00:00thanks for joining the a 16z podcast I'm
00:02Margot when mockers a partner here at
00:04the firm I wanted to introduce the
00:06conversation between Dan Primack and
00:08Marc Andreessen that we hosted at our
00:10recent policy summit in Washington DC
00:14you've talked about in the past how you
00:16actually think that technology hasn't
00:17necessarily moved as fast as people
00:20think it has I'm curious do you feel
00:22that the pace of change and I know
00:24that's a vague thing has been speeding
00:26up lately because that seemed to be the
00:27consensus there that tech advancements
00:28are coming faster than they have in the
00:31past right great thanks and thanks Dan
00:33for doing this so there's been two
00:34narratives on the tech industry and on
00:36tech change over the last decade one
00:38narrative has been sort of continuous in
00:40sort of years one through nine over the
00:41last decade which is tech is dead tech
00:43is over Tech is dumb tech is stupid tech
00:45is a bubble it'll crash in a minute you
00:47know Silicon Valley is just a bunch of
00:48kids running around you know raising too
00:50much money and blowing out parts
00:51accurate right okay and you know
00:54producing a bunch of photo sharing apps
00:55and like you know the golden the golden
00:57days of innovation are over and like
00:59this all this stuff is a bunch of hot
01:00air and it doesn't matter in the last 12
01:01months it's flash cut from that to tech
01:04is overwhelmingly impact in the world in
01:06the economy tech is having way too
01:07dramatic of an impact Tech has become
01:09way too important tech is fundamentally
01:11affecting the economy changing jobs
01:12destroying jobs robots AI the Terminator
01:15like it's all it's all of a sudden come
01:17crashing down so how do you reconcile
01:18these two kind of diameter and these are
01:20diametrically opposed views right it's
01:22worthless or like sort of infinitely
01:23powerful or kind of at least gently two
01:26diametrically opposed views then you say
01:28okay well what's going on and so maybe I
01:29start with a pop quiz so sign up for big
01:32questions on how to think about the pace
01:33of change in the economy and the impact
01:35of technology so so one is the way
01:38economists measure the pace of
01:39technology innovation in the economy is
01:41through with measuring productivity
01:42growth and productivity growth right is
01:44economists talk with us all the time
01:46it's the ability for the economy to
01:47generate more output with less input and
01:49technology is the main driver of
01:51productivity growth machines providing
01:53levers to human effort and so would we
01:54expect based on the current narrative
01:55for productivity growth to be running at
01:57generational highs or generational lows
01:59and well what we expect would be
02:00generational highs but it's been flatted
02:02well what we're getting is generational
02:03lows what we're getting is like 1%
02:05annual productivity gains and in fact
02:06there's a whole genre of books with
02:08titles like the rise and fall of
02:09American growth and the great stagnation
02:11written by top economists talking about
02:13back to the first thesis about basically
02:15there's no innovation and productivity
02:16growth it's not actually happening
02:17second is would we expect the rate you
02:20know the era of the disruptor and all
02:21the startups and all the great companies
02:23you know that we have here today we
02:24expect the rate of creation of new
02:26companies in the economy to be a
02:28generational higher or generational low
02:29should yeah it should be high and know
02:32we're at a low outside although I don't
02:33know what the breakout is when you think
02:34tech companies is a piece of that right
02:35so Robin is so actually it's interesting
02:37so tech companies are a tiny tiny tiny
02:39part of the overall of the overall craze
02:41you say the do have an outsized Empire I
02:43mean you talked about you should buy
02:44Google stock if you look at the top five
02:45stocks I think in top five companies
02:47there's a market cap now our tech
02:48companies where's just five years ago I
02:50think only Microsoft was in that group
02:52yeah I think that's right now let's come
02:54back to that because that is a big deal
02:55but generally what's happening is the
02:56rate of introduction of new companies
02:58and economy has been falling for 40
02:59years and it's showing no sign of
03:01resuming so there's more economic
03:03stability as measured by company
03:04creation and destruction than there has
03:06third is would you expect the rate of
03:08destruction of jobs so so when we talk
03:11about employment we always talk about
03:12the headlines are lies net employment
03:13gains or losses right but with but the
03:15net is the result of adding you know
03:17taking all the gross ads and then
03:18subtracting all the all the gross number
03:20of jobs destroyed and so economists also
03:22measure overall gross job creation and
03:25overall gross job destruction would you
03:26expect the rate of job destruction to be
03:28at a generation against generational
03:30high it slow outside of the financial
03:32crisis era exactly right yeah it's miked
03:34up during that but it's come right back
03:35down like it's just it's crashed back
03:36down again and then so the rate of job
03:38destruction is at a generational low and
03:40then fourth is would you expect the time
03:42that people spend in a job to be in a
03:45day at a generational high or a
03:46generational low in other words the rate
03:47of individual turnover an individual
03:49going from job to job respect I turn
03:50right and instead guess what the rate of
03:52actual job turnover is that is it not
03:54even actually that was a little bit that
03:55was a little bit softer it's not
03:56generational lows but it's been slowing
03:57for 20 years and it's quite slow and so
04:00I actually think I'm sort of a complete
04:02I guess contrarian radical in this point
04:04which is the problem that we have today
04:05is not too much technological innovation
04:07at all the problem overwhelmingly is
04:09that we don't have enough and the reason
04:11I say that so confidently is because if
04:13we had higher productivity growth we
04:14would have higher economic growth if we
04:16had higher economic growth we would have
04:17higher job creation we would have faster
04:19rising incomes we would have more
04:20opportunity for people and people would
04:22be more optimistic about the future
04:23instead because we don't have enough
04:26technological change
04:27economy we don't have enough growth
04:29because we don't know if growth people
04:30don't sense opportunity and then that
04:31translates to zero-sum politics and in
04:33the valley that translates to if I'm
04:35gaining somebody else must be losing
04:36which is sort of this wave of kind of
04:38ant sort of these we're an anti tech
04:39politics actually playing out in the
04:40tech industry and then in the rest of
04:42the country it's translating into I am
04:44not doing well and it must be somebody's
04:45fault and I just say I think the
04:47zero-sum mentality is the dangerous
04:49thing and I think we're just we're all
04:50at risk on all sides of the ideological
04:51spectrum right now falling into it you
04:53talk about how the narrative switch that
04:5412 months ago that it was you know
04:56bubble everything's you know to mine and
04:58then it's switch I'm curious pacifically
05:01from stupid to evil and one stupid evil
05:03how much it with nothing in the middle
05:05like we didn't we didn't get like three
05:06weeks where it was like hey this is
05:07pretty good well so I'm curious do you
05:09think that's what do you think is behind
05:11that means November's election the
05:12reason for that in other words that's
05:13not the reason for this was building
05:15yeah it was building and so well so
05:17because because the previous narrative
05:18was wrong right the idea that there was
05:20there was nothing of any significance
05:21happening is also wrong so that
05:23narrative was wrong wasn't there was
05:24nothing of significance it was that
05:25people were thinking that what was being
05:26built was too significant from pricing
05:28standpoint that was just significant I
05:29know there was the whole nobody in
05:31Silicon Valley's doing anything
05:32important but that started to go away a
05:33little bit oh I don't know we kept
05:34hearing it but I mean you still hear it
05:36from time to time the article still pop
05:37up like it's the it's the other
05:38guaranteed headline it's guaranteed way
05:40to get thing on page one of a newspaper
05:41it's true this is all stupid yeah it's
05:43just this is all evil as all of a sudden
05:44sell more papers so if you don't think
05:47innovation is is going at a I don't want
05:50say transformational because certainly
05:51with things that are happening now are
05:52transformational every time there's been
05:53kind of a platform shift call the
05:55platform shift and whether you want to
05:56go from horses to cars and oxen oxen to
05:58tractors or even desktop to mobile
06:00there's always been kind of dislocation
06:02there's been a little bit of a trough
06:03the the argument seems to be right now
06:05that even among those who think in the
06:07end there will be more new types of jobs
06:08we don't know what they'll be it's not
06:10going to be a labor problem but that
06:11this particular trough could be deeper
06:13it could be longer than in the past
06:15because really the the big we don't
06:17really know what the big next thing is
06:19right you went from the farms to
06:20manufacturing to the service industry
06:22and where the technology seems to be
06:23going right now particularly aimed at
06:25the service industry and there doesn't
06:26seem to be an obvious next thing yeah so
06:29I don't worry about that at all and I'll
06:30describe why which is what's happened
06:32and the way to reconcile the stupid to
06:34the stupids versus evil position the way
06:35to reconcile it is they're both true
06:36they're true in different sectors that
06:38the polar arguments are true in
06:39different sectors and so what's
06:41the economy is bifurcated and the way to
06:42look at this is prices the price of
06:44prices of products and so there are
06:46sectors of the economy that I would
06:47describe as the the fast productivity
06:50growth sectors of the economy that also
06:52tend to be the less regulated sectors of
06:53the economy that also happen to be the
06:54sectors that are have been affected
06:55deeply by technology and there are some
06:57of those and you just give three quick
06:59examples of those media is one and one
07:01of the reasons why the press has worked
07:02up on these topics is because the impact
07:04of technology on media has been profound
07:06so so the median is trees bent
07:07productivity growth the media story has
07:08been astonishingly high because of this
07:10the new distribution mechanism called
07:11the internet right and so so so this has
07:14really been you know the story of the
07:15and obviously in the for example the
07:17news business like there's been a lot of
07:18job lost because of this radical sudden
07:20the sudden radical dislocation of this
07:22new technology retail right it's playing
07:24out right now actually retail it's
07:26interesting retail used to be believed
07:27that retail was not gonna be a sector
07:29ever subject to to technology change and
07:31productivity growth because how could
07:32what could you do like if you need the
07:34story you need the inventory in the
07:35story you need the person to be able to
07:37check things out like it was a
07:38relatively stagnant industry in terms of
07:40technological change and then two things
07:41happen one is Walmart and now and now
07:43Amazon and of course now there's there's
07:45waves of retail bankruptcies as
07:46consumers shopping behavior shifting
07:48online so that's a sector where tech has
07:50had a is has had and is having a big
07:52impact and then financial services at
07:54least in part and specifically you could
07:56you could cite investment management
07:57stock trading index funds you know you
07:59can now get world-class investment
08:00management as a consumer you can get
08:02world-class investment management for
08:03you know less than ten basis points you
08:05know there is fidelity and Vanguard are
08:06fighting over pennies to be able to
08:08manage your money in the in the stock
08:09market which is fantastic from a
08:11consumer standpoint but at the result of
08:12dramatic tech change and so in these
08:14sort of high productivity growth sectors
08:15let's have those prices are crashing
08:17right and so it's a consumer utopia
08:19right because the consumers have access
08:20to the Internet and Netflix and Amazon
08:21and and Vanguard and it's all actually
08:24spectacular but there is huge change
08:26happening and a lot of job loss and a
08:27lot of job transformation so that's
08:29where the prices are crashing then
08:30there's the other sectors of the economy
08:32where the prices are rising and
08:33healthcare is front and center right
08:35health care is a sixth of the economy
08:35and the prices in healthcare are
08:37shooting straight up to the right
08:38education is another one and then a
08:40third example would be real estate and
08:42construction where the prices just sort
08:43of continuously rise right both actually
08:45for the land especially in high-income
08:48areas or high sort of Economic
08:50Opportunity areas but also the actual
08:52price of construction keeps rising and
08:55take healthcare education is kind of the
08:56two big examples there people are not
08:58upset about job transformation and
09:00technological change people are upset
09:02because everything cost too much and is
09:03getting very expensive very even more
09:05expensive very fast and so we're looking
09:07you know we're looking forward into the
09:08future where if you want to send your
09:09kid to college it's five hundred
09:10thousand dollars a year like that's not
09:12you can extrapolate out you can see that
09:13we're looking in the future I mean the
09:14healthcare debate today is fundamentally
09:16because health care is too expensive and
09:18we all want more than we can get and as
09:20a society we want more than we can get
09:21and it's just like we can't afford it
09:23and it's a it's a it's a pricing issue
09:25in those sectors technology's having
09:27next to no effect right and as measured
09:29by economists there's next to no
09:31productivity growth which is why the
09:32prices are spiraling out of control and
09:34so my people my point is we're really
09:35mad about the sectors in which tech is
09:37having a big impact and then we're also
09:39very mad for the completely opposite
09:40reason at the center if the secretary
09:42compact the kicker to the whole thing
09:44back your back to your question the
09:46kicker the whole thing is if you had the
09:48sectors where prices are crashing by
09:49definition right are shrinking as a
09:51percentage of the economy and the
09:53sectors for prices are rising or growing
09:54as a percentage of the economy and so
09:56what's actually happening as the
09:57sector's where tech is not having a big
09:59impact are growing and will eventually
10:00be the entire economy right so TVs are
10:02gonna cost $10 and healthcare is gonna
10:04cost a million dollars like this is
10:05where this is all headed right and so as
10:07a consequence jobs the answer is we're
10:09all going to be employed and health care
10:10and education which is actually what's
10:13well it's except that there's one
10:14problem with that which is that when you
10:16look for example I think it's something
10:17I'm gonna screw this number up but
10:18something like three percent of
10:19Americans right now are employed as
10:20cashiers another six percent is quote
10:22retail workers somebody on a floor
10:23somewhere in a retail store a lot of
10:26those people you have a massive skills
10:27gap for going particularly to health
10:30care and education depending on how you
10:31define those things you know Silicon
10:33Valley talks about this is the Silicon
10:35Valley have a role in trying to figure
10:37out some sort of solution to this
10:38because there is gonna be that I mean
10:39he'll they it's the sort of thing that
10:41foment social unrest I mean if you have
10:43lots of and when you think of some of
10:45those jobs it's not just the entry-level
10:46jobs when you're 16 I mean you were what
10:48a corn shucker and you worked in the
10:49back of a restaurant cuz you couldn't
10:50get promoted to the front of the
10:51restaurant and they didn't have the
10:53personality form you know the
10:54personality it's fair but like it's not
10:56just entry-level jobs for 16 year olds
10:57it's also for folks who say I've had
10:59drug issues in the past or criminal
11:01if those jobs disappear and they're
11:02replaced by higher skilled jobs what
11:04from your perspective happens to that
11:05group of people I mean is you know
11:07there's talk about UVI is that a salut
11:08from your perspective what what do we do
11:11what people in DC do yeah so I've got a
11:13personal perspective on this I grew up
11:14in rural Wisconsin if you saw the photos
11:17of Mark Zuckerberg on the farm a few
11:18days ago learning how to milk a cow it
11:20was not far from where I grew up he was
11:21doing all the things that I got to do
11:22when I was growing up and so knocked on
11:24strangers doors in Ohio and I like I'm
11:26really hungry can I have dinner no no
11:29the cows provide the dentist's told one
11:30of the cows so Tiger doesn't roll in the
11:32real Midwest net specifically rural
11:33Midwest 1970s 1980s and so this is at a
11:35point right a Greek ultra was in like
11:37severe distress and had been through a
11:39200 year process of transformation and
11:41there were all kinds of chaos happening
11:42and agriculture but lots of farmers and
11:43then actually manufacturing was in
11:45distress right we didn't we had light
11:46manufacturing where I grew up but we
11:48were right next door to Michigan which
11:49had the onslaught from the Japanese and
11:50the German automakers in the 70s and 80s
11:52and so we felt on this really acutely so
11:54this is this this is the world I grew up
11:55in again though what I would say is I
11:57think it's a I think it's a coastal
11:59conceit that the problem is these idiots
12:01can't keep up with the change I don't
12:02think that's the problem at least that
12:04was not the problem I experienced when I
12:05was there the problem was it was it was
12:07not a question of the raise a question
12:08of whether the opportunities existed and
12:10this is sort of the thing maybe this is
12:11sort of a thing people it's hard to put
12:13yourself in this frame of mind if you
12:14didn't grow up in a place like this but
12:15it's not that people work their entire
12:17lives the Midwest of doing you know the
12:19really brutal rigorous work of you know
12:21farming the firmer mark was just with
12:23like he hasn't had a day off since 1981
12:25right I mean like these people work hard
12:28it's sunrise to sundown every day seven
12:30days a week like these are hard brutal
12:32jobs the truck drive truck drivers job
12:34people talk about all the time and I
12:35mean I you know I look I grew up not my
12:37the basic main feature of my town was a
12:39truck stop like it was like crap that
12:40was like basically a trucking I mean
12:42these people work incredibly our
12:43trucking is a brutal job trucking will
12:45take ten years off your life span
12:46trucking is a very very rough job and
12:48has this externality where you kill
12:49people because like you fall asleep on
12:51the freeway and like you you crash and
12:52then trucks crash it's a big problem so
12:54these are hard and brutal jobs most
12:56folks in those jobs don't want their
12:58kids to spend the rest of their lives
12:59working there just like every other
13:00current that want a better life for
13:01their kids and the question is not so
13:03much like what happens to that job the
13:04question is what's the opportunity where
13:07where are things going to go in the
13:08future and then what happens is well
13:10many people from the coast show up and
13:11say oh I've got good news for you we're
13:13just gonna write you all bigger checks
13:14right we're just gonna write you all
13:15bigger you know whatever you want to
13:16call it these are not answers right
13:18these don't you take these messages to
13:20the Midwest when they laugh at you and
13:22County I grew up in right flip
13:23predictably right flipped from Obama to
13:25Trump precisely because of this right
13:27because the the message coming in that
13:28case out of the Democratic Party wasn't
13:29working at all and so it can't be an
13:31answer of what are we going to do for
13:32these poor people oh my god you know
13:33that that can't be the answer the answer
13:35has to be an opportunity based answer it
13:37has to be here here's the growth here's
13:38the opportunity now that said I deeply
13:40agree with what you said which is the
13:41the crux the entire thing is skills
13:43right the corrupts the entire thing is
13:45skills in education and that is an area
13:47and this will this is a big theme of you
13:49know what we talked about already today
13:50and we'll keep talking about is a big
13:52thing is happening in Silicon Valley is
13:53you're seeing a lot more founders and
13:55startups trying to go after the problems
13:57and the opportunities in these larger
13:59slower productivity growth growing areas
14:02of the economy including health care but
14:04also education right so as an example we
14:06have a company Udacity that's aimed
14:07squarely at this problem right with an
14:08entirely new way to think about having
14:10both real education but also real
14:12certification for education linked
14:13directly into employment opportunities
14:14and there's a broader range of other
14:16education startups in Silicon Valley
14:17trainers trying to solve this problem
14:19that's one and I think that's that that
14:21is what I mean now there's a set of
14:22other issues that we need to talk about
14:23like also internal migration turns out
14:25to be a big issue land use regulations
14:26are a big problem you mentioned like
14:28what happens to people with you know
14:29your drug issues or ex-convicts they're
14:31a professional licensing is another big
14:33issue so there's there's like lots and
14:34lots of issues but it's an issue of
14:36trying to figure out how to clear a path
14:37forward so that people see opportunity
14:38in their lives is that one solution not
14:40a so not a one-size-fits-all but there's
14:42lots of talking this particularly comes
14:44out of Ally or out of the New York
14:45texting etc is more people in this goes
14:47to education skills more you know teach
14:48people to code to learn to code I'm
14:50curious because this is this is the life
14:52you came from and this there is an
14:54argument that gets made that when you
14:56look at where artificial intelligence is
14:57heading and look it's down the road
14:59because I still can't tell my phone
15:00necessarily to order a pizza and get the
15:01pizza at my house but the the AI the way
15:05it's going it's gonna be able the basic
15:07coding it's going to be able to do that
15:09even though there's an inherent
15:10creativity in computer science AI is
15:13heading towards a place where it's going
15:15to be able to mimic a lot of that and so
15:16that you might be creating a generation
15:18of coders who by the time they're 35
15:20aren't gonna have anything to do yeah so
15:22this is where it just gets kind of
15:23hand-wavy like at some point we can just
15:24say oh whatever it is AI is gonna be
15:26able to do that and we just kind of hand
15:27away I guess I can tell you when you
15:28talk to professional air researchers
15:30they're worried about the opposite
15:31problem which is which is they're gonna
15:32disappoint yeah so so AI yeah
15:35as this long history of having had AI is
15:37not a new topic has been a topic
15:38continuously since the 1940s the concept
15:41was first invented late 1942 1943 by
15:43Alan Turing and his colleagues and
15:44there's been a wave after wave after
15:45wave of AI you can go back and read
15:47about all this stuff when it happened
15:48there was wave after wave of AI hype and
15:50then huge disappointment and in fact
15:51there was a huge actually AI bubble in
15:53the 80s where there was there was just
15:55tons of AI companies trying to made all
15:57these promises expert systems some of
15:59you may remember medical diagnosis who
16:01can be transforming all these things and
16:02then and then it crashed so hard that
16:03the entire field almost got completely
16:05written off in the following 20 years
16:07the thing that does seem to be different
16:09it is it is working in the way that it
16:10in the way that AI actually works it is
16:13working now like the drone stuff these
16:15guys are talking at like we can do we're
16:16gonna be able to do autonomous drones
16:17which is I think a very good thing we're
16:18gonna be able to do salt driving cars
16:20but the idea that AI is this sort of
16:22this magic pixie dust that we sprinkle
16:23in anything and therefore all the
16:24programmers are going away it's just
16:25it's I mean it's just science fiction
16:27okay right if anything actually what's
16:29gonna happen is the programmers are
16:30gonna get there the programmers and it's
16:31gonna be higher paid because they're
16:32gonna be higher productivity
16:33productivity also important thing to
16:36remember is productivity also drives
16:37compensation the more productive
16:39somebody is the more technological
16:40leverage somebody has in the job they
16:42have the more they get paid the more
16:44their skills are worth on the market and
16:45so I actually think probably the
16:46opposite is gonna happen which is well
16:48have more programmers than ever because
16:49we'll be able to apply software to more
16:51fields than ever we can talk more about
16:52that and programmers would end up being
16:54higher paid because you're gonna have a
16:55programmer assisted by an AI who's then
16:57gonna be much more productive gonna be
16:59able to write much better cuz it's
16:59probably worth not a I look back there
17:01was a it was a Business Week on that
17:03Bloomberg Businessweek cover store maybe
17:04eight years ago which was a future of
17:06work sort of story and the number one
17:08job that they said was going to be
17:09destroyed in the United States
17:10specifically was with software engineer
17:11yeah that's just a bunch I mean I don't
17:13you know as you know like we're on the
17:14receiving end of the exact opposite
17:15accusation everyday which is all these
17:17software people are paid too much money
17:18and destroying all the cities so driving
17:20the gentrification crisis so we're
17:22getting it coming and going on that one
17:23there's an old the the the Peter teal
17:25line of they promises flying cars which
17:27by the way apparently is now coming so
17:28he must be just thrilled really but it's
17:31funny he refuses to admit that he
17:32actually doesn't know he refuses to
17:35actually back the flight he doesn't
17:36think flying cars are good idea I know
17:38but you think he'd want just one that he
17:40could put in his backyard just to fly
17:41around and one would think or maybe just
17:44waiting let somebody else produce them
17:46in and I'll buy mine I'm looking forward
17:47to it there's a there's a guy
17:48should working on the Ironman suit have
17:50you seen the videos now but there's
17:51there's a guy who actually has the
17:53practical application of the iron to
17:54swallow just to fly okay yeah but it can
17:57also like shoot like the fireballs out
17:58of your hands we already know how to do
18:00that that's right that's the easy part
18:01we got in fact Washington is ringed by
18:03companies there was a guy at the ted
18:08koppel not a jet pack it's like it's
18:10like it's on your feet and you're it's I
18:12mean it's astonishing you see I don't
18:13know the technical definition of jet
18:15pack is there at active yeah the jet
18:16pack it goes in your back you're saying
18:19that's that's the pack that's very back
18:22of the pack that's good to know these
18:24are armed just this is totally different
18:26absolutely Denver what I'm curious is
18:27there a technology at to the flying car
18:29is there a technology don't go back to
18:31when you were kid but say maybe 10 years
18:32ago that you thought we would have
18:34commercialized at this point that that
18:35doesn't exist yet you know so it's a so
18:38this is actually I think the weird so
18:40I'll make up maybe a notations claim and
18:42then try to defend it so I actually have
18:43reached the point where I think that all
18:45of the ideas in tech and all the ideas
18:46in Silicon Valley are good ideas I don't
18:48think they're actually are bad ideas I
18:49mean maybe we could we could pick a
18:51couple but they actually all seem to be
18:52good ideas the reason I say that is they
18:53all do seem to actually happen at some
18:55point it's just it's a timing issue and
18:56goes back to your question it's just the
18:58timing is timing timing is really really
19:00hard I'll just give you one random
19:02example of that so you know the poster
19:03child for excess during the dot-com era
19:05with pets calm and that stupid sock
19:07puppet they came in icon and it's sort
19:08of proof of like it's all the articles
19:10the time was like this is proof of how
19:11crazy all this stuff has gotten is this
19:13idea that you'd ship a 50-pound bag of
19:14dog food right without online commerce
19:16it's just nutty and you ever be able to
19:18make any money doing it and then this
19:19company and Chewie just got what 3
19:21billion dollars by tomorrow yeah yeah
19:24which and guess what my dog food sales
19:27and so like that works online pet food
19:29sales like worked by the way smart
19:31phones you know were invented originaly
19:33in the mid-1980s and then a lot of us
19:35had like nerdy weird versions of them in
19:36the 90s and early 2000s which if you
19:38remember the trio and then the iPhone
19:39mainstream you know seven Apple invented
19:41the iPad in 1989 they called it the
19:43Newton it became a laughingstock it was
19:45a huge failure the iPad is the Newton
19:47everything other than the pen they
19:48figured out that you could just do it on
19:49the screen but other than that it's the
19:50exact same thing and so timing is the
19:52hard part and so I guess the answer is
19:54I'm generally sort of like always super
19:56dissatisfied like we have all these
19:57people with all these incredible ideas
19:59and many of them are happening and
20:01and then you know there's going to be a
20:02whole generation of founders this time
20:04just like there were last time at the
20:06where they actually have the right idea
20:07they get the timing wrong the startups
20:09can't survive long enough like the
20:11timing has to when you start a company
20:12you basically basically starts a
20:14five-year fuse if the idea doesn't hit
20:16the idea doesn't hit critical mass sort
20:18of in society with the customers in the
20:19first five years you basically lose the
20:21company and then somebody else picks it
20:22up and runs with it and so that is sort
20:24of probably that's actually probably the
20:26single biggest thing that tortures us
20:27more than actually good and I bring it
20:29up because so much of the dialogue when
20:31people comment on tax so much of it is
20:32around good idea for a bad idea which i
20:34think is actually not the main question
20:35has one last thing on this kind general
20:37topic then move on something new which
20:38is you've talked about how you have a
20:40sometimes an imaginary Peter Thiel
20:41actually on your shoulder he lives he
20:42lives right here who whispers us sweet
20:45contradictions in your ear and and I'm
20:46curious when it comes to this general
20:48issue which is you know what we're all
20:50gonna we you know as society we're all
20:52gonna be okay Tech is going to be a
20:53force for good in the end and from a
20:54labor perspective particularly if people
20:55can figure out what is he whispering in
20:57you what's been the most convincing
20:58thing he's whispered in your ear to say
21:00you're wrong mark we're all we're all in
21:01deep deep oh it's the it's actually
21:03why he's a trump supporter it's the
21:04extreme form in this stagnation thesis
21:06it's the extreme form of the other
21:07thesis it's much more like that book the
21:10great stagnation is kind of
21:11representative it's a telecon it's a
21:12great economist wrote this book and it's
21:13Peter sort of believes that deep version
21:15of that phases which is basically yeah
21:16we talk it's the hundred we it's the
21:18business Logan we were promised flying
21:20cars are got a hundred forty characters
21:21so like he cites as an example he's like
21:23that was at the Golden Gate Bridge I
21:24forget the exact members but the Golden
21:26Gate Bridge was build from start to
21:27finish and like I don't know two and a
21:28half years for a price of you know in
21:30modern adjusted terms I'm you know
21:32crazily low number like they just did it
21:34and then he's like his house in San
21:35Francisco he cites they've been working
21:36on a new on-ramp for the bridge and it's
21:39been they've been they've been in the
21:40planning phase and the initial
21:41construction for ten years and just the
21:43on-ramp will cost like
21:44inflation-adjusted like 15 times as much
21:46as the entire bridge cost right and so
21:48and so he basically goes through you
21:50know another argument to make his air
21:51travel like wheat yeah drones whatever
21:53whatever their command he'd make is like
21:54we got to the point where we could
21:55figure out how to get passenger planes
21:56close to Mach one we figured that out
21:58like 40 years ago we briefly had the
22:00Concorde to get and then we decided we
22:02don't want that anymore and now we're
22:03still flying at some of the speed of
22:04sound like what what the hell is that a
22:06supersonic jet coming yeah there is
22:08actually there are new actually Silicon
22:09Valley starting there are new actual
22:10supersonic jet companies and Silicon
22:11Valley which is not something I ever
22:12thought would happen so so it's
22:14it's the strong version the stagnation
22:16thesis which is yeah in the world world
22:18a bit yeah it's all good you can do
22:19whatever you want it's all great but
22:20like the majority of the world is the
22:22world of atoms and in the world of atoms
22:23he he would make the claim that
22:25innovation has been comprehensively
22:26outlawed actually formerly outlawed by
22:28the by the legal and regulatory and
22:30political apparatus and then sort of
22:32culturally outlawed where we've sort of
22:34stagnated as a culture and we don't want
22:36we fundamentally don't want change
22:37anymore and we just decided to stagnate
22:39by the way there's another Tyler :
22:41who wrote the they're fairly close in
22:44their views Tyler wrote the great
22:45stagnation his new book is it's I think
22:46it's called the complacent culture and
22:48it's the cultural side of this argument
22:49which I know Peter also believes is it a
22:51responsibility particularly with startup
22:52or maybe a quasi mature startup to to
22:55give serious thought to the second third
22:57degree effects of their technology so
22:59you know we're building whatever we're
23:01building this is the use case this is
23:02our use case is why people are gonna buy
23:03it how much responsibility they have to
23:05think of how somebody else might use it
23:07or what might come down the line I would
23:08say a lot but with two caveats and so on
23:11a lot I would say I think we all have
23:12responsibility to think about the
23:13implications of what we do and I
23:14actually also believe that most of us do
23:16I think there's I I have met I generally
23:18believe in the idea that everybody's the
23:19hero of their own story right and so we
23:21all have an internal narrative like I'm
23:23the protagonist and you all are like in
23:24in rope in D&D we called you all
23:26non-playing characters like you you're
23:27all like you know video games are all
23:29BOTS like I've got my moral path right
23:31and I know what I'm about I don't know
23:32about the rest of you guys and we kind
23:34of all have that point of view right we
23:36we each have a sense of ourselves it's
23:38making moral progress through life and
23:39then it turns out we don't all agree on
23:42our respective views and so I actually
23:43think most people in most fields of
23:45human activity and I know most people in
23:46the valley have a very strong view like
23:48in private after a few drinks they wilt
23:51out like you know I really do believe
23:52what I'm doing XYZ there is not a lot of
23:55historical evidence that either the
23:56adventures of the new technology or
23:57anybody else can anticipate the effects
23:59very well and my favorite story there's
24:01lots of stories on this but my favorite
24:02example this is Thomas Edison invented
24:03the phonograph and like literally they
24:05didn't quite know what it was going to
24:06be for and they made a list of the use
24:08cases and applications one thing his
24:10music was not on the list
24:11it was just viewed it something you
24:13would why would you do that
24:14why would you listen to music in your
24:15home and then the other was the Edison's
24:17personal number one thing that he just
24:18thought was a slam dunk for market
24:20adoption right was of course by
24:22listening to religious sermons so you
24:24would you know being a god-fearing
24:25Christian you know white male in that
24:26area you would come home at night you
24:27you're black bowtie you would sit back
24:29and you would listen to religious
24:31sermons for two hours and that would be
24:32the killer use case and so like he did
24:33of course he therefore thought it was a
24:35moral an instrument of great moral
24:37purpose because it would make everybody
24:38a lot more a lot more ethical and so if
24:40Edison couldn't figure that out like I
24:42don't you know it's it's it's it's a
24:44stretch to say that the rest of us can
24:45my other favorite example of this
24:47nuclear weapons nuclear weapons the
24:48nuclear weapons were I understand I was
24:50in ther I understand hotly controversial
24:52when they were invented many many people
24:54took very well-meaning well-intentioned
24:55ethical stands against nuclear weapons
24:57you know the revisionist historical take
24:59is that the existence of nuclear weapons
25:00may have prevented World War three you
25:03know in other words in the absence of
25:04nuclear weapons there were a lot of the
25:05far so far so far but look there was
25:08supposed to be there was there was some
25:09if you read the contemporary accounts of
25:11what was happening after World War two
25:12there was supposed to be a jiving that
25:14the military spent thirty years
25:15preparing for a giant land war you know
25:16in and on the plains of Germany like
25:18they were supposed to be this massive
25:19military conflict between the US and
25:21Soviet Union it never happened and you
25:23could argue it's it only it only didn't
25:25happen because mutually assured
25:26destruction and so it may be that nukes
25:27save two hundred million lives and so
25:28it's one of those things where I think
25:30it's just very hard to predict the other
25:32thing I just think is I think these
25:34become inherently political questions
25:36very very quickly and I think we all
25:38have our own politics and society has
25:39its politics and I think it's very hard
25:41and this this also entered into a lot of
25:43a london-based actually run nukes at the
25:45time is you know or actually by
25:46spy-cicle bicycles are a good example
25:48there was a moral panic when with this
25:49is actually a true story
25:50what bicycles were invented there was a
25:52moral panic people freaked out bicycles
25:53were the first mechanism that allowed
25:55unmarried young women to easily get to
25:56the next village seriously and so young
25:59women were you know young women would
26:00buy bicycle and they would get on and
26:01they would go to the next village and
26:02this freaked out the moral authorities
26:05at the time so much that the popular
26:06magazines at the time created a concept
26:08and popularized if they call bicycle
26:10face on bicycle faces if you were an
26:12unmarried young woman and you wrote a
26:13bicycle your face would permanently lock
26:15into because of the exertion and then
26:17you would never be able to find a
26:18husband and get married
26:18I swear to god this is a real thing this
26:21was a thing right and so in and again
26:24today that sounds ridiculous but at the
26:25time through the moral lens of what it
26:27meant to have unmarried young men and
26:28women like this was a very very big deal
26:30and so I just think it's it's I think
26:32it's aspirational say that we can
26:34predict these things I think in practice
26:35I think things have I mean these things
26:37happen these technologies get invented
26:38they can't be uninvented I mean that
26:39just simply Jack well
26:41just kind of Jekyll split this Valentine
26:42we just said at one point there was no
26:43steel and in there was steel and people
26:45either figured out what to do with steel
26:47or not right and you have to do lots of
26:48things with steel you could be either
26:49build buildings or you could build
26:51battleships and in fact people did both
26:52and the world changed and and then it's
26:54it's it's more a question of how do you
26:56adapt it's more a question of how do you
26:57accommodate to change and be able to
26:59change than it is a question of trying
27:00to anticipate its outside of events like
27:01this took your voice kind of off
27:03literally offline you were the most
27:05prolific tweeter more so even than our
27:06president I think you you I yeah yeah I
27:10mean you're in fact to be honest it
27:12wrote this this morning preparing for
27:13this interview was much harder than
27:14preparing for the last interview I did
27:15with you because that one I could just
27:17read your tweets and I knew what you
27:18I tested quit first why did you leave I
27:20mean the the perception is obviously
27:21there was the India tweeting there was a
27:22hubbub over that and then you were just
27:24like screw this I'm done is that
27:26it's sort of this question of like why
27:28are so why can we talk about some issues
27:30like why can we talk about differential
27:31calculus and not get like all angry
27:33about it like if you have different
27:35views on differential calculus than I do
27:36like I respect you but you know I don't
27:38think you're a giant you know stupid
27:39person but if we talk about other issues
27:41if we talk about health care policy like
27:43all of a sudden like everybody who has
27:44the other position from us as evil and
27:46so he goes through kind of what causes
27:48some issues to become politicized with
27:50other issues not and I just think this
27:52fear of issues that are being
27:53politicized at least in the valley and
27:55tech and economics it's just is just
27:57really broadening out I think it's
27:58really corrosive to it's certainly
27:59corrosive to discourse I'm an engineer
28:01by background and my natural inclination
28:02is I like to get in the details and I
28:04like to try to understand what makes
28:05things work and there are just certain
28:06areas that are very hard to have those
28:07discussions so I just found that that
28:10that phenomenon was swallowing up almost
28:11everything I wanted to talk about that's
28:13interesting I mean it's don't be on some
28:14of the quote the right just issued not
28:16quite maybe the differential calculus
28:17but we were talking backstage on jessica
28:19Levinson who helped found Y Combinator
28:21she wrote up she wasn't very very active
28:25publicly from a blogging or tweeting
28:26perspective but was out there a bit and
28:27she wrote a blog post town or maybe a
28:29month or two ago basically saying that
28:31from here on in no matter the topic she
28:33was no longer gonna publicly write about
28:34our comments she would talk to her
28:35friends privately and that was gonna be
28:36it do you feel that there is I mean
28:39leave aside something really some of
28:41those obvious hot-button political
28:42issues do you feel in the valley that
28:44discourse is drying up a little bit or
28:46people's willingness that open discourse
28:48open yes the open discourse is drying up
28:50probably the private the private
28:51discourse is probably getting more
28:52interesting because people are
28:54in private about the things they don't
28:55feel like they can talk about the public
28:56this is always one of the things you
28:57wonder this is always kind of a lot of
28:59things you wonder is if you suppress
29:00speech in the public sphere how much of
29:01it just happens in the private sphere
29:02and how much does it actually mutate and
29:04possibly get worse in the areas that you
29:05care about in the private sphere wait
29:07does that mean this is if some people
29:08think this is a big part of the Trump
29:09phenomenon as people had you know it's
29:11the concept of the shy conservative or
29:13the Trump supporter who won't admit it
29:14by the way for example I will tell you
29:17this I know of exactly two Trump
29:19supporters in Silicon Valley right -
29:21right - the one other than Peter hey I'm
29:23sure this is the thing it the one only
29:24one has even been visible up until
29:26recently Palmer Luckey is the other one
29:28it's a the founder of oculus and so I
29:30know if - out of a community of you know
29:31tech community of hundreds of thousands
29:34of people and so like I guarantee I
29:36don't know but I can't prove but I
29:38guarantee there are Trump supporters in
29:39Silicon Valley who feel like they can't
29:40say so right and so what does it do to
29:42somebody right when they feel like they
29:44literally cannot express themselves and
29:46like what's that happened like that's
29:48just such an unhealthy place to get to
29:49and it is it I do really worry that it's
29:51the place we're getting - what do you
29:52think DC least understands about the
29:54valley when I say DC I mean the
29:56political instructor would you say yeah
29:58so I think the biggest thing is there
30:00was a famous a Luna the nuclear weapons
30:02issue nuclear weapons history earlier
30:04there was a British writer section SAS
30:06actually turned out he was also a
30:07chemical engineer so he had a feat in
30:09kind of both the engineering and liberal
30:10arts worlds name CP snow and he wrote
30:12this essay in the 1950s called the two
30:14cultures and it was the two cultures at
30:16the time actually was sort of the
30:18liberal you know sort of through the UK
30:19lens so sort of the Oxford Cambridge
30:21politics what they call it PPE
30:23politics and economics philosophy kind
30:26of liberal arts kind of foundation that
30:28a lot of people write and government
30:29kind of come up through you know
30:30politics or philosophy or economics or
30:32law and so sort of the liberal arts
30:34culture if you will and then the
30:36engineering culture and at the time he
30:37wrote the essay the engineering culture
30:39of the time that was the dominant
30:40culture was the physicists and if you
30:42read this essay and you enjoy this you
30:44read this essay and you read about how
30:45he would describe to physicists and
30:47you'll immediately think of all of us
30:48like right now it's like those pompey
30:50you know those pompous arrogant like
30:51fold themselves you think I think no no
30:54I just mean I just mean these people
30:55these people didn't say you were wrong
30:57they'll just carry that okay the liberal
31:00arts you the general liberal Westview is
31:01these engineers that full themselves
31:02they think technology is the answer for
31:03everything and they think technology's
31:05going to change everything and they
31:05don't understand normal human beings the
31:07technologists the engineer
31:08think that the liberalize people are
31:10just wilfully behind the times and
31:11uninformed and can't even have the
31:12discussion because I don't understand
31:13the technology and so he just he
31:15describes this dynamic historically that
31:17happened at that time and and and then
31:18what he calls for is he calls the third
31:20culture which is he says we need to
31:21merge the cultures and and we need to
31:23eat both sides need to merge the
31:24cultures both sides need to contribute
31:25the technologists need to reach out to
31:27the people who are on the liberal arts
31:29slash policy slash loss slash right that
31:32axis of things and need to do a much
31:34better job of explaining and under you
31:36know understanding fears and concerns
31:37and then explaining the implications and
31:38exploring the ideas and in making people
31:40feel like they're included in the
31:41process right but equally the people on
31:43the other side then people a liberal
31:45arts side need to really make an attempt
31:46to really deeply understand technology
31:48and so I don't know if his si had any
31:50effect back then I would hope that the
31:52you know the current version of it would
31:53be all around the issues we're talking
31:54about today and at least you know of
31:55course this conference is a big part of
31:56our attempt from other to do this out
31:58here and correspondingly hopefully if
31:59all of you who haven't been out to the
32:00valley hopefully you'll you'll come soon
32:02and come see us because this is a big
32:04thing that we're trying to we're trying
32:05to we're trying to help trying to do our
32:07part and helping to blend the cultures I
32:08know why I thought this but I'm just
32:09just a quick question going back this is
32:11not quite quite a flying car question
32:12but I've got a six year old you've got a
32:13two year old are either them they I
32:15assume California like Massachusetts
32:16around seventeen is when you get to
32:18license are either them gonna learn to
32:20drive a car I don't know I think it's
32:23possible but the answer is I think it's
32:25possible for the six-year-old the answer
32:26is no I think for the two-year-old it's
32:27a very real possibility the answer is no
32:29so the six-year-old like I mean it's
32:31already the case if you're a parent a
32:32lot of parents of teenagers like it's
32:34already the case that if the economics
32:36work and uber or a lyft account right
32:37it's probably the best way to go because
32:38you you eliminate a huge amount of risk
32:40right from teenage drivers there's all
32:43these studies now of actually what
32:44happens in the teenage mind which now
32:45explains a lot of my behavior when I was
32:47that age of you know risk-taking and so
32:48forth and so there's a big advantage to
32:50having these services by the time you
32:52get you know full self driving car
32:54fleece deployed and it's it's you know
32:56and it's it's it's a button on a phone
32:57and the you know the ride costs of you
33:00know what half or a third of what it
33:01cost today it's gonna be so cost
33:02effective and so safe to not drive that
33:05I think there's gonna be a big I think a
33:06lot of parents are gonna push in and
33:08will their kids drive on roads or in the
33:10air oh I would certainly hope that it
33:12would be so disappointing if they're not
33:13in the air fair enough mark ivory hit
33:15that okay great thanks everybody
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