I have written previously about losing my teenage optimism for technology, and how we struggle to have bold dreams for the future. Many people have articulated theses of this type, most famously Peter Thiel in claiming that we’ve seen great innovation in the world of bits, but not of atoms. However, change is in the air. I believe we are approaching an inflection point of technological change and ambition. In a twist of irony, COVID has done a great deal to push this along.
Before 2020, we were stuck in what I call the eternal 90s. With the Soviet Union defeated, the United States had no focal objective: no great enemy to defeat, no great frontier to explore. For almost thirty years, the same set of Bill Clinton-era trends compounded on themselves: liberalization, globalization, and growth of the internet. It’s been a good thirty years of steady marginal progress: reliable growth in GDP, better medicine, higher quality of food, and so on, like clockwork. Unfortunately, marginal change is not inspirational. It has been a long time since technology has captured the hearts and minds of a generation like the space race did in the 1960s.
Enter 2020. Between COVID and Trump, the trends of the eternal 90s have ruptured somewhat. Technological penetration has leapt forward by years. The year 2021, and the thoughts prevalent in it, will be different from 2019, much more so than for almost any other one-year gap in recent history. There are several important components in this shift:
1. Cheap Capital
In response to COVID, the American fiscal response has been aggressive. With around 6 trillion dollars of stimulus, capital is cheap and will be for a long time. This is subtle, but of dominant importance.
2. The Best Ever Funding Environment
With trillions of stimulus dollars in the markets, the zero-interest-rate search for yield of the late 2010s is more desperate than ever before. There are more dollars in venture than there are ideas. If there has ever been a time in which it is feasible to raise gargantuan rounds to pursue real-world moonshots, this is it.
3. The Great Unbundling
Many institutions exist as a consequence of returns to scale. While technology has slowly eroded some of their necessity, this has greatly accelerated under COVID. These institutions are now clearly struggling to deliver value, and self-sufficiency is becoming a priority again. We are on the cusp of many traditional structures and institutions being totally overhauled and unbundled. This is an enormously exciting opportunity across many industries.
Cities were Schelling points for talent in 2019, but no longer. COVID has catapulted remote work tools and culture forward by years. Previously urban professionals are moving to smaller cities and suburbs, and owning homes years ahead of schedule. This has wide-ranging impacts: a class of workers is suddenly much more financially secure, tier-2/3 cities see an influx of high-earning professionals, tier-1 cities become cheaper, and as geography wanes in importance, opportunity becomes more accessible to all, even on a global scale.
Schooling is being rapidly unbundled at all levels. Like de-urbanization, homeschooling was previously a small, niche trend. Under COVID, it is a necessity. As with remote work, the demand, culture, and tools for it have advanced by years in a few months.
The same has occurred for higher education. Many have written about the out-of-control costs of college, while struggling to replace the extremely convenient all-in-one package of academics, socializing, and professional training that college provides. But COVID has forced the unbundling of college: now that students get to meet none of their classmates in person and are paying $60k a year for online lectures that they could get for free off YouTube, the simple BA credential obviously isn’t worth it for most. As education gets unbundled, it will become radically cheaper and open, multiplying opportunity on a global scale.
6. Digital Gold and More
The fiscal response to COVID was explicitly inflationary. The Fed has nearly doubled the assets on its balance sheet to prop up the markets, and the US dollar has depreciated against other currencies. Prudent investors are worried about potential runaway inflation, and attention turns to Bitcoin again. Now much more mature and validated, it is appealing as an inflation hedge. As its ecosystem matures more, we may see many products on top of the base layer. In the next decade, we might not just see programmable money, but a groundbreaking separation of state and money. The opportunities for (tumultuous) change and innovation in this context are endless.
7. Independent Workers
With remote work, workers become more independent. Superstars – who bring outsize value, many times their compensation – are realizing they can go independent with their brand. You see it in investing, writing, even porn. The newspapers and TV of tomorrow will look very different from those of today. This trend will be universal across media.
8. New Dreams: SpaceX and Tesla
Tesla has had a dizzying ten-fold run in the markets this year, surpassing a $500B market cap. By valuation, the markets think that TSLA will not obsolete some incumbent car companies, but all of them. I believe that part of why $TSLA has appreciated so greatly is that in this time of desperation, Elon Musk delivers a vision people can believe in. People are watching rocket launches again, and this time they’re reusable rockets out of Musk’s private enterprise. He is innovating in the world of atoms, not of bits, and that’s relatable and inspiring in a way that no software entrepreneur before him ever was. Tesla is barely even working on truly self-driving cars, and somehow Musk has sold a vision of autonomous vehicles that Waymo hasn’t. People are dreaming of going to space again. Musk is inspiring a generation of budding entrepreneurs to build things that are grand and ambitious.
9. New Worlds: AR/VR
AR and VR technologies had their moment of hype in the mid-2010s, but didn’t catch on in the mainstream. However, a little like Bitcoin, the technology and infrastructure has been steadily improving in the background. It’s becoming very good, and soon it’ll be ready for primetime. Video games and movies are going to get hit by the colossal force of a new, more immersive medium with enormous room for experimentation. Even mundane things like exercise and videocalls will get turned on their heads. This will be the biggest leap in the medium of computing since the smartphone in 2007.
10. Digital Health
Six years ago, only medical patients had real-time feeds of their vital signs. Thanks to Apple Watches, tens of millions of consumers now have a continuous ECG and blood oxygen monitor. Thousands of hobbyists wear glucose monitors. Innovations in chips (M1) and wireless (5G) dramatically improve the computing and streaming capacity for detailed vital sign data, and the benefits will compound. Over the decade, I expect us to get fitness-grade health data streams for most major vital signs, and that analysis of this data at scale will enable early detection of both common and grave medical conditions like heart attacks.
So, what’s happening? Well, capital is cheaper than ever. It’s an amazing time to be an entrepreneur with bold, ambitious ideas. The success of Elon Musk is inspiring a generation to be exactly that. And where are these entrepreneurs to start? Well, digital health and AR/VR are ripening to change people’s lives massively at scale. We might see the separation between state and money. And if that’s not enough, most of our traditional institutions and structures, like cities, schools, and employment are getting unbundled as we speak, democratizing access to opportunity. Roll up your sleeves, pick whatever target you want, it’s a good time to build.
Addendum: Empty Spaces
While this doesn’t fit strictly into the realm of technological innovation, there’s work to be done reimagining the city, too. Under COVID, cities have lost not just residents, but also businesses. With retail having jumped online, and many restaurants now operating as delivery-only cloud kitchens, there’s a big question as to what happens with vacant prime real estate. Are bars and clothing shops really the best we can do? The destruction that has happened here has created an opening for experimentation and new establishments that offer novel in-person experiences.