Productive Illusions: January 13, 2019 Snippets
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This week’s theme: why did people in tech love Sapiens so much, and why does that matter?
Last week in Snippets, we talked about William H Whyte’s book The Organization Man, which was originally published in 1956 and painted a picture of a business world that looks very different than what we see today in tech. You might think at first glance that the lessons of The Organization Man — that conformity stifles creativity, that large bureaucracies are in danger of ossification or disruption, or even that submission to the group goes against basic human drive — have been fully born out in the way that the business world has evolved from the 80s onward, through to Silicon Valley today. Although it’s true that the corporate world has to some extent genuinely evolved out of its conformist 50s mindset (with the Silicon Valley tech industry leading the charge, both economically and culturally), in my view it makes the lessons of The Organization Man even more important to appreciate, because at a deep level, the social forces that make Silicon Valley work are much closer to the ones Whyte describes than you might think.
To see what we mean here, consider another book, written more recently, that was an absolute crowd-favourite in the tech industry: Sapiens by Yuval Harari. Sapiens, to be honest, is a real head-scratcher to contemplate. Its subtitle is “a brief history of humankind”, and to be quite honest, if you evaluate it on its merit as a work of history, the book is frankly bad. I mean, it’s a best-selling popular book that promises (and, in a way, succeeds) at describing the entirety of human history in 416 pages; so look, if you expected a serious work of history, then you’ll be mistaken. But Sapiens is not a bad book. It’s very good at making the point that it sets out to make, which isn’t really about history at all but about a particular societal invention that makes human civilization work: storytelling.
You can summarize Sapiens more or less as follows: “The world as we know it is made up almost entirely out of stories that people collectively believe. It’s true that a tree is real, or a lion threatening to eat you is real. But everything more advanced than that — languages and customs, tribes and armies, governments and laws, businesses and money, all of it — is made up of stories that, if enough people believe in them, effectively become real.” Harari defines these stories that achieve durable societal importance as Intersubjective Realities: “Something that exists within the communication network linking the subjective consciousness of many individuals. If a single individual changes his or her beliefs, or even dies, it is of little importance. However, if most individuals in the network die or change their beliefs, the inter-subjective phenomenon will mutate or disappear. Inter-subjective phenomena are neither malevolent frauds nor insignificant charades. They exist in a different way from physical phenomena like radioactivity, but their impact on the world may still be enormous.”
In a passage from early on in the book that basically captures the main point he makes repeatedly for the remaining duration of the book, Harari pontificates: “People easily understand that [primitive societies] cement their social order by believing in ghosts and spirits, and gathering each full moon to dance together around the campfire. What we fail to appreciate is that our modern institutions function on exactly the same basis. Take for example the world of business corporations. Modern businesspeople and lawyers are, in fact, powerful sorcerers. The principal difference between them and tribal shamans is that modern lawyers tell far stranger tales. … Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone else to believe it. Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives Sapiens immense power, because it enables millions of strangers to work cooperate and work towards common goals. Just try to imagine how difficult it would have been to create states, or churches, or legal systems if we could speak only about things that really exist, such as rivers, trees and lions.”
The point we want to extract out of this for our own purposes is that one way intersubjective realities change the way the world works is by lowering or eliminating some sort of friction or cost that should normally exist, but doesn’t if everyone thinks in a certain way or believes in a certain thing. Languages lower the friction and cost of communicating; money lowers the friction and cost of trading goods and services for one another; the legal system lowers the friction and cost associated with trusting strangers. One way to think about how a community or ecosystem functions is to ask, “what cost or friction that is normally present has this group collectively decided to eliminate?” By appreciating what frictions this group is specifically choosing to eliminate through their collective beliefs, we can gain an understanding of what makes the group work, and also what tradeoffs it has to make in order to do.
In The Organization Man, Whyte makes it quite clear what friction we had decided to collectively eliminate: conflict. The HR departments and “personnel men” of Whyte’s 1950s universe, along with their happily willing middle management subjects, have all bought into a particular idea: conflict is expensive. If we all agree that conflict should be shunned or eliminated as much as possible, we will have eliminated an important friction that held the group back. If we all believe there should be no conflict, then the conflict will go away, and the costs of conflict will disappear along with it. And, in a superficial sense, it does. But at what cost? A huge one, as we’ve come to realize in the decades since: a conflict-free organization does not grow, does not adapt, does not challenge itself, and ultimately does not survive. But we must admit that the intersubjective reality of “everyone should all just get along” does, in fact, work — if that’s the kind of thing you care about.
Now what about in Silicon Valley? What is it that we all collectively believe is expensive and that should be gone without? Well, one thing we collectively hate is inaction. Have an idea? Just build it. Want advice from someone important and famous? Just ask them. We all buy into this mindset, both with our behavior and with the shortcuts that we make, like standardized funding documents like SAFE notes, all reinforcing this common mantra: if we all believe there’s no barrier to starting anything, or talking to anyone, or trying something new, then there is no barrier. This is something that people outside of the tech industry, and particularly outside of the Bay Area, misunderstand about what makes Silicon Valley work. It’s not just what is here — the talent, the money, the universities, whatever — it’s what isn’t here, which is inertia. I don’t think it’s an accident that so many tech people loved Sapiens — at some level, we recognize that Silicon Valley only works because we inhabit a particularly powerful intersubjective reality in the Bay Area. For all these reasons, which we’ll continue talking about next week, the Silicon Valley tech industry might best be understood as a kind of collective illusion or story around what normally is expensive, but instead we all just agree won’t be.
One story everyone was talking about this week is this bombshell from Joseph Cox at Motherboard, who shed some light on the murky and incredibly sketchy market of cell phone providers reselling your real-time data, including your live location:
I gave a bounty hunter $300. Then he located our phone. | Joseph Cox, Motherboard
Your cell phone provider more than likely says things like, “We value your privacy. We will never make your location data public.” But they do package up and resell that data to third party buyer after third party buyer, who in turn resells that to other people, and on down a dark hole that is effectively impossible to trace. But skilled professionals can easily exploit this marketplace to find exactly what they’re looking for: in the case of our bounty hunter, someone’s exact location, in real time, obtained using nothing more than a cell phone number. It’s pretty scary stuff, and Cox’s article was appropriately commended for the conversations it’s gotten started, and some major cell phone companies have AT&T have pledged to end the practice. Time will tell whether or not they actually do.
More startups have an unfamiliar message for venture capitalists: get lost | Erin Griffith, NYT
We’ll say more about this soon, but this message should be familiar to anyone who’s read Chamath’s annual letter from last year, or has been following our mission and commitment at Social Capital over the past while. Venture Capital is not the only way to fund important companies; in fact, it can be incredibly myopic in its scope, and un-creative in its methods for how to build lasting, valuable businesses. Griffith’s article is excellent; please read it, and you can certainly bet we’ll have a lot to say about it in short order.
A part of tech you may have completely forgotten about, but still very much matters: hard drive storage technology
Why the future of data storage is (still) magnetic tape | Mark Lantz, IEEE Spectrum
A pretty hilarious paper that comes to a surprisingly believable conclusion: active investors outperform the market when they buy, but then underperform when they sell:
Investors have to sell stocks, too | Matt Levine, Bloomberg
Great interviews:
Success comes with its own heart attack Salt, Fat, Acid, Heat chef Samin Nosrat on the reality of fame | Mayukh Sen, The Guardian
Vinod Khosla on how to build the future | Y Combinator Podcast with Sam Altman
Unresolved mysteries:
The history of blood (and why we still don’t really understand it) | Jerome Groopman, The New Yorker
A new idea about what triggers Alzheimer’s | Jerold Chun, Scientific American
Other reading from around the Internet:
Tech’s next big battle: protecting immunity from content lawsuits | Ashley Gold, The Information
Book review: Thomas Kuhn’s The Structure of Scientific Revolutions | Scott Alexander, Slate Star Codex
The “future book” is here, but it’s not what we expected | Craig Mod, Wired
Daimler is beating Tesla to making semi-autonomous big rigs | Sean O’Kane, The Verge
The Instagram husband revolution | Taylor Lorenz, The Atlantic
And just for fun:
2018 McGingerbread Mansion Hell Competition Winter | McMansion Hell
In this week’s news and notes from the Social Capital family, we have… a CES crossover episode!
Snippets readers will remember Autonomic, a Social Capital portfolio company led by Sunny Madra and his team, which was acquired last year by Ford. Inside Ford, Autonomic has risen to the challenge of creating Ford’s 21st century operating system for all connected vehicles: an ambitious and impressive effort called the Transportation Mobility Cloud. At this year’s CES in Las Vegas, Ford’s TMC was on full display, and one of the biggest pieces of the platform that has to be established first is connectivity.
Coming together: why we’re teaming up to improve our cities | Mary Klevorn, President: Ford Mobility
Marcy Klevorn, the President of Ford Mobility, writes: Every single mobility option is part of a comprehensive transportation network — one that could be vastly more useful if all the services involved were connected. That’s exactly why Autonomic has created a platform called the Transportation Mobility Cloud that can facilitate communication between numerous services, and synchronize their operations so people can get the most out of what their cities have to offer. One company they’re partnering with to make this happen? None other than Swarm, from Social Capital’s Discover family, who are building the world’s smallest satellites in pursuit of their mission to provide the world’s lowest-cost connectivity, all around the world, anywhere a satellite can fly.
Sara Spangelo, Swarm’s CEO, Connectivity for transportation systems, particularly for vehicles, is currently limited to select portions of the world where cell service is available. As the world’s lowest cost communications network, we recognized the importance of partnering with others in the ecosystem who share a similar vision, and that’s where the team at Ford-owned Autonomic comes in. … We are thrilled to announce that we are teaming up with Autonomic to extent [Ford’s Transportation Mobility Cloud]’s reach even further — anywhere a satellite can fly.
The net result will be nothing less than the world’s first low-cost ubiquitous connectivity platform for connected vehicles. Together, we will enable enterprises to easily access critical telematics and emergency services anywhere on Earth by integrating Swarm’s microsatellite network with the TMC.
In practical terms, without ubiquitous coverage, car sharing systems, for instance, are limited to urban areas, command and control systems are hampered and in-vehicle emergency services may not function. Our combined offering will allow access to a single global network solution of critical connectivity services — regardless of where a vehicle may travel.
Sometimes, the future of transportation — with autonomous vehicles, on-demand transportation services, and new problems and challenges that emerge along with them — seem like it’s far away or ominously scary. But then we realize that this future is already starting to appear, in little building blocks, everywhere. We can’t wait to see what’s next!
In other housekeeping announcements from around the Social Capital family, here are a few other things you should know about:
First of all, ever since Datacoral launched a few months ago, they’ve been quickly building out their data infrastructure offering, as their “end-to-end data infrastructure stack in minutes” becomes increasingly full-featured. As they grow, they have a number of positions opening up they’ll need to fill, including engineering roles in San Francisco and Bangalore, and sales roles in San Francisco. One role in particular to keep in mind is their position for Product Marketing Manager, a cross-disciplinary role for someone who loves unpacking and explaining complex technical concepts and technologies for enterprise customers; if you or someone you know has the right engineering chops and is looking for a marketing challenge, please send them Datacoral’s way.
And finally, a neat new feature just released by Saildrone: they now do weather forecasting!
Seriously, just go play around with it. It’s beautiful. Before long, you’ll be looking for excuses to check the weather.
Have a great week,
Alex & the team from Social Capital
