Interesting discussion between Matt Ridley and Naval Ravikant:
This discussion illustrates why community is important for innovation.
Naval: This also helps explain why it tends to be geographically concentrated. If it was a breakthrough by lone individuals, you would expect innovation to be highly geographically distributed. But it tends to be very geographically concentrated where you’re surrounded by other inventors, tinkerers and thinkers, because you’re always building on little bits and pieces. We see that in Silicon Valley, where it’s geographically dense and concentrated almost to a level that seems unfair to the rest of the world. One person’s idea at a cocktail party goes to the next person at a coffee shop, goes into a prototype, which goes to a VC, who talks about it with the portfolio company, who then mentions it to another entrepreneur, and so on.
Historically, centers of innovation have moved from place to place. But in the future, more and more innovation may happen in the cloud. As Naval illustrates, this is already happening in crypto/blockchain technology:
Naval: For a long time I had thought, despite the poor political governance, California was impregnable. It had too much of a network effect; the lock was too strong. But now I can see the cracks.
This pandemic, of course, is accelerating things, forcing people to work remotely. Twitter recently announced they’re going fully remote. Many of the companies that I’ve been involved with are wondering, “Should we even go back to having an office?” I wouldn’t be surprised if the next Silicon Valley moves to the cloud. That would be an incredibly good thing for all of humanity, because then we could distribute it. Obviously, some things can’t move to the cloud. You can’t have a semiconductor manufacturing plant in the cloud, but a lot of the initial coordination, invention, social networking, conversation, design work can happen in the cloud.
There is recent precedent for this. I don’t know how much you’ve been tracking the crypto revolution, but crypto obviously went through its big hype cycle a few years ago. At this point there’s a lot of innovation going on in crypto. We’re now in that silent under-the-radar phase where great entrepreneurs are building great products that will be more widely deployed in the next 5 to 10 years. What’s interesting about crypto is that it’s truly geographically distributed. Some of the biggest innovators in crypto are scattered all around the world. More than half of my crypto investments are outside of the Bay area, which is not true of any other class of investment that I do. Many of the top crypto innovators are anonymous, like Satoshi Nakamoto famously.
“I wouldn’t be surprised if the next Silicon Valley moves to the cloud.”
This is the reason communities like TMPDIR are important. For true innovation to happen, ideas need to feed on other ideas and this only happens in loosely structured communities. The network effect is powerful.