup raised. Same way how if you watch news and read magazines, one might start to believe that the world is in a very sorry state.
Perhaps Thiel, Arrington and the author are taking too much of a top down view of the issues.
To stick with Thiel's hyperbole, I think we don't have flying cars because we still haven't fixed the issues with the road bound ones. Its great to have grand aims at revolutionizing the world, but lets not forget the big impact something as small as 140 characters can have. There are third world countries where entire economies have grown out of the ability to text message. Only a few years ago we saw entire swaths of the Middle East get big quality of life improvements thanks to wall posts and tweets.
I don't think it has stalled. Its actually pretty healthy. Every day I see posts here of people working on greta projects. My own projects are actually pretty innovating (and challenging), so I can personally attest to it.
I do believe that people are now used to a constant supply of groundbreaking news from SV. So, even though we are working at a pretty good rate, theit POV will be skewed from that need to always have their mind blown by some awesome app. A lot of innovation happens under the hood and they never notice. Too bad, though.
Nothing directed at the writer of this one single blog post, but who are these bloggers to be talking about innovation? They all use the same blogging platforms and write the same articles. And why have blog posts of this topic started to appear? Arrington writes something and all other blogging websites feel like they have to get a piece of the story trend pie and write a similar post, as well? I'm sorry but these are the kind of posts that make me shake my head.
Personally, I'm looking into the possibility to work at SpaceX, exactly for such reasons. I feel like I can't do anything "remotely important" at any job I've found in the silicon valley, and i haven't done any innovation myself that i deem to be "really changing something that I believe in".
So I though, I might as well help a company that does just that, even if I'm not going to be the one designing the actual rockets.
I find the most exciting innovation in software happening now is in computer vision and machine learning. To me, these counts as true innovations. Most internet technology however is just engineering with fairly obvious solutions. There's nothing wrong with that, but it's not innovations if you're just pushing what's possible on the internet, but not pushing what's possible overall.
in order to push the innovation envelope, people must be working at, or at least have a deep knowledge of the current cutting edge of innovation.
I agree, and that's a full-time job that has to be self-directed. Excellence is a nonlinear phenomenon. A person who excels in 10 hours of his time and subordinates in 30 isn't 25% as someone who gets to be full-time excellent, but possibly 1%.
I spent 6 months at Google, a company that has some awe-inspiring R&D "centers of excellence" but is essentially just a bank if you don't get to work in one. Now, I'm sick of ragging on Google because I think I've overdone that schtick. On the other hand, with the incredible wealth of talent it has got, it can do a lot better. It's the best a closed-allocation company can be, and it has amazing people. But my experience there is instructive on the mediocrity that closed allocation command-and-control creates. If you don't have worker autonomy, you won't get creativity or excellence or innovation.
Google remains awesome because the ~25% who get to be Real Googlers (they can, like Yegge, quit their projects and join better ones, because teams compete for them) have enough autonomy to do really good work and keep pulling the company, but if you're not a Real Googler, you're going to be working on 4th-Quadrant crap. (For the definition of "4th-Quadrant", go here: http://michaelochurch.wordpress.com/2013/01/01/fourth-quadra... .)
After that, I worked in a reputable (but diseased) NYC startup-- a VC darling-- with serious ethical problems at managerial levels (multiple people hired into the same leadership role; dishonesty about product direction used to keep people motivated). To my chagrin, the culture there was traditional MBA-style corporate bullshit: closed allocation, supernumerary people with fancy titles who didn't do much, extremely vicious politics (I resigned when asked to sign affadavits disparaging engineering old hands with too much equity).
The Valves and Githubs excepted, these "hip" tech startups are not culturally innovative, and it's the prevalence of the old-style corporate culture that makes them all devolve into grey-goo mediocrity.
Subordination is a genocidal killer of innovation, and the cultures of these "hip" tech startups are often not much different from large corporations in culture, creativity, innovation, or ethics. For every Valve, there are 100 companies that claim to be "startups" but are just as hierarchical and command-oriented. The hierarchy isn't as deep with only 100 people, but it's every bit as dysfunctional.
If we want innovation out of these startups, we have to focus on culture. We have to stop funding culturally retarded people with MBAs just because they're "credible" and, instead, look for people who can lead very smart people (an extremely rare skill).
It's funny, I'm reading a lot of blog posts about "We have unlimited vacation and beer Fridays!" from startups, but no mention of how their company actually functions (I'll echo "Valve and Github excepted"). Any psychopath can get a small group of people together and raise some money to throw at fancy laptops and build a product, and then proceed to run the business like their own personal kingdom. Startup doesn't equate to "awesome work environment" but for some reason people think it does, which ignores a large part of human evolution and psychology.
Living in NYC, I hear horror stories from programmers who have left well-known "startups" in the area that are chock-full of "dysfunctional company bullshit". Yes, they produce products and people pay them for it, but they can't keep folks working there (which is a nice side effect for my company :D).
Without having a fundamental sense of how to build an innovative company, all these startups are doing is cargo-culting the trappings of culture.
"Sure, we give you standup desks and a MacBook Pro, but we also don't trust you at all."
Startup doesn't equate to "awesome work environment" but for some reason people think it does, which ignores a large part of human evolution and psychology.
The nice thing about startups is the freedom from legacy and the small program size-- at least in theory. The reality is that multi-programmer single programs ultimately end up with one "blazer" and N-1 chumps who keep up with the blazer's changes. You have to do Unix philosophy small-program development or else almost no one is getting the one Startup Perk that actually matters: high productivity.
I would rather be in a corporate R&D lab (if they still existed) than a typical startup. I am fine with upper-middle-class financial mediocrity, but don't make me do mediocre shit.
Without having a fundamental sense of how to build an innovative company, all these startups are doing is cargo-culting the trappings of culture.
Bingo. I am 29 years old and have already had the experience of getting career-fucking health problems from too much time in an open-plan office. I don't give the square root of a fuck about foosball tables and other diversions. At 8:30, I am at home with my wife, not playing XBox with co-workers. From my perspective, videogames peaked during Final Fantasy 6, Chrono Trigger, and Terranigma. Valve figured it out and focused on the one Perk actually worth giving a shit about: autonomy.
>We have to stop funding culturally retarded people with MBAs just because they're "credible" and look for people who can lead very smart people (an extremely rare skill).
With all due respect, you have to articulate better than that. I agree that it sucks that command-and-control types seem to be loved by capital as leaders of organizations. But isn't the real culprit here on the demand side? E.g a problem with the capitalists? How do you convince them that a) cultural innovation is a winning move and b) you're the guy to get it done?
The other issue here is that it's a lot of moving parts. Presumably at a startup you're already innovating in at least one area. Now you're talking about innovating in an orthogonal area. If my experience as an engineer is any indication, introducing one new technology is somewhat risky, the risk for two sky-rockets, and at three you might as well not start the project.
"Culturally retarded" wasn't intended for offense. Retarded means "delayed" or "behind the times" and I couldn't think of a better word. I am no fan of the colloquial use of "retarded" (making a slight on people who, through no fault of their own, have congenital cognitive problems) but that's not what I was going for.
How do you convince them that a) cultural innovation is a winning move and b) you're the guy to get it done?
These VC darlings grow too fast and hire before they trust. That's their original sin. If you can't trust someone with his own time and effort (open allocation) then don't fucking hire that person.
If you are going to retain the ability to fire people, you are still subjecting them to hierarchy. Except now you have a narrower channel of communication--they can only ask: was I fired today or not?
And if you open more communication with the implied threat of firing, you are back to a traditional managerial relationship.
Well, I'm a fan of open allocation. People aren't beholden to one manager. They work for the company.
Two cases of firing that I see:
1. Objectively unethical or toxic. Leakers, people who arrogate power in power vacuums, people who insult colleagues, people who break the law. Fire them. Don't wait a day. This is less than 1%.
2. People who can't fit anywhere in the organization. You need to get rid of them, but you have time. They might be a solid "5" or "6", but they'll never be a "8". There's just no fit. Give them a generous severance and a good reference. Let them use the office and represent themselves as employed during the search. Treat them as alumni and leave them feeling good about the company.
3. People who are not doing great where they are. Let them find a better fit (open allocation). If they don't have the initiative for that-- not everyone does-- see #2.
That's the right way to fire people. It's a serious and important function and it shouldn't be used as punishment. You fire because you have no other choice.
Then firing isn't about power. It's a necessary and unpleasant duty that keeps the company from falling to pieces.
If we want innovation out of these startups, we have to focus on culture. We have to stop funding culturally retarded people with MBAs just because they're "credible" and look for people who can lead very smart people (an extremely rare skill).
May you provide more insight into what such culture would be like? I agree that culture is the important factor for innovation, and I'm working hard to develop a good one. So please, share your thoughts on that. Anyone else is also welcome to do so.
Haha the DFA, happened to me this last year. And it took exactly 7 months to quit the company with all the symptoms of challenged authority and co-workers looking bad. I managed to finally work from home and loving it so far.
Thank you for this, it looks very interesting. Looks like you have another subscriber to your blog. Your "about page" doesn't go into much detail though...
Frankly, it is extremely boring to read articles like this. The heading "Why ABC innovation has stalled" itself sounds quite artificial.
Here is how innovation seems unfolding itself lately (Both in Silicon valley and outside of it):
Early stages of 3D printing, cars that drive themselves, drones that are cheap and interesting, gestures which lend themselves to web, voice processing and response at higher level, interesting touch surfaces where the buttons grow out of the screen depending on software interface, banking and virtual currency to kick ass of the arcane and so on ...
Here is (probably) the problem of tech blogs apparently. You guys have gone too close to investor community, or have started believing in the hype machine too much. Open your eyes and report on start-ups outside of 'likes' and 'tweets' and 'pluses' (Not that those are not news).
The elephant in the room for the valley is that nothing is happening. Randomly select a startup from AngelList and tell me what you think of it. Is it creating something innovative or is it a new application for existing technology? And now we've exhausted permutations for social/sharing/tweet/feeds. It's old.
Yes interesting research areas exist. They always have. But what we're talking about here is the proportion of those, especially in the valley, to what the average startup is working on.
Okay. So now search for start-ups involved around those interesting areas. Don't just down-vote generally on an article like this which borders on flame-bait.
On the other hand, I also accept your down-vote (it is your karma ultimately, not mine) but that doesn't change a thing. According to me it's just plain stupid to claim that innovation has stalled because one is unable to figure out 5 awesome start-ups from a crowd of 50,000 wannabes. Period.
You say that like you aren't aware it's a true statement? You have terrible odds of becoming rich being a cancer researcher.
It's a hard problem to solve, though. The obvious answer of "route more money to cancer researchers" produces the obvious social attack of "more marginal people being or simply pretending to be cancer researchers", for instance. It's easy to get "more money" -> "more researchers", it's much harder to get "more money" -> "more research". (I'm not saying it's impossible, just that it's a lot harder than it looks.)