Connection in Silicon Valley
Ingenuism Weekly 17
“But by far the greatest obstacle to the progress of science and to the undertaking of new tasks and provinces therein is found in this—that men despair and think things impossible.” —Francis Bacon
Climate, China, and COVID - Silicon Valley Examined 5
On the Silicon Valley Explored podcast, Robert Hendershott and Don Watkins discuss how Ingenuism can help us conquer climate challenges, China's tech crackdown, and calls for a new government agency to fight disease.
Connection in Silicon Valley
Robert Hendershott and Don Watkins
Form Energy recently reported a key breakthrough for low-cost, long-duration energy storage for utilities—the kind of thing that could fundamentally alter the impact of solar and wind power. According to the Wall Street Journal:
A four-year-old startup says it has built an inexpensive battery that can discharge power for days using one of the most common elements on Earth: iron.
Form Energy Inc.’s batteries are far too heavy for electric cars. But it says they will be capable of solving one of the most elusive problems facing renewable energy: cheaply storing large amounts of electricity to power grids when the sun isn’t shining and wind isn’t blowing.
The story of Form Energy is really the story of how connection in Silicon Valley helps to drive progress forward.
Firms by their nature connect groups of people who are themselves groups of connected people (e.g., subsidiaries, divisions, departments). And the better connected these people are—the more they share knowledge, ideas, and insights and the more they collaborate—the better the firm does.
Silicon Valley start-ups are a particularly elegant way to connect people with complementary knowledge and skills. Start-ups simultaneously connect insights while protecting intellectual property and contracting on how the value created by connection will be divided among the people involved. Accomplishing this complex set of tasks is the primary reason the start-up structure exists and thrives.
But while each individual start-up is connected, start-ups as a group are fragmented. There are many different start-ups made up of small, insulated groups. Explicit connection is limited, which would seem to imply that ideas and insights aren’t getting shared across companies. But that turns out not to be true. A key part of Silicon Valley’s success is that technology companies, both start-ups and established firms, are connected in less formal but just as important ways.
Technology workers in Silicon Valley change jobs often. This is partly because many start-ups fail but also because it is part of the culture: job hopping does not create a stigma with future employers and California generally does not enforce non-compete agreements that hinder job mobility. Continual stirring of the entrepreneur pot takes ideas that alone are worthless and allows them to be recycled into something of value.
This was crucial to Form Energy’s breakthrough. The founders describe themselves as “the alumni of a generation of failed battery companies who all came back for more.” They were able to use a collective 100 years of battery experience at failed companies to inform their new technology.
What’s more, their breakthrough idea wasn’t developed in-house, but at a failed battery company.
In 2020, as work was moving quickly, Form caught a break. It needed a critical battery component called a cathode that was impermeable to water but breathed oxygen, like a Gore-Tex jacket. An Arizona battery company, NantEnergy Inc., had spent a decade building such a membrane for a zinc-air battery. Owner Patrick Soon-Shiong, a billionaire biotechnology entrepreneur who owns the Los Angeles Times, wound down operations last year to focus on other investments.
Form bought its patents as well as its inventory of thousands of cathodes, which sit in cardboard boxes in a corner of the company’s building. “Having this piece nailed down allowed us to hit the accelerator,” said [CEO Mateo] Jaramillo.
Start-ups fail but the entrepreneurs, ideas, and insights live on to recombine into something better.
Connecting the right people and ideas can create enormous value—neither Confinity nor X.com were soaring individually but when they merged they created PayPal, a $350b powerhouse.
Connection magnifies the gains from ingenuity, and the start-up culture in Silicon Valley is leading the way in both maximizing connection and nurturing ingenuity.
How will cars see?
Just as it’s not obvious how to make battery storage affordable, so it’s not obvious what technology will make autonomous vehicles practical at scale. But it turns out, there’s a surprising contender.
There’s a major debate in the autonomous vehicle space over which vision tech will get us to true autonomy: regular ol’ cameras or lidar (light-emitting optical sensors).
But the conversation generally skips right over radar, which emits radio waves rather than light and is the cheapest and most ubiquitous detection system available today.
The rest of the article contains an interview with Oculii CEO Steven Hong about the benefits and challenges of incorporating radar into self-driving cars. Fascinating stuff that illustrates why the freedom of entrepreneurs to explore different strategies for innovation is so crucial to human progress.
Water? Where we’re going, we won’t need water
Okay, not quite. But scientists are using RNA technology to create crops that can grow in drought conditions.
In initial tests, adding a gene encoding for a protein called FTO to both rice and potato plants increased their yield by 50% in field tests. The plants grew significantly larger, produced longer root systems and were better able to tolerate drought stress. Analysis also showed that the plants had increased their rate of photosynthesis.
“The change really is dramatic,” said University of Chicago Prof. Chuan He, who together with Prof. Guifang Jia at Peking University led the research. “What’s more, it worked with almost every type of plant we tried it with so far, and it’s a very simple modification to make.” . . .
“This really provides the possibility of engineering plants to potentially improve the ecosystem as global warming proceeds,” said He, who is the John T. Wilson Distinguished Service Professor of Chemistry, Biochemistry and Molecular Biology. “We rely on plants for many, many things—everything from wood, food, and medicine, to flowers and oil—and this potentially offers a way to increase the stock material we can get from most plants.”
Most of the scary predictions about our climate future radically underrate our ability to innovate and adapt. But if history shows us anything, it’s that we are incredible problem solvers. Speaking of which…
Respect the problem…and our ability to solve it
Jason Crawford from Roots of Progress has an outstanding piece in Technology Review championing what he calls “solutionism.” Reflecting on the debate over technological optimism and pessimism, Jason observes:
Those who identify as optimists can be too quick to dismiss or downplay the problems of technology, while self-styled technology pessimists or progress skeptics can be too reluctant to believe in solutions.
A better approach?
To embrace both the reality of problems and the possibility of overcoming them, we should be fundamentally neither optimists nor pessimists, but solutionists.
The term “solutionism,” usually in the form of “technocratic solutionism,” has been used since the 1960s to mean the belief that every problem can be fixed with technology. This is wrong, and so “solutionism” has been a term of derision. But if we discard any assumptions about the form that solutions must take, we can reclaim it to mean simply the belief that problems are real, but solvable.
It's an important distinction. “Optimism” can lead to the conviction that we can sit back in the face of problems and allow solutions to arise “somehow.” Solutionism, by contrast, reminds us that problems won’t get solved unless we confront them head on and take responsibility for the addressing them.
The return of house calls
One potentially positive side-effect of the pandemic was that telemedicine has finally become normalized. But is that a good thing?
[W]hile remote care is clearly convenient, there remain concerns that it might reduce care quality or increase costs, as it could lead to unnecessary visits, involve decreased diagnostic accuracy, and result in duplicate visits and overuse of downstream services such as testing and specialist care.
Though we don’t yet have a definitive answer, the evidence so far seems to show that these concerns haven’t materialized:
We find that access to telemedicine results in a slight increase in primary care utilisation (3.5% over the pre-COVID-19 baseline) and no significant increase in overall costs. The evidence is inconsistent with the concerns of increased care intensity, as we find that patients with access to telemedicine appear to receive less intensive treatment; they receive slightly fewer prescriptions and referrals and spend overall 5% less on healthcare services during the 30 days following an initial primary care visit. Although patients with access to telemedicine are 8% more likely to follow up with a physician within a week of the initial visit, the bulk of these follow-ups are with the same physician that provided the initial visit and they tend to be done remotely, so care continuity does not seem to be compromised.
Great news for anyone who doesn’t love driving to the clinic and staring at the wall for forty-five minutes so they can spend three minutes with their doctor.
In Pursuit of Wealth: The Moral Case for Finance edited by Don Watkins and Yaron Brook
I’m on vacation and behind on my reading, so I’ll shamelessly plug one of my own books. In Pursuit of Wealth is a collection of essays that looks at the vital role the financial industry plays in promoting human progress and human flourishing.
In the lead essay, for example, we show how finance matches economic resources with the best productive ideas. Whether it’s venture capitalists, private equity, or your local bank, financiers sift through potential productive undertakings and try to spot the ideas that will create the most value. This means that an entrepreneur looking to create the next Apple or Uber doesn’t have to be independently wealthy—goods ideas can come from anyone, anywhere.
Unfortunately, the opaqueness of finance and the fact that financiers often make incredible fortunes without creating something tangible has left them vulnerable to demonization. We examine the historic and philosophic roots of that vilification and show how it is based on a deep ignorance of finance’s productive role. Simply put: the finance industry helps create the companies that create all of the tangible goods that make up the modern world.
That is not to deny there are real problems in finance. But as we show, the vast majority of these problems are rooted in longstanding intervention in finance by government. Whether it’s the bank runs of the 19th century, the Great Depression of the 20th century, or the Great Recession of the 21st century, most of the evils we associate with finance have been the result of government control and government support of this vital industry.
The finance industry plays an indispensable role in human progress. If you want to better understand that role—and the policies we need in order to secure it—In Defense of Wealth is, if I may say so myself, not a bad place to start.
Until next time,
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