"We Wanted Flying Cars, Got Twitter Instead"

[Hellman]

Megatrend: Diminishing Marginal Innovation — Six Consequences

How Revolutionary Is Social Media?

“We wanted flying cars, instead we got 140 characters.” Founders Fund website, Peter Thiel

We live in an age of rapid change. Amazon, Apple, Facebook, Google, Twitter and many other innovators have changed how we work, communicate and live. But is this a new industrial revolution?

Twenty-some years ago, a large bookstore might have had 100,000 books available. Today online retailers (e.g., Amazon) have millions of books to sell. Similarly, there were no smartphones two decades ago — just simple mobile phones and land lines. Social media then consisted of email and a listserve; now we have Facebook and Twitter. A 1990s personal computer had only basic capabilities (word processing, spreadsheets, and a few others). Now an iMac has the power of an earlier generation’s supercomputer.

Revolutionary? Well, it depends on what we mean by a revolutionary innovation. I propose that: An innovation is revolutionary if it so changes society, that going back to the pre-innovation technology would be catastrophic. By this standard, many of our most recent innovations are incremental, not revolutionary.

Consider the car, that archetypal innovation of a few generations ago. If all motor vehicles vanish tomorrow, the result would be catastrophic. If all phones (land lines and mobiles) suddenly stop working — the result would be disastrous for communication.

Now, let’s imagine that all social media (e.g., Twitter, Facebook, etc.) disappear. Would the economy collapse? I don’t think so. Or, if every online store in America closed, would it be catastrophic? Probably not.

Leaving aside these anecdotal examples, it’s noteworthy that there isn’t an obvious economic growth spike resulting from the Internet era.

Founders Fund believes that many recent innovations have been incremental, and not revolutionary. It attributes this incrementality to the VC community’s failure to support revolutionary technology companies. Critical as this view may be, it implies that incrementalism is a reversible choice. Founders Fund itself is dedicated to investing in revolutionary technologies (for more on Founders Fund’s analysis, please read their manifesto).

My hypothesis, however, is that we’re at the start of a new Megatrend: Diminishing Marginal Innovation. The low-hanging fruits of revolutionary technologies have already been discovered. Consequently, we’ll need increasing effort to achieve changes that are only incremental and at most, transform a sector. If this Megatrend is real, consider these potential consequences:

1. The Trend is Your Friend: Incrementalism is the Way to Go – For many entrepreneurs/VCs, incrementalism will be their defining strategy. Stretching to develop revolutionary products will be a losing proposition. Incrementalism isn’t unprofitable. LinkedIn, for example, hasn’t revolutionized society, but has been very lucrative.

2. Diminishing Marginal Innovation Applies at the Economy Level, Not the Sector Level – We don’t have flying cars as routine transport, and it’s difficult to see this occurring. On the other hand, DNA technology is still in its infancy, and might have “running room.” We will continue to see sectors transformed (e.g., conventional retailing impacted by online retailing). But innovations in the remaining high growth sectors won’t be sufficient to drive revolutionary change/growth in the overall economy. (Consider that even in the 21st Century, an estimated 1/10th of all American jobs are connected to the car industry; it’s difficult to see Social Media having that kind of impact.)

3. America as a Relative Backwater Economically and Politically – By the end of the 21st Century, the world’s global multi-nationals will increasingly be headquartered in Asia. Since the late 1970s, the rest of the world has been catching up economically with the West. This trend will only accelerate, unless there’s new high-impact revolutionary technological innovation in the United States, or economic collapse/stagnation in China/India. (If country GDPs per capita converge to about the same level, country GDPs will then be driven by population. Consequently, China will have four times America’s GDP.)

4. Offshoring Will Reverse – As wage levels converge globally, wage differentials (as a driver of offshoring) will also decline/reverse. This is already happening, as the global management consultancy BCG has recently highlighted.

5. Politics of Divide the Pie – As the public increasingly understands that growth has slowed, and won’t soon increase, the focus of politics will be on the zero-sum game of dividing up what already exists (it feels like this political trend has already started).

6. The Future Belongs to Corporate Apparatchiks – A future of slow-growth incremental capitalism will favor corporate bureaucrats rather than visionary entrepreneurs.

For most of human history, economic innovation and productivity growth have been low, as were productivity differences between countries. The last two or so centuries have been an exciting exception — but not the norm — for human history.

I hope Founders Fund will be right and I’ll be wrong. So, let me close with the sage counsel of Yogi Berra:

Prediction is very hard, especially about the future.

Note: The Oxford English Dictionary (online) defines a Megatrend as – an important shift in the progress of a society or any other particular field or activity.Through a series of commentaries in the coming months, I’ll explore other Megatrends that may shape our future. I offer these thoughts — not because I’m sure I’m right – but in the hope that debate will help us prepare for the future. If you would like to see more posts in this series, or want to share your thoughts with me, I invite you to follow me on Twitter @Steven_Strauss or on Facebook.

[ktrout]

I really don't buy into the Western decline meme, especially with respect to the United States. Asian cultures don't value creativity and personal initiative as much as Euro-American culture does. Also most of Asia is still really, really, really fucked up. It's going to take a long time for them to catch up there.
I completely disagree that the Internet is not revolutionary. I think this is just the beginning.

[friendlyskies]

Jesus fucking Christ. Love Peter Thiel, Paypal is every multiple-country freelancer's best friend. But good grief, we do have flying cars. We've had them for decades. They're called "helicopters" and you have to be rich as fuck to own one and connected as fuck to fly one in the city. Thiel is probably one of the few people who has access to these "flying cars," so what's up with the autistic blind spot, buddy? Oh, right.....

No, seriously, what these "where are the flying cars" people are bitching about is that they want flying cars that are as cheap and available as regular cars, and look like regular cars, per, say the Fifth Element. They also probably want hot girls dressed in strategically placed bandaids to drop into them out of the sky and help them fight diabolical enemies named "Mr. Zorg."


A totally realistic vision of an average day in the life of an American cabbie
20 years from 1997.

Here's a clue, people. That's Hollywood scifi, not hard scifi. Try some Ben Bova, or Kim Stanley Robinson, or anything from Analog when extrapolating technology, not a tits-and-ass comic book remake brought to you by the writer of "Colombiana," about a hot chick wearing strategically placed bandaids who also happens to be a genius but psychotic hit killer. Come on. You have your flying cars, as promised. But no, they don't look like 1970s Detroit muscle cars with jets attached, and no, not everyone gets one for their 16th birthday along with a free pass to fly anywhere they want, anytime they want. That would be ridiculous. But, nonetheless, you have your flying cars. Can we please move on?

Anyway, re: the Decline of the West or whatever, I have a tendency to see all this as the Malthusian Endgame, and the winner will be the population capable of consolidating and exploiting resources on this planet while creating viable trade routes with other planets. China's on it - they've got Strategy 1 locked up. They're still behind vis a vis space technology, but while we were flailing around in Afghanistan like a bunch of historically ignorant knuckleheads, Asia began laying the groundwork for their own space program. Fuck flying cars, what we need is a space elevator, devised long ago by Team Anglophone (Sir Arthur C. Clarke), but being built by Team Asia (Japan). That's the thing - the Western World has had the blueprints and technology for all this for decades; the USA was supposed to have had a permanent colony of 100 people on Mars by 1988. But we dropped the ball.

Are we going to pick it up again? Ummm.... It was nice that we got all excited about the latest Mars Rover, but imo that's just another hangover from the devastating "Faster, Cheaper, Better" debacle brought to us by that fucktard Sean O'Keefe. Cool, great, it's a fantastic achievement blah blah blah.... but really, whoopdie shit. That ought to have been cutting edge in 1982. We've wasted time and resources gambling like junkies on the stock market, buying 12,000-square-foot homes with car elevators, and having ridiculous little wars in places like Nicaragua and Iraq and Vietnam.... and it may well come back to bite us, or rather our children, in the ass. On that count, Peter Thiel may well be correct.

Or.... back to the scifi analogies, maybe Joss Whedon will be correct, and China's ascent into space will light the fire under our ass that we so desperately need to break the celebrity-worshipping, reality-TV slavering, neocon-believing, Walmart-shopping, conspicuous consumption-addicted, corporation-manipulated spell we've been under since 1980 or so. That would be kind of cool.

[Sri Lanky]

I don't buy into Western decline either. But I do buy into the "bullshit culture" decline....a decline that's happening everywhere because the energy shift is happening. Now.

The evolutionary laggards are in every nation-state and in every culture.

[nanuq]

You can only have the advanced toys that physics allows. Less chance of fatal accidents with Twitter than flying cars.

[el3so]

Less chance of fatal accidents with Twitter than flying cars.

Sure, whatever.

[ktrout]

I don't buy into Western decline either. But I do buy into the "bullshit culture" decline....a decline that's happening everywhere because the energy shift is happening. Now.

The evolutionary laggards are in every nation-state and in every culture.

How come nothing you say ever makes any fucking sense?

[el3so]

I don't buy into Western decline either. But I do buy into the "bullshit culture" decline....a decline that's happening everywhere because the energy shift is happening. Now.
The evolutionary laggards are in every nation-state and in every culture.

How come nothing you say ever makes any fucking sense?

I met Sri Lanky. It changed my perspective. Not all of that was due to being Amsterdamned.
Some things are hard to convey through words on a screen.
It makes sense though. Most of the time ;-)

Anyways, screw the flying cars.
I have a solid connect to the internets. I got a computer. I have gmail accounts. Amazon account gone dormant probably but there's pr0n, game, etc etc sites I don't remember the password of. No credit card activity on my part or stuff I pay for to access. No iWhatevers though.

Now I don't care too much about exactly how computers work but if the boys at SoylentGreen think you are good people,I tend to pay attention.
Couple of days ago, Wozniak of Apple fame said cloudcomputing is bad.
I keep most of my legal downloads (just digital backups for all the DVDs I own) on extra drives for if I ever like end up in prison plus I'm not some high-tech guru so none of this will affect me all that much other than maybe having to troll webcam women under the alias of el3so2.
But some of you are bound to have sites, blogs, facebook, twitter accounts, live streams and whatnot, this being the internet.

Didn't mean to hijack the thread but IMO this is about as sci-fi as it gets at the moment. Unless some of you are training to travel to Mars.

[ktrout]

Less chance of fatal accidents with Twitter than flying cars.

Sure, whatever.

Actually, this kind of puts this thread back on track, doesn't it?

[ktrout]

Yeah, and who would have imagined just a couple of decades ago a device I could carry in my pocket that could send Led Zeppelin to Bluetooth headphones while measuring my heart rate?

[ktrout]

I guess the thing is, the improvements are so incremental that we don't really notice them creeping up on us. Do you have any idea how fucking lost my Dad is with technology? I guess I've been fortunate to live in Silicon Valley. Even my brother who is a retired chip designer and moved back into the boonies is surprised at some of the stuff I take for granted.

[Hellman]

But good grief, we do have flying cars. We've had them for decades. They're called "helicopters" and you have to be rich as fuck to own one and connected as fuck to fly one in the city.

This is a flying car

This is a helicopter


thought of by some dude 600 years ago.

That's Hollywood scifi, not hard scifi. Try some Ben Bova, or Kim Stanley Robinson, or anything from Analog when extrapolating technology, not a tits-and-ass comic book remake brought to you by the writer of "Colombiana," about a hot chick wearing strategically placed bandaids who also happens to be a genius but psychotic hit killer. Come on. You have your flying cars, as promised. But no, they don't look like 1970s Detroit muscle cars with jets attached, and no, not everyone gets one for their 16th birthday along with a free pass to fly anywhere they want, anytime they want. That would be ridiculous. But, nonetheless, you have your flying cars. Can we please move on?

The author's comparing what we're building now in 2012 to what we we've done in the last century. Early 1900's we have cars and flight. Shortly thereafter, we have them being mass produced to consumers. After 8 years of planning we put a guy on the moon, 40 years later we put a rover on mars.

The point is while all of these ideas initially sounded like a scifi movie, they've been done, and in a fairly short amount of time.

Now look at what gets our attention in 2012, what gets venture capital attention: for the most part, an improvement of the same thing, just faster, sleeker, and more efficient (Siri, Retina Display, one day shipping).

I like my iPhone. I have 24/7 access to porn, Facebook and videos of pandas sneezing, all on one device. But I don't buy into thinking that the leap from landline to iPhone is as innovative as the leap made from buggy to car, from steamship to airplane. And yet this is what our news covers, what is discussed around the watercooler, what we are fascinated with.

The sooner our obsession with tech 2.0 ends, the sooner we can stop tinkering and improving with what we already have, and start making things with actual value.

[muskrat]

Cool French written, directed & designed movies. I'll watch anything Luc Besson is involved with



Sadly innovation is really currently driven thru US Valley based VC's like Mary Meeker, Sequoia, Kleiners & Mitt's company Bain Capital et al betting baby boomers pension funds on arrogant 20 y/o Stanford guys who feel entitled to get a $30m handout for some digital tech idea, a PPT business model & a 30sec elevator pitch. Youthful exuberance provides full certainty to be the next billion dollar god who's Company has a 25x P/E ratio.

I got my head in the trough.

Cheers M.

[Alessandro]

FS, you don´t need to be "rich like intercourse" to own one of these, http://www.bush-planes.com/Safari-Helicopter.html

[2Bahramm]

Funny. Thinking; that the first "information age" predictions in which we now live were made decades ago. As wryly prescient 'revenge of the nerds' as a film might be in alluding to this, the nerd truly is now the king of all things cool, like a slick form of revenge. Steve Jobs Man of the Year, who would have ever thought so seriously? And everyone with a mental mechanical wrist flick or bend has had to adapt. We've always known programmers make damn good fast walking cash at the end of the day, but not everyone has the mind set to do it.
So, moreover on the other side of that coin, I think this is why it'll always be cool to rescue and refurbish old cars and look at the evening lineup of popular reality television and a lot of it has everything to do with junk, and I mean storage wars to shows about hoarders to pawn shops. Stuff like that ever make a popular re-tweet or go viral social media?
So I think there'll always must be a contingent of even minded folks that constantly scoff at the digirati.
Just take a look at your average Twitter feed and tell me it doesn't remind you of so much excess dna material that does nothing. So yes I think we are at an apex where we see that information, collecting, gathering and disseminating ("sharing") is just really, really popular and that sooner or later , much like a bubble that bursts, will soon stop being such a to-do thing and will lose its luster. Isn't this what always happen when things become normal and commonplace? Like a new washing machine. After a while, no one knows how long exactly, it becomes just another appliance; very boring. So I think what will drive things will be more miniaturization, less buttoning and more thin. And more G's to come, 3 gs', 4G , 5G and so on. Just by the way, the first thing I thought of stumbling upon this topic thread was the name of a band I had seen passerby just once-,..plastered to on a street light standard going by which announced as (name of band): 'we were promised jet packs'. And here they are now:
http://martinjetpack.com/
http://www.jetpackinternational.com/
http://www.popularmechanics.com/technol ... ng/4217989